<PAGE>
Wanger Advisors Trust 1997 Semi-Annual Report
[SQUIRREL WANGER 97 LOGO]
<PAGE>
Wanger Advisors Trust
1997 Semi-Annual Report
Contents
1 Squirrel Chatter
3 Funds at a Glance
4 Performance Review
Wanger U.S. Small Cap
6 Performance Review
Wanger International
Small Cap
8 Statement of Investments
Wanger U.S. Small Cap
12 Statement of Investments
Wanger International
Small Cap
16 Portfolio Diversification
Wanger International
Small Cap
17 Statements of Assets
and Liabilities
18 Statements of Operations
19 Statements of Changes in
Net Assets
20 Financial Highlights
Wanger U.S. Small Cap
21 Financial Highlights
Wanger International
Small Cap
22 Notes to Financial Statements
Wanger Asset Management, L.P.,
("WAM") is one of the leading
global small-cap equity managers
in the U.S. with 27 years of small-cap
investment experience. WAM
manages over $6 billion in equities
and is the investment adviser to
Wanger U.S. Small Cap, Wanger
International Small Cap, Acorn Fund,
Acorn International and Acorn USA.
WAM uses a unique style of catch-
ing trends with small, attractively-
priced niche companies. For
more complete information about
our funds including the Acorn
Funds, fees and expenses, call
WAM Brokerage Services, L.L.C.,
distributor, at 1-800-5WANGER for a
prospectus. Read it carefully
before you invest or send money.
[SQUIRREL WANGER 97 LOGO]
<PAGE>
Wanger Advisors Trust 1997 Semi-Annual Report
- --------------------------------------------------------------------------------
[LOGO] Squirrel Chatter
Mr. Wanger identified the investment concept of "downstream technology" in 1970,
all the while wondering whether the idea had already run its course. 27 years
later, he defined the idea for investors in his book, A Zebra in Lion Country:
"Going downstream - investing in the businesses that will benefit from new
technology rather than in the technology companies themselves - is often the
smarter strategy."
We thought our readers would find this excerpt from A Zebra in Lion Country
interesting, as it shows how Mr. Wanger's 27-year-old investment philosophy
still applies today.
The Users, Not the Makers
I seldom own the companies that develop the new technologies, however - the
makers of the computers and the semiconductor chips that go into them.
Semiconductors are what really make computers, cellular phones, fax machines,
and much else possible. But Motorola and Intel have never been in our portfolio.
Intel and Motorola have done well, but other semiconductor makers, such as
Fairchild, failed at the game, and anyway, Intel's and Motorola's customers have
made more money than they have. New products are dangerous, especially in the
computer field, where obsolescence comes fast and technological breakthroughs
bring price slashing every year.
What I have always looked for instead are the downstream users of new
technologies. I've bought the stocks of companies that buy, use, and exploit the
computers and electronics to reduce costs, revitalize their businesses, and add
functionality to their products. Even new industries emerge as people figure
out ways to use these devices. (And some industries and enterprises can be made
obsolete. I believe that the New York Stock Exchange, since we no longer need a
hub to create a trading network, is an anachronism that is taking a very long
time to die.)
I may never have owned semiconductor companies, but I've made a
considerable amount of money in cellular phone companies - LIN Broadcasting,
Mobile Communications, and Telephone & Data Systems - that use the chips. I
didn't buy VCR makers, but I have owned companies like Electronic Arts and
Sierra On-line, which make those video games that keep kids away from useful
activities. Television is also dependent on semiconductors, but broadcasting
stations have made more profit than the entire semiconductor industry put
together. There is no comparing the genius it takes to run a television station.
But I'm afraid that when you compare profit margins, it just proves the point
that in this world the stupid people can make all the money. Most of the folks
running electronics companies are indeed geniuses, and they've got a building
full of even smarter geniuses out back, working like crazy to invent new stuff.
But they end up struggling; they have problems in the competitive world. There's
usually some nerd in Austin or Aoyama who's a little bit ahead of them. The
geniuses cancel each other out. Even if you invent a brand new sixteen-meg chip,
you'll still be surrounded by competitors. But if you have the only channel that
can show Home Improvement at 7 p.m., you have a monopoly. All you have to do to
run a cable company is get a license from the city and be mean to your
customers.
Since the Industrial Revolution began, going downstream - investing in
businesses that will benefit from new technology rather than investing in the
technology companies themselves - has often proved the smarter strategy. The
railroad, the product of the transforming technology of the steam locomotive,
one of the greatest inventions in history, was obviously of supreme importance
to the United States and its economy. But the makers of the locomotives, like
Baldwin and American
(continued)
1
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Wanger Advisors Trust 1997 Semi-Annual Report
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[LOGO] Squirrel Chatter (continued)
"One future downstream possibility has me worried. Some day you'll be able to go
into a computer store and pay $80 for a "Portfolio Manager" program, and I'll
be out of business."
Locomotive Works, were not terribly profitable.The railroads themselves were
moderately profitable for a while, but in the end most of them fared poorly or
went broke. (Their capital came mostly from abroad, an international wealth
transfer, a sort of Marshall Plan in reverse. The savings in English and
Scottish trusts moved over here, and the net return to all those investors was
probably zero.)
Those who really made money out of the new technology were not the
transportation people but those who bought real estate in Chicago in the 1880's
and 1890's. As the railroad came in and created a city of 3 million people, land
values skyrocketed. The railroads that were most successful were those that
secured land grants from the government to build the tracks and thus owned some
enormously valuable real estate. So the manufacturer who built the steam
locomotive made $5, the tycoon who built the railroad made $50, and the land
speculator who bought land that later became downtown Wichita made $500.
Similarly, when jet planes - larger and faster than the props - came on the
scene, they changed the airline business, but it wasn't the jet-engine makers
General Electric, Pratt and Whitney, and Rolls-Royce that benefited most. In
that instance it was the airlines that reaped the profits for a while; I know,
because I did well in airline stocks back then, when the big carriers could
actually make money. Now the airline industry is barely breaking even, and
airline stocks are only speculations. But think of what the jet plane made
possible!
Also in the postwar era, air-conditioning changed the way we all live, but
you didn't make much money investing in Carrier and the other makers. But
downstream, you could have made a fortune, for air conditioners created the New
South. In 1930 the population of Houston was six men and a dog, and the dog was
dead. Houston was in a basically uninhabitable part of the world. But then came
air conditioners, which made southern California, Texas, and Arizona boom areas.
Phoenix is a thriving city, in spite of the fact that it gets to 116 degrees in
the summer. Without air-conditioning it would still be a trading post. So
Carrier made a moderate amount of money, but the big money came to the fellows
who owned the land, built the tract houses, created the stores (like Phoenix's
Goldwater's), and opened the restaurants.
Recognizing a transforming technology and then investing downstream from it
should be a key concept for any direct stock investor.
From A Zebra in Lion Country by Ralph Wanger with Everett Mattlin. Copyright (C)
1997 by Ralph Wanger. Published by Simon & Schuster, New York, $25.00. Reprinted
by permission.
[PHOTO]
Ralph Wanger
President
2
<PAGE>
Wanger Advisors Trust 1997 Semi-Annual Report
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Funds at a Glance
- --------------------------------------------------------
Wanger U.S. Small Cap
Results to June 30, 1997
2nd qtr Last Last
6 months 12 months
Wanger U.S. Small Cap 16.7% 12.3% 24.4%
Russell 2000 16.2% 10.2% 16.3%
S&P MidCap 400 14.7% 13.0% 23.3%
S&P 500 17.5% 20.6% 34.7%
Dow Jones 17.1% 20.1% 38.5%
Net Asset Value per share as of 6/30/97 $18.62
The Russell 2000 is formed by taking 3,000 companies and then eliminating the
largest 1,000 leaving a good small company index. The S&P MidCap 400 is a market
value-weighted index of 400 stocks that are in the next tier down from the S&P
500. The S&P 500 is a broad market-weighted average, still blue chip dominated.
The Dow Jones Industrial Average includes 30 large companies. All indices are
unmanaged and include reinvested dividends.
