<PAGE>
EVERGREEN
VARIABLE ANNUITY TRUST
SEMIANNUAL REPORT
JUNE 30, 2000
MUTUAL FUND
[LOGO OF EVERGREEN FUNDS] SERVICE AWARD
1999
<PAGE>
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Table of Contents
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Letter to Shareholders .................................................... 1
Evergreen VA Blue Chip Fund
Fund at a Glance & Portfolio Manager Interview .......................... 2
Financial Highlights .................................................... 5
Schedule of Investments & Financial Statements .......................... 6
Evergreen VA Capital Growth Fund
Fund at a Glance & Portfolio Manager Interview .......................... 14
Financial Highlights..................................................... 17
Schedule of Investments & Financial Statements .......................... 18
Evergreen VA Equity Index Fund
Fund at a Glance & Portfolio Manager Interview .......................... 24
Financial Highlights .................................................... 27
Schedule of Investments & Financial Statements .......................... 28
Evergreen VA Fund
Fund at a Glance & Portfolio Manager Interview .......................... 47
Financial Highlights .................................................... 50
Schedule of Investments & Financial Statements .......................... 51
Evergreen VA Foundation Fund
Fund at a Glance & Portfolio Manager Interview .......................... 59
Financial Highlights .................................................... 62
Schedule of Investments & Financial Statements .......................... 63
Evergreen VA Global Leaders Fund
Fund at a Glance & Portfolio Manager Interview .......................... 72
Financial Highlights .................................................... 77
Schedule of Investments & Financial Statements .......................... 78
Evergreen VA Growth Fund
Fund at a Glance & Portfolio Manager Interview .......................... 86
Financial Highlights .................................................... 89
Schedule of Investments & Financial Statements .......................... 90
Evergreen VA Growth & Income Fund
Fund at a Glance & Portfolio Manager Interview .......................... 99
Financial Highlights .................................................... 102
Schedule of Investments & Financial Statements .......................... 103
Evergreen VA High Income Fund
Fund at a Glance & Portfolio Manager Interview .......................... 115
Financial Highlights .................................................... 118
Schedule of Investments & Financial Statements .......................... 119
Evergreen VA International Growth Fund
Fund at a Glance & Portfolio Manager Interview .......................... 125
Financial Highlights .................................................... 129
Schedule of Investments & Financial Statements .......................... 130
Evergreen VA Masters Fund
Fund at a Glance & Portfolio Manager Interview .......................... 140
Financial Highlights .................................................... 148
Schedule of Investments & Financial Statements .......................... 149
Evergreen VA Omega Fund
Fund at a Glance & Portfolio Manager Interview .......................... 168
Financial Highlights .................................................... 172
Schedule of Investments & Financial Statements .......................... 173
Evergreen VA Perpetual International Fund
Fund at a Glance & Portfolio Manager Interview .......................... 180
Financial Highlights .................................................... 184
Schedule of Investments & Financial Statements .......................... 185
Evergreen VA Small Cap Value Fund
Fund at a Glance & Portfolio Manager Interview .......................... 197
Financial Highlights .................................................... 200
Schedule of Investments & Financial Statements .......................... 201
Evergreen VA Special Equity Fund
Fund at a Glance & Portfolio Manager Interview .......................... 209
Financial Highlights .................................................... 212
Schedule of Investments & Financial Statements .......................... 213
Evergreen VA Strategic Income Fund
Fund at a Glance & Portfolio Manager Interview .......................... 223
Financial Highlights .................................................... 226
Schedule of Investments & Financial Statements .......................... 227
Combined Notes to Schedules of Investments ................................ 234
Combined Notes to Financial Statements .................................... 235
<PAGE>
Letter to Shareholders
----------------------
August 2000
[PHOTO]
William M. Ennis
President and CEO
Dear Evergreen Shareholders,
We are pleased to provide the Evergreen Variable Annuity Trust semiannual
report, which covers the six-month period ended June 30, 2000.
Interest Rate Uncertainty Influences the Markets
During the past six months, the U.S. markets have experienced significant ups
and down. Technology, communications and biotechnology stocks reigned supreme
during the first half of the period only to undergo a volatile environment
during the latter half of the period. While these sectors experienced sharp
corrections late in the period, they remain favored sectors.
During the six-month period the Federal Reserve Board raised short-term interest
rates three times. One key question for investors is whether the Federal Reserve
Board will be able to negotiate a so-called "soft landing" by increasing
interest rates just enough to cool inflation and promote moderate economic
growth or whether there will be a more destructive outcome, with a recession and
bear market. We continue to lean toward the optimistic view. A pickup in
productivity is what typically allows the U.S. economy to expand without
inflation, accompanied with strong corporate earnings and rising real wages.
Because technology spending remains so strong, we believe that U.S. productivity
will continue to grow rapidly.
Despite the recent volatility and the potential effects of interest rate
increases in the U.S., we believe investors remain generally positive about the
markets and their long-term potential. At Evergreen, we believe these economies
are still fundamentally strong and remain cautiously optimistic about continued
growth in the markets.
Website Enhancements
Please visit our enhanced website, evergreen-funds.com, for more information
about Evergreen Funds. The site offers an array of helpful information including
an investment education center, interactive calculators to assist your
investment planning and general information about Evergreen Funds.
We believe that sound investing is about taking steps to meet your long-term
financial needs and goals. We remind you to take advantage of your financial
advisor's expertise to develop and refine a financial plan that will enable you
to meet your objectives. Evergreen Funds offers a broad mix of stock, bond and
money market funds that should assist you in choosing the most appropriate for
your portfolio.
Thank you for your continued investment in Evergreen Funds.
Sincerely,
/s/ William M. Ennis
William M. Ennis
President and CEO
Evergreen Investment Company, Inc.
1
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Blue Chip Fund
Fund at a Glance as of June 30, 2000
"Our investment philosophy is based on the belief that, over time, earnings
growth is the main determinant of stock price performance."
Portfolio
Management
--------------
[PHOTO]
Judith A Warners
Tenure: April 2000
--------------------------------------------------------------------------------
PERFORMANCE & RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date 4/28/2000
Cumulative Returns
Since Portfolio Inception -0.60%
1Past performance is no guarantee of future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Performance includes the
reinvestment of income dividends and capital gains distributions.
The Fund's investment objective is non-fundamental and may be changed without
the vote of shareholders.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
Performance results are extremely short term, and may not provide an adequate
basis for evaluating a fund's performance potential over varying market
conditions or economic cycles. Unusual investment returns may be a result of a
fund's recent inception, existing market and economic conditions and the
increased potential of a small number of stocks effecting fund performance due
to the smaller asset size. Most mutual funds are intended to be long-term
investments.
All data is as of June 30, 2000 and subject to change
2
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Blue Chip Fund
Portfolio Manager Interview
How did the Fund perform?
The Fund performed very well, but it began investment operations only in April
of this year and we believe investors should take a long-term view and not be
too influenced by short-term results.
Portfolio
Characteristics
---------------
(As of 6/30/2000)
Total Net Assets $5,363,686
Number of Holdings 118
P/E Ratio 36.2x
How do you manage the Fund?
Over the long-term, our goal is to perform better than both the average
large-cap core portfolio fund, as tracked by Lipper Inc., an independent monitor
of mutual fund performance, and the S&P 500 Index.
Our investment philosophy is based on the belief that, over time, earnings
growth is the main determinant of stock price performance.
We model this Fund after the Evergreen Blue Chip Fund, which has built a
successful record investing in leading companies for more than 60 years. In
managing the Fund, our approach is to invest in quality, large- and medium-sized
companies, and have reasonable diversification across industries and sectors. We
use a bottom-up stock-selection method, investing in stocks based upon our
fundamental analysis of the characteristics of each company. This fundamental
analysis considers both quantitative and qualitative factors, but we also look
for a catalyst that can drive the company's stock price. The quantitative
factors may include attractive earnings growth, strong balance sheets and
healthy cash flows, and attractive stock valuations. The qualitative factors
include market leadership positions in growing markets, superior management that
seeks competitive advantages over competitors and that are dedicated to the
financial interests of shareholders. Catalysts for stock price performance may
be an acceleration in earnings growth, an important change in the company or
industry, and important products approaching or in a rapid increase in their
sales volume cycle.
Top 5 Sectors
-------------
(as a percentage of 6/30/2000 net assets)
Information Technology 32.6%
Financials 12.2%
Health Care 10.3%
Energy 9.6%
Consumer Discretionary 9.0%
In what type companies do you invest?
The core of the Fund's portfolio consists of high quality, multi-national
companies that in many cases have become household names because of their strong
industry leadership. They typically include companies such as Microsoft,
Wal-Mart, AOL, Intel, American International Group, Johnson & Johnson, General
Electric, Merck, Medtronics and Tyco International. All these companies were in
the Fund's portfolio on June 30, 2000. These companies, which provide the
nucleus for the Fund, are the true blue chip companies in American industry.
3
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Blue Chip Fund
Portfolio Manager Interview
Around this core we add companies that we believe have the potential to be the
future blue chip leaders. They are growing companies that already possess the
characteristics of high quality companies, but may be in new markets or new
market niches. Two good examples in which the Fund has invested are Siebel
Systems, which produces customer relationship software to facilitate commerce
over the internet; and Millenium Pharmaceuticals, a biotech company involved in
producing therapeutic and diagnostic products for the health care industry.
Top 10 Holdings
---------------
(as a percentage of 6/30/2000 net assets)
General Electric Co. 4.3%
Intel Corp. 3.5%
Cisco Systems, Inc. 3.1%
Microsoft Corp. 3.1%
Exxon Mobil Corp. 2.6%
Viacom, Inc., Class B 1.8%
Citigroup, Inc. 1.7%
Wal-Mart Stores, Inc. 1.7%
International Business Machines Corp. 1.6%
American International Group, Inc. 1.5%
How was the Fund's portfolio structured as of June 30, 2000?
The largest sector weightings were: technology, at 32.6% of net assets;
financials, 12.2% of net assets; health care, 10.3% of net assets; and energy,
at 9.6% of net assets.
Our largest positions included: Microsoft, the world's leading software company
whose stock price, we believe became more attractive because of the impact of
the government's anti-trust case; Wal-Mart, the nation's leading retailing
company that now is diversifying into Europe and Latin America; Exxon, the
world's largest energy company following its merger with Mobil Oil; Cisco
Systems, the technology giant that provides the backbone for the internet as
well as computer networks throughout the world.
Each of these companies is a high-quality, multinational blue chip corporation
with excellent records of improving their earnings growth rates.
What is your outlook?
We believe the Federal Reserve Board may be successful in slowing the rate of
economic growth by tightening the money supply through increases in short-term
interest rates. We have seen some signs that the rate of economic expansion may
be slowing, although we would not rule out some further increases in short-term
rates by the Federal Reserve Board. We expect the stock markets to continue to
be choppy, with short-term movements both pushing stock prices up and pulling
them down. Moreover, uncertainty about the upcoming elections as well as recent
rallies in major stock market indices could indicate that the markets could
suffer further corrections.
In this environment, we expect to increase our weightings in those sectors with
positive earnings potential, including health care, technology, communications
equipment, internet infrastructure and software. We plan to trim back our
positions in successful investments that have advanced to relatively high stock
prices, and we will re-evaluate any holdings that have raised questions because
of factors such as disappointing earnings.
4
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Capital Growth Fund
Fund at a Glance as of June 30, 2000
"We employed the Fund's ongoing strategy of investing in large, fundamentally
stable companies with reasonable stock valuations, and it held up well."
Portfolio Management
--------------------
[PHOTO] [PHOTO]
John Davenport, Richard
CFA Skeppstrom
Tenure: March 1998 Tenure: March 1998
[PHOTO] [PHOTO]
Steve Certo Craig Dauer
Tenure: March 1998 Tenure: March 1998
[PHOTO]
Jay Jordan, CFA
Tenure: March 1998
--------------------------------------------------------------------------------
PERFORMANCE & RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date: 3/3/1998
Average Annual Returns
6-month 4.30%
1 year 1.50%
Since Portfolio Inception 8.41%
6-month income dividends per share $0.01
6-month capital gain distributions per share $0.45
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
VA Capital Growth Fund Consumer Price Index - US S & P 500 Composite Total Return Russell 1000 Value
---------------------- ------------------------- -------------------------------- ------------------
<S> <C> <C> <C> <C>
3/3/98 10,000 10,000 10,000 10,000
06/30/98 10,200 10,068 10,859 10,659
12/31/98 10,864 10,124 11,861 10,989
06/30/99 11,888 10,266 13,332 12,404
12/31/99 11,570 10,395 14,359 11,797
06/30/00 12,066 10,582 14,298 11,298
</TABLE>
Comparison of a $10,000 investment in Evergreen VA Capital Growth Fund 1 versus
a similar investment in the Standard & Poor's 500 Index (S&P 500), the Russell
1000 Value, and the Consumer Price Index (CPI).
The S&P 500 and the Russell 1000 Value are unmanaged market indices which do not
include transaction costs associated with buying and selling securities or any
mutual fund expenses. The CPI is a commonly used measure of inflation and does
not represent an investment return. It is not possible to invest directly in an
index.
1Past performance is no guarantee of future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Performance includes the
reinvestment of income dividends and capital gains distributions.
The Fund's investment objective is non-fundamental and may be changed without
the vote of shareholders.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
All data is as of June 30, 2000 and subject to change.
14
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Capital Growth Fund
Portfolio Manager Interview
How did the Fund perform?
Evergreen VA Capital Growth Fund returned 4.30% for the six-month period ended
June 30, 2000, surpassing its benchmark, the S&P 500 Index, which returned
-0.42% for the same period. For the same period, the Russell 1000 Value Index
returned -4.23%. We attribute the strong relative performance to the Fund's
conservative investment philosophy, its bias toward quality and lower exposure
to the technology sector particularly during March 2000 through May 2000 when
the technology sector experienced a sharp correction.
Portfolio
Characteristics
---------------
(As of 6/30/2000)
Total Net Assets $29,951,035
Number of Holdings 39
P/E Ratio 28.0x
What was the investment environment like for the period?
The stock market was filled with emotion and volatility in the first half of
2000. As the year opened, investor speculation that began in 1999 sent stock
prices soaring and many valuations to unprecedented levels. The ensuing "wealth
effect" of the stock market's rise had fueled both unsustainably strong economic
growth and concerns about future inflation. Interest rates were rising; and
investors believed the Federal Reserve Board--which began pushing interest rates
higher in June 1999--would continue the trend until inflationary pressures were
sufficiently cooled.
The roller coaster ride intensified, mid-way through the Fund's fiscal period.
Concerns that higher interest rates and slower economic growth would dampen
corporate earnings replaced the euphoria that had driven valuations to elevated
levels. Investors began to unwind many speculative trades, causing some stock
prices to plummet. Technology issues, in particular, corrected sharply. As the
period closed, market sentiment had once again reversed course. Signs of slower
economic growth caused investors to be optimistic that the Fed might end its
string of interest rate hikes and adopt a more neutral monetary policy. With new
and growing confidence, the market regained an emotionally charged, highly
speculative nature; and technology stocks--with their continued high
valuations--resumed market leadership.
Top 5 Sectors
-------------
(as a percentage of 6/30/2000 net assets)
Industrials 26.6%
Consumer Staples 15.2%
Health Care 13.9%
Financials 13.1%
Information Technology 10.8%
How did this environment affect the Fund's investment strategies?
We employed the Fund's ongoing strategy of investing in large, fundamentally
stable companies with reasonable stock valuations, and it held up well. Several
companies, in particular, turned in impressive performances. Tyco International,
the Fund's largest position, climbed 22% during the period. The stock rebounded
from a slump in the fourth quarter of 1999, which stemmed from an acquisition
accounting
15
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Capital Growth Fund
Portfolio Manager Interview
controversy. Tyco, itself, requested that the Securities and Exchange Commission
(SEC) look into the matter, and the SEC cleared the company of using any
marginal practices. Another holding, Intel Corporation, rose 62% since the
beginning of the year. Intel, which was the Fund's only significant position in
the so-called high-flying stocks, was one of the market's best-performing larger
technology stocks. Further, it carried a reasonable valuation. When other
technology stocks were trading at 100 times earnings, Intel was valued at
approximately 30 times earnings.
We believed it was a high quality company with strong growth prospects. The
health care sector also contributed to the Fund's performance. On the flipside,
the Fund was slightly over-weighted in the financial sector, which detracted
from performance. Other holdings, such as Masco Corporation and Illinois Tool
Works, also limited returns.
Top 10 Holdings
---------------
(as a percentage of 6/30/2000 net assets)
Tyco International Ltd. 5.3%
First Data Corp. 4.5%
SYSCO Corp. 4.5%
Automatic Data Processing, Inc. 4.3%
Philip Morris Co., Inc. 4.2%
Intel Corp. 4.2%
Tenet Healthcare Corp. 4.1%
WorldCom, Inc. 3.6%
Kimberly-Clarke Corp. 3.3%
Sherwin Williams Co. 3.2%
What is your outlook?
We think the environment will be similar to that of the last six months, a lot
of volatility with little net change. In our opinion, the Federal Reserve Board
is in a "catch-22" position. Clearly, the economy's growth is directly tied to
the level of the stock market. We expect stocks to move higher again when
investors are convinced the Federal Reserve Board is done raising rates.
However, if stocks surge, the Federal Reserve Board will be forced to tighten
policy further, which could bring prices down.
Also, investors are anticipating the annual earnings of S&P 500 companies to
continue to grow in the 15% to 20% range like they have during the past several
quarters. Expectations are exceptionally high for technology companies. We think
these expectations are too aggressive and believe earnings could come in lower,
especially if the economy slows. That leaves considerable downside risk for some
stocks, since many valuations still range from 80 to 100 times earnings. In our
opinion, the situation underscores the importance of selecting companies with
sound financial fundamentals and reasonable valuations--we think the Fund's more
conservative investment strategy will continue to serve its investors well.
16
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Fund at a Glance as of June 30, 2000
"We believe the Fund is an attractive opportunity for investors because it is
fully diversified and captures all sectors of the economy."
Portfolio
Management
----------
William E. Zieff
Tenure: May 2000
--------------------------------------------------------------------------------
PERFORMANCE & RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date: 9/29/1999
Cumulative Returns
6-month -0.44%
Since Portfolio Inception 14.97%
6-month capital gain distributions per share $0.03
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
VA Equity Index Fund Consumer Price Index - US S&P 500 Composite Total Return
<S> <C> <C> <C>
09/29/99 10,000 10,000 10,000
10/30/99 10,100 10,018 10,633
11/30/99 10,911 10,024 10,849
12/31/99 11,547 10,024 11,488
01/31/00 10,963 10,048 10,911
02/29/00 10,763 10,107 10,704
03/31/00 11,799 10,191 11,751
04/30/00 11,456 10,197 11,398
05/31/00 11,224 10,203 11,164
06/30/00 11,497 10,204 11,439
</TABLE>
Comparison of a $10,000 investment in Evergreen VA Equity Index Fund1 versus a
similar investment in the Standard & Poor's 500 Index (S&P 500) and the Consumer
Price Index (CPI).
The S&P 500 is an unmanaged market index which does not include transaction
costs associated with buying and selling securities or any mutual fund expenses.
The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in an index.
1 Past performance is no guarantee of future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Performance includes the
reinvestment of income dividends and capital gains distributions.
The Fund's investment objective is non-fundamental and may be changed without
the vote of shareholders.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
Performance results are extremely short-term, and may not provide an adequate
basis for evaluating a fund's performance potential over varying market
conditions or economic cycles. Unusual investment returns may be a result of a
fund's recent inception, existing market and economic conditions and the
increased potential of a small number of stocks effecting fund performance due
to the smaller asset size. Most mutual funds are intended to be long-term
investments.
All data is as of June 30, 2000 and subject to change.
24
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Portfolio Manager Interview
How did the Fund perform?
For the six-month period ended June 30, 2000, the Evergreen VA Equity Index Fund
had a return of -0.44%. The Fund tracked the return of its benchmark, the S&P
500, which returned -0.42% for the same period.
The Fund seeks to achieve price and yield performance that closely aligns with
the S&P 500. We use a stratified sampling technique to replicate industry
positions versus the benchmark, and to minimize the variation in returns between
the Fund and the Index. We have improved trading execution, which has enhanced
the Fund's returns. This has been especially critical in the first six months of
2000, given the large amount of additions and deletions to the S&P 500. We
emphasized completing those actions in the most timely and cost effective
manner. Close risk-monitoring has also aided performance. The Fund is fully
invested at all times, and we rebalance the Fund daily to ensure consistency
with the S&P 500 Index.
Portfolio
Characteristics
---------------
(As of 6/30/2000)
Total Net Assets $28,323,502
Number of Holdings 500
P/E Ratio 34.6x
What was the investment environment like during the period?
The U.S. equity market exhibited extreme price volatility as the speculative
excesses that built up in the last quarters of 1999 and early 2000 unwound. That
volatility had a major impact on the S&P 500. In the first six months of 2000,
the S&P 500 had intra-day swings of more than 1% on 95% of its trading days. On
more than 60% of its trading days, those intra-day swings exceeded 2%.
Merger and acquisition activity also had a significant impact on the S&P 500,
and thus on the Fund. Over the past six months, 25 new companies were added to
the S&P 500. These stocks were also added to the Fund's portfolio. Many of those
firms fell within the technology and telecommunications sectors, such as Yahoo!,
Broadcom Corp., VERITAS Software, and QUALCOMM. As a result, the S&P 500 has
shifted to focus on so-called "New Economy" stocks, a shift mirrored in the
Fund's portfolio.
Top 5 Sectors
-------------
(as a percentage of 6/30/2000 net assets)
Information Technology 29.7%
Financials 12.1%
Health Care 11.1%
Consumer Discretionary 10.3%
Industrials 8.7%
25
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Portfolio Manager Interview
Top 10 Holdings
---------------
(as a percentage of 6/30/2000 net assets)
General Electric Co. 3.9%
Intel Corp. 3.3%
Cisco Systems, Inc. 3.3%
Microsoft Corp. 3.1%
Pfizer, Inc. 2.2%
Exxon Mobil Corp. 2.0%
Wal-Mart Stores, Inc. 1.9%
Oracle Systems Corp. 1.8%
Citigroup, Inc. 1.5%
Nortel Networks Corp. 1.5%
What is your outlook?
Recent economic data suggest that Gross Domestic Product growth may finally be
cooling. In addition, uncertainty about inflation and interest rates seems to be
tempering. We believe that tighter monetary policy and a less exuberant equity
market will produce a soft landing by 2001. The outlook for equities will be
somewhat contingent on the Federal Reserve Board's engineering a soft landing
for the economy. Overall, we expect earnings to remain strong and supportive of
stocks. We believe that merger and acquisition activity will continue to be
strong, but may slow from the torrid pace of the last few years and return to
more historical levels. However, we expect volatility to continue to increase.
Despite that, we remain optimistic on the longer-term outlook for the equity
market. We believe the recent market correction has reduced market speculation
and moderated the excessive valuations prevailing at the end of March, setting
the stage for a broader and more sustainable market advance.
We believe the Fund is an attractive opportunity for investors because it is
fully diversified and captures all sectors of the economy.
26
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Fund
Fund at a Glance as of June 30, 2000
"We remained consistent in our largest holdings, all of which were large-cap,
global industry leaders with strong records of revenue and earnings."
Portfolio
Management
----------
[PHOTO]
Jean C. Ledford, CFA
Tenure: August 1999
[PHOTO]
Richard S. Welsh
Tenure: August 1999
--------------------------------------------------------------------------------
PERFORMANCE & RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date: 3/1/1996
Average Annual Returns
6-month -2.73%
1 year 5.58%
3 year 14.04%
Since Portfolio Inception 17.45%
6-month capital gain distributions per share $0.29
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
VA Evergreen Fund Consumer Price Index - US S&P 500 Composite Total Return Russell 2000
<S> <C> <C> <C> <C>
3/1/96 10,000 10,000 10,000 10,000
06/30/96 10,590 10,116 10,549 10,714
12/31/96 11,486 10,239 11,782 11,309
06/30/97 13,528 10,349 14,209 12,463
12/31/97 15,753 10,413 15,712 13,839
06/30/98 17,158 10,523 18,495 14,521
12/31/98 16,769 10,581 20,202 13,486
06/30/99 19,007 10,730 22,707 14,738
12/31/99 20,631 10,865 24,455 16,353
06/30/00 20,067 11,060 24,351 16,849
</TABLE>
Comparison of a $10,000 investment in Evergreen VA Fund1 versus a similar
investment in the Standard & Poor's 500 Index (S&P 500), the Russell 2000 Index
(Russell 2000), and the Consumer Price Index (CPI).
The S&P 500 and the Russell 2000 are unmanaged market indices which do not
include transaction costs associated with buying and selling securities or any
mutual fund expenses. The CPI is a commonly used measure of inflation and does
not represent an investment return. It is not possible to invest directly in an
index.
1 Past performance is no guarantee of future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Performance includes the
reinvestment of income dividends and capital gains distributions.
The Fund's investment objective is non-fundamental and may be changed without
the vote of shareholders.
All data is as of June 30, 2000 and subject to change.
47
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Fund
Portfolio Manager Interview
How did the Fund perform?
Evergreen VA Fund returned -2.73% for the six-month period ended June 30, 2000.
During the same period, the benchmark S&P 500 returned -0.42%. The Russell 2000
returned 3.04% for the same period.
Portfolio
Characteristics
---------------
(As of 6/30/2000)
Total Net Assets $73,298,317
Number of Holdings 113
What factors most influenced performance during the six-month period?
The sectors that helped us the most were technology, health care and energy. In
technology, where we had a slight over-weighting relative to the S&P 500, we
continued to take advantage of increased spending on infrastructure development.
Our larger technology holdings, global leaders in technology infrastructure
development, all were major contributors to performance. At the end of the
fiscal period on June 30, 2000, our investments in the information technology
industry totaled 27.6% of net assets.
The Fund's weighting in health care was about even with that of the benchmark
S&P 500. At the end of the period, health care accounted for 13.1% of net
assets. Our health care investments did very well. One of our top contributors
was Pfizer, the result of the merger of two powerful pharmaceutical companies,
Pfizer and Warner Lambert. This combined company is benefiting both from strong
revenue growth and an excellent flow of new products into the market.
We substantially increased our investments in energy during the six-month
period, and these holdings were strong contributors to performance. This sector
benefited from increasing economic growth rates throughout the world and rising
oil prices. Our investments in oil service companies such as Schlumberger,
Halliburton and Baker Hughes all performed well, as did Exxon Mobil, the world's
largest integrated energy company and a top holding of the Fund throughout the
period. During the six-month period, our emphasis on energy went from an
under-weighted position to a significant over-weighted position relative to the
S&P 500. On June 30, energy accounted for 9.6% of net assets.
Performance was held back, however, by our emphasis on other cyclical
industries, such as capital goods and basic materials. Despite strong global
economic expansion, these stocks did not perform well, even with accelerating
revenue and earnings growth.
Top 5 Sectors
-------------
(as a percentage of 6/30/2000 net assets)
Information Technology 27.6%
Health Care 13.1%
Consumer Discretionary 10.3%
Industrials 9.8%
Energy 9.6%
What were your principal strategies during the period?
We remained consistent in our largest holdings, all of which were large-cap,
global industry leaders with strong records of revenue and earnings.
48
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Fund
Portfolio Manager Interview
In our stock-selection process, we look for market sectors where earnings and
revenue growth rates are improving. We tend to emphasize established large-cap
companies with good earnings records, strong managements, and catalysts--such as
new product introductions or changes in market opportunities--that give them new
growth opportunities. As we entered the period, we were witnessing strong
economic growth in the United States and accelerating growth throughout the
world. This led us to over-weight those areas with the greatest growth from this
economic expansion, including technology, energy, capital goods and basic
materials. While we had a positive outlook on all these industries, the stock
market did not have confidence in the sustainability of the growth rates in
capital goods and basic materials.
In technology, we had our greatest concentrations in global leaders,
particularly infrastructure stocks providing the backbones for the internet,
networking and communications systems. Major holdings that did well included
Nortel Networks, Intel, and Oracle.
Top 10 Holdings
---------------
(as a percentage of 6/30/2000 net assets)
General Electric Co. 5.6%
Intel Corp. 4.8%
Cisco Systems, Inc. 3.5%
Exxon Mobil Corp. 3.0%
Pfizer, Inc. 3.0%
Nortel Networks Corp. 2.6%
Wal-Mart Stores, Inc. 2.3%
Johnson & Johnson 2.2%
American International Group, Inc. 1.9%
Sun Microsystems, Inc. 1.9%
What is your outlook?
We expect a continuation of the more recent trends that have favored the
technology, health care and energy industries. Each of these areas has surpassed
even the most optimistic forecasts of a year ago, as they have shown remarkable
resilience in their earnings as the U.S. economy has shown continued strength
and the foreign markets have accelerated in growth.
In the second half of the year, market opportunities will depend upon corporate
profitability and the level of interest rates. We believe we are experiencing a
long-term, secular increase in economic productivity, corporate profitability
and improving returns on financial assets. Investments in companies with
sustainable underlying earnings and revenue growth should continue to be
rewarded.
49
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Fund at a Glance as of June 30, 2000
"In our stock-selection process, we look for market sectors where earnings and
revenue growth rates are improving."
Portfolio
Management
----------
[PHOTO]
Jean C. Ledford, CFA
Tenure: August 1999
[PHOTO]
Richard S. Welsh, CFA
Tenure: August 1999
--------------------------------------------------------------------------------
PERFORMANCE & RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date: 3/1/1996
Average Annual Returns
6-month -0.99%
1 year 4.08%
Since Portfolio Inception 14.32%
6-month capital gain distributions per share $0.09
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
VA Foundation Fund Consumer Price Index - US S & P 500 Composite Total Return Lehman Brothers Govt/Corp
<S> <C> <C> <C> <C>
3/1/96 10,000 10,000 10,000 10,000
06/30/96 10,071 10,116 10,549 9,963
12/31/96 11,527 10,239 11,782 10,448
06/30/97 13,056 10,349 14,209 10,734
12/31/97 14,732 10,413 15,712 11,468
06/30/98 15,756 10,523 18,495 11,939
12/31/98 16,299 10,581 20,202 12,556
06/30/99 17,155 10,730 22,707 12,271
12/31/99 18,033 10,865 24,455 12,284
06/30/00 17,855 11,060 24,351 12,796
</TABLE>
Comparison of a $10,000 investment in Evergreen VA Foundation Fund1 versus a
similar investment in the Standard & Poor's 500 Index (S&P 500), the Lehman
Brothers Government/Corporate Bond Index (LBGCBI) and the Consumer Price Index
(CPI).
The S&P 500 and the LBGCBI are unmanaged market indices which do not include
transaction costs associated with buying and selling securities or any mutual
fund expenses. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
1 Past performance is no guarantee of future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Performance includes the
reinvestment of income dividends and capital gains distributions.
The Fund's investment objective is non-fundamental and may be changed without
the vote of shareholders.
U.S. government guarantee apply only to the underlying securities of the Fund's
portfolio and not to the Fund's shares.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations. Risks of international investing are magnified in
emerging or developing markets.
All data is as of June 30, 2000 and subject to change.
59
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Portfolio Manager Interview
How did the Fund perform?
Evergreen Foundation Fund had a total return of -0.99% for the six-month period
ended June 30, 2000. For the same period, the S&P 500, returned -0.42% and the
Lehman Brothers Government/Corporate Bond Index returned 4.18%.
Portfolio
Characteristics
-----------------
(As of 6/30/2000)
Total Net Assets $176,320,583
Number of Holdings 125
P/E Ratio 39.0x
What were the factors that most influenced performance?
In the equity portion of the portfolio, holdings in technology, health care and
energy were the largest positive contributors. In technology, where we had a
slight over-weighting relative to the S&P 500, we continued to take advantage of
increased spending on infrastructure development. Many of our larger technology
holdings are global leaders in these areas, and were major contributors to
performance.
The Fund's equity weighting in health care was about even with that of the
benchmark S&P 500. Our health care investments did very well. One of our top
contributors was Pfizer, the result of the merger of two powerful pharmaceutical
companies, Warner Lambert and Pfizer. This combined company is benefiting both
from strong revenue and earnings growth from an excellent flow of new products
into the market. The Fund's health care weighting at the end of the fiscal
period totaled 9.0% of net assets. We substantially increased our investments in
energy during the six-month period, and these holdings were strong contributors
to performance. This sector benefited from increasing economic growth rates
throughout the world and rising oil prices. Our investments in oil service
companies such as Schlumberger, Halliburton and Baker Hughes all performed well,
as did Exxon Mobil, the world's largest integrated energy company and a top
holding of the Fund throughout the period. During the six-month period, our
emphasis on energy went from an under-weighted position to a significant over-
weighted position relative to the S&P 500. On June 30, 2000 energy accounted for
6.8% of total net assets.
Lastly, the fixed income portion of the portfolio tended to increase the
stability of the overall fund, as we concentrated on those areas of the market
where we could find relatively attractive yields without taking undue price
risk.
Top 5 Sectors
-------------
(as a percentage of 6/30/2000 net assets)
Information Services & Technology 19.3%
Health Care 9.0%
Consumer Discretionary 7.7%
Industrials 6.9%
Energy 6.8%
What were your principal strategies during the six-month period?
We remained consistent in our asset allocation, with between 70% and 75% of
assets in equities and between 25% and 30% of Fund assets in fixed income.
Within the fixed income portion of the portfolio, we concentrated on the high
quality portion of the spectrum, emphasizing Treasury securities and AAA-rated
corporate bonds from blue chip, industry leaders. In a period of volatility in
the fixed income markets,
60
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Portfolio Manager Interview
we tended to invest in bonds where attractive yields compensated for price
fluctuations, such as 10-year Treasuries. Duration, or the portfolio's
sensitivity to changes in interest rates, remained fairly consistent at about 6
years.
Among the major positions in the equity portfolio, we also remained consistent,
with few changes in our top 10 positions, which tended to be established,
large-cap industry leaders.
In our stock-selection process, we look for market sectors where earnings and
revenue growth rates are improving. We tend to emphasize larger companies with
good earnings records, strong managements, and catalysts--such as new product
introductions or changes in market opportunities--that give them new growth
opportunities. As we entered the period, we were witnessing strong economic
growth in the United States and accelerating growth throughout the world. This
led us to over-weight those areas with the greatest growth from this economic
expansion, including technology, energy, capital goods and basic materials.
While we had a positive outlook on all these industries, the stock market didn't
have confidence in the sustainability of the growth rates in capital goods and
basic materials.
In technology, we had our greatest concentrations in global leaders,
particularly infrastructure stocks providing the backbones for the internet,
networking and communications systems. Major holdings that did well included
Nortel Networks, Intel, and Oracle.
Top 10 Holdings
---------------
(as a percentage of 6/30/2000 net assets)
General Electric Co. 3.9%
Intel Corp. 3.4%
Cisco Systems, Inc. 2.4%
Exxon Mobil Corp. 2.1%
Pfizer, Inc. 2.1%
Nortel Networks Corp. 1.8%
Wal-Mart Stores, Inc. 1.7%
Johnson & Johnson 1.6%
Sun Microsystems, Inc. 1.3%
Time Warner, Inc. 1.3%
What is your outlook?
We intend to remain consistent in our approach to managing this balanced fund.
In the equity portion of the portfolio, we plan to concentrate on large-cap
companies with growth, or the potential for growth, in both revenues and
earnings. In the fixed income portion of the portfolio, we intend to maintain an
emphasis on capital preservation and income through high quality investments.
We expect a continuation of the more recent trends that have favored the
technology, health care and energy industries. Each of these areas has surpassed
even the most optimistic forecasts of a year ago, as they have shown remarkable
resilience in their earnings as the U.S. economy has shown continued strength
and the foreign markets have accelerated in growth.
In the second half of the year, market opportunities will depend upon corporate
profitability and the level of interest rates. We believe we are experiencing a
long-term, secular increase in economic productivity, corporate profitability
and improving returns on financial assets. Investments in companies with
sustainable underlying earnings and revenue growth should continue to be
rewarded.
61
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Fund at a Glance as of June 30, 2000
"We will continue to rely on an investment approach that emphasizes disciplined
stock selection, fundamental analysis and prudent country allocation."
Portfolio Management
--------------------
Anthony Han
Tenure: March 2000
Edward D. Miska
Tenure: March 1997
--------------------------------------------------------------------------------
PERFORMANCE & RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date: 3/6/1997
Average Annual Returns
6-month -5.49%
1 year 8.80%
Since Portfolio Inception 13.56%
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
VA Global Leaders Fund Consumer Price Index - US MSCI World Equity Index
<S> <C> <C> <C>
03/06/97 10,000 10,000 10,000
06/30/97 11,019 10,044 11,291
12/31/97 10,880 10,107 11,350
06/30/98 12,382 10,213 13,263
12/31/98 12,936 10,269 14,164
06/30/99 14,014 10,414 15,395
12/31/99 16,134 10,545 17,753
06/30/00 15,250 10,734 17,325
</TABLE>
Comparison of a $10,000 investment in Evergreen VA Global Leaders Fund(1) versus
a similar investment in the Morgan Stanley Capital International World Index
(MSCI World) and the Consumer Price Index (CPI).
The MSCI World is an unmanaged market index which does not include transaction
costs associated with buying and selling securities or any mutual fund expenses.
The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in an index.
1Past performance is no guarantee of future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than original cost. Performance includes the reinvestment
of income dividends and capital gains distributions.
The Fund's investment objective is non-fundamental and may be changed without
the vote of shareholders.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations. Risks of international investing are magnified in
emerging or developing markets.
All data is as of June 30, 2000 and subject to change.
72
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Portfolio Manager Interview
How did the Fund perform?
For the six-month period ended June 30, 2000, the Evergreen VA Global Leaders
Fund had a total return of -5.49%. During the same six-month period, the Morgan
Stanley Capital International World Index, a common benchmark for global stock
investing, returned -2.56%.
Portfolio
Characteristics
---------------
(As of 6/30/2000)
Total Net Assets $34,498,934
Number of Holdings 97
What was the investment environment like during the six-month period?
The Fund's returns were realized during an unusual time in the world's equity
markets--characterized by extreme volatility, leading to wild swings both over
weeks and months and even within inter-day trading. As 1999 ended, stock markets
throughout the world had rallied on strong synchronized global expansion and the
abatement of Year 2000 computer concerns. While the large-cap, industry-leading
companies in which the Fund invests participated in this rally, they did not
benefit as strongly as did smaller-cap, internet-related technology stocks or
emerging markets companies.
A more speculative period emerged during the first two months of the new year.
Global stock investing was difficult, as local influences were overwhelmed by
daily events and reactions to the momentum of the U.S. market. During this
period, positive performance tended to be focused narrowly in the new economy
"TMT stocks" of the technology, media and telecommunications industries. Broadly
diversified strategies such as the Fund's were not rewarded. This speculative
run climaxed in late February, to be followed by a steep and swift sell-off in
the TMT sectors. Money was rotated aggressively out of these areas and back into
so-called "old economy" names.
March 2000 was positive for the Fund, marking a return towards fundamental
investing principles. Market leadership began to broaden again to include
companies that were able to show strong earnings growth, regardless of the
industry in which they were achieved. Investor fascination waned with internet,
technology and biotech stocks, many of which had no record of earnings and no
prospects for any. The Fund regained momentum during this period, and performed
well relative to the overall markets.
The second calendar quarter was characterized by great volatility early,
followed by sharp declines in the world's equity markets and a moderate recovery
during June to current levels. The environment was punctuated by repeated
interventions by the Federal Reserve Board, which raised interest rates to snuff
out any re-emergence of inflationary pressures and slow down the rapid rate of
growth. Investors lost their focus on equities, and became enamored with the
effects of rising interest rates on stock prices and corporate profitability.
The quarter produced lackluster results from stocks, as market leadership was
directionless, ebbing from the technology sector towards more defensive oriented
industries. However, economic evidence late in the quarter indicated a slowing
economy or "soft landing" may be at hand, setting the stage for a potential
rally once second quarter earnings were announced.
73
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Portfolio Manager Interview
Top 5 Sectors
-------------
(as a percentage of 6/30/2000 net assets)
Consumer Discretionary 20.0%
Information Technology 18.5%
Financials 16.4%
Industrials 12.2%
Health Care 9.6%
What were your principal strategies?
We kept our country allocations relatively consistent, with slightly less than
half of net assets invested in the U.S. Investments in the United Kingdom
increased somewhat, from about 7.5% on December 31, 1999 to about 10% on June
30, 2000. At the same time, investments in Japan decreased from about 8.5% to
about 6.5%. We maintained our level of diversification with 18 countries
represented in the Fund.
In the U.S., we maintained positions in high-quality, globally-oriented
companies that had risen to industry leadership in many different areas. These
included companies such as Cisco Systems, General Electric, Intel, Microsoft,
Citigroup, and Wal-Mart. We also added several companies, including technology
company Sun Microsystems, Inc., financial services giant American Express Corp.,
brewer Anheuser-Busch Cos. and global telecommunications service provider Bell
Atlantic. The extreme volatility during the period provided a unique opportunity
to add these distinguished companies to our portfolio. We took advantage of
price declines that we believe were unrelated to these companies' strong
fundamentals. On the sell side, we sold or reduced our positions in names that
either had largely disappointed or that showed signs of having near-term
weakening outlooks.
They included SLM Holding, Inc., Carnival Corp., Maytag Corp. and Marriott
International Corp. We also took advantage of extreme valuations given to our
select holdings within technology, and took profits with partial sales of Cisco
Systems, Intel, Microsoft and Oracle Corp.
In the United Kingdom, we added several new names, including Royal Bank of
Scotland, which we believe is poised to become a leading global financial
services company following its acquisition of Natwest. We also invested in two
companies benefiting from the growth in technology: Sema Group, Europe's second
largest technology services company, and Spirent, a leading technology component
manufacturer. We also added shares of Airtours, Plc. a leading global player in
the tourism and travel agent industry. Shares of industrial companies Laporte
Plc, Williams Plc, Morgan Crucible and High Street retailer Next Plc were sold.
Within Continental Europe, the Fund made several changes, particularly in
Germany. The Fund's longtime holdings in utility giants RWE and VEW were sold as
mounting competitive pressures from falling electricity rates took their toll on
the ability of these companies to generate continued strong profit growth. The
Fund replaced them with fast growing firms, DePfa Bank, a leader in alternative
financing for public sector and infrastructure projects, and MLP Ag, a growing
leader in diversified financial services tapping into the growing European
savings markets. A further play on that theme, BIPOP-Carire, of Italy was also
added to the portfolio. The addition of Finnish company Tieto-enator OYJ, a
leader in the Nordic region for information technology and consulting services
and Swedish telecom giant LM Ericcson rounded out the Fund's new purchases.
74
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Portfolio Manager Interview
The reduced weighting in Japan came primarily from our decision to cut our
position in Seven-Eleven Japan Co., a long-time holding that had grown to become
the Fund's largest position. Seven-Eleven's stock rose sharply during the early
months of the period under review after the company announced it was forming an
alliance with a leading internet retailer, under which Seven-Eleven store
locations would also become distribution points for the retailer's products sold
over the internet. In addition, Seven-Eleven announced it was considering
installing ATM machines in its network of stores. As a result of the company's
strong performance, we took profits by reducing the Fund's position by about
half. We also realized profits in partial sales of the shares of Nintendo, as
competitive pressures from Sony's new platform, Playstation 2 and Microsoft's
intention to enter the field may weigh negatively on Nintendo's future profit
picture. At the same time, we did invest in another Japanese firm, NTT Docomo,
the country's leading mobile phone company, that is poised for global expansion.
How did the specific investment decisions affect performance?
Cisco Systems, the Fund's largest position, was up 19%, while Oracle Systems
rose by 51.6% and Intel by 63.4%. Microsoft's stock did not perform as well,
declining by 31% as investors worried about uncertainties created by the
government's anti-trust case. Other domestic companies that performed well
included Avon Products, Inc., +35.1%, Walt Disney Co. which rose by 32.6%, and
Charles Schwab & Co., which was up 31.6%. Poor performers were primarily related
to our retail investments, as interest rate fears dominated: Home Depot, Black &
Decker, Wal-Mart, TJX Cos and GAP, Inc. all underperformed. Shares of Honeywell
and Computer Associates declined on earnings warnings late in the quarter.
The foreign portion of the portfolio had a return of -7.70%, with adverse
currency movements detracting from results by approximately 3%. Among the
leading reasons contributing to the Fund's returns was the performance of
Seven-Eleven Japan, which has risen 300% during 1999, but had corrected by 47.0%
during the last six months. Overall, investments in euro-denominated countries,
including France, Belgium, Italy and the Netherlands, tended to lag, primarily
because of currency. Our Asian Pacific allocations performed poorly as well, as
our small positions in Malaysia and Hong Kong underperformed.
Positive performance among foreign holdings was led by Bombardier Inc., a
Canadian manufacturer, which rose by 32% during the six months on strong
continued profit growth from aerospace. Consumer growth names such as Luxottica
Spa, the Italian leader in eyeglasses, rose 39.0% and Numico, a Dutch leader in
baby food and nutritional supplements, had a 29% return. German apparel maker
Hugo Boss posted a rise of 30.8% on the introduction of new women's line of
clothing. Energy-related names IHC Caland and Societe Technip rounded out the
top performers, up 34% and 19%, respectively.
Top 10 Holdings
---------------
(as a percentage of 6/30/2000 net assets)
Cisco Systems, Inc. 3.0%
Nokia Corp., ADR 2.5%
Seven-Eleven Japan Co. Ltd. 2.4%
General Electric Co. 2.4%
Bombardier, Inc., Class B 2.4%
Intel Corp 2.3%
Citigroup, Inc. 2.1%
Oracle Systems Corp. 1.9%
Microsoft Corp. 1.9%
Wal-Mart Stores, Inc. 1.8%
75
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Portfolio Manager Interview
What is your outlook for global investing?
We have a positive outlook and believe that we have opportunities to achieve
strong performance by investing in industry-leading companies that should be
able to continue to increase their earnings.
Despite the incredible challenges of the past six months, we believe that we are
well positioned from a company-specific, industry and geographic allocation to
benefit in the coming months. We believe four key factors will affect the
investment environment:
First, continued strength in demand for technology, including information
services and hardware. In much of the world, the build-outs of the internet and
of traditional and wireless telecommunications networks lag the United States.
We expect countries and corporations will continue to invest in upgrading
networks and expanding communications systems, creating demand for hardware,
software and integration related consulting services.
Secondly, we believe that growth in the U.S. should continue, albeit at a
slower, more sustainable pace. We believe the Federal Reserve Board will succeed
in slowing growth and avoiding an increase in inflation. If successful, the
Federal Reserve Board's policies should lengthen the record period of prosperity
in the U.S., which has a major impact on markets throughout the world.
Thirdly, we believe that the environment in Europe should improve, helped by
accelerating economic growth and the dividends of corporate restructuring, which
has made many leading European companies more efficient competitors. As the U.S.
economy begins to decelerate, growth in Europe should pick up. An increase in
economic growth in Europe also would help support the value of the euro on world
currency markets. Lastly, the economies in Asia, including Japan, should
continue their slow recovery from the financial crisis of 1998. Japan, the
region's leading economy, finally has begun to embrace economic reforms,
although not at the pace or with the vigor that economists outside Japan would
like.
We believe the Fund is appropriately positioned to harness the changes underway
in the world. We will continue to rely on an investment approach that emphasizes
disciplined stock selection, fundamental analysis and prudent country
allocation. We plan to invest opportunistically and selectively in companies
with records of consistent earnings leadership that have demonstrated their
ability to grow as the economic environment changes and that are proactive in
addressing shareholder's interests. We look forward to updating you on the
Fund's continued progress.
76
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth Fund
Fund at a Glance as of June 30, 2000
"We are watching the financial sector closely. Financial stocks have been
significantly out of favor,and the Fund has been substantially under-weighted
there."
Portfolio Management
--------------------
[PHOTO] [PHOTO]
Ted Price, CFA Linda Zigler, CFA
Tenure: March 1998 Tenure: March 1998
[PHOTO]
Jeff Drummond, CFA
Tenure: March 1998
--------------------------------------------------------------------------------
PERFORMANCE & RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date 3/3/1998
Average Annual Returns
6-month 25.45%
1 year 60.91%
Since Portfolio Inception 15.35%
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
VA Growth Fund Consumer Price Index - US Russell 2000
-------------- ------------------------- ------------
03/28/98 10,000 10,000 10,000
06/30/98 9,287 10,068 9,927
12/31/98 9,167 10,124 9,220
06/30/99 8,663 10,266 10,076
12/31/99 11,112 10,395 11,180
06/30/00 13,941 10,582 11,519
Comparison of a $10,000 investment in Evergreen VA Growth Fund(1) versus a
similar investment in the Russell 2000 Index (Russell 2000) and the Consumer
Price Index (CPI).
The Russell 2000 is an unmanaged market index which does not include transaction
costs associated with buying and selling securities or any mutual fund expenses.
The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in an index.
1Past performance is no guarantee of future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Performance includes the
reinvestment of income dividends and capital gains distributions.
Small capitalization stock investing may offer the potential for greater
long-term results, however, it is also generally associated with greater price
volatility due to the higher risk of failure.
The Fund's investment objective is non-fundamental and may be changed without
the vote of shareholders.
Investment return and net asset value will fluctuate so an investor's shares
when redeemed may be worth more or less than the original cost. Some of the
returns shown reflect a period of unusually favorable market conditions, which
may be difficult to repeat. A portion of the returns may be due to investments
in IPO's, private placements and/or leveraging investments techniques.
All data is as of June 30, 2000 and subject to change.
86
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth Fund
Portfolio Manager Interview
How did the Fund perform?
For the six-month period ended June 30, 2000, Evergreen VA Growth Fund had a
return of 25.45%, outperforming its benchmark, the Russell 2000 Index, which
returned 3.04% for the same period.
Portfolio
Characteristics
-----------------
(As of 6/30/2000)
Total Net Assets $21,605,927
Number of Holdings 148
P/E Ratio 29.5x
What was the investment environment like during the six-month period?
Unlike 1999, when momentum drove the market, the first half of 2000 has been
more of a stock-pickers market. The Fund advanced very strongly in the first
quarter, surpassing the Russell 2000, and declined less than its benchmark in
the second quarter. Aiding our performance were good picks in technology,
especially telecommunications equipment, and also in health care.
After the first quarter strength in technology stocks, we trimmed our position
fairly substantially. At the highest point, 48% of the portfolio was invested in
technology, including telecommunications. We cut back that percentage to the
high-30% level. This action worked to the Fund's benefit as the sector
subsequently collapsed. We used that opportunity to increase technology
holdings. At the end of the second quarter, technology stocks had accelerated,
and we reduced the Fund's position again. These moves positively impacted the
total return performance. Several concerns have arisen in the technology sector.
The business-to-business industry has largely collapsed, and there has been a
significant slowing in the rate in the growth of cellular handsets. These
factors likely point to the importance of careful stock selection in the months
ahead.
Among the top holdings in the fund which have been good performers was Benchmark
Electronics. Benchmark is a technology outsourcer that provides manufacturing
services to original equipment manufacturers in the telecommunications, computer
and peripheral business, as well as high-end audiovisual businesses; and Parlax
Corp., which manufactures custom electronic components including flexible
printed circuits. Sales and earnings have accelerated rapidly for both
companies, and rising backlog point to potentially continuing rapid gains.
There were no fundamental changes in the health care industry from 1999, when
the Fund's holdings detracted from performance. We are roughly equally weighted
in health care to the Russell 2000 Growth Index, and within that broad category,
are over-weighted in pharmaceuticals and health care services. However, we are
under-weighted in biotechnology relative to the Russell 2000 because it is
difficult to find good companies that meet our criteria. Including Affymetrix
and Alkermes, we do own about ten biotechnology companies.
The portfolio is also over-weighted in capital goods companies. This sector
includes telecommunications equipment companies that install the services. On
the energy side, these firms produce parts for offshore rigs and natural gas
turbine and lease and service HP compression engines.
87
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth Fund
Portfolio Manager Interview
Top 5 Sectors
-------------
(as a percentage of 6/30/2000 net assets)
Information Technology 31.2%
Industrials 22.4%
Health Care 14.5%
Consumer Discretionary 10.6%
Energy 8.4%
Describe the strategy of the Fund?
The portfolio contains about 150 stocks, and we maintain individual stock
weightings below 2% of total assets. We have learned over many years not to take
big positions, but rather to spread them out. Our team of five portfolio
managers has worked together since 1990: One of the key selling points for the
Fund.
We believe the outlook for energy equities is favorable. The fundamentals of the
industry indicate that energy supplies will stay very tight for this year and
probably next; natural gas, in particular, will be in very short supply. Hence,
we continue to be over-weighted in energy. Two of our larger holdings in this
area are Hanover Compressor, one of the largest lessors and servicers of
high-pressure gas compression equipment, principally for the oil and natural gas
industry, and Shaw Group, a manufacturer of piping for turbines. Shaw's sales,
earnings, and backlog are benefiting from the huge demand for natural gas-fired
utility plants.
We also have focused on sectors of the transportation industry that are not
affected by the cost of fuel, which we predict will remain high. The Fund owns
regional airlines such as Atlantic Coast and Skywest, which are largely contract
airlines: i.e., they are paid to fly. We have purchased freight forwarders
because they are non-asset based shipping companies. Thus, they do not own the
ships, planes, or trucks, and are not impacted by the cost of fuel.
We are watching the financial sector closely. Financial stocks have been out of
favor over the past several years, and the Fund has been substantially
under-weighted in this sector. Two small banks and one insurance company are in
the portfolio, but there is no exposure to financial services. However, once the
Federal Reserve Board drops interest rates, this could be an area that
appreciates rapidly.
Top 10 Holdings
---------------
(as a percentage of 6/30/2000 net assets)
Benchmark Electronics, Inc. 1.8%
Hanover Compressor Co. 1.8%
Parlex Corp. 1.6%
C & D Technologies 1.6%
Shaw Group, Inc. 1.5%
Sipex Corp. 1.5%
CSG Systems International, Inc. 1.4%
Kent Electronics Corp. 1.3%
Dendrite International, Inc. 1.3%
Core Laboratories, NV 1.3%
What is your outlook?
It appears that the Federal Reserve Board has been successful in slowing the
economy. We do not expect a slowdown to impact our holdings too much, because
they are growing due to demand for unique products. We are staying in close
touch with managements to monitor growth prospects.
88
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Fund at a Glance as of June 30, 2000
"We are bullish on both stocks and bonds and believe the internet is beginning
to deliver benefits in improved productivity that are filtering through the
entire economy."
Portfolio Management
--------------------
[PHOTO]
Irene D. O'Neill, CFA
Tenure: September 1999
[PHOTO]
Philip M. Foreman, CFA, CFP
Tenure: January 1999
--------------------------------------------------------------------------------
PERFORMANCE & RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date: 3/1/1996
Average Annual Returns
6-month -2.07%
1 year 5.21%
Since Portfolio Inception 16.66%
6-month capital gain distributions per share $ 0.35
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
VA G&I Fund Consumer Price Index - US S & P 400 Midcap Total Return
----------- ------------------------- -----------------------------
<S> <C> <C> <C>
3/1/96 10,000 10,000 10,000
06/30/96 10,711 10,116 10,411
12/31/96 11,899 10,239 11,361
06/30/97 13,880 10,349 12,839
12/31/97 16,021 10,413 15,004
06/30/98 17,238 10,523 16,293
12/31/98 16,789 10,581 17,871
06/30/99 18,526 10,730 19,084
12/31/99 19,905 10,865 20,492
06/30/00 19,494 11,060 22,330
</TABLE>
Comparison of a $10,000 investment in Evergreen VA Growth and Income
Fund(1) versus a similar investment in the Standard & Poor's 400 Mid-Cap Index
(S&P 400), and the Consumer Price Index (CPI).
The S&P 400 is an unmanaged market index which does not include transaction
costs associated with buying and selling securities or any mutual fund expenses.
The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in an index.
1Past performance is no guarantee of future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Performance includes the
reinvestment of income dividends and capital gains distributions.
The Fund's investment objective is non-fundamental and may be changed without
the vote of shareholders.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations. Risks of international investing are magnified in
emerging or developing markets.
Funds that invest in high yield, lower-rated bonds may contain more risks due to
the increased possibility of default.
All data is as of June 30, 2000 and subject to change.
99
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Portfolio Manager Interview
How did the Fund perform?
For the six-month period ended June 30, 2000, the Evergreen VA Growth and Income
Fund had a return of -2.07%, compared to the 9.06% return of the benchmark S&P
400 Index.
Portfolio
Characteristics
-----------------
(As of 6/30/2000)
Total Net Assets $85,361,738
Number of Holdings 226
P/E Ratio 25.6x
What factors affected the Fund's performance?
The momentum style of stock investing was in vogue during the six-month period,
and this held back performance as we stuck to our long-term strategy of
investing in outstanding mid-sized companies that we believe are undervalued.
Our strategy is to buy good businesses when they are on sale. During the period,
performance in the mid-cap stock market was led by biotechnology,
semi-conductor, oil drilling and electric utility companies. We de-emphasized
each of these areas because companies did not meet our investment criteria. We
were concerned about the high valuations of biotechnology and semi-conductor
companies, and we did not like the quality of the companies in the oil drilling
and electric utility industries.
One area that we emphasized and that worked very well for us was the general
health care industry other than biotechnology. One leading investment was in
Warner-Lambert, which was a major holding throughout the six-month period until
its acquisition by Pfizer. The Warner-Lambert position appreciated by 60% during
the six-month period.
Top 5 Sectors
-------------
(as a percentage of 6/30/2000 net assets)
Information Technology 24.6%
Industrials 16.4%
Consumer Discretionary 13.7%
Financials 12.3%
Health Care 10.0%
What were your principal strategies during the period?
We were faithful to our long-term strategy of investing in what we believe to be
outstanding companies that have competitive advantages, that enjoy barriers to
entry that discourage additional competition, and that have shown their
historical ability to generate high returns on invested capital. We want to
invest in these companies when they are on sale, which means when their stock
prices are trading at substantial discounts to the private market value of the
company, or the price that another corporation would likely pay to acquire the
company. We held investments in a number of attractive companies that met these
criteria.
An excellent example is Convergys, the largest cellular phone billing company in
the country. It is the low-cost competitor providing a vital service to the
fast-growing wireless communications market. Three of the nation's four largest
wireless telecommunications companies, including AT&T and Sprint, use Convergys
to process their billing. Convergys has a business that
100
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Portfolio Manager Interview
is hard to duplicate and it has a competitive advantage because of efficient
operations. The stock, one of our top holdings throughout the six months, was up
78% during the period.
Another successful investment was in Neuberger-Berman, an investment management
firm whose stock rose 88% in value during the six months. Neuberger-Berman's
attractive stock price was highlighted with the high-profile acquisitions of
several other investment management firms by large institutions.
Top 10 Holdings
---------------
(as a percentage of 6/30/2000 net assets)
Seagate Technology 2.3%
Convergys Corp. 2.3%
General Electric Co. 2.0%
New York Times Co., Class A 1.7%
Cisco Systems, Inc. 1.6%
Kansas City Southern Industries, Inc. 1.6%
American Tower Systems Corp., Class A 1.6%
U.S. West, Inc. 1.5%
Microsoft Corp. 1.5%
Pfizer, Inc. 1.5%
What is your outlook?