- --------------------------------------------------------
Wanger International Small Cap
Results to June 30, 1997
2nd qtr Last Last
6 months 12 months
Wanger Int'l Small Cap 6.6% 10.2% 13.9%
EAFE 13.0% 11.2% 12.8%
Lipper International
Small Co. Funds Average 7.3% 10.4% 13.5%
Lipper International
Funds Average 11.1% 12.5% 16.5%
Net Asset Value per share as of 6/30/97 $19.07
EAFE is Morgan Stanley's Europe, Australia and Far East Index, an index of
companies throughout the world in proportion to world market capitalization,
excluding the U.S. and Canada. The Lipper International Small Company Funds
Average is calculated from the performance of a group of small company
international funds. The Lipper International Funds Average is an average of all
international funds tracked by Lipper Analytical Services. All indices are
unmanaged and include reinvested dividends.
- --------------------------------------------------------
Wanger U.S. Small Cap Top 5 Industries
As a % of net assets, as of 6/30/97
Information 25.1%
Energy/Minerals 18.8%
Industrial Goods/Services 16.7%
Finance 12.7%
Health Care 11.6%
- --------------------------------------------------------
Wanger International Small Cap Top 5 Countries
As a % of net assets, as of 6/30/97
United Kingdom 17.0%
Japan 13.2%
Australia 6.0%
Singapore 5.6%
Sweden 5.5%
- --------------------------------------------------------
Wanger U.S. Small Cap Top 10 Holdings
HealthCare Compare 5.2%
PPO Network
CalEnergy 5.2%
Power Plants
C-Tec 4.1%
Cable TV/Local Telephone
Data Transmission 3.9%
Data Services for Farmers
Coast Savings 3.6%
California Savings & Loan
Wackenhut 3.2%
Prison Management
Tesoro Petroleum 3.2%
Oil Refinery/Gas Reserves
Kronos 3.2%
Time Accounting
Software & Clocks
Applied Industrial 2.8%
Distributes Industrial
Components
Host Marriott Services 2.7%
Runs Airport Restaurants
- --------------------------------------------------------
Wanger International Small Cap Top 10 Holdings
Genting International 2.9%
Cruise Line - Singapore
Tyndall Australia 2.6%
Money Management/
Insurance - Australia
Kempen 2.5%
Stock Brokerage/Investment
Management - Netherlands
TT Tieto 2.3%
Computer Services/
Consulting - Finland
Li and Fung 2.0%
Sourcing of Consumer
Goods - Hong Kong
Euro Money 1.9%
Publications
Financial Publications/
Databases - United Kingdom
Shinki 1.9%
Corporate/Consumer
Lending - Japan
Venture Manufacturing 1.9%
Contract Electronics
Manufacturer - Singapore
St James Place 1.8%
Life Insurance -
United Kingdom
Vanda Systems 1.8%
Systems Integrator -
Hong Kong
- --------------------------------------------------------
The funds' top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statements of Investments for complete lists of
the funds' holdings, including those described under "Performance Review."
<PAGE>
Wanger Advisors Trust 1997 Semi-Annual Report
- --------------------------------------------------------------------------------
Wanger U.S. Small Cap Performance Review
Exuberance reigned on Wall Street last quarter, and Wanger U.S. Small Cap joined
in the parade. Your fund's 16.7% return was not quite up to the large-capped S&P
500's +17.5%, but better than the small-fried Russell 2000's +16.2%. Over the
past year, your fund has gained 24.4%, better than nearly three quarters of all
other variable annuity funds tracked by Lipper Analytical Services, Inc. This is
based on the one-year total return ending 6/30/97 for all 1013 variable
insurance funds.
We nearly pitched a perfect game last quarter. Only one of our top 20 holdings
(Respironics) fell in price, and merely 1/8 of a point at that. Our top five
sluggers were Wackenhut, HealthCare Compare, Data Transmission, C-Tec and
Kronos, each up 20-60% over the past three months. What propelled such strong
returns? Not any extraordinary news events, not any outsized earnings increases,
but simply the buying pressure from investors discovering and paying up for our
companies' wonderful franchises.
These newly enlightened investors figured out that Wackenhut manages safer,
cheaper prisons than do state bureaucrats; HealthCare Compare has a one-of-a-
kind national PPO health care network impossible to clone; Data Transmission's
subscriber base is growing 20% a year; C-Tec is offering a prix fixe bundled
cable, phone and internet service before any other cable guy or baby Bell; and
Kronos's time-clock software is a crucial piece of the factory automation
puzzle.
Even after their recent run, none of these companies are household names, yet.
We don't want to own yesterday's celebrity stocks, we want tomorrow's. We're
stock market talent scouts, not autograph hounds. We will continue to build our
portfolio of new and exciting small companies for you.
[PHOTO]
Robert Mohn
Lead Portfolio Manager
Wanger U.S. Small Cap
4
<PAGE>
Wanger Advisors Trust 1997 Semi-Annual Report
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[SQUIRREL LOGO] Wanger U.S. Small Cap Results to June 30, 1997
- --------------------------------------------------------------------------------
The Value of a $10,000 Investment in
Wanger U.S. Small Cap
Total Return for Each Period
May 3, 1995 through June 30, 1997
Wanger U.S. Small Cap
$19,093
Russell 2000
$15,159
[GRAPH]
Wanger U.S. Small Cap
Wanger U.S. Small Cap Russell 2000
--------------------- ------------
5/3/95 $10,000 $10,000
6/30/95 $10,770 $10,700
9/30/95 $12,060 $11,757
12/31/95 $11,600 $12,012
3/31/96 $13,297 $12,629
6/30/96 $15,351 $13,261
9/30/96 $15,792 $13,306
12/31/96 $17,004 $13,756
3/31/97 $16,366 $13,044
4/30/97 $16,355 $13,081
5/31/97 $17,986 $14,536
6/30/97 $19,093 $15,159
- --------------------------------------------------------------------------------
This graph compares the results of $10,000 invested in Wanger U.S. Small Cap on
May 3,1995 (the date the Fund began operations) through June 30, 1997, with the
Russell 2000 with dividends reinvested. The beginning date of the Russell 2000
is as of May 31, 1995. The performance data quoted is past performances and does
not guarantee future results. The investment return and principal value of an
investment will fluctuate so that investors' shares, when redeemed, may be worth
more or less than their original cost.
Average Annual Total Return
1 year: 24.4% Life: 34.9%
5
<PAGE>
Wanger Advisors Trust 1997 Semi-Annual Report
- --------------------------------------------------------------------------------
Wanger International Small Cap Performance Review
Your fund performed well in absolute terms during the first half of 1997 with a
gain of 10.2%. However, while we would all be very happy to have our investments
rise 10% every six months, you will note that the benchmarks we publish on page
3 of this report rose even more during the period, and that the red hot US
market did even better than the international benchmarks.
The underperformance of foreign stock markets relative to the US is explained by
the fact that not all foreign markets followed the US bull, and that those which
did (mainly the European markets) experienced currency weakness, which almost
entirely offset the appreciation in local share prices.
Adding insult to injury, small company shares in the larger foreign markets
underperformed their large company brethren by a very substantial margin. For
example, the UK FTSE index of large British company shares rose a respectable
12%, but the smaller companies managed only a measly 2% in the half. In France,
the large caps beat the small caps by a score of 23% to 11% (but a 13% fall in
the French Franc meant 10% and -2% returns in US $ terms), and in Japan the
large caps rose 6% whereas the small caps actually declined 8%!