We are bullish on both stocks and bonds and believe the internet is beginning to
deliver benefits in improved productivity that are filtering through the entire
economy. We anticipate an environment of slow economic growth and low inflation.
Presidential election years tend to be good for stock market investing. We
intend to emphasize pharmaceutical, cellular phone and defense industry stock,
at least until we see signs that the Federal Reserve Board may begin to reverse
course and ease the money supply by lowering short-term interest rates. Until
the prospect of the Federal Reserve Board's easing begins to appear more likely,
we believe that the retail and cyclical industries will continue to post
earnings disappointments and poor stock performance.
We have confidence in our style, and will continue to look for outstanding
businesses that are on sale. We will invest in those sectors or groups that have
strong business fundamentals and attractive stock prices.
101
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA High Income Fund
Fund at a Glance as of June 30, 2000
"Volatility in the stock market, rising interest rates and cash outflow from
high yield bond mutual funds all put downward pressure on high yield bond
prices."
Portfolio Management
--------------------
[PHOTO]
Prescott B. Crocker, CFA
Tenure: May 2000
--------------------------------------------------------------------------------
PERFORMANCE & RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date: 6/30/1999
Average Annual Returns
6-month 0.59%
1 year 5.07%
Since Portfolio Inception 5.07%
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
VA High Income Fund Consumer Price Index - US Merrill Lynch High Yield Bond
<S> <C> <C> <C>
06/30/99 10,000 10,000 10,000
08/31/99 10,070 10,054 9,913
10/31/99 10,200 10,120 9,817
12/31/99 10,445 10,126 9,982
02/29/00 10,445 10,211 9,968
04/30/00 10,414 10,301 9,832
06/30/00 10,506 10,308 9,890
</TABLE>
Comparison of a $10,000 investment in Evergreen VA High Income Fund(1)versus a
similar investment in Merrill Lynch High Yield Master Index (MLHYMI) and the
Consumer Price Index (CPI).
The MLHYMI is an unmanaged market index which does not include transaction costs
associated with buying and selling securities or any mutual fund expenses. The
CPI is a commonly used measure of inflation and does not represent an investment
return. It is not possible to invest directly in an index.
1Past performance is no guarantee of future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Performance includes the
reinvestment of income dividends and capital gains distributions.
Funds that invest in high yield, lower-rated bonds may contain more risks due to
the increased possibility of default.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
The Fund's investment objective is non-fundamental and may be changed without
the vote of the Fund's shareholders.
All data is as of June 30, 2000 and subject to change.
115
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA High Income Fund
Portfolio Manager Interview
How did the Fund perform?
The VA High Income Fund returned 0.59% for the six-month period ended June 30,
2000, compared to the -1.19% return for the Merrill Lynch High Yield Master
Index during the same period. We attribute the Fund's relative performance to
careful security selection, particularly in the following sectors: energy,
forest products, health care, telecommunications and wireless communications.
Portfolio
Characteristics
-----------------
(As of 6/30/2000)
Total Net Assets $5,290,295
Average Credit Quality B
Effective Maturity 8.0 years
Average Duration 4.7 years
What was the environment like for high yield bonds?
The environment remained challenging, although conditions improved toward the
end of the period. Volatility in the stock market, rising interest rates and
cash outflow from high yield bond mutual funds all put downward pressure on high
yield bond prices. In June 2000, however, the trend of outflows may have begun
to reverse, with a cash inflow of $600 million into the high yield bond sector.
We are optimistic that this is the beginning of a new trend rather than a single
occurrence, for two reasons. First, continued volatility in the equity market
may have motivated investors to redirect their assets to high yield bonds.
Secondly, the inflow was a substantial amount.
Portfolio Composition
-----------------------------------------
(as a percentage of 6/30/2000 net assets)
Corporate Bonds 78.8%
Repurchase Agreements 19.9%
Other Assets and Liabilities, Net 1.3%
How do you manage the Fund?
We focused on careful industry and security selection, emphasizing large, liquid
bond issues. Specifically, we increased holdings in the gaming and energy
industries, and reduced the Fund's positions in forest products and cable. While
we also reduced holdings in telecommunications during the period, we began to
add to that position in June 2000, when we believed some bonds within that
sector offered attractive relative value. The Fund's relatively heavy weighting
in the wireless communications and energy industries, as well as performance in
the telecommunications, forest products and health care sectors, contributed
positively to returns. In contrast, the Fund's heavier exposure to retail and
diversified media, in addition to its position in the metals and transportation
industries detracted from performance. As of June 30, 2000, our investment
strategy favored the energy, gaming and telecommunications industries.
Portfolio Quality
-----------------------------------------------
(as a percentage of 6/30/2000 portfolio assets)
BB 12.8%
B 79.4%
CCC 2.6%
Not Rated/Not Available 5.2%
116
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA High Income Fund
Portfolio Manager Interview
What is your outlook for high yield bonds?
We are cautiously optimistic. Fund flows appear to have turned in response to
extraordinarily attractive yield advantages over U.S. Treasuries and an improved
investor outlook. At the end of the period, "B-rated" securities typically
yielded over 12%, approximately double that of U.S. Treasuries with comparable
maturities and rivaling the historical annual returns of 12% generated by small
capitalization stocks. We expect to see improved demand from insurance
companies; and further, an increase in collateralized bond offerings (CBOs), new
bond issues collateralized by high yield securities, could also support prices.
Longer-term, much will depend on the direction of the economy and performance of
the stock market. We believe economic growth is moderating. This could cause
consolidation in the stock market, as investors become uncertain about future
earnings growth and harvest gains. Investors also could become increasingly
sensitive to the political uncertainty of November's presidential elections.
117
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Fund at a Glance as of June 30, 2000
"The most significant factor helping our performance was our decision to have a
healthy concentration in Canadian stocks."
Portfolio Management
--------------------
[PHOTO]
Gilman C.Gunn
Tenure: August 1998
--------------------------------------------------------------------------------
PERFORMANCE & RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date: 8/17/1998
Average Annual Returns
6-month -2.34%
1 year 30.68%
Since Portfolio Inception 13.53%
6-month income dividends per share $0.01
6-month capital gain distributions per share $0.32
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
VA International Growth Consumer Price Index - US MSCI EAFE Equity Index
<S> <C> <C> <C>
08/17/98 10,000 10,000 10,000
09/30/98 8,550 10,012 9,696
12/31/98 9,389 10,031 11,708
03/31/99 9,289 10,098 11,879
06/30/99 9,699 10,171 12,189
09/30/99 10,299 10,275 12,732
12/31/99 12,978 10,300 14,904
03/31/00 13,000 10,471 14,896
06/30/00 12,676 10,485 14,315
</TABLE>
Comparison of a $10,000 investment in Evergreen VA International Growth
Fund(1)versus a similar investment in the Morgan Stanley Capital International
Europe, Australia and Far East Index (MSCI EAFE) and the Consumer Price Index
(CPI).
The MSCI EAFE is an unmanaged market index which does not include transaction
costs associated with buying and selling securities or any mutual fund expenses.
The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in an index.
1Past performance is no guarantee of future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Performance includes the
reinvestment of income dividends and capital gains distributions.
The Fund's investment objective is non-fundamental and may be changed without
the vote of shareholders.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations. Risks of international investing are magnified in
emerging or developing markets.
Funds that invest in high yield, lower-rated bonds may contain more risks due to
the increased possibility of default.
All data is as of June 30, 2000 and subject to change.
125
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Portfolio Manager Interview
How did the Fund perform?
In a challenging period for international investing, the Evergreen VA
International Growth Fund had a total return of -2.34% for the six-month period
ended June 30, 2000. The Fund outperformed its benchmark, the MSCI EAFE, a
common standard for international investing, which had a return of -3.95%. Our
investments in Canada helped the Fund's performance relative to the MSCI EAFE
index.
Portfolio
Characteristics
-----------------
(As of 6/30/2000)
Total Net Assets $7,064,036
Number of Holdings 169
What was the investment environment like during the period?
As in the United States, the major factor affecting foreign market performance
during the six months was the influence of the U.S. Federal Reserve Board's
actions to slow economic growth in the United States by raising short-term
interest rates. While we did see some signs that economic growth was moderating
in the United States, growth continued to improve in most other parts of the
world. Nevertheless, it was a difficult period for foreign markets for several
reasons.
First, the strong U.S. dollar undercut the performance in foreign equity markets
when returns were translated back into the dollar. The European-wide currency,
the euro, also continued to show weakness against the dollar during the
six-month period.
Secondly, the world's second largest market, Japan, was off 13% in dollar terms
during the six months, partly because of the weak yen and partly because of
continuing disappointing economic growth relative to the rest of the world.
Thirdly, technology stocks continued to lead the equity markets in performance,
despite the downturn in the sector midway through the six-month period.
Technology continued to perform reasonably well when compared against other
sectors, and the United States continues to be home to a disproportionate
number of technology companies.
Lastly, emerging markets lost ground during the six-month period, partly because
of the secondary effects of the interest rate increases in the United States.
Top 5 Sectors
-------------
(as a percentage of 6/30/2000 net assets)
Financials 21.1%
Health Care 11.0%
Information Technology 10.4%
Consumer Discretionary 9.2%
Industrials 8.0%
What were some of the factors that contributed to the relatively strong
performance by the Fund?
The most significant factor helping our performance was our decision to have a
healthy concentration in Canadian stocks. While the benchmark MSCI EAFE index
has no allocation to Canada, our weighting in Canada at the end of the six-month
period totaled 10.4% of net assets. In our opinion, Canada is in the best
financial health of any major industrialized nation,
126
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Portfolio Manager Interview
and is more attractive than it has been at any time in the 25 years that we have
been following the Canadian market. Canada tends to be overlooked by investors
both in the United States and in other countries, and yet it is on course to
have faster economic growth than the United States with lower inflation. A
report by J.P. Morgan predicts that Gross Domestic Product (GDP) will grow by
3.4% in Canada next year, compared to a projected 3.1% rate in the United
States. The same report forecasts a 2.1% inflation rate in Canada and a 2.5%
rate of inflation in the United States. Canada currently has a trade surplus of
1.3% of GDP, while the United States is in a trade deficit of 4.9% of GDP.
In Canada, we invested in both value and growth stocks. The value side of the
portfolio included financial services, natural resources, retailing and energy
companies. The growth side of the portfolio consisted principally in our
investment in Nortel Networks, a major global telecommunications equipment
company.
During the six months, we also doubled our weighting in energy stocks, which did
well in an environment of high energy prices. In addition, we had a strong
emphasis on health and medical stocks, which performed well. Our de-emphasis of
the market in the United Kingdom also contributed to the relatively good
performance of the Fund.
Our general strategy was to broaden out the portfolio to include stable
companies that could continue to do well in the face of higher interest rates.
During the six months, we also removed all remaining currency hedges. We believe
the euro, after 18 months of poor performance, is very cheap, while conditions
in Japan are improving, which should help the yen. We also believe that the
current account deficit of the United States increases the potential that the
U.S. dollar would begin to weaken against other currencies.
What are some of the individual investments that you would like to highlight?
Sobeys Inc., our largest holding in Canada, was up 28% year-to-date. Sobeys is a
Canadian food retailer that is in the process of successfully integrating the
operations of another retailer that it acquired last year. This acquisition has
made Sobeys, a pan-Canadian retailer, with improved economies of scale and an
excellent earnings outlook. We expect Sobeys earnings to grow by 33% this year
and another 31% next year, and yet its stock has been selling at a very
reasonable valuation.
Brookfield Properties Corp., another Canadian-based company, was purchased
recently. Brookfield is a property company, with major real estate investments
throughout North America. Brookfield specializes in Class A office space in
prime locations in major cities in the United States and Canada. We have
invested in Brookfield directly through its common stock and indirectly through
our investment in Brascan, which owns part of Brookfield.
In Europe, Philips Electronics was one of our more successful investments.
Philips benefited from its ownership position in TSMC, a major semi-conductor
manufacturer based in Taiwan, as well as its ongoing reorganization. When you
add the value of all the parts of Philips' diversified operations, the total is
substantially higher than the Philips' recent stock price.
One of our other successful investments was in the holding companies of
Rembrandt, a South African tobacco company. As a result of a corporate
restructuring, the discounted price of shares of the various holding companies
Rembrandt increased in value, benefiting the Fund.
127
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Portfolio Manager Interview
Top 10 Holdings
-----------------------------------------
(as a percentage of 6/30/2000 net assets)
Total Fina SA, Class B 2.0%
NEC Corp. 1.8%
Toshiba Corp. 1.8%
Sobeys Inc. 1.6%
Allianz AG 1.6%
Koninklijke (Royal) Philips Electronics NV 1.6%
ENI SpA 1.6%
Yamanouchi Pharmaceutical Co., Ltd. 1.6%
Takefuji Corp. 1.5%
ISS International Services Systems 1.5%
What is your outlook for the international markets?
Following a good year for international investing in 1999, the first six months
of 2000 have been challenging. Investors have become concerned about the effects
of interest rate increases in the United States and other countries, while the
technology sector has experienced high volatility.
As we look ahead, we are placing greater emphasis on value stocks, which are
trading at reasonable stock valuations to their earnings and assets. We believe
some growth stocks have become overvalued and present greater risk to investors.
Currently, the portfolio is about 60% growth stocks and 40% value stocks.
While economic growth in most foreign countries is expected to rise faster than
in the United States, the United States economy continues to be a major
influence, both real and psychological, on markets throughout the world.
However, we believe that growth in the United States will continue to be good,
although not robust. We believe economic growth in Europe and Asia should
continue to increase. This should offer an environment for reasonable returns
from international investing over the next six to twelve months.
128
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Fund at a Glance as of June 30, 2000
"During this period of market volatility, we maintained the portfolio's
investment strategy of seeking great companies with outstanding business
prospects that we believe were selling at attractive valuations."
--------------------------------------------------------------------------------
PERFORMANCE & RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date: 1/29/1999
Average Annual Returns
6-month 5.16%
1 year 23.86%
Since Portfolio Inception 23.13%
6-month capital gain distributions per share $0.40
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
VA Masters Fund Consumer Price Index - US S & P 400 Midcap Total Return S & P 500 Composite Total Return
<S> <C> <C> <C> <C>
01/31/99 10,000 10,000 10,000 10,000
03/31/99 9,860 10,043 9,742 10,076
06/30/99 10,840 10,116 11,112 10,786
09/30/99 10,360 10,219 10,182 10,112
12/31/99 12,759 10,243 11,932 11,616
03/31/00 13,531 10,414 13,445 11,883
06/30/00 13,427 10,427 13,002 11,567
</TABLE>
Comparison of a $10,000 investment in Evergreen VA Masters Fund(1) versus a
similar investment in the Standard & Poor's 500 Index (S&P 500), the Standard
and Poor's 400 Mid-Cap Index (S&P 400), and the Consumer Price Index (CPI).
The S&P 500 and the S&P 400 are unmanaged market indices which do not include
transaction costs associated with buying and selling securities or any mutual
fund expenses. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
1Past performance is no guarantee of future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Performance includes the
reinvestment of income dividends and capital gains distributions.
The Fund's investment objective is non-fundamental and may be changed without
the vote of shareholders.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations. Risks of international investing are magnified in
emerging or developing markets.
U.S. government guarantees apply only to the underlying securities of the Fund's
portfolio and not to the Fund's shares.
Smaller capitalization stock investing may offer the potential for greater
long-term results, however, it is also generally associated with greater price
volatility due to the higher risks of failure.
All data is as of June 30, 2000 and subject to change.
140
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Portfolio Manager Interview
How did the Fund perform?
For the six-month period ended June 30, 2000, the Evergreen VA Masters Fund
shares returned 5.24%. The Fund's benchmarks, the S&P 400 and S&P 500, returned
-0.42% and 9.06%, respectively for the same period. Evergreen VA Masters Fund is
composed of four separate portfolio segments; each managed by a different
sub-advisor. Together these portfolio segments provide a diversified growth
fund. Each investment advisor brings a unique investment approach to the Fund.
As a result, the Fund has the potential to benefit from various investment
methods and styles.
Portfolio
Characteristics
-----------------
(As of 6/30/2000)
Total Net Assets $30,378,117
Number of Holdings 515
P/E Ratio 25.8x
Top 5 Sectors
-------------
(as a percentage of 6/30/2000 net assets)
Information Technology 29.3%
Energy 12.4%
Health Care 11.6%
Industrials 11.4%
Consumer Discretionary 9.6%
Top 10 Holdings
-----------------------------------------
(as a percentage of 6/30/2000 net assets)
Intel Corp. 2.2%
General Electric Co. 1.9%
Cisco Systems, Inc. 1.7%
United Therapeutics Corp. 1.6%
VeriSign, Inc. 1.6%
VISX, Inc. 1.5%
EOG Resources, Inc. 1.3%
Kroger Co. 1.2%
Exxon Mobil Corp. 1.2%
Noble Drilling Corp. 1.2%
141
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EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Portfolio Manager Interview
Evergreen Asset Management Corp.
Portfolio Management
--------------------------------------------------------------------------------
[PHOTO] [PHOTO]
Jean C. Ledford,CFA Richard C. Welsh,CFA
Tenure: August 1999 Tenure: August 1999
The six-month period that ended June 30, 2000 was turbulent for most investors.
The period began on a positive note, with some major market indices reaching
historic highs during the first three months. Around mid-March, however, market
sentiment changed. Investors became uneasy about the relatively high valuations
of technology stocks, rising interest rates and the possibility of slower
economic growth. Investor concerns over these issues led to a sell-off in
technology stocks that expanded to the broader market.
As stock prices declined, particularly in the growth area of the market,
investors sought the relatively safe havens of value stocks--an area they had
largely overlooked for more than a year. This renewed interest in value stocks
was relatively short-lived, however. Volatility dominated every area of the
market, and no single investment style or market sector maintained leadership
for very long. Because mid-cap stocks are sensitive to higher interest rates and
the prospects of slower economic growth, their prices declined sharply during
the market turbulence.
During this period of market volatility, we maintained the portfolio's
investment strategy of seeking great companies with outstanding business
prospects that we believe were selling at attractive valuations. We used the
market correction to purchase stocks that were "on sale." As share prices became
more reasonable, we took advantage of many companies with good fundamentals that
met our criteria as value investments. As a result, we reduced the Fund's cash
position, which accounted for 15% of net assets at the beginning of the period,
to 7% of net assets at the end of the period. We invested the cash aggressively
by adding primarily to the technology and retail portions of the Fund. These
were the industry groups that we felt went on sale during the period.
During the six months, the technology weighting in the Fund rose from 20% to 27%
of net assets. Internet software and telecommunication companies accounted for
most of the new investment in the high-tech area. Within the technology segment
of the Fund, semiconductor holdings were among the largest contributors to
performance. Semiconductor companies benefited from the continued development of
the cellular and wireless telephone industry. We believe that the prospects for
wireless data infrastructure expansion should result in significant growth for
many semiconductor companies in the months and years ahead. In the semiconductor
area, we added Altera, a company that makes programmable logic chips for the
cellular telephone infrastructure. Altera was recently added to the S&P 500
Index. We also invested in
142
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EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Portfolio Manager Interview
Triquent, which makes products that can help extend the battery life of cellular
telephones.
In the retail area, we favored CVS, Martha Stewart and Family Dollar. We believe
these companies are poised to do well even if the economy slows. These stocks
usually perform well after the Federal Reserve Board ends a tightening cycle.
For several months, we have held a relatively large number of oil drilling
companies in the Fund, and during the January-to-June time period, these
companies benefited performance. Higher oil prices caused energy exploration and
production companies to increase their capital spending, and oil drillers were
the direct beneficiaries of this spending.
The pharmaceutical companies in the Fund also made a significant contribution to
performance. These companies were aided by the prospects for a variety of new
drugs and therapies to treat some of the most serious diseases.
The financial and consumer stocks in the portfolio held back performance.
Companies in both of these market segments were negatively affected by the
Federal Reserve Board's tight monetary policy. Three times during the period,
the Federal Reserve Board raised the Federal Funds Rate--twice by 0.25% and once
by 0.50%. Rising rates generally result in weaker profits for banks and other
financial institutions, and over time they usually dampen consumer spending.
Over the period, we reduced the Fund's investments in these two interest-rate
sensitive areas.
Looking ahead, we are optimistic about the prospects for mid-cap stocks. We
believe the pace of economic activity may slow and that inflation should remain
at a moderate level. We also expect merger and acquisition activity to remain
brisk. The merger and acquisition trend is particularly beneficial for mid-cap
stocks, because large companies acquire mid-cap companies to enhance their
growth rates. For example, during the last six months, Sanmina, a manufacturing
outsourcer, bought the Fund's Hadco Corporation shares at a nice premium. We
think the Federal Reserve Board is nearing the end of its cycle of interest-rate
hikes and that once the uncertainty over interest rates subsides, value stocks
should perform well.
143
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Portfolio Manager Interview
MFS Institutional Advisors, Inc.
Portfolio Management
-------------------------------------------------------------------------------
[PHOTO]
Mark Regan, MFS
Tenure: January 1999
While the direction of stocks is highly reliant upon interest rates and the
health of the economy, there are many other factors that come into play. Looking
back at the history of the stock market, it is typically the least-expected
economic report, political coup, or currency problem that roils markets around
the world. That said, we believe there are two primary reasons to maintain a
diversified portfolio--earnings and valuations. We anticipate broad earnings
growth across nearly every sector in the market, which should help to broaden
market leadership.
One of the key questions for investors is whether the Federal Reserve Board will
be able to negotiate a so-called soft landing--increasing interest rates just
enough to cool inflation and promote moderate economic growth--or whether there
will be a more destructive outcome, with a recession and bear market. We
continue to lean toward the optimistic view for a number of reasons. First, a
pickup in productivity is what typically allows the U.S. economy to expand
without inflation, accompanied with strong corporate earnings and rising real
wages. Because technology spending remains so strong, we believe that U.S.
productivity will continue to grow rapidly.
Given this backdrop of slowing economic growth, the Federal Reserve Board
refrained from raising interest rates during its June meeting. While it is very
difficult to get a clear picture of future economic growth based on the past
couple months, we believe future reports may continue to show signs of
moderating economic growth. If this is the case, we believe the Federal Reserve
Board may be done raising rates in the near term, which could bode well for the
bond and equity markets.
Stock selection within the health care sector also contributed equally to the
portfolio's return. Cytyc, a manufacturer of proprietary cancer detection
devices, performed well after beating first-quarter net income estimates and
garnering new patents on cancer detection technologies. Intrabiotics
Pharmaceuticals, a developer of antibacterial and antifungal drugs, rose
consistently throughout the quarter due to strong products in the pipeline.
United Therapeutics, another pharmaceutical company that targets vascular
disease, surged on repeated "buy" recommendations from outside analysts (based
on exclusive arrangements to market certain drugs in the U.S.). And Visx, the
leading manufacturer of laser eye surgery equipment, more than doubled after the
U.S. Patent office issued them an amended patent for a popular method of
vision-correction surgery.
Over-weightings in health care and energy were strong contributors to the Fund's
relative outperformance in the quarter. Rapidly growing companies within the
medical device and pharmaceutical industries were rewarded by the market, while
the entire energy sector benefited from positive trends including record prices
for oil and gas and a pronounced supply and demand imbalance.
Stock selection within the energy sector was also a major contributor.
Significant positions in exploration and production companies such as EOG
Resources and oil service companies such as Global Industries bolstered
performance. The market rewarded these companies across the board on the
expectation of strong second-quarter profits.
144
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Portfolio Manager Interview
Stock selection within technology was the only significant detractor from
performance, specifically S1 Corporation. In May, the company reported a loss
per share far greater than the market expected, caused primarily by
underestimated cost related to integrating acquisitions.
While technology stocks represent some of the most innovative and dynamic
companies in the market, we believe there are attractive opportunities for
growth outside the tech sector, but at much more reasonable valuations. The
financial services sector, for example, has experienced prolonged weakness due
to rising interest rates. In addition to attractive valuations, we see a number
of companies that are demonstrating their ability to generate strong revenue
growth and that possess improving business fundamentals. We also believe there
are numerous opportunities for these financial companies to produce positive
earnings surprises. Other sectors where we see the strong potential for earnings
strength are health care and energy. While we have seen some companies rebound
from historically low levels in these sectors, we believe the market's
persistent focus on growth at the expense of value has created a compelling
argument for value stocks with attractive growth prospects to regain prominence.
145
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Portfolio Manager Interview
OppenheimerFunds, Inc.
Portfolio Management
--------------------------------------------------------------------------------
[PHOTO]
Charles Albers & Nikolaos Monoyios, Oppenheimer
Tenure: January 1999
During the past quarter, several economic indicators such as retail sales,
consumer confidence and new home sales appeared to point towards a moderation of
economic activity. In addition, inflation measures remained under control
despite very tight labor markets. Finally, a sharp correction in major stock
market averages during April and May let some of the air out of what may have
been a speculative bubble and reduced the stimulative impact of the "wealth
effect" on the real economy. Given these circumstances, the Federal Reserve
Board, which had raised short-term rates six times over the past year in an
effort to slow the expansion, decided to take no action at its June meeting,
leaving the key Federal Funds rate unchanged at 6.5%.
The Oppenheimer segment of the VA Masters Fund is managed with a disciplined
quantitative strategy that seeks to produce consistently good results relative
to the S&P 500 Index.
The market continues to be subject to concerns alternating between potentially
accelerating inflation and higher interest rates on the one hand, and economic
slowing and decelerating profits on the other. In addition, the approach of
elections introduces uncertainty regarding tax and social policy issues. Great
valuation discrepancies continue to exist even after the correction of this past
spring. In this environment, a relatively low risk profile may be the best
investment policy over the next few months. We believe the Fund is
well-diversified with a slight tilt towards value and increasing emphasis
towards large-cap and higher-quality issues. We believe it is also
well-represented in sound, high growth technology companies that should give it
exposure to the most dynamic growth areas of the economy.
146
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Portfolio Manager Interview
Putnam Investment Management, Inc.
Portfolio Management
--------------------------------------------------------------------------------
Putnam Growth Team
Tenure: January 1999
Following the momentum that led up to the advent of year 2000, the tone of the
U.S. equity market turned more somber in the year's first half. Though still
trending positive, market volatility reached extreme levels in the first quarter
as dramatic shifts occurred within single weeks and even days. April opened with
a hair-raising decline of the technology-laden Nasdaq Composite, which lost
nearly 30% before bouncing back to end the second quarter with a loss of 13%.
This slide coincided with the government's ruling against Microsoft in its
antitrust case, which caused the company to lose over 42% of its value before a
quarter-end tech rally boosted the share price.
Responding to signs of robust economic strength, the Federal Reserve Board
raised interest rates three times in the period; the final 50 basis-point
increase in May equaled the two first-quarter rate hikes combined. This capped a
spate of six tightenings over a twelve-month period. By June, a slowdown in
retail sales, coupled with other early indications of a cooling economy, left
the Federal Reserve Board on the sidelines.
While growth stocks continued to lead value stocks in the period, market
preference shifted from small-cap stocks in the first quarter to the relative
stability of large-cap stocks in the second. This sharp rotation called into
question the theory that "Old Economy" companies were being supplanted by "New
Economy" up-and-comers.
Putnam expects the current economic environment of moderating growth and low
inflation to continue for the remainder of 2000. The markets will be closely
watched for any indications of Federal Reserve Board activity. In response to
the Federal Reserve Board's statement released on June 28, most market
participants continue to assign a high probability to at least one more rate
hike this year--most likely at the August meeting in order to avoid interference
with the November elections.
We are monitoring market volatility, which persists unabated and will continue
to unsettle investors as valuations gyrate both well above and well below
stocks' intrinsic values. In addition, high energy prices have acted as a tax on
the economy, reducing disposable income for consumers and adding pressure to
corporate profit margins. Ongoing high prices will be a boon for
energy-producing industries but a bane for those that are energy-intensive.
Nevertheless, it is important to remember that the United States still exhibits
low inflation and a strong economy. We continue to believe that the current
environment will reward high-quality growth companies that are experiencing
strong demand for their products and stable or improving pricing power.
Going forward, within the technology sector we plan to emphasize communications
equipment, semiconductors, and software. We plan to concentrate on
entertainment, cable programming, media, and household products within consumer
staples. Within conglomerates we plan to focus on Tyco and General Electric.
While we intend to underweight financials and capital goods, within those
sectors, respectively, we plan to focus on financial services, insurance, and
investment banking as well as specialty chemicals and containers and packaging.
The Fund's investment philosophy remains constant: We believe that a strategy of
systematic selection of high-quality growth stocks, combined with rigorous risk
management and a disciplined sell process, will generate attractive
risk-adjusted returns over the course of a market cycle.
147
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Omega Fund
Fund at a Glance as of June 30, 2000
"We think the market will become increasingly focused on corporate earnings
during the next six months, in contrast to the past six months which was
dominated by concern about interest rates."
Portfolio Management
--------------------------------------------------------------------------------
[PHOTO]
Maureen E.Cullinane, CFA
Tenure: April 1999
--------------------------------------------------------------------------------
PERFORMANCE & RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date: 3/6/1997
Average Annual Returns
6-month 15.37%
1 year 50.56%
Since Portfolio Inception 28.62%
6-month capital gain distributions per share $ 0.74
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
VA Omega Fund Consumer Price Index - US Russell 1000 S&P 500
<S> <C> <C> <C> <C>
02/28/97 10000 10000 10000 10000
06/30/97 10270 10044 11248 11263
12/31/97 11100 10107 12277 12454
06/30/98 12279 10213 14778 14660
12/31/98 13569 10269 17028 16013
06/30/99 15309 10414 18808 17998
12/31/99 19979 10545 22672 19385
06/30/00 23050 10734 23631 19302
</TABLE>
Comparison of a $10,000 investment in Evergreen VA Omega Fund(1)versus a similar
investment in the Standard & Poor's 500 Index (S&P 500), Russell 1000 Growth
(Russell 1000 Growth) and the Consumer Price Index (CPI).
The S&P 500 and the Russell 1000 Growth are unmanaged market indices which do
not include transaction costs associated with buying and selling securities or
any mutual fund expenses. The CPI is a commonly used measure of inflation and
does not represent an investment return. It is not possible to invest directly
in an index.
1Past performance is no guarantee of future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Performance includes the
reinvestment of income dividends and capital gains distributions.
The Fund's investment objective is non-fundamental and may be changed without
the vote of shareholders.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
Small capitalization stock investing may offer the potential for greater
long-term results, however, it is also generally associated with greater price
volatility due to the higher risk of failure.
Investment return and net asset value will fluctuate so an investor's shares
when redeemed may be worth more or less than the original cost. Some of the
returns shown reflect a period of unusually favorable market conditions, which
may be difficult to repeat. A portion of the returns may be due to investments
in IPO's, private placements and/or leveraging investments techniques.
All data is as of June 30, 2000 and subject to change.
168
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Omega Fund
Portfolio Manager Interview
How did the Fund perform?
The Evergreen VA Omega Fund performed very well. For the six-month period ended
June 30, 2000, the Fund had a return of 15.37%. During the same period, the
Russell 1000 Growth Index and the S&P 500 returned 4.23% and -0.42%,
respectively. Fund performance benefited both from a high technology weighting
early in the period and a decision to reduce that weighting later in the period
and invest in energy stocks.
Portfolio
Characteristics
--------------------------------------------------------------------------------
(As of 6/30/2000)
Total Net Assets $73,231,640
Number of Holdings 73
P/E Ratio 39.9x
What was the environment like for investing during the first six months of 2000?
For most of the period, stock market investors appeared to be fixated on
interest rates and the policies of the U.S. Federal Reserve Board, which was
raising short-term rates to slow the economy's rapid growth. The market was
volatile as investors rotated from sector to sector. Technology stocks led the
market in performance early in the period, but suffered a sharp correction in
April and May when the market became concerned about high valuations in
technology stocks as well as the effects of rising interest rates. During that
time, rising energy prices encouraged investments in oil services and natural
gas companies, and the energy sector performed well.
Pharmaceutical stocks also advanced after having disappointed investors for much
of 1999. By June, we began to see signs of more moderate economic growth, which
led investors to believe the end of the interest rate increases might be at
hand. This perception seemed to stabilize the market.
Top 5 Sectors
--------------------------------------------------------------------------------
(as a percentage of 6/30/2000 net assets)
Information Technology 43.3%
Health Care 17.3%
Energy 10.8%
Consumer Discretionary 9.7%
Financials 8.0%
What were your principal strategies during the period?
We continued to follow two broad, secular themes that have influenced our
investment thinking: First, the enhanced productivity of corporations throughout
the world because of technological advances. Second, the "graying of America"
which has led to increased opportunities in health care in general, and the
pharmaceutical industry in particular as the baby boomer generation advances in
age and medical breakthroughs extend life expectancy.
We also were influenced by a more recent, cyclical theme, which may be shorter
in duration: the effects of rising oil and gas prices on the energy industry.
We began the six-month period with a heavy weighting in technology. However,
after technology stocks continued their spectacular rally during the first two
months of the fiscal period, we began to reduce
169
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Omega Fund
Portfolio Manager Interview
our holdings because we were concerned that stock valuations had become extended
to unrealistically high levels. While we thought these valuations were
particularly excessive in some internet-related stocks, we expected that a
correction would affect the entire technology sector. We pared back the entire
technology sector, concentrating on those stocks with the most extended
valuations. We reduced or sold our holdings of: Applied Materials, a
semi-conductor manufacturer; Sandisk, which produces memory chips for hand-held
computing and communications devices; Veritas Software, which has developed data
protection software for internet applications; and Citrix, which hosts websites
for other companies. These investments had done extremely well for the
portfolio, but were reduced because of our concern about their valuations. Other
technology companies that we cut back included Solectron, I2 Technologies, and
F5 Networks.
In the health care industry, we had investments in diversified pharmaceutical
companies with what we believe were reasonable stock valuations, such as
Schering Plough, American Home Products, and Lilly, as well as some medical
equipment and biotechnology companies. This group included Medarex, Immunex and
Millenium Pharmaceuticals. At the end of the fiscal period, our health care
weighting was about 16% of net assets.
The energy stocks grew to 12% of net assets by the end of the fiscal period, a
very large over-weighting when compared to the 0.4% energy weight in the Russell
1000 Growth Index. We believed that as the major energy corporations became
increasingly confident that energy prices would be firm and that the OPEC
nations would continue to show discipline in restraining production, investments
in exploration and production operations would increase substantially. As a
result, we invested in a number of oil services companies. Firm energy prices
also encouraged us to invest in natural gas companies such as Apache and
Anadarko.
We also held an over-weighted position in finance stocks, at about 8% of net
assets. We focused primarily on global leaders such as American Express,
Citigroup, American International Group, and Morgan Stanley-Dean Witter.
Top 10 Holdings
-------------------------------------------------------------------------------
(as a percentage of 6/30/2000 net assets)
Micron Technology 4.2%
American Home Products Corp. 3.9%
Schering-Plough Corp. 3.6%
Intel Corp. 3.1%
Cisco Systems, Inc. 3.0%
Viacom, Inc., Class B 2.4%
NVIDA 2.3%
Microsoft Corp. 2.2%
Citigroup, Inc. 2.2%
Tyco International, Ltd. 2.0%
What is your outlook?
We think the market will become increasingly focused on corporate earnings
during the next six months, in contrast to the past six months which was
dominated by concern about interest rates. If the Federal Reserve Board is
successful in slowing economic growth to an annual rate of 3.5% of Gross
Domestic Product (GDP), a natural outgrowth would be a slowing of corporate
earnings growth. With slower earnings growth as a backdrop, it would not be
surprising to see greater volatility in the market as investors react to
announcements about disappointing earnings by
170
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Omega Fund
Portfolio Manager Interview
corporations. Slower economic growth, high interest rates, and moderately higher
prices will pressure corporate earnings. While the remainder of 2000 might be
relatively stable, market volatility could increase in early 2001 because of
concerns about the effects of the new president's economic policies as well as
worries about corporate earnings.
In this environment, we will look for companies with continued growth potential.
We expect this will continue to lead to technology because of the need of
corporations in general to use new tools to enhance their productivity. We also
believe pharmaceutical companies should have a continued flow of new products to
generate sustained earnings growth.
While we do not think the economy will fall into a recession, we expect
investors will become increasingly selective. While the past several months have
presented a challenging environment in the stock market, we don't think the
challenges will become any easier in the coming months.
171
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Perpetual International Fund
Fund at a Glance as of June 30, 2000
"An important theme for the Fund continues to be the rapid expansion of wireless
telephony."
Portfolio
Management
--------------------------------------------------------------------------------
Kathryn Langridge Scott
Tenure: March 1998 McGlashan
Tenure: March 1998
Margaret Roddan Robert Yerbury
Tenure: March 1998 Tenure: March 1998
Stephen Paul Chesson
Whittaker, CFA Tenure: January 2000
Tenure: March 1998
--------------------------------------------------------------------------------
PERFORMANCE & RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date: 3/3/1998
Average Annual Returns
6-month 0.46%
1 year 25.89%
Since Portfolio Inception 21.60%
6-month capital gain distributions per share $ 1.58
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VA Perpetual International Fund Consumer Price Index - US MSCI EAFE Equity Index
<S> <C> <C> <C>
02/28/98 10,000 10,000 10,000
03/31/98 10,200 10,019 10,310
06/30/98 11,009 10,068 10,427
09/30/98 9,657 10,105 8,951
12/31/98 11,209 10,124 10,808
03/31/99 11,521 10,191 10,966
06/30/99 12,521 10,266 11,253
09/30/99 13,153 10,371 11,754
12/31/99 15,689 10,395 13,759
03/31/00 16,602 10,568 13,752
06/30/00 15,761 10,582 13,215
</TABLE>
Comparison of a $10,000 investment in Evergreen VA Perpetual International
Fund1 versus a similar investment in the Morgan Stanley Capital International
Europe, Australasia, and Far East Index (MSCI EAFE) and the Consumer Price Index
(CPI).
The MSCI EAFE is an unmanaged market index which does not include transaction
costs associated with buying and selling securities or any mutual fund expenses.
The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in an index.
1 Past performance is no guarantee of future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Performance includes the
reinvestment of income dividends and capital gains distributions.
The Fund's investment objective is non-fundamental and may be changed without
the vote of shareholders.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations. Risks of international investing are magnified in
emerging or developing markets.
Small capitalization stock investing may offer the potential for greater
long-term results, however, it is also generally associated with greater price
volatility due to the higher risk of failure
All data is as of June 30, 2000 and subject to change.
180
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Perpetual International Fund
Portfolio Manager Interview
How did the Fund perform?
For the six-month period ended June 30, 2000, the Fund returned 0.46%, and the
Fund's benchmark, the MSCI EAFE Index, returned 3.95%. It was a turbulent time
for international investors, as most overseas markets experienced broad-based
declines.
Portfolio
Characteristics
---------------
(As of 6/30/2000)
Total Net Assets $29,249,395
Number of Holdings 226
How did international markets perform during the period?
There were remarkable similarities in the performance of the world's financial
markets. Early in the period, investors favored technology, media and
telecommunications stocks at the expense of virtually everything else. In
mid-March, however, a number of factors combined to trigger declines in most
financial markets. Not only were investors growing uneasy about the relatively
high valuations of technology stocks, but concerns about higher U.S. interest
rates and a potential decline in U.S. economic growth and corporate profits had
a negative effect on the markets. In most markets, sell-offs occurred first in
technology stocks and then expanded to the broader market. As the period drew to
a close, volatility was the order of the day, and most overseas markets finished
the six-month period in negative territory.
How did you manage the Fund in this environment?
We adjusted the Fund's asset allocation, and we raised its cash position, which
at the end of the period was 9%. The Fund's cash position reflects our strategy
of seeking stocks with reasonable prices. In the coming months, this cash is
likely to be invested in Continental Europe and Japan.
Were there areas that benefited the Fund despite the turbulent environment?
Investments in the United Kingdom (UK) and Europe were the best performers. We
raised the Fund's target weightings in the UK to 17% and in Europe to 43%, for a
total of 60% up from 56% at the beginning of the period.
Top 10 Countries
----------------
(as a percentage of 6/30/2000 net assets)
Japan 22.9%
United Kingdom 15.7%
Netherlands 8.8%
United States 7.0%
Germany 6.2%
France 6.1%
Spain 5.7%
Hong Kong 4.4%
Sweden 4.0%
Finland 3.7%
181
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Perpetual International Fund
Portfolio Manager Interview
What accounted for your enthusiasm about the UK and Europe?
There are strong economic indicators from core countries--France, Germany and
Italy--suggesting that the raising of interest rates by the European Central
Bank was necessary to keep inflation under control. Inflation remains at 2% for
most of Europe. An important theme for the Fund continues to be the rapid
expansion of wireless telephony. We are particularly interested in the
beneficiaries of the so-called 3G (Third Generation) cellular telephone system,
which is expected to be rolled out in Scandinavia and the UK, ahead of the
United States, over the next two years. 3G will provide rapid e-mail and
internet access by cellular telephone and will spawn a new wave of applications.
The implications of the extraordinarily high prices paid by telecommunication
companies for 3G licenses, particularly in the UK, are still being digested by
the markets. We believe that massive infrastructure investment will be needed
and that there will be a complete handset re-equipment cycle. These developments
will favor the large, technologically advanced equipment and component providers
such as Nokia, Ericsson, Siemens and Epcos, all of which are holdings in the
Fund.
Top 5 Sectors
--------------------------------------------------------------------------------
(as a percentage of 6/30/2000 net assets)
Information Technology 20.0%
Financials 18.6%
Industrials 13.4%
Consumer Discretionary 12.8%
Telecommunication Services 8.5%
How did you manage investments in Asia?
In Japan, sentiment about the timing and pace of economic recovery is still
cautious, but we are optimistic. The Organization for Economic Cooperation and
Development (OECD) has raised its forecast for economic growth in 2000 to 1.7%,
and there has been recovery in consumer spending, falling unemployment, rising
production and declining inventories. These positive indicators should lead to a
strong profit recovery, which we believe is not reflected in the market. The
Fund has holdings in telecommunication and technology stocks such as Rohm and
Kyocera, bluechip growth stocks such as Canon and cyclical consumer stocks such
as Honda. We plan to continue covering half of the Fund's yen exposure back into
the U.S. dollar, because we expect the Bank of Japan will allow the yen to
weaken as signs of economic recovery continue.
Other Asian markets have a strong link to the U.S. economy, because much of
their success depends on exports of consumer products and electronic components
to the U.S. Therefore, the sensitivity of these markets to the unfolding drama
of the U.S. `soft landing' is greater than in others. However, the valuations of
some world-class manufacturers in Korea and Taiwan are considerably more
attractive than their U.S. counterparts. Most of the Fund's Asian investments
are in Hong Kong holdings in China Telecom, Cheung Kong and Hutchison Whampoa.
These investments provide exposure to a broad range of telecommunication,
trading and real estate interests in the region.
182
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Perpetual International Fund
Portfolio Manager Interview
Top 10 Holdings
--------------------------------------------------------------------------------
(as a percentage of 6/30/2000 net assets)
Ericsson LM Telephone, Ser B 3.5%
Nokia Oyj 2.8%
Koninklijke (Royal) Philips Electronics NV 1.8%
Rohm Co., Ltd. 1.8%
Honda Motor Co., Ltd. 1.7%
NEC Corp. 1.7%
Canon, Inc. 1.5%
Hitachi, Ltd. 1.5%
TDK Corp. 1.5%
Nippon Telegraph & Telephone Corp. 1.5%
What is your outlook?
While the U.S. market tries to reconcile the prospect of rising interest rises,
international markets will be influenced by factors in their own economies. The
United States is in the late stages of an economic cycle. Europe is in
mid-cycle, with monetary policy and inflation under control, and Japan is early
in its economic recovery, with no inflation and interest rates at zero. Similar
events affect the various economies differently. For example, growth in consumer
demand and higher interest rates in Japan during the next three months would
probably be viewed as a sign of confidence in the economy. The same developments
in the United States might not be as well received. We believe being exposed to
world markets and economies at different stages of their economic cycle has
particular value; such a strategy not only provides shareholders with wider
opportunities, it also helps to moderate risk.
183
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Small Cap Value Fund
Fund at a Glance as of June 30, 2000
"We have found many good companies selling at reasonable stock valuations at a
time when there is evidence of renewed investor interest in the small-cap value
stocks."
Portfolio Management
--------------------------------------------------------------------------------
[PHOTO]
Jordan Alexander
Tenure: April 1999
--------------------------------------------------------------------------------
PERFORMANCE & RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date: 5/1/1998
Average Annual Returns
6-month 6.41%
1 year 7.78%
Since Portfolio Inception 7.03%
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
VA Small Cap Value Consumer Price Index - US Russell 2000 Wilshire Target Small Value TR
------------------ ------------------------- ------------ ------------------------------
<S> <C> <C> <C> <C>
5/1/98 10,000 10,000 10,000 10,000
6/30/98 9,810 10,031 9,591 9,564
9/30/98 8,710 10,068 7,877 8,041
12/31/98 9,714 10,086 8,592 8,825
3/31/99 9,167 10,154 7,759 7,773
6/30/99 10,749 10,228 9,043 8,792
9/30/99 10,525 10,332 8,336 7,990
12/31/99 10,887 10,357 8,464 7,738
3/31/00 11,220 10,529 8,787 7,437
6/30/00 11,585 10,543 8,958 7,155
</TABLE>
Comparison of a $10,000 investment in Evergreen VA Small Cap Value Fund(1)versus
a similar investment in the Russell 2000 Value Index (Russell 2000 Value), the
Wilshire Small Cap Value Index (Wilshire Small Cap Value), and the Consumer
Price Index (CPI).
The Russell 2000 Value and the Wilshire Small Cap Value are unmanaged market
indices which do not include transaction costs associated with buying and
selling securities or any mutual fund expenses. The CPI is a commonly used
measure of inflation and does not represent an investment return. It is not
possible to invest directly in an index.
1Past performance is no guarantee of future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Performance includes the
reinvestment of income dividends and capital gains distributions.
The Fund's investment objective is non-fundamental and may be changed without
the vote of shareholders.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
Small capitalization stock investing may offer the potential for greater
long-term results, however, it is also generally associated with greater price
volatility due to the higher risk of failure.
All data is as of June 30, 2000 and subject to change.
197
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Small Cap Value Fund
Portfolio Manager Interview
How did the Fund perform?
Evergreen VA Small Cap Value Fund performed well, showing improvement as the
period progressed. For the six-month period ended June 30, 2000, the Fund had a
return of 6.41%, while the Russell 2000 Value and the Wilshire Small Cap Value
returned 5.85% and 3.57%, respectively.
Portfolio
Characteristics
--------------------------------------------------------------------------------
(As of 6/30/2000)
Total Net Assets $7,230,719
Number of Holdings 113
P/E 21.8x
What factors contributed to this performance?
We increased the Fund's emphasis on health care, technology and energy, while
lowering weightings in sectors such as consumer cyclicals and financial
services. The increased weighting in health care and technology made a
significant contribution to the Fund's outperformance, while the energy holdings
also contributed to the positive returns for the period.
Top 5 Sectors
--------------------------------------------------------------------------------
(as a percentage of 6/30/2000 net assets)
Information Technology 17.3%
Health Care 16.9%
Financials 12.7%
Consumer Discretionary 9.7%
Industrials 8.7%
What investments in particular made the most significant contributions to the
Fund's returns?
Selected investments in health care and technology helped the most. In health
care, our leading performers during the six-month period included AmeriSource
and Alpharma. AmeriSource, the fourth largest pharmaceutical distributor in the
United States, benefited from an expanded relationship with a key customer and
improved earnings growth. The stock rose by 104.1% during the six months. The
Fund's investment in the convertible bonds of Alpharma, a generic pharmaceutical
company, also contributed to the favorable performance with a gain of 86.7% in
the period. Alpharma produces generic pharmaceutical products for the U.S. and
European markets, and also operates animal health and fine chemicals businesses.
The company announced the acquisition of an animal feed additive business that
is expected to contribute to accelerated earnings growth next year.
The leading performers in technology included Scientific Atlanta, Hadco, and CSG
Systems. The stock of Scientific Atlanta, which manufactures TV set-top boxes
for cable television systems, rose by 166.7% during the six months. Hadco, a
company that manufactures printed circuit boards, generated a gain of 120.1% for
the six months. Sanmina, a contract manufacturer, acquired the company. CSG
Systems, which provides customer care and billing services for the
communications industry, appreciated 40.6% for the period.
198
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Small Cap Value Fund
Portfolio Manager Interview
Top 10 Holdings
--------------------------------------------------------------------------------
(as a percentage of 6/30/2000 net assets)
AmeriSource Health Corp., Class A 2.8%
Alza Corp. 1.9%
Burr-Brown Corp. 1.7%
Sanmina Corp. 1.7%
Pride International, Inc. 1.6%
Medicis Pharmaceutical Corp., Class A 1.6%
CSG Systems International, Inc. 1.5%
Pier 1 Imports, Inc. 1.5%
MDU Resources Group, Inc. 1.3%
Zebra Technologies Corp., Class A 1.3%
What is your outlook?
We continue to have a favorable outlook for the stocks in the portfolio. We have
found many good companies selling at reasonable stock valuations at a time when
there is evidence of renewed investor interest in the small cap value stocks.
Relative to large-cap companies, small-caps trade at more attractive valuations
and we believe small-caps can generate stronger earnings growth this year. The
reasonable prices of these stocks, combined with continued stock buybacks and
merger-and-acquisition activity, increases the potential for strong small-cap
performance.
Indications that the Federal Reserve Board may be approaching the end of its
current cycle of short-term interest rate increases are another positive for
small-cap stocks, which have generally out-performed large-cap stocks in a
declining rate environment in the past. Stabilization of interest rates also
should create a more favorable environment for those sectors, such as consumer
cyclicals and financials, which have under-performed during the past year.
199
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Fund at a Glance as of June 30, 2000
"We think technology stocks could continue to achieve exceptional earnings
growth, despite their high valuations."
Portfolio
Management
--------------------------------------------------------------------------------
[PHOTO] [PHOTO]
Tim Stevenson, Eric M. Teal,
CFA CFA
Tenure: October 1999 Tenure: October 1999
[PHOTO]
Jay Zelko
Tenure: October 1999
--------------------------------------------------------------------------------
PERFORMANCE & RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date: 9/29/1999
Cumulative Returns
6-month 4.36%
Since Portfolio Inception 23.95%
6-month capital gain distributions per share $ 0.31
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
[GRAPH]
VA Special Equity Fund Consumer Price Index - US Russell 2000
---------------------- ------------------------- ------------
09/30/99 10,000 10,000 10,000
10/31/99 10,280 10,018 10,041
11/30/99 11,094 10,024 10,640
12/31/99 11,886 10,024 11,844
01/31/00 11,927 10,048 11,654
02/29/00 13,280 10,107 13,578
03/31/00 13,585 10,191 12,683
04/30/00 12,415 10,197 11,920
05/31/00 11,389 10,203 11,225
06/30/00 12,395 10,204 12,203
Comparison of a $10,000 investment in Evergreen VA Special Equity Fund1 versus
a similar investment in the Russell 2000 Index (Russell 2000) and the Consumer
Price Index (CPI).
The Russell 2000 is an unmanaged market index which does not include transaction
costs associated with buying and selling securities or any mutual fund expenses.
The CPI is a commonly used measure of inflation and does not represent an
investment return. It is not possible to invest directly in an index.
1 Past performance is no guarantee of future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than original cost. Performance includes the reinvestment
of income dividends and capital gains distributions.
The Fund's investment objective is non-fundamental and may be changed without
the vote of shareholders.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
Small capitalization stock investing may offer the potential for greater
long-term results, however, it is also generally associated with greater price
volatility due to the higher risk of failure.
Performance results are extremely short-term, and may not provide an adequate
basis for evaluating a fund's performance potential over varying market
conditions or economic cycles. Unusual investment returns may be a result of a
fund's recent inception, existing market and economic conditions and the
increased potential of a small number of stocks affecting fund performance due
to the smaller asset size. Most mutual funds are intended to be long-term
investments.
All data is as of June 30, 2000 and subject to change.
209
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Portfolio Manager Interview
How did the Fund perform?
Evergreen VA Special Equity Fund returned 4.36% for the six-month period ended
June 30, 2000, outperforming the Russell 2000 Index, which returned 3.04%. We
attribute the Fund's strong relative performance to its holdings in the
technology and brokerage services sectors.
Portfolio
Characteristics
---------------
(As of 6/30/2000)
Total Net Assets $14,393,209
Number of Holdings 152
P/E Ratio 19.1x
Why did small capitalization stocks experience such considerable price swings
during the period?
Expectations of strong earnings growth and increasing opportunities within
certain industries drove prices higher, while investors' concerns that a tighter
Federal Reserve Board policy would interrupt the quarterly progression of
positive earnings surprises--particularly in light of some extraordinarily high
stock valuations--pushed prices lower. Many of the big winners over the past
several quarters were the big losers in the market's retreat. "New Economy"
stocks such as internet and software companies provided much of the fireworks.
Biotechnology stocks also captured headlines, as investor optimism soared over
the prospects for human gene mapping. Some of the "Old Economy" stocks were not
immune to the market's gyrations, either, as some industries experienced
spectacular rallies in response to strong earnings growth. The energy sector, in
particular, stood out as steadily rising oil and gas prices drove many of these
stocks to new highs before succumbing to concerns about a slowdown in global
demand in response to expectations of higher interest rates.
Top 5 Sectors
-------------
(as a percentage of 6/30/2000 net assets)
Information Technology 29.3%
Consumer Discretionary 15.3%
Financials 13.0%
Industrials 12.2%
Health Care 11.7%
What stocks most affected the Fund's performance?
Holdings in the technology, industrial and energy sectors all contributed to the
Fund's returns. Brokerage services stocks also added to the Fund's performance,
although some of the stocks in that sector experienced higher-than-average
volatility. Our slight underweighting in technology issues was offset by the
Fund's stock selection discipline, which identified exceptional performers like
Integrated Device Technology (IDTI) and Trimble Navigation (TRMB). During the
period, IDTI rose 106% and TRMB rose 126%, versus the 1.1% gain produced by the
technology stocks in the Russell 2000 Index. In contrast, the Fund was
over-weighted in the industrial and energy sectors, with positions in Hanover
Compressor (HC), Mark IV industries (IV), Stone Energy (SGY) and Western Gas
Resources (WGR). Dain Rauscher (DRC) was our most prominent holding in brokerage
services. Detracting from performance were stocks in the pharmaceutical and
health care sectors and the telephone industry. Some of these stocks included
Supergen (SUPG) and Nextlink Communications (NXLK).
210
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Portfolio Manager Interview
Top 10 Holdings
---------------
(as a percentage of 6/30/2000 net assets)
Pegrine Systems, Inc. 1.9%
Hanover Compressor Co. 1.7%
Dain Rauscher Corp. 1.7%
American Capital Strategies, Ltd. 1.7%
Nabors Industries, Inc. 1.6%
Imperial Bancorp 1.5%
Newfield Exploration Co. 1.5%
Mercury Interactive Corp. 1.4%
Michaels Stores, Inc. 1.3%
Circle International Group, Inc. 1.2%
What are your expectations for small capitalization stocks over the next six
months?
We think an improved earnings outlook and the ongoing boom in information
technology will drive prices higher. We do not anticipate a significant economic
slowdown in the third quarter of 2000--therefore, we do not believe investors
will redirect their assets to larger, more liquid stocks.
We think technology stocks could continue to achieve exceptional earnings
growth, despite their high valuations. The productivity enhancing benefits of
today's technology products compel many businesses to invest heavily in
technology in order to remain competitive in the global marketplace. We expect
demand for faster and better technology to remain solid. Other sectors also are
poised for success, in our opinion. Many smaller companies have carved out
profitable niches within their industries that may ultimately translate into
higher stock prices. We expect a number of these companies to benefit from
merger and acquisition activity as larger competitors view smaller companies as
important sources of future earnings growth.
211
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Strategic Income Fund
Fund at a Glance as of June 30, 2000
"In our opinion,the Fund's broad investment parameters leave it well-positioned
to take advantage of the opportunities that emerge from the market's dynamics."
Portfolio Management
--------------------
[PHOTO]
Prescott B. Crocker
Tenure: March 1997
--------------------------------------------------------------------------------
PERFORMANCE & RETURNS1
--------------------------------------------------------------------------------
Portfolio Inception Date: 3/6/1997
Average Annual Returns
6-month -2.48%
1 year -0.02%
Since Portfolio Inception 3.06%
6-month income dividends per share $ 0.63
--------------------------------------------------------------------------------
LONG TERM GROWTH
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VA Strategic Income Fund Consumer Price Index - US Lehman Brothers Long Govt Lehman Brothers Aggregate Bond
<S> <C> <C> <C> <C>
03/06/97 10000 10000 10000 10000
06/30/97 10121 10044 10295 10252
12/31/97 10529 10107 11589 10905
06/30/98 10941 10213 12322 11333
12/31/98 11150 10269 13139 11852
06/30/99 11053 10414 12251 11688
12/31/99 11333 10545 11982 11754
06/30/00 11051 10734 13033 12221
</TABLE>
Comparison of a $10,000 investment in Evergreen VA Strategic Income Fund(1)
versus a similar investment in the Lehman Brothers Long Term Government Bond
Index (LBLTGBI), the Lehman Brothers Aggregate Bond Index (LBABI), and the
Consumer Price Index (CPI).
The LBLTGBI and the LBABI are unmanaged market indices which do not include
transaction costs associated with buying and selling securities or any mutual
fund expenses. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
1Past performance is no guarantee of future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than original cost. Performance includes the reinvestment
of income dividends and capital gains distributions.
The Fund's investment objective is non-fundamental and may be changed without
the vote of shareholders.
All data is as of June 30, 2000 and subject to change.
U.S. Government guarantees apply only to the underlying securities of the Fund's
portfolio and not to the Fund's shares.
Funds that invest in high yield, lower-rated bonds may contain more risk due to
the increased possibility of default.
Foreign investments may contain more risk due to the inherent risks associated
with changing political climates, foreign market instability and foreign
currency fluctuations.
223
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Strategic Income Fund
Portfolio Manager Interview
How did the Fund perform?
The Fund returned -2.48% for the six-month period ended June 30, 2000, versus
the 8.77% and 3.99% respective returns for the Lehman Brothers Long Term
Government Bond and Lehman Brothers Aggregate Bond Indices for the same period.
We attribute the lag to underperformance in several high yield bond holdings and
the Fund's relatively small exposure to the high risk emerging market sector.
During the period, emerging market securities generated high returns relative to
other fixed-income sectors.
Portfolio
Characteristics
---------------
(As of 6/30/2000)
Total Net Assets $17,533,147
Average Credit Quality BBB-
Effective Maturity 8.4 years
Average Duration 4.9 years
What was the Fund's investment environment like?
Interest rates rose in both the United States and Europe for most of the period,
as economic growth continued to be robust. Toward the end of the period,
however, domestic interest rates fell--pushing bond prices higher--in response
to signs of a slower economy. European bond prices lagged their U.S.
counterparts during that time. European economic growth remained strong, which
prompted concerns about future interest rate hikes. Canada's investment
environment was favorable. The Canadian stock market continued to outperform its
U.S. counterpart, reinforcing a strong Canadian dollar. In the high yield
sector, volatility from the stock market spilled over to push bond prices lower.
Bond prices rose in June, however, benefited by an increase in cash flows. The
high yield sector attracted approximately $600 million in June after having
experienced net outflows for the past six months. The improved technicals helped
generate impressive returns for high yield bonds, for that month.
Portfolio Quality
-----------------
(as a percentage of 6/30/2000 portfolio assets)
AAA 27.8%
BB 14.5%
B 49.9%
CCC 5.7%
Not Rated/Not Available 2.1%
224
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Strategic Income Fund
Portfolio Manager Interview
What strategies did you use in managing the Fund?
We focused on asset-allocation, actively managing the Fund's currency positions,
and careful security and sector selection, within the high yield sector. We
shifted some of the Fund's assets from U.S. governments to the international
sector to increase total return potential, taking advantage of the higher yields
available in Europe and the favorable investment conditions in Canada.
Accordingly, we adjusted the hedges on the Fund's currency holdings. At times,
these positions emphasized the Canadian dollar, the Australian dollar and euro-
denominated securities. In the high yield sector, we focused on the energy and
wireless communications industries--sectors that contributed solidly to returns.
In contrast, the Fund's equity position, as well as holdings in the retail and
diversified media sectors, detracted from performance.
Portfolio
Composition
-----------
(as a percentage of 6/30/2000 net assets)
Corporate Bonds 50.4%
U.S. Treasury Obligations 18.6%
Yankee Obligations 10.5%
Foreign Bonds 18.8%
Other Investments, and Other Assets
and Liabilities, net 1.7%
What is your outlook?
We are optimistic for all of the sectors, near-term. We think the U.S. dollar
could stabilize after its recent slide, and U.S. Treasury and agency returns
could remain strong as signs of a "soft landing" for the economy begin to
materialize. In the high yield sector, we believe cash flows could continue to
be positive, which should help support prices; and internationally, Canada's
investment remains solid. Longer-term, we are a little more cautious. We
anticipate more moderate economic growth in the United States to cause
consolidation in the stock market, as investors harvest gains and wrestle with
uncertain earnings growth. Further, November's presidential elections could add
some uncertainty to the environment. These changing conditions can both
challenge investors and open-up longer-term opportunity. In our opinion, the
Fund's broad investment parameters leave it well-positioned to take advantage of
the opportunities that emerge from the market's dynamics.
225
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Blue Chip Fund
Financial Highlights
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Period Ended
June 30, 2000 (a)
(Unaudited)
<S> <C>
Net asset value, beginning of period $10.00
------
Income from investment operations
Net investment income 0.01
Net realized and unrealized losses on securities (0.07)
------
Total from investment operations (0.06)
------
Distributions to shareholders from net investment income 0
------
Net asset value, end of period $ 9.94
------
Total return* (0.60%)
Ratios and supplemental data
Net assets, end of period (thousands) $5,364
Ratios to average net assets
Expenses** 1.01%+
Net investment income 0.51%+
Portfolio turnover rate 31%
</TABLE>
(a) For the period from April 28, 2000 (commencement of operations) to June 30,
2000.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
See Combined Notes to Financial Statements.
5
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Blue Chip Fund
Schedule of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 92.0%
CONSUMER DISCRETIONARY - 9.0%
Automobiles - 0.3%
General Motors Corp. ..................................... 300 $ 17,419
----------
Distributors - 0.6%
Avnet, Inc. .............................................. 550 32,587
----------
Hotels, Restaurants & Leisure - 0.5%
McDonald's Corp. ......................................... 850 27,997
----------
Media - 4.7%
Disney (Walt) Co. ........................................ 1,450 56,278
Infinity Broadcasting Corp. .............................. 550 20,041
Seagram Co., Ltd. ........................................ 50 2,900
Time Warner, Inc. ........................................ 600 45,600
Univision Communications, Inc., Class A* ................. 300 31,050
Viacom, Inc., Class B .................................... 1,409 96,076
----------
251,945
----------
Multi-line Retail - 1.7%
Wal-Mart Stores, Inc. .................................... 1,550 89,319
----------
Specialty Retail - 1.2%
Best Buy Co., Inc.* ...................................... 600 37,950
Home Depot, Inc. ......................................... 550 27,465
----------
65,415
----------
CONSUMER STAPLES - 2.2%
Beverages - 1.0%
Pepsico, Inc. ............................................ 1,250 55,547
----------
Food & Drug Retailing - 0.9%
Safeway, Inc.* ........................................... 1,000 45,125
----------
Household Products - 0.3%
Procter & Gamble Co. ..................................... 300 17,175
----------
ENERGY - 9.6%
Energy Equipment & Services - 1.0%
Diamond Offshore Drilling, Inc. .......................... 50 1,756
Halliburton Co. .......................................... 400 18,875
Nabors Industries, Inc.* ................................. 750 31,172
----------
51,803
----------
Oil & Gas - 8.6%
Apache Corp. ............................................. 1,050 61,753
BP Amoco Plc, ADR ........................................ 1,050 59,391
Conoco, Inc., Class A .................................... 1,050 23,100
Exxon Mobil Corp. ........................................ 1,750 137,375
Kerr-McGee Corp. ......................................... 400 23,575
Royal Dutch Petroleum Co. ................................ 1,050 64,641
Sunoco, Inc. ............................................. 850 25,022
Texaco, Inc. ............................................. 800 42,600
</TABLE>
6
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Blue Chip Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
ENERGY - continued
Oil & Gas - continued
Unocal Corp. .............................................. 700 $ 23,187
----------
460,644
----------
FINANCIALS - 12.2%
Banks - 3.9%
Bank of America Corp. ..................................... 850 36,550
Chase Manhattan Corp. ..................................... 375 17,273
FleetBoston Financial Corp. ............................... 600 20,400
Mellon Financial Corp. .................................... 1,350 49,191
PNC Financial Services Group .............................. 450 21,094
The Bank of New York Co., Inc. ............................ 700 32,550
Wells Fargo Co. ........................................... 850 32,937
----------
209,995
----------
Diversified Financials - 5.6%
American Express Co. ...................................... 900 46,913
Citigroup, Inc. ........................................... 1,550 93,387
Federal National Mortgage Assn. ........................... 650 33,922
Merrill Lynch & Co., Inc. ................................. 350 40,250
Morgan Stanley, Dean Witter & Co. ......................... 400 33,300
SCG Holding Corp. ......................................... 1,600 35,000
Schwab (Charles) & Co., Inc. .............................. 550 18,494
----------
301,266
----------
Insurance - 2.7%
American International Group, Inc. ........................ 700 82,250
Hartford Financial Services Group, Inc. ................... 650 36,360
Marsh & McLennan Co., Inc. ................................ 250 26,109
----------
144,719
----------
HEALTH CARE - 10.3%
Biotechnology - 1.4%
Amgen, Inc.* .............................................. 550 38,637
MedImmune, Inc.* .......................................... 150 11,100
Millennium Pharmaceuticals, Inc. .......................... 200 22,375
----------
72,112
----------
Health Care Equipment & Supplies - 0.8%
Medtronic, Inc. ........................................... 500 24,906
PE Corp-PE Biosystems Group ............................... 300 19,763
----------
44,669
----------
Pharmaceuticals - 8.1%
American Home Products Corp. .............................. 1,200 70,500
Bristol-Myers Squibb Co. .................................. 500 29,125
Johnson & Johnson ......................................... 650 66,219
Lilly (Eli) & Co. ......................................... 350 34,956
</TABLE>
7
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Blue Chip Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
HEALTH CARE - continued
Pharmaceuticals - continued
Merck & Co., Inc. ......................................... 1,050 $ 80,456
Pfizer, Inc. .............................................. 1,237 59,376
Pharmacia Corp. ........................................... 750 38,766
Schering-Plough Corp. ..................................... 1,100 55,550
----------
434,948
----------
INDUSTRIALS - 9.0%
Aerospace & Defense - 0.7%
United Technologies Corp. ................................. 600 35,325
----------
Commercial Services & Supplies - 1.6%
Automatic Data Processing, Inc. ........................... 650 34,816
Avery Dennison Corp. ...................................... 500 33,562
Convergys Corp.* .......................................... 300 15,562
Electronic Data Systems Corp. ............................. 50 2,063
----------
86,003
----------
Electrical Equipment - 0.4%
American Power Conversion Corp.* .......................... 450 18,366
----------
Industrial Conglomerates - 5.1%
General Electric Co. ...................................... 4,350 230,550
Tyco International, Ltd. .................................. 950 45,006
----------
275,556
----------
Machinery - 0.4%
Deere & Co. ............................................... 600 22,200
----------
Road & Rail - 0.8%
Burlington Northern Santa Fe Corp. ........................ 600 13,762
Kansas City Southern Industries, Inc. ..................... 350 31,041
----------
44,803
----------
INFORMATION TECHNOLOGY - 32.6%
Communications Equipment - 8.4%
Cisco Systems, Inc.* ...................................... 2,600 165,262
Corning, Inc. ............................................. 200 53,975
Extreme Networks, Inc. .................................... 100 10,550
Juniper Networks, Inc. .................................... 100 14,556
Lucent Technologies, Inc. ................................. 1,200 71,100
Motorola, Inc. ............................................ 750 21,797
Nokia Corp., ADR .......................................... 1,100 54,931
Nortel Networks Corp. ..................................... 850 58,013
----------
450,184
----------
Computers & Peripherals - 5.4%
Dell Computer Corp.* ...................................... 600 29,587
EMC Corp.* ................................................ 950 73,091
</TABLE>
8
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Blue Chip Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Computers & Peripherals - continued
Hewlett-Packard Co. ....................................... 350 $ 43,706
International Business Machines Corp. ..................... 800 87,650
Lexmark Intl. Group, Inc., Class A* ....................... 320 21,520
Sun Microsystems, Inc.* ................................... 350 31,828
----------
287,382
----------
Electronic Equipment & Instruments - 1.7%
Agilent Technologies, Inc. ................................ 133 9,809
JDS Uniphase Corp.* ....................................... 100 11,988
Sanmina Corp.* ............................................ 600 51,300
Solectron Corp.* .......................................... 500 20,937
----------
94,034
----------
Internet Software & Services - 1.0%
America Online, Inc.* ..................................... 650 34,288
VeriSign, Inc. ............................................ 100 17,650
----------
51,938
----------
Semiconductor Equipment & Products - 9.4%
Applied Materials, Inc.* .................................. 400 36,250
Broadcom Corp.* ........................................... 100 21,894
Cypress Semiconductor Corp. ............................... 1,000 42,250
Intel Corp. ............................................... 1,400 187,163
Lam Research Corp.* ....................................... 500 18,750
Microchip Technology, Inc. ................................ 950 55,352
Micron Technology, Inc. ................................... 900 79,256
National Semiconductor Corp.* ............................. 400 22,700
Teradyne, Inc.* ........................................... 550 40,425
----------
504,040
----------
Software - 6.7%
Adobe Systems, Inc. ....................................... 150 19,500
Mercury Interactive Corp.* ................................ 150 14,513
Microsoft Corp.* .......................................... 2,050 164,000
Oracle Systems Corp.* ..................................... 800 67,250
Rational Software Corp.* .................................. 150 13,941
Remedy Corp.* ............................................. 550 30,662
Siebel Systems, Inc.* ..................................... 200 32,712
Veritas Software Corp.* ................................... 150 16,952
----------
359,530
----------
MATERIALS - 1.0%
Chemicals - 1.0%
Millipore Corp. ........................................... 500 37,688
Potash Corp. of Saskatchewan, Inc. ........................ 300 16,556
----------
54,244
----------
</TABLE>
9
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Blue Chip Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
TELECOMMUNICATION SERVICES - 5.1%
Diversified Telecommunication Services - 5.1%
Allegiance Telecom, Inc.* ................................ 150 $ 9,600
AT&T Corp. ............................................... 800 25,300
AT&T Corp., Liberty Media Group, Class A ................. 800 19,400
Bell Atlantic Corp. ...................................... 850 43,191
BellSouth Corp. .......................................... 1,200 51,150
Global Crossing, Ltd.* ................................... 50 1,316
SBC Communications, Inc. ................................. 1,450 62,712
Sprint Corp. ............................................. 750 38,250
WorldCom, Inc. ........................................... 500 22,937
----------
273,856
----------
UTILITIES - 1.0%
Electric Utilities - 1.0%
Dominion Resources, Inc. ................................. 500 21,438
Duke Energy Corp. ........................................ 600 33,825
----------
55,263
----------
Total Common Stocks (cost $4,864,047)................... 4,935,409
-------------------------------------
----------
SHORT-TERM INVESTMENTS - 10.1%
MUTUAL FUND SHARES - 10.1%
Evergreen Select Money Market Fund (cost $543,520)o ...... 543,520 543,520
----------
Total Investments - (cost $5,407,567) - 102.1% ..................... 5,478,929
Other Assets and Liabilities - (2.1%) .............................. (115,243)
----------
Net Assets - 100.0% ................................................ $5,363,686
----------
</TABLE>
See Combined Notes to Schedules of Investments.
10
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Blue Chip Fund
Statement of Assets and Liabilities
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets
Identified cost of securities..................................... $5,407,567
Net unrealized gains on securities................................ 71,362
--------------------------------------------------------------------------------
Market value of securities........................................ 5,478,929
Cash.............................................................. 26,331
Dividends receivable.............................................. 1,820
Receivable from investment advisor................................ 8,650
--------------------------------------------------------------------------------
Total assets...................................................... 5,515,730
--------------------------------------------------------------------------------
Liabilities
Payable for securities purchased.................................. 142,401
Due to other related parties...................................... 44
Accrued expenses and other liabilities............................ 9,599
--------------------------------------------------------------------------------
Total liabilities................................................. 152,044
--------------------------------------------------------------------------------
Net assets......................................................... $5,363,686
--------------------------------------------------------------------------------
Net assets represented by
Paid-in capital................................................... $5,392,054
Undistributed net investment income............................... 4,550
Accumulated net realized losses on securities..................... (104,280)
Net unrealized gains on securities................................ 71,362
--------------------------------------------------------------------------------
Total net assets................................................... $5,363,686
--------------------------------------------------------------------------------
Shares outstanding................................................. 539,525
--------------------------------------------------------------------------------
Net asset value per share.......................................... $ 9.94
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
11
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Blue Chip Fund
Statement of Operations
Period Ended June 30, 2000 (Unaudited) (a)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
<S> <C>
Investment income
Dividends (net of foreign withholding taxes of $159)............... $ 13,575
--------------------------------------------------------------------------------
Total investment income............................................. 13,575
--------------------------------------------------------------------------------
Expenses
Advisory fee....................................................... 5,505
Administrative services fees....................................... 902
Transfer agent fee................................................. 43
Trustees' fees and expenses........................................ 94
Printing and postage expenses...................................... 5,197
Custodian fee...................................................... 1,482
Professional fees.................................................. 7,144
Organization expenses.............................................. 1,747
Other.............................................................. 465
--------------------------------------------------------------------------------
Total expenses................................................... 22,579
Less: Expense reductions......................................... (112)
Fee waivers................................................ (13,442)
--------------------------------------------------------------------------------
Net expenses..................................................... 9,025
--------------------------------------------------------------------------------
Net investment income 4,550
--------------------------------------------------------------------------------
Net realized and unrealized gains or losses on securities
Net realized losses on securities.................................. (104,280)
--------------------------------------------------------------------------------
Net change in unrealized gains on securities....................... 71,362
--------------------------------------------------------------------------------
Net realized and unrealized losses on securities................... (32,918)
--------------------------------------------------------------------------------
Net decrease in net assets resulting from operations............... $ (28,368)
--------------------------------------------------------------------------------
</TABLE>
(a) For the period from April 28, 2000 (commencement of operations) to June 30,
2000.
See Combined Notes to Financial Statements.
12
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Blue Chip Fund
Statement of Changes in Net Assets
Period Ended June 30, 2000 (Unaudited) (a)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Operations
Net investment income............................................ $ 4,550
Net realized losses on securities................................ (104,280)
Net change in unrealized gains on securities..................... 71,362
-------------------------------------------------------------------------------
Net decrease in net assets resulting from operations............. (28,368)
-------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold........................................ 5,392,054
Payment for shares redeemed...................................... 0
Net asset value of shares issued in reinvestment of
distributions................................................... 0
-------------------------------------------------------------------------------
Net increase in net assets resulting from capital share
transactions.................................................... 5,392,054
-------------------------------------------------------------------------------
Total increase in net assets.................................... 5,363,686
Net assets
Beginning of period.............................................. 0
-------------------------------------------------------------------------------
End of period.................................................... $5,363,686
-------------------------------------------------------------------------------
Undistributed net investment income............................... $ 4,550
-------------------------------------------------------------------------------
</TABLE>
(a) For the period from April 28, 2000 (commencement of operations) to June 30,
2000.
See Combined Notes to Financial Statements.
13
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen Capital Growth Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 2000 ------------------------
(Unaudited) 1999 1998 (b)
<S> <C> <C> <C>
(Formerly Mentor VIP Capital Growth
Portfolio) (a) Net asset value,
beginning of period $ 14.42 $ 13.58 $ 12.50
------- ----------- -----------
Income from investment operations
Net investment income 0.05 0.01 0.03
Net realized and unrealized gains
on securities 0.55 0.87 1.05
------- ----------- -----------
Total from investment operations 0.60 0.88 1.08
------- ----------- -----------
Distributions to shareholders from
Net investment income (0.01) (0.02) 0
Net realized gains (0.45) (0.02) 0
------- ----------- -----------
Total distributions (0.46) (0.04) 0
------- ----------- -----------
Net asset value, end of period $ 14.56 $ 14.42 $ 13.58
------- ----------- -----------
Total return* 4.30% 6.50% 8.64%
Ratios and supplemental data
Net assets, end of period
(thousands) $29,951 $ 28,377 $ 20,142
Ratios to average net assets
Expenses** 1.00%+ 1.18% 1.05%+
Net investment income 0.73%+ 0.06% 0.50%+
Portfolio turnover rate 37% 87% 54%
</TABLE>
(a) Effective February 1, 2000, shareholders of Mentor VIP Capital Growth Port-
folio became owners of that number of full and fractional shares of Ever-
green VA Capital Growth Fund. As Mentor VIP Capital Growth Portfolio con-
tributed the majority of assets and shareholders to the Evergreen VA Capi-
tal Growth Fund, the accounting and performance history is carried forward.
(b) For the period from March 3, 1998 (commencement of operations) to December
31, 1998.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
See Combined Notes to Financial Statements.
17
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Capital Growth Fund
Schedule of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 94.5%
CONSUMER DISCRETIONARY - 6.8%
Household Durables - 2.9%
Newell Rubbermaid, Inc. ................................... 34,000 $ 875,500
----------
Media - 3.0%
Interpublic Group of Companies, Inc. ...................... 20,820 895,260
----------
Multi-line Retail - 0.9%
May Department Stores Co. ................................. 10,900 261,600
----------
CONSUMER STAPLES - 15.2%
Food & Drug Retailing - 7.7%
Albertsons, Inc. .......................................... 17,430 579,547
Kroger Co.* ............................................... 17,000 375,063
SYSCO Corp. ............................................... 31,790 1,339,154
----------
2,293,764
----------
Personal Products - 3.3%
Kimberly-Clark Corp. ...................................... 17,200 986,850
----------
Tobacco - 4.2%
Philip Morris Cos., Inc. .................................. 47,350 1,257,734
----------
FINANCIALS - 13.1%
Banks - 7.3%
SouthTrust Corp. .......................................... 23,250 526,031
Wachovia Corp. ............................................ 6,600 358,050
Washington Mutual, Inc. ................................... 21,948 633,749
Wells Fargo Co. ........................................... 17,680 685,100
----------
2,202,930
----------
Diversified Financials - 5.8%
American Express Co. ...................................... 17,610 917,921
Federal Home Loan Mortgage Assn. .......................... 7,000 283,500
Federal National Mortgage Assn. ........................... 10,110 527,616
----------
1,729,037
----------
HEALTH CARE - 13.9%
Health Care Equipment & Supplies - 2.0%
Baxter International, Inc. ................................ 4,500 316,406
Boston Scientific Corp.* .................................. 13,200 289,575
----------
605,981
----------
Health Care Providers & Services - 4.1%
Tenet Healthcare Corp.* ................................... 45,410 1,226,070
----------
Pharmaceuticals - 7.8%
American Home Products Corp. .............................. 7,900 464,125
Bristol-Myers Squibb Co. .................................. 8,500 495,125
Johnson & Johnson ......................................... 6,130 624,494
</TABLE>
18
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Capital Growth Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
HEALTH CARE - continued
Pharmaceuticals - continued
Pfizer, Inc. .............................................. 7,600 $ 364,800
Schering-Plough Corp. ..................................... 7,500 378,750
----------
2,327,294
----------
INDUSTRIALS - 26.6%
Aerospace & Defense - 1.8%
United Technologies Corp. ................................. 9,000 529,875
----------
Building Products - 1.9%
Masco Corp. ............................................... 30,900 558,131
----------
Commercial Services & Supplies - 11.9%
Automatic Data Processing, Inc. ........................... 24,100 1,290,856
Computer Sciences Corp.* .................................. 12,320 920,150
First Data Corp. .......................................... 27,250 1,352,281
----------
3,563,287
----------
Industrial Conglomerates - 7.8%
Danaher Corp. ............................................. 15,400 761,338
Tyco International, Ltd. .................................. 33,480 1,586,115
----------
2,347,453
----------
Machinery - 3.1%
Illinois Tool Works, Inc. ................................. 16,530 942,210
----------
Road & Rail - 0.1%
Werner Enterprises, Inc. .................................. 2,950 34,109
----------
INFORMATION TECHNOLOGY - 10.8%
Computers & Peripherals - 2.6%
International Business Machines Corp. ..................... 7,100 777,894
----------
Electronic Equipment & Instruments - 1.2%
Solectron Corp.* .......................................... 9,000 376,875
----------
Semiconductor Equipment & Products - 4.2%
Intel Corp. ............................................... 9,350 1,249,978
----------
Software - 2.8%
Computer Associates International, Inc. ................... 16,250 831,797
----------
MATERIALS - 3.2%
Chemicals - 3.2%
Sherwin Williams Co. ...................................... 45,400 961,912
----------
TELECOMMUNICATION SERVICES - 3.6%
Diversified Telecommunication Services - 3.6%
WorldCom, Inc. ............................................ 23,635 1,084,256
----------
</TABLE>
19
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Capital Growth Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
UTILITIES - 1.3%
Electric Utilities - 1.3%
Duke Energy Corp. ..................................... 6,850 $ 386,169
-----------
Total Common Stocks (cost $25,182,600)............... 28,305,966
-----------
SHORT-TERM INVESTMENTS - 3.6%
MUTUAL FUND SHARES - 3.6%
Evergreen Select Money Market Fund
(Cost $1,068,806) o .................................. 1,068,806 1,068,806
-----------
Total Investments - (cost $26,251,406) - 98.1% .................... 29,374,772
Other Assets and Liabilities - 1.9% ............................... 576,263
-----------
Net Assets - 100.0% ............................................... $29,951,035
-----------
</TABLE>
See Combined Notes to Schedules of Investments.
20
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Capital Growth Fund
Statement of Assets and Liabilities
June 30, 2000 (Unaudited)
<TABLE>
--------------------------------------------------------------------------------
<S> <C>
Assets
Identified cost of securities..................................... $26,251,406
Net unrealized gains on securities................................ 3,123,366
--------------------------------------------------------------------------------
Market value of securities........................................ 29,374,772
Receivable for securities sold.................................... 575,593
Dividends and interest receivable................................. 49,435
Deferred organization expenses.................................... 8,958
Receivable from investment advisor................................ 21,821
Prepaid expenses and other assets................................. 8,957
--------------------------------------------------------------------------------
Total assets.................................................... 30,039,536
--------------------------------------------------------------------------------
Liabilities
Due to custodian bank............................................. 78,310
Due to other related parties...................................... 246
Accrued expenses and other liabilities............................ 9,945
--------------------------------------------------------------------------------
Total liabilities............................................... 88,501
--------------------------------------------------------------------------------
Net assets......................................................... $29,951,035
--------------------------------------------------------------------------------
Net assets represented by
Paid-in capital................................................... $26,390,875
Undistributed net investment income............................... 103,225
Accumulated net realized gains on securities...................... 333,569
Net unrealized gains on securities................................ 3,123,366
--------------------------------------------------------------------------------
Total net assets................................................... $29,951,035
--------------------------------------------------------------------------------
Shares outstanding................................................. 2,057,615
--------------------------------------------------------------------------------
Net asset value per share.......................................... $ 14.56
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
21
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Capital Growth Fund
Statement of Operations
Six Months Ended June 30, 2000 (Unaudited)
<TABLE>
--------------------------------------------------------------------------------
<S> <C>
Investment income
Dividends.......................................................... $ 205,411
Interest........................................................... 40,288
--------------------------------------------------------------------------------
Total investment income............................................. 245,699
--------------------------------------------------------------------------------
Expenses
Advisory fee....................................................... 113,340
Administrative services fees....................................... 14,168
Transfer agent fee................................................. 235
Trustees' fees and expenses........................................ 338
Printing and postage expenses...................................... 13,593
Custodian fee...................................................... 4,377
Professional fees.................................................. 5,515
Organization expenses.............................................. 1,761
Other.............................................................. 9,724
--------------------------------------------------------------------------------
Total expenses................................................... 163,051
Less: Expense reductions......................................... (663)
Fee waivers.................................................... (20,914)
--------------------------------------------------------------------------------
Net expenses..................................................... 141,474
--------------------------------------------------------------------------------
Net investment income.............................................. 104,225
--------------------------------------------------------------------------------
Net realized and unrealized gains on securities
Net realized gains on securities................................... 584,345
--------------------------------------------------------------------------------
Net change in unrealized gains on securities....................... 506,701
--------------------------------------------------------------------------------
Net realized and unrealized gains on securities.................... 1,091,046
--------------------------------------------------------------------------------
Net increase in net assets resulting from operations............... $1,195,271
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
22
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Capital Growth Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
-------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income..................... $ 104,225 $ 13,671
Net realized gains on securities.......... 584,345 680,856
Net change in unrealized gains on
securities............................... 506,701 835,607
-------------------------------------------------------------------------------
Net increase in net assets resulting
from operations........................ 1,195,271 1,530,134
-------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income..................... (13,710) (35,194)
Net realized gains........................ (879,433) (40,752)
-------------------------------------------------------------------------------
Total distributions to shareholders... (893,143) (75,946)
-------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold................. 2,817,573 10,355,763
Payment for shares redeemed............... (2,438,459) (3,651,247)
Net asset value of shares issued in
reinvestment of distributions............ 893,143 75,941
-------------------------------------------------------------------------------
Net increase in net assets resulting from
capital share transactions............. 1,272,257 6,780,457
-------------------------------------------------------------------------------
Total increase in net assets......... 1,574,385 8,234,645
Net assets
Beginning of period....................... 28,376,650 20,142,005
-------------------------------------------------------------------------------
End of period............................. $29,951,035 $28,376,650
-------------------------------------------------------------------------------
Undistributed net investment income........ $ 103,225 $ 12,710
-------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
23
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Period Ended
(Unaudited) December 31, 1999 (a)
<S> <C> <C>
Net asset value, beginning of period $ 11.48 $ 10.00
======= =======
Income from investment operations
Net investment income 0.05 0.03
Net realized and unrealized gains or
losses on securities and future
contracts (0.10) 1.51
------- -------
Total from investment operations (0.05) 1.54
------- -------
Distributions to shareholders from
Net investment income 0 (0.03)
Net realized gains (0.03) (0.03)
------- -------
Total distributions (0.03) (0.06)
------- -------
Net asset value, end of period $ 11.40 $ 11.48
======= =======
Total return* (0.44%) 15.47%
Ratios and supplemental data
Net assets, end of period (thousands) $28,324 $18,685
Ratios to average net assets
Expenses** 0.31%+ 0.31%+
Net investment income 1.17%+ 1.34%+
Portfolio turnover rate 1% 5%
</TABLE>
(a) For the period from September 29, 1999 (commencement of operations) to De-
cember 31, 1999.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
See Combined Notes to Financial Statements.
27
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 93.8%
CONSUMER DISCRETIONARY - 10.3%
Auto Components - 0.3%
Cooper Tire & Rubber Co. ............................. 650 $ 7,231
Dana Corp. ........................................... 300 6,356
Delphi Automotive Systems Corp. ...................... 1,040 15,145
Eaton Corp. .......................................... 200 13,400
Genuine Parts Co. .................................... 400 8,000
Goodyear Tire & Rubber Co. ........................... 260 5,200
Johnson Controls, Inc. ............................... 200 10,263
TRW, Inc. ............................................ 250 10,844
Visteon Corp. ........................................ 327 3,965
-----------
80,404
-----------
Automobiles - 0.8%
Ford Motor Co. ....................................... 2,500 107,500
General Motors Corp. ................................. 1,390 80,707
Harley-Davidson, Inc. ................................ 600 23,100
-----------
211,307
-----------
Distributors - 0.0%
W.W. Grainger, Inc. .................................. 200 6,162
-----------
Hotels, Restaurants & Leisure - 0.6%
Carnival Corp., Class A .............................. 1,150 22,425
Darden Restaurants, Inc. ............................. 450 7,312
Harrahs Entertainment, Inc.* ......................... 450 9,422
Hilton Hotels Corp. .................................. 670 6,281
Marriott International, Inc., Class A ................ 430 15,507
McDonald's Corp. ..................................... 2,820 92,884
Starbucks Corp.* ..................................... 400 15,275
Tricon Global Restaurants, Inc.* ..................... 300 8,475
Wendy's International, Inc. .......................... 150 2,672
-----------
180,253
-----------
Household Durables - 0.2%
Black & Decker Corp. ................................. 200 7,863
Centex Corp. ......................................... 300 7,050
Leggett & Platt, Inc. ................................ 460 7,590
Maytag Corp. ......................................... 150 5,531
Newell Rubbermaid, Inc. .............................. 470 12,102
Snap-on, Inc. ........................................ 300 7,987
Stanley Works ........................................ 100 2,375
Tupperware Corp. ..................................... 210 4,620
Whirlpool Corp. ...................................... 100 4,663
-----------
59,781
-----------
</TABLE>
28
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
CONSUMER DISCRETIONARY - continued
Leisure Equipment & Products - 0.2%
Brunswick Corp. ...................................... 200 $ 3,312
Eastman Kodak Co. .................................... 710 42,245
Hasbro, Inc. ......................................... 200 3,013
Mattel, Inc. ......................................... 650 8,572
Polaroid Corp. ....................................... 300 5,419
-----------
62,561
-----------
Media - 3.7%
Clear Channel Communications, Inc.* .................. 740 55,500
Comcast Corp., Class A................................ 1,830 74,115
Disney (Walt) Co. .................................... 4,400 170,775
Dow Jones & Co., Inc. ................................ 200 14,650
Gannett Co., Inc. .................................... 570 34,093
Harcourt General, Inc. ............................... 100 5,438
Interpublic Group of Cos., Inc. ...................... 570 24,510
Knight-Ridder, Inc. .................................. 200 10,637
MediaOne Group, Inc.* ................................ 1,240 81,995
Meredith Corp. ....................................... 300 10,125
New York Times Co., Class A........................... 300 11,850
Omnicom Group, Inc. .................................. 330 29,391
Seagram Co., Ltd. .................................... 950 55,100
Time Warner, Inc. .................................... 2,840 215,840
Tribune Co. .......................................... 520 18,200
Viacom, Inc., Class B................................. 3,224 219,836
Young & Rubicam, Inc. ................................ 100 5,719
-----------
1,037,774
-----------
Multi-line Retail - 2.7%
Consolidated Stores Corp.* ........................... 450 5,400
Costco Wholesale Corp.* .............................. 880 29,040
Dillards, Inc., Class A............................... 600 7,350
Dollar General Corp. ................................. 562 10,959
Federated Department Stores, Inc.* ................... 450 15,188
J.C. Penney Co., Inc. ................................ 400 7,375
Kmart Corp.* ......................................... 850 5,791
Kohl's Corp.* ........................................ 720 40,050
May Department Stores Co. ............................ 640 15,360
Reebok International, Ltd. ........................... 300 4,781
Sears, Roebuck & Co. ................................. 700 22,837
Target Corp. ......................................... 980 56,840
Wal-Mart Stores, Inc. ................................ 9,520 548,590
-----------
769,561
-----------
</TABLE>
29
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
CONSUMER DISCRETIONARY - continued
Specialty Retail - 1.7%
Autozone, Inc.* ...................................... 300 $ 6,600
Bed Bath & Beyond, Inc.* ............................. 250 9,063
Best Buy Co., Inc.* .................................. 470 29,727
Circuit City Stores, Inc. ............................ 360 11,948
Gap, Inc. ............................................ 1,850 57,812
Home Depot, Inc. ..................................... 4,885 243,945
Limited, Inc. ........................................ 900 19,462
Lowe's Companies, Inc. ............................... 800 32,850
Nordstrom, Inc. ...................................... 250 6,031
Office Depot, Inc.* .................................. 1,300 8,125
RadioShack Corp. ..................................... 350 16,581
Staples, Inc.* ....................................... 910 13,991
Tiffany & Co. ........................................ 100 6,750
TJX Co., Inc. ........................................ 750 14,063
Toys "R" Us, Inc.* ................................... 450 6,553
-----------
483,501
-----------
Textiles & Apparel - 0.1%
Liz Claiborne, Inc. .................................. 100 3,525
Nike, Inc., Class B................................... 570 22,693
Springs Industries, Inc. ............................. 100 3,219
V.F. Corp. ........................................... 150 3,572
-----------
33,009
-----------
CONSUMER STAPLES - 6.2%
Beverages - 1.9%
Adolph Coors Co. ..................................... 150 9,075
Anheuser Busch Cos., Inc. ............................ 1,010 75,434
Brown Forman Corp., Class B........................... 90 4,838
Coca Cola Co. ........................................ 5,230 300,398
Coca Cola Enterprises, Inc. .......................... 750 12,234
Pepsico, Inc. ........................................ 2,960 131,535
-----------
533,514
-----------
Food & Drug Retailing - 0.9%
Albertsons, Inc. ..................................... 850 28,262
CVS Corp. ............................................ 800 32,000
Great Atlantic & Pacific Tea, Inc. ................... 400 6,650
Kroger Co.* .......................................... 1,800 39,712
Longs Drug Stores Corp. .............................. 200 4,350
Rite Aid Corp. ....................................... 1,000 6,563
Safeway, Inc.* ....................................... 1,050 47,381
SYSCO Corp. .......................................... 630 26,539
</TABLE>
30
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
CONSUMER STAPLES - continued
Food & Drug Retailing - continued
Walgreen Co. ......................................... 2,110 $ 67,916
Winn Dixie Stores, Inc. .............................. 450 6,441
-----------
265,814
-----------
Food Products - 1.3%
Archer Daniels Midland Co. ........................... 1,310 12,854
Bestfoods............................................. 570 39,472
Campbell Soup Co. .................................... 970 28,251
Conagra, Inc. ........................................ 1,140 21,731
General Mills, Inc. .................................. 600 22,950
H.J. Heinz Co. ....................................... 670 29,312
Hershey Foods Corp. .................................. 250 12,125
Kellogg Co. .......................................... 930 27,668
Nabisco Group Holding Corp. .......................... 950 24,641
Quaker Oats Co. ...................................... 300 22,538
Ralston Purina Co. ................................... 550 10,966
Sara Lee Corp. ....................................... 1,900 36,694
Unilever NV........................................... 1,150 49,450
Wrigley (W.M.) Junior Co. ............................ 250 20,047
-----------
358,699
-----------
Health Care Equipment & Supplies - 0.0%
SuperValu, Inc. ...................................... 450 8,578
-----------
Household Products - 0.6%
American Greetings Corp., Class A..................... 400 7,600
Procter & Gamble Co. ................................. 2,890 165,452
-----------
173,052
-----------
Personal Products - 1.0%
Alberto Culver Co., Class B........................... 200 6,112
Avon Products, Inc. .................................. 500 22,250
Clorox Co. ........................................... 510 22,854
Colgate-Palmolive Co. ................................ 1,210 72,449
Gillette Co. ......................................... 2,150 75,116
International Flavors & Fragrances, Inc. ............. 200 6,038
Kimberly-Clark Corp. ................................. 1,150 65,981
-----------
270,800
-----------
Tobacco - 0.5%
Philip Morris Cos., Inc. ............................. 4,780 126,969
UST, Inc. ............................................ 300 4,406
-----------
131,375
-----------
</TABLE>
31
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
ENERGY - 5.1%
Energy Equipment & Services - 0.7%
Baker Hughes, Inc. ................................... 730 $ 23,360
Halliburton Co. ...................................... 880 41,525
Rowan Companies, Inc.*................................ 200 6,075
Schlumberger, Ltd. ................................... 1,220 91,042
Transocean Sedco Forex, Inc. ......................... 539 28,803
-----------
190,805
-----------
Oil & Gas - 4.4%
Amerada Hess Corp. ................................... 200 12,350
Anadarko Petroleum Corp. ............................. 250 12,328
Apache Corp. ......................................... 300 17,644
Ashland, Inc. ........................................ 300 10,519
Burlington Resources, Inc. ........................... 380 14,535
Chevron Corp. ........................................ 1,410 119,586
Conoco, Inc., Class B................................. 1,200 29,475
Exxon Mobil Corp. .................................... 7,328 575,248
Kerr-McGee Corp. ..................................... 200 11,788
Occidental Petroleum Corp. ........................... 700 14,744
Phillips Petroleum Co. ............................... 530 26,864
Royal Dutch Petroleum Co. ............................ 4,550 280,109
Sunoco, Inc. ......................................... 300 8,831
Texaco, Inc. ......................................... 1,120 59,640
Tosco Corp. .......................................... 350 9,909
Union Pacific Resource Group, Inc. ................... 450 9,900
Unocal Corp. ......................................... 420 13,913
USX Marathon Group.................................... 600 15,037
-----------
1,242,420
-----------
FINANCIALS - 12.1%
Banks - 4.3%
AmSouth Bancorp....................................... 820 12,915
Bank of America Corp. ................................ 3,620 155,660
Bank One Corp. ....................................... 2,350 62,422
BB&T Corp. ........................................... 720 17,190
Charter One Financial, Inc. .......................... 400 9,200
Chase Manhattan Corp. ................................ 2,610 120,223
Comerica, Inc. ....................................... 300 13,462
Fifth Third Bancorp................................... 700 44,275
First Union Corp. (degrees)........................... 2,000 49,625
Firstar Corp. ........................................ 2,100 44,231
FleetBoston Financial Corp. .......................... 2,105 71,570
Golden West Financial Corp. .......................... 310 12,652
Huntington Bancshares, Inc. .......................... 400 6,325
J.P. Morgan & Co., Inc. .............................. 360 39,645
</TABLE>
32
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
FINANCIALS - continued
Banks - continued
KeyCorp............................................... 890 $ 15,686
Mellon Financial Corp. ............................... 1,050 38,259
National City Corp. .................................. 1,310 22,352
Northern Trust Corp. ................................. 500 32,531
Old Kent Financial Corp. ............................. 273 7,303
PNC Financial Services Group.......................... 600 28,125
Regions Financial Corp. .............................. 400 7,950
SouthTrust Corp. ..................................... 300 6,788
State Street Corp. ................................... 410 43,486
Summit Bancorp........................................ 400 9,850
Suntrust Banks, Inc. ................................. 620 28,326
Synovus Financial Corp. .............................. 500 8,813
The Bank of New York Co., Inc. ....................... 1,500 69,750
U.S. Bancorp.......................................... 1,500 28,875
Union Planters Corp. ................................. 240 6,705
Wachovia Corp. ....................................... 460 24,955
Washington Mutual, Inc. .............................. 1,170 33,784
Wells Fargo Co. ...................................... 3,410 132,137
-----------
1,205,070
-----------
Diversified Financials - 5.1%
American Express Co. ................................. 2,770 144,386
Associates First Capital Corp., Class A............... 1,400 31,237
Bear Stearns Cos., Inc. .............................. 257 10,698
Capital One Financial Corp. .......................... 360 16,065
Citigroup, Inc. ...................................... 7,120 428,980
Conseco, Inc. ........................................ 1,650 16,088
Countrywide Credit Industries, Inc. .................. 250 7,578
Crane Co. ............................................ 150 3,647
Federal Home Loan Mortgage Assn. ..................... 1,450 58,725
Federal National Mortgage Assn. ...................... 2,100 109,594
Fortune Brands, Inc. ................................. 300 6,919
Franklin Resources, Inc. ............................. 430 13,061
Household International, Inc. ........................ 930 38,653
Lehman Brothers Holdings, Inc. ....................... 250 23,641
MBNA Corp. ........................................... 1,650 44,756
McDermott International, Inc. ........................ 550 4,847
Merrill Lynch & Co., Inc. ............................ 830 95,450
Morgan Stanley, Dean Witter & Co. .................... 2,400 199,800
National Service Industries, Inc. .................... 400 7,800
Paine Webber Group, Inc. ............................. 290 13,195
Price (T.) Rowe & Associates, Inc. ................... 260 11,050
Providian Financial Corp. ............................ 290 26,100
Ryder Systems, Inc. .................................. 250 4,734
</TABLE>
33
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
FINANCIALS - continued
Diversified Financials - continued
Schwab (Charles) & Co., Inc. ......................... 2,950 $ 99,194
SLM Holding Corp. .................................... 600 22,462
Textron, Inc. ........................................ 300 16,294
-----------
1,454,954
-----------
Insurance - 2.7%
AFLAC, Inc. .......................................... 550 25,266
Allstate Corp. ....................................... 1,900 42,275
American General Corp. ............................... 530 32,330
American International Group, Inc. ................... 3,330 391,275
Aon Corp. ............................................ 500 15,531
Chubb Corp. .......................................... 370 22,755
CIGNA Corp. .......................................... 340 31,790
Cincinnati Financial Corp. ........................... 300 9,431
Hartford Financial Services Group, Inc. .............. 400 22,375
Jefferson Pilot Corp. ................................ 240 13,545
Lincoln National Corp. ............................... 460 16,617
Loews Corp. .......................................... 240 14,400
Marsh & McLennan Co., Inc. ........................... 550 57,441
MBIA, Inc. ........................................... 230 11,083
MGIC Investment Corp. ................................ 240 10,920
Progressive Corp. .................................... 200 14,800
SAFECO Corp. ......................................... 250 4,969
St. Paul Cos., Inc. .................................. 400 13,650
Torchmark Corp. ...................................... 250 6,172
UnumProvident Corp. .................................. 410 8,226
-----------
764,851
-----------
HEALTH CARE - 11.1%
Biotechnology - 0.7%
Amgen, Inc.* ......................................... 2,230 156,658
Biogen, Inc.* ........................................ 300 19,350
MedImmune, Inc.* ..................................... 400 29,600
-----------
205,608
-----------
Health Care Equipment & Supplies - 1.1%
Alza Corp.* .......................................... 200 11,825
Bausch & Lomb, Inc. .................................. 100 7,738
Baxter International, Inc. ........................... 580 40,781
Becton Dickinson & Co. ............................... 430 12,336
Biomet, Inc. ......................................... 200 7,688
Boston Scientific Corp.* ............................. 840 18,427
C.R. Bard, Inc. ...................................... 150 7,219
Guidant Corp.* ....................................... 600 29,700
Mallinckrodt, Inc. ................................... 300 13,031
</TABLE>
34
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
HEALTH CARE - continued
Health Care Equipment & Supplies - continued
Medtronic, Inc. ...................................... 2,450 $ 122,041
PE Corp-PE Biosystems Group........................... 460 30,302
St. Jude Medical, Inc.* .............................. 300 13,762
-----------
314,850
-----------
Health Care Providers & Services - 0.7%
Aetna, Inc. .......................................... 300 19,256
Cardinal Health, Inc. ................................ 560 41,440
HCA-The Healthcare Corp. ............................. 1,100 33,412
HEALTHSOUTH Corp. .................................... 2,200 15,813
Humana, Inc. ......................................... 1,850 9,019
IMS Health, Inc. ..................................... 500 9,000
Manor Care, Inc.* .................................... 1,250 8,750
McKesson HBOC, Inc. .................................. 470 9,841
Quintiles Transnational Corp. ........................ 680 9,605
Shared Medical System Corp. .......................... 80 5,835
Tenet Healthcare Corp.* .............................. 550 14,850
UnitedHealth Group, Inc. ............................. 300 25,725
Wellpoint Health Networks, Inc., Class A* ............ 90 6,519
-----------
209,065
-----------
Pharmaceuticals - 8.6%
Abbott Laboratories................................... 3,190 142,154
Allergan, Inc. ....................................... 280 20,860
American Home Products Corp. ......................... 2,710 159,212
Bristol-Myers Squibb Co. ............................. 4,200 244,650
Johnson & Johnson..................................... 3,010 306,644
Lilly (Eli) & Co. .................................... 2,400 239,700
Merck & Co., Inc. .................................... 4,800 367,800
Pfizer, Inc. ......................................... 13,220 634,560
Pharmacia Corp. ...................................... 2,682 138,626
Schering-Plough Corp. ................................ 3,070 155,035
Watson Pharmaceuticals, Inc.* ........................ 200 10,750
-----------
2,419,991
-----------
INDUSTRIALS - 8.7%
Aerospace & Defense - 0.8%
B.F. Goodrich Co. .................................... 200 6,813
Boeing Co. ........................................... 1,950 81,534
General Dynamics Corp. ............................... 460 24,035
Lockheed Martin Corp. ................................ 850 21,091
Northrop Grumman Corp. ............................... 200 13,250
Perkinelmer, Inc. .................................... 90 5,951
</TABLE>
35
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INDUSTRIALS - continued
Aerospace & Defense - continued
Raytheon Co., Class B ................................ 650 $ 12,512
United Technologies Corp. ............................ 1,030 60,641
-----------
225,827
-----------
Air Freight & Couriers - 0.1%
FedEx Corp. .......................................... 600 22,800
-----------
Airlines - 0.2%
AMR Corp.* ........................................... 300 7,931
Delta Air Lines, Inc. ................................ 300 15,169
Southwest Airlines Co. ............................... 900 17,044
US Airways Group, Inc.* .............................. 300 11,700
-----------
51,844
-----------
Building Products - 0.0%
Armstrong Holdings, Inc. ............................. 50 765
Masco Corp. .......................................... 780 14,089
-----------
14,854
-----------
Commercial Services & Supplies - 1.5%
Allied Waste Industries, Inc.* ....................... 750 7,500
Automatic Data Processing, Inc. ...................... 1,310 70,167
Avery Dennison Corp. ................................. 250 16,781
Cendant Corp.* ....................................... 1,540 21,560
Ceridian Corp.* ...................................... 450 10,828
Computer Sciences Corp.* ............................. 310 23,153
Convergys Corp.* ..................................... 300 15,563
Deluxe Corp. ......................................... 300 7,069
Donnelley (R.R.) & Sons Co. .......................... 350 7,897
Dun & Bradstreet Corp. ............................... 350 10,019
Electronic Data Systems Corp. ........................ 950 39,187
Equifax, Inc. ........................................ 250 6,563
First Data Corp. ..................................... 960 47,640
H&R Block, Inc. ...................................... 200 6,475
McGraw-Hill Cos., Inc. ............................... 360 19,440
Paychex, Inc. ........................................ 780 32,760
Pitney Bowes, Inc. ................................... 550 22,000
Sabre Group Holdings, Inc. Class A* .................. 344 9,804
Waste Management, Inc. ............................... 1,150 21,850
Xerox Corp. .......................................... 1,270 26,352
-----------
422,608
-----------
Construction & Engineering - 0.0%
Fluor Corp. .......................................... 100 3,163
-----------
</TABLE>
36
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INDUSTRIALS - continued
Electrical Equipment - 0.3%
American Power Conversion Corp.* ..................... 400 $ 16,325
Cooper Industries, Inc. .............................. 200 6,512
Emerson Electric Co. ................................. 870 52,526
Molex, Inc. .......................................... 375 18,047
Thomas & Betts Corp. ................................. 150 2,869
-----------
96,279
-----------
Industrial Conglomerates - 5.1%
Danaher Corp. ........................................ 250 12,359
Dover Corp. .......................................... 370 15,008
General Electric Co. ................................. 20,970 1,111,410
Honeywell International, Inc. ........................ 1,631 54,944
ITT Industries, Inc. ................................. 300 9,113
Minnesota Mining & Manufacturing Co. ................. 830 68,475
Thermo Electron Corp.* ............................... 200 4,213
Tyco International, Ltd. ............................. 3,490 165,339
-----------
1,440,861
-----------
Machinery - 0.4%
Caterpillar, Inc. .................................... 670 22,696
Cummins Engine, Inc. ................................. 150 4,088
Deere & Co. .......................................... 410 15,170
Illinois Tool Works, Inc. ............................ 590 33,630
Ingersoll Rand Co. ................................... 300 12,075
Navistar International Corp., Inc.* .................. 150 4,659
Paccar, Inc. ......................................... 100 3,969
Parker Hannifin Corp. ................................ 240 8,220
Timken Co. ........................................... 210 3,911
-----------
108,418
-----------
Road & Rail - 0.3%
Burlington Northern Santa Fe Corp. ................... 900 20,644
CSX Corp. ............................................ 350 7,416
Kansas City Southern Industries, Inc. ................ 240 21,285
Norfolk Southern Corp. ............................... 700 10,412
Union Pacific Corp. .................................. 570 21,197
-----------
80,954
-----------
INFORMATION TECHNOLOGY - 29.7%
Communications Equipment - 8.2%
3Com Corp.* .......................................... 770 44,371
Adaptec, Inc.* ....................................... 440 10,010
Cabletron Systems, Inc.* ............................. 300 7,575
Cisco Systems, Inc.* ................................. 14,600 928,013
Comverse Technology, Inc.* ........................... 280 26,040
</TABLE>
37
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Communications Equipment - continued
Corning, Inc. ........................................ 620 $ 167,323
Lucent Technologies, Inc. ............................ 6,800 402,900
Motorola, Inc. ....................................... 4,449 129,299
Nortel Networks Corp. ................................ 6,280 428,610
Qualcomm, Inc.* ...................................... 1,540 92,400
Scientific Atlanta, Inc. ............................. 300 22,350
Tellabs, Inc.* ....................................... 860 58,856
-----------
2,317,747
-----------
Computers & Peripherals - 6.6%
Apple Computer* ...................................... 720 37,710
Compaq Computer Corp. ................................ 3,470 88,702
Dell Computer Corp.* ................................. 5,480 270,232
EMC Corp.* ........................................... 4,600 353,912
Gateway, Inc.* ....................................... 710 40,293
Hewlett-Packard Co. .................................. 2,100 262,238
International Business Machines Corp. ................ 3,750 410,859
Lexmark Intl. Group, Inc., Class A* .................. 300 20,175
NCR Corp.* ........................................... 200 7,788
Network Appliance, Inc. .............................. 600 48,300
Seagate Technology* .................................. 450 24,750
Sun Microsystems, Inc.* .............................. 3,420 311,006
Unisys Corp.* ........................................ 650 9,466
-----------
1,885,431
-----------
Electronic Equipment & Instruments - 0.6%
Agilent Technologies, Inc. ........................... 1,000 73,750
Andrew Corp.* ........................................ 280 9,398
Rockwell International Corp. ......................... 350 11,025
Sanmina Corp.* ....................................... 200 17,100
Solectron Corp.* ..................................... 1,260 52,762
Tektronix, Inc. ...................................... 100 7,400
-----------
171,435
-----------
Internet Software & Services - 1.4%
America Online, Inc.* ................................ 4,800 253,200
Yahoo!, Inc.* ........................................ 1,100 136,262
-----------
389,462
-----------
Semiconductor Equipment & Products - 6.6%
Advanced Micro Devices, Inc.* ........................ 350 27,038
Altera Corp.* ........................................ 400 40,775
Analog Devices, Inc.* ................................ 760 57,760
Applied Materials, Inc.* ............................. 1,700 154,062
Conexant Systems, Inc.* .............................. 400 19,450
</TABLE>
38
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Semiconductor Equipment & Products - continued
Intel Corp. .......................................... 7,080 $ 946,507
KLA-Tencor Corp.* .................................... 400 23,425
Linear Technology Corp. .............................. 900 57,544
LSI Logic Corp.* ..................................... 680 36,805
Maxim Integrated Products, Inc.* ..................... 600 40,763
Micron Technology, Inc. .............................. 1,160 102,152
Mips Technologies Inc. ............................... 104 4,001
National Semiconductor Corp.* ........................ 400 22,700
Novellus Systems, Inc.* .............................. 300 16,969
Teradyne, Inc.* ...................................... 320 23,520
Texas Instruments, Inc. .............................. 3,460 237,659
Xilinx, Inc.* ........................................ 720 59,445
-----------
1,870,575
-----------
Software - 6.1%
Adobe Systems, Inc. .................................. 260 33,800
Autodesk, Inc. ....................................... 200 6,938
BMC Software, Inc.* .................................. 510 18,607
Citrix Systems, Inc.* ................................ 320 6,060
Computer Associates International, Inc. .............. 1,200 61,425
Compuware Corp.* ..................................... 670 6,951
Mercury Interactive Corp.* ........................... 200 19,350
Microsoft Corp.* ..................................... 11,030 882,400
Novell, Inc.* ........................................ 540 4,995
Oracle Systems Corp.* ................................ 6,060 509,419
Parametric Technology Corp.* ......................... 450 4,950
Peoplesoft, Inc.* .................................... 450 7,537
Sapient Corp.* ....................................... 100 10,694
Siebel Systems, Inc.* ................................ 400 65,425
Veritas Software Corp.* .............................. 800 90,412
-----------
1,728,963
-----------
Specialty Retail - 0.2%
ADC Telecommunications, Inc.* ........................ 600 50,325
-----------
MATERIALS - 2.0%
Chemicals - 1.0%
Air Products & Chemicals, Inc. ....................... 450 13,866
Dow Chemical Co. ..................................... 1,470 44,376
DuPont (E.I.) De Nemours & Co. ....................... 2,120 92,750
Eastman Chemical Co. ................................. 100 4,775
Ecolab, Inc. ......................................... 250 9,766
Engelhard Corp. ...................................... 950 16,209
FMC Corp.* ........................................... 50 2,900
Grace (W.R.) & Co.* .................................. 450 5,456
</TABLE>
39
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
MATERIALS - continued
Chemicals - continued
Great Lakes Chemical Corp. ............................ 300 $ 9,450
Hercules, Inc. ........................................ 300 4,219
Millipore Corp. ....................................... 100 7,538
Pall Corp. ............................................ 150 2,775
PPG Industries, Inc. .................................. 350 15,509
Praxair, Inc. ......................................... 300 11,231
Rohm & Haas Co. ....................................... 450 15,525
Sherwin Williams Co. .................................. 300 6,356
Sigma-Aldrich Corp. ................................... 400 11,700
Union Carbide Corp. ................................... 300 14,850
-----------
289,251
-----------
Construction Materials - 0.0%
Owens Corning ......................................... 450 4,163
Vulcan Materials Co. .................................. 200 8,537
-----------
12,700
-----------
Containers & Packaging - 0.1%
Ball Corp. ............................................ 100 3,219
Bemis Co., Inc. ....................................... 100 3,363
Crown Cork & Seal Co., Inc. ........................... 150 2,250
Owens Illinois, Inc.* ................................. 150 1,753
Pactiv Corp.* ......................................... 700 5,512
Sealed Air Corp.* ..................................... 200 10,475
Temple Inland, Inc. ................................... 70 2,940
-----------
29,512
-----------
Metals & Mining - 0.5%
Alcan Aluminum, Ltd. .................................. 360 11,160
Alcoa, Inc. ........................................... 1,728 50,112
Allegheny Technologies, Inc. .......................... 300 5,400
Arch Coal, Inc. ....................................... 24 185
Barrick Gold Corp. .................................... 710 12,913
Bethlehem Steel Corp.* ................................ 50 178
Freeport McMoran Copper & Gold, Inc., Class B* ........ 700 6,475
Homestake Mining Co. .................................. 800 5,500
Inco, Ltd. ............................................ 400 6,150
Newmont Mining Corp. .................................. 300 6,487
Nucor Corp. ........................................... 200 6,637
Phelps Dodge Corp. .................................... 100 3,719
Placer Dome, Inc. ..................................... 1,050 10,041
USX-United States Steel Group ......................... 100 1,856
Worthington Industries, Inc. .......................... 200 2,100
-----------
128,913
-----------
</TABLE>
40
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
MATERIALS - continued
Paper & Forest Products - 0.4%
Boise Cascade Corp. .................................. 100 $ 2,588
Fort James Corp. ..................................... 350 8,094
Georgia-Pacific Corp. ................................ 300 7,875
International Paper Co. .............................. 946 28,203
Louisiana Pacific Corp. .............................. 1,100 11,962
Mead Corp. ........................................... 200 5,050
Potlatch Corp. ....................................... 90 2,981
Westvaco Corp. ....................................... 200 4,962
Weyerhaeuser Co. ..................................... 510 21,930
Willamette Industries, Inc. .......................... 150 4,088
-----------
97,733
-----------
TELECOMMUNICATION SERVICES - 6.3%
Diversified Telecommunication Services - 5.5%
ALLTEL Corp. ......................................... 650 40,259
AT&T Corp. ........................................... 6,650 210,306
Bell Atlantic Corp. .................................. 3,230 164,124
BellSouth Corp. ...................................... 3,900 166,238
Centurytel, Inc. ..................................... 300 8,625
Global Crossing, Ltd.* ............................... 2,660 69,991
GTE Corp. ............................................ 2,150 133,838
SBC Communications, Inc. ............................. 7,169 310,059
Sprint Corp. ......................................... 1,800 91,800
U.S. West, Inc. ...................................... 1,110 95,183
WorldCom, Inc. ....................................... 6,100 279,837
-----------
1,570,260
-----------
Wireless Telecommunications Services - 0.8%
Nextel Communications, Inc., Class A* ................ 1,640 100,348
Sprint Corp. (PCS Group), Ser. 1* .................... 1,960 116,620
-----------
216,968
-----------
UTILITIES - 2.3%
Electric Utilities - 1.5%
AES Corp.* ........................................... 940 42,888
Ameren Corp. ......................................... 250 8,438
American Electric Power Co., Inc. .................... 650 19,256
Cinergy Corp. ........................................ 250 6,359
CMS Energy Corp. ..................................... 450 9,956
Consolidated Edison, Inc. ............................ 450 13,331
Constellation Energy Group, Inc. ..................... 250 8,141
Dominion Resources, Inc. ............................. 443 18,994
DTE Energy Co. ....................................... 250 7,641
Duke Energy Corp. .................................... 780 43,972
</TABLE>
41
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
UTILITIES - continued
Electric Utilities - continued
Edison International ................................. 750 $ 15,375
Entergy Corp. ........................................ 420 11,419
FirstEnergy Corp. .................................... 350 8,181
Florida Progress Corp. ............................... 200 9,375
FPL Group, Inc. ...................................... 400 19,800
GPU, Inc. ............................................ 150 4,059
New Century Energies, Inc. ........................... 200 6,000
Niagara Mohawk Holdings, Inc.* ....................... 1,000 13,938
Northern State Power Corp. ........................... 450 9,084
PECO Energy Co. ...................................... 400 16,125
PG&E Corp. ........................................... 800 19,700
Pinnacle West Capital Corp. .......................... 110 3,726
PPL Corp. ............................................ 250 5,484
Public Service Enterprise Group, Inc. ................ 450 15,581
Reliant Energy, Inc. ................................. 600 17,738
Southern Co. ......................................... 1,350 31,472
TXU Corp. ............................................ 560 16,520
Unicom Corp. ......................................... 450 17,409
-----------
419,962
-----------
Gas Utilities - 0.8%
Coastal Corp. ........................................ 450 27,394
Columbia Energy Group ................................ 200 13,125
Eastern Enterprises .................................. 50 3,150
El Paso Energy Corp. ................................. 500 25,469
Enron Corp. .......................................... 1,500 96,750
NICOR, Inc. .......................................... 100 3,263
Oneok, Inc. .......................................... 300 7,781
Peoples Energy Corp. ................................. 300 9,712
Sempra Energy ........................................ 350 5,950
The Williams Cos., Inc. .............................. 870 36,268
-----------
228,862
-----------
Multi-Utilities - 0.0%
CP & L Energy, Inc. .................................. 310 9,901
-----------
Total Common Stocks (cost $24,562,626) ............. 26,559,367
-----------
</TABLE>
42
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
U.S. TREASURY OBLIGATIONS - 0.7%
U.S. Government Agency Obligations - 0.7%
U.S. Treasury Bills:
5.595%, 08/03/2000................................... $ 125,000 $ 124,398
5.64%, 07/06/2000.................................... 67,000 66,968
-----------
Total U.S. Treasury Obligations (cost $191,366)..... 191,366
-----------
SHORT-TERM INVESTMENTS - 6.2%
REPURCHASE AGREEMENTS - 6.2%
Dresdner Bank AG
6.40%, dated 6/30/2000, maturing 7/3/2000, maturity
value $1,767,527 (cost $1,766,585) (1)............... 1,766,585 1,766,585
-----------
Total Investments - (cost $26,520,577) - 100.7%.................... 28,517,318
Other Assets and Liabilities - (0.7%).............................. (193,816)
-----------
Net Assets - 100.0%................................................ $28,323,502
-----------
</TABLE>
See Combined Notes to Schedules of Investments.