In last year's annual report we emphasized that the relatively low volatility of
the fund (which has continued in the first six months of 1997) is the result of
extensive diversification by country and industry. The first half once again
provided evidence of this diversification in that the five best and worst stocks
came from eight different countries and nine different industries.
The good news is that international small company stocks now appear to be priced
more attractively relative to larger company stocks than at any time since this
fund's inception.
[PHOTO OF MARCEL HOUTZAGER]
Marcel Houtzager
Lead Portfolio Manager
Wanger International
Small Cap
6
<PAGE>
Wanger Advisors Trust 1997 Semi-Annual Report
- --------------------------------------------------------------------------------
[SQUIRREL LOGO] Wanger International Small Cap Results to June 30, 1997
- --------------------------------------------------------------------------------
The Value of a $10,000 Investment in
Wanger International Small Cap
Total Return for Each Period
May 3, 1995 through June 30, 1997
Wanger International Small Cap
$19,568
EAFE
$12,558
[GRAPH]
Wanger Int'l Small Cap
Wanger Int'l Small Cap EAFE
---------------------- ----
5/3/95 $10,000 $10,000
6/30/95 $10,970 $ 9,825
9/30/95 $12,910 $10,234
12/31/95 $13,450 $10,649
3/31/96 $15,499 $10,956
6/30/96 $17,183 $11,130
9/30/96 $17,023 $11,116
12/31/96 $17,755 $11,293
3/31/97 $18,357 $11,116
4/30/97 $18,204 $11,175
5/31/97 $18,983 $11,901
6/30/97 $19,568 $12,558
- --------------------------------------------------------------------------------
This graph compares the results of $10,000 invested in Wanger International
Small Cap on May 3,1995 (the date the Fund began operations) through June
30,1997, with Morgan Stanley's Europe, Australia and Far East Index (EAFE), with
dividends reinvested. The beginning date of EAFE is as of May 31, 1995. The
performance data quoted is past performances and does not guarantee future
results. The investment return and principal value of an investment will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
Average Annual Total Return
1 year: 13.9% Life: 36.5%
7
<PAGE>
Wanger Advisors Trust 1997 Semi-Annual Report
- --------------------------------------------------------------------------------
Wanger U.S. Small Cap Statement of Investments June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
<C> <S> <C>
Number Value
of Shares
Common Stocks and Other Equity-Like
Securities-93.4%
Information -25.1%
- ---------------------------------------------------------------------------------
Broadcasting/CATV-4.1%
235,200 C-Tec (b) $ 8,202,600
Cable TV/Local Telephone
- ---------------------------------------------------------------------------------
Programming for CATV/TV/Satellites-10.6%
244,600 Data Transmission (b) 7,766,050
Data Services for Farmers
195,000 Gaylord Entertainment 4,497,187
Country & Western Cable Channels
193,100 United Video Satellite (b) 4,055,100
CATV & Satellite Dish Programming
118,000 Tele-Communications,
Liberty Media Group (b) 2,802,500
CATV & Satellite Dish Programming
58,000 International Family Entertainment 1,993,750
Cable TV Programming
- ---------------------------------------------------------------------------------
Total 21,114,587
- ---------------------------------------------------------------------------------
Mobile Communications-2.3%
184,500 COMARCO (b) 3,551,625
Wireless Network Testing
63,000 Centennial Cellular (b) 1,000,125
Cellular Franchises
- ---------------------------------------------------------------------------------
Total 4,551,750
- ---------------------------------------------------------------------------------
Computer Software/Services-3.6%
306,400 Wonderware (b) 4,327,900
Industrial Control Software
69,500 CACI International, Cl. A (b) 1,059,875
Computer Software Systems
20,000 Compuware (b) 955,000
Computer Software & Services
29,200 BDM International (b) 671,600
Software Consulting
6,300 Analysts International 211,050
Contract Programming
- ---------------------------------------------------------------------------------
Total 7,225,425
- ---------------------------------------------------------------------------------
Business Information-0.5%
49,000 American Business Information (b) $ 1,065,750
Provides Data on Small Businesses
- ---------------------------------------------------------------------------------
Contract Manufacturing-0.8%
38,200 ACT Manufacturing (b) 1,594,850
Contract Manufacturing
- ---------------------------------------------------------------------------------
Computer Systems-3.2%
232,000 Kronos (b) 6,380,000
Time Accounting Software & Clocks
=================================================================================
Information-Total 50,134,962
Health Care-11.6%
- ---------------------------------------------------------------------------------
Medical Equipment -3.2%
210,000 Respironics (b) 4,436,250
Sleep Apnea Products
70,000 Kinetic Concepts 1,260,000
Hospital Beds
80,000 Cardiac Pathways (b) 720,000
Heart Surgery Devices
- ---------------------------------------------------------------------------------
Total 6,416,250
- ---------------------------------------------------------------------------------
Services-8.4%
199,000 HealthCare Compare (b) 10,422,625
PPO Network
125,000 Lincare Holdings (b) 5,375,000
Home Health Care Services
74,900 United Payors & Providers (b) 992,425
Medical Claims Repricing
- ---------------------------------------------------------------------------------
Total 16,790,050
=================================================================================
Health Care-Total 23,206,300
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
Wanger Advisors Trust 1997 Semi-Annual Report
- --------------------------------------------------------------------------------
Wanger U.S. Small Cap Statement of Investments June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
Number Value
of Shares
Consumer Goods/Services -6.7%
- ---------------------------------------------------------------------------------
Retail-3.5%
<C> <S> <C>
458,400 Host Marriott Services (b) $ 5,386,200
Runs Airport Restaurants
60,000 Borders Group (b) 1,447,500
Bookstores
- ---------------------------------------------------------------------------------
Total 6,833,700
- ---------------------------------------------------------------------------------
Entertainment/Leisure-3.0%
112,500 Royal Caribbean Cruises 3,930,468
Cruises to Caribbean & Alaska
50,400 Showboat 878,850
Casinos
42,000 Rio Hotel & Casino (b) 632,625
Casino & Hotel
115,200 Monarch Casino & Resort (b) 460,800
Casino & Hotel
- ---------------------------------------------------------------------------------
Total 5,902,743
- ---------------------------------------------------------------------------------
Manufacturers-0.3%
14,000 Newell 554,750
Household Goods
=================================================================================
Consumer Goods/Services-Total 13,291,193
Finance-12.7%
- ---------------------------------------------------------------------------------
Banks/Savings & Loans-7.3%
160,000 Coast Savings (b) 7,270,000
California Savings & Loan
60,000 Texas Regional Bancshares 2,520,000
TexMex Bank
67,500 Peoples Bank Bridgeport 1,746,562
Consumer Finance
106,000 Imperial Thrift & Loan (b) 1,722,500
California Thrift
80,000 Commonwealth Bancorp 1,310,000
Pennsylvania Savings & Loan
- ---------------------------------------------------------------------------------
Total 14,569,062
- ---------------------------------------------------------------------------------
Insurance-2.9%
112,100 Acceptance Insurance (b) $ 2,550,275
Crop Insurance
64,000 Penn Treaty American (b) 1,960,000
Nursing Home Insurance
43,000 Leucadia National 1,330,312
Insurance Holding Company
- ---------------------------------------------------------------------------------
Total 5,840,587
- ---------------------------------------------------------------------------------
Money Management-2.3%
125,000 Baker Fentress 2,468,750
Closed-End Investment Company
68,000 SEI Investments 1,640,500
Mutual Fund Administration
65,000 Phoenix Duff & Phelps 479,375
Money Management
- ---------------------------------------------------------------------------------
Total 4,588,625
- ---------------------------------------------------------------------------------
Credit Cards-0.2%
10,000 National Data 433,125
Credit Card & Medical Claims Processor
=================================================================================
Finance-Total 25,431,399
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
<TABLE>
<CAPTION>
Wanger Advisors Trust 1997 Semi-Annual Report
- --------------------------------------------------------------------------------