43
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Statement of Assets and Liabilities
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
<S> <C>
Assets
Identified cost of securities.................................... $24,753,992
Repurchase agreements, at amortized cost......................... 1,766,585
-------------------------------------------------------------------------------
Total identified cost of investments............................. 26,520,577
Net unrealized gains on securities............................... 1,996,741
-------------------------------------------------------------------------------
Market value of securities....................................... 28,517,318
Cash............................................................. 8,826
Foreign currency, at value (cost $16)............................ 16
Receivable for securities sold................................... 12,007
Dividends and interest receivable................................ 20,914
Receivable for daily variation margin on open futures contracts.. 9,363
-------------------------------------------------------------------------------
Total assets................................................... 28,568,444
-------------------------------------------------------------------------------
Liabilities
Payable for securities purchased................................. 228,533
Payable for Fund shares redeemed................................. 104
Due to other related parties..................................... 230
Accrued expenses and other liabilities........................... 16,075
-------------------------------------------------------------------------------
Total liabilities.............................................. 244,942
-------------------------------------------------------------------------------
Net assets........................................................ $28,323,502
-------------------------------------------------------------------------------
Net assets represented by
Paid-in capital.................................................. $26,269,137
Undistributed net investment income.............................. 133,245
Accumulated net realized losses on securities.................... (55,943)
Net unrealized gains on securities............................... 1,977,063
-------------------------------------------------------------------------------
Total net assets.................................................. $28,323,502
-------------------------------------------------------------------------------
Shares outstanding................................................ 2,485,440
-------------------------------------------------------------------------------
Net asset value per share......................................... $ 11.40
-------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
44
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Statement of Operations
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income
Dividends (net of foreign withholding taxes of $702)................ $121,047
Interest............................................................ 46,659
--------------------------------------------------------------------------------
Total investment income.............................................. 167,706
--------------------------------------------------------------------------------
Expenses
Advisory fee........................................................ 36,839
Administrative services fees........................................ 11,408
Transfer agent fee.................................................. 163
Trustees' fees and expenses......................................... 229
Printing and postage expenses....................................... 7,011
Custodian fee....................................................... 4,089
Professional fees................................................... 6,000
Other............................................................... 7,098
--------------------------------------------------------------------------------
Total expenses 72,837
Less: Expense reductions.......................................... (1,217)
Fee waivers and expense reimbursements...................... (37,159)
--------------------------------------------------------------------------------
Net expenses...................................................... 34,461
--------------------------------------------------------------------------------
Net investment income............................................... 133,245
--------------------------------------------------------------------------------
Net realized and unrealized gains or losses on securities and futures
contracts
Net realized gains or losses on:
Securities........................................................ (11,101)
Futures contracts................................................. 17,041
--------------------------------------------------------------------------------
Net realized gains on securities and futures contracts.............. 5,940
--------------------------------------------------------------------------------
Net change in unrealized losses on securities and futures
contracts.......................................................... (95,780)
--------------------------------------------------------------------------------
Net realized and unrealized gains or losses on securities and
futures contracts.................................................. (89,840)
--------------------------------------------------------------------------------
Net increase in net assets resulting from operations................ $ 43,405
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
45
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Equity Index Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999 (a)
--------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income.................. $ 133,245 $ 51,531
Net realized gains on securities and
futures contracts..................... 5,940 48,329
Net change in unrealized gains or
losses on securities and futures
contracts............................. (95,780) 2,072,843
--------------------------------------------------------------------------------
Net increase in net assets resulting
from operations....................... 43,405 2,172,703
--------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income.................. 0 (53,614)
Net realized gains..................... (60,908) (47,221)
--------------------------------------------------------------------------------
Total distributions to shareholders.... (60,908) (100,835)
--------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold.............. 9,641,316 16,604,324
Payment for shares redeemed............ (9,454) (12,392)
Net asset value of shares issued in
reinvestment of distributions......... 23,708 21,635
--------------------------------------------------------------------------------
Net increase in net assets resulting
from capital share transactions....... 9,655,570 16,613,567
--------------------------------------------------------------------------------
Total increase in net assets.......... 9,638,067 18,685,435
Net assets
Beginning of period.................... 18,685,435 0
--------------------------------------------------------------------------------
End of period.......................... $28,323,502 $18,685,435
--------------------------------------------------------------------------------
Undistributed net investment income..... $ 133,245 $ 0
--------------------------------------------------------------------------------
</TABLE>
(a) For the period from September 29, 1999 (commencement of operations) to De-
cember 31, 1999.
See Combined Notes to Financial Statements.
46
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 2000 -------------------------------------
(Unaudited) 1999 # 1998 # 1997 # 1996 (a) #
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 17.31 $ 15.31 $ 14.89 $ 11.41 $ 10.00
------- ------- ------- ------- -------
Income from investment
operations
Net investment income 0.01 0.09 0.07 0.06 0.05
Net realized and
unrealized gains or
losses on securities (0.46) 3.36 0.86 4.15 1.44
------- ------- ------- ------- -------
Total from investment
operations (0.45) 3.45 0.93 4.21 1.49
------- ------- ------- ------- -------
Distributions to
shareholders from
Net investment income 0 (0.11) 0 (0.05) (0.05)
Net realized gains (0.29) (1.34) (0.51) (0.68) (0.03)
------- ------- ------- ------- -------
Total distributions (0.29) (1.45) (0.51) (0.73) (0.08)
------- ------- ------- ------- -------
Net asset value, end of
period $ 16.57 $ 17.31 $ 15.31 $ 14.89 $ 11.41
------- ------- ------- ------- -------
Total return* (2.73%) 23.03% 6.44% 37.16% 14.90%
Ratios and supplemental
data
Net assets, end of
period (thousands) $73,298 $69,774 $45,820 $21,600 $10,862
Ratios to average net
assets
Expenses** 1.03%+ 1.02% 1.01% 1.01% 1.00%+
Net investment income 0.10%+ 0.57% 0.49% 0.42% 0.87%+
Portfolio turnover rate 61% 111% 16% 32% 6%
</TABLE>
(a) For the period from March 1, 1996 (commencement of operations) to December
31, 1996.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
50
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Fund
Schedule of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 93.5%
CONSUMER DISCRETIONARY - 10.3%
Hotels, Restaurants & Leisure - 1.0%
McDonald's Corp. .......................................... 22,810 $ 751,305
-----------
Media - 5.7%
Clear Channel Communications, Inc.* ....................... 5,100 382,500
Disney (Walt) Co. ......................................... 25,500 989,719
Echostar Communications Corp., Class A..................... 7,600 251,631
Seagram Co., Ltd. ......................................... 6,000 348,000
Time Warner, Inc. ......................................... 17,500 1,330,000
Viacom, Inc., Class B...................................... 13,239 902,734
-----------
4,204,584
-----------
Multi-line Retail - 3.0%
Kohl's Corp.* ............................................. 8,000 445,000
Wal-Mart Stores, Inc. ..................................... 29,800 1,717,225
-----------
2,162,225
-----------
Specialty Retail - 0.6%
Home Depot, Inc. .......................................... 8,350 416,978
-----------
CONSUMER STAPLES - 7.7%
Beverages - 2.8%
Anheuser Busch Cos., Inc................................... 9,100 679,656
Coca Cola Co. ............................................. 6,500 373,344
Pepsico, Inc. ............................................. 21,560 958,072
-----------
2,011,072
-----------
Food & Drug Retailing - 2.1%
Albertsons, Inc. .......................................... 8,700 289,275
CVS Corp. ................................................. 7,800 312,000
Kroger Co.* ............................................... 13,800 304,462
Safeway, Inc.* ............................................ 5,900 266,238
Walgreen Co. .............................................. 12,100 389,469
-----------
1,561,444
-----------
Food Products - 0.5%
Quaker Oats Co. ........................................... 4,900 368,112
-----------
Household Products - 0.3%
Procter & Gamble Co. ...................................... 4,100 234,725
-----------
Personal Products - 1.7%
Avon Products, Inc. ....................................... 10,700 476,150
Clorox Co. ................................................ 5,200 233,025
Kimberly-Clark Corp. ...................................... 7,200 413,100
The Estee Lauder Cos., Inc., Class A....................... 3,100 153,256
-----------
1,275,531
-----------
</TABLE>
51
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
CONSUMER STAPLES - continued
Tobacco - 0.3%
Philip Morris Cos., Inc. .................................. 7,400 $ 196,563
-----------
ENERGY - 9.6%
Energy Equipment & Services - 2.2%
Baker Hughes, Inc. ........................................ 15,700 502,400
Diamond Offshore Drilling, Inc. ........................... 3,800 133,475
Halliburton Co. ........................................... 3,900 184,031
Schlumberger, Ltd. ........................................ 7,600 567,150
Transocean Sedco Forex, Inc. .............................. 3,900 208,407
-----------
1,595,463
-----------
Oil & Gas - 7.4%
Anadarko Petroleum Corp. .................................. 5,600 276,150
Apache Corp. .............................................. 4,000 235,250
Burlington Resources, Inc. ................................ 9,000 344,250
Chevron Corp. ............................................. 7,430 630,157
Conoco, Inc., Class B...................................... 15,700 385,631
Exxon Mobil Corp. ......................................... 28,060 2,202,710
Royal Dutch Petroleum Co. ................................. 13,300 818,781
Texaco, Inc. .............................................. 7,100 378,075
Unocal Corp. .............................................. 6,000 198,750
-----------
5,469,754
-----------
FINANCIALS - 7.6%
Banks - 2.1%
Bank of America Corp. ..................................... 13,500 580,500
FleetBoston Financial Corp. ............................... 10,700 363,800
PNC Financial Services Group............................... 3,900 182,813
State Street Corp. ........................................ 1,600 169,700
The Bank of New York Co., Inc. ............................ 4,300 199,950
-----------
1,496,763
-----------
Diversified Financials - 3.0%
American Express Co. ...................................... 7,200 375,300
Citigroup, Inc. ........................................... 22,600 1,361,650
Federal National Mortgage Assn. ........................... 5,390 281,291
Schwab (Charles) & Co., Inc. .............................. 4,800 161,400
-----------
2,179,641
-----------
Insurance - 2.5%
Allstate Corp. ............................................ 6,100 135,725
American International Group, Inc. ........................ 11,715 1,376,512
Chubb Corp. ............................................... 2,800 172,200
Progressive Corp. ......................................... 2,400 177,600
-----------
1,862,037
-----------
</TABLE>
52
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
HEALTH CARE - 13.1%
Biotechnology - 0.6%
Amgen, Inc. *.............................................. 6,200 $ 435,550
-----------
Health Care Equipment & Supplies - 2.5%
Baxter International, Inc. ................................ 5,000 351,562
Biomet, Inc. .............................................. 5,400 207,563
Guidant Corp. *............................................ 10,200 504,900
Medtronic, Inc. ........................................... 14,400 717,300
-----------
1,781,325
-----------
Health Care Providers & Services - 0.7%
HCA-The Healthcare Corp. .................................. 10,100 306,787
Tenet Healthcare Corp. *................................... 8,300 224,100
-----------
530,887
-----------
Pharmaceuticals - 9.3%
Abbott Laboratories........................................ 16,600 739,738
American Home Products Corp. .............................. 15,460 908,275
Bristol-Myers Squibb Co. .................................. 6,900 401,925
Johnson & Johnson.......................................... 16,100 1,640,187
Pfizer, Inc. .............................................. 45,575 2,187,600
Pharmacia Corp. ........................................... 8,125 419,961
Schering-Plough Corp. ..................................... 10,500 530,250
-----------
6,827,936
-----------
INDUSTRIALS - 9.8%
Aerospace & Defense - 0.9%
General Motors Corp., Class H *............................ 3,400 298,350
United Technologies Corp. ................................. 5,990 352,661
-----------
651,011
-----------
Commercial Services & Supplies - 0.7%
Automatic Data Processing, Inc. ........................... 6,800 364,225
Pitney Bowes, Inc. ........................................ 3,900 156,000
-----------
520,225
-----------
Industrial Conglomerates - 7.6%
General Electric Co. ...................................... 78,100 4,139,300
Honeywell International, Inc. ............................. 10,487 353,281
Minnesota Mining & Manufacturing Co. ...................... 5,400 445,500
Tyco International, Ltd. .................................. 13,550 641,931
-----------
5,580,012
-----------
Machinery - 0.6%
Illinois Tool Works, Inc. ................................. 4,000 228,000
Ingersoll Rand Co. ........................................ 5,600 225,400
-----------
453,400
-----------
</TABLE>
53
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - 27.6%
Communications Equipment - 9.1%
Cisco Systems, Inc.* ................................. 40,450 $ 2,571,103
Corning, Inc. ........................................ 1,900 512,763
Lucent Technologies, Inc. ............................ 19,200 1,137,600
Nokia Corp., ADR...................................... 10,400 519,350
Nortel Networks Corp. ................................ 28,400 1,938,300
------------
6,679,116
------------
Computers & Peripherals - 5.6%
EMC Corp.* ........................................... 15,100 1,161,756
Hewlett-Packard Co. .................................. 5,100 636,863
International Business Machines Corp. ................ 8,460 926,899
Sun Microsystems, Inc.* .............................. 15,000 1,364,062
------------
4,089,580
------------
Electronic Equipment & Instruments - 0.2%
Agilent Technologies, Inc. ........................... 2,097 154,654
------------
Internet Software & Services - 1.3%
America Online, Inc.* ................................ 13,500 712,125
Yahoo!, Inc.* ........................................ 1,800 222,975
------------
935,100
------------
Semiconductor Equipment & Products - 8.2%
Applied Materials, Inc.* ............................. 7,060 639,812
Intel Corp. .......................................... 26,090 3,487,907
LSI Logic Corp.* ..................................... 3,300 178,613
Micron Technology, Inc. .............................. 6,500 572,406
Teradyne, Inc.* ...................................... 4,100 301,350
Texas Instruments, Inc. .............................. 12,000 824,250
------------
6,004,338
------------
Software - 3.2%
Computer Associates International, Inc. .............. 4,600 235,462
Microsoft Corp.* ..................................... 10,400 832,000
Oracle Systems Corp.* ................................ 15,600 1,311,375
------------
2,378,837
------------
MATERIALS - 1.4%
Chemicals - 1.2%
Dow Chemical Co. ..................................... 5,700 172,069
DuPont (E.I.) De Nemours & Co. ....................... 8,100 354,375
PPG Industries, Inc. ................................. 5,400 239,287
Union Carbide Corp. .................................. 2,100 103,950
------------
869,681
------------
Paper & Forest Products - 0.2%
Bowater, Inc. ........................................ 3,100 136,788
------------
</TABLE>
54
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Fund
Schedule of Investments (continued)
June 30, 2000
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
TELECOMMUNICATION SERVICES - 5.0%
Diversified Telecommunication Services - 4.2%
Bell Atlantic Corp. ............................... 9,300 $ 472,556
GTE Corp. ......................................... 7,300 454,425
SBC Communications, Inc. .......................... 10,300 445,475
Sprint Corp. ...................................... 17,900 912,900
U.S. West, Inc. ................................... 4,100 351,575
WorldCom, Inc. .................................... 9,900 454,163
-----------
3,091,094
-----------
Wireless Telecommunications Services - 0.8%
Nextel Communications, Inc., Class A* ............. 4,180 255,764
Sprint Corp. (PCS Group), Ser. 1* ................. 5,300 315,350
-----------
571,114
-----------
UTILITIES - 1.4%
Electric Utilities - 0.6%
Duke Energy Corp. ................................. 2,800 157,850
Southern Co. ...................................... 12,800 298,400
-----------
456,250
-----------
Gas Utilities - 0.8%
Enron Corp. ....................................... 8,600 554,700
-----------
Total Common Stocks (cost $58,541,032)........... 68,487,795
-----------
SHORT-TERM INVESTMENTS - 6.5%
MUTUAL FUND SHARES - 6.5%
Evergreen Select Money Market Fund (cost
$4,777,811) o..................................... 4,777,811 4,777,811
-----------
Total Investments - (cost $63,318,843) - 100.0%.................. 73,265,606
Other Assets and Liabilities - 0.0%.............................. 32,711
-----------
Net Assets - 100.0%.............................................. $73,298,317
-----------
</TABLE>
See Combined Notes to Schedules of Investments.
55
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Fund
Statements of Assets and Liabilities
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
<S> <C>
Assets
Identified cost of securities.................................... $63,318,843
Net unrealized gains on securities............................... 9,946,763
-------------------------------------------------------------------------------
Market value of securities....................................... 73,265,606
Receivable for securities sold................................... 340,465
Dividends and interest receivable................................ 39,743
Deferred organization expenses................................... 1,979
-------------------------------------------------------------------------------
Total assets.................................................... 73,647,793
-------------------------------------------------------------------------------
Liabilities
Payable for securities purchased................................. 303,483
Due to custodian bank............................................ 23,760
Advisory fee payable............................................. 1,852
Due to other related parties..................................... 599
Accrued expenses and other liabilities........................... 19,782
-------------------------------------------------------------------------------
Total liabilities............................................... 349,476
-------------------------------------------------------------------------------
Net assets........................................................ $73,298,317
-------------------------------------------------------------------------------
Net assets represented by
Paid-in capital.................................................. $64,329,891
Undistributed net investment income.............................. 33,030
Accumulated net realized losses on securities.................... (1,011,367)
Net unrealized gains on securities............................... 9,946,763
-------------------------------------------------------------------------------
Total net assets.................................................. $73,298,317
-------------------------------------------------------------------------------
Shares outstanding................................................ 4,424,416
-------------------------------------------------------------------------------
Net asset value per share......................................... $ 16.57
-------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
56
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Fund
Statement of Operations
Six Months Ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
<S> <C>
Investment income
Dividends (net of foreign withholding taxes of $2,518)........... $ 272,503
Interest......................................................... 115,968
--------------------------------------------------------------------------------
Total investment income........................................... 388,471
--------------------------------------------------------------------------------
Expenses
Advisory fee..................................................... 305,802
Administrative services fees..................................... 34,819
Transfer agent fee............................................... 23
Trustees' fees and expenses...................................... 694
Printing and postage expenses.................................... 7,911
Custodian fee.................................................... 18,488
Professional fees................................................ 7,637
Organization expenses............................................ 2,345
Other............................................................ 2,319
--------------------------------------------------------------------------------
Total expenses................................................... 380,038
Less: Expense reductions......................................... (9,709)
Fee waivers.................................................... (19,182)
--------------------------------------------------------------------------------
Net expenses..................................................... 351,147
--------------------------------------------------------------------------------
Net investment income............................................ 37,324
--------------------------------------------------------------------------------
Net realized and unrealized losses on securities
Net realized losses on securities................................ (856,422)
--------------------------------------------------------------------------------
Net change in unrealized losses on securities.................... (1,139,542)
--------------------------------------------------------------------------------
Net realized and unrealized losses on securities................. (1,995,964)
--------------------------------------------------------------------------------
Net decrease in net assets resulting from operations............. $(1,958,640)
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
57
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
-------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income..................... $ 37,324 $ 332,353
Net realized gains or losses on
securities............................... (856,422) 6,047,723
Net change in unrealized gains or losses
on securities............................ (1,139,542) 6,103,722
-------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations.............. (1,958,640) 12,483,798
-------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income..................... 0 (421,000)
Net realized gains........................ (1,191,061) (5,088,833)
-------------------------------------------------------------------------------
Total distributions to shareholders..... (1,191,061) (5,509,833)
-------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold................. 7,855,748 17,827,523
Payment for shares redeemed............... (2,372,841) (6,357,630)
Net asset value of shares issued in
reinvestment of distributions............ 1,191,061 5,509,833
-------------------------------------------------------------------------------
Net increase in net assets resulting
from capital share transactions........ 6,673,968 16,979,726
-------------------------------------------------------------------------------
Total increase in net assets........... 3,524,267 23,953,691
Net assets
Beginning of period....................... 69,774,050 45,820,359
-------------------------------------------------------------------------------
End of period............................. $73,298,317 $69,774,050
-------------------------------------------------------------------------------
Undistributed (overdistributed) net
investment income......................... $ 33,030 $ (4,294)
-------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
58
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 2000 --------------------------------------
(Unaudited) 1999 1998 # 1997 # 1996 (a) #
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 15.70 $ 14.47 $ 13.54 $ 11.31 $ 10.00
-------- -------- ------- ------- -------
Income from investment
operations
Net investment income 0.11 0.28 0.35 0.26 0.16
Net realized and
unrealized gains or
losses on securities (0.26) 1.27 1.07 2.86 1.37
-------- -------- ------- ------- -------
Total from investment
operations (0.15) 1.55 1.42 3.12 1.53
-------- -------- ------- ------- -------
Distributions to
shareholders from
Net investment income 0 (0.28) (0.26) (0.24) (0.16)
Net realized gains (0.09) (0.04) (0.23) (0.65) (0.06)
-------- -------- ------- ------- -------
Total distributions (0.09) (0.32) (0.49) (0.89) (0.22)
-------- -------- ------- ------- -------
Net asset value, end of
period $ 15.46 $ 15.70 $ 14.47 $ 13.54 $ 11.31
-------- -------- ------- ------- -------
Total return* (0.99%) 10.64% 10.56% 27.80% 15.30%
Ratios and supplemental
data
Net assets, end of
period (thousands) $176,321 $145,566 $78,371 $31,840 $15,812
Ratios to average net
assets
Expenses** 0.95%+ 0.95% 1.00% 1.01% 1.00%+
Net investment income 1.57%+ 2.29% 2.44% 2.15% 2.70%+
Portfolio turnover rate 47% 77% 10% 26% 12%
</TABLE>
(a) For the period from March 1, 1996 (commencement of operations) to December
31, 1996.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the
period.
See Combined Notes to Financial Statements.
62
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Schedule of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 64.9%
CONSUMER DISCRETIONARY - 7.1%
Hotels, Restaurants & Leisure - 0.7%
McDonald's Corp. ................................... 39,420 $ 1,298,396
------------
Media - 3.9%
Clear Channel Communications, Inc.* ................ 8,400 630,000
Disney (Walt) Co. .................................. 42,200 1,637,887
Echostar Communications Corp., Class A.............. 11,500 380,758
Seagram Co., Ltd. .................................. 9,800 568,400
Time Warner, Inc. .................................. 29,300 2,226,800
Viacom, Inc., Class B............................... 22,090 1,506,262
------------
6,950,107
------------
Multi-line Retail - 2.1%
Kohl's Corp.* ...................................... 12,800 712,000
Wal-Mart Stores, Inc. .............................. 50,830 2,929,079
------------
3,641,079
------------
Specialty Retail - 0.4%
Home Depot, Inc. ................................... 14,285 713,357
------------
CONSUMER STAPLES - 5.2%
Beverages - 2.0%
Anheuser Busch Cos., Inc. .......................... 15,600 1,165,125
Coca Cola Co. ...................................... 11,300 649,044
Pepsico, Inc. ...................................... 37,140 1,650,408
------------
3,464,577
------------
Food & Drug Retailing - 1.5%
Albertsons, Inc. ................................... 14,500 482,125
CVS Corp. .......................................... 13,600 544,000
Kroger Co.* ........................................ 22,800 503,025
Safeway, Inc.* ..................................... 10,200 460,275
Walgreen Co. ....................................... 20,700 666,281
------------
2,655,706
------------
Food Products - 0.3%
Quaker Oats Co. .................................... 8,300 623,538
------------
Personal Products - 1.2%
Avon Products, Inc. ................................ 18,500 823,250
Clorox Co. ......................................... 8,600 385,388
Kimberly-Clark Corp. ............................... 11,800 677,025
The Estee Lauder Cos., Inc., Class A................ 5,100 252,131
------------
2,137,794
------------
Tobacco - 0.2%
Philip Morris Cos., Inc. ........................... 12,300 326,719
------------
</TABLE>
63
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
ENERGY - 6.8%
Energy Equipment & Services - 1.5%
Baker Hughes, Inc. ................................. 26,700 $ 854,400
Diamond Offshore Drilling, Inc. .................... 6,200 217,775
Halliburton Co. .................................... 6,200 292,563
Schlumberger, Ltd. ................................. 13,200 985,050
Transocean Sedco Forex, Inc. ....................... 6,400 342,000
------------
2,691,788
------------
Oil & Gas - 5.3%
Anadarko Petroleum Corp. ........................... 10,000 493,125
Apache Corp. ....................................... 6,800 399,925
Burlington Resources, Inc. ......................... 15,000 573,750
Chevron Corp. ...................................... 12,580 1,066,941
Conoco, Inc., Class B............................... 27,800 682,838
Exxon Mobil Corp. .................................. 47,941 3,763,368
Royal Dutch Petroleum Co. .......................... 22,300 1,372,844
Texaco, Inc. ....................................... 12,200 649,650
Unocal Corp. ....................................... 10,600 351,125
------------
9,353,566
------------
FINANCIALS - 5.2%
Banks - 1.4%
Bank of America Corp. .............................. 22,540 969,220
FleetBoston Financial Corp. ........................ 18,900 642,600
PNC Financial Services Group........................ 6,500 304,687
State Street Corp. ................................. 2,800 296,975
The Bank of New York Co., Inc. ..................... 7,100 330,150
------------
2,543,632
------------
Diversified Financials - 2.1%
American Express Co. ............................... 11,580 603,607
Citigroup, Inc. .................................... 36,300 2,187,075
Federal National Mortgage Assn. .................... 10,500 547,969
Schwab (Charles) & Co., Inc. ....................... 8,100 272,363
------------
3,611,014
------------
Insurance - 1.7%
Allstate Corp. ..................................... 10,100 224,725
American International Group, Inc. ................. 18,850 2,214,875
Chubb Corp. ........................................ 4,600 282,900
Progressive Corp. .................................. 4,000 296,000
------------
3,018,500
------------
HEALTH CARE - 9.0%
Biotechnology - 0.4%
Amgen, Inc.* ....................................... 10,200 716,550
------------
</TABLE>
64
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
HEALTH CARE - continued
Health Care Equipment & Supplies - 1.7%
Baxter International, Inc. ......................... 8,400 $ 590,625
Biomet, Inc. ....................................... 8,900 342,094
Guidant Corp.* ..................................... 17,000 841,500
Medtronic, Inc. .................................... 23,830 1,187,032
------------
2,961,251
------------
Health Care Providers & Services - 0.5%
HCA-The Healthcare Corp. ........................... 16,900 513,337
Tenet Healthcare Corp.* ............................ 14,000 378,000
------------
891,337
------------
Pharmaceuticals - 6.4%
Abbott Laboratories................................. 27,300 1,216,556
American Home Products Corp. ....................... 25,600 1,504,000
Bristol-Myers Squibb Co. ........................... 10,800 629,100
Johnson & Johnson................................... 26,800 2,730,250
Pfizer, Inc. ....................................... 75,450 3,621,600
Pharmacia Corp. .................................... 13,386 691,889
Schering-Plough Corp. .............................. 17,600 888,800
------------
11,282,195
------------
INDUSTRIALS - 6.9%
Aerospace & Defense - 0.7%
General Motors Corp., Class H* ..................... 5,800 508,950
United Technologies Corp. .......................... 10,400 612,300
------------
1,121,250
------------
Commercial Services & Supplies - 0.5%
Automatic Data Processing, Inc. .................... 12,000 642,750
Pitney Bowes, Inc. ................................. 6,500 260,000
------------
902,750
------------
Industrial Conglomerates - 5.3%
General Electric Co. ............................... 129,400 6,858,200
Honeywell International, Inc. ...................... 17,650 594,584
Minnesota Mining & Manufacturing Co. ............... 9,000 742,500
Tyco International, Ltd. ........................... 23,900 1,132,263
------------
9,327,547
------------
Machinery - 0.4%
Illinois Tool Works, Inc. .......................... 6,600 376,200
Ingersoll Rand Co. ................................. 9,300 374,325
------------
750,525
------------
</TABLE>
65
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - 19.2%
Communications Equipment - 6.2%
Cisco Systems, Inc.* ..................................... 66,950 $ 4,255,509
Corning, Inc. ............................................ 3,200 863,600
Lucent Technologies, Inc. ................................ 31,400 1,860,450
Nokia Corp., ADR.......................................... 17,040 850,935
Nortel Networks Corp. .................................... 46,000 3,139,500
------------
10,969,994
------------
Computers & Peripherals - 3.9%
EMC Corp.* ............................................... 25,000 1,923,437
Hewlett-Packard Co. ...................................... 8,900 1,111,388
International Business Machines Corp. .................... 14,000 1,533,875
Sun Microsystems, Inc.* .................................. 24,620 2,238,881
------------
6,807,581
------------
Electronic Equipment & Instruments - 0.1%
Agilent Technologies, Inc. ............................... 3,737 275,604
------------
Internet Software & Services - 0.9%
America Online, Inc.* .................................... 23,340 1,231,185
Yahoo!, Inc.* ............................................ 2,900 359,238
------------
1,590,423
------------
Semiconductor Equipment & Products - 5.8%
Applied Materials, Inc.* ................................. 11,680 1,058,500
Intel Corp. .............................................. 44,600 5,962,462
LSI Logic Corp.* ......................................... 5,800 313,925
Micron Technology, Inc. .................................. 11,300 995,106
Teradyne, Inc.* .......................................... 7,200 529,200
Texas Instruments, Inc. .................................. 19,800 1,360,013
------------
10,219,206
------------
Software - 2.3%
Computer Associates International, Inc. .................. 7,600 389,025
Microsoft Corp.* ......................................... 17,300 1,384,000
Oracle Systems Corp.* .................................... 26,400 2,219,250
------------
3,992,275
------------
MATERIALS - 1.0%
Chemicals - 0.8%
Dow Chemical Co. ......................................... 9,600 289,800
DuPont (E.I.) De Nemours & Co. ........................... 13,790 603,313
PPG Industries, Inc. ..................................... 8,900 394,381
Union Carbide Corp. ...................................... 3,600 178,200
------------
1,465,694
------------
Paper & Forest Products - 0.2%
Bowater, Inc. ............................................ 5,400 238,275
------------
</TABLE>
66
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
TELECOMMUNICATION SERVICES - 3.5%
Diversified Telecommunication Services - 3.0%
Bell Atlantic Corp. ................................. 15,500 $ 787,594
GTE Corp. ........................................... 12,400 771,900
SBC Communications, Inc. ............................ 16,800 726,600
Sprint Corp. ........................................ 30,000 1,530,000
U.S. West, Inc. ..................................... 6,900 591,675
WorldCom, Inc. ...................................... 16,600 761,525
------------
5,169,294
------------
Wireless Telecommunications Services - 0.5%
Nextel Communications, Inc., Class A *............... 6,800 416,075
Sprint Corp. (PCS Group), Ser. 1 *................... 8,600 511,700
------------
927,775
------------
UTILITIES - 1.0%
Electric Utilities - 0.4%
Duke Energy Corp. ................................... 4,400 248,050
Southern Co. ........................................ 21,300 496,556
------------
744,606
------------
Gas Utilities - 0.6%
Enron Corp. ......................................... 14,800 954,600
------------
Total Common Stocks (cost $98,490,592)............. 114,338,505
------------
<CAPTION>
Principal
Amount Value
<S> <C> <C>
CORPORATE BONDS - 0.7%
CONSUMER DISCRETIONARY - 0.6%
Multi-line Retail - 0.6%
Wal-Mart Stores, Inc., 6.875%, 08/10/2009............ $ 1,000,000 980,360
------------
INFORMATION TECHNOLOGY - 0.1%
Communications Equipment - 0.1%
Lucent Technologies, Inc., 6.90%, 07/15/2001......... 250,000 250,586
------------
Total Corporate Bonds (cost $1,248,362)............ 1,230,946
------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 1.6%
FNMA, 5.125%, 02/13/2004 (cost $2,837,843)........... 3,000,000 2,820,762
------------
U.S. TREASURY OBLIGATIONS - 26.7%
U.S. Treasury Bonds:
6.00%, 02/15/2026................................... 3,000,000 2,933,439
7.125%, 02/15/2023.................................. 3,000,000 3,329,064
7.25%, 05/15/2016................................... 6,300,000 6,933,938
U.S. Treasury Notes:
5.50%, 05/15/2009................................... 6,000,000 5,739,378
5.875%, 09/30/2002 - 11/15/2005..................... 8,500,000 8,367,813
</TABLE>
67
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
CORPORATE BONDS - continued
U.S. TREASURY OBLIGATIONS - continued
U.S. Treasury Notes - continued
6.125%, 08/15/2007.................................. $ 6,000,000 $ 5,966,250
6.50%, 08/15/2005 - 02/15/2010...................... 13,500,000 13,800,003
------------
Total U.S. Treasury Obligations (cost
$46,694,686)...................................... 47,069,885
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
<S> <C> <C>
SHORT-TERM INVESTMENTS - 5.4%
MUTUAL FUND SHARES - 5.4%
Evergreen Select Money Market Fund
(cost $9,557,598) 0................................... 9,557,598 9,557,598
------------
Total Investments - (cost $158,829,081) - 99.3%.................... 175,017,696
Other Assets and Liabilities - 0.7%................................ 1,302,887
------------
Net Assets - 100.0%................................................ $176,320,583
------------
</TABLE>
See Combined Notes to Schedules of Investments.
68
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Statement of Assets and Liabilities
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
<S> <C>
Assets
Identified cost of securities................................... $158,829,081
Net unrealized gains on securities.............................. 16,188,615
--------------------------------------------------------------------------------
Market value of securities...................................... 175,017,696
Cash............................................................ 118,931
Receivable for securities sold.................................. 564,455
Receivable for fund shares sold................................. 234,871
Dividends and interest receivable............................... 975,172
Deferred organization expenses.................................. 2,854
--------------------------------------------------------------------------------
Total assets.................................................... 176,913,979
--------------------------------------------------------------------------------
Liabilities
Payable for securities purchased................................ 528,479
Advisory fee payable............................................ 10,670
Due to other related parties.................................... 1,440
Accrued expenses and other liabilities.......................... 52,807
--------------------------------------------------------------------------------
Total liabilities............................................... 593,396
--------------------------------------------------------------------------------
Net assets....................................................... $176,320,583
--------------------------------------------------------------------------------
Net assets represented by
Paid-in capital................................................. $160,416,407
Undistributed net investment income............................. 1,201,431
Accumulated net realized losses on securities................... (1,485,870)
Net unrealized gains on securities.............................. 16,188,615
--------------------------------------------------------------------------------
Total net assets................................................. $176,320,583
--------------------------------------------------------------------------------
Shares outstanding............................................... 11,406,477
--------------------------------------------------------------------------------
Net asset value per share........................................ $ 15.46
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
69
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Statement Of Operations
Six Months Ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
<S> <C>
Investment income
Dividends (net of foreign withholding taxes of $3,714)........... $ 452,450
Interest......................................................... 1,472,431
--------------------------------------------------------------------------------
Total investment income........................................... 1,924,881
--------------------------------------------------------------------------------
Expenses
Advisory fee..................................................... 582,877
Administrative services fees..................................... 77,536
Transfer agent fee............................................... 191
Trustees' fees and expenses...................................... 1,534
Printing and postage expenses.................................... 10,282
Custodian fee.................................................... 37,923
Professional fees................................................ 13,142
Organization expenses............................................ 2,184
Other............................................................ 9,568
--------------------------------------------------------------------------------
Total expenses................................................... 735,237
Less: Expense reductions......................................... (18,385)
--------------------------------------------------------------------------------
Net expenses..................................................... 716,852
--------------------------------------------------------------------------------
Net investment income............................................ 1,208,029
--------------------------------------------------------------------------------
Net realized and unrealized losses on securities
Net realized losses on securities................................ (1,473,127)
--------------------------------------------------------------------------------
Net change in unrealized losses on securities.................... (1,134,834)
--------------------------------------------------------------------------------
Net realized and unrealized losses on securities................. (2,607,961)
--------------------------------------------------------------------------------
Net decrease in net assets resulting from operations............. $(1,399,932)
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
70
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Foundation Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
-------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income..................... $ 1,208,029 $ 2,545,865
Net realized gains or losses on
securities............................... (1,473,127) 806,824
Net change in unrealized gains or losses
on securities............................ (1,134,834) 9,352,295
-------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations................ (1,399,932) 12,704,984
-------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income..................... 0 (2,526,366)
Net realized gains........................ (886,673) (227,108)
-------------------------------------------------------------------------------
Total distributions to shareholders....... (886,673) (2,753,474)
-------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold................. 34,375,963 57,697,868
Payment for shares redeemed............... (2,221,823) (3,207,434)
Net asset value of shares issued in
reinvestment of distributions............ 886,673 2,753,474
-------------------------------------------------------------------------------
Net increase in net assets resulting from
capital share transactions............... 33,040,813 57,243,908
-------------------------------------------------------------------------------
Total increase in net assets............. 30,754,208 67,195,418
Net assets
Beginning of period....................... 145,566,375 78,370,957
-------------------------------------------------------------------------------
End of period............................. $176,320,583 $145,566,375
-------------------------------------------------------------------------------
Undistributed (overdistributed) net
investment income......................... $ 1,201,431 $ (6,598)
-------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
71
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 2000 ---------------------------
(Unaudited) 1999 1998 # 1997 (a) #
<S> <C> <C> <C> <C>
Net asset value, beginning of
period $ 15.85 $ 12.76 $10.79 $10.00
======= ======= ====== ======
Income from investment operations
Net investment income 0.07 0.06 0.10 0.11
Net realized and unrealized gains
or losses on securities
and foreign currency related
transactions (0.94) 3.09 1.94 0.77
------- ------- ------ ------
Total from investment operations (0.87) 3.15 2.04 0.88
------- ------- ------ ------
Distributions to shareholders
from
Net investment income 0 (0.06) (0.07) (0.06)
Net realized gains 0 0 0 (0.03)
------- ------- ------ ------
Total distributions 0 (0.06) (0.07) (0.09)
------- ------- ------ ------
Net asset value, end of period $ 14.98 $ 15.85 $12.76 $10.79
======= ======= ====== ======
Total return* (5.49%) 24.72% 18.92% 8.80%
Ratios and supplemental data
Net assets, end of period
(thousands) $34,499 $21,022 $9,583 $2,899
Ratios to average net assets
Expenses** 1.02%+ 1.01% 1.04% 1.05%+
Net investment income 0.99%+ 0.58% 0.89% 1.15%+
Portfolio turnover rate 13% 17% 12% 11%
</TABLE>
(a) For the period from March 6, 1997 (commencement of operations) to December
31, 1997.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
77
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Schedule of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Country Shares Value
<S> <C> <C> <C>
COMMON STOCKS - 94.0%
CONSUMER DISCRETIONARY - 20.0%
Automobiles - 1.1%
Harley-Davidson, Inc. ...................... United States 10,000 $ 385,000
Perusahaan Otomobil Nasional Berhad......... Malaysia 2,000 2,842
-----------
387,842
-----------
Hotels, Restaurants & Leisure - 2.9%
Airtours Plc................................ United Kingdom 25,000 131,261
Granada Group Plc. ......................... United Kingdom 35,988 359,393
Marriott International, Inc., Class A....... United States 8,000 288,500
Sodexho Alliance............................ France 1,180 214,044
-----------
993,198
-----------
Household Durables - 2.0%
Black & Decker Corp. ....................... United States 8,800 345,950
Industrie Natuzzi SpA, ADR.................. Italy 30,000 356,250
-----------
702,200
-----------
Leisure Equipment & Products - 1.2%
Nintendo Co., Ltd. ......................... Japan 2,300 401,451
-----------
Media - 3.9%
Disney (Walt) Co. .......................... United States 8,000 310,500
Gannett Co., Inc. .......................... United States 3,800 227,287
Pearson Publishing Plc...................... United Kingdom 9,000 285,976
Tribune Co. ................................ United States 6,000 210,000
VNU NV...................................... Netherlands 5,900 304,731
-----------
1,338,494
-----------
Multi-line Retail - 1.7%
Wal-Mart Stores, Inc. ...................... United States 10,500 605,063
-----------
Specialty Retail - 3.7%
Gap, Inc. .................................. United States 7,525 235,156
Hennes & Mauritz, Class B................... Sweden 8,000 166,894
Home Depot, Inc. ........................... United States 7,500 374,531
TJX Co., Inc. .............................. United States 26,300 493,125
-----------
1,269,706
-----------
Textiles & Apparel - 3.5%
Benetton Group SpA, ADS..................... Italy 8,224 340,268
Hermes International........................ France 2,750 371,498
Hugo Boss AG................................ Germany 3,120 482,544
-----------
1,194,310
-----------
CONSUMER STAPLES - 7.2%
Beverages - 1.1%
Anheuser Busch Cos., Inc. .................. United States 5,100 380,906
-----------
</TABLE>
78
<PAGE>
EVERGREEN VARIABLE TRUST ANNUITY
Evergreen VA Global Leaders Fund
Schedule of Investments (continued)
June 30, 2000
<TABLE>
<CAPTION>
Country Shares Value
<S> <C> <C> <C>
COMMON STOCKS - continued
CONSUMER STAPLES - continued
Food & Drug Retailing - 3.1%
Carrefour SA............................... France 3,700 $ 252,919
Seven-Eleven Japan Co., Ltd. .............. Japan 10,000 835,965
-----------
1,088,884
-----------
Food Products - 2.0%
General Mills, Inc. ....................... United States 5,500 210,375
Numico Kon NV.............................. Netherlands 9,837 466,752
-----------
677,127
-----------
Personal Products - 1.0%
Avon Products, Inc. ....................... United States 8,000 356,000
-----------
ENERGY - 1.5%
Energy Equipment & Services - 0.7%
IHC Caland NV.............................. Netherlands 5,319 258,980
-----------
Oil & Gas - 0.8%
Woodside Petroleum, Ltd. .................. Australia 35,000 272,113
-----------
FINANCIALS - 16.4%
Banks - 5.4%
Bipop-Carire, SpA.......................... Italy 40,000 314,669
DePfa Deutsche Pfandbriefbank AG (DePfa-
Bank)..................................... Germany 3,000 301,017
Lloyds TSB Group Plc. ..................... United Kingdom 25,000 236,044
Malayan Banking Berhad *................... Malaysia 2,000 8,105
National Australia Bank, Ltd. ............. Australia 4,000 331,000
Royal Bank of Scotland Group Plc .......... United Kingdom 20,500 343,065
Wells Fargo Co. ........................... United States 8,300 321,625
-----------
1,855,525
-----------
Diversified Financials - 6.5%
American Express Co. ...................... United States 7,300 380,512
AMMB Holdings Berhad....................... Malaysia 1,400 4,679
Citigroup, Inc. ........................... United States 12,000 723,000
Federal National Mortgage Assn. ........... United States 5,100 266,156
MBNA Corp. ................................ United States 9,375 254,297
Morgan Stanley, Dean Witter & Co. ......... United States 4,400 366,300
Schwab (Charles) & Co., Inc. .............. United States 7,500 252,188
-----------
2,247,132
-----------
Insurance - 3.8%
American International Group, Inc. ........ United States 3,000 352,500
Marschollek Lauten......................... Germany 800 335,291
Marsh & McLennan Co., Inc. ................ United States 3,150 328,978
Schweizerische Rueckversicherungs-
Gesellschaft.............................. Switzerland 150 305,738
-----------
1,322,507
-----------
</TABLE>
79
<PAGE>
EVERGREEN VARIBLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Country Shares Value
<S> <C> <C> <C>
COMMON STOCKS - continued
FINANCIALS - continued
Real Estate - 0.7%
Cheung Kong Holdings, Ltd.* ................ Hong Kong 11,000 $ 120,999
Henderson Land Development Co., Ltd. ....... Hong Kong 27,000 118,800
-----------
239,799
-----------
HEALTH CARE - 9.6%
Health Care Equipment & Supplies - 2.5%
Coloplast................................... Denmark 5,800 270,865
Luxottica Group SpA, ADS.................... Italy 48,000 585,000
-----------
855,865
-----------
Pharmaceuticals - 7.1%
Abbott Laboratories......................... United States 9,000 401,063
Altana AG................................... Germany 4,650 372,906
Astrazeneca Plc, ADR........................ United Kingdom 6,717 312,341
Merck & Co., Inc............................ United States 5,000 383,125
Sanofi Synthelabo........................... France 5,420 258,206
Schering-Plough Corp........................ United States 6,500 328,250
SmithKline Beecham, Plc, ADR................ United Kingdom 3,200 208,600
UCB SA...................................... Belgium 5,000 183,684
-----------
2,448,175
-----------
INDUSTRIALS - 12.2%
Aerospace & Defense - 3.4%
Bombardier Inc., Class B.................... Canada 30,000 814,865
United Technologies Corp.................... United States 6,295 370,618
-----------
1,185,483
-----------
Commercial Services & Supplies - 2.6%
McGraw-Hill Cos., Inc....................... United States 5,200 280,800
Pitney Bowes, Inc........................... United States 6,800 272,000
Viad Corp................................... United States 13,000 354,250
-----------
907,050
-----------
Construction & Engineering - 1.1%
Societe Technip............................. France 3,100 374,978
-----------
Electrical Equipment - 1.1%
ABB AG...................................... Switzerland 3,000 359,069
-----------
Industrial Conglomerates - 3.8%
General Electric Co......................... United States 15,500 821,500
Honeywell International, Inc................ United States 8,000 269,500
Smiths Industries Plc....................... United Kingdom 17,231 224,221
-----------
1,315,221
-----------
Machinery - 0.2%
TI Group Plc................................ United Kingdom 10,000 54,472
-----------
</TABLE>
80
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Country Shares Value
<S> <C> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - 18.5%
Communications Equipment - 6.1%
Cisco Systems, Inc.* ........ United States 16,200 $ 1,029,713
Ericsson LM Telephone Co.,
Class B, ADR................ Sweden 10,000 200,000
Nokia Corp., ADR............. Finland 17,500 873,906
-----------
2,103,619
-----------
Computers & Peripherals - 2.0%
Dell Computer Corp.* ........ United States 10,000 493,125
Sun Microsystems, Inc.* ..... United States 2,000 181,875
-----------
675,000
-----------
Electronic Equipment & In-
struments - 0.6%
Spirent Plc.................. United Kingdom 28,500 191,683
-----------
Semiconductor Equipment &
Products - 2.3%
Intel Corp. ................. United States 6,000 802,125
-----------
Software - 6.1%
Computer Associates
International, Inc. ........ United States 5,400 276,413
Microsoft Corp.* ............ United States 8,000 640,000
Oracle Systems Corp.* ....... United States 7,650 643,078
SAP AG....................... Germany 300 44,680
SAP AG, ADR.................. Germany 10,700 502,231
-----------
2,106,402
-----------
IT Consulting & Services - 1.4%
Getronics NV................. Netherlands 4,000 61,674
SEMA Group Plc............... United Kingdom 17,485 248,691
Tieto Corp. ................. Finland 5,500 183,517
-----------
493,882
-----------
MATERIALS - 1.3%
Chemicals - 0.5%
Du Pont Canada, Inc.,
Class A..................... Canada 6,000 188,919
Malaysian Oxygen Berhad...... Malaysia 2,000 5,684
-----------
194,603
-----------
Construction Materials - 0.8%
CRH Plc (London Exchange).... Ireland 15,061 272,477
-----------
TELECOMMUNICATION
SERVICES - 5.9%
Diversified
Telecommunication
Services - 3.0%
Bell Atlantic Corp. ......... United States 7,000 355,688
SBC Communications,Inc. ..... United States 10,174 440,025
Telecom Italia Mobile
(TIM) SpA................... Italy 23,000 234,952
-----------
1,030,665
-----------
</TABLE>
81
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Country Shares Value
<S> <C> <C> <C>
COMMON STOCKS - continued
TELECOMMUNICATION SERVICES - continued
Wireless Telecommunications Services - 2.9%
NTT Mobile Communication Network,
Inc. ................................. Japan 18 $ 486,876
Vodafone AirTouch Plc, ADR............. United Kingdom 12,500 517,969
-----------
1,004,845
-----------
UTILITIES - 1.4%
Electric Utilities - 1.0%
Endesa SA, ADR......................... Spain 17,500 341,250
-----------
Gas Utilities - 0.4%
Hong Kong & China Gas Co., Ltd. ....... Hong Kong 111,870 126,285
-----------
Total Common Stocks (cost
$28,498,127)........................ 32,434,386
-----------
WARRANTS - 0.0%
INDUSTRIALS - 0.0%
Construction & Engineering - 0.0%
United Engineers Berhad, expires
11/18/2002
(cost $0) *........................... Malaysia 400 368
-----------
SHORT-TERM INVESTMENTS - 6.5%
MUTUAL FUND SHARES - 6.5%
Evergreen Select Money Market Fund
(cost $2,238,025) 0.................................. 2,238,025 2,238,025
-----------
Total Investments - (cost $30,736,152) - 100.5%................... 34,672,779
Other Assets and Liabilities - (0.5%)............................. (173,845)
-----------
Net Assets - 100.0%............................................... $34,498,934
-----------
</TABLE>
See Combined Notes to Schedules of Investments.
82
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Statement of Assets and Liabilities
June 30, 2000 (Unaudited)
-------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets
Identified cost of securities.................................... $30,736,152
Net unrealized gains on securities............................... 3,936,627
-------------------------------------------------------------------------------
Market value of securities....................................... 34,672,779
Cash............................................................. 9,660
Foreign currency, at value (cost $187)........................... 187
Receivable for fund shares sold.................................. 121,828
Dividends and interest receivable................................ 79,351
Deferred organization expenses................................... 3,379
Receivable from investment advisor............................... 10,547
-------------------------------------------------------------------------------
Total assets..................................................... 34,897,731
-------------------------------------------------------------------------------
Liabilities
Payable for securities purchased................................. 393,018
Due to other related parties..................................... 279
Accrued expenses and other liabilities........................... 5,500
-------------------------------------------------------------------------------
Total liabilities................................................ 398,797
-------------------------------------------------------------------------------
Net assets $34,498,934
-------------------------------------------------------------------------------
Net assets represented by
Paid-in capital.................................................. $30,926,053
Undistributed net investment income.............................. 137,786
Accumulated net realized losses on securities and foreign
currency related transactions................................... (501,721)
Net unrealized gains on securities and foreign currency related
transactions.................................................... 3,936,816
-------------------------------------------------------------------------------
Total net assets.................................................. $34,498,934
-------------------------------------------------------------------------------
Shares outstanding................................................ 2,303,307
-------------------------------------------------------------------------------
Net asset value per share......................................... $ 14.98
-------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
83
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Statement of Operations
Six Months Ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
<S> <C>
Investment income
Dividends (net of foreign withholding taxes of $26,529).......... $ 232,274
Interest......................................................... 45,600
--------------------------------------------------------------------------------
Total investment income........................................... 277,874
--------------------------------------------------------------------------------
Expenses
Advisory fee..................................................... 121,746
Administrative services fees..................................... 13,889
Transfer agent fee............................................... 214
Trustees' fees and expenses...................................... 277
Printing and postage expenses.................................... 6,239
Custodian fee.................................................... 11,543
Professional fees................................................ 6,510
Organization expenses............................................ 1,025
Other............................................................ 8,530
--------------------------------------------------------------------------------
Total expenses................................................... 169,973
Less: Expense reductions......................................... (2,839)
Fee waivers.................................................... (27,301)
--------------------------------------------------------------------------------
Net expenses..................................................... 139,833
--------------------------------------------------------------------------------
Net investment income............................................ 138,041
--------------------------------------------------------------------------------
Net realized and unrealized losses on securities and foreign
currency related transactions
Net realized losses on:
Securities....................................................... (416,007)
Foreign currency related transactions............................ (2,881)
--------------------------------------------------------------------------------
Net realized losses on securities and foreign currency related
transactions.................................................... (418,888)
--------------------------------------------------------------------------------
Net change in unrealized losses on securities and foreign
currency related transactions................................... (834,471)
--------------------------------------------------------------------------------
Net realized and unrealized losses on securities and foreign
currency related transactions................................... (1,253,359)
--------------------------------------------------------------------------------
Net decrease in net assets resulting from operations............. $(1,115,318)
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
84
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Global Leaders Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
--------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income...................... $ 138,041 $ 82,804
Net realized losses on securities and
foreign currency related transactions..... (418,888) (14,836)
Net change in unrealized gains or losses on
securities and foreign currency related
transactions.............................. (834,471) 3,690,865
--------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations............... (1,115,318) 3,758,833
--------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income...................... 0 (84,708)
--------------------------------------------------------------------------------
Total distributions to shareholders..... 0 (84,708)
--------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold.................. 17,983,407 9,841,393
Payment for shares redeemed................ (3,390,986) (2,161,861)
Net asset value of shares issued in
reinvestment of distributions............. 0 84,874
--------------------------------------------------------------------------------
Net increase in net assets resulting
from capital share transactions........ 14,592,421 7,764,406
--------------------------------------------------------------------------------
Total increase in net assets.......... 13,477,103 11,438,531
Net assets
Beginning of period........................ 21,021,831 9,583,300
--------------------------------------------------------------------------------
End of period.............................. $34,498,934 $21,021,831
--------------------------------------------------------------------------------
Undistributed (overdistributed) net
investment income.......................... $ 137,786 $ (255)
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
85
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 2000 ------------------------------
(Unaudited) (a) 1999 (a) 1998 (a) (b)
<S> <C> <C> <C>
Net asset value, beginning of period $ 13.87 $ 11.46 $ 12.50
------- ----------- -----------
Income from investment operations
Net investment income (loss) (0.01) (0.07) 0.02
Net realized and unrealized
gains or losses on securities 3.54 2.50 (1.06)
------- ----------- -----------
Total from investment operations 3.53 2.43 (1.04)
------- ----------- -----------
Distributions to shareholders
from net investment income 0 (0.02) 0
------- ----------- -----------
Net asset value, end of period $ 17.40 $ 13.87 $ 11.46
------- ----------- -----------
Total return* 25.45% 21.21% (8.32%)
Ratios and supplemental data
Net assets, end of period (thousands $21,606 $ 15,888 $ 11,064
Ratios to average net assets
Expenses** 0.54%+ 1.33% 0.97%+
Net investment income (loss) (0.01%)+ (0.67%) 0.44%+
Portfolio turnover rate 80% 143% 62%
</TABLE>
(a) Effective February 1, 2000, shareholders of Mentor VIP Growth Portfolio
became owners of that number of full and fractional shares of Evergreen VA
Growth Fund. As Mentor VIP Growth Portfolio contributed the majority of
assets and shareholders to the Evergreen VA Growth Fund, its accounting
and performance history is carried forward.
(b) For the period from March 3, 1998 (commencement of operations) to December
31, 1998.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
See Combined Notes to Financial Statements.