Wanger U.S. Small Cap Statement of Investments June 30, 1997
(Unaudited)
- ---------------------------------------------------------------------
Number Value
of Shares
<C> <S> <C>
Industrial Goods/Services-16.7%
- ---------------------------------------------------------------------
Machinery-3.7%
154,800 Applied Industrial Technologies $5,572,800
Distributes Industrial Components
117,450 Farr (b) 1,835,156
Filters
- ---------------------------------------------------------------------
Total 7,407,956
- ---------------------------------------------------------------------
Steel-6.6%
115,000 Schnitzer Steel 3,421,250
Scrap Steel Processor
176,000 Atchison Casting (b) 2,926,000
Steel Foundries
87,000 Gibraltar Steel (b) 2,001,000
Steel Processing
73,600 Steel Dynamics (b) 1,840,000
Steel Mini-Mill
91,000 Worthington Industries 1,666,437
Steel Processing
105,000 Universal Stainless (b) 1,365,000
Semi-Finished Stainless Steel Producer
- ---------------------------------------------------------------------
Total 13,219,687
- ---------------------------------------------------------------------
Industrial Suppliers-1.1%
115,000 Lilly Industries, Cl. A 2,314,375
Industrial Coatings
- ---------------------------------------------------------------------
Services-5.2%
323,300 Wackenhut, Cl. B 6,445,793
Prison Management
100,000 World Color Press (b) 2,375,000
Printing
50,000 Hub Group (b) 1,506,250
Freight Forwarder
- ---------------------------------------------------------------------
Total 10,327,043
- ---------------------------------------------------------------------
Industrial Goods/Services-Total 33,269,061
- ---------------------------------------------------------------------
Energy/Minerals-18.8%
- ---------------------------------------------------------------------
Independent Power-5.9%
272,000 CalEnergy (b) $10,336,000
Power Plants
19,000 AES Corporation (b) 1,344,250
Power Plants
- ---------------------------------------------------------------------
Total 11,680,250
- ---------------------------------------------------------------------
Oil/Gas Producers-5.1%
432,300 Tesoro Petroleum (b) 6,403,443
Oil Refinery/Gas Reserves
126,900 Seagull Energy (b) 2,220,750
Oil & Gas Producer
41,300 United Meridian (b) 1,239,000
Oil & Gas Producer
100,000 Tipperary (b) 400,000
Oil & Gas Producer
- ---------------------------------------------------------------------
Total 10,263,193
- ---------------------------------------------------------------------
Distribution/Marketing/Refining-3.5%
163,000 United Cities Natural Gas 3,830,500
Natural Gas Distributor
181,100 NGC 2,795,736
Gas Processing/Marketing
18,000 Atmos Energy 432,000
Natural Gas Distributor
- ---------------------------------------------------------------------
Total 7,058,236
- ---------------------------------------------------------------------
Oil Services-4.3%
46,700 Atwood Oceanics (b) 3,128,900
Offshore Drilling
211,000 GeoScience (b) 2,769,375
Offshore Seismic Equipment
100,300 J Ray McDermott (b) 2,708,100
Offshore Construction
- ---------------------------------------------------------------------
Total 8,606,375
- ---------------------------------------------------------------------
Energy/Minerals-Total 37,608,054
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
Wanger Advisors Trust 1997 Semi-Annual Report
- --------------------------------------------------------------------------------
Wanger U.S. Small Cap Statement of Investments June 30, 1997
(Unaudited)
- ----------------------------------------------------------------
Principal Amount or Value
Number
of Shares
Real Estate-1.9%
- ----------------------------------------------------------------
54,800 Forest City Enterprises Cl. A $2,616,700
Shopping Centers
80,000 Cornerstone Properties 1,230,000
Downtown Office Buildings
- ----------------------------------------------------------------
Real Estate-Total 3,846,700
Total Common Stocks and Other
Equity-Like Securities-93.4% 186,787,669
- ----------------------------------------------------------------
(Cost: $149,968,929)
Short-Term Obligation-6.5% 12,947,000
$12,947,000 State Street Bank Repurchase
Agreement 5.00% 07/01/97;
6/30/97 Agreement Collateralized by U.S. Treasury Notes
- ----------------------------------------------------------------
(Cost: $12,947,000)
Total Investments-99.9% 199,734,669
- ----------------------------------------------------------------
(Cost: $162,915,929)
Cash and Other Assets Less Liabilities-0.1% 180,800
- ----------------------------------------------------------------
Total Net Assets-100% $199,915,469
- ----------------------------------------------------------------
Notes to Statement of Investments:
(a) At June 30, 1997 for federal income tax purposes cost of
investments was $162,915,929 and net unrealized appreciation
was $36,818,740 consisting of gross unrealized appreciation
of $38,144,789 and gross unrealized depreciation of $1,326,049.
(b) Non-income producing security.
See accompanying notes to financial statements.
11
<PAGE>
<TABLE>
Wanger Advisors Trust 1997 Semi-Annual Report
- --------------------------------------------------------------------------------
Wanger International Small Cap Statement of Investments June 30, 1997
(Unaudited)
- --------------------------------------------------------------------------
Number Value
of Shares
<S> <C> <C>
Common Stocks and Other Equity-Like
Securities-96.2%
Europe-43.4%
- --------------------------------------------------------------------------
Germany/Austria-4.0%
10,000 Rhoen Klinikum $1,319,866
1,200 Rhoen Klinikum Pfd. 153,563
Hospital Management
9,200 Schaltbau 1,425,456
Components Supplier to the Rail Industry
12,000 KTM Motorradholding (b) 822,118
Off-Road Motorcycles (Austria)
10,000 Schoeller-Bleckmann (b) 812,087
Oilfield Services (Austria)
2,500 Cewe Color Holdings 652,762
Photographic Developing/Printing
- --------------------------------------------------------------------------
Total 5,185,852
- --------------------------------------------------------------------------
Denmark-0.5%
5,000 Kompan International 603,227
Playground Equipment
- --------------------------------------------------------------------------
Netherlands-2.5%
90,000 Kempen 3,293,523
Stock Brokerage/Investment Management
- --------------------------------------------------------------------------
Finland-3.1%
34,000 TT Tieto, Cl. B 2,945,593
Computer Services/Consulting
99,200 Talentum 1,126,795
Trade Journals
- --------------------------------------------------------------------------
Total 4,072,388
- --------------------------------------------------------------------------
Norway-0.4%
62,500 P4 Radio Helo Norge (b) 529,299
Commercial Radio Station
- --------------------------------------------------------------------------
Sweden-5.5%
106,000 Getinge Industrier 1,878,168
Sterilization & Disinfection Equipment
50,000 Esselte, Series A 1,144,593
Office Supplies & Related Equipment
78,000 MTV Production (b) 635,540
Television Production Company
78,300 Caran 587,351
Engineering Consulting
10,200 Scala International (b) 580,444
Accounting Software
50,000 Elanders (b) 565,830
Printer
20,000 Tryckindustri 475,944
Printer
75,000 Micronic Laser Systems (b) 368,598
Laser Equipment
10,500 Pricer, Cl. B (b) 361,226
Electronic Shelf Labels for Supermarkets
30,000 Mandator (b) 343,378
Computer Services/Consulting
24,000 Oresa Ventures (b) 223,490
Eastern European Venture Capital
- --------------------------------------------------------------------------
Total 7,164,562
- --------------------------------------------------------------------------
France-2.0%
12,000 Axime Ex Segin (b) 1,420,541
Computer Services/Consulting
10,000 Fininfo 1,175,268
Data Feeds for French Banks & Brokers
- --------------------------------------------------------------------------
Total 2,595,809
- --------------------------------------------------------------------------
United Kingdom/Ireland-17.0%
100,000 Euro Money Publications 2,504,772
Financial Publications & Databases
1,100,000 St James Place 2,398,257
Life Insurance
3,000,000 Premier Oil (b) 2,309,217
Oil & Gas Producer
63,000 Oresa 2,097,018
Natural Cosmetics Sold Door-to-Door
480,000 Medeva 2,049,086
Drugs for Hyperactive Children
85,000 Oriflame International 1,493,293
Natural Cosmetics Sold Door-to-Door
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
<TABLE>
<CAPTION>
Wanger Advisors Trust 1997 Semi-Annual Report
- --------------------------------------------------------------------------------
Wanger International Small Cap
- --------------------------------------------------------------------------------
Number Value
of Shares
- --------------------------------------------------------------------------------
<C> <S> <C>
United Kingdom/Ireland-17.0% (cont.)