89
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth Fund
Schedule of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 94.4%
CONSUMER DISCRETIONARY - 10.6%
Distributors - 3.3%
Black Box Corp.* ....................................... 1,650 $ 130,633
Kent Electronics Corp.* ................................ 9,350 278,747
Metron Tech* ........................................... 11,500 145,008
SCP Pool Corp.* ........................................ 7,050 165,675
-----------
720,063
-----------
Hotels, Restaurants & Leisure - 1.3%
Applebee's International, Inc. ......................... 3,700 112,156
Ruby Tuesday, Inc. ..................................... 13,200 165,825
-----------
277,981
-----------
Internet & Catalog Retail - 0.3%
Polymedica Corp.* ...................................... 1,250 54,063
-----------
Leisure Equipment & Products - 0.4%
Jakks Pacific, Inc.* ................................... 5,725 84,444
-----------
Media - 2.2%
Cox Radio, Inc. Class A* ............................... 4,800 134,400
Imax Corp.* ............................................ 6,150 139,912
Radio One, Inc., Class A* .............................. 1,600 47,300
Radio One, Inc., Non-Voting Class D* ................... 3,350 73,909
World Wrestling Federation Entertainment, Inc.* ........ 3,650 75,966
-----------
471,487
-----------
Multi-line Retail - 1.1%
Dollar Tree Stores, Inc.* .............................. 2,925 115,720
Family Dollar Stores, Inc. ............................. 6,650 130,091
-----------
245,811
-----------
Semiconductor Equipment & Products - 1.0%
Actel Corp.* ........................................... 4,900 223,563
-----------
Specialty Retail - 1.0%
Linens 'n Things, Inc.* ................................ 3,300 89,512
Men's Wearhouse, Inc.* ................................. 6,050 134,991
-----------
224,503
-----------
CONSUMER STAPLES - 0.1%
Food Products - 0.1%
NBTY, Inc.* ............................................ 4,050 25,819
-----------
ENERGY - 8.4%
Energy Equipment & Services - 7.3%
Core Laboratories NV* .................................. 9,500 275,500
Global Industries, Ltd.* ............................... 10,650 201,019
Gulf Islands Fabrication, Inc.* ........................ 10,650 181,050
Hanover Compressor Co.* ................................ 10,000 380,000
</TABLE>
90
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
ENERGY - continued
Energy Equipment & Services - continued
Precision Drilling Corp.* .............................. 5,100 $ 196,988
Pride International, Inc.* ............................. 9,850 243,787
Varco International, Inc.* ............................. 3,900 90,675
-----------
1,569,019
-----------
Oil & Gas - 1.1%
Louis Dreyfus Natural Gas Corp.* ....................... 3,950 123,684
St. Mary Land & Exploration Co.* ....................... 2,900 121,981
-----------
245,665
-----------
FINANCIALS - 2.8%
Banks - 1.1%
Commerce Bancorp, Inc. ................................. 2,855 131,330
National Commerce Bancorp............................... 6,500 104,406
-----------
235,736
-----------
Diversified Financials - 1.1%
RentWay, Inc.* ......................................... 7,050 205,772
Vyyo Inc.* ............................................. 1,150 31,050
-----------
236,822
-----------
Insurance - 0.6%
Markel Corp.* .......................................... 900 127,462
-----------
HEALTH CARE - 14.5%
Biotechnology - 2.3%
Affymetrix, Inc.* ...................................... 300 49,537
Alkermes, Inc.* ........................................ 1,500 70,687
Cephalon , Inc.* ....................................... 850 50,894
Enzon, Inc.* ........................................... 1,200 51,000
Genome Therapeutics Corp.* ............................. 800 24,350
Human Genome Sciences, Inc.* ........................... 650 86,694
Incyte Pharmaceuticals, Inc.* .......................... 500 41,094
Millennium Pharmaceuticals, Inc.* ...................... 1,050 117,469
-----------
491,725
-----------
Health Care Equipment & Supplies - 1.9%
Cytyc Corp.* ........................................... 1,050 56,044
Endocare , Inc.* ....................................... 3,900 78,975
Molecular Devices Corp.* ............................... 900 62,269
Physiometrix, Inc.* .................................... 2,600 57,525
ResMed Inc.* ........................................... 1,150 30,762
The Cooper Companies, Inc. ............................. 2,700 98,212
Zoll Medical Corp.* .................................... 350 17,150
-----------
400,937
-----------
</TABLE>
91
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
HEALTH CARE - continued
Health Care Providers & Services - 6.1%
Accredo Health, Inc.* .................................. 5,300 $ 183,181
Bindley Western Industries, Inc. ....................... 8,316 219,854
Brookdale Living Communities, Inc.* .................... 7,000 101,500
Hooper Holmes, Inc. .................................... 7,850 62,800
Orthodontic Centers of America, Inc.* .................. 5,200 117,650
Priority Healthcare Corp., Class B* .................... 940 69,854
Province Healthcare Co.* ............................... 3,700 133,663
Rare Hospitality International, Inc.* .................. 4,200 118,650
Renal Care Group, Inc.* ................................ 6,700 163,836
Universal Health Services, Inc., Class B* .............. 2,200 144,100
-----------
1,315,088
-----------
Pharmaceuticals - 4.2%
Barr Laboratories, Inc.* ............................... 4,200 188,212
Biotech Holders Trust................................... 1,000 178,000
Cubist Pharmaceuticals, Inc.* .......................... 1,350 66,488
King Pharmaceuticals, Inc.* ............................ 4,988 218,827
Medicis Pharmaceutical Corp., Class A* ................. 4,700 267,900
-----------
919,427
-----------
INDUSTRIALS - 22.4%
Air Freight & Couriers - 1.7%
CH Robinson Worldwide................................... 2,200 108,900
Circle International Group, Inc. ....................... 3,650 91,706
EGL, Inc.* ............................................. 4,100 126,075
Expeditors International of Washington, Inc. ........... 900 42,750
-----------
369,431
-----------
Airlines - 1.3%
Atlantic Coast Airlines Holdings* ...................... 4,850 153,987
Mesaba Holdings, Inc.* ................................. 3,975 38,011
Skywest, Inc. .......................................... 2,300 85,244
-----------
277,242
-----------
Commercial Services & Supplies - 12.3%
Acxiom Corp.* .......................................... 5,400 147,150
Concord EFS, Inc.* ..................................... 4,287 111,462
Copart, Inc.* .......................................... 13,400 214,400
CSG Systems International, Inc.* ....................... 5,400 302,738
CTC Communications Group, Inc.* ........................ 2,725 98,100
Dendrite International, Inc.* .......................... 8,350 278,159
Hall, Kinion & Associates , Inc.* ...................... 6,900 229,856
Heidrick & Struggles International, Inc.* .............. 4,050 255,656
iXL Enterprises, Inc.* ................................. 7,650 110,925
Management Network Group, Inc.* ........................ 4,450 155,750
</TABLE>
92
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INDUSTRIALS - continued
Commercial Services & Supplies - continued
Manhattan Assoc. Inc.* ................................. 3,650 $ 91,250
META Group, Inc.* ...................................... 7,350 141,488
Newgen Results Corp.* .................................. 9,950 164,175
Nova Corp.* ............................................ 2,966 82,863
ProsoftTraining.com.* .................................. 4,550 76,497
Teletech Holdings, Inc.* ............................... 3,750 116,484
The Intercept Group, Inc.* ............................. 4,150 70,550
-----------
2,647,503
-----------
Construction & Engineering - 0.8%
Dycom Industries, Inc.* ................................ 3,600 165,600
-----------
Electrical Equipment - 2.5%
Advanced Lighting Technologies, Inc.* .................. 2,650 49,025
AstroPower, Inc.* ...................................... 2,450 66,456
C&D Technologies........................................ 6,100 344,650
Power One, Inc.* ....................................... 625 71,211
-----------
531,342
-----------
Machinery - 2.4%
Maverick Tube Corp.* ................................... 6,800 198,050
Shaw Group, Inc.* ...................................... 6,800 320,450
-----------
518,500
-----------
Road & Rail - 1.2%
Forward Air Corp.* ..................................... 6,750 270,000
-----------
Transportation Infrastructure - 0.2%
Carey International, Inc.* ............................. 3,900 54,113
-----------
INFORMATION TECHNOLOGY - 31.2%
Communications Equipment - 8.1%
Adtran, Inc.* .......................................... 2,150 128,731
Advanced Fibre Communications, Inc.* ................... 5,400 244,688
Alteon Websystems, Inc.* ............................... 2,200 220,138
Brocade Communications Systems, Inc.* .................. 500 91,742
Commscope, Inc.* ....................................... 6,000 246,000
Digital Microwave Corp.* ............................... 6,600 251,625
Extreme Networks, Inc.* ................................ 1,750 184,625
Polycom, Inc.* ......................................... 2,850 268,167
Powerwave Technologies, Inc.* .......................... 2,450 107,800
-----------
1,743,516
-----------
</TABLE>
93
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Computers & Peripherals - 2.1%
Corsair Communications, Inc.* .......................... 8,650 $ 248,687
Network Appliance, Inc.* ............................... 1,400 112,700
QLogic Corp.* .......................................... 1,400 92,488
-----------
453,875
-----------
Electronic Equipment & Instruments - 8.5%
Artesyn Technologies, Inc.* ............................ 1,350 37,547
Benchmark Electronics, Inc.* ........................... 10,550 385,734
Burr-Brown Corp.* ...................................... 1,475 127,864
Methode Electronics, Inc. .............................. 3,000 115,875
Mettler Toledo International, Inc.* .................... 2,100 84,000
Oak Technology, Inc.* .................................. 6,600 142,312
Parlex Corp.* .......................................... 8,350 351,744
Sandisk Corp.* ......................................... 1,600 97,900
Sensormatic Electronics Corp.* ......................... 11,750 185,797
Sipex Corp.* ........................................... 11,450 317,022
-----------
1,845,795
-----------
Internet Software & Services - 0.9%
Accrue Software, Inc.* ................................. 2,900 102,950
Digex, Inc.* ........................................... 1,350 91,716
-----------
194,666
-----------
Office Electronics - 0.2%
Manugistics Group, Inc.* ............................... 850 39,737
-----------
Semiconductor Equipment & Products - 7.9%
Alliance Semiconductor Corp.* .......................... 4,750 116,672
Alpha Industries, Inc.* ................................ 2,500 110,156
Atmel Corp.* ........................................... 2,250 82,969
ATMI, Inc.* ............................................ 3,600 167,400
Cerprobe Corp.* ........................................ 10,550 147,700
Cypress Semiconductor Corp.* ........................... 1,900 80,275
Elantec Semiconductor, Inc.* ........................... 2,600 181,025
Exar Corp.* ............................................ 1,600 139,500
hi/fn, Inc.* ........................................... 1,050 46,594
International Rectifier Corp.* ......................... 4,750 266,000
Micrel, Inc.* .......................................... 2,100 91,219
MKS Instruments, Inc.* ................................. 1,950 76,294
PRI Automation, Inc.* .................................. 2,400 156,937
Therma-Wave, Inc.* ..................................... 2,400 53,550
-----------
1,716,291
-----------
</TABLE>
94
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Software - 3.2%
Answerthink Consulting Group* ...................... 2,400 $ 39,900
Moldflow Corp.* .................................... 5,300 85,794
Network Associates, Inc.* .......................... 8,650 176,244
New Era of Networks, Inc.* ......................... 3,100 131,750
Remedy Corp.* ...................................... 3,150 175,612
Verity, Inc.* ...................................... 2,300 87,400
-----------
696,700
-----------
IT Consulting & Services - 0.3%
Braun Consulting, Inc.* ............................ 2,500 52,812
-----------
MATERIALS - 0.3%
Chemicals - 0.3%
Evercel, Inc.* ..................................... 4,800 66,000
-----------
TELECOMMUNICATION SERVICES - 4.1%
Diversified Telecommunication Services - 4.1%
Choice One Communications, Inc.* ................... 2,850 116,316
Efficient Networks, Inc.* .......................... 2,400 176,550
ITC DeltaCom, Inc.* ................................ 7,400 165,112
Powertel, Inc.* .................................... 2,150 152,516
Primus Telecomm Group, Inc.* ....................... 1,300 32,338
Time Warner Telecom, Inc. .......................... 3,700 238,187
-----------
881,019
-----------
Total Common Stocks (cost $14,818,929)............ 20,393,757
-----------
<CAPTION>
Principal
Amount Value
<S> <C> <C>
SHORT-TERM INVESTMENTS - 5.5%
REPURCHASE AGREEMENTS - 5.5%
State Street Bank & Trust Co. 6.30%, dated
6/30/2000, maturing, 7/3/2000, maturity value
$1,187,336, (cost $1,186,721)(2) .................. $1,186,721 1,186,721
-----------
Total Investments - (cost $16,005,650) - 99.9%................... 21,580,478
Other Assets and Liabilities - 0.1%.............................. 25,449
-----------
Net Assets - 100.0%.............................................. $21,605,927
-----------
</TABLE>
See Combined Notes to Schedules of Investments.
95
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth Fund
Statement of Assets and Liabilities
June 30, 2000 (Unaudited)
-------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets
Identified cost of securities.................................... $14,818,929
Repurchase agreements, at amortized cost......................... 1,186,721
-------------------------------------------------------------------------------
Total identified cost of investments............................. 16,005,650
Net unrealized gains on securities............................... 5,574,828
-------------------------------------------------------------------------------
Market value of securities....................................... 21,580,478
Receivable for securities sold................................... 253,615
Dividends and interest receivable................................ 2,101
Deferred organization expenses................................... 5,099
Receivable from investment advisor............................... 11,660
-------------------------------------------------------------------------------
Total assets..................................................... 21,852,953
-------------------------------------------------------------------------------
Liabilities
Payable for securities purchased................................. 239,013
Due to custodian bank............................................ 274
Due to other related parties..................................... 176
Accrued expenses and other liabilities........................... 7,563
-------------------------------------------------------------------------------
Total liabilities................................................ 247,026
-------------------------------------------------------------------------------
Net assets........................................................ $21,605,927
-------------------------------------------------------------------------------
Net assets represented by
Paid-in capital.................................................. $13,744,052
Undistributed net investment loss................................ (7,258)
Accumulated net realized gains on securities..................... 2,294,305
Net unrealized gains on securities............................... 5,574,828
-------------------------------------------------------------------------------
Total net assets.................................................. $21,605,927
-------------------------------------------------------------------------------
Shares outstanding................................................ 1,241,661
-------------------------------------------------------------------------------
Net asset value per share......................................... $ 17.40
-------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
96
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth Fund
Statement of Operations
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income
Dividends........................................................ $ 6,065
Interest......................................................... 36,638
--------------------------------------------------------------------------------
Total investment income........................................... 42,703
--------------------------------------------------------------------------------
Expenses
Advisory fee..................................................... 66,218
Administrative services fees..................................... 9,460
Transfer agent fee............................................... 166
Trustees' fees and expenses...................................... 184
Printing and postage expenses.................................... 7,036
Custodian fee.................................................... 1,916
Professional fees................................................ 5,870
Organization expenses............................................ 957
Other............................................................ 3,026
--------------------------------------------------------------------------------
Total expenses................................................... 94,833
Less: Expense reductions......................................... (658)
Fee waivers ................................................... (44,214)
--------------------------------------------------------------------------------
Net expenses..................................................... 49,961
--------------------------------------------------------------------------------
Net investment loss............................................... (7,258)
--------------------------------------------------------------------------------
Net realized and unrealized gains on securities
Net realized gains on securities................................. 2,569,939
--------------------------------------------------------------------------------
Net change in unrealized gains on securities..................... 1,669,047
--------------------------------------------------------------------------------
Net realized and unrealized gains on securities.................. 4,238,986
--------------------------------------------------------------------------------
Net increase in net assets resulting from operations............. $4,231,728
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
97
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
-------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment loss....................... $ (7,258) $ (75,300)
Net realized gains on securities.......... 2,569,939 274,592
Net change in unrealized gains on
securities............................... 1,669,047 2,704,797
-------------------------------------------------------------------------------
Net increase in net assets resulting
from operations........................ 4,231,728 2,904,089
-------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income..................... 0 (17,317)
-------------------------------------------------------------------------------
Total distributions to shareholders..... 0 (17,317)
-------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold................. 2,540,872 4,282,662
Payment for shares redeemed............... (1,054,873) (2,362,779)
Net asset value of shares issued in
reinvestment of distributions............ 0 17,317
-------------------------------------------------------------------------------
Net increase in net assets resulting
from capital share transactions........ 1,485,999 1,937,200
-------------------------------------------------------------------------------
Total increase in net assets.......... 5,717,727 4,823,972
Net assets
Beginning of period....................... 15,888,200 11,064,228
-------------------------------------------------------------------------------
End of period............................. $21,605,927 $15,888,200
-------------------------------------------------------------------------------
Undistributed net investment loss ......... $ (7,258) $ 0
-------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
98
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 2000 -------------------------------------
(Unaudited) 1999 # 1998 # 1997 # 1996 (a) #
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 17.44 $ 15.58 $ 15.29 $ 11.83 $ 10.00
======= ======= ======= ======= =======
Income from investment
operations
Net investment income 0.01 0.07 0.16 0.08 0.06
Net realized and
unrealized gains or
losses on securities
and foreign currency
related transactions (0.35) 2.74 0.56 4.01 1.84
------- ------- ------- ------- -------
Total from investment
operations (0.34) 2.81 0.72 4.09 1.90
------- ------- ------- ------- -------
Distributions to
shareholders from
Net investment income 0 (0.06) (0.13) (0.07) (0.06)
Net realized gains (0.35) (0.89) (0.30) (0.56) (0.01)
------- ------- ------- ------- -------
Total distributions (0.35) (0.95) (0.43) (0.63) (0.07)
------- ------- ------- ------- -------
Net asset value, end of
period $ 16.75 $ 17.44 $ 15.58 $ 15.29 $ 11.83
======= ======= ======= ======= =======
Total return* (2.07%) 18.57% 4.77% 34.66% 19.00%
Ratios and supplemental
data
Net assets, end of
period (thousands) $85,362 $84,067 $60,576 $31,088 $14,484
Ratios to average net
assets
Expenses** 1.01%+ 1.01% 1.01% 1.01% 1.00%+
Net investment income 0.11%+ 0.44% 1.02% 0.59% 1.00%+
Portfolio turnover rate 25% 66% 13% 18% 2%
</TABLE>
(a) For the period from March 1, 1996 (commencement of operations) to December
31, 1996.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
102
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Schedule of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 94.7%
CONSUMER DISCRETIONARY - 13.3%
Air Freight & Couriers - 0.0%
Getty Images, Inc. ....................................... 500 $ 18,531
-----------
Household Durables - 1.4%
Lennar Corp. ............................................. 23,513 476,138
Newell Rubbermaid, Inc. .................................. 3,000 77,250
Sony Corp., ADR........................................... 6,000 565,875
Toll Brothers, Inc. ...................................... 6,000 123,000
-----------
1,242,263
-----------
Leisure Equipment & Products - 0.4%
Hasbro, Inc. ............................................. 23,000 346,438
-----------
Media - 10.8%
AMFM, Inc. ............................................... 3,000 207,000
Be Free, Inc. ............................................ 500 4,500
Charter Communications, Inc. ............................. 32,200 529,288
Clear Channel Communications, Inc.* ...................... 6,009 450,675
Comcast Corp., Class A.................................... 3,000 121,500
Cox Communications, Inc., Class A* ....................... 1,954 89,029
Disney (Walt) Co. ........................................ 21,100 818,944
Emmis Broadcasting Corp., Class A* ....................... 16,000 662,000
Fox Entertainment Group, Inc.* ........................... 16,400 498,150
Gaylord Entertainment Co. ................................ 27,000 580,500
Martha Stewart Living Omnimedia, Inc. .................... 32,000 704,000
MediaOne Group, Inc.* .................................... 11,000 727,375
Netratings, Inc. ......................................... 4,800 123,000
New York Times Co., Class A............................... 36,600 1,445,700
Time Warner, Inc. ........................................ 10,000 760,000
Univision Communications, Inc., Class A* ................. 3,500 362,250
Viacom, Inc., Class A PA.................................. 9,100 622,212
Washington Post Co., Class B.............................. 600 286,800
Young Broadcasting, Inc., Class A......................... 8,400 215,775
-----------
9,208,698
-----------
Multi-line Retail - 0.2%
Saks, Inc.* .............................................. 12,916 135,618
-----------
Specialty Retail - 0.5%
Intimate Brands, Inc. .................................... 21,000 414,750
-----------
CONSUMER STAPLES - 2.2%
Food & Drug Retailing - 0.6%
CVS Corp. ................................................ 12,600 504,000
-----------
Food Products - 0.4%
Conagra, Inc. ............................................ 9,000 171,562
International Multifoods Corp. ........................... 3,800 65,788
</TABLE>
103
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
CONSUMER STAPLES - continued
Food Products - continued
Sara Lee Corp. ............................................ 5,000 $ 96,562
Vlasic Foods International, Inc. .......................... 10,000 16,250
-----------
350,162
-----------
Household Products - 0.4%
Procter & Gamble Co. ...................................... 5,000 286,250
-----------
Personal Products - 0.8%
Colgate-Palmolive Co. ..................................... 7,000 419,125
Kimberly-Clark Corp. ...................................... 5,000 286,875
-----------
706,000
-----------
ENERGY - 5.6%
Energy Equipment & Services - 1.5%
Halliburton Co. ........................................... 2,000 94,375
L-3 Communications Holding Corp. .......................... 13,600 776,050
Nabors Industries, Inc.* .................................. 1,500 62,344
Petroleum Helicopters, Inc. ............................... 18,000 171,000
Transocean Sedco Forex, Inc. .............................. 1,000 53,437
Weatherford International, Inc.* .......................... 3,100 123,419
-----------
1,280,625
-----------
Oil & Gas - 4.1%
Berry Petroleum Co., Class A............................... 3,300 56,100
BP Amoco Plc, ADR.......................................... 18,464 1,044,370
Conoco, Inc., Class B...................................... 6,684 164,176
Exxon Mobil Corp. ......................................... 5,100 400,350
Houston Exploration Co.* .................................. 17,500 439,687
Kerr-McGee Corp. .......................................... 7,690 453,229
Occidental Petroleum Corp. ................................ 10,500 221,156
Phillips Petroleum Co. .................................... 7,000 354,813
Shell Transport & Trading Plc, ADR......................... 1,000 49,938
Texaco, Inc. PA............................................ 1,100 58,575
Tosco Corp. ............................................... 10,500 297,281
-----------
3,539,675
-----------
FINANCIALS - 12.3%
Banks - 3.9%
Astoria Financial Corp. ................................... 5,000 128,750
Comerica, Inc. ............................................ 100 4,488
First Security Corp. ...................................... 8,000 108,500
First Tennessee National Corp. ............................ 13,000 215,312
Hibernia Corp., Class A.................................... 14,000 152,250
Marshall & Ilsley Corp. ................................... 5,700 236,550
Mellon Financial Corp. .................................... 22,000 801,625
One Valley Bancorp, Inc.................................... 12,000 375,000
</TABLE>
104
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
FINANCIALS - continued
Banks - continued
Pacific Century Financial Corp. ...................... 22,000 $ 321,750
SouthTrust Corp. ..................................... 7,000 158,375
Susquehanna Bancshares, Inc. ......................... 6,975 99,394
U.S. Bancorp ......................................... 8,100 155,925
Webster Financial Corp. .............................. 21,500 477,031
Wells Fargo Co. ...................................... 2,000 77,500
-----------
3,312,450
-----------
Diversified Financials - 5.1%
Citigroup, Inc. ...................................... 2,000 120,500
Federal Home Loan Mortgage Assn. ..................... 13,500 546,750
Goldman Sachs Group, Inc. ............................ 2,000 189,750
Legg Mason, Inc. ..................................... 11,000 550,000
Lehman Brothers Holdings, Inc. ....................... 7,000 661,937
Neuberger Berman, Inc. ............................... 24,000 1,116,000
Price (T.) Rowe & Associates, Inc. ................... 16,500 701,250
Waddell & Reed Financial, Inc., Class A............... 15,000 492,188
-----------
4,378,375
-----------
Insurance - 2.2%
AMBAC Finl. Group, Inc. .............................. 5,300 290,506
American International Group, Inc. ................... 5,343 627,803
Hartford Financial Services Group, Inc. .............. 2,500 139,844
Progressive Corp. .................................... 8,000 592,000
UnumProvident Corp. .................................. 12,100 242,756
-----------
1,892,909
-----------
Real Estate - 1.1%
Arden Realty Group, Inc. REIT......................... 2,800 65,800
Boston Properties, Inc., REIT......................... 6,900 266,513
Duke Weeks Realty Corp. .............................. 25,460 569,667
Liberty Property Trust REIT........................... 2,000 51,875
-----------
953,855
-----------
HEALTH CARE - 10.0%
Biotechnology - 0.7%
Affymetrix, Inc. ..................................... 300 49,538
Biogen, Inc.* ........................................ 2,500 161,250
Chiron Corp. ......................................... 4,000 190,000
Gilead Sciences, Inc. ................................ 2,700 192,037
-----------
592,825
-----------
Health Care Equipment & Supplies - 2.2%
Alza Corp.* .......................................... 2,000 118,250
Beckman Coulter, Inc. ................................ 5,200 303,550
</TABLE>
105
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
HEALTH CARE - continued
Health Care Equipment & Supplies - continued
Boston Scientific Corp.* .............................. 6,300 $ 138,206
Medtronic, Inc. ....................................... 4,500 224,156
PE Corp-PE Biosystems Group............................ 11,800 777,325
Sybron International Corp.* ........................... 16,600 328,888
-----------
1,890,375
-----------
Health Care Providers & Services - 1.7%
AmeriSource Health Corp., Class A...................... 18,000 558,000
HEALTHSOUTH Corp. ..................................... 4,000 28,750
IMS Health, Inc. ...................................... 19,500 351,000
McKesson HBOC, Inc. ................................... 2,300 48,156
Quorum Health Group, Inc. ............................. 14,500 149,531
Shared Medical System Corp. ........................... 4,500 328,219
-----------
1,463,656
-----------
Pharmaceuticals - 5.4%
Abbott Laboratories.................................... 14,600 650,612
American Home Products Corp. .......................... 13,700 804,875
Elan Corp. Plc., ADR* ................................. 2,100 101,719
Johnson & Johnson...................................... 6,000 611,250
Lilly (Eli) & Co. ..................................... 3,200 319,600
Pfizer, Inc. .......................................... 25,250 1,212,000
Pharmacia Corp. ....................................... 14,400 744,300
Schering-Plough Corp. ................................. 2,000 101,000
-----------
4,545,356
-----------
INDUSTRIALS - 16.4%
Aerospace & Defense - 2.3%
Bombardier, Inc., Class B.............................. 18,000 488,919
General Dynamics Corp. ................................ 13,500 705,375
Lockheed Martin Corp. ................................. 31,100 771,669
-----------
1,965,963
-----------
Air Freight & Couriers - 1.0%
Atlas Air, Inc. ....................................... 2,000 71,750
Expeditores International Washington, Inc. ............ 9,300 441,750
Loral Space & Communications........................... 18,500 128,344
United Parcel Service, Inc., Class B................... 3,700 218,300
-----------
860,144
-----------
Chemicals - 0.3%
IMC Global, Inc. ...................................... 22,000 286,000
-----------
Commercial Services & Supplies - 6.0%
American Management Systems, Inc. ..................... 400 13,131
Cadence Design Systems, Inc.* ......................... 26,000 529,750
</TABLE>
106
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INDUSTRIALS - continued
Commercial Services & Supplies - continued
Computer Sciences Corp.* .................................. 10,800 $ 806,625
Convergys Corp.* .......................................... 37,100 1,924,562
Dendrite International, Inc. .............................. 1,500 49,969
Electronic Data Systems Corp. ............................. 2,500 103,125
Equifax, Inc. ............................................. 10,000 262,500
McGraw-Hill Cos., Inc. .................................... 20,000 1,080,000
Pittston Brink's Group..................................... 21,300 291,544
Service Corp. International................................ 7,400 23,588
-----------
5,084,794
-----------
Construction & Engineering - 0.3%
Jacobs Engineering Group, Inc. ............................ 9,000 294,187
-----------
Electrical Equipment - 0.8%
Emerson Electric Co. ...................................... 11,000 664,125
-----------
Industrial Conglomerates - 3.1%
General Electric Co. ...................................... 31,500 1,669,500
Honeywell International, Inc. ............................. 6,650 224,022
Teleflex, Inc. ............................................ 20,000 741,250
-----------
2,634,772
-----------
Machinery - 0.4%
Caterpillar, Inc. ......................................... 5,000 169,375
CNH Global NV.............................................. 5,000 46,250
Deere & Co. ............................................... 2,400 88,800
-----------
304,425
-----------
Road & Rail - 2.2%
Burlington Northern Santa Fe Corp. ........................ 7,900 181,206
Kansas City Southern Industries, Inc. ..................... 15,000 1,330,312
Union Pacific Corp. ....................................... 10,200 379,313
-----------
1,890,831
-----------
INFORMATION TECHNOLOGY - 22.7%
Commercial Services & Supplies - 0.6%
ACNielsen Corp. ........................................... 22,700 499,400
-----------
Communications Equipment - 7.6%
3Com Corp.* ............................................... 10,750 619,469
American Tower Systems Corp., Class A* .................... 31,650 1,319,409
Cisco Systems, Inc.* ...................................... 21,548 1,369,645
Corning, Inc. ............................................. 3,600 971,550
Infospace, Inc. ........................................... 8,600 475,150
Lucent Technologies, Inc. ................................. 9,600 568,800
</TABLE>
107
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Communications Equipment - continued
Motorola, Inc. ............................................ 24,936 $ 724,702
Nokia Corp., ADR........................................... 500 24,969
Qualcomm, Inc.* ........................................... 3,300 198,000
RF Micro Devices, Inc.* ................................... 2,000 175,250
Storagenetworks, Inc. ..................................... 100 9,025
-----------
6,455,969
-----------
Computers & Peripherals - 4.1%
Dell Computer Corp.* ...................................... 9,900 488,194
EMC Corp.* ................................................ 7,600 584,725
International Business Machines Corp. ..................... 2,900 317,731
Seagate Technology* ....................................... 36,100 1,985,500
Sun Microsystems, Inc.* ................................... 1,500 136,406
-----------
3,512,556
-----------
Electronic Equipment & Instruments - 0.6%
Burr-Brown Corp. .......................................... 6,200 537,462
Stratos Lightwave, Inc. ................................... 100 2,788
-----------
540,250
-----------
Internet Software & Services - 1.0%
Broadvision, Inc.* ........................................ 1,000 50,813
CMGI, Inc. ................................................ 2,000 91,625
Go2Net..................................................... 3,400 171,062
Internet Capital Group, Inc. .............................. 1,700 62,927
Real Networks, Inc.* ...................................... 8,000 404,500
SOFTBANK CORP. ............................................ 750 101,786
-----------
882,713
-----------
Office Electronics - 0.2%
Unova, Inc. ............................................... 20,000 146,250
-----------
Semiconductor Equipment & Products - 3.1%
Intel Corp. ............................................... 8,300 1,109,606
Jabil Circuit, Inc.* ...................................... 4,100 203,462
KLA-Tencor Corp.* ......................................... 12,000 702,750
Mentor Graphics Corp. ..................................... 8,000 159,000
Novellus Systems, Inc.* ................................... 2,400 135,750
Texas Instruments, Inc. ................................... 900 61,819
Triquint Semiconductor, Inc. .............................. 1,400 133,963
Vitesse Semiconductor Corp.* .............................. 1,500 110,344
-----------
2,616,694
-----------
Software - 5.5%
Adobe Systems, Inc. ....................................... 6,500 845,000
BMC Software, Inc.* ....................................... 4,100 149,586
</TABLE>
108
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Software - continued
Legato Systems, Inc.* ..................................... 8,700 $ 131,587
Macromedia, Inc............................................ 6,100 589,794
Microsoft Corp.* .......................................... 15,400 1,232,000
National Instruments Corp. ................................ 8,200 357,725
Network Associates, Inc. .................................. 22,000 448,250
Parametric Technology Corp.* .............................. 15,600 171,600
Rational Software Corp.* .................................. 3,600 334,575
Siebel Systems, Inc.* ..................................... 1,900 310,769
Telemate Net Software, Inc. ............................... 3,900 12,431
Veritas Software Corp.* ................................... 1,400 158,222
-----------
4,741,539
-----------
MATERIALS - 3.6%
Chemicals - 2.0%
Air Products & Chemicals, Inc. ............................ 2,600 80,113
Albemarle Corp. ........................................... 12,500 246,875
Donaldson, Inc. ........................................... 30,000 592,500
Engelhard Corp. ........................................... 32,500 554,531
Sigma-Aldrich Corp. ....................................... 8,000 234,000
-----------
1,708,019
-----------
Construction Materials - 0.5%
Southdown, Inc. ........................................... 8,000 462,000
-----------
Containers & Packaging - 0.8%
AptarGroup, Inc. .......................................... 11,000 297,000
Bemis Co., Inc. ........................................... 5,000 168,125
Sealed Air Corp.* ......................................... 3,216 168,438
-----------
633,563
-----------
Paper & Forest Products - 0.3%
Asia Pulp & Paper Ltd., ADR................................ 14,000 70,875
Deltic Timber Corp. ....................................... 10,000 213,750
-----------
284,625
-----------
TELECOMMUNICATION SERVICES - 6.5%
Diversified Telecommunication Services - 4.2%
AT&T Corp. ................................................ 17,200 543,950
AT&T Corp., Liberty Media Group, Class A................... 2,000 48,500
AT&T Wireless Group........................................ 2,500 69,687
Broadwing, Inc. ........................................... 4,700 121,906
Global Crossing, Ltd.* .................................... 4,000 105,250
Powertel, Inc. ............................................ 3,700 262,469
Qwest Communications International, Inc.* ................. 8,000 397,500
SBC Communications, Inc. .................................. 1,100 47,575
</TABLE>
109
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
TELECOMMUNICATION SERVICES - continued
Diversified Telecommunication Services - continued
Sprint Corp. ............................................. 1,100 $ 56,100
Teleglobe, Inc. .......................................... 28,700 604,494
U.S. West, Inc. .......................................... 15,200 1,303,400
-----------
3,560,831
-----------
Wireless Telecommunications Services - 2.3%
Crown Castle International Corp. ......................... 2,000 73,000
Leap Wireless International, Inc. ........................ 3,600 169,200
Nextel Communications, Inc., Class A* .................... 18,600 1,138,088
Voicestream Wireless Corp.* .............................. 3,995 464,606
Western Wireless Corp., Class A........................... 3,000 163,500
-----------
2,008,394
-----------
UTILITIES - 2.1%
Electric Utilities - 0.9%
Dynegy, Inc. ............................................. 3,000 204,938
Niagara Mohawk Holdings, Inc.* ........................... 40,000 557,500
-----------
762,438
-----------
Gas Utilities - 1.2%
Piedmont Natural Gas Co., Inc. ........................... 23,000 610,937
Southwestern Energy Co. .................................. 37,600 235,000
The Williams Companies, Inc. ............................. 4,000 166,750
-----------
1,012,687
-----------
Total Common Stocks (cost $73,159,060).................. 80,875,980
-----------
CONVERTIBLE PREFERRED STOCKS - 0.6%
CONSUMER DISCRETIONARY - 0.2%
Leisure Equipment & Products - 0.2%
Tribune Co. (exchangeable for Mattel, Inc. common stock),
6.25%, 08/15/2001........................................ 10,000 167,500
-----------
MATERIALS - 0.2%
Containers & Packaging - 0.2%
Sealed Air Corp., $2.00, 04/01/2018, Ser. A............... 2,850 144,281
-----------
TELECOMMUNICATION SERVICES - 0.2%
Diversified Telecommunication Services - 0.2%
Global Crossing, Ltd., 7.00%, 12/31/2049 144A............. 1,000 181,750
-----------
Total Convertible Preferred Stocks (cost $519,565)...... 493,531
-----------
PREFERRED STOCKS - 0.0%
HEALTH CARE - 0.0%
Health Care Equipment & Supplies - 0.0%
Fresenius National Med Care, Inc., Ser. D (cost $736)..... 3,500 101
-----------
</TABLE>
110
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
CONVERTIBLE DEBENTURES - 0.6%
INFORMATION TECHNOLOGY - 0.6%
Semiconductor Equipment & Products - 0.5%
Triquint Semiconductor, Inc., 4.00%, 03/01/2007.......... $450,000 $ 404,437
---------
Software - 0.1%
Network Associates, Inc., 0.00%, 02/13/201 [_]........... 350,000 124,688
---------
Total Convertible Debentures (cost $534,192)........... 529,125
---------
CORPORATE BONDS - 1.5%
CONSUMER DISCRETIONARY - 0.2%
Internet & Catalog Retail - 0.2%
Amazon Com. Inc., 4.75%, 02/01/2009...................... 250,000 158,125
---------
HEALTH CARE - 0.0%
Biotechnology - 0.0%
Affymetrix Inc., 4.75%, 02/15/2007....................... 50,000 38,438
---------
INFORMATION TECHNOLOGY - 1.3%
Aerospace & Defense - 0.4%
Getty Images, Inc., 5.00%, 03/15/2007.................... 400,000 320,000
---------
Communications Equipment - 0.2%
American Tower Corp., 6.25%, 10/15/2009.................. 100,000 185,125
---------
Semiconductor Equipment & Products - 0.2%
Vitesse Semiconductor Corp., 4.00%, 03/15/2005........... 200,000 186,000
---------
Software - 0.5%
Juniper Networks, Inc., 4.75%, 03/15/2007................ 350,000 382,812
---------
Total Corporate Bonds (cost $1,200,771)................ 1,270,500
---------
</TABLE>
<TABLE>
<CAPTION>
Shares
<S> <C> <C>
SHORT-TERM INVESTMENTS - 1.0%
MUTUAL FUND SHARES - 1.0%
Evergreen Select Money Market Fund (cost $827,002)o....... 827,002 827,002
-----------
Total Investments - (cost $76,241,326) - 98.4%...................... 83,996,239
Other Assets and Liabilities - 1.6%................................. 1,365,499
-----------
Net Assets - 100.0%................................................. $85,361,738
-----------
</TABLE>
See Combined Notes to Schedules of Investments.
111
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Statement of Assets and Liabilities
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets
Identified cost of securities..................................... $76,241,326
Net unrealized gains on securities................................ 7,754,913
--------------------------------------------------------------------------------
Market value of securities........................................ 83,996,239
Cash.............................................................. 7,123
Foreign currency, at value (cost $40)............................. 40
Receivable for securities sold.................................... 2,084,242
Dividends and interest receivable................................. 87,794
Deferred organization expenses.................................... 2,852
--------------------------------------------------------------------------------
Total assets................................................... 86,178,290
--------------------------------------------------------------------------------
Liabilities
Payable for securities purchased.................................. 776,447
Advisory fee payable.............................................. 20,205
Due to other related parties...................................... 697
Accrued expenses and other liabilities............................ 19,203
--------------------------------------------------------------------------------
Total liabilities.............................................. 816,552
--------------------------------------------------------------------------------
Net assets......................................................... $85,361,738
--------------------------------------------------------------------------------
Net assets represented by
Paid-in capital................................................... $73,770,270
Undistributed net investment income............................... 39,595
Accumulated net realized gains on securities ..................... 3,796,960
Net unrealized gains on securities................................ 7,754,913
--------------------------------------------------------------------------------
Total net assets................................................... $85,361,738
--------------------------------------------------------------------------------
Shares outstanding................................................. 5,095,249
--------------------------------------------------------------------------------
Net asset value per share.......................................... $ 16.75
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
112
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Statement of Operations
Six Months Ended June 30, 2000 (Unaudited)
<TABLE>
--------------------------------------------------------------------------------
<S> <C>
Investment income
Dividends (net of foreign withholding taxes of $1,887)........... $ 400,917
Interest......................................................... 57,368
--------------------------------------------------------------------------------
Total investment income........................................... 458,285
--------------------------------------------------------------------------------
Expenses
Advisory fee..................................................... 360,370
Administrative services fees..................................... 41,003
Transfer agent fee............................................... 320
Trustees' fees and expenses...................................... 832
Printing and postage expenses.................................... 10,644
Custodian fee.................................................... 15,359
Professional fees................................................ 7,848
Organization expenses............................................ 2,184
Other............................................................ 6,518
--------------------------------------------------------------------------------
Total expenses................................................... 445,078
Less: Expense reductions......................................... (2,930)
Fee waivers.................................................... (28,349)
--------------------------------------------------------------------------------
Net expenses..................................................... 413,799
--------------------------------------------------------------------------------
Net investment income............................................ 44,486
--------------------------------------------------------------------------------
Net realized and unrealized gains or losses on securities
Net realized gains on securities................................. 3,798,201
--------------------------------------------------------------------------------
Net change in unrealized losses on securities.................... (5,506,362)
--------------------------------------------------------------------------------
Net realized and unrealized losses on securities................. (1,708,161)
--------------------------------------------------------------------------------
Net decrease in net assets resulting from operations............. $(1,663,675)
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
113
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Growth and Income Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
-------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income..................... $ 44,486 $ 314,542
Net realized gains on securities.......... 3,798,201 5,480,579
Net change in unrealized gains or losses
on securities............................ (5,506,362) 7,069,772
-------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations................ (1,663,675) 12,864,893
-------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income..................... 0 (313,974)
Net realized gains........................ (1,682,143) (4,132,246)
-------------------------------------------------------------------------------
Total distributions to shareholders....... (1,682,143) (4,446,220)
-------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold................. 5,204,626 15,606,381
Payment for shares redeemed............... (2,246,202) (4,980,475)
Net asset value of shares issued in
reinvestment of distributions............ 1,682,143 4,446,219
-------------------------------------------------------------------------------
Net increase in net assets resulting from
capital share transactions............... 4,640,567 15,072,125
-------------------------------------------------------------------------------
Total increase in net assets............. 1,294,749 23,490,798
Net assets
Beginning of period....................... 84,066,989 60,576,191
-------------------------------------------------------------------------------
End of period............................. $85,361,738 $84,066,989
-------------------------------------------------------------------------------
Undistributed (overdistributed) net
investment income......................... $ 39,595 $ (4,891)
-------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
114
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA High Income Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Period Ended
(Unaudited) (a) December 31, 1999 (a) (b)
<S> <C> <C>
Net asset value, beginning of
period $10.15 $10.00
------ ------
Income from investment operations
Net investment income 0.44 0.29
Net realized and unrealized gains
or losses on securities (0.38) 0.16
------ ------
Total from investment operations 0.06 0.45
------ ------
Distributions to shareholders from
net investment income 0 (0.30)
------ ------
Net asset value, end of period $10.21 $10.15
------ ------
Total return* 0.59% 4.46%
Ratios and supplemental data
Net assets, end of period
(thousands) $5,290 $5,257
Ratios to average net assets
Expenses** 1.01%+ 1.02%+
Net investment income 8.74%+ 5.88%+
Portfolio turnover rate 93% 19%
</TABLE>
(a) Effective February 1, 2000, shareholders of Mentor VIP High Income Portfo-
lio became owners of that number of full and fractional shares of Evergreen
VA High Income Fund. As Mentor VIP High Income Portfolio contributed the
majority of assets and shareholders to the Evergreen VA High Income Fund,
its accounting and performance history is carried forward.
(b) For the period from June 30, 1999 (commencement of operations) to December
31, 1999.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
See Combined Notes to Financial Statements.
118
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA High Income Fund
Schedule of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Credit Principal
Rating Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - 75.0%
CONSUMER DISCRETIONARY - 18.6%
Auto Components - 1.7%
Tenneco Automotive, Inc., 11.625%, 10/15/2009... B+ $100,000 $ 89,500
-----------
Hotels, Restaurants & Leisure - 8.4%
Argosy Gaming Co., 10.75%, 06/01/2009........... B 100,000 103,875
Coast Hotels & Casinos, Inc., 9.50%,
04/01/2009..................................... B- 100,000 95,500
Hollywood Casino Corp., 11.25%, 05/01/2007...... B 100,000 102,750
Isle of Capri Casinos, Inc., 8.75%, 04/15/2009.. B 100,000 93,000
Venetian Casino Resort Llc, 12.25%, 11/15/2004.. B- 50,000 50,750
-----------
445,875
-----------
Household Durables - 1.7%
Simmons Co., Ser. B, 10.25%, 03/15/2009......... B- 100,000 89,250
-----------
Media - 6.8%
Adelphia Communications Corp., 9.375%,
11/15/2009..................................... B+ 100,000 93,000
CD Radio, Inc., 14.50%, 05/15/2009.............. CCC+ 30,000 27,750
Echostar DBS Corp., 9.375%, 02/01/2009.......... B 100,000 96,500
Loews Ciniplex Entertainment Corp., 8.875%,
08/01/2008..................................... B 100,000 47,500
Telewest Communications Plc, 11.00%,
10/01/2007..................................... B+ 100,000 95,250
-----------
360,000
-----------
ENERGY - 14.4%
Energy Equipment & Services - 1.8%
Parker Drilling Co., Ser. D, 9.75%, 11/15/2006.. B+ 100,000 97,250
-----------
Oil & Gas - 12.6%
Chesapeake Energy Corp., Ser. B, 9.625%,
05/01/2005..................................... B 25,000 24,375
Eott Energy Partners LP, 11.00%, 10/01/2009..... BB 100,000 102,000
Houston Exploration Co., 8.625%, 01/01/2008..... B 100,000 93,500
HS Resources, Inc., 9.25%, 11/15/2006........... B 100,000 97,750
Nuevo Energy Co., Ser. B, 9.50%, 06/01/2008..... B+ 100,000 99,250
Pride Petroleum Svcs., Inc., 9.375%,
05/01/2007..................................... BB 50,000 50,125
Swift Energy Co., 10.25%, 08/01/2009............ B- 100,000 101,750
Tesoro Petroleum Corp., Ser. B, 9.00%,
07/01/2008..................................... BB- 100,000 95,500
-----------
664,250
-----------
HEALTH CARE - 7.5%
Health Care Providers & Services - 7.5%
Iasis Healthcare Corp., 13.00%, 10/15/2009...... B- 100,000 100,000
Lifepoint Hosps. Holdings, Inc., Ser. B, 10.75%,
05/15/2009..................................... B- 100,000 103,500
Tenet Healthcare Corp., Ser. B, 8.125%,
12/01/2008..................................... BB- 100,000 92,000
Triad Hosps. Holdings, Inc., Ser. B, 11.00%,
05/15/2009..................................... B- 100,000 102,750
-----------
398,250
-----------
</TABLE>
119
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA High Income Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Credit Principal
Rating Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - continued
INDUSTRIALS - 6.2%
Construction & Engineering - 6.2%
Asat Fin., LLC, 12.50%, 11/01/2006.............. B $100,000 $ 128,500
Metromedia Fiber Network, Inc., 10.00%,
12/15/2009..................................... B+ 100,000 99,000
Spectrasite Holdings, Inc., Step Bond, 0.00%,
04/15/2004 +................................... NA 175,000 103,250
-----------
330,750
-----------
INFORMATION TECHNOLOGY - 3.0%
Internet Software & Services - 1.1%
Verio, Inc., 11.25%, 12/01/2008................. B- 50,000 56,375
-----------
Semiconductor Equipment & Products - 1.9%
Amkor Tech., Inc., 10.50%, 05/01/2009........... B 100,000 100,625
-----------
MATERIALS - 4.5%
Chemicals - 0.9%
Lyondell Chemical Co., 10.875%, 05/01/2009...... B+ 50,000 49,875
-----------
Containers & Packaging - 1.8%
Riverwood Intl. Corp., 10.25%, 04/01/2006....... B- 100,000 96,500
-----------
Paper & Forest Products - 1.8%
Millar Western Forest Products Ltd., 9.875%,
05/15/2008..................................... B+ 100,000 94,000
-----------
TELECOMMUNICATION SERVICES - 20.8%
Diversified Telecommunication Services - 15.1%
Allegiance Telecom, Inc., Step Bond, 0.00%,
02/15/2008 +................................... B 150,000 109,500
Level 3 Communications, Inc., 9.125%,
05/01/2008..................................... B 100,000 90,250
McLeod USA, Inc., 9.25%, 07/15/2007............. B+ 100,000 97,000
Nextel Communications, Inc., Step Bond, 0.00%,
09/15/2007 +................................... B 140,000 110,600
Nextel Partners, Inc.:
11.00%, 03/15/2010............................. CCC+ 50,000 50,000
Step Bond, 0.00%, 02/01/2004 +................. CCC+ 65,000 45,175
Nextlink Communications, Inc., 10.75%,
06/01/2009..................................... B 100,000 99,000
Tritel PCS, Inc., Step Bond, 0.00%,
05/15/2004 +................................... NR 150,000 100,125
Williams Communications Group, Inc., 10.875%,
10/01/2009..................................... BB- 100,000 98,250
-----------
799,900
-----------
Wireless Telecommunications Services - 5.7%
Crown Castle Intl. Corp., 10.75%, 08/01/2011.... B 100,000 101,875
Microcell Telecommunications, Inc., Ser. B, Step
Bond, 0.00%, 06/01/2006 +...................... NA 100,000 92,750
Voicestream Wireless Corp., 10.375%,
11/15/2009..................................... B- 100,000 104,000
-----------
298,625
-----------
Total Corporate Bonds (cost $3,964,142)....... 3,971,025
-----------
</TABLE>
120
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA High Income Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Credit Principal
Rating Amount Value
<S> <C> <C> <C>
YANKEE OBLIGATIONS-CORPORATE - 3.8%
CONSUMER DISCRETIONARY - 1.0%
Media - 1.0%
Rogers Cablesystems Ltd., Ser. B, 10.00%,
03/15/2005..................................... BB+ $ 50,000 $ 51,375
-----------
MATERIALS - 1.8%
Paper & Forest Products - 1.8%
Norampac, Inc., 9.50%, 02/01/2008............... BB 100,000 97,000
-----------
TELECOMMUNICATION SERVICES - 1.0%
Diversified Telecommunication Services - 1.0%
Clearnet Communications, Inc., Step Bond, 0.00%,
12/15/2005 +................................... B 50,000 51,875
-----------
Total Yankee Obligations-Corporate (cost
$201,487).................................... 200,250
-----------
<CAPTION>
Shares
<S> <C> <C>
WARRANTS - 0.0%
INFORMATION TECHNOLOGY - 0.0%
Communications Equipment - 0.0%
Metricom, Inc., Expires 2/15/2010 (cost $10,603)
*.............................................. 50 1,025
-----------
SHORT-TERM INVESTMENTS - 19.9%
<CAPTION>
Principal
Amount
<S> <C> <C>
REPURCHASE AGREEMENTS - 19.9%
State Street Bank & Trust Co.
6.45%, dated 6/30/2000, maturing 7/3/2000,
maturity value $1,051,565 (cost
$1,051,000)(3)................................. $1,051,000 1,051,000
-----------
Total Investments - (cost $5,227,232) - 98.7%....................... 5,223,300
Other Assets and Liabilities - 1.3%................................. 66,995
-----------
Net Assets - 100.0%................................................. $5,290,295
-----------
</TABLE>
See Combined Notes to Schedule of Investments.
121
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA High Income Fund
Statement of Assets and Liabilities
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets
Identified cost of securities..................................... $4,176,232
Repurchase agreements, at amortized cost.......................... 1,051,000
--------------------------------------------------------------------------------
Total identified cost of investments.............................. 5,227,232
Net unrealized losses on securities............................... (3,932)
--------------------------------------------------------------------------------
Market value of securities........................................ 5,223,300
Cash.............................................................. 330
Interest receivable............................................... 79,102
--------------------------------------------------------------------------------
Total assets...................................................... 5,302,732
--------------------------------------------------------------------------------
Liabilities
Advisory fee payable.............................................. 7,234
Due to other related parties...................................... 43
Accrued expenses and other liabilities............................ 5,160
--------------------------------------------------------------------------------
Total liabilities................................................. 12,437
--------------------------------------------------------------------------------
Net assets......................................................... $5,290,295
--------------------------------------------------------------------------------
Net assets represented by
Paid-in capital................................................... $5,189,669
Undistributed net investment income............................... 228,439
Accumulated net realized losses on securities..................... (123,881)
Net unrealized losses on securities............................... (3,932)
--------------------------------------------------------------------------------
Total net assets................................................... $5,290,295
--------------------------------------------------------------------------------
Shares outstanding................................................. 518,365
--------------------------------------------------------------------------------
Net asset value per share.......................................... $ 10.21
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
122
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA High Income Fund
Statement of Operations
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income
Interest........................................................... $ 254,804
--------------------------------------------------------------------------------
Total investment income............................................. 254,804
--------------------------------------------------------------------------------
Expenses
Advisory fee....................................................... 18,456
Administrative services fees....................................... 2,637
Transfer agent fee................................................. 89
Trustees' fees and expenses........................................ 51
Printing and postage expenses...................................... 1,004
Custodian fee...................................................... 1,103
Professional fees.................................................. 5,989
Other.............................................................. 97
--------------------------------------------------------------------------------
Total expenses................................................... 29,426
Less: Expense reductions......................................... (312)
Fee waivers................................................ (2,749)
--------------------------------------------------------------------------------
Net expenses..................................................... 26,365
--------------------------------------------------------------------------------
Net investment income.............................................. 228,439
--------------------------------------------------------------------------------
Net realized and unrealized losses on securities
Net realized losses on securities.................................. (121,786)
--------------------------------------------------------------------------------
Net change in unrealized losses on securities...................... (75,255)
--------------------------------------------------------------------------------
Net realized and unrealized losses on securities................... (197,041)
--------------------------------------------------------------------------------
Net increase in net assets resulting from operations............... $ 31,398
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
123
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA High Income Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999 (a)
-------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income................. $ 228,439 $ 151,700
Net realized losses on securities..... (121,786) (2,070)
Net change in unrealized gains or
losses on securities................. (75,255) 71,323
-------------------------------------------------------------------------------
Net increase in net assets resulting
from operations...................... 31,398 220,953
-------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income................. 0 (152,762)
-------------------------------------------------------------------------------
Total distributions to shareholders... 0 (152,762)
-------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold............. 4,350 5,186,531
Payment for shares redeemed........... (2,479) (2,958)
Net asset value of shares issued in
reinvestment of distributions........ 0 5,262
-------------------------------------------------------------------------------
Net increase in net assets resulting
from capital share transactions...... 1,871 5,188,835
-------------------------------------------------------------------------------
Total increase in net assets......... 33,269 5,257,026
Net assets
Beginning of period................... 5,257,026 0
-------------------------------------------------------------------------------
End of period......................... $5,290,295 $5,257,026
-------------------------------------------------------------------------------
Undistributed net investment income.... $ 228,439 $ 0
-------------------------------------------------------------------------------
</TABLE>
(a) For the period from June 30, 1999 (commencement of operations) to December
31, 1999.
See Combined Notes to Financial Statements.
124
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Financial Highlights
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 2000 --------------------------
(Unaudited) 1999 # 1998 (a)#
<S> <C> <C> <C>
Net asset value, beginning of
period $12.72 $ 9.39 $ 10.00
====== =========== ===========
Income from investment operations
Net investment income 0.10 0.09 0.03
Net realized and unrealized gains
or losses on securities and
foreign currency related
transactions (0.39) 3.48 (0.64)
------ ----------- -----------
Total from investment operations (0.29) 3.57 (0.61)
------ ----------- -----------
Distributions to shareholders
from
Net investment income (0.01) (0.14) 0
Net realized gains (0.32) (0.10) 0
------ ----------- -----------
Total distributions (0.33) (0.24) 0
------ ----------- -----------
Net asset value, end of period $12.10 $ 12.72 $ 9.39
====== =========== ===========
Total return* (2.34%) 38.22% (6.10%)
Ratios and supplemental data
Net assets, end of period
(thousands) $7,064 $ 3,782 $ 1,425
Ratios to average net assets
Expenses** 1.03%+ 1.03% 1.02%+
Net investment income 2.28%+ 0.87% 1.05%+
Portfolio turnover rate 76% 144% 59%
</TABLE>
(a) For the period from August 17, 1998 (commencement of operations) to Decem-
ber 31, 1998.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
129
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Schedule of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 89.4%
CONSUMER DISCRETIONARY - 9.2%
Automobiles - 2.6%
Honda Motor Co., Ltd.* ..................................... 1,000 $ 34,023
Peugeot SA ................................................. 504 101,142
Toyota Motor Corp. ......................................... 1,000 45,521
----------
180,686
----------
Hotels, Restaurants & Leisure - 0.1%
Indian Hotels Co., Ltd., GDR ............................... 300 1,650
Indian Hotels Co., Ltd., GDR, Reg. S ....................... 400 2,200
----------
3,850
----------
Household Durables - 2.3%
Electrolux AB .............................................. 3,200 49,524
Koninklijke (Royal) Philips Electronics NV* ................ 2,359 111,255
----------
160,779
----------
Leisure Equipment & Products - 0.5%
Club Mediterranee SA ....................................... 108 14,631
Shimano, Inc. .............................................. 800 19,226
----------
33,857
----------
Media - 2.5%
Aegis Group Plc ............................................ 17,800 52,385
Edipresse SA ............................................... 32 15,085
Grupo Televisa SA, ADR* .................................... 400 27,575
Quebecor, Inc., Class B .................................... 492 14,295
Seat Pagine Gialle SpA ..................................... 5,600 13,553
Springer (Axel) Verlag AG .................................. 16 18,483
Telegraaf Holdings NV ...................................... 1,672 38,310
----------
179,686
----------
Specialty Retail - 1.2%
Paris Miki, Inc. ........................................... 50 3,251
Toys "R" Us Japan .......................................... 500 84,822
----------
88,073
----------
CONSUMER STAPLES - 7.5%
Beverages - 1.4%
Al-Ahram Beverage Co. SA, GDR* ............................. 2,100 36,289
Al-Ahram Beverage Co. SA, GDR, 144A* ....................... 146 2,523
Fomento Economico Mexicano, Ser. B, ADR* ................... 875 37,680
Heineken NV ................................................ 219 13,329
Pernod Ricard SA ........................................... 216 11,754
----------
101,575
----------
Food & Drug Retailing - 1.6%
Sobeys, Inc. ............................................... 6,858 113,759
----------
</TABLE>
130
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
CONSUMER STAPLES - continued
Food Products - 2.2%
Danone...................................................... 118 $ 15,659
Grupo Industrial Bimbo, Ser. A* ............................ 9,300 14,640
Lindt & Spruengli........................................... 20 9,502
Nestle SA................................................... 52 104,076
Souza Cruz Cia SA........................................... 2,100 12,564
Tiger Oats.................................................. 100 896
----------
157,337
----------
Household Products - 0.9%
Kao Corp. .................................................. 2,000 61,072
----------
Tobacco - 1.4%
British America Tobacco Inds. Plc* ......................... 10,800 72,066
Swedish Match Co. AB........................................ 7,828 24,141
----------
96,207
----------
ENERGY - 7.5%
Oil & Gas - 7.5%
BP Amoco.................................................... 8,161 78,289
BP Amoco Plc, ADR........................................... 300 16,969
Canadian Occidental Petroleum Ltd. ......................... 1,540 41,778
ENI SpA..................................................... 18,920 109,281
Fletcher Challenge, Energy Shares* ......................... 22,900 74,660
Petro-Canada................................................ 1,756 32,806
Repsol-YPF, SA.............................................. 573 11,406
Shell Transportation & Trading Co. Plc...................... 2,238 18,675
SK Corp., GDR 144A.......................................... 110 2,017
Total Fina SA, Class B...................................... 939 143,972
----------
529,853
----------
FINANCIALS - 21.1%
Banks - 5.6%
Banco Bilbao Vizcaya SA..................................... 3,104 46,377
Banco Popular Espanol SA.................................... 590 18,250
Bank Nova Scotia Halifax.................................... 600 14,716
Banque Nationale de Paris................................... 228 21,941
Barclays Bank Plc........................................... 3,066 76,221
DBS Group Holdings.......................................... 3,144 40,415
Deutsche Bank AG............................................ 730 60,076
Dexia Belgium (Credit Communal)............................. 41 6,048
Toronto Dominion Bank Ontario............................... 1,661 40,403
UBS AG...................................................... 100 14,651
Uniao de Bancos Brasileiros SA, GDR ("Unibanco")............ 1,050 30,188
Verwalt & Private Bank...................................... 60 11,457
</TABLE>
131
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
FINANCIALS - continued
BANKS - continued
Wing Hang Bank Ltd. ........................................ 6,800 $ 16,879
----------
397,622
----------
Diversified Financials - 7.8%
Acom Co., Ltd.* ............................................ 200 16,814
Brascan Corp. .............................................. 3,920 46,087
Close Brothers Group Plc.................................... 904 13,993
Fortis (NL) NV.............................................. 3,351 97,544
Garban Plc* ................................................ 5,000 16,341
HSBC Holdings Plc (London Exchange)......................... 3,375 38,581
HSBC Holdings Plc........................................... 6,550 74,990
Hutchison Whampoa, Ltd. .................................... 3,300 41,485
Lend Lease Corp., Ltd. ..................................... 694 8,844
Orix Corp. ................................................. 420 61,948
Rembrandt Controlling Investments Ltd. ..................... 900 6,181
Societe Eurafrance SA* ..................................... 31 14,842
Takefuji Corp. ............................................. 900 108,657
Technical & Industrial Investments Ltd. .................... 400 2,594
Technical Investment Corp. ................................. 600 3,714
----------
552,615
----------
Insurance - 6.6%
Allianz AG* ................................................ 312 112,087
Allied Zurich Plc........................................... 4,495 53,153
Assicurazioni Generali SpA.................................. 562 19,262
AXA......................................................... 529 83,331
Clarica Life Insurance Co. ................................. 2,000 40,946
Industrial Alliance Life Insurance Co.* .................... 1,000 16,554
Manulife Financial Corp. ................................... 4,800 84,649
Prudential Corp. Plc........................................ 3,572 52,318
----------
462,300
----------
Real Estate - 1.1%
British Land Co., Plc* ..................................... 4,400 26,963
Brookfield Properties Corp. ................................ 800 10,622
Cheung Kong Holdings, Ltd.* ................................ 2,000 22,000
Henderson Investment Ltd. .................................. 22,000 13,617
Simco SA.................................................... 72 5,258
----------
78,460
----------
HEALTH CARE - 11.0%
Health Care Equipment & Supplies - 0.5%
Terumo Corp. ............................................... 1,000 33,834
----------
Health Care Providers & Services - 0.4%
Cochlear Ltd. .............................................. 1,548 26,624
----------
</TABLE>
132
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
HEALTHCARE - continued
Paper & Forest Products - 1.1%
Glaxo Wellcome Plc.......................................... 2,756 $ 80,358
----------
Pharmaceuticals - 9.0%
Aventis SA.................................................. 75 5,377
Aventis SA, Class A......................................... 495 36,128
Chugai Pharmaceutical Co., Ltd.* ........................... 3,000 56,689
CSL Ltd. ................................................... 2,200 43,464
Merck KGaA.................................................. 248 7,932
Novartis AG................................................. 64 101,377
Pharmacia Corp. ............................................ 1,150 58,087
Roche Holding AG............................................ 2 19,469
Sanofi Synthelabo........................................... 432 20,580
Schering AG................................................. 1,149 62,965
SkyePharma Plc* ............................................ 17,800 23,163
SmithKline Beecham Plc...................................... 278 3,639
Taisho Pharmaceutical Co.* ................................. 2,000 71,627
Yamanouchi Pharmaceutical Co., Ltd. ........................ 2,000 109,137
Zeneca Group* .............................................. 300 14,004
----------
633,638
----------
INDUSTRIALS - 6.9%
Building Products - 0.2%
Nippon Sheet Glass Co. ..................................... 1,000 13,892
----------
Commercial Services & Supplies - 2.1%
Atos SA..................................................... 66 6,175
ISS International Services Systems* ........................ 1,400 106,580
Transiciel.................................................. 108 6,939
Williams Plc................................................ 4,425 25,778
----------
145,472
----------
Electrical Equipment - 1.2%
Makita Corp. ............................................... 8,000 76,226
Matsushita Electric Works Ltd. ............................. 1,000 12,384
----------
88,610
----------
Industrial Conglomerates - 1.3%
FKI Plc..................................................... 4,976 17,694
Marine-Wendel SA* .......................................... 123 9,388
Nitto Kohki Co., Ltd. ...................................... 600 15,353
Siemens AG.................................................. 250 37,711
Smiths Industries Plc....................................... 1,208 15,719
----------
95,865
----------
</TABLE>
133
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INDUSTRIALS - continued
Machinery - 1.5%
Assa Abloy AB .............................................. 880 $ 17,660
Fanuc Ltd. ................................................. 700 71,184
Saurer Arbon AG* ........................................... 23 14,353
----------
103,197
----------
Specialty Retail - 0.5%
Ashtead Group Plc .......................................... 23,616 34,304
----------
Trading Companies & Distributors - 0.1%
Mitsubishi Corp. ........................................... 1,000 9,038
----------
INFORMATION TECHNOLOGY - 10.4%
Commercial Services & Supplies - 0.2%
Net One Systems Co. ........................................ 1 11,498
----------
Communications Equipment - 3.5%
Ericsson LM Telephone ...................................... 4,054 80,207
Nokia Corp., ADR* .......................................... 400 19,975
Nokia Oyj .................................................. 1,368 69,807
Nortel Networks Corp. ...................................... 1,140 79,107
----------
249,096
----------
Computers & Peripherals - 3.5%
NEC Corp.* ................................................. 4,000 125,536
Toshiba Corp.* ............................................. 11,000 124,094
----------
249,630
----------
Electronic Equipment & Instruments - 1.0%
Kyocera Corp.* ............................................. 400 67,820
----------
Office Electronics - 0.7%
Erg Ltd.* .................................................. 6,600 51,194
----------
Semiconductor Equipment & Products - 1.1%
Hyundai Electronics Industries* ............................ 110 2,170
ST Microelectronics ........................................ 1,216 76,621
----------
78,791
----------
IT Consulting & Services - 0.4%
Logica Plc ................................................. 1,100 26,031
----------
MATERIALS - 7.4%
Chemicals - 2.4%
Akzo Nobel NV .............................................. 1,882 79,955
Asahi Chemical Industry Co., Ltd. .......................... 7,300 51,600
BASF AG .................................................... 431 17,323
Bayer AG ................................................... 440 17,172
Givaudan AG* ............................................... 2 609
</TABLE>
134
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
MATERIALS - continued
Nippon Shokubai Co. ........................................ 1,000 $ 6,371
----------
173,030
----------
Construction Materials - 2.3%
Cemex SA de CV, Ser. B, ADR................................. 53 1,239
Compagnie Generale des Etablissements Michelin, Class B..... 365 11,712
Holderbank Financiere Glarus AG............................. 44 53,945
Lafarge SA.................................................. 1,237 96,130
----------
163,026
----------
Industrial Conglomerates - 0.7%
Compagnie de Saint Gobain................................... 345 46,639
----------
Metals & Mining - 1.3%
Anglo American Plc.......................................... 524 24,883
Billiton Plc................................................ 5,492 22,354
Placer Dome, Inc. (Canadian Exchange)....................... 4,500 42,264
----------
89,501
----------
Paper & Forest Products - 0.7%
Kimberly Clark Corp. de Mexico SA de CV, Class A............ 5,339 15,183
Sappi Ltd.* ................................................ 2,493 18,739
Timberwest Forest Corp. .................................... 1,293 9,086
UPM-Kymmene Oyj............................................. 344 8,539
----------
51,547
----------
TELECOMMUNICATION SERVICES - 7.7%
Diversified Telecommunication Services - 7.3%
British Telecommunications Plc. ............................ 1,600 20,675
China Unicom, Ltd.* ........................................ 38,000 80,187
Colt Telecom Group Plc* .................................... 1,000 33,288
Deutsche Telekom............................................ 568 32,428
France Telecom SA........................................... 221 30,889
Hellenic Telecommunications Organization SA, GDR* .......... 484 11,859
Kon Kpn NV.................................................. 814 36,408
Korea Telecom Corp. ........................................ 400 19,350
Nippon Telegraph & Telephone Corp. ......................... 6 79,732
Tecnost SpA* ............................................... 10,778 40,645
Tele Norte Leste Participacoes SA, ADR* .................... 1,400 33,075
Telecom Italia Mobile (TIM) SpA............................. 1,819 18,582
Telefonica SA* ............................................. 2,300 49,406
Telefonos de Mexico SA, ADR ("Telmex")...................... 500 28,562
----------
515,086
----------
Wireless Telecommunications Services - 0.4%
Vodafone Airtouch Plc. ..................................... 7,898 31,908
----------
</TABLE>
135
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
UTILITIES - 0.7%
Electric Utilities - 0.3%
Korea Electric Power Corp., ADR........................... 1,200 $ 22,125
----------
Multi-Utilities - 0.4%
Suez Lyonnaise des Eaux SA................................ 160 28,030
----------
Total Common Stocks (cost $5,858,043)................... 6,317,515
----------
PREFERRED STOCKS - 1.1%
INDUSTRIALS - 1.1%
Aerospace & Defense - 1.1%
Embraer-Empresa Brasileira de Aeronautica SA (cost
$28,969)................................................. 13,000 74,317
----------
RIGHTS - 0.0%
FINANCIALS - 0.0%
Banks - 0.0%
Dexia..................................................... 41 66
----------
MATERIALS - 0.0%
Construction Materials - 0.0%
Lafarge SA................................................ 1,237 2,421
----------
Total Rights (cost $0).................................. 2,487
----------
SHORT-TERM INVESTMENTS - 9.2%
MUTUAL FUND SHARES - 9.2%
Evergreen Select Money Market Fund
(cost $650,939) 0........................................ 650,939 650,939
----------
Total Investments - (cost $6,537,951) - 99.7%....................... 7,045,258
Other Assets and Liabilities - 0.3%................................. 18,778
----------
Net Assets - 100.0%................................................. $7,064,036
----------
</TABLE>
See Combined Notes to Schedules of Investments.