200,000 Seton Healthcare Group $ 1,436,291
Pharmaceuticals
160,000 Edinburgh Fund Managers 1,255,548
Investment Management
775,000 Aberdeen Trust 1,180,197
Money Management
2,000,000 Electronics Boutique (b) 1,115,081
Videogame/Computer Software Stores
240,000 Dorling Kindersley 1,024,543
Reference Books & CD-ROMs
40,000 NTL (b) 995,000
Cable TV & Telephone System
60,000 Vosper Thornycroft 761,417
Naval Shipbuilding
58,500 Serco Group 685,425
Facilities Management
65,000 Planning Sciences (b) 373,756
Database & Business Intelligence Software
170,000 Tunstall 370,639
"I've fallen and I can't get up" monitors
- --------------------------------------------------------------------------------
Total 22,049,540
- --------------------------------------------------------------------------------
Portugal-1.0%
39,200 Investec (b) 1,337,737
Sports Newspaper
- --------------------------------------------------------------------------------
Switzerland-1.4%
3,000 Societe Generale d'Affichage 1,154,400
Billboard Advertising
1,400 Phoenix Mecano 729,817
Electrical Components Manufacturer
- --------------------------------------------------------------------------------
Total 1,884,217
- --------------------------------------------------------------------------------
Hungary-0.9%
40,000 Cofinec (b) 1,105,000
Consumer Goods Packaging
- --------------------------------------------------------------------------------
Italy/Greece-5.1%
232,500 Athens Medical Center 1,867,827
Hospitals (Greece)
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Statement of Investments June 30, 1997
(Unaudited)
- --------------------------------------------------------------------------------
Number Value
of Shares
- --------------------------------------------------------------------------------
<C> <S> <C>
Italy/Greece-5.1% (cont.)
100,000 Pininfarina $ 1,660,299
Car Design
40,000 Cellular Communications International (b) 1,340,000
Mobile Communications
75,000 Banca Pop Commercia e Industria 905,819
Regional Bank
500,000 Autogrill Finanziaria (b) 836,027
Tollway Restaurants
- --------------------------------------------------------------------------------
Total 6,609,972
================================================================================
Europe-Total 56,431,126
Asia-32.3%
- --------------------------------------------------------------------------------
Hong Kong-5.4%
2,300,000 Li and Fung 2,582,935
Sourcing of Consumer Goods
4,994,000 Vanda Systems 2,320,691
Systems Integrator
4,900,000 Golden Harvest Entertainment 1,214,405
Movie Distribution & Exhibition
3,000,000 Regent Pacific 842,263
Money Management
- --------------------------------------------------------------------------------
Total 6,960,294
- --------------------------------------------------------------------------------
Japan-13.2%
100,040 Shinki 2,482,859
Corporate & Consumer Lending
120,300 Belluna 1,576,946
Catalog Sales
39,000 Hokuto 1,380,319
Mushroom Grower
40,000 People 1,363,278
Sports Clubs
85,000 Tecmo 1,337,061
Commercial Video Games
50,000 Nihon Jumbo 1,214,716
Photo Processing Lab
25,000 Tiemco 1,114,218
Fishing Equipment
30,000 Konami 1,122,083
Entertainment Software/Hardware
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
<TABLE>
Wanger Advisors Trust 1997 Semi-Annual Report
- --------------------------------------------------------------------------------
Wanger International Small Cap Statement of Investments June 30, 1997
(Unaudited)
<CAPTION>
- ----------------------------------------------------------------------------
Number Value
of Shares
- ----------------------------------------------------------------------------
Japan--13.2% (cont.)
<C> <S> <C>
20,300 HIS $1,073,276
Travel Agent
50,000 Arrk 1,070,523
Industrial Modeling
35,000 NuSkin Asia Pacific (b) 927,500
Network Sales
61,920 Central Uni 811,675
Health Care/Medical Equipment
10,000 Ryohin Keikaku 790,002
Designer & Retailer of Muji Brand
Specialty Consumer Goods
12,600 Noritsu Koki 622,127
Photo Processing Lab Manufacturer
10,000 Mars Engineering 228,967
150 Mars Engineering Warrants 1/25/00 2,187
Gaming Systems & Machinery
- ----------------------------------------------------------------------------
Total 17,127,737
- ----------------------------------------------------------------------------
Malaysia--0.7%
159,500 Malaysian Assurance Alliance 928,942
Insurance
- ----------------------------------------------------------------------------
Indonesia/Philippines--3.4%
3,236,700 Int'l Container Terminal Services (b) 1,656,636
Container Handling Terminals & Port
Management (Philippines)
900,000 Komatsu Indonesia 1,406,539
Industrial Equipment Machines
3,700,000 Mondragon International (b) 1,304,55
Casinos/Resorts (Philippines)
- ----------------------------------------------------------------------------
Total 4,367,770
- ----------------------------------------------------------------------------
India--0.7%
60,000 IS Himalaya Fund (b) 906,000
Closed-End Fund
- ----------------------------------------------------------------------------
Korea--2.6%
9,135 S1 Corporation 1,831,114
Alarm Monitoring
55,000 Dongbu Fire & Marine Insurance (b) 1,597,973
Non-Life Insurance
- ----------------------------------------------------------------------------
Total 3,429,087
- ----------------------------------------------------------------------------
Singapore--5.6%
1,277,400 Genting International 3,768,331
Cruise Line
750,000 Venture Manufacturing 2,444,397
Contract Electronics Manufacturer
2,062,000 Omni Industries (b) 1,059,987
Contract Electronics Manufacturer
- ----------------------------------------------------------------------------
Total 7,272,715
- ----------------------------------------------------------------------------
Thailand--0.7%
745,600 Shinawatra Satellite 899,440
Satellite Leasing
============================================================================
Asia--Total 41,891,985
Latin America--8.0%
- ----------------------------------------------------------------------------
Mexico--2.0%
417,000 Nadro, Series L 1,417,957
Pharmaceutical Distribution
87,000 Grupo Radio Centro 1,022,250
Radio Stations & Networks
35,000 Corp Interamericana de Entretenimiento (b) 149,591
Management of Live Entertainment
- ----------------------------------------------------------------------------
Total 2,589,798
- ----------------------------------------------------------------------------
Brazil/Chile--2.9%
120,000 Elevadores Atlas 1,563,254
Elevator Services
20,000 Genesis Chile Fund 1,005,000
Closed-End Fund (Chile)
29,500 Bompreco 818,625
Supermarket Chain
550,000 Braziian Smaller Companies Warrants 409,750
Closed-End Fund
- ----------------------------------------------------------------------------
Total 3,796,629
</TABLE>
14
See accompanying notes to financial statements.