136
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Statement of Assets and Liabilities
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets
Identified cost of securities...................................... $6,537,951
Net unrealized gains on securities................................. 507,307
--------------------------------------------------------------------------------
Market value of securities......................................... 7,045,258
Cash............................................................... 23,990
Foreign currency, at value (cost $89).............................. 84
Receivable for securities sold..................................... 31,118
Dividends and interest receivable.................................. 11,922
Receivable for closed forward foreign currency exchange contracts.. 7,797
--------------------------------------------------------------------------------
Total assets....................................................... 7,120,169
--------------------------------------------------------------------------------
Liabilities
Payable for closed forward foreign currency exchange contracts..... 27,899
Unrealized losses on forward foreign currency exchange contracts... 806
Advisory fee payable............................................... 441
Due to other related parties....................................... 57
Accrued expenses and other liabilities............................. 26,930
--------------------------------------------------------------------------------
Total liabilities.................................................. 56,133
--------------------------------------------------------------------------------
Net assets.......................................................... $7,064,036
--------------------------------------------------------------------------------
Net assets represented by
Paid-in capital.................................................... $6,351,070
Undistributed net investment income................................ 57,498
Accumulated net realized gains on securities and foreign currency
related transactions.............................................. 169,037
Net unrealized gains on securities and foreign currency related
transactions...................................................... 486,431
--------------------------------------------------------------------------------
Total net assets.................................................... $7,064,036
--------------------------------------------------------------------------------
Shares outstanding.................................................. 583,699
--------------------------------------------------------------------------------
Net asset value per share........................................... $ 12.10
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
137
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Statement of Operations
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income
Dividends (net of foreign withholding taxes of $5,570)............. $ 70,979
Interest........................................................... 15,982
--------------------------------------------------------------------------------
Total investment income............................................. 86,961
--------------------------------------------------------------------------------
Expenses
Advisory fee....................................................... 17,653
Administrative services fees....................................... 2,656
Transfer agent fee................................................. 90
Trustees' fees and expenses........................................ 52
Printing and postage expenses...................................... 705
Custodian fee...................................................... 16,832
Professional fees.................................................. 5,229
Other.............................................................. 1,036
--------------------------------------------------------------------------------
Total expenses..................................................... 44,253
Less: Expense reductions........................................... (805)
Fee waivers...................................................... (16,728)
--------------------------------------------------------------------------------
Net expenses....................................................... 26,720
--------------------------------------------------------------------------------
Net investment income.............................................. 60,241
--------------------------------------------------------------------------------
Net realized and unrealized gains or losses on securities and
foreign currency related transactions
Net realized gains on:
Securities......................................................... 197,003
Foreign currency related transactions.............................. 10,685
--------------------------------------------------------------------------------
Net realized gains on securities and foreign currency related
transactions...................................................... 207,688
--------------------------------------------------------------------------------
Net change in unrealized losses on securities and foreign currency
related transactions.............................................. (335,949)
--------------------------------------------------------------------------------
Net realized and unrealized losses on securities and foreign
currency related transactions..................................... (128,261)
--------------------------------------------------------------------------------
Net decrease in net assets resulting from operations............... $ (68,020)
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
138
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA International Growth Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
--------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income...................... $ 60,241 $ 20,007
Net realized gains on securities and
foreign currency related transactions..... 207,688 271,364
Net change in unrealized gains or losses on
securities and foreign currency related
transactions.............................. (335,949) 696,814
--------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations................. (68,020) 988,185
--------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income...................... (4,719) (41,012)
Net realized gains......................... (137,282) (29,759)
--------------------------------------------------------------------------------
Total distributions to shareholders........ (142,001) (70,771)
--------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold.................. 3,386,201 1,656,976
Payment for shares redeemed................ (36,065) (287,841)
Net asset value of shares issued in
reinvestment of distributions............. 142,002 70,772
--------------------------------------------------------------------------------
Net increase in net assets resulting from
capital share transactions................ 3,492,138 1,439,907
--------------------------------------------------------------------------------
Total increase in net assets.............. 3,282,117 2,357,321
Net assets
Beginning of period........................ 3,781,919 1,424,598
--------------------------------------------------------------------------------
End of period.............................. $7,064,036 $3,781,919
--------------------------------------------------------------------------------
Undistributed net investment income......... $ 57,498 $ 1,976
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
139
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Period Ended
(Unaudited) December 31, 1999 (a) #
<S> <C> <C>
Net asset value, beginning of period $ 12.58 $ 10.00
======= =======
Income from investment operations
Net investment income 0 0.01
Net realized and unrealized gains on
securities, futures contracts and
foreign currency related
transactions 0.66 2.74
------- -------
Total from investment operations 0.66 2.75
------- -------
Distributions to shareholders from
Net investment income 0 (0.01)
Net realized gains (0.40) (0.16)
------- -------
Total distributions (0.40) (0.17)
------- -------
Net asset value, end of period $ 12.84 $ 12.58
======= =======
Total return* 5.24% 27.58%
Ratios and supplemental data
Net assets, end of period (thousands) $30,378 $18,873
Ratios to average net assets
Expenses** 1.01%+ 1.00%+
Net investment income 0.06%+ 0.15%+
Portfolio turnover rate 43% 83%
</TABLE>
(a) For the period from January 29, 1999 (commencement of operations) to Decem-
ber 31, 1999.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
148
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investment
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 93.4%
CONSUMER DISCRETIONARY - 9.5%
Auto Components - 0.4%
Arvin Industries, Inc. .................................... 100 $ 1,737
CLARCOR, Inc. ............................................. 4,000 79,500
Delphi Automotive Systems Corp. ........................... 400 5,825
Eaton Corp. ............................................... 100 6,700
Johnson Controls, Inc. .................................... 100 5,131
Meritor Automotive, Inc. .................................. 200 2,200
SPX Corp. ................................................. 100 12,094
-----------
113,187
-----------
Automobiles - 0.1%
General Motors Corp. ...................................... 350 20,322
Harley-Davidson, Inc. ..................................... 200 7,700
-----------
28,022
-----------
Distributors - 0.3%
W.W. Grainger, Inc. ....................................... 3,200 98,600
-----------
Hotels, Restaurants & Leisure - 0.3%
Brinker International, Inc. ............................... 100 2,925
Carnival Corp., Class A.................................... 500 9,750
Darden Restaurants, Inc. .................................. 100 1,625
Harrahs Entertainment, Inc.* .............................. 1,190 24,916
Marriott International, Inc., Class A...................... 100 3,606
MGM Grand, Inc. ........................................... 220 7,067
Park Place Entertainment Corp. ............................ 3,250 39,609
Ruby Tuesday, Inc. ........................................ 200 2,513
Wendy's International, Inc. ............................... 100 1,781
-----------
93,792
-----------
Household Durables - 0.1%
Clayton Homes, Inc. ....................................... 1,080 8,640
Del Webb Corp. ............................................ 100 1,531
Mohawk Industries, Inc.* .................................. 100 2,175
NVR, Inc.* ................................................ 100 5,700
Ryland Group, Inc. ........................................ 100 2,213
WestPoint Stevens, Inc. ................................... 100 1,113
Whirlpool Corp. ........................................... 100 4,662
-----------
26,034
-----------
Leisure Equipment & Products - 0.1%
Brunswick Corp. ........................................... 300 4,969
Eastman Kodak Co. ......................................... 300 17,850
-----------
22,819
-----------
</TABLE>
149
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
CONSUMER DISCRETIONARY - continued
Media - 4.2%
Charter Communications, Inc. .............................. 3,300 $ 54,244
Clear Channel Communications, Inc.* ....................... 1,300 97,500
Comcast Corp., Class A..................................... 500 20,250
Cox Communications, Inc., Class A* ........................ 100 4,556
Disney (Walt) Co. ......................................... 700 27,169
Dow Jones & Co., Inc. ..................................... 100 7,325
Echostar Communications Corp., Class A..................... 500 16,555
Emmis Communications Corp. ................................ 1,000 58,000
Fox Entertainment Group, Inc.* ............................ 600 18,225
Gannett Co., Inc. ......................................... 400 23,925
Hearst-Argyle Television, Inc.* ........................... 972 18,954
Infinity Broadcasting Corp. ............................... 100 3,644
Interpublic Group of Cos, Inc. ............................ 1,700 73,100
Knight-Ridder, Inc. ....................................... 100 5,319
Martha Stewart Living Omnimedia, Inc. ..................... 1,700 37,400
McClatchy Co., Class A..................................... 100 3,312
New York Times Co., Class A................................ 1,640 64,780
Omnicom Group, Inc. ....................................... 500 44,531
Reader's Digest Association, Inc., Class A................. 200 7,950
RH Donnelley Corp. ........................................ 100 1,938
Scholastic Corp * ......................................... 1,881 114,976
Sinclair Broadcast Group, Inc., Class A* .................. 234 2,574
Snyder Communications, Inc. ............................... 100 2,375
SportsLine USA, Inc.* ..................................... 4,200 71,662
Time Warner, Inc. ......................................... 2,400 182,400
Tribune Co. ............................................... 200 7,000
Univision Communications, Inc., Class A* .................. 400 41,400
USA Networks, Inc.* ....................................... 500 10,812
Valassis Communications, Inc.* ............................ 100 3,812
Viacom, Inc., Class B...................................... 3,727 254,135
Young & Rubicam, Inc. ..................................... 100 5,719
Ziff Davis, Inc. - ZDNet* ................................. 300 2,700
-----------
1,288,242
-----------
Multi-line Retail - 2.4%
BJ's Wholesale Club, Inc.* ................................ 6,469 213,477
Family Dollar Stores, Inc. ................................ 2,380 46,559
Federated Department Stores, Inc.* ........................ 300 10,125
Kohl's Corp.* ............................................. 500 27,813
May Department Stores Co. ................................. 300 7,200
Saks, Inc.* ............................................... 2,000 21,000
Target Corp. .............................................. 1,100 63,800
Wal-Mart Stores, Inc. ..................................... 5,900 339,987
-----------
729,961
-----------
</TABLE>
150
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
CONSUMER DISCRETIONARY - continued
Specialty Retail - 1.4%
Ann Taylor Stores Corp.* .................................. 100 $ 3,312
Barnes & Noble, Inc.* ..................................... 320 7,120
Best Buy Co., Inc.* ....................................... 300 18,975
Borders Group, Inc.* ...................................... 540 8,404
Circuit City Stores, Inc. ................................. 100 3,319
Gap, Inc. ................................................. 200 6,250
Home Depot, Inc. .......................................... 4,750 237,203
Limited, Inc. ............................................. 400 8,650
Linens 'n Things, Inc. .................................... 100 2,713
Payless Shoesource, Inc.* ................................. 2 103
RadioShack Corp. .......................................... 1,390 65,851
Ross Stores, Inc. ......................................... 300 5,119
Tiffany & Co. ............................................. 100 6,750
TJX Co., Inc. ............................................. 2,100 39,375
Too, Inc. ................................................. 28 712
Williams Sonoma, Inc.* .................................... 170 5,514
Zale Corp.* ............................................... 200 7,300
-----------
426,670
-----------
Textiles & Apparel - 0.2%
Jones Apparel Group, Inc.* ................................ 1,530 35,955
Liz Claiborne, Inc. ....................................... 100 3,525
V.F. Corp. ................................................ 870 20,717
-----------
60,197
-----------
CONSUMER STAPLES - 3.8%
Beverages - 0.3%
Adolph Coors Co. .......................................... 100 6,050
Anheuser Busch Cos., Inc. ................................. 1,000 74,687
Canandaigua Wine Co., Inc.* ............................... 100 5,044
-----------
85,781
-----------
Food & Drug Retailing - 1.8%
CVS Corp. ................................................. 2,800 112,000
Kroger Co.* ............................................... 16,630 366,899
SYSCO Corp. ............................................... 1,200 50,550
Walgreen Co. .............................................. 500 16,094
-----------
545,543
-----------
Food Products - 0.9%
Agribrands International, Inc.* ........................... 100 4,194
Conagra, Inc. ............................................. 100 1,906
Del Monte Foods Co.* ...................................... 12,940 88,154
Keebler Foods Co.* ........................................ 2,629 97,601
Quaker Oats Co. ........................................... 1,000 75,125
</TABLE>
151
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EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
CONSUMER STAPLES - continued
Food Products - continued
Ralston Purina Co. ........................................ 100 $ 1,994
-----------
268,974
-----------
Personal Products - 0.8%
Avon Products, Inc. ....................................... 400 17,800
Colgate-Palmolive Co. ..................................... 1,100 65,863
Dial Corp. ................................................ 670 6,951
Kimberly-Clark Corp. ...................................... 1,800 103,275
The Estee Lauder Cos., Inc., Class A....................... 1,200 59,325
-----------
253,214
-----------
Tobacco - 0.0%
R.J. Reynolds Tobacco Holdings, Inc. *..................... 500 13,969
-----------
ENERGY - 12.4%
Energy Equipment & Services - 5.2%
BJ Services Co., Inc.* .................................... 520 32,500
Diamond Offshore Drilling, Inc. ........................... 4,597 161,470
ENSCO International, Inc. ................................. 1,000 35,812
Global Industries, Ltd. ................................... 14,707 277,595
Global Marine, Inc.* ...................................... 5,450 153,622
Grant Pride, Inc. ......................................... 820 20,500
L-3 Communications Holding Corp. .......................... 1,700 97,006
Nabors Industries, Inc.* .................................. 600 24,937
Noble Affiliates, Inc. .................................... 600 22,350
Noble Drilling Corp.* ..................................... 8,494 349,847
Rowan Cos., Inc.* ......................................... 100 3,037
Santa Fe International Corp. .............................. 1,300 45,419
Transocean Sedco Forex, Inc. .............................. 6,118 326,931
Weatherford International, Inc.* .......................... 1,020 40,609
-----------
1,591,635
-----------
Oil & Gas - 7.2%
Amerada Hess Corp. ........................................ 200 12,350
Anadarko Petroleum Corp. .................................. 700 34,519
Anderson Exploration, Ltd.* ............................... 1,219 22,156
Apache Corp. .............................................. 3,935 231,427
Beau Canada Exploration, Ltd. ............................. 2,500 2,736
Berkley Petroleum Corp.* .................................. 1,500 9,476
Cabot Oil & Gas Corp., Class A............................. 500 10,594
Canadian 88 Energy Corp.* ................................. 4,000 8,243
Canadian Hunter Exploration, Ltd. ......................... 900 19,125
Canadian Natural Resources, Ltd.* ......................... 800 23,243
Chevron Corp. ............................................. 800 67,850
Chieftain International, Inc.* ............................ 300 5,719
</TABLE>
152
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EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
ENERGY - continued
Oil & Gas - continued
Conoco, Inc., Class A...................................... 2,200 $ 48,400
Conoco, Inc., Class B...................................... 200 4,913
Devon Energy Corp. ........................................ 300 16,856
Encal Energy, Ltd. ........................................ 500 3,176
EOG Resources, Inc. ....................................... 11,400 381,900
Exxon Mobil Corp. ......................................... 4,560 357,960
Frontier Oil Corp. ........................................ 2,500 20,000
Genesis Exploration, Ltd. ................................. 3,000 22,297
Houston Exploration Co.* .................................. 5,354 134,519
Kerr-McGee Corp. .......................................... 200 11,788
Murphy Oil Corp. .......................................... 660 39,229
Newfield Exploration Co.* ................................. 8,174 319,808
Occidental Petroleum Corp. ................................ 900 18,956
Paramount Resources, Ltd. ................................. 1,000 10,236
Phillips Petroleum Co. .................................... 300 15,206
Ranger Oil, Ltd. .......................................... 3,000 16,014
Rio Alto Exploration, Ltd. ................................ 300 5,493
Royal Dutch Petroleum Co. ................................. 3,300 203,156
Stone Energy Corp.* ....................................... 100 5,975
Talisman Energy, Inc. ..................................... 500 16,571
Tesoro Petroleum Corp. .................................... 300 3,038
Texaco, Inc. .............................................. 600 31,950
Tosco Corp. ............................................... 300 8,494
Vastar Resources, Inc. .................................... 400 32,850
-----------
2,176,223
-----------
FINANCIALS - 7.0%
Banks - 2.2%
Associated Banc Corp. ..................................... 737 16,076
Bank of America Corp. ..................................... 500 21,500
BB&T Corp. ................................................ 100 2,388
Charter One Financial, Inc. ............................... 1,710 39,330
Comerica, Inc. ............................................ 1,600 71,800
Dime Bancorp, Inc. ........................................ 100 1,575
Fifth Third Bancorp........................................ 800 50,600
First Security Corp. ...................................... 2,790 37,839
First Tennessee National Corp. ............................ 2,500 41,406
Firstar Corp. ............................................. 2,100 44,231
FleetBoston Financial Corp. ............................... 484 16,456
Golden St. Bancorp, Inc.* ................................. 200 3,600
Golden West Financial Corp. ............................... 100 4,081
Huntington Bancshares, Inc. ............................... 2,750 43,484
KeyCorp.................................................... 2,000 35,250
M&T Bank Corp. ............................................ 90 40,500
</TABLE>
153
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
FINANCIALS - continued
Banks - continued
Mellon Financial Corp. .................................... 100 $ 3,644
North Fork Bancorp, Inc. .................................. 1,160 17,545
Northern Trust Corp. ...................................... 300 19,519
Old Kent Financial Corp. .................................. 110 2,949
PNC Financial Services Group............................... 200 9,375
SouthTrust Corp. .......................................... 1,500 33,938
State Street Corp. ........................................ 600 63,638
The Bank of New York Co., Inc. ............................ 100 4,650
Wells Fargo Co. ........................................... 400 15,500
Zions Bancorp.............................................. 300 13,767
-----------
654,641
-----------
Diversified Financials - 2.9%
American Express Co. ...................................... 2,000 104,250
Avis Rent-A-Car, Inc.* .................................... 200 3,750
AXA Financial, Inc. ....................................... 400 13,600
Bear Stearns Companies, Inc. .............................. 100 4,163
Citigroup, Inc. ........................................... 5,700 343,425
Comdisco, Inc. ............................................ 1,240 27,667
Edwards (A.G.), Inc. ...................................... 2,655 103,545
Federal National Mortgage Assn. ........................... 100 5,219
Fortune Brands, Inc. ...................................... 100 2,306
Goldman Sachs Group, Inc. ................................. 200 18,975
Lehman Brothers Holdings, Inc. ............................ 200 18,912
Merrill Lynch & Co., Inc. ................................. 500 57,500
Morgan Stanley, Dean Witter & Co. ......................... 1,100 91,575
Price (T.) Rowe & Associates, Inc. ........................ 500 21,250
Schwab (Charles) & Co., Inc. .............................. 1,800 60,525
Xtra Corp. ................................................ 200 7,888
-----------
884,550
-----------
Insurance - 1.7%
AFLAC, Inc. ............................................... 100 4,594
Allmerica Financial Corp. ................................. 710 37,186
AMBAC Finl. Group, Inc. ................................... 950 52,072
American International Group, Inc. ........................ 1,600 188,000
CIGNA Corp. ............................................... 400 37,400
Cincinnati Financial Corp. ................................ 100 3,144
Financial Security Assured Holdings, Ltd. ................. 100 7,587
Hartford Financial Services Group, Inc. ................... 500 27,969
Jefferson Pilot Corp. ..................................... 100 5,644
MBIA, Inc. ................................................ 690 33,249
MGIC Investment Corp. ..................................... 200 9,100
Partnerre, Ltd. ........................................... 990 35,083
</TABLE>
154
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
FINANCIALS - continued
Insurance - continued
PMI Group, Inc. ........................................... 150 $ 7,125
ReliaStar Financial Corp. ................................. 720 37,755
St. Paul Companies, Inc. .................................. 100 3,413
XL Capital Ltd., Class A................................... 690 37,346
-----------
526,667
-----------
Real Estate - 0.2%
Boston Properties, Inc., REIT.............................. 1,400 54,075
-----------
HEALTH CARE - 11.6%
Biotechnology - 1.4%
Amgen, Inc.* .............................................. 2,400 168,600
Chiron Corp. .............................................. 1,690 80,275
Genetech, Inc. ............................................ 400 68,800
Gilead Sciences, Inc. ..................................... 400 28,450
Idexx Laboratories, Inc.* ................................. 2,964 67,801
Immunex Corp.* ............................................ 200 9,888
MedImmune, Inc.* .......................................... 100 7,400
-----------
431,214
-----------
Health Care Equipment & Supplies - 3.4%
Alza Corp.* ............................................... 1,000 59,125
Baxter International, Inc. ................................ 500 35,156
Beckman Coulter, Inc. ..................................... 1,100 64,213
Biomet, Inc. .............................................. 100 3,844
Boston Scientific Corp.* .................................. 700 15,356
Cytyc Corp. ............................................... 5,900 314,912
PE Corp - PE Biosystems Group.............................. 850 55,994
Sybron International Corp.* ............................... 1,200 23,775
VISX, Inc.* ............................................... 16,000 449,000
-----------
1,021,375
-----------
Health Care Providers & Services - 0.9%
Andrx Corp. ............................................... 200 12,784
Cardinal Health, Inc. ..................................... 1,000 74,000
Cerner Corp. .............................................. 1,200 32,700
HCA - The Healthcare Corp. ................................ 200 6,075
Health Management Associates, Inc., Class A* .............. 1,990 25,994
IMS Health, Inc. .......................................... 980 17,640
Pacificare Health Systems, Inc., Class A................... 100 6,019
Total Renal Care Holdings, Inc.* .......................... 9,833 58,998
Trigon Healthcare, Inc. ................................... 200 10,313
UnitedHealth Group, Inc. .................................. 200 17,150
-----------
261,673
-----------
</TABLE>
155
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
HEALTHCARE - continued
Pharmaceuticals - 5.9%
Abbott Laboratories........................................ 1,700 $ 75,756
Allergan, Inc. ............................................ 1,000 74,500
American Home Products Corp. .............................. 1,800 105,750
Bristol-Myers Squibb Co. .................................. 1,000 58,250
Elan Corp. Plc., ADR* ..................................... 500 24,219
Intrabiotics Pharmaceuticals............................... 4,710 125,698
Johnson & Johnson.......................................... 1,000 101,875
Lilly (Eli) & Co. ......................................... 500 49,938
Merck & Co., Inc. ......................................... 1,800 137,925
Pfizer, Inc. .............................................. 6,100 292,800
Pharmacia Corp. ........................................... 2,200 113,712
Schering-Plough Corp. ..................................... 3,300 166,650
United Therapeutics Corp. ................................. 4,361 472,623
-----------
1,799,696
-----------
INDUSTRIALS - 11.4%
Aerospace & Defense - 0.7%
Boeing Co. ................................................ 1,300 54,356
General Dynamics Corp. .................................... 1,200 62,700
General Motors Corp., Class H* ............................ 453 39,751
Lockheed Martin Corp. ..................................... 1,700 42,181
PerkinElmer, Inc. ......................................... 100 6,613
-----------
205,601
-----------
Air Freight & Couriers - 0.2%
Expeditors International of Washington, Inc. .............. 700 33,250
United Parcel Service, Inc., Class B....................... 600 35,400
-----------
68,650
-----------
Airlines - 0.1%
Continental Airlines, Inc., Class B* ...................... 200 9,400
Delta Air Lines, Inc. ..................................... 600 30,337
-----------
39,737
-----------
Building Products - 0.0%
American Standard Companies, Inc.* ........................ 200 8,200
-----------
Commercial Services & Supplies - 5.4%
Amdocs, Ltd.* ............................................. 100 7,675
American Management Systems, Inc. ......................... 200 6,566
Automatic Data Processing, Inc. ........................... 400 21,425
Avery Dennison Corp. ...................................... 800 53,700
Bea Systems, Inc. ......................................... 500 24,719
Cadence Design Systems, Inc.* ............................. 1,860 37,897
Checkfree Holdings Corp. .................................. 6,643 342,530
Collectors Universe, Inc. ................................. 1,100 3,231
</TABLE>
156
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INDUSTRIALS - continued
Commercial Services & Supplies - continued
Computer Sciences Corp.* .................................. 700 $ 52,281
Convergys Corp.* .......................................... 2,500 129,687
CSG Systems International, Inc. ........................... 5,334 299,037
DST Systems, Inc.* ........................................ 630 47,959
Electronic Data Systems Corp. ............................. 100 4,125
Fair Issac & Co., Inc. .................................... 1,930 84,920
First Data Corp. .......................................... 400 19,850
Fiserv, Inc.* ............................................. 1,030 44,547
John H. Harland Co. ....................................... 200 2,988
McGraw-Hill Cos., Inc. .................................... 900 48,600
Miller (Herman), Inc. ..................................... 100 2,588
National Data Corp. ....................................... 3,010 69,230
Nova Corp. ................................................ 8,906 248,811
Paychex, Inc. ............................................. 300 12,600
SEI Investments Co. ....................................... 300 11,944
Switchboard, Inc. ......................................... 4,890 48,900
The Intercept Group, Inc. ................................. 1,250 21,250
-----------
1,647,060
-----------
Construction & Engineering - 0.0%
Spectrasite Holdings, Inc. ................................ 420 11,918
-----------
Electrical Equipment - 0.7%
Cable Design Technologies Corp.* .......................... 5,248 175,808
Cooper Industries, Inc. ................................... 100 3,256
Emerson Electric Co. ...................................... 200 12,075
Energizer Holdings, Inc. .................................. 33 602
Molex, Inc. ............................................... 200 7,000
Thomas & Betts Corp. ...................................... 1,000 19,125
-----------
217,866
-----------
Industrial Conglomerates - 3.1%
Dover Corp. ............................................... 300 12,169
General Electric Co. ...................................... 11,000 583,000
Honeywell International, Inc. ............................. 787 26,512
Mark IV Industries, Inc. .................................. 200 4,175
Minnesota Mining & Manufacturing Co. ...................... 600 49,500
Teleflex, Inc. ............................................ 500 18,531
Tyco International, Ltd. .................................. 5,100 241,613
-----------
935,500
-----------
Machinery - 0.9%
AGCO Corp. ................................................ 8,330 102,042
Caterpillar, Inc. ......................................... 100 3,388
CNH Global NV.............................................. 2,950 27,287
</TABLE>
157
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INDUSTRIALS - continued
Machinery - continued
Illinois Tool Works, Inc. ................................. 100 $ 5,700
Parker Hannifin Corp. ..................................... 100 3,425
Reliance Steel & Aluminum Co. ............................. 150 2,869
Terex Corp.* .............................................. 8,000 113,000
Tower Automotive, Inc.* ................................... 100 1,250
-----------
258,961
-----------
Marine - 0.1%
Tidewater, Inc. ........................................... 450 16,200
-----------
Road & Rail - 0.2%
Kansas City Southern Industries, Inc. ..................... 500 44,344
Union Pacific Corp. ....................................... 300 11,156
-----------
55,500
-----------
INFORMATION TECHNOLOGY - 28.8%
Commercial Services & Supplies - 0.1%
ACNielsen Corp. ........................................... 1,230 27,060
-----------
Communications Equipment - 8.3%
3Com Corp.* ............................................... 870 50,134
American Tower Systems Corp., Class A* .................... 8,290 345,589
Ancor Communications, Inc. ................................ 4,890 174,894
Aware, Inc. ............................................... 800 40,900
Brocade Communications Systems, Inc. ...................... 300 55,045
CIENA Corp.* .............................................. 100 16,669
Cisco Systems, Inc.* ...................................... 7,900 502,144
Commscope, Inc. ........................................... 100 4,100
Computer Network Technology* .............................. 1,460 25,368
Comverse Technology, Inc.* ................................ 1,100 102,300
Corning, Inc. ............................................. 780 210,502
Emulex Corp. .............................................. 4,410 289,682
Harmonic Lightwaves, Inc.* ................................ 100 2,475
Infospace, Inc. ........................................... 1,000 55,250
Lucent Technologies, Inc. ................................. 1,400 82,950
MMC Networks, Inc.* ....................................... 2,300 122,906
Nokia Corp., ADR........................................... 1,607 80,250
Nortel Networks Corp. ..................................... 3,900 266,175
Scientific Atlanta, Inc. .................................. 200 14,900
Storagenetworks, Inc. ..................................... 25 2,256
Tekelec, Inc. ............................................. 600 28,912
Tellabs, Inc.* ............................................ 700 47,906
-----------
2,521,307
-----------
</TABLE>
158
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Computers & Peripherals - 4.0%
Apple Computer* ........................................... 1,700 $ 89,037
Dell Computer Corp.* ...................................... 600 29,588
Electronics for Imaging, Inc.* ............................ 100 2,531
EMC Corp.* ................................................ 1,600 123,100
Gateway, Inc.* ............................................ 100 5,675
Hewlett-Packard Co. ....................................... 1,500 187,312
International Business Machines Corp. ..................... 1,600 175,300
Lexmark Intl. Group, Inc., Class A* ....................... 100 6,725
Micros Systems, Inc.* ..................................... 300 5,569
NCR Corp.* ................................................ 560 21,805
Network Appliance, Inc. ................................... 200 16,100
QLogic Corp. .............................................. 200 13,213
Seagate Technology* ....................................... 5,660 311,300
Sun Microsystems, Inc.* ................................... 2,500 227,344
Symbol Technologies, Inc. ................................. 75 4,050
-----------
1,218,649
-----------
Electronic Equipment & Instruments - 2.5%
Agilent Technologies, Inc. ................................ 43 3,171
AVX Corp. ................................................. 400 9,175
Burr-Brown Corp. .......................................... 500 43,344
JDS Uniphase Corp.* ....................................... 800 95,900
Rockwell International Corp. .............................. 300 9,450
RSA Security, Inc. ........................................ 4,990 345,557
Sanmina Corp.* ............................................ 700 59,850
Sawtek, Inc. .............................................. 440 25,328
SCI Systems, Inc.* ........................................ 1,880 73,673
Sipex Corp. ............................................... 2,992 82,841
Stratos Lightwave, Inc. ................................... 55 1,533
Vishay Intertechnology, Inc. .............................. 100 3,794
Waters Corp.* ............................................. 100 12,481
-----------
766,097
-----------
Internet Software & Services - 3.0%
America Online, Inc.* ..................................... 1,000 52,750
Chordiant Software, Inc. .................................. 830 13,799
Epresence, Inc. ........................................... 3,500 25,375
Ivillage, Inc. ............................................ 300 2,531
Netzee, Inc. .............................................. 1,480 8,464
Real Networks, Inc.* ...................................... 1,100 55,619
S1 Corp. .................................................. 10,590 246,879
VeriSign, Inc. ............................................ 2,663 470,019
Yahoo!, Inc.* ............................................. 200 24,775
-----------
900,211
-----------
</TABLE>
159
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Office Electronics - 0.2%
Radiant Systems, Inc.* .................................... 2,080 $ 49,920
-----------
Semiconductor Equipment & Products - 6.2%
Advanced Micro Devices, Inc.* ............................. 100 7,725
Altera Corp.* ............................................. 430 43,833
Analog Devices, Inc.* ..................................... 800 60,800
Applied Materials, Inc.* .................................. 1,400 126,875
Applied Science & Tech, Inc. *............................. 759 19,639
Atmel Corp. ............................................... 1,860 68,587
Broadcom Corp.* ........................................... 100 21,894
Conexant Systems, Inc.* ................................... 200 9,725
Cypress Semiconductor Corp. ............................... 300 12,675
Dupont Photomasks, Inc.* .................................. 1,200 82,200
Integrated Device Technology............................... 200 11,975
Intel Corp. ............................................... 4,900 655,069
Jabil Circuit, Inc.* ...................................... 1,480 73,445
KLA-Tencor Corp.* ......................................... 200 11,713
Lam Research Corp. *....................................... 200 7,500
Lattice Semiconductor Corp.* .............................. 200 13,825
Linear Technology Corp. ................................... 1,200 76,725
LSI Logic Corp.* .......................................... 900 48,713
Mentor Graphics Corp....................................... 1,000 19,875
MKS Instruments, Inc. ..................................... 600 23,475
National Semiconductor Corp.* ............................. 200 11,350
Novellus Systems, Inc.* ................................... 660 37,331
Teradyne, Inc.* ........................................... 900 66,150
Texas Instruments, Inc. ................................... 2,200 151,112
Triquint Semiconductor, Inc. .............................. 600 57,413
Veeco Instruments, Inc.* .................................. 600 43,950
Vitesse Semiconductor Corp.* .............................. 100 7,356
Xilinx, Inc.* ............................................. 1,200 99,075
-----------
1,870,005
-----------
Software - 4.5%
Adobe Systems, Inc. ....................................... 200 26,000
Aspen Technology, Inc.* ................................... 1,226 47,201
Computer Associates International, Inc. ................... 600 30,713
Diversinet Corp. .......................................... 2,700 32,063
Entrust Technologies, Inc.* ............................... 800 66,200
I2 Technologies, Inc.* .................................... 300 31,280
Informix Corp. ............................................ 780 5,801
Intuit, Inc.* ............................................. 1,130 46,754
Legato Systems, Inc.* ..................................... 360 5,445
Macromedia, Inc. .......................................... 1,400 135,362
</TABLE>
160
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Software - continued
Microsoft Corp.* .......................................... 2,300 $ 184,000
National Instruments Corp. ................................ 1,100 47,987
Network Associates, Inc.* ................................. 2,140 43,603
Oracle Systems Corp.* ..................................... 2,900 243,781
Parametric Technology Corp.* .............................. 1,300 14,300
Pegrine Systems, Inc.* .................................... 3,087 107,080
Peoplesoft, Inc.* ......................................... 100 1,675
Rational Software Corp.* .................................. 300 27,881
Siebel Systems, Inc.* ..................................... 1,000 163,562
Symantec Corp. ............................................ 100 5,394
Veritas Software Corp.* ................................... 1,000 113,016
-----------
1,379,098
-----------
MATERIALS - 2.1%
Chemicals - 0.8%
Albemarle Corp. ........................................... 1,200 23,700
Dow Chemical Co. .......................................... 900 27,169
DuPont (E.I.) De Nemours & Co. ............................ 1,000 43,750
Ecolab, Inc. .............................................. 100 3,906
PPG Industries, Inc. ...................................... 100 4,431
Praxair, Inc. ............................................. 1,720 64,393
Rohm & Haas Co. ........................................... 1,400 48,300
Union Carbide Corp. ....................................... 200 9,900
Valspar Corp. ............................................. 700 23,625
-----------
249,174
-----------
Construction Materials - 0.1%
Centex Construction Products, Inc. ........................ 100 2,269
Lafarge Corp. ............................................. 100 2,100
Southdown, Inc. ........................................... 100 5,775
Vulcan Materials Co. ...................................... 100 4,269
-----------
14,413
-----------
Containers & Packaging - 0.8%
AptarGroup, Inc. .......................................... 700 18,900
Pactiv Corp.* ............................................. 100 787
Sealed Air Corp.* ......................................... 1,320 69,135
Smurfit Container Corp.* .................................. 12,880 165,830
-----------
254,652
-----------
Metals & Mining - 0.2%
AK Steel Holding Corp...................................... 100 800
Alcan Aluminum, Ltd. ...................................... 400 12,400
Alcoa, Inc. ............................................... 1,200 34,800
Inco, Ltd. ................................................ 200 3,075
</TABLE>
161
<PAGE>
EVERGREE VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
MATERIALS - continued
Metals & Mining - continued
Ryerson Tull, Inc. ........................................ 100 $ 1,037
-----------
52,112
-----------
Paper & Forest Products - 0.2%
Asia Pulp & Paper Ltd., ADR................................ 1,000 5,063
Bowater, Inc. ............................................. 1,020 45,007
Rayonier, Inc. ............................................ 200 7,175
Weyerhaeuser Co. .......................................... 300 12,900
Willamette Industries, Inc. ............................... 100 2,725
-----------
72,870
-----------
TELECOMMUNICATION SERVICES - 5.0%
Diversified Telecommunication Services - 3.5%
Adelphia Business Solutions................................ 1,000 23,187
Allegiance Telecom, Inc.* ................................. 300 19,200
ALLTEL Corp. .............................................. 700 43,356
AT&T Corp., Liberty Media Group, Class A* ................. 6,400 155,200
Bell Atlantic Corp. ....................................... 1,200 60,975
BellSouth Corp. ........................................... 2,100 89,512
Broadwing, Inc. ........................................... 1,000 25,937
Covad Communications Group, Inc. .......................... 700 11,288
Global Crossing, Ltd.* .................................... 1,250 32,891
GTE Corp. ................................................. 200 12,450
ICG Communications, Inc.* ................................. 440 9,708
Intermedia Communications, Inc.* .......................... 1,084 32,249
MGC Communications, Inc.* ................................. 1,040 62,335
Pinnacle Holdings, Inc.* .................................. 1,420 76,680
Powertel, Inc. ............................................ 1,200 85,125
SBC Communications, Inc. .................................. 1,000 43,250
Sprint Corp. .............................................. 1,900 96,900
Teleglobe, Inc. ........................................... 2,400 50,550
Telephone & Data Systems, Inc. ............................ 280 28,070
Time Warner Telecom, Inc. ................................. 1,210 77,894
U.S. West, Inc. ........................................... 200 17,150
-----------
1,053,907
-----------
Wireless Telecommunications Services - 1.5%
Crown Castle International Corp. .......................... 1,000 36,500
I3 Mobile, Inc. ........................................... 20 368
Leap Wireless International, Inc. ......................... 1,100 51,700
Nextel Communications, Inc.* .............................. 1,400 85,662
Sprint Corp. (PCS Group), Ser. 1* ......................... 1,100 65,450
Vodafone AirTouch Plc, ADR................................. 1,400 58,013
Voicestream Wireless Corp.* ............................... 648 75,360
</TABLE>
162
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
TELECOMMUNICATION SERVICES - continued
Wireless Telecommunications Services - continued
Western Wireless Corp., Class A............................ 1,900 $ 103,550
-----------
476,603
-----------
UTILITIES - 1.8%
Electric Utilities - 1.2%
Allegheny Energy, Inc. .................................... 650 17,794
Ameren Corp. .............................................. 100 3,375
Calpine Corp.* ............................................ 500 32,875
CH Energy Group, Inc. ..................................... 1,300 44,119
Constellation Energy Group, Inc. .......................... 100 3,256
Dominion Resources, Inc. .................................. 100 4,288
DQE, Inc. ................................................. 300 11,850
DTE Energy Co. ............................................ 100 3,056
Dynegy, Inc. .............................................. 1,390 94,954
Energy East Corp. ......................................... 100 1,906
Entergy Corp. ............................................. 100 2,719
FirstEnergy Corp. ......................................... 100 2,338
Florida Progress Corp. .................................... 200 9,375
Montana Power Co. ......................................... 1,160 40,962
Northeast Utilities........................................ 100 2,175
PECO Energy Co. ........................................... 300 12,094
PG&E Corp. ................................................ 200 4,925
PPL Corp. ................................................. 200 4,388
Public Service Enterprise Group, Inc. ..................... 400 13,850
Southern Co. .............................................. 200 4,662
TXU Corp. ................................................. 100 2,950
Unicom Corp. .............................................. 300 11,606
UtiliCorp United, Inc. .................................... 1,520 30,210
-----------
359,727
-----------
Energy Equipment & Services - 0.0%
Capstone Turbine Corp. .................................... 30 1,352
-----------
Gas Utilities - 0.5%
Coastal Corp. ............................................. 100 6,088
Enron Corp. ............................................... 1,900 122,550
Piedmont Natural Gas Co., Inc. ............................ 1,000 26,562
-----------
155,200
-----------
Water Utilities - 0.1%
American Water Works, Inc. ................................ 730 18,250
-----------
Total Common Stocks (cost $25,298,852)................... $28,362,554
-----------
</TABLE>
163
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS - 0.1%
CONSUMER DISCRETIONARY - 0.1%
Leisure Equipment & Products - 0.1%
Tribune Co. (exchangeable for Mattel, Inc. common
stock), 6.25%, 08/15/2001 (cost $28,442)............. 1,800 $ 30,150
-----------
<CAPTION>
Principal
Amount Value
<S> <C> <C>
CORPORATE BONDS - 0.5%
INFORMATION TECHNOLOGY - 0.5%
Aerospace & Defense - 0.1%
Getty Images, Inc., 5.00%, 03/15/2007................. $ 40,000 32,000
-----------
Internet Software & Services - 0.1%
Mail.com, Inc., 7.00%, 02/01/2005 144A................ 40,000 17,900
-----------
Semiconductor Equipment & Products - 0.1%
Vitesse Semiconductor Corp., 4.00%, 03/15/2005........ 50,000 46,500
-----------
Software - 0.2%
Juniper Networks, Inc., 4.75%, 03/15/2007............. 50,000 54,687
-----------
Total Corporate Bonds (cost $155,462)............... 151,087
-----------
<CAPTION>
Shares Value
<S> <C> <C>
SHORT-TERM INVESTMENTS - 6.7%
MUTUAL FUND SHARES - 6.7%
Evergreen Select Money Market Fund (Cost
$2,032,932) 0........................................ 2,032,932 2,032,932
-----------
Total Investments - (cost $27,515,688) - 100.7%................... 30,576,723
Other Assets and Liabilities - (0.7%)............................. (198,606)
-----------
Net Assets - 100.0%............................................... $30,378,117
-----------
</TABLE>
See Combined Notes to Schedules of Investments.
164
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Statement of Assets and Liabilities
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets
Identified cost of securities..................................... $27,515,688
Net unrealized gains on securities................................ 3,061,035
--------------------------------------------------------------------------------
Market value of securities........................................ 30,576,723
Cash.............................................................. 76,285
Receivable for securities sold.................................... 48,614
Dividends and interest receivable................................. 21,086
Receivable from investment advisor................................ 956
--------------------------------------------------------------------------------
Total assets...................................................... 30,723,664
--------------------------------------------------------------------------------
Liabilities
Payable for securities purchased.................................. 328,402
Due to other related parties...................................... 246
Accrued expenses and other liabilities............................ 16,899
--------------------------------------------------------------------------------
Total liabilities................................................. 345,547
--------------------------------------------------------------------------------
Net assets......................................................... $30,378,117
--------------------------------------------------------------------------------
Net assets represented by
Paid-in capital................................................... $26,042,767
Undistributed net investment income............................... 6,864
Accumulated net realized gains on securities and foreign currency
related transactions............................................. 1,267,451
Net unrealized gains on securities................................ 3,061,035
--------------------------------------------------------------------------------
Total net assets................................................... $30,378,117
--------------------------------------------------------------------------------
Shares outstanding................................................. 2,366,621
--------------------------------------------------------------------------------
Net asset value per share.......................................... $ 12.84
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
165
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Statement of Operations
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income
Dividends (net of foreign withholding taxes of $660).............. $ 68,305
Interest.......................................................... 57,211
--------------------------------------------------------------------------------
Total investment income............................................ 125,516
--------------------------------------------------------------------------------
Expenses
Advisory fee...................................................... 103,153
Administrative services fees...................................... 11,768
Transfer agent fee................................................ 73
Trustees' fees and expenses....................................... 236
Printing and postage expenses..................................... 6,331
Custodian fee..................................................... 4,372
Professional fees................................................. 6,082
Other............................................................. 5,382
--------------------------------------------------------------------------------
Total expenses.................................................... 137,397
Less: Expense reductions.......................................... (818)
Fee waivers..................................................... (18,106)
--------------------------------------------------------------------------------
Net expenses...................................................... 118,473
--------------------------------------------------------------------------------
Net investment income............................................. 7,043
--------------------------------------------------------------------------------
Net realized and unrealized gains on securities
Net realized gains on securities.................................. 1,303,581
--------------------------------------------------------------------------------
Net change in unrealized gains on securities...................... 152,314
--------------------------------------------------------------------------------
Net realized and unrealized gains on securities................... 1,455,895
--------------------------------------------------------------------------------
Net increase in net assets resulting from operations.............. $1,462,938
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
166
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Masters Fund
Statements of Changes in Net Assets
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999 (a)
-------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income................. $ 7,043 $ 16,339
Net realized gains on securities...... 1,303,581 907,970
Net change in unrealized gains on
securities........................... 152,314 2,908,721
-------------------------------------------------------------------------------
Net increase in net assets resulting
from operations..................... 1,462,938 3,833,030
-------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income................. 0 (17,862)
Net realized gains.................... (715,317) (227,439)
-------------------------------------------------------------------------------
Total distributions to
shareholders........................ (715,317) (245,301)
-------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold............. 10,043,220 15,347,628
Payment for shares redeemed........... (552) (308,147)
Net asset value of shares issued in
reinvestment of distributions........ 715,317 245,301
-------------------------------------------------------------------------------
Net increase in net assets resulting
from capital share transactions..... 10,757,985 15,284,782
-------------------------------------------------------------------------------
Total increase in net assets...... 11,505,606 18,872,511
Net assets
Beginning of period................... 18,872,511 0
-------------------------------------------------------------------------------
End of period......................... $30,378,117 $18,872,511
-------------------------------------------------------------------------------
Undistributed (overdistributed) net
investment income..................... $ 6,864 $ (179)
-------------------------------------------------------------------------------
</TABLE>
(a) For the period from January 29, 1999 (commencement of operations) to Decem-
ber 31, 1999.
See Combined Notes to Financial Statements.
167
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Omega Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 2000 -----------------------------
(Unaudited) (a) 1999 # 1998 # 1997 (b) #
<S> <C> <C> <C> <C>
Net asset value, beginning of
period $ 19.98 $ 13.57 $11.10 $10.00
------- ------- ------ ------
Income from investment
operations
Net investment loss 0.01 (0.06) (0.04) (0.06)
Net realized and unrealized
gains or losses on securities 3.13 6.47 2.51 1.16
------- ------- ------ ------
Total from investment
operations 3.14 6.41 2.47 1.10
------- ------- ------ ------
Distributions to shareholders
from net realized gains (0.74) 0 0 0
------- ------- ------ ------
Net asset value, end of period $ 22.38 $ 19.98 $13.57 $11.10
------- ------- ------ ------
Total return* 15.37% 47.24% 22.25% 11.00%
Ratios and supplemental data
Net assets, end of period
(thousands) $73,232 $24,176 $4,039 $1,868
Ratios to average net assets
Expenses** 0.69%+ 0.96% 1.02% 1.06%+
Net investment loss 0.08%+ (0.35)% (0.33)% (0.74)%+
Portfolio turnover rate 66% 120% 49% 39%
</TABLE>
(a) The net realized and unrealized gains or losses per share amount may not
agree with the net realized and unrealized gains or losses for the period
due to the timing of sales and redemptions of Fund shares in relation to
fluctuating market values for the portfolio.
(b) For the period from March 6, 1997 (commencement of operations) to December
31, 1997.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
172
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Omega Fund
Schedule of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 97.1%
CONSUMER DISCRETIONARY - 9.7%
Automobiles - 0.9%
Harley-Davidson, Inc. ..................................... 17,700 $ 681,450
-----------
Household Durables - 0.5%
Ethan Allen Interiors, Inc. ............................... 15,400 369,600
-----------
Media - 5.5%
Clear Channel Communications, Inc.* ....................... 12,000 900,000
Infinity Broadcasting Corp. ............................... 16,900 615,794
Univision Communications, Inc., Class A* .................. 7,000 724,500
Viacom, Inc., Class B...................................... 25,856 1,763,056
-----------
4,003,350
-----------
Multi-line Retail - 1.2%
Wal-Mart Stores, Inc. ..................................... 15,600 898,950
-----------
Specialty Retail - 1.6%
Best Buy Co., Inc.* ....................................... 11,000 695,750
Tweeter Home Entertainment Group, Inc. .................... 14,500 440,437
-----------
1,136,187
-----------
ENERGY - 10.8%
Energy Equipment & Services - 5.8%
Diamond Offshore Drilling, Inc. ........................... 13,500 474,188
ENSCO International, Inc................................... 20,000 716,250
Nabors Industries, Inc.* .................................. 20,000 831,250
R&B Falcon Corp. .......................................... 27,500 647,969
Santa Fe International Corp. .............................. 25,000 873,437
Weatherford International, Inc.* .......................... 17,000 676,812
-----------
4,219,906
-----------
Oil & Gas - 5.0%
Anadarko Petroleum Corp. .................................. 15,000 739,688
Apache Corp. .............................................. 19,500 1,146,844
Devon Energy Corp. ........................................ 16,000 899,000
Kerr-McGee Corp. .......................................... 15,000 884,062
-----------
3,669,594
-----------
FINANCIALS - 8.0%
Banks - 1.7%
Fifth Third Bancorp........................................ 10,000 632,500
The Bank of New York Co., Inc. ............................ 12,500 581,250
-----------
1,213,750
-----------
Diversified Financials - 4.9%
American Express Co. ...................................... 23,000 1,198,875
Citigroup, Inc. ........................................... 26,300 1,584,575
</TABLE>
173
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Omega Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
FINANCIALS - continued
Diversified Financials - continued
Morgan Stanley, Dean Witter & Co. ......................... 9,600 $ 799,200
-----------
3,582,650
-----------
Insurance - 1.4%
American International Group, Inc. ........................ 8,862 1,041,285
-----------
HEALTH CARE - 17.3%
Biotechnology - 0.6%
Millennium Pharmaceuticals, Inc. .......................... 3,900 436,313
-----------
Health Care Equipment & Supplies - 1.8%
Becton Dickinson & Co. .................................... 26,000 745,875
Medtronic, Inc. ........................................... 9,600 478,200
Stryker Corp. ............................................. 2,500 109,375
-----------
1,333,450
-----------
Pharmaceuticals - 14.9%
Alpharma, Inc., Class A.................................... 17,900 1,114,275
American Home Products Corp. .............................. 49,000 2,878,750
ICN Pharmaceuticals, Inc. ................................. 30,000 834,375
Lilly (Eli) & Co. ......................................... 12,500 1,248,437
Pfizer, Inc. .............................................. 15,000 720,000
Pharmacia Corp. ........................................... 27,777 1,435,724
Schering-Plough Corp. ..................................... 52,500 2,651,250
-----------
10,882,811
-----------
INDUSTRIALS - 6.6%
Commercial Services & Supplies - 2.0%
Apollo Group, Inc. *....................................... 14,900 417,200
Paychex, Inc. ............................................. 25,000 1,050,000
-----------
1,467,200
-----------
Industrial Conglomerates - 3.9%
General Electric Co. ...................................... 26,000 1,378,000
Tyco International, Ltd. .................................. 31,200 1,478,100
-----------
2,856,100
-----------
Marine - 0.7%
Tidewater, Inc. ........................................... 15,000 540,000
-----------
INFORMATION TECHNOLOGY - 43.3%
Communications Equipment - 7.5%
Ancor Communications, Inc. ................................ 25,000 894,141
Cisco Systems, Inc. *...................................... 34,400 2,186,550
Copper Mountain Networks, Inc. ............................ 7,000 616,875
Nokia Corp., ADR........................................... 22,000 1,098,625
</TABLE>
174
<PAGE>
EVERGREEN VARIABLE ANNUITY FUND
Evergreen VA Omega Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Communications Equipment - continued
Plantronics, Inc. ......................................... 800 $ 92,400
RF Micro Devices, Inc.* ................................... 7,000 613,375
-----------
5,501,966
-----------
Computers & Peripherals - 5.9%
EMC Corp.* ................................................ 15,400 1,184,838
Maxtor Corp.* ............................................. 62,500 660,156
NVIDIA Corp. .............................................. 27,000 1,716,187
Sun Microsystems, Inc.* ................................... 8,000 727,500
-----------
4,288,681
-----------
Electronic Equipment & Instruments - 5.5%
Cree Research, Inc.* ...................................... 7,000 934,500
JDS Uniphase Corp.* ....................................... 8,500 1,018,938
Sandisk Corp. ............................................. 17,800 1,089,137
Sanmina Corp.* ............................................ 12,000 1,026,000
-----------
4,068,575
-----------
Internet Software & Services - 1.7%
America Online, Inc.* ..................................... 23,000 1,213,250
-----------
Semiconductor Equipment & Products - 13.2%
Broadcom Corp.* ........................................... 3,100 678,706
Intel Corp. ............................................... 17,000 2,272,687
Lam Research Corp.* ....................................... 16,200 607,500
Microchip Technology, Inc. ................................ 16,650 970,123
Micron Technology, Inc. ................................... 35,300 3,108,606
National Semiconductor Corp.* ............................. 11,700 663,975
Teradyne, Inc.* ........................................... 5,800 426,300
Vitesse Semiconductor Corp.* .............................. 12,600 926,888
-----------
9,654,785
-----------
Software - 9.5%
Entrust Technologies, Inc. *............................... 16,000 1,324,000
Mercury Interactive Corp. *................................ 7,800 754,650
Microsoft Corp. *.......................................... 20,200 1,616,000
Oracle Systems Corp. *..................................... 9,000 756,562
Rational Software Corp. *.................................. 6,500 604,094
Siebel Systems, Inc. *..................................... 5,500 899,594
Veritas Software Corp. *................................... 9,175 1,036,918
-----------
6,991,818
-----------
MATERIALS - 1.4%
Chemicals - 0.4%
Sherwin Williams Co. ...................................... 15,000 317,813
-----------
</TABLE>
175
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Omega Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
MATERIALS - continued
Containers & Packaging - 1.0%
Sealed Air Corp.* ..................................... 14,000 $ 733,250
-----------
Total Common Stocks (cost $60,777,381)............... 71,102,734
-----------
SHORT-TERM INVESTMENTS - 5.3%
MUTUAL FUND SHARES - 5.3%
Evergreen Select Money Market Fund
(cost $3,871,934)..................................... 3,871,934 3,871,934
-----------
Total Investments - (cost $64,649,315) - 102.4%.................... 74,974,668
Other Assets and Liabilities - (2.4%).............................. (1,743,028)
-----------
Net Assets - 100.0%................................................ $73,231,640
-----------
</TABLE>
See Combined Notes to Schedules of Investments.