<PAGE>
Wanger Advisors Trust 1997 Semi-Annual Report
- --------------------------------------------------------------------------------
Wanger International Small Cap Statement of Investments June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
Number Value
of Shares
<S> <C> <C>
- -------------------------------------------------------------------
Argentina-3.1%
123,300 Patagonia $ 1,812,691
Supermarkets
500,000 Siderca 1,295,129
Steel Pipe Producer
412,000 Cresud (b) 918,852
Grain & Cattle Farms
- -------------------------------------------------------------------
Total 4,026,672
===================================================================
Latin America-Total 10,413,099
Other Countries-12.5%
- -------------------------------------------------------------------
Australia-6.0%
2,000,000 Tyndall Australia 3,371,412
Money Management & Insurance
1,000,000 Australia Hospital Care 1,723,160
Hospital Management
450,000 Anaconda Nickel (b) 1,264,275
Nickel Mining
100,000 Hudson Conway (b) 1,000,183
Casino Managers
88,450 PetSec Energy (b) 400,913
Oil & Gas Producer
- -------------------------------------------------------------------
Total 7,759,943
- -------------------------------------------------------------------
Israel-1.4%
70,100 Blue Square Israel (b) 1,209,225
Supermarkets & Department Stores
56,100 ZAG Industries (b) 575,025
Plastic Hardwares
- -------------------------------------------------------------------
Total 1,784,250
- -------------------------------------------------------------------
Canada-4.3%
70,000 Shaw Industries 1,778,414
Oil Field Services
140,000 Ranger Oil 1,303,750
Oil & Gas Producer
76,000 Milltronics (b) 936,503
Industrial Measurement Instruments
<CAPTION>
- -------------------------------------------------------------------
Principal Amount or Value
Number
of Shares
<S> <C> <C>
- -------------------------------------------------------------------
Canada-4.3% (cont.)
316,500 Pan East Petroleum (b) $ 825,892
Oil & Gas Producer
85,000 Club Monaco (b) 754,747
Speciality Apparel & Accessories
- -------------------------------------------------------------------
Total 5,599,306
- -------------------------------------------------------------------
South Africa-0.8%
200,000 Energy Africa (b) 1,036,269
Oil & Gas Producer
===================================================================
Other-Total 16,179,768
Total Common Stocks and Other
Equity-Like Securities-96.2% 124,915,978
- -------------------------------------------------------------------
(Cost: $109,472,124)
Short-Term Obligation-4.7% 6,129,000
$6,129,000 State Street Bank Repurchase
Agreement 5.00% 7/01/97; 6/30/97 Agreement
Collateralized by U.S. Treasury Notes
- -------------------------------------------------------------------
(Cost: $6,129,000)
Total Investments-100.9% 131,044,978
- -------------------------------------------------------------------
(Cost: $115,601,124)
Cash and Other Assets Less Liabilities-(0.9%) (1,169,102)
- -------------------------------------------------------------------
Total Net Assets-100% $129,875,876
</TABLE>
- -------------------------------------------------------------------
Notes to Statement of Investments:
(a) At June 30, 1997 for federal income tax purposes cost of
investments was $115,789,080 and net unrealized appreciation
was $15,255,898 consisting of gross unrealized appreciation of
$23,430,383 and gross unrealized depreciation of $8,174,485.
(b) Non-income producing security.
See accompanying notes to financial statements.
15
<PAGE>
Wanger Advisors Trust 1997 Semi-Annual Report
================================================================================
Wanger International Small Cap Portfolio Diversification June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
At June 30, 1997, the Fund's portfolio of investments as a percentage of net
assets was diversified as follows:
Value Percent
======================================================
<S> <C> <C>
Information
Software/Services $11,103,089 8.6%
Broadcasting/CATV 4,519,826 3.5
Distribution 3,529,315 2.7
Mobile Communications 2,239,440 1.7
Consumer Electronics 2,066,878 1.6
Computer Systems 1,059,987 0.8
Equipment 368,598 0.3
- ------------------------------------------------------
Total 24,887,133 19.2
======================================================
Health Care
Biotechnology/Drug Delivery 4,903,334 3.8
Services 4,131,258 3.2
Equipment 2,689,843 2.1
Hospital/Laboratory Supplies 1,723,160 1.3
- ------------------------------------------------------
Total 13,447,595 10.4
======================================================
Consumer Goods/Services
Retail 16,354,863 12.6
Entertainment/Leisure 9,503,635 7.3
Manufacturers 7,366,586 5.7
Food 3,135,198 2.4
Recreational Vehicles 822,118 0.6
- ------------------------------------------------------
Total 37,182,400 28.6
======================================================
Finance
Money Management 14,885,440 11.5
Insurance 2,526,915 1.9
Banks 905,819 0.7
Other 4,588,825 3.5
- ------------------------------------------------------
Total 22,906,999 17.6
======================================================
Industrial Goods/Services
Services 13,650,907 10.5
Machinery 1,406,539 1.1
Steel 761,417 0.6
- ------------------------------------------------------
Total 15,818,863 12.2
======================================================
Energy/Minerals
Oil/Gas Producers 5,876,041 4.5
Oil Services 2,107,216 1.6
Mining 1,264,275 1.0
- ------------------------------------------------------
Total 9,247,532 7.1
======================================================
Transportation 1,425,456 1.1
======================================================
Total Common Stocks and
Other Equity-Like Securities 124,915,978 96.2
======================================================
Short-Term Obligations 6,129,000 4.7
======================================================
Cash and Other Assets less
Liabilities (1,169,102) (0.9)
======================================================
Net Assets $129,875,876 100.0%
</TABLE>
See accompanying notes to financial statements.
16
<PAGE>
<TABLE>
<CAPTION>
Wanger Advisors Trust 1997 Semi-Annual Report
===============================================================================================================================
Statements of Assets and Liabilities June 30, 1997
(Unaudited)
Wanger U.S. Wanger International
Small Cap Small Cap
===============================================================================================================================
<S> <C> <C>
Assets
Investments, at value (cost: Wanger U.S. Small Cap $162,915,929; $199,734,669 $131,044,978
Wanger International Small Cap $115,601,124)
Cash 981 627,022
Organization costs 56,735 56,735
Receivable for:
Securities sold 850,358 300,400
Fund shares sold 509,961 328,129
Dividends and interest 40,725 300,227
Other assets 1,735 1,723
- -------------------------------------------------------------------------------------------------------------------------------
Total assets 201,195,164 132,659,214
Liabilities and Net Assets
Payable for:
Securities purchased 664,647 1,928,057
Fund shares redeemed 522,244 730,062
Amount owed to advisor 56,960 56,742
Other 35,844 68,477
- -------------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,279,695 2,783,338
- -------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Fund shares outstanding $199,915,469 $129,875,876
===============================================================================================================================
Fund shares outstanding 10,733,961 6,811,524
===============================================================================================================================
Pricing of Shares
Net asset value, offering price and redemption price per share $18.62 $19.07
===============================================================================================================================
Analysis of Net Assets
Paid-in capital $159,357,460 $111,243,576
Undistributed net realized gain on sales of investments and foreign currency transactions 3,894,567 3,094,271
Net unrealized appreciation of investments and foreign currencies
(net of unrealized PFIC gains of $187,956 for Wanger International Small Cap) 36,818,740 15,258,756
Net investment income (loss) (155,298) 279,273
- -------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Fund shares outstanding $199,915,469 $129,875,876
===============================================================================================================================
</TABLE>
See accompanying notes to financial statements.