176
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Omega Fund
Statement of Assets and Liabilities
Six Months Ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
<S> <C>
Assets
Identified cost of securities.................................... $64,649,315
Net unrealized gains on securities............................... 10,325,353
--------------------------------------------------------------------------------
Market value of securities....................................... 74,974,668
Cash............................................................. 25,015
Receivable for securities sold................................... 737,519
Receivable for Fund shares sold.................................. 461,615
Dividends and interest receivable................................ 16,737
Deferred organization expense.................................... 3,412
--------------------------------------------------------------------------------
Total assets................................................. 76,218,966
--------------------------------------------------------------------------------
Liabilities
Payable for securities purchased................................. 2,967,363
Advisory fee payable............................................. 3,069
Due to other related parties..................................... 590
Accrued expenses and other liabilities........................... 16,304
--------------------------------------------------------------------------------
Total liabilities............................................ 2,987,326
--------------------------------------------------------------------------------
Net assets........................................................ $73,231,640
--------------------------------------------------------------------------------
Net assets represented by
Paid-in capital.................................................. $63,777,996
Undistributed net investment income.............................. 19,251
Accumulated net realized losses on securities.................... (890,960)
Net unrealized gains on securities............................... 10,325,353
--------------------------------------------------------------------------------
Total net assets.................................................. $73,231,640
--------------------------------------------------------------------------------
Shares outstanding................................................ 3,271,534
--------------------------------------------------------------------------------
Net asset value per share......................................... $ 22.38
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
177
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Omega Fund
Statement of Operations
Six Months Ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
<S> <C>
Investment income
Dividends......................................................... $ 73,924
Interest.......................................................... 108,802
--------------------------------------------------------------------------------
Total investment income............................................ 182,726
--------------------------------------------------------------------------------
Expenses
Advisory fee...................................................... 124,649
Administrative services fees...................................... 23,850
Transfer agent fee................................................ 135
Trustees' fees and expenses....................................... 464
Printing and postage expenses..................................... 2,697
Custodian fee..................................................... 4,830
Professional fees................................................. 7,500
Organization expenses............................................. 1,019
Other............................................................. 278
--------------------------------------------------------------------------------
Total expenses................................................ 165,422
Less: Expense reductions...................................... (2,200)
--------------------------------------------------------------------------------
Net expenses.................................................. 163,222
--------------------------------------------------------------------------------
Net investment income............................................. 19,504
--------------------------------------------------------------------------------
Net realized and unrealized gains or losses on securities
Net realized losses on securities................................. (816,489)
--------------------------------------------------------------------------------
Net change in unrealized gains on securities...................... 5,914,669
--------------------------------------------------------------------------------
Net realized and unrealized gains on securities................... 5,098,180
--------------------------------------------------------------------------------
Net increase in net assets resulting from operations.............. $5,117,684
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
178
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Omega Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
-------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income (loss).............. $ 19,504 $ (32,393)
Net realized gains or losses on
securities............................... (816,489) 1,643,233
Net change in unrealized gains on
securities............................... 5,914,669 3,434,126
-------------------------------------------------------------------------------
Net increase in net assets resulting from
operations............................... 5,117,684 5,044,966
-------------------------------------------------------------------------------
Distributions to shareholders from
Net realized gains........................ (1,525,368) 0
-------------------------------------------------------------------------------
Total distributions to shareholders....... (1,525,368) 0
-------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold................. 44,129,573 15,509,072
Payment for shares redeemed............... (191,206) (417,288)
Net asset value of shares issued in
reinvestment of distributions............ 1,525,369 0
-------------------------------------------------------------------------------
Net increase in net assets resulting from
capital share transactions............... 45,463,736 15,091,784
-------------------------------------------------------------------------------
Total increase in net assets............. 49,056,052 20,136,750
Net assets
Beginning of period....................... 24,175,588 4,038,838
-------------------------------------------------------------------------------
End of period............................. $73,231,640 $24,175,588
===============================================================================
Undistributed (overdistributed) net
investment income......................... $ 19,251 $ (253)
===============================================================================
</TABLE>
See Combined Notes to Financial Statements.
179
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Perpetual International Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 2000 ----------------------------
(Unaudited) (a) 1999 (a) 1998 (a)(b)
<S> <C> <C> <C>
Net asset value, beginning of
period $ 19.60 $ 14.01 $ 12.50
======= =========== ===========
Income from investment
operations
Net investment income 0.03 0.02 0.02
Net realized and unrealized
gains on securities and foreign
currency related transactions 0.13 5.58 1.49
------- ----------- -----------
Total from investment operations 0.16 5.60 1.51
------- ----------- -----------
Distributions to shareholders
from net realized gains (1.58) (0.01) 0
------- ----------- -----------
Net asset value, end of period $ 18.18 $ 19.60 $ 14.01
======= =========== ===========
Total return* 0.46% 39.99% 12.08%
Ratios and supplemental data
Net assets, end of period
(thousands) $29,249 $ 24,816 $ 11,821
Ratios to average net assets
Expenses** 1.34%+ 1.96% 1.60%+
Net investment income 0.35%+ 0.13% 0.34%+
Portfolio turnover rate 68% 113% 95%
</TABLE>
(a) Effective February 1, 2000, shareholders of Mentor VIP Perpetual Interna-
tional Portfolio became owners of that number of full and fractional shares
of Evergreen VA Perpetual International Fund. As Mentor VIP Perpetual In-
ternational Portfolio contributed the majority of assets and shareholders
to the Evergreen VA Perpetual International Fund, its accounting and per-
formance history is carried forward.
(b) For the period from March 3, 1998 (commencement of operations) to December
31, 1998.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
See Combined Notes to Financial Statements.
184
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Perpetual International Fund
Schedule of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Country Shares Value
<S> <C> <C> <C>
COMMON STOCKS - 91.6%
CONSUMER DISCRETIONARY - 11.9%
Auto Components - 0.2%
BBA Group Plc............................. United Kingdom 8,241 $ 53,993
-----------
Automobiles - 1.8%
Honda Motor Co., Ltd. .................... Japan 15,000 510,344
Mahindra & Mahindra, Ltd. GDR............. India 4,000 18,000
-----------
528,344
-----------
Distributors - 0.9%
Li & Fung................................. Hong Kong 17,000 85,049
Synnex Technology International Corp.,
GDR...................................... Taiwan 7,200 153,000
Wolseley Plc.............................. United Kingdom 7,707 41,398
-----------
279,447
-----------
Electronic Equipment & Instruments - 0.2%
Tf1 Tv Francaise.......................... France 1,030 71,784
-----------
Hotels, Restaurants & Leisure - 0.7%
Cafe De Coral Holdings, Ltd. ............. Hong Kong 60,000 21,551
Corp Interamericana Entretenimiento SA.... Mexico 8,000 31,282
First Choice Holidays Plc................. United Kingdom 9,000 19,746
Granada Group Plc......................... United Kingdom 8,000 79,891
Hilton Group Plc.......................... United Kingdom 17,132 60,140
-----------
212,610
-----------
Household Durables - 3.4%
Fairview Holdings Plc..................... United Kingdom 18,400 40,370
Koninklijke (Royal) Philips Electronics
NV....................................... Netherlands 11,208 528,594
Matsushita-Kotobuki Electronics Industries
Ltd. .................................... Japan 19,000 424,391
Taylor Woodrow............................ United Kingdom 9,000 20,835
Wimpey (George)........................... United Kingdom 10,000 17,514
-----------
1,031,704
-----------
Leisure Equipment & Products - 0.5%
e-New Media Co., Ltd. .................... Hong Kong 150,000 19,627
Infogrames Entertainment SA............... France 4,931 125,693
-----------
145,320
-----------
Media - 2.3%
ABS-CBN Broadcasting Corp. ............... Philippines 23,000 28,451
Bec World................................. Thailand 4,000 24,301
Daily Mail & General Trust, Class A....... United Kingdom 3,660 63,409
Globo Cabo SA, ADR........................ Brazil 500 6,937
Grupo Televisa SA, ADR.................... Mexico 900 62,044
Gruppo Editoriale L'Espresso.............. Italy 1,251 14,810
Rank Group................................ United Kingdom 7,450 17,247
Reed Intl. ............................... United Kingdom 6,000 52,202
</TABLE>
185
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Perpetual International Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Country Shares Value
<S> <C> <C> <C>
COMMON STOCKS - continued
CONSUMER DISCRETIONARY - continued
Media - continued
Shaw Brothers (Hong Kong), Ltd. ........... Hong Kong 43,000 $ 44,680
Singapore Press Holdings, Ltd. ............ Singapore 2,000 31,268
Trinity Mirror Plc......................... United Kingdom 6,300 56,528
VNU NV..................................... Netherlands 5,595 288,978
-----------
690,855
-----------
Metals & Mining - 0.4%
Giordano International, Ltd. .............. Hong Kong 70,000 106,408
-----------
Multi-line Retail - 0.4%
Debenhams Retail Plc....................... United Kingdom 10,000 32,759
Next Plc................................... United Kingdom 6,928 60,590
Selfridges Plc............................. United Kingdom 9,000 39,219
-----------
132,568
-----------
Specialty Retail - 0.4%
D.F.S. Furniture Co. Plc................... United Kingdom 3,900 20,772
Mfi Furniture Group........................ United Kingdom 26,250 25,321
Signet Group Plc........................... United Kingdom 68,925 57,620
-----------
103,713
-----------
Textiles & Apparel - 0.7%
Gucci Group NV............................. Netherlands 2,150 202,284
-----------
CONSUMER STAPLES - 6.5%
Beverages - 1.7%
Al-Ahram Beverage Co. SA, GDR.............. Egypt 18,000 309,150
Bass Plc................................... United Kingdom 9,677 108,792
Coca-Cola Femsa SA, ADR.................... Mexico 2,580 48,698
Diageo Plc................................. United Kingdom 5,400 48,452
-----------
515,092
-----------
Distributors - 0.7%
Buhrmann NV................................ Netherlands 7,620 217,881
-----------
Food & Drug Retailing - 0.7%
Boots Co. Plc.............................. United Kingdom 4,000 30,444
Iceland Group Plc.......................... United Kingdom 16,355 68,982
Safeway Plc................................ United Kingdom 8,000 31,109
Tesco Plc.................................. United Kingdom 23,200 72,138
-----------
202,673
-----------
</TABLE>
186
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Perpetual International Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Country Shares Value
<S> <C> <C> <C>
COMMON STOCKS - continued
CONSUMER STAPLES - continued
Food Products - 0.2%
Express Dairies Plc.................... United Kingdom 27,000 $ 34,726
Northern Foods Plc..................... United Kingdom 8,900 16,025
Tate & Lyle Plc........................ United Kingdom 3,610 18,025
-----------
68,776
-----------
Paper & Forest Products - 0.8%
Sappi Ltd. ............................ United States 32,500 239,687
-----------
Personal Products - 1.1%
Body Shop International Plc............ United Kingdom 15,500 28,144
L'Oreal................................ France 296 256,310
Reckitt Benckiser Plc.................. United Kingdom 2,700 30,232
-----------
314,686
-----------
Tobacco - 1.3%
British America Tobacco Inds. Plc...... United Kingdom 12,175 81,241
PT HM Sampoerna........................ Indonesia 22,000 31,922
Tabacalera, Ser. A..................... Spain 17,056 262,000
-----------
375,163
-----------
ENERGY - 2.3%
Energy Equipment & Services - 1.2%
IHC Caland NV.......................... Netherlands 2,730 132,923
Petroleum Geo-Services................. Norway 12,890 220,079
-----------
353,002
-----------
Oil & Gas - 1.1%
Enterprise Oil Plc..................... United Kingdom 6,960 58,026
Petroleo Brasileiro SA, ADR
("Petrobras")......................... Brazil 1,640 49,547
Shell Transportation & Trading Co.
Plc................................... United Kingdom 29,250 244,084
-----------
351,657
-----------
FINANCIALS - 18.2%
Banks - 5.3%
Abbey Natl. Bank Plc................... United Kingdom 9,825 117,443
Akbank Turk Anonim Sirket.............. Turkey 26,000,000 201,156
Banco Popular Espanol SA............... Spain 8,310 257,047
Bank of Scotland....................... United Kingdom 12,000 114,118
Barclays Bank Plc...................... United Kingdom 3,449 85,743
Dah Sing Financial Group............... Hong Kong 16,031 64,572
Hypo Vereinsbank AG.................... Germany 610 39,403
Lloyds TSB Group Plc................... United Kingdom 14,500 136,905
Overseas Union Bank, Ltd. ............. Singapore 16,000 62,073
Public Bank Bhd........................ Malaysia 50,000 50,000
Royal Bank of Scotland Group Plc....... United Kingdom 4,840 80,997
</TABLE>
187
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Perpetual International Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Country Shares Value
<S> <C> <C> <C>
COMMON STOCKS - continued
FINANCIALS - continued
Banks - continued
Standard Chartered Bank................ United Kingdom 5,700 $ 70,981
Turkiye Garanti Bankasi SA............. Turkey 17,000,000 205,508
Uniao de Bancos Brasileiros SA, GDR
("Unibanco").......................... Brazil 1,400 40,250
United Overseas Bank................... Singapore 8,448 55,276
-----------
1,581,472
-----------
Diversified Financials - 9.8%
Aeon Credit Service Co., Ltd. ......... Hong Kong 148,400 49,971
Aiful Corp. ........................... Japan 3,450 317,996
Cattles Plc............................ United Kingdom 12,000 44,485
Dexia Ex Dexia Bel..................... Belgium 841 128,464
Fortis (B)............................. Belgium 4,383 127,542
Fortis (NL) NV......................... Netherlands 3,480 101,299
HSBC Holdings Plc...................... Hong Kong 6,375 72,987
Hutchison Whampoa, Ltd. ............... Hong Kong 14,000 175,999
ING Groep NV........................... Netherlands 3,973 268,546
Irish Life & Permanent Plc............. Ireland 13,210 111,797
Kokusai Securities Co., Ltd. .......... Japan 14,000 193,827
Lonrho Plc............................. United Kingdom 6,000 66,546
Orix Corp. ............................ Japan 2,800 412,987
Public Finance Bhd..................... Malaysia 32,000 33,853
Sulzer AG.............................. Switzerland 105 69,837
Taiwan Opportunities Fund.............. Taiwan 2,000 29,500
Tele Atlas NV.......................... Netherlands 7,450 108,822
Veba AG................................ Germany 4,235 204,179
Vivendi SA............................. France 4,673 412,449
-----------
2,931,086
-----------
Insurance - 2.0%
Aegon NV............................... Netherlands 5,671 201,784
Britannic Assurance Plc................ United Kingdom 2,550 38,102
Legal & General Group Plc.............. United Kingdom 5,000 11,689
Munchener Ruckvers..................... Germany 980 307,814
Prudential Corp. Plc................... United Kingdom 3,510 51,410
-----------
610,799
-----------
Real Estate - 1.1%
Amoy Properties, Ltd. ................. Hong Kong 50,000 33,353
Burford Holdings Plc................... United Kingdom 27,000 39,730
Chelsfield Plc......................... United Kingdom 4,000 19,489
Cheung Kong Holdings, Ltd. ............ Hong Kong 17,000 186,999
Land Securities Plc.................... United Kingdom 4,100 49,009
-----------
328,580
-----------
</TABLE>
188
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Perpetual International Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Country Shares Value
<S> <C> <C> <C>
COMMON STOCKS - continued
HEALTH CARE - 3.3%
Biotechnology - 0.4%
Cambridge Antibody Technology Group, Plc.... United Kingdom 600 $ 26,873
Celltech Group Plc, Class F................. United Kingdom 4,300 83,281
-----------
110,154
-----------
Health Care Equipment & Supplies - 0.3%
Nycomed Amersham Plc........................ United Kingdom 10,200 101,244
-----------
Machinery - 0.3%
Coflexip SA................................. France 775 93,966
-----------
Pharmaceuticals - 2.3%
British Biotech............................. United Kingdom 50,000 15,131
Elan Corp. Plc, ADR......................... Ireland 7,007 339,401
Sankyo Co. ................................. Japan 11,000 248,292
Scotia Holdings Plc......................... United Kingdom 6,960 13,533
Zeneca Group................................ United Kingdom 1,500 70,019
-----------
686,376
-----------
INDUSTRIALS - 13.1%
Aerospace & Defense - 0.7%
British Aerospace Plc....................... United Kingdom 9,500 59,223
Meggitt Plc................................. United Kingdom 14,122 37,821
Rolls-Royce Plc............................. United Kingdom 20,820 73,874
Singapore Tech Eng.......................... Singapore 20,000 29,415
-----------
200,333
-----------
Air Freight & Couriers - 1.0%
TNT Post Group NV........................... Netherlands 11,290 304,494
-----------
Airlines - 0.5%
British Airways Plc......................... United Kingdom 8,400 48,298
Lufthansa AG................................ Germany 3,796 87,738
-----------
136,036
-----------
Automobiles - 0.2%
Brilliance China Automotive................. United States 4,000 69,500
-----------
Building Products - 0.5%
Geberit International AG.................... Switzerland 481 160,697
-----------
Commercial Services & Supplies - 5.5%
Amadeus Global Travel....................... Spain 12,835 146,430
Atos SA..................................... France 1,232 115,267
Canon, Inc. ................................ Japan 9,000 447,858
Cap Gemini NV............................... France 864 152,187
ITG Group Plc............................... Ireland 10,055 105,307
Ricoh Co., Ltd. ............................ Japan 7,000 148,108
</TABLE>
189
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Perpetual International Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Country Shares Value
<S> <C> <C> <C>
COMMON STOCKS - continued
INDUSTRIALS - continued
Commercial Services & Supplies - continued
Securicor Plc............................... United Kingdom 20,115 $ 41,545
Telegate SA................................. Germany 1,270 130,947
Toppan Printing Co., Ltd. .................. Japan 33,000 348,956
----------
1,636,605
----------
Construction & Engineering - 0.0%
Mitsui Engineering & Shipbuilding........... Japan 3,000 2,856
----------
Electrical Equipment - 0.7%
Elexis AG................................... Germany 10,700 69,464
Entrelec Groupe SA.......................... France 2,570 131,880
----------
201,344
----------
Household Products - 0.1%
Grupo Carso SA de CV, ADR................... Mexico 3,500 24,535
----------
Industrial Conglomerates - 1.6%
Johnson Electric Holdings, Ltd. ............ Hong Kong 7,000 66,449
NatSteel Electronics, Ltd. ................. Singapore 7,000 21,482
Siemens AG.................................. Germany 1,870 282,076
Smiths Industries Plc....................... United Kingdom 2,728 35,499
Swire Pacific Ltd. ......................... Hong Kong 15,000 87,935
----------
493,441
----------
Machinery - 1.3%
Bodycote Intl. ............................. United Kingdom 17,000 55,947
Fuji Machine Manufacturing Co., Ltd. ....... Japan 2,300 120,739
Konecranes Intl. ........................... Finland 5,250 175,426
Larsen & Toubro, Ltd., GDR.................. India 1,100 11,935
TI Group Plc................................ United Kingdom 5,240 28,543
----------
392,590
----------
Marine - 0.3%
Associated British Ports Holdings Plc....... United Kingdom 9,005 44,351
Smith (H.W.) Group Plc...................... United Kingdom 6,260 37,888
----------
82,239
----------
Road & Rail - 0.2%
Railtrack Group Plc......................... United Kingdom 4,000 62,128
----------
Transportation Infrastructure - 0.5%
Autopistas Cesa............................. Spain 13,300 5,714
Autopistas del Mare Nostrum SA.............. Spain 1,551 20,730
Autopistas, Concesionaria Espanola SA....... Spain 13,300 115,674
Stagecoach Holdings Plc..................... United Kingdom 7,000 7,732
----------
149,850
----------
</TABLE>
190
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Perpetual International Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Country Shares Value
<S> <C> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - 19.5%
Communications Equipment - 6.8%
Datacraft Asia, Ltd. ..................... Singapore 4,160 $ 36,608
Enea Date Ab.............................. Sweden 1,800 12,245
Enea Date Ab.............................. Sweden 18,200 123,809
Ericsson LM Telephone..................... Sweden 52,149 1,031,746
Nokia Oyj................................. Finland 16,068 819,930
-----------
2,024,338
-----------
Computers & Peripherals - 2.5%
Compal Electronic, GDR.................... Taiwan 10,351 126,800
Computer & Technologies Holdings, Ltd. ... Hong Kong 30,000 30,595
Hon Hai Precision Industry Co., Ltd.,
GDR...................................... Taiwan 1,000 25,000
NEC Corp. ................................ Japan 16,000 502,144
Ritek Corp., GDR.......................... Taiwan 2,393 19,020
Systex Corp. ............................. United States 3,000 31,950
-----------
735,509
-----------
Electronic Equipment & Instruments - 6.6%
Cookson Group Plc......................... United Kingdom 42,000 140,128
ELMOS Semiconductor AG.................... Germany 5,067 256,386
Epcos AG.................................. Germany 1,743 173,876
Hirose Elec. ............................. Japan 200 31,120
Hitachi, Ltd. ............................ Japan 30,000 432,590
Kyocera Corp. ............................ Japan 2,500 423,873
Stonesoft Oyj............................. Finland 6,020 95,405
TDK Corp. ................................ Japan 3,000 430,894
-----------
1,984,272
-----------
Internet Software & Services - 0.3%
Himalaya.................................. France 3,600 99,671
-----------
Semiconductor Equipment & Products - 3.1%
Be Semiconductor I........................ Netherlands 6,000 93,656
Mirae Corp., ADR.......................... Korea 3,000 23,250
Rohm Co., Ltd. ........................... Japan 1,800 525,894
Samsung Electronics, Ltd., GDR, 144A...... Korea 180 35,190
Samsung Electronics, Ltd., GDR, 144A non-
voting shares............................ Korea 1,125 102,797
Winbond Electronics Corp., GDR............ Taiwan 5,550 159,563
-----------
940,350
-----------
Software - 0.2%
Singapore Computer........................ Singapore 30,000 64,968
-----------
</TABLE>
191
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Perpetual International Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Country Shares Value
<S> <C> <C> <C>
COMMON STOCKS - continued
MATERIALS - 5.2%
Chemicals - 1.7%
Asahi Chemical Industry Co., Ltd. ....... Japan 12,000 $ 84,822
Imperial Chemical Inds. Plc.............. United Kingdom 10,000 79,362
Shin Etsu Chemical Co., Ltd. ............ Japan 7,000 354,931
-----------
519,115
-----------
Construction Materials - 1.4%
CRH Plc. ................................ Ireland 11,891 214,559
Imerys SA................................ France 1,660 192,712
-----------
407,271
-----------
Containers & Packaging - 0.9%
Ifco Sys. ............................... Netherlands 5,060 134,779
Pechiney SA.............................. France 3,013 125,704
-----------
260,483
-----------
Metals & Mining - 0.9%
Corus Group.............................. United Kingdom 40,000 58,405
Johnson Matthey Plc...................... United Kingdom 2,000 28,144
Pohang Iron & Steel, Ltd., ADR........... Korea 3,700 88,800
Rio Tinto Plc............................ United Kingdom 5,625 91,921
-----------
267,270
-----------
Paper & Forest Products - 0.3%
Empresa Nacional de Celulosas SA......... Spain 5,720 93,381
-----------
TELECOMMUNICATION SERVICES - 8.3%
Diversified Telecommunication Services -
6.1%
Asia Satellite Telecommunications
Holdings, Ltd. ......................... Hong Kong 24,000 82,048
British Telecommunications Plc........... United Kingdom 5,500 71,070
Cable & Wireless Plc..................... United Kingdom 7,500 126,987
Global TeleSystems Group, Inc. .......... Germany 5,760 69,480
Indosat, ADR............................. Indonesia 30,000 35,304
Kingston Communication (Hull) Plc........ United Kingdom 1,480 14,556
Korea Telecom Corp. ..................... Korea 1,000 48,375
Mahanagar Telep Ni, GDR.................. India 2,000 20,000
Nexus Telecommunication.................. Israel 100,000 256,250
Nippon Telegraph & Telephone Corp. ...... Japan 32 425,239
Tele Norte Leste Participacoes SA, ADR... Brazil 2,683 63,386
Telecel-Comunicacoes Pessoais, SA........ Portugal 11,765 178,590
Telefonica SA............................ Spain 15,765 338,644
Telefonos de Mexico SA, ADR ("Telmex")... Mexico 1,640 93,685
-----------
1,823,614
-----------
</TABLE>
192
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Perpetual International Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Country Shares Value
<S> <C> <C> <C>
COMMON STOCKS - continued
TELECOMMUNICATION SERVICES - continued
Wireless Telecommunications Services - 2.2%
China Telecom (Hong Kong), Ltd. ........... Hong Kong 17,000 $ 149,926
Grupo Iusacell SA de CV New................ United States 3,900 60,937
Smartone Telecom........................... Bermuda 10,055 22,250
Tele Celular Sul Participacoes............. United States 600 27,150
Telemig Celular Participacoes SA, ADR...... Brazil 200 14,300
Telesp Celular Participacoes SA............ Brazil 500 22,438
Vodafone Airtouch Plc...................... United Kingdom 89,163 360,216
-----------
657,217
-----------
UTILITIES - 3.3%
Electric Utilities - 2.3%
Companhia Brasileira de Distr, ADR......... Brazil 1,200 38,550
Endesa SA.................................. Spain 9,160 177,437
National Power Plc......................... United Kingdom 8,000 50,961
Powergen Plc............................... United Kingdom 3,500 29,922
Scot & Southern Energy Plc................. United Kingdom 5,500 50,432
The Tokyo Elec. Pwr. Co., Inc. ............ Japan 13,000 316,715
United Utilities Plc....................... United Kingdom 2,976 29,449
-----------
693,466
-----------
Gas Utilities - 1.0%
BG Group Plc............................... United Kingdom 8,888 57,425
Gas Natural Sdg............................ Spain 14,000 251,277
-----------
308,702
-----------
Total Common Stocks (cost $25,060,560)... 27,437,599
-----------
PREFERRED STOCKS - 0.6%
CONSUMER DISCRETIONARY - 0.6%
Automobiles - 0.6%
Porsche AG (cost $146,158)................. Germany 70 190,463
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS - 3.4%
REPURCHASE AGREEMENTS - 3.4%
State Street Bank & Trust Co. 6.30%, dated
06/30/2000, maturing, 07/03/2000,
maturity value
$1,005,150 (cost $1,004,630) (4)......... United States 1,004,630 1,004,630
-----------
Total Investments - (cost $26,211,348) - 95.6%...................... 28,632,692
Other Assets and Liabilities - 4.4%................................. 1,316,703
-----------
Net Assets - 100.0%................................................. $29,949,395
-----------
</TABLE>
See Combined Notes to Schedules of Investments.
193
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Perpetual International Fund
Statement of Assets and Liabilities
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets
Identified cost of securities..................................... $25,206,718
Repurchase agreements, at amortized cost.......................... 1,004,630
--------------------------------------------------------------------------------
Total identified cost of investments.............................. 26,211,348
Net unrealized gains on securities................................ 2,421,344
--------------------------------------------------------------------------------
Market value of securities........................................ 28,632,692
Cash.............................................................. 26,382
Foreign currency, at value (cost $62,887)......................... 62,129
Receivable for securities sold.................................... 470,056
Dividends and interest receivable................................. 51,565
Unrealized gains on forward foreign currency exchange contracts... 75,306
Deferred organization expenses.................................... 6,135
--------------------------------------------------------------------------------
Total assets..................................................... 29,324,265
--------------------------------------------------------------------------------
Liabilities
Payable for securities purchased.................................. 51,625
Advisory fee payable.............................................. 2,373
Due to other related parties...................................... 237
Accrued expenses and other liabilities............................ 20,635
--------------------------------------------------------------------------------
Total liabilities................................................ 74,870
--------------------------------------------------------------------------------
Net assets......................................................... $29,249,395
--------------------------------------------------------------------------------
Net assets represented by
Paid-in capital................................................... $24,311,160
Undistributed net investment income............................... 47,167
Accumulated net realized gains on securities and foreign currency
related transactions............................................. 2,395,741
Net unrealized gains on securities and foreign currency related
transactions..................................................... 2,495,327
--------------------------------------------------------------------------------
Total net assets................................................... $29,249,395
--------------------------------------------------------------------------------
Shares outstanding................................................. 1,608,875
--------------------------------------------------------------------------------
Net asset value per share.......................................... $ 18.18
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
194
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Perpetual International Fund
Statement of Operations
Six Months Ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
<S> <C>
Investment income
Dividends (net of foreign withholding taxes of $30,483).......... $ 197,561
Interest......................................................... 32,938
-------------------------------------------------------------------------------
Total investment income........................................... 230,499
-------------------------------------------------------------------------------
Expenses
Advisory fee..................................................... 138,313
Administrative services fees..................................... 13,831
Transfer agent fee............................................... 128
Trustees' fees and expenses...................................... 280
Printing and postage expenses.................................... 6,752
Custodian fee.................................................... 17,624
Professional fees................................................ 6,799
Organization expenses............................................ 1,162
Other............................................................ 436
-------------------------------------------------------------------------------
Total expenses................................................... 185,325
Less: Expense reductions......................................... (1,993)
-------------------------------------------------------------------------------
Net expenses..................................................... 183,332
-------------------------------------------------------------------------------
Net investment income............................................ 47,167
-------------------------------------------------------------------------------
Net realized and unrealized gains or losses on securities and
foreign currency related transactions
Net realized gains or losses on:
Securities....................................................... 2,540,625
Foreign currency related transactions............................ (74,661)
-------------------------------------------------------------------------------
Net realized gains on securities and foreign currency related
transactions.................................................... 2,465,964
-------------------------------------------------------------------------------
Net change in unrealized losses on securities and foreign
currency related transactions................................... (2,430,629)
-------------------------------------------------------------------------------
Net realized and unrealized gains on securities and foreign
currency related transactions................................... 35,335
-------------------------------------------------------------------------------
Net increase in net assets resulting from operations............. $ 82,502
-------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
195
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Perpetual International Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months
Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
--------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income......................... $ 47,167 $ 22,312
Net realized gains on securities and foreign
currency related transactions................ 2,465,964 2,172,701
Net change in unrealized gains or losses on
securities and foreign currency related
transactions................................. (2,430,629) 4,273,273
--------------------------------------------------------------------------------
Net increase in net assets resulting from
operations................................... 82,502 6,468,286
--------------------------------------------------------------------------------
Distributions to shareholders from
Net realized gains............................ (2,238,337) (11,368)
--------------------------------------------------------------------------------
Total distributions to shareholders........... (2,238,337) (11,368)
--------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold..................... 4,771,400 7,703,706
Payment for shares redeemed................... (420,394) (1,177,344)
Net asset value of shares issued in
reinvestment of distributions................ 2,238,334 11,368
--------------------------------------------------------------------------------
Net increase in net assets resulting from
capital share transactions................... 6,589,340 6,537,730
--------------------------------------------------------------------------------
Total increase in net assets................. 4,433,505 12,994,648
Net assets
Beginning of period........................... 24,815,890 11,821,242
--------------------------------------------------------------------------------
End of period................................. $29,249,395 $24,815,890
================================================================================
Undistributed net investment income............ $ 47,167 $ 0
================================================================================
</TABLE>
See Combined Notes to Financial Statements.
196
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Small Cap Value Fund
Financial Highlights
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 2000 ---------------------------
(Unaudited) 1999 1998 (a) #
<S> <C> <C> <C>
Net asset value, beginning of
period $10.14 $ 9.58 $10.00
------ ------ ------
Income from investment
operations
Net investment income 0.06 0.13 0.15
Net realized and unrealized
gains or losses on securities 0.59 1.02 (0.45)
------ ------ ------
Total from investment operations 0.65 1.15 (0.30)
------ ------ ------
Distributions to shareholders
from
Net investment income 0 (0.13) (0.11)
Net realized gains 0 (0.46) (0.01)
------ ------ ------
Total distributions 0 (0.59) (0.12)
------ ------ ------
Net asset value, end of period $10.79 $10.14 $ 9.58
------ ------ ------
Total return* 6.41% 12.07% (2.86%)
Ratios and supplemental data
Net assets, end of period
(thousands) $7,231 $ 4,958 $ 2,282
Ratios to average net assets
Expenses** 1.03%+ 1.01% 1.02%+
Net investment income 1.31%+ 1.69% 2.49%+
Portfolio turnover rate 65% 65% 16%
</TABLE>
(a) For the period from May 1, 1998 (commencement of operations) to December
31, 1998.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the
period.
See Combined Notes to Financial Statements.
200
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Small Cap Value Fund
Schedule of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 84.6%
CONSUMER DISCRETIONARY - 9.7%
Auto Components - 0.5%
Arvin Industries, Inc. ..................................... 2,000 $ 34,750
----------
Household Durables - 3.1%
Ethan Allen Interiors, Inc. ................................ 1,200 28,800
Fossil, Inc.* .............................................. 4,100 79,694
Furniture Brands International, Inc.* ...................... 2,400 36,300
Industrie Natuzzi SpA, ADR ................................. 6,500 77,187
----------
221,981
----------
Media - 0.8%
Advanced Marketing Services, Inc. .......................... 3,000 55,313
----------
Multi-line Retail - 0.6%
Reebok International, Ltd.* ................................ 2,500 39,844
----------
Specialty Retail - 3.1%
Linens 'n Things, Inc.* .................................... 2,500 67,812
Pier 1 Imports, Inc. ....................................... 10,900 106,275
Ross Stores, Inc. .......................................... 3,100 52,894
----------
226,981
----------
Textiles & Apparel - 1.6%
Guess?, Inc.* .............................................. 4,100 57,400
Russell Corp. .............................................. 1,600 32,000
Wolverine World Wide, Inc. ................................. 3,000 29,625
----------
119,025
----------
CONSUMER STAPLES - 4.0%
Food & Drug Retailing - 1.0%
Whole Foods Market, Inc.* .................................. 1,800 74,363
----------
Food Products - 3.0%
Michael Foods, Inc. ........................................ 2,500 61,250
Monterey Pasta Co.* ........................................ 20,000 83,750
Smithfield Foods, Inc.* .................................... 2,500 70,156
----------
215,156
----------
ENERGY - 7.4%
Energy Equipment & Services - 3.8%
Cal Dive International, Inc.* .............................. 700 37,931
Hanover Compressor Co.* .................................... 2,400 91,200
Pride International, Inc.* ................................. 4,700 116,325
UTI Energy Corp.* .......................................... 800 32,100
----------
277,556
----------
</TABLE>
201
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Small Cap Value Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
ENERGY - continued
Oil & Gas - 3.6%
Cabot Oil & Gas Corp., Class A ............................. 2,300 $ 48,731
Newfield Exploration Co.* .................................. 1,500 58,687
Pennzoil-Quaker State Co. .................................. 3,800 45,838
Pogo Producing Co. ......................................... 900 19,913
Santa Fe Snyder Corp.* ..................................... 4,000 45,500
Stone Energy Corp.* ........................................ 700 41,825
----------
260,494
----------
FINANCIALS - 12.7%
Banks - 9.5%
Anchor Bancorp Wisconsin, Inc. ............................. 1,700 26,031
Astoria Financial Corp. .................................... 1,700 43,775
Banknorth Group, Inc. ...................................... 5,400 82,687
Britton & Koontz Capital Corp. ............................. 1,800 19,800
Centura Banks, Inc. ........................................ 1,400 47,513
City National Corp. ........................................ 1,360 47,260
Columbia Banking Systems, Inc.* ............................ 2,310 28,298
Commercial Bankshares, Inc. ................................ 1,874 33,264
Cullen/Frost Bankers, Inc. ................................. 2,500 65,781
Granite State Bankshares, Inc. ............................. 1,600 24,200
Harbor Florida Bancshares, Inc. ............................ 2,000 20,875
Independent Bank Corp. ..................................... 2,000 22,625
Independent Bankshares, Inc. ............................... 2,000 37,875
Interchange Financial Services Corp. ....................... 1,400 18,375
Mid-State Bancshares ....................................... 2,400 65,400
Washington Trust Bancorp, Inc. ............................. 1,200 17,700
Webster Financial Corp. .................................... 530 11,759
West Coast Bancorp, Inc. ................................... 3,650 36,500
Wilmington Trust Corp. ..................................... 900 38,475
----------
688,193
----------
Diversified Financials - 0.8%
McGrath Rentcorp ........................................... 2,500 42,500
Ulticom, Inc.* ............................................. 700 16,811
----------
59,311
----------
Real Estate - 2.4%
AMB Property Corp. REIT .................................... 2,300 52,468
Liberty Property Trust REIT ................................ 1,300 33,719
Prentiss Properties Trust REIT ............................. 1,400 33,600
SL Green Realty Corp. REIT ................................. 1,900 50,825
----------
170,612
----------
</TABLE>
202
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Small Cap Value Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
HEALTH CARE - 15.7%
Biotechnology - 0.2%
Charles River Laboratories International, Inc.* ............ 500 $ 11,094
----------
Health Care Equipment & Supplies - 6.2%
Alza Corp.* ................................................ 2,300 135,987
Beckman Coulter, Inc. ...................................... 1,000 58,375
CONMED Corp.* .............................................. 2,800 72,450
DENTSPLY International, Inc. ............................... 2,200 67,788
KV Pharmaceutical Co.* ..................................... 500 13,594
KV Pharmaceutical Co., Class A* ............................ 600 15,900
Sybron International Corp.* ................................ 4,200 83,212
----------
447,306
----------
Health Care Providers & Services - 2.8%
AmeriSource Health Corp., Class A* ......................... 6,534 202,554
----------
Pharmaceuticals - 6.5%
Alpharma, Inc., Class A..................................... 1,252 77,937
Barr Laboratories, Inc.* ................................... 1,500 67,219
Jones Pharma, Inc. ......................................... 800 31,950
Medicis Pharmaceutical Corp., Class A* ..................... 2,000 114,000
Shire Pharmaceuticals Group Plc, ADR* ...................... 1,100 57,062
Warner Chilcott Laboratories Plc, ADR....................... 2,700 60,075
Watson Pharmaceuticals, Inc.* .............................. 1,200 64,500
----------
472,743
----------
INDUSTRIALS - 8.7%
Building Products - 1.1%
American Woodmark Corp. .................................... 800 16,400
LSI Industries, Inc. ....................................... 4,000 60,750
----------
77,150
----------
Commercial Services & Supplies - 4.4%
Affiliated Computer Services, Inc., Class A* ............... 2,000 66,125
American Management Systems, Inc.* ......................... 2,500 82,070
Bowne & Co., Inc. .......................................... 3,500 35,219
CSG Systems International, Inc.* ........................... 1,900 106,519
Interim Services, Inc.* .................................... 1,600 28,400
----------
318,333
----------
Electrical Equipment - 0.4%
Baldor Electric Co. ........................................ 1,600 29,800
----------
Machinery - 2.8%
Applied Power, Inc., Class A................................ 1,700 56,950
Badger Meter, Inc. ......................................... 1,200 30,300
Idex Corp. ................................................. 1,000 31,562
</TABLE>
203
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Small Cap Value Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INDUSTRIALS - continued
Machinery - continued
Manitowoc Co., Inc. ........................................ 1,300 $ 34,775
Roper Industries, Inc. ..................................... 2,000 51,250
----------
204,837
----------
INFORMATION TECHNOLOGY - 17.3%
Communications Equipment - 2.1%
Apex, Inc.* ................................................ 1,000 43,750
Communications Systems, Inc. ............................... 2,100 32,025
Scientific Atlanta, Inc. ................................... 1,000 74,500
----------
150,275
----------
Computers & Peripherals - 2.6%
Cybex Computer Products Corp.* ............................. 1,300 55,900
Radisys Corp.* ............................................. 700 39,725
Zebra Technologies Corp., Class A* ......................... 2,100 93,056
----------
188,681
----------
Electronic Equipment & Instruments - 3.3%
Burr-Brown Corp.* .......................................... 1,400 121,363
Sanmina Corp.* ............................................. 1,400 119,700
----------
241,063
----------
Semiconductor Equipment & Products - 3.3%
Advanced Energy Industries, Inc.* .......................... 900 53,044
Helix Technology Corp. ..................................... 2,300 89,700
Kulicke & Soffa Industries, Inc.* .......................... 400 23,750
Lattice Semiconductor Corp.* ............................... 1,100 76,037
----------
242,531
----------
Software - 6.0%
Answerthink Consulting Group* .............................. 2,900 48,212
FileNet Corp.* ............................................. 1,700 31,238
Hyperion Solutions Corp.* .................................. 2,000 64,875
National Instruments Corp.* ................................ 1,100 47,988
Network Associates, Inc.* .................................. 3,500 71,312
Progress Software Corp.* ................................... 4,700 84,306
Remedy Corp.* .............................................. 1,500 83,625
----------
431,556
----------
MATERIALS - 4.6%
Chemicals - 3.0%
Cambrex Corp. .............................................. 1,600 72,000
Crompton Corp. ............................................. 4,100 50,225
</TABLE>
204
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Small Cap Value Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
MATERIALS - continued
Chemicals - continued
Donaldson, Inc. .................................... 2,700 $ 53,325
Olin Corp. ......................................... 2,600 42,900
----------
218,450
----------
Containers & Packaging - 0.9%
AptarGroup, Inc. ................................... 2,400 64,800
----------
Electronic Equipment & Instruments - 0.7%
Manufacturers Services, Ltd.* ...................... 2,300 47,294
----------
TELECOMMUNICATION SERVICES - 0.4%
Diversified Telecommunication Services - 0.4%
Hickory Tech Corp. ................................. 2,200 26,813
----------
UTILITIES - 4.1%
Electric Utilities - 1.3%
Cleco Corp. ........................................ 1,000 33,500
UtiliCorp United, Inc. ............................. 3,100 61,612
----------
95,112
----------
Gas Utilities - 2.8%
Chesapeake Utilities Corp. ......................... 2,400 42,600
Eastern Enterprises ................................ 1,000 63,000
MDU Resources Group, Inc. .......................... 4,400 95,150
----------
200,750
----------
Total Common Stocks (cost $5,645,646)............. 6,114,721
----------
<CAPTION>
Principal
Amount
<S> <C> <C>
CONVERTIBLE DEBENTURES - 1.2%
HEALTH CARE - 1.2%
Pharmaceuticals - 1.2%
Alpharma, Inc., 144A, 5.75%, 04/01/2005 (cost
$39,858)........................................... $ 40,000 87,550
----------
<CAPTION>
Shares
<S> <C> <C>
SHORT-TERM INVESTMENTS - 17.2%
MUTUAL FUND SHARES - 17.2%
Evergreen Select Money Market Fund
(cost $1,244,961).................................. 1,244,961 1,244,961
----------
Total Investments - (cost $6,930,465) - 103.0%................... 7,447,232
Other Assets and Liabilities - (3.0%)............................ (216,513)
----------
Net Assets - 100.0%.............................................. $7,230,719
----------
</TABLE>
See Combined Notes to Schedules of Investments.
205
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Small Cap Value Fund
Statement of Assets and Liabilities
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets
Identified cost of securities...................................... $6,930,465
Net unrealized gains on securities................................. 516,767
--------------------------------------------------------------------------------
Market value of securities......................................... 7,447,232
Cash............................................................... 37,636
Receivable for securities sold..................................... 19,273
Dividends and interest receivable.................................. 18,612
--------------------------------------------------------------------------------
Total assets..................................................... 7,522,753
--------------------------------------------------------------------------------
Liabilities
Payable for securities purchased................................... 267,222
Advisory fee payable............................................... 3,517
Due to other related parties....................................... 60
Accrued expenses and other liabilities............................. 21,235
--------------------------------------------------------------------------------
Total liabilities................................................ 292,034
--------------------------------------------------------------------------------
Net assets.......................................................... $7,230,719
--------------------------------------------------------------------------------
Net assets represented by
Paid-in capital.................................................... $6,628,215
Undistributed net investment income................................ 38,709
Accumulated net realized gains on securities....................... 47,028
Net unrealized gains on securities................................. 516,767
--------------------------------------------------------------------------------
Total net assets.................................................... $7,230,719
--------------------------------------------------------------------------------
Shares outstanding.................................................. 669,939
--------------------------------------------------------------------------------
Net asset value per share........................................... $ 10.79
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
206
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Small Cap Value Fund
Statement of Operations
Six Months Ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
<S> <C>
Investment income
Dividends (net of foreign withholding taxes of $1,439).............. $ 34,547
Interest............................................................ 33,628
-------------------------------------------------------------------------------
Total investment income.............................................. 68,175
-------------------------------------------------------------------------------
Expenses
Advisory fee........................................................ 25,657
Administrative services fees........................................ 2,926
Transfer agent fee.................................................. 54
Trustees' fees and expenses......................................... 56
Printing and postage expenses....................................... 1,920
Custodian fee....................................................... 1,425
Professional fees................................................... 5,058
Other............................................................... 590
-------------------------------------------------------------------------------
Total expenses.................................................... 37,686
Less: Expense reductions.......................................... (688)
Fee waivers................................................. (7,532)
-------------------------------------------------------------------------------
Net expenses...................................................... 29,466
-------------------------------------------------------------------------------
Net investment income............................................... 38,709
-------------------------------------------------------------------------------
Net realized and unrealized gains on securities
Net realized gains on securities.................................... 157,110
-------------------------------------------------------------------------------
Net change in unrealized gains on securities........................ 221,809
-------------------------------------------------------------------------------
Net realized and unrealized gains on securities..................... 378,919
-------------------------------------------------------------------------------
Net increase in net assets resulting from operations................ $417,628
-------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
207
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Small Cap Value Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
-------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income..................... $ 38,709 $ 61,088
Net realized gains on securities.......... 157,110 112,099
Net change in unrealized gains on
securities............................... 221,809 273,682
-------------------------------------------------------------------------------
Net increase in net assets resulting from
operations............................... 417,628 446,869
-------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income..................... 0 (61,654)
Net realized gains........................ 0 (200,093)
-------------------------------------------------------------------------------
Total distributions to shareholders....... 0 (261,747)
-------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold................. 1,967,679 3,503,809
Payment for shares redeemed............... (112,840) (1,274,153)
Net asset value of shares issued in
reinvestment of distributions............ 0 261,747
-------------------------------------------------------------------------------
Net increase in net assets resulting from
capital share transactions............... 1,854,839 2,491,403
-------------------------------------------------------------------------------
Total increase in net assets............. 2,272,467 2,676,525
Net assets
Beginning of period....................... 4,958,252 2,281,727
-------------------------------------------------------------------------------
End of period............................. $7,230,719 $ 4,958,252
-------------------------------------------------------------------------------
Undistributed net investment income........ $ 38,709 $ 0
-------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
208
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Period Ended
(Unaudited) December 31, 1999 (a)
<S> <C> <C>
Net asset value, beginning of period $ 11.84 $10.00
------- ------
Income from investment operations
Net investment income 0 0
Net realized and unrealized gains or
losses on securities 0.55 1.88
------- ------
Total from investment operations 0.55 1.88
------- ------
Distributions to shareholders from net
realized gains (0.31) (0.04)
------- ------
Net asset value, end of period $ 12.08 $11.84
------- ------
Total return* 4.27% 18.87%
Ratios and supplemental data
Net assets, end of period (thousands) $14,393 $3,059
Ratios to average net assets
Expenses** 1.02%+ 1.03%+
Net investment income (loss) (0.10%)+ (0.07%)+
Portfolio turnover rate 262% 104%
</TABLE>
(a) For the period from September 29, 1999 (commencement of operations) to De-
cember 31, 1999.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
See Combined Notes to Financial Statements.
212
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Schedule of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 98.6%
CONSUMER DISCRETIONARY - 14.4%
Auto Components - 1.2%
Superior Industries International, Inc. .................. 4,982 $ 128,286
Tenneco Automotive, Inc. ................................. 9,459 49,660
-----------
177,946
-----------
Distributors - 1.2%
Kent Electronics Corp. ................................... 1,948 58,075
SCP Pool Corp. ........................................... 4,777 112,247
-----------
170,322
-----------
Hotels, Restaurants & Leisure - 2.6%
Applebee's International, Inc. ........................... 5,522 167,386
CEC Entertainment, Inc.* ................................. 6,343 162,539
Pinnacle Entertainment, Inc. ............................. 2,197 42,704
-----------
372,629
-----------
Household Durables - 0.3%
Applica, Inc. ............................................ 3,805 43,044
-----------
Internet & Catalog Retail - 0.5%
Coldwater Creek, Inc.* ................................... 2,342 70,553
-----------
Media - 4.0%
Chris Craft Industries., Inc. ............................ 1,624 107,285
Emmis Broadcasting Corp., Class A* ....................... 1,672 69,179
Interpublic Group of Companies, Inc. ..................... 1,645 70,735
SBS Broadcasting SA* ..................................... 1,527 83,222
True North Communications, Inc. .......................... 3,265 143,660
VDI Media* ............................................... 13,660 95,620
-----------
569,701
-----------
Specialty Retail - 2.4%
Michaels Stores, Inc.* ................................... 3,956 181,235
Pacific Sunwear of California* ........................... 5,523 103,556
Whitehall Jewellers, Inc. ................................ 3,434 63,958
-----------
348,749
-----------
Textiles & Apparel - 1.4%
Guess?, Inc.* ............................................ 4,227 59,178
Kenneth Cole Productions, Inc., Class A* ................. 1,579 63,160
Wellman, Inc. ............................................ 5,140 83,204
-----------
205,542
-----------
Real Estate - 0.8%
Choice Hotels, Inc., REIT* ............................... 11,351 112,801
-----------
CONSUMER STAPLES - 0.7%
Food & Drug Retailing - 0.3%
Fleming Cos., Inc. ....................................... 3,345 43,694
-----------
</TABLE>
213
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
CONSUMER STAPLES - continued
Household Products - 0.4%
Sola International, Inc.* ................................ 11,857 $ 57,803
-----------
ENERGY - 6.8%
Energy Equipment & Services - 3.7%
Cal Dive International, Inc.* ............................ 1,576 85,400
Hanover Compressor Co. ................................... 6,180 234,840
Nabors Industries, Inc.* ................................. 5,163 214,587
-----------
534,827
-----------
Oil & Gas - 3.1%
Newfield Exploration Co.* ................................ 5,096 199,381
St. Mary Land & Exploration Co. .......................... 2,524 106,166
Stone Energy Corp.* ...................................... 2,395 143,101
-----------
448,648
-----------
FINANCIALS - 12.2%
Banks - 3.7%
Imperial Bancorp* ........................................ 13,291 206,841
Roslyn Bancorp, Inc. ..................................... 9,795 162,689
Silicon Valley Bancshares................................. 2,052 87,466
Staten Islands Bancorp, Inc. ............................. 4,129 72,774
-----------
529,770
-----------
Diversified Financials - 7.3%
Allied Capital Corp. ..................................... 3,048 51,816
American Capital Strategies, Ltd. ........................ 9,459 225,834
Dain Rauscher Corp. ...................................... 3,423 225,918
Eaton Vance Corp. ........................................ 1,818 84,083
Lancaster Colony Corp. ................................... 3,410 65,429
Southwest Securities Group, Inc. ......................... 2,480 92,380
Triarc Cos, Inc.* ........................................ 7,843 160,781
WFS Financial, Inc. ...................................... 8,614 148,591
-----------
1,054,832
-----------
Insurance - 0.4%
Scpie Holdings, Inc. ..................................... 3,030 62,115
-----------
Real Estate - 0.8%
LNR Property Corp., REIT.................................. 5,653 110,234
-----------
HEALTH CARE - 11.0%
Biotechnology - 5.4%
Affymetrix, Inc. ......................................... 502 82,893
Corixa Corp.* ............................................ 1,828 78,490
CuraGen Corp. ............................................ 1,574 59,910
Guilford Pharmaceuticals, Inc.* .......................... 3,735 56,258
</TABLE>
214
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
HEALTH CARE - continued
Biotechnology - continued
Human Genome Sciences, Inc. .............................. 1,069 $ 142,578
ImClone Systems, Inc. .................................... 590 45,098
Millennium Pharmaceuticals, Inc. ......................... 1,058 118,364
Myriad Genetics, Inc.* ................................... 316 46,793
SuperGen, Inc.* .......................................... 1,942 70,397
Transkaryotic Therapies, Inc.* ........................... 2,161 79,417
-----------
780,198
-----------
Electronic Equipment & Instruments - 0.7%
Novoste Corp.* ........................................... 1,567 95,587
-----------
Health Care Equipment & Supplies - 1.7%
ArthroCare Corp.* ........................................ 1,160 61,770
Computer Motion, Inc.* ................................... 7,859 64,837
Cytyc Corp. .............................................. 1,072 57,218
Haemonetics Corp. ........................................ 2,872 60,312
-----------
244,137
-----------
Health Care Providers & Services - 1.5%
First Health Group Corp.* ................................ 3,105 101,883
Hooper Holmes, Inc. ...................................... 13,873 110,984
-----------
212,867
-----------
Pharmaceuticals - 1.7%
Dura Pharmaceuticals, Inc.* .............................. 6,522 93,754
Jones Pharma, Inc. ....................................... 2,284 91,217
Medicis Pharmaceutical Corp., Class A .................... 1,005 57,285
-----------
242,256
-----------
INDUSTRIALS - 11.5%
Aerospace & Defense - 1.5%
PerkinElmer, Inc. ........................................ 2,272 150,236
Titan Corp. .............................................. 1,593 71,287
-----------
221,523
-----------
Air Freight & Couriers - 1.2%
Circle International Group, Inc. ......................... 6,665 167,458
-----------
Building Products - 0.5%
Aaon, Inc.* .............................................. 3,139 76,905
-----------
Commercial Services & Supplies - 1.2%
Insurance Auto Auctions, Inc.* ........................... 3,047 64,368
Startek, Inc.* ........................................... 874 44,028
United Stationers, Inc. .................................. 2,038 65,980
-----------
174,376
-----------
</TABLE>
215
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INDUSTRIALS - continued
Electrical Equipment - 1.0%
American Superconductor Corp. ............................ 1,853 $ 89,407
Cable Design Technologies Corp.* ......................... 1,627 54,505
-----------
143,912
-----------
Industrial Conglomerates - 0.6%
Pentair, Inc. ............................................ 2,255 80,052
-----------
Machinery - 1.7%
AGCO Corp. ............................................... 4,708 57,673
Maverick Tube Corp. ...................................... 2,028 59,066
Shaw Group, Inc. ......................................... 2,571 121,158
-----------
237,897
-----------
Marine - 0.3%
Overseas Shipholding Group, Inc. ......................... 1,908 46,985
-----------
Road & Rail - 3.5%
American Freightways Corp.* .............................. 3,681 53,375
Arkansas Best Corp.* ..................................... 13,561 134,762
Forward Air Corp. ........................................ 2,394 95,760
Genesee & Wyoming, Inc.* ................................. 5,707 95,592
Roadway Express, Inc. .................................... 5,335 125,039
-----------
504,528
-----------
INFORMATION TECHNOLOGY - 27.5%
Communications Equipment - 3.7%
Advanced Fibre Communications, Inc. ...................... 1,865 84,508
Allen Telecom, Inc. ...................................... 3,911 69,176
C-COR.net Corp.* ......................................... 3,669 99,063
Emulex Corp. ............................................. 1,133 74,424
Harmonic Lightwaves, Inc.* ............................... 456 11,286
Natural Microsystems Corp.* .............................. 982 110,413
Netro Corp. .............................................. 1,475 84,628
-----------
533,498
-----------
Computers & Peripherals - 1.3%
Pinnacle Systems, Inc.* .................................. 4,185 94,097
Radisys Corp.* ........................................... 1,715 97,326
-----------
191,423
-----------
Electrical Equipment - 1.1%
Anaren Microwave, Inc.* .................................. 1,237 162,337
-----------
Electronic Equipment & Instruments - 4.5%
Amkor Technology, Inc. ................................... 1,649 58,230
Amphenol Corp. ........................................... 1,342 88,824
Cree Research, Inc.* ..................................... 500 66,750
</TABLE>
216
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
INFORMATION TECHNOLOGY - continued
Electronic Equipment & Instruments - continued
II-VI, Inc.* ............................................. 1,913 $ 92,541
Kemet Corp.* ............................................. 2,301 57,669
Kopin Corp.* ............................................. 828 57,339
Macrovision Corp. ........................................ 1,044 66,734
Mettler Toledo International, Inc. ....................... 1,878 75,120
Three-Five Systems, Inc.* ................................ 1,388 81,892
-----------
645,099
-----------
Internet Software & Services - 1.1%
Broadvision, Inc.* ....................................... 1,963 99,745
Digital Islands, Inc. .................................... 1,046 50,862
-----------
150,607
-----------
Semiconductor Equipment & Products - 10.5%
ANADIGICS, Inc.* ......................................... 1,925 65,570
Applied Science & Tech, Inc.* ............................ 2,770 71,674
Credence Systems Corp. ................................... 1,066 58,830
Cypress Semiconductor Corp. .............................. 3,162 133,594
Elantec Semiconductor, Inc. .............................. 1,114 77,562
Gasonics International Corp.* ............................ 2,740 108,059
Helix Technology Corp. ................................... 3,565 139,035
Integrated Device Technology.............................. 2,524 151,124
International Rectifier Corp. ............................ 1,774 99,344
Lam Research Corp.* ...................................... 2,669 100,088
LTX Corp.* ............................................... 3,783 132,169
Mattson Technology, Inc.* ................................ 2,921 94,933
Photon Dynamics, Inc.* ................................... 930 69,459
S3, Inc.* ................................................ 4,116 60,711
Semtech Corp. ............................................ 1,082 82,756
Triquint Semiconductor, Inc. ............................. 714 68,321
-----------
1,513,229
-----------
Software - 5.3%
Aspect Communications, Inc. .............................. 1,456 57,239
Documentum, Inc.* ........................................ 876 78,293
I2 Technologies, Inc.* ................................... 739 77,052
Mercury Interactive Corp.* ............................... 1,975 191,081
Pegrine Systems, Inc.* ................................... 7,526 261,058
Tecnomatix Technologies, Ltd.* ........................... 3,490 47,551
Wind River Systems, Inc.* ................................ 1,461 55,336
-----------
767,610
-----------
MATERIALS - 7.6%
Chemicals - 3.2%
Chirex, Inc.* ............................................ 2,577 51,540
Georgia Gulf Corp. ....................................... 3,331 69,326
</TABLE>
217
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
MATERIALS - continued
Chemicals - continued
Lubrizol Corp. ........................................... 5,197 $ 109,137
Material Sciences Corp.* ................................. 4,875 48,750
Olin Corp. ............................................... 7,302 120,483
Spartech Corp. ........................................... 2,268 61,236
-----------
460,472
-----------
Construction Materials - 1.0%
Elcor Chemical Corp. ..................................... 2,503 57,569
Texas Industries, Inc. ................................... 2,828 81,659
-----------
139,228
-----------
Metals & Mining - 2.3%
Commercial Metals Co. .................................... 4,769 131,147
Freeport McMoran Copper & Gold, Inc., Class B* ........... 7,510 69,468
Lone Star Technologies, Inc.* ............................ 2,827 130,749
-----------
331,364
-----------
Paper & Forest Products - 1.1%
Glatfelter P. H. Co. ..................................... 6,173 62,887
Pope & Talbot, Inc. ...................................... 6,314 101,024
-----------
163,911
-----------
TELECOMMUNICATION SERVICES - 1.6%
Diversified Telecommunication Services - 1.6%
NEXTLINK Communications, Inc., Class A* .................. 2,366 89,760
Powertel, Inc. ........................................... 1,035 73,420
US LEC Corp., Class A* ................................... 3,955 67,235
-----------
230,415
-----------
UTILITIES - 5.3%
Electric Utilities - 1.6%
Bangor Hydro Electric Co. ................................ 3,709 86,930
CMP Group, Inc. .......................................... 2,333 68,386
El Paso Electric Co. ..................................... 6,763 75,661
-----------
230,977
-----------
Gas Utilities - 3.3%
CTG Resources, Inc. ...................................... 1,410 51,729
Equitable Resources, Inc. ................................ 1,763 85,065
MCN Energy Group, Inc. ................................... 5,053 108,008
New Jersey Resources Corp. ............................... 3,591 136,682
Western Gas Resources, Inc. .............................. 4,474 93,954
-----------
475,438
-----------
Water Utilities - 0.4%
Etown Corp. .............................................. 814 54,080
-----------
Total Common Stocks (cost $13,306,328).................. 14,191,579
-----------
</TABLE>
218
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
SHORT-TERM INVESTMENTS - 1.4%
REPURCHASE AGREEMENTS - 1.4%
Dresdner Bank AG
6.40%, dated 6/30/2000, due 7/3/2000, maturity value
$199,335
(cost $199,229) (5)................................... $199,229 $ 199,229
-----------
Total Investments - (cost $13,505,557) - 100.0%.................... 14,390,808
Other Assets and Liabilities - 0.0%................................ 2,401
-----------
Net Assets - 100.0%................................................ $14,393,209
-----------
</TABLE>
See Combined Notes to Schedules of Investments.
219
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Statement of Assets and Liabilities
June 30, 2000 (Unaudited)
-------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets
Identified cost of securities.................................... $13,306,328
Repurchase agreements, at amortized cost......................... 199,229
-------------------------------------------------------------------------------
Total identified cost of investments............................. 13,505,557
Net unrealized gains on securities............................... 885,251
-------------------------------------------------------------------------------
Market value of securities....................................... 14,390,808
Receivable for securities sold................................... 7,488
Receivable for Fund shares sold.................................. 139,875
Dividends and interest receivable................................ 3,255
Prepaid expenses and other assets................................ 595
-------------------------------------------------------------------------------
Total assets.................................................... 14,542,021
-------------------------------------------------------------------------------
Liabilities
Payable for securities purchased................................. 137,857
Advisory fee payable............................................. 7,359
Due to other related parties..................................... 116
Accrued expenses and other liabilities........................... 3,480
-------------------------------------------------------------------------------
Total liabilities............................................... 148,812
-------------------------------------------------------------------------------
Net assets........................................................ $14,393,209
-------------------------------------------------------------------------------
Net assets represented by
Paid-in capital.................................................. $14,122,983
Undistributed net investment loss................................ (4,688)
Accumulated net realized losses on securities.................... (610,337)
Net unrealized gains on securities............................... 885,251
-------------------------------------------------------------------------------
Total net assets.................................................. $14,393,209
-------------------------------------------------------------------------------
Shares outstanding................................................ 1,191,262
-------------------------------------------------------------------------------
Net asset value per share......................................... $ 12.08
-------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
220
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Statement of Operations
Six Months Ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
<S> <C>
Investment income
Dividends.......................................................... $ 20,513
Interest........................................................... 19,530
--------------------------------------------------------------------------------
Total investment income............................................. 40,043
--------------------------------------------------------------------------------
Expenses
Advisory fee....................................................... 41,165
Administrative services fees....................................... 4,459
Transfer agent fee................................................. 159
Trustees' fees and expenses........................................ 89
Printing and postage expenses...................................... 1,546
Custodian fee...................................................... 1,001
Professional fees.................................................. 5,185
Other.............................................................. 38
--------------------------------------------------------------------------------
Total expenses..................................................... 53,642
Less: Expense reductions........................................... (1,001)
Fee waivers ..................................................... (7,910)
--------------------------------------------------------------------------------
Net expenses....................................................... 44,731
--------------------------------------------------------------------------------
Net investment loss................................................ (4,688)
--------------------------------------------------------------------------------
Net realized and unrealized gains or losses on securities
Net realized losses on securities.................................. (580,886)
--------------------------------------------------------------------------------
Net change in unrealized gains on securities....................... 673,839
--------------------------------------------------------------------------------
Net realized and unrealized gains on securities.................... 92,953
--------------------------------------------------------------------------------
Net increase in net assets resulting from operations............... $ 88,265
--------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
221
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Special Equity Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999 (a)
----------------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment loss ......................... $ (4,688) $ (381)
Net realized gains or losses on
securities ................................. (580,886) 189,212
Net change in unrealized gains on
securities ................................. 673,839 211,412
----------------------------------------------------------------------------------------
Net increase in net assets resulting
from operations ........................ 88,265 400,243
----------------------------------------------------------------------------------------
Distributions to shareholders from
Net realized gains .......................... (210,459) (7,823)
----------------------------------------------------------------------------------------
Total distributions to shareholders ...... (210,459) (7,823)
----------------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold ................... 34,233,683 2,725,653
Payment for shares redeemed ................. (22,956,522) (63,713)
Net asset value of shares issued in
reinvestment of distributions .............. 179,559 4,323
----------------------------------------------------------------------------------------
Net increase in net assets resulting
from capital share transactions ........ 11,456,720 2,666,263
----------------------------------------------------------------------------------------
Total increase in net assets ............. 11,334,526 3,058,683
Net assets
Beginning of period ......................... 3,058,683 0
----------------------------------------------------------------------------------------
End of period ............................... $ 14,393,209 $3,058,683
----------------------------------------------------------------------------------------
Undistributed net investment loss ............ $ (4,688) $ 0
----------------------------------------------------------------------------------------
</TABLE>
(a) For the period from September 29, 1999 (commencement of operations) to
December 31, 1999.
See Combined Notes to Financial Statements.
222
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Strategic Income Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 2000 ----------------------------
(Unaudited) 1999 # 1998 # 1997 (a) #
<S> <C> <C> <C> <C>
Net asset value, beginning of
period $ 10.56 $ 10.39 $ 10.20 $10.00
------- ------- ------- ------
Income from investment
operations
Net investment income 0.45 0.73 0.64 0.32
Net realized and unrealized
gains or losses on securities
and foreign currency related
transactions (0.70) (0.56) (0.04) 0.21
------- ------- ------- ------
Total from investment operations (0.25) 0.17 0.60 0.53
------- ------- ------- ------
Distributions to shareholders
from
Net investment income (0.63) 0 (0.41) (0.31)
Net realized gains 0 0 0 (0.02)
------- ------- ------- ------
Total distributions (0.63) 0 (0.41) (0.33)
------- ------- ------- ------
Net asset value, end of period $ 9.68 $ 10.56 $ 10.39 $10.20
------- ------- ------- ------
Total return* (2.48%) 1.64% 5.91% 5.28%
Ratios and supplemental data
Net assets, end of period
(thousands) $17,533 $18,076 $11,182 $2,204
Ratios to average net assets
Expenses** 0.84%+ 0.84% 1.02% 1.02%+
Net investment income 8.80%+ 7.02% 6.05% 5.34%+
Portfolio turnover rate 132% 205% 231% 119%
</TABLE>
(a) For the period from March 6, 1997 (commencement of operations) to December
31, 1997.
* Total return does not reflect charges attributable to your insurance
company's separate account.
** Ratio of expenses to average net assets includes fee waivers and excludes
expense reductions.
+ Annualized.
# Net investment income is based on average shares outstanding during the pe-
riod.
See Combined Notes to Financial Statements.
226
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Strategic Income Fund
Schedule of Investments
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Credit Principal
Rating Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - 50.4%
CONSUMER DISCRETIONARY - 10.4%
Hotels, Restaurants & Leisure - 6.0%
Argosy Gaming Co., 10.75%, 06/01/2009.......... B $ 250,000 $ 259,688
Hollywood Casino Corp., 13.00%, 08/01/2006
144A.......................................... B 300,000 320,250
Isle of Capri Casinos, Inc., 8.75%,
04/15/2009.................................... B 350,000 325,500
Venetian Casino Resort Llc, 12.25%,
11/15/2004.................................... B- 150,000 152,250
-----------
1,057,688
-----------
Leisure Equipment & Products - 0.4%
Outboard Marine Corp., Ser. B, 10.75%,
06/01/2008 p.................................. B 150,000 75,750
-----------
Media - 2.9%
American Lawyer Media, Inc., Ser. B, 9.75%,
12/15/2007.................................... B 300,000 275,250
Carmike Cinemas, Inc., Ser. B, 9.375%,
02/01/2009 p.................................. B- 200,000 110,500
Loews Ciniplex Entertainment Corp., 8.875%,
08/01/2008 p.................................. B 250,000 118,750
-----------
504,500
-----------
Multi-line Retail - 1.1%
Ames Dept. Stores, Inc., 10.00%, 04/15/2006.... B+ 300,000 183,000
-----------
ENERGY - 5.2%
Energy Equipment & Services - 1.4%
Parker Drilling Co., Ser. D, 9.75%,
11/15/2006.................................... B+ 250,000 243,125
-----------
Oil & Gas - 3.8%
Chesapeake Energy Corp., Ser. B, 9.625%,
05/01/2005.................................... B 100,000 97,500
Petsec Energy, Inc., Ser. B, 9.50%,
06/15/2007.................................... D 300,000 150,000
Pioneer Natural Resources Co., 9.625%,
04/01/2010 p.................................. BB+ 400,000 413,703
-----------
661,203
-----------
HEALTH CARE - 3.5%
Health Care Providers & Services - 3.5%
Lifepoint Hosps. Holdings, Inc., Ser. B,
10.75%, 05/15/2009 p.......................... B- 300,000 310,500
Triad Hosps. Holdings, Inc., Ser. B, 11.00%,
05/15/2009.................................... B- 300,000 308,250
-----------
618,750
-----------
INDUSTRIALS - 6.2%
Commercial Services & Supplies - 3.7%
Allied Waste, Inc., Ser. B, 10.00%,
08/01/2009 p.................................. B+ 450,000 378,000
Century Communications Corp., 8.875%,
01/15/2007.................................... BB- 300,000 277,500
-----------
655,500
-----------
Machinery - 1.0%
Holley Performance Products, Inc., Ser. B,
12.25%, 09/15/2007............................ B+ 250,000 181,250
-----------
Road & Rail - 1.5%
Greyhound Lines, Inc., Ser. B, 11.50%,
04/15/2007 p.................................. CC 350,000 253,750
-----------
</TABLE>
227
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Strategic Income Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Credit Principal
Rating Amount Value
<S> <C> <C> <C>
CORPORATE BONDS - continued
INFORMATION TECHNOLOGY - 2.7%
Internet Software & Services - 2.7%
PSINet, Inc., 11.50%, 11/01/2008............... B- $ 500,000 $ 472,500
-----------
MATERIALS - 4.0%
Containers & Packaging - 4.0%
Four M Corp., Ser. B, 12.00%, 06/01/2006....... CCC 500,000 462,500
Riverwood Intl. Corp., 10.25%, 04/01/2006p .... B- 250,000 241,250
-----------
703,750
-----------
TELECOMMUNICATION SERVICES - 18.4%
Diversified Telecommunication Services - 11.0%
Allegiance Telecom, Inc., 12.875%, 05/15/2008.. B 250,000 271,875
Intermedia Communications, Inc.:
Ser. B, 8.60%, 06/01/2008..................... B 175,000 162,750
Ser. B, Step Bond, 0.00%, 07/15/2007+ ........ B 125,000 98,750
Level 3 Communications, Inc., 9.125%,
05/01/2008.................................... B 300,000 270,750
McLeod USA, Inc., 9.25%, 07/15/2007............ B+ 200,000 194,000
Nextel Communications, Inc., 9.375%,
11/15/2009.................................... B 275,000 264,000
Nextlink Communications, Inc., Step Bond,
0.00%, 06/01/2009+p .......................... B 300,000 186,000
Williams Communications Group, Inc., 10.875%,
10/01/2009.................................... BB- 250,000 245,625
Winstar Communications, Inc., Sr. Disc. Notes,
Step Bond, 0.00%,04/15/2005 144A+ ............ B- 500,000 235,000
-----------
1,928,750
-----------
Wireless Telecommunications Services - 7.4%
AMSC Acquisition Co., Inc., Ser. B, 12.25%,
04/01/2008.................................... NR 300,000 235,500
Crown Castle Intl. Corp., 10.75%, 08/01/2011... B 250,000 254,687
Telecorp PCS, Inc., Step Bond, 0.00%,
04/15/2009+p ................................. NA 150,000 98,625
Voicestream Wireless Corp., 10.375%,
11/15/2009.................................... B- 675,000 702,000
-----------
1,290,812
-----------
Total Corporate Bonds (cost $9,448,801)...... 8,830,328
-----------
FOREIGN BONDS-CORPORATE (PRINCIPAL AMOUNT
DENOMINATED IN CURRENCY INDICATED) - 9.7%
FINANCIALS - 5.2%
Banks - 3.8%
Nykredit:
4.00%, 01/01/2002, DKK......................... NA 5,250,000 652,917
5.00%, 10/01/2029, DKK......................... NA 17,000 1,849
-----------
654,766
-----------
Diversified Financials - 1.4%
PTC Intl. Fin., 11.25%, 12/01/2009, EUR........ NA 250,000 251,134
-----------
</TABLE>
228
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Strategic Income Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Credit Principal
Rating Amount Value
<S> <C> <C> <C>
FOREIGN BONDS-CORPORATE (PRINCIPAL AMOUNT
DENOMINATED IN CURRENCY INDICATED) - continued
TELECOMMUNICATION SERVICES - 2.5%
Diversified Telecommunication Services - 2.5%
Jazztel PLC, 13.25%, 12/15/2009, EUR........... CCC+ $ 500,000 $ 441,310
-----------
UTILITIES - 2.0%
Water Utilities - 2.0%
Azurix Corp., 10.375%, 02/15/2007, GBP......... BB 250,000 359,361
-----------
Total Foreign Bonds-Corporate (cost
$1,801,527)................................. 1,706,571
-----------
FOREIGN BONDS-GOVERNMENT (PRINCIPAL AMOUNT
DENOMINATED IN CURRENCY INDICATED) - 9.1%
Canada, 5.50%, 06/01/2009, CAD................. AAA 1,623,000 1,069,754
Germany, 4.50%, 03/15/2002, EUR................ AAA 550,000 521,252
-----------
Total Foreign Bonds-Government (cost
$1,559,737)................................. 1,591,006
-----------
U.S. TREASURY OBLIGATIONS - 18.6%
U.S. Treasury Bonds, 6.125%, 08/15/2029........ AAA 570,000 576,235
U.S. Treasury Notes:
4.50%, 01/31/2001............................. AAA 300,000 296,719
4.75%, 11/15/2008............................. AAA 480,000 436,050
5.50%, 12/31/2000 - 05/31/2003................ AAA 530,000 523,228
5.75%, 04/30/2003............................. AAA 945,000 930,825
6.00%, 08/15/2009............................. AAA 250,000 248,047
6.50%, 02/15/2010............................. AAA 240,000 248,250
-----------
Total U.S. Treasury Obligations (cost
$3,301,895)................................. 3,259,354
-----------
YANKEE OBLIGATIONS-CORPORATE - 4.2%
INDUSTRIALS - 1.1%
Media - 1.1%
United Pan-Europe Communication, Ser. B, Step
Bond, 0.00%, 08/01/2005+p .................... B 400,000 190,000
-----------
MATERIALS - 3.1%
Containers & Packaging - 1.4%
Grupo Indl. Durango S.A., 12.00%, 07/15/2001... BB- 250,000 253,125
-----------
Paper & Forest Products - 1.7%
Repap New Brunswick, Inc., 11.50%, 06/01/2004.. B- 300,000 303,000
-----------
Total Yankee Obligations-Corporate (cost
$758,822)................................... 746,125
-----------
YANKEE OBLIGATIONS-GOVERNMENT - 6.3%
Brazil, 8.00%, 04/15/2014...................... B+ 1,305,295 958,609
Venezuela, 7.875%, 12/18/2000.................. B 178,570 145,311
-----------
Total Yankee Obligations-Government (cost
$1,103,705)................................. 1,103,920
-----------
</TABLE>
229
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
Evergreen VA Strategic Income Fund
Schedule of Investments (continued)
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
WARRANTS - 0.1%
FINANCIALS - 0.0%
Diversified Financials - 0.0%
Ono Finance, Plc, expiring 5/31/2009 144A* ...... 500 $ 5,000
-----------
TELECOMMUNICATION SERVICES - 0.1%
Wireless Telecommunications Services - 0.1%
Motient Corp., expiring 4/1/2008* ............... 300 12,038
-----------
Total Warrants (cost $30,000).................. 17,038
-----------
<CAPTION>
Principal
Amount Value
<S> <C> <C>
SHORT-TERM INVESTMENTS - 15.4%
REPURCHASE AGREEMENTS - 6.7%
State Street Bank & Trust Co.
Dated 6/30/2000, 6.45%, due 7/3/2000, maturity
value $1,174,631 (cost $1,174,000) (6).......... $1,174,000 1,174,000
-----------
<CAPTION>
Shares Value
<S> <C> <C>
MUTUAL FUND SHARES - 8.7%
Navigator Prime Portfolio pp .................... 1,519,360 1,519,360
-----------
Total Short-Term Investments (cost
$2,693,360)................................... 2,693,360
-----------
Total Investments - (cost $20,697,847) - 113.8%................... 19,947,702
Other Assets and Liabilities - (13.8%)............................ (2,414,555)
-----------
Net Assets - 100.0%............................................... $17,533,147
-----------
</TABLE>
See Combined Notes to Schedules of Investments.
230
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
VA Strategic Income Fund
Statement of Assets and Liabilities
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets
Identified cost of securities..................................................................................... $19,523,847
Repurchase agreements, at amortized cost.......................................................................... 1,174,000
------------------------------------------------------------------------------------------------------------------------------------
Total identified cost of investments.............................................................................. 20,697,847
Net unrealized losses on securities............................................................................... (750,145)
------------------------------------------------------------------------------------------------------------------------------------
Market value of securities........................................................................................ 19,947,702
Cash.............................................................................................................. 64,499
Interest receivable............................................................................................... 353,121
Deferred organization expenses.................................................................................... 3,412
------------------------------------------------------------------------------------------------------------------------------------
Total assets...................................................................................................... 20,368,734
------------------------------------------------------------------------------------------------------------------------------------
Liabilities
Payable for securities purchased.................................................................................. 1,283,611
Payable for closed forward foreign currency exchange contracts.................................................... 27,158
Payable for securities on loan.................................................................................... 1,519,360
Advisory fee payable.............................................................................................. 607
Due to other related parties...................................................................................... 143
Accrued expenses and other liabilities............................................................................ 4,708
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities................................................................................................. 2,835,587
------------------------------------------------------------------------------------------------------------------------------------
Net assets......................................................................................................... $17,533,147
------------------------------------------------------------------------------------------------------------------------------------
Net assets represented by
Paid-in capital................................................................................................... $18,782,453
Undistributed net investment income............................................................................... 783,609
Accumulated net realized losses on securities and foreign
currency related transactions.................................................................................... (1,269,548)
Net unrealized losses on securities and foreign currency related
transactions..................................................................................................... (763,367)
------------------------------------------------------------------------------------------------------------------------------------
Total net assets................................................................................................... $17,533,147
------------------------------------------------------------------------------------------------------------------------------------
Shares outstanding................................................................................................. 1,810,662
------------------------------------------------------------------------------------------------------------------------------------
Net asset value per share.......................................................................................... $ 9.68
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
231
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
VA Strategic Income Fund
Statement of Operations
Six Months Ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
<S> <C>
Investment income
Interest......................................................... $ 853,943
-------------------------------------------------------------------------------
Total investment income........................................... 853,943
-------------------------------------------------------------------------------
Expenses
Advisory fee..................................................... 48,829
Administrative services fees..................................... 8,723
Transfer agent fee............................................... 289
Trustees' fees and expenses...................................... 175
Printing and postage expenses.................................... 4,200
Custodian fee.................................................... 4,626
Professional fees................................................ 5,654
Organization expenses............................................ 1,019
Other............................................................ 295
-------------------------------------------------------------------------------
Total expenses................................................... 73,810
Less: Expense reductions......................................... (1,609)
-------------------------------------------------------------------------------
Net expenses..................................................... 72,201
-------------------------------------------------------------------------------
Net investment income............................................ 781,742
===============================================================================
Net realized and unrealized losses on securities and foreign
currency related transactions
Net realized losses on:
Securities....................................................... (826,811)
Foreign currency related transactions............................ (15,742)
-------------------------------------------------------------------------------
Net realized losses on securities and foreign currency related
transactions.................................................... (842,553)
-------------------------------------------------------------------------------
Net change in unrealized losses on securities and foreign
currency related transactions................................... (376,002)
-------------------------------------------------------------------------------
Net realized and unrealized losses on securities and foreign
currency related transactions................................... (1,218,555)
-------------------------------------------------------------------------------
Net decrease in net assets resulting from operations............. $ (436,813)
===============================================================================
</TABLE>
See Combined Notes to Financial Statements.
232
<PAGE>
EVERGREEN VARIABLE ANNUITY TRUST
VA Strategic Income Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
---------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income....................... $ 781,742 $ 1,091,595
Net realized losses on securities and
foreign currency related transactions...... (842,553) (402,121)
Net change in unrealized losses on
securities and foreign currency related
transactions............................... (376,002) (357,337)
---------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations.................. (436,813) 332,137
---------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income....................... (1,060,384) 0
---------------------------------------------------------------------------------
Total distributions to shareholders......... (1,060,384) 0
---------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold................... 1,694,045 9,279,823
Payment for shares redeemed................. (1,800,000) (2,717,874)
Net asset value of shares issued in
reinvestment of distributions.............. 1,060,384 0
---------------------------------------------------------------------------------
Net increase in net assets resulting from
capital share transactions................. 954,429 6,561,949
---------------------------------------------------------------------------------
Total increase (decrease) in net assets.... (542,768) 6,894,086
Net assets
Beginning of period......................... 18,075,915 11,181,829
---------------------------------------------------------------------------------
End of period............................... $17,533,147 $18,075,915
---------------------------------------------------------------------------------
Undistributed net investment income.......... $ 783,609 $ 1,062,251
---------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
233
<PAGE>
Combined Notes to Schedules of Investments
Symbol Description
--------------------------------------------------------------------------------
* Non incoming producing.
. Security which has defaulted on payment of interest and/or principal.
144A Security that may be resold to "qualified institutional buyers" under
Rule 144A of the Securities Act of 1933. This security has been
determined to be liquid under guidelines established by the Board of
Trustees.
+ Security initially issued in zero coupon form which converts to coupon
form at a specified rate and date. An effective interest rate is applied
to recognize interest income daily for the bond. This rate is based on
total expected interest to be earned over the life of the bond which
consists of the aggregate coupon-interest payments and discount at
acquisition. The rate shown is the stated rate at the current period
end.
f All or a portion of the principal amount of this security was pledged to
cover initial margin requirements for open futures contracts.
p All or a portion of this security is on loan.
pp Represents investment of cash collateral received for securities on
loan.
/\ Credit ratings are unaudited and rated by Moody's Investors Service
where Standard and Poor's ratings are not available.
. At June 30, 2000, the Fund owned 2,000 shares of First Union Corp.
Common Stock at a cost of $69,505. During the period ended June 30,
2000, the Fund earned $960 in dividend income from this investment. This
investment in First Union Corp. enables the Fund to maintain a similar
weighting as that of the S&P 500 Index.
o The advisor of the Fund and the advisor of the money market fund are
each a subsidiary of First Union.
[_] Security issued in zero coupon form with no periodic interest payments
but is acquired at a discount that results in a current yield to
maturity. An effective interest rate is applied to recognize interest
income daily for the bond. This rate is based on total expected income
to be earned over the life of the bond from amortization of discount at
acquisition.
(1) The repurchase agreement is fully collateralized by $1,765,000 U.S.
Treasury Notes, 7.50% 11/15/2001, value including accrued interest is
$1,804,156.
(2) The repurchase agreement is fully collateralized by $1,215,000 FNMA,
6.25% 11/20/2001; value including accrued interest is $1,214,104.
(3) The repurchase agreement is fully collateralized by $1,075,000 FNMA,
6.25% 11/20/2001; value including accrued interest is $1,074,221.
(4) The repurchase agreement is fully collateralized by $1,024,850 FHLMC,
6.70% 01/03/2002; value including accrued interest is $1,025,377.
(5) The repurchase agreement is fully collateralized by $200,000 U.S.
Treasury Notes, 7.50% 11/15/2001; value including accrued interest is
$204,437.
(6) The repurchase agreement is fully collateralized by $1,190,000 FNMA,
5.94% 09/04/2001; value including accrued interest is $1,200,413.
Summary of Abbreviations
ADR American Depository Receipts
ADS American Depository Shares
CDD Canadian Dollar
DKK Danish Krone
EUR European Currency
FHLMA Federal Home Loan Mortgage Association
FNMA Federal National Mortgage Association
GDR Global Depository Receipts
GBP Great British Pound
REIT Real Estate Investment Trust
See Combined Notes to Financial Statements.
234
<PAGE>
Combined Notes to Financial Statements (Unaudited)
1. ORGANIZATION
The Evergreen Variable Annuity Trust (the "Trust") consists of Evergreen VA
Blue Chip Fund ("Blue Chip Fund"), Evergreen VA Capital Growth Fund ("Capital
Growth Fund"), (formerly Mentor VIP Capital Growth Portfolio), Evergreen VA Eq-
uity Index Fund ("Equity Index Fund"), Evergreen VA Fund ("Evergreen Fund"),
Evergreen VA Foundation Fund ("Foundation Fund"), Evergreen VA Global Leaders
Fund ("Global Leaders Fund"), Evergreen VA Growth Fund ("Growth Fund"), (for-
merly Mentor VIP Growth Portfolio), Evergreen VA Growth and Income Fund
("Growth and Income Fund"), Evergreen VA High Income Fund ("High Income Fund"),
(formerly Mentor VIP High Income Portfolio), Evergreen VA International Growth
Fund ("International Growth Fund"), Evergreen VA Masters Fund ("Masters Fund"),
Evergreen VA Omega Fund ("Omega Fund"), Evergreen VA Perpetual International
Fund ("Perpetual International Fund"), (formerly Mentor VIP Perpetual Interna-
tional Portfolio), Evergreen VA Small Cap Value Fund ("Small Cap Value Fund"),
Evergreen VA Special Equity Fund ("Special Equity Fund") and Evergreen VA Stra-
tegic Income Fund ("Strategic Income Fund"), (collectively, the "Funds"). Each
Fund is a diversified series of the Trust, a Delaware business trust originated
on December 23, 1997. The Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended ("the 1940
Act"). Shares of each Fund may only be purchased by insurance companies for the
purpose of funding variable annuity contracts or variable life insurance
policies.
Effective February 1, 2000, shares of funds in the Trust were substituted for
shares of funds in the Mentor Variable Investment Portfolio. The Mentor Vari-
able Investment Portfolio consisted of the following diversified series: Mentor
VIP Capital Growth Portfolio, Mentor VIP Growth Portfolio, Mentor VIP High In-
come Portfolio and Mentor VIP Perpetual International Portfolio (collectively,
the "Mentor Portfolios"). As a result of the substitution, shareholders of the
Mentor Portfolios became owners of that number of full and fractional shares of
the respective fund in the Trust having a net asset value equal to the net as-
set value of their shares immediately prior to the substitution of shares as
follows:
<TABLE>
<CAPTION>
Shares owned Shares received
-----------------------------------------------------------------------
<S> <C>
Mentor VIP Capital Growth
Portfolio Evergreen VA Capital Growth Fund
Mentor VIP Growth Portfolio Evergreen VA Growth Fund
Mentor VIP High Income
Portfolio Evergreen VA High Income Fund
Mentor VIP Perpetual
International Portfolio Evergreen VA Perpetual International Fund
</TABLE>
Since the Mentor Portfolios had substantially similar investment objectives and
policies of the respective funds in the Trust and the Mentor Portfolios con-
tributed the majority of the net assets and shareholders, the basis of account-
ing for assets and liabilities and the operating results of the Mentor Portfo-
lios and their performance are being carried forward.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently fol-
lowed by the Funds in the preparation of their financial statements. The poli-
cies are in conformity with generally accepted accounting principles, which re-
quire management to make estimates and assumptions that affect amounts reported
herein. Actual results could differ from these estimates.
A. Valuation of Securities
Securities traded on a national securities exchange or included on the Nasdaq
National Market System ("NMS") and other securities traded in the over-the-
counter market are valued at the last reported sales price on the exchange
where primarily traded. For international securities, the Funds value invest-
ments traded on an established exchange on the basis of the last sales price on
the exchange where primarily traded. Securities traded on an exchange or NMS
and other securities traded in the over-the-counter market for which there has
been no sale are valued at the mean between the last reported bid and asked
price.
235
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
Corporate bonds, U.S. government obligations and other fixed income securities,
and mortgage and other asset-backed securities are valued at prices provided by
an independent pricing service. In determining a price for normal
institutional-size transactions, the pricing service uses methods based on mar-
ket transactions for comparable securities and analysis of various relation-
ships between similar securities which are generally recognized by institu-
tional traders. Securities for which valuations are not available from an inde-
pendent pricing service may be valued by brokers which use prices provided by
market makers or estimates of market value obtained from yield data relating to
investments or securities with similar characteristics.
Securities for which valuations are not available (including restricted securi-
ties) are valued at fair value as determined in good faith according to proce-
dures established by the Board of Trustees.
Mutual fund shares held in a fund are valued at the net asset value of each mu-
tual fund.
Short-term investments with remaining maturities of 60 days or less are carried
at amortized cost, which approximates market value.
B. Repurchase Agreements
Each Fund may invest in repurchase agreements. Securities pledged as collateral
for repurchase agreements are held by the custodian on the Fund's behalf. Each
Fund monitors the adequacy of the collateral daily and will require the seller
to provide additional collateral in the event the market value of the securi-
ties pledged falls below the carrying value of the repurchase agreement, in-
cluding accrued interest. Each Fund will only enter into repurchase agreements
with banks and other financial institutions, which are deemed by the investment
advisor to be creditworthy pursuant to guidelines established by the Board of
Trustees.
Pursuant to an exemptive order issued by the Securities and Exchange Commis-
sion, the Funds may transfer uninvested cash balances into a joint trading ac-
count. These balances are invested in one or more repurchase agreements that
are fully collateralized by U.S. Treasury and or federal agency obligations.
236
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
C. Foreign Currency
The books and records of the Funds are maintained in United States (U.S.) dol-
lars. Foreign currency amounts are translated into U.S. dollars as follows:
market value of investment securities, other assets and liabilities at the
daily rate of exchange; purchases and sales of investment securities and income
and expenses at the rate of exchange prevailing on the respective dates of such
transactions. Net unrealized foreign exchange gains or losses resulting from
changes in foreign currency exchange rates are a component of net unrealized
gains or losses on securities and foreign currency related transactions. Net
realized foreign currency gains or losses on foreign currency related transac-
tions include: foreign currency gains or losses between trade date and settle-
ment date on investment securities transactions, foreign currency related
transactions and the difference between the amounts of interest and dividends
recorded on the books of the Funds and the amounts that are actually received.
The portion of foreign currency gains or losses related to fluctuations in ex-
change rates between the initial purchase trade date and subsequent sale trade
date is included in realized gains or losses on securities.
D. Futures Contracts
In order to gain exposure to or protect against changes in security values, the
Funds may buy and sell futures contracts.
The initial margin deposited with a broker when entering into a futures trans-
action is subsequently adjusted by daily payments or receipts ("variation mar-
gin") as the value of the contract changes. Such changes are recorded as
unrealized gains or losses. Realized gains or losses are recognized on closing
the contract.
Risks of entering into futures contracts include (i) the possibility of an il-
liquid market for the contract, (ii) the possibility that a change in the value
of the contract may not correlate with changes in the value of the underlying
instrument or index, and (iii) the credit risk that the other party will not
fulfill their obligations under the contract. Futures contracts also involve
elements of market risk in excess of the amount reflected in the Statements of
Assets and Liabilities.
E. Forward Foreign Currency Exchange Contracts
The Funds may enter into forward foreign currency exchange contracts ("forward
contracts") to settle portfolio purchases and sales of securities denominated
in a foreign currency and to hedge certain foreign currency assets or liabili-
ties. Forward contracts are recorded at the forward rate and marked-to-market
daily. Realized gains and losses arising from such transactions are included in
net realized gains or losses on foreign currency related transactions. The Fund
bears the risk of an unfavorable change in the foreign currency exchange rate
underlying the forward contract and is subject to the credit risk that the
other party will not fulfill their obligations under the contract. Forward con-
tracts involve elements of market risk in excess of the amount reflected in the
Statements of Assets and Liabilities.
F. Securities Lending
In order to generate income and to offset expenses, the Funds may lend portfo-
lio securities to brokers, dealers and other qualified financial organizations.
The Funds' investment adviser(s) will monitor the creditworthiness of such bor-
rowers. Loans of securities may not exceed 33 1/3% of a Fund's total assets and
will be collateralized by cash, letters of credit or U.S. Government securities
that are maintained at all times in an amount equal to at least 100% of the
current market value of the loaned securities, including accrued interest. The
Fund monitors the adequacy of the collateral daily and will require the bor-
rower to provide additional collateral in the event the value of the collateral
falls below 100% of the market value of the securities on loan. While such se-
curities are on loan, the borrower will pay a Fund any income accruing thereon,
and the Fund may invest any cash collateral received in portfolio securities,
thereby increasing its return. A Fund will have the right to call any such loan
and obtain the securities loaned at any time on five days' notice. Any gain or
loss in the market price of the loaned securities, which occurs during the term
of the loan, would affect a Fund and its investors. A Fund may pay fees in con-
nection with such loans.
237
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
G. Security Transactions and Investment Income
Securities transactions are accounted for no later than one business day after
the trade date. Realized gains and losses are computed on the identified cost
basis. Interest income is recorded on the accrual basis and includes accretion
of discounts and amortization of premiums. Dividend income is recorded on the
ex-dividend date, or in the case of some foreign securities, on the date there-
after when the Fund is made aware of the dividend. Foreign income and capital
gains realized on some foreign securities may be subject to foreign taxes,
which are accrued as applicable.
H. Federal Taxes
The Funds have qualified and intend to continue to qualify as regulated invest-
ment companies under the Internal Revenue Code of 1986, as amended (the
"Code"). Thus, the Funds will not incur any federal income tax liability since
they are expected to distribute all of their net investment company taxable in-
come and net capital gains, if any, to their shareholders. The Funds also in-
tend to avoid excise tax liability by making the required distributions under
the Code. Accordingly, no provision for federal taxes is required. To the ex-
tent that realized capital gains can be offset by capital loss carryforwards,
it is each Fund's policy not to distribute such gains.
I. Distributions
Distributions from net investment income and net realized capital gains for the
Funds, if any, are declared and paid at least annually. Distributions to share-
holders are recorded at the close of business on the ex-dividend date.
Income and capital gains distributions to shareholders are determined in accor-
dance with income tax regulations, which may differ from generally accepted ac-
counting principles.
J. Organization Expenses
For Capital Growth Fund, Evergreen Fund, Foundation Fund, Growth Fund, Global
Leaders Fund, Growth and Income Fund, Omega Fund, Perpetual International Fund
and Strategic Income Fund, organization expenses are amortized to operations
over a five-year period on a straight-line basis. In the event any of the ini-
tial shares of the Funds are redeemed by any holder during the five-year amor-
tization period, redemption proceeds will be reduced by any unamortized organi-
zation expenses in the same proportion as the number of initial shares being
redeemed bears to the number of initial shares outstanding at the time of the
redemption.
Expenses relating to the organization of Blue Chip Fund, Equity Index Fund,
High Income Fund, International Growth Fund, Masters Fund, Small Cap Value Fund
and Special Equity Fund have been reflected, in their entirety, in each Fund's
operating results in the first twelve months after the commencement of opera-
tions.
3. INVESTMENT ADVISORY AGREEMENT AND OTHER AFFILIATED TRANSACTIONS
Evergreen Investment Management Company ("EIMC"), an indirect wholly owned sub-
sidiary of First Union National Bank ("FUNB"), is the investment advisor for
Blue Chip Fund and is paid an advisory fee that is calculated and paid daily by
applying percentage rates, starting at 0.61% and declining to 0.26% per annum
as net assets increase, to the average daily net assets of the Fund.
Mentor Investment Advisors, LLC ("Mentor Advisors"), a subsidiary of First
Union Corp. ("First Union"), is the investment advisor for Capital Growth Fund
and is paid a management fee that is computed and paid daily at a rate of 0.80%
of the average daily net assets of the Fund.
EIM, an indirect wholly owned subsidiary of FUNB, is the investment advisor for
Equity Index Fund and is paid an advisory fee that is calculated and paid daily
at an annual rate of 0.32% of its average daily net assets. Prior to January 3,
2000, the management fee was computed daily at an annual rate of 0.40% of the
Fund's average daily net assets.
Evergreen Asset Management Corp. ("EAMC"), an indirect wholly owned subsidiary
of FUNB, is the investment advisor for Evergreen Fund and is paid a management
fee that is computed and paid daily at an annual
238
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
rate of 0.87% of the Fund's average daily net assets. Prior to January 3, 2000,
the management fee was computed daily at an annual rate of 0.95% of the Fund's
average daily net assets.
EAMC is the investment advisor for Foundation Fund and is paid a management fee
that is computed and paid daily at an annual rate of 0.745% of the Fund's aver-
age daily net assets. Prior to January 3, 2000, the management fee was computed
daily at an annual rate of 0.825% of the Fund's average daily net assets.
EAMC is the investment advisor for Global Leaders Fund and is paid a management
fee that is computed and paid daily at an annual rate of 0.87% of the Fund's
average daily net assets. Prior to January 3, 2000, the management fee was com-
puted daily at an annual rate of 0.95% of the Fund's average daily net assets.
Mentor Advisors is the investment advisor for Growth Fund and is paid a manage-
ment fee that is computed and paid daily at a rate of 0.70% of its average
daily net assets.
EAMC is the investment advisor for Growth and Income Fund and is paid a manage-
ment fee that is computed and paid daily at an annual rate of 0.87% of the
Fund's average daily net assets. Prior to January 3, 2000, the management fee
was computed daily at an annual rate of 0.95% of the Fund's average daily net
assets.
Mentor Advisors is the investment advisor for High Income Fund and is paid a
management fee that is computed and paid daily at a rate of 0.70% of the Fund's
average daily net assets.
EIMC is the investment advisor for International Growth Fund and is paid an ad-
visory fee that is calculated and paid daily. The investment advisory fee is
calculated by applying percentage rates, starting at 0.66% and declining to
0.36% per annum as net assets increase, to the Fund's average daily net assets.
Prior to January 3, 2000, the investment advisory fee was calculated by apply-
ing percentage rates, which started at 0.75% and declined to 0.45% as assets
increased to the Fund's average daily net assets.
FUNB is the investment advisor for Masters Fund and is paid an advisory fee
that is calculated and paid daily at a rate of 0.87% of the average daily net
assets of the Fund. Prior to January 3, 2000, the management fee was computed
at an annual rate of 0.95% of the Fund's average daily net assets. EAMC, MFS
Institutional Advisors, Inc., OppenheimerFunds, Inc. and Putnam Investment Man-
agement, Inc. are sub-advisors to the Masters Fund. Subject to the supervision
of FUNB, each sub-advisor manages a segment of the Master Fund's portfolio in
accordance with the Fund's investment objectives and policies. The Masters Fund
pays no direct fees to the sub-advisors for their services.
EIMC is the investment advisor for Omega Fund and is paid an advisory fee that
is calculated and paid daily at an annual rate of 0.52% of its average daily
net assets. Prior to January 3, 2000, the management fee was computed daily at
an annual rate of 0.60% of the Fund's average daily net assets.
Mentor Perpetual Advisors, LLC ("Mentor Perpetual"), an advisory firm organized
in 1995, is owned equally by Perpetual Plc and Mentor Advisors. Mentor Perpet-
ual serves as the investment advisor to the Perpetual International Fund and is
paid a management fee that is computed and paid daily at a rate of 1.00% of its
average daily net assets.
EAMC is the investment advisor for Small Cap Value Fund and is paid a manage-
ment fee that is computed and paid daily at an annual rate of 0.87% of the
Fund's average daily net assets. Prior to January 3, 2000, the management fee
was computed daily at an annual rate of 0.95% of the Fund's average daily net
assets.
Meridian Investment Company ("MIC"), an indirect, wholly owned subsidiary of
FUNB, is the investment advisor for Special Equity Fund and is paid an advisory
fee that is calculated and paid daily at an annual rate of 0.92% of its average
daily net assets. Prior to January 3, 2000, the management fee was computed at
an annual rate of 1.00% of the Fund's average daily net assets.
EIMC is the investment advisor for Strategic Income Fund and is paid an advi-
sory fee that is calculated and paid daily at an annual rate of 2.00% of the
Fund's gross investment income plus an amount which is determined by applying
percentage rates, starting at 0.36% and declining to 0.11% as net assets in-
crease, to the average daily net assets of the Fund. Prior to January 3, 2000,
the advisory fee was calculated at an annual rate of 2.00% of
239
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
the Fund's gross investment income plus an amount which was determined by ap-
plying percentage rates, starting at 0.45% and declining to 0.20% as net assets
increased, to the Fund's average daily net assets.
Lieber & Company also provides brokerage services for Evergreen Fund, Founda-
tion Fund, Global Leaders Fund, Growth and Income Fund, Masters Fund, and Small
Cap Value Fund with respect to substantially all security transactions executed
on the New York or American Stock Exchanges. For transactions executed during
the six months ended June 30, 2000, Evergreen Fund, Foundation Fund, Global
Leaders Fund, Growth and Income Fund, and Masters Fund incurred brokerage com-
missions of $5,243, $12,355, $8,429, $26,492 and $4,640, respectively, with
Lieber & Company.
For the six months ended June 30, 2000, the investment advisors voluntarily
waived and/or reimbursed the following amounts:
<TABLE>
<CAPTION>
Waived Reimbursed
------------------
<S> <C> <C>
Blue Chip Fund............................... $13,442 $ 0
Capital Growth Fund.......................... 20,914 0
Equity Index Fund............................ 36,839 320
Evergreen Fund............................... 19,182 0
Global Leaders Fund.......................... 27,301 0
Growth Fund.................................. 44,214 0
Growth and Income Fund....................... 28,349 0
High Income Fund............................. 2,749 0
International Growth Fund.................... 16,728 0
Masters Fund................................. 18,106 0
Small Cap Value Fund......................... 7,532 0
Special Equity Fund.......................... 7,910 0
</TABLE>
Evergreen Investment Services ("EIS"), an indirect, wholly owned subsidiary of
FUNB, is the administrator to the Funds. For its services, the Funds pay the
administrator a fee at the annual rate of 0.10% of each Fund's average daily
net assets. As administrator, EIS provides the Funds with facilities, equipment
and personnel. Prior to May 1, 2000, The BISYS Group, Inc. ("BISYS") served as
the sub-administrator to the Funds and provided the officers of the Funds. Of-
ficers of the Funds and affiliated Trustees receive no compensation directly
from the Funds.
The administrator and sub-administrator for the Funds were entitled to an an-
nual fee based on the average daily net assets of the funds administered by EIS
for which First Union or its investment advisory subsidiaries are also the in-
vestment advisors. The administration fee was calculated by applying percentage
rates, which started at 0.05% and declined to 0.01% per annum as net assets in-
creased, to the average daily net assets of each Fund. The sub-administration
fee was calculated by applying percentage rates, which started at 0.01% and de-
clined to 0.004% per annum as net assets increased, to the average daily net
assets of each Fund.
During the six months ended June 30, 2000, the Funds paid or accrued the fol-
lowing amounts to EIS for administration fees and sub-administration fees:
<TABLE>
<CAPTION>
Administration Sub-administration
Fee Fee
---------------------------------
<S> <C> <C>
Blue Chip Fund................ $ 902 $ 0
Capital Growth Fund........... 14,168 0
Equity Index Fund............. 6,762 4,646
Evergreen Fund................ 34,138 681
Foundation Fund............... 43,714 33,822
Global Leaders Fund........... 13,657 232
Growth Fund................... 9,460 0
Growth and Income Fund........ 40,194 809
High Income Fund.............. 2,573 64
International Growth Fund..... 1,619 1,037
Masters Fund.................. 6,822 4,946
Omega Fund.................... 15,500 8,350
Perpetual International Fund.. 13,831 0
Small Cap Value Fund.......... 2,874 52
Special Equity Fund........... 4,395 64
Strategic Income Fund......... 8,547 176
</TABLE>
Evergreen Service Company ("ESC"), an indirect, wholly-owned subsidiary of
First Union, is the transfer and dividend disbursing agent for the Funds.
240
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
4. CAPITAL SHARE TRANSACTIONS
The Funds have an unlimited number of shares of beneficial interest with a
$0.001 par value authorized. Transactions in shares of the Funds were as fol-
lows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 2000 December 31, 1999
------------------------------------------------------------------------------
Blue Chip Fund (a)
<S> <C> <C>
Shares sold................................ 539,525
Shares redeemed............................ 0
Shares issued in reinvestment of
distributions............................. 0
------------------------------------------------------------------------------
Net increase............................... 539,525
------------------------------------------------------------------------------
Capital Growth Fund
Shares sold................................ 201,039 744,068
Shares redeemed............................ (175,427) (265,656)
Shares issued in reinvestment of
distributions............................. 64,486 5,444
------------------------------------------------------------------------------
Net increase............................... 90,098 483,856
------------------------------------------------------------------------------
Equity Index Fund (b)
Shares sold................................ 857,039 1,626,422
Shares redeemed............................ (810) (1,117)
Shares issued in reinvestment of
distributions............................. 1,987 1,919
------------------------------------------------------------------------------
Net increase............................... 858,216 1,627,224
------------------------------------------------------------------------------
Evergreen Fund
Shares sold................................ 469,132 1,086,105
Shares redeemed............................ (141,933) (380,136)
Shares issued in reinvestment of
distributions............................. 66,170 331,321
------------------------------------------------------------------------------
Net increase............................... 393,369 1,037,290
------------------------------------------------------------------------------
Foundation Fund
Shares sold................................ 2,225,418 3,888,229
Shares redeemed............................ (143,201) (210,326)
Shares issued in reinvestment of
distributions............................. 54,065 177,859
------------------------------------------------------------------------------
Net increase............................... 2,136,282 3,855,762
------------------------------------------------------------------------------
Global Leaders Fund
Shares sold................................ 1,200,063 713,152
Shares redeemed............................ (223,068) (143,281)
Shares issued in reinvestment of
distributions............................. 0 5,490
------------------------------------------------------------------------------
Net increase............................... 976,995 575,361
------------------------------------------------------------------------------
</TABLE>
(a) For the period from April 28, 2000 (commencement of operations) to June 30,
2000.
(b) For the period from September 29, 1999 (commencement of operations) to De-
cember 31, 1999.
241
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 2000 December 31, 1999
------------------------------------------------------------------------------
Growth Fund
<S> <C> <C>
Shares sold................................ 164,043 400,486
Shares redeemed............................ (68,037) (221,726)
Shares issued in reinvestment of
distributions............................. 0 1,634
------------------------------------------------------------------------------
Net increase............................... 96,006 180,394
------------------------------------------------------------------------------
Growth and Income Fund
Shares sold................................ 314,067 959,190
Shares redeemed............................ (134,040) (300,975)
Shares issued in reinvestment of
distributions............................. 95,414 272,834
------------------------------------------------------------------------------
Net increase............................... 275,441 931,049
------------------------------------------------------------------------------
High Income Fund (a)
Shares sold................................ 430 517,952
Shares redeemed............................ (245) (291)
Shares issued in reinvestment of
distributions............................. 0 519
------------------------------------------------------------------------------
Net increase............................... 185 518,180
------------------------------------------------------------------------------
International Growth Fund
Shares sold................................ 277,858 166,805
Shares redeemed............................ (2,984) (27,055)
Shares issued in reinvestment of
distributions............................. 11,433 5,974
------------------------------------------------------------------------------
Net increase............................... 286,307 145,724
------------------------------------------------------------------------------
Masters Fund (b)
Shares sold................................ 811,187 1,508,534
Shares redeemed............................ (44) (29,082)
Shares issued in reinvestment of
distributions............................. 54,688 21,338
------------------------------------------------------------------------------
Net increase............................... 865,831 1,500,790
------------------------------------------------------------------------------
Omega Fund
Shares sold................................ 2,009,078 939,320
Shares redeemed............................ (8,896) (27,094)
Shares issued in reinvestment of
distributions............................. 61,507 0
------------------------------------------------------------------------------
Net increase............................... 2,061,689 912,226
------------------------------------------------------------------------------
Perpetual International Fund
Shares sold................................ 248,086 497,308
Shares redeemed............................ (23,192) (75,708)
Shares issued in reinvestment of
distributions............................. 117,621 694
------------------------------------------------------------------------------
Net increase............................... 342,515 422,294
------------------------------------------------------------------------------
</TABLE>
(a) For the period from June 30, 1999 (commencement of operations) to December
31, 1999.
(b) For the period from January 29, 1999 (commencement of operations) to Decem-
ber 31, 1999.
242
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 2000 December 31, 1999
------------------------------------------------------------------------------
Small Cap Value Fund
<S> <C> <C>
Shares sold................................ 191,907 352,514
Shares redeemed............................ (11,143) (127,570)
Shares issued in reinvestment of
distributions............................. 0 26,058
------------------------------------------------------------------------------
Net increase............................... 180,764 251,002
------------------------------------------------------------------------------
Special Equity Fund (a)
Shares sold................................ 2,716,887 263,419
Shares redeemed............................ (1,797,164) (5,564)
Shares issued in reinvestment of
distributions............................. 13,301 383
------------------------------------------------------------------------------
Net increase............................... 933,024 258,238
------------------------------------------------------------------------------
Strategic Income Fund
Shares sold................................ 169,845 895,646
Shares redeemed............................ (178,538) (260,018)
Shares issued in reinvestment of
distributions............................. 107,435 0
------------------------------------------------------------------------------
Net increase............................... 98,742 635,628
------------------------------------------------------------------------------
</TABLE>
(a) For the period from September 29, 1999 (commencement of operations) to De-
cember 31, 1999.
243
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
5. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities (excluding
short-term securities) were as follows for the six months ended June 30, 2000:
<TABLE>
<CAPTION>
Cost of Purchases Proceeds from Sales
-----------------------------------------------
U.S. Non-U.S. U.S. Non-U.S.
Government Government Government Government
<S> <C> <C> <C> <C>
-----------------------------------------------
Blue Chip Fund....... $ 0 $ 5,955,766 $ 0 $ 987,439
Capital Growth Fund.. 426,165 10,215,516 457,728 9,898,042
Equity Index Fund.... 0 9,661,618 0 280,639
Evergreen Fund....... 0 42,870,153 0 40,617,771
Foundation Fund...... 19,873,078 76,998,958 5,925,710 64,168,967
Global Leaders Fund.. 0 16,332,966 0 3,386,982
Growth Fund.......... 0 14,041,183 0 12,367,577
Growth and Income
Fund............... 22,183,206 0 20,202,341 0
High Income Fund..... 0 3,240,936 0 3,369,898
International Growth
Fund............... 0 6,584,495 0 3,741,910
Masters Fund......... 0 18,591,200 0 9,428,866
Omega Fund........... 0 73,154,237 0 30,154,615
Perpetual
International Fund. 0 22,025,281 0 17,809,285
Small Cap Value Fund. 0 4,358,691 0 3,188,713
Special Equity Fund.. 0 31,958,035 0 20,637,598
Strategic Income
Fund............... 5,577,110 17,419,031 7,858,054 13,942,676
</TABLE>
The Strategic Income Fund loaned securities during the six months ended June
30, 2000 to certain brokers who paid the Fund a negotiated lenders' fee. These
fees are included in interest income. At June 30, 2000, the value of securities
on loan and the value of collateral (including accrued interest) amounted to
$1,492,082 and $1,519,360, respectively. During the six months ended June 30,
2000, the Strategic Income Fund earned $3,947 in income from securities lend-
ing.
At June 30, 2000, the International Growth Fund had forward foreign exchange
contracts outstanding as follows:
Forward Foreign Currency Exchange Contracts to Sell:
<TABLE>
<CAPTION>
Exchange Contracts to U.S. Value In exchange Unrealized
Date Deliver at June 30, 2000 For U.S. $ Loss
------------------------------------------------------------------
<S> <C> <C> <C> <C>
8/14/2000 Canadian Dollar $160,806 $160,000 $806
</TABLE>
At June 30, 2000, the Perpetual International Fund had forward foreign exchange
contracts outstanding as follows:
Forward Foreign Currency Exchange Contracts to Sell:
<TABLE>
<CAPTION>
Exchange Contracts to U.S. Value In exchange Unrealized
Date Deliver at June 30, 2000 For U.S. $ Gain
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
1/29/2001 Japanese Yen $1,947,514 $2,000,000 $52,486
1/29/2001 Japanese Yen 1,377,180 1,400,000 22,820
-------
$75,306
=======
</TABLE>
At June 30, 2000, the Equity Index Fund had open futures contracts outstanding
as follows:
<TABLE>
<CAPTION>
Initial
Contract Value at Unrealized
Expiration Contracts Amount June 30, 2000 Loss
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
September
2000 1000 S&P 500 Index $1,487,750 $1,468,072 $(19,678)
</TABLE>
Capital losses incurred after October 31, 1999 within a Fund's fiscal year are
deemed to arise on the first business day of the Fund's following fiscal year.
For the fiscal year ended December 31, 1999, International Growth, Small Cap
Value and Strategic Income Fund incurred and elected to defer $381, $110,166
and $59,756, respectively.
244
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
6. EXPENSE OFFSET ARRANGEMENT
The Funds have entered into expense offset arrangements with ESC and their cus-
todian whereby credits realized as a result of uninvested cash balances were
used to reduce a portion of each Fund's related expenses. The assets deposited
with ESC and the custodian under these expense offset arrangements could have
been invested in income-producing assets. The Funds have also entered into
brokerage/service arrangements with specific brokers who paid a portion of the
Funds' expenses. The amount of expense reductions received by each Fund and the
impact on each Fund's expense ratio represented as a percentage of its average
daily net assets were as follows:
<TABLE>
<CAPTION>
% of
Expense Total Average
Offset Brokerage Expense Net
Arrangements Transactions Reductions Assets
--------------------------------------------
<S> <C> <C> <C> <C>
Blue Chip Fund... $ 112 $ 0 $ 112 0.01%
Capital Growth
Fund............ 663 0 663 0.00%
Equity Index
Fund............ 1,217 0 1,217 0.01%
Evergreen Fund... 2,565 7,144 9,709 0.03%
Foundation Fund.. 8,485 9,900 18,385 0.02%
Global Leaders
Fund............ 2,839 0 2,839 0.02%
Growth Fund...... 658 0 658 0.01%
Growth and Income
Fund............ 2,830 100 2,930 0.01%
High Income
Fund............ 312 0 312 0.01%
International
Growth Fund..... 805 0 805 0.03%
Masters Fund..... 818 0 818 0.01%
Omega Fund....... 1,368 832 2,200 0.01%
Perpetual
International
Fund............ 1,993 0 1,993 0.01%
Small Cap Value
Fund............ 688 0 688 0.02%
Special Equity
Fund............ 1,001 0 1,001 0.02%
Strategic Income
Fund............ 1,609 0 1,609 0.02%
</TABLE>
7. DEFERRED TRUSTEES' FEES
Each Independent Trustee of the Funds may defer any or all compensation related
to performance of their duties as Trustees. The Trustees' deferred balances are
allocated to deferral accounts, which are included in the accrued expenses for
the Funds. The investment performance of the deferral accounts are based on the
investment performance of certain Evergreen Funds. Any gains earned or losses
incurred in the deferral accounts are reported in the Fund's Trustees' fees and
expenses. At the election of the Trustees, the deferral account will be paid
either in one lump sum or in quarterly installments for up to ten years.
8. FINANCING AGREEMENT
On July 27, 1999, all of the Evergreen Funds and a group of banks (the "Lend-
ers") entered into a credit agreement. Each series of the Trust is a party to
this agreement. Under this agreement, the Lenders provided an unsecured revolv-
ing credit commitment in the aggregate amount of $1.050 billion. The credit fa-
cility is allocated, under the terms of the financing agreement, among the
Lenders. The credit facility is accessed by the Funds for temporary of emer-
gency purposes to fund the redemption of their shares or a general working cap-
ital as permitted by each Fund's borrowing restrictions. Borrowings under this
facility bear interest at 0.75% per annum above the Federal Funds rate (1.50%
per annum above the Federal Funds rate during the period from and including De-
cember 1, 1999 through and including January 31, 2000). A commitment fee of
0.10% per annum is incurred on the average daily unused portion of the revolv-
ing credit commitment. The commitment fee is allocated to all funds. For its
assistance in arranging this financing agreement, First Union Capital Markets
Corp. is paid a one-time arrangement fee of $250,000. State Street served as
paying agent for the funds and as paying agent is entitled to a fee of $20,000
per annum which is allocated to all the funds.
During the six months ended June 30, 2000, the Funds had no borrowings pursuant
to this line of credit.
245
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
9. CONCENTRATION OF RISK
The Funds may invest a substantial portion of its assets in an industry or sec-
tor and, therefore, may be more affected by changes in that industry or sector
than would be a comparable mutual fund that is not heavily weighed in any in-
dustry or sector.
246
<PAGE>
Variable Annuities
----------------------------
NOT May lose value
FDIC
INSURED No bank guarantee
----------------------------
Evergreen Investment Services,Inc.
58913 547189 8/00