17
<PAGE>
<TABLE>
<CAPTION>
Wanger Advisors Trust 1997 Semi-Annual Report
- ----------------------------------------------------------------------------------------------------------------------------------
Statements of Operations For the Six Months Ended June 30, 1997
(Unaudited)
Wanger U.S. Wanger International
Small Cap Small Cap
=========================================================================================================================
<S> <C> <C>
Investment Income:
Dividends (net of foreign taxes of $105,009 for Wanger International Small Cap) $396,581 $1,026,335
Interest 296,431 140,936
- -------------------------------------------------------------------------------------------------------------------------
Total investment income 693,012 1,167,271
=========================================================================================================================
Expenses:
Investment advisory 771,098 697,099
Custodian 15,609 113,701
Legal and audit 33,374 33,814
Reports to shareholders 11,826 10,726
Amortization of organization costs 9,906 9,906
Transfer agent 9,593 9,593
Trustees 8,001 8,025
Insurance 3,408 3,410
Other 1,045 1,724
- -------------------------------------------------------------------------------------------------------------------------
Total expenses 863,860 887,998
Less custodian fees paid indirectly (15,550) -
- -------------------------------------------------------------------------------------------------------------------------
Net expenses 848,310 887,998
=========================================================================================================================
Net investment income (loss) (155,298) 279,273
Net realized and unrealized gain on investments:
Net realized gain on sales of investments 3,894,637 3,094,338
Net change in unrealized appreciation 17,357,008 7,442,343
- -------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 21,251,645 10,536,681
- -------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $21,096,347 $10,815,954
=========================================================================================================================
See accompanying notes to financial statements.
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Wagner Advisors Trust 1997 Semi-Annual Report
- ---------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
(Unaudited)
-----------------------------------------------------------------------------------
Wanger U.S. Small Cap Wanger International Small Cap
Six months ended Year ended Six months ended Year ended
June 30, 1997 December 31, 1996 June 30, 1997 December 31, 1996
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations:
Net investment income (loss) ($155,298) ($286,925) $279,273 ($272,469)
Net realized gain on sales of investments 3,894,637 3,926,442 3,094,338 2,570,609
Net change in unrealized appreciation 17,357,008 19,022,289 7,442,343 6,894,415
- ---------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting 21,096,347 22,661,806 10,815,954 9,192,555
from operations
Distributions to shareholders from:
Net investment income - - - (6,530)
Net realized gain (3,530,225) (66,519) (2,453,255) (52,334)
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders (3,530,225) (66,519) (2,453,255) (58,864)
From Fund share transactions:
Reinvestment of dividends and capital
gain distributions 3,530,225 66,519 2,453,255 58,864
Proceeds from other shares sold 53,233,183 91,019,446 38,496,843 67,872,674
- ---------------------------------------------------------------------------------------------------------------------------
56,763,408 91,085,965 40,950,098 67,931,538
Payments for shares redeemed (3,371,972) (6,626,877) (4,292,003) (3,579,071)
- ---------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from
Fund share transactions 53,391,436 84,459,088 36,658,095 64,352,467
- ---------------------------------------------------------------------------------------------------------------------------
Total increase in net assets 70,957,558 107,054,375 45,020,794 73,486,158
===========================================================================================================================
Net assets:
Beginning of period 128,957,911 21,903,536 84,855,082 11,368,924
- ---------------------------------------------------------------------------------------------------------------------------
End of period (a) $199,915,469 $128,957,911 $129,875,876 $84,855,082
===========================================================================================================================
</TABLE>
(a) Includes accumulated net investment income (loss) of ($155,298) and $279,273
at June 30, 1997 for Wanger U.S. Small Cap and Wanger International Small Cap,
respectively.
See accompanying notes to financial statements.
19
<PAGE>
<TABLE>
<CAPTION>
Wagner Advisors Trust 1997 Semi-Annual Report
- ---------------------------------------------------------------------------------------------------------------------------
Wanger U.S. Small Cap Financial Highlights
(Unaudited)
Six months ended Year ended May 3, 1995 through
June 30, 1997 December 31, 1996 December 31, 1995
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, beginning of period $16.97 $11.60 $10.00
Income From Investment Operations
Net investment loss (c) (.01) (.06) (.05)
Net realized and unrealized gain on investments 2.05 5.46 1.65
- --------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.04 5.40 1.60
Less Distributions
Dividends from net investment income - - -
Distributions from net realized gain (.39) (.03) -
- --------------------------------------------------------------------------------------------------------------------------
Total distributions (.39) (.03) -
Net Asset Value, end of period $18.62 $16.97 $11.60
- --------------------------------------------------------------------------------------------------------------------------
Total Return 12.28% 46.59% 16.00%
Ratios/Supplemental Data
Ratio of expenses to average net assets (a) (b) 1.09%* 1.21% 2.08%*
Ratio of net investment income (loss) to average net assets(b) (.20) (.41) (1.44)
Portfolio turnover rate 31%* 46% 59%*
Net assets at end of period $199,915,469 $128,957,911 $21,903,536
The average commissions paid per share on stock transactions
for the six months ended June 30, 1997 and the year
ended December 31, 1996 was $.0574 and $.0581, respectively.
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Annualized
(a) In accordance with a requirement of the Securities and Exchange
Commission, this ratio reflects gross custodian fees. This ratio net of
custodian fees paid indirectly would have been 1.07% for the six
months ended June 30, 1997, 1.19% for the year ended December 31, 1996
and 2.00% for the period ended December 31, 1995.
(b) The Fund was reimbursed by the Advisor for certain expenses from
May 3, 1995 through December 31, 1995. Without the reimbursement, the
ratio of expenses to average net assets and the ratio of net investment
income to average net assets for the period ended December 31, 1996
would have been 2.35% and (1.71%), respectively.
(c) Net investment loss per share for the six months ended June 30, 1997
and the year ended December 31, 1996 was based upon the average
shares outstanding during the period.
See accompanying notes to financial statements.
20
<PAGE>
Wanger Advisors Trust 1997 Semi-Annual Report
- --------------------------------------------------------------------------------
Wanger International Small Cap Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Six months ended Year ended May 3, 1995 through
June 30, 1997 December 31, 1996 December 31, 1995
================================================================================================================================
<S> <C> <C> <C>
Net Asset Value, beginning of period $17.71 $13.45 $10.00
Income From Investment Operations
Net investment income (loss) (c) .05 (.09) (.03)
Net realized and unrealized gain on investments 1.73 4.38 3.48
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.78 4.29 3.45
Less Distributions
Dividends from net investment income - - -
Distributions from net realized gain (.42) (.03) -
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions (.42) (.03) -
Net Asset Value, end of period $19.07 $17.71 $13.45
=================================================================================================================================
Total Return 10.21% 32.01% 34.50%
Ratios/Supplemental Data
Ratio of expenses to average net assets (a) (b) 1.64% 1.79% 2.32%
Ratio of net investment income (loss) to average net assets (b) .52% (.56%) (.81%)*
Portfolio turnover rate 38%* 50% 14%*
Net assets at end of period $129,875,876 $84,855,082 $11,368,924
The average commissions paid per share on stock transactions
for the six months ended June 30, 1997 and for the year
ended December 31, 1996 was $.0096 and $.0130, respectively.
- --------------------------------------------------------------------------------------------------------------------------------
*Annualized
</TABLE>
(a) In accordance with a requirement of the Securities and Exchange Commission,
this ratio reflects gross custodian fees. This ratio net of custodian fees
paid indirectly would have been 1.75% for the year ended December 31, 1996
and 2.00% for the period ended December 31, 1995.
(b) The Fund was reimbursed by the Advisor for certain expenses from May 3,
1995 through December 31, 1995. Without the reimbursement, the ratio of
expenses to average net assets and the ratio of net investment income to
average net assets for the period ended December 31, 1995 would have been
4.20% and (2.69%), respectively.
(c) Net investment income (loss) per share for the six months ended June 30,
1997 and the year ended December 31, 1996 was based upon the average shares
outstanding during the period.
See accompanying notes to financial statements.
21
<PAGE>
Wanger Advisors Trust 1997 Semi-Annual Report
- --------------------------------------------------------------------------------
Notes to Financial Statements
(Unaudited)
1. Nature of Operations
Wanger U.S. Small Cap and Wanger International Small Cap ("the Funds") are
series of Wanger Advisors Trust ("the Trust"), an open-end management investment
company organized as a Massachusetts business trust. The investment objective of
each Fund is to seek long-term growth of capital. The Funds are available only
for allocation to certain life insurance company separate accounts established
for the purpose of funding qualified and non-qualified variable annuity
contracts, and may also be offered directly to certain types of pension plans
and retirement arrangements.
2. Significant Accounting Policies
Security valuation
Investments are stated at current value. Securities traded on securities
exchanges or in over-the-counter markets in which transaction prices are
reported are valued at the last sales price at the time of valuation. Securities
for which there are no reported sales on the valuation date are valued at the
mean of the latest bid and ask quotation or, if there is no ask quotation, at
the most recent bid quotation. Money market instruments having a maturity of 60
days or less from the valuation date are valued on an amortized cost basis.
Securities for which quotations are not readily available and any other assets
are valued as determined in good faith by the Board of Trustees.
Foreign currency translations
Values of investments denominated in foreign currencies are converted into U.S.
dollars using the spot market rate of exchange at the time of valuation.
Purchases and sales of investments and dividend and interest income are
translated into U.S. dollars using the spot market rate of exchange prevailing
on the respective dates of such transactions. The gain or loss resulting from
changes in foreign exchange rates is included with net realized and unrealized
gain or loss from investments, as appropriate.
Security transactions and investment income
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon as
the information is available to the Fund. Interest income is recorded on the
accrual basis and includes amortization of discounts on money market instruments
and on long-term debt instruments when required for federal income tax purposes.
Realized gains and losses from security transactions are reported on an
identified cost basis.
Fund share valuation
Fund shares are sold and redeemed on a continuing basis at net asset value. Net
asset value per share is determined daily as of the close of trading on the New
York Stock Exchange on each day the Exchange is open for trading by dividing the
total value of the Fund's investments and other assets, less liabilities, by the
number of Fund's shares outstanding.
Custodian fees
Custodian fees are reduced based on each Fund's cash balances maintained with
the custodian. This presentation does not affect the determination of net
investment income.
Federal income taxes, dividends and distributions to shareholders
The Funds have complied with the special provisions of the Internal Revenue Code
available to regulated investment companies and, in the manner provided therein,
distribute all of their taxable income, as well as any net realized gain on
sales of investments and foreign currency transactions reportable for federal
income tax purposes.
Wanger International Small Cap has elected to mark-to-market its
investments in Passive Foreign Investment Companies ("PFICS") for income tax
purposes. In accordance with this election, the Fund recognizes net unrealized
appreciation on PFICS as ordinary income for federal income tax purposes.
Cumulative net unrealized appreciation at June 30, 1997 amounted to $187,956.
Dividends and distributions payable to its shareholders are recorded by
each Fund on the ex-dividend date.
22
<PAGE>
Wanger Advisors Trust 1997 Semi-Annual Report
- --------------------------------------------------------------------------------
[WANGER LOGO]
Notes to Financial Statements
(Unaudited)
3. Transaction with Affiliates
The Funds' investment advisor, Wanger Asset Management, L.P., ("WAM")
furnishes continuing investment supervision to the Funds and is responsible for
overall management of the Funds' business affairs. Each Fund pays WAM a monthly
advisory fee based upon average daily net assets at the following rates:
<TABLE>
<CAPTION>
Wanger U.S. Wanger International
Small Cap Small Cap
- --------------------------------------------------------------------
<S> <C> <C>
Average Daily Net Assets:
For the first $100 million 1.00% 1.30%
Next $150 million .95% 1.20%
In excess of $250 million .90% 1.10%
- --------------------------------------------------------------------
</TABLE>
The investment advisory agreement also provides that WAM will reimburse the
Funds to the extent that ordinary operating expenses (computed based on net
custodian fees) exceed 1.50% for Wanger U.S. and 1.90% for Wanger International
Small Cap, of average net assets. WAM was not required to reimburse the Funds
under these agreements for the six months ended June 30, 1997.
Certain officers and trustees of the Trust are also principals of WAM. The
Trust makes no direct payments to its officers and trustees who are affiliated
with WAM. Wanger U.S. Small Cap and Wanger International Small Cap incurred
trustees' fees and expenses of $7,950 each in 1997 to trustees not affiliated
with WAM.
WAM advanced $100,000 in connection with the organization and initial
registration of the Fund. These costs are being amortized and reimbursed to WAM
over the period May, 1995 through April, 2000.
WAM Brokerage Services, L.L.C., a wholly-owned subsidiary of WAM, is the
distributor of each Fund's shares and receives no compensation for its services.
- --------------------------------------------------------------------------------
4. Fund Share Transactions
Proceeds and payments on Fund shares as shown in the statements of changes
in net assets are in respect of the following numbers of shares:
<TABLE>
<CAPTION>
---------------------------------------- --------------------------------------
Wanger U.S.Small Cap Wanger International Small Cap
Six months ended Year ended Six months ended Year ended
June 30, 1997 December 31, 1996 June 30, 1997 December 31, 1996
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 3,123,276 6,137,385 2,117,892 4,154,432
Shares issued in reinvestment of dividend and
capital gain distributions 210,886 5,157 136,748 3,911
- ----------------------------------------------------------------------------------------------------------------------------
3,334,162 6,142,542 2,254,640 4,158,343
Less shares redeemed 198,322 432,817 234,237 212,404
- ----------------------------------------------------------------------------------------------------------------------------
Net increase in shares outstanding 3,135,840 5,709,725 2,020,403 3,945,939
============================================================================================================================
</TABLE>
5. Investment Transactions
The aggregate cost of purchases and proceeds from sales other than
short-term obligations for the six months ended June 30, 1997 were:
<TABLE>
<CAPTION>
Purchases Sales
<S> <C> <C>
Wanger U.S. Small Cap $72,035,139 $22,884,152
Wanger International Small Cap 55,007,526 19,800,575
- --------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
Wanger Advisors Trust 1997 Semi-Annual Report
- --------------------------------------------------------------------------------
24
<PAGE>
Wanger Advisors Trust
Trustees
Fred D. Hasselbring
Charles P. McQuaid
P. Michael Phelps
James A. Star
Ralph Wanger
Officers
Ralph Wanger
President
Charles P. McQuaid
Senior Vice President
Terence M. Hogan
Vice President
Marcel P. Houtzager
Vice President
Robert A. Mohn
Vice President
Leah J. Zell
Vice President
Merrillyn J. Kosier
Vice President
Bruce H. Lauer
Vice President and
Treasurer
Paula L. Rogers
Vice President and
Secretary
Kenneth A. Kalina
Assistant Treasurer
Transfer Agent,
Dividend Disbursing Agent
and Custodian
State Street Bank
and Trust Company
Attention:
Wanger Advisors Trust
P.O. Box 8502
Boston, Massachusetts
02266-8502
Distributor
WAM Brokerage
Services, L.L.C.
227 West Monroe Street
Suite 3000
Chicago, Illinois 60606
1-800-5-WANGER
(1-800-592-6437)
Investment Advisor
Wanger Asset
Management, L.P.
227 West Monroe Street
Suite 3000
Chicago, Illinois 60606
1-800-5-WANGER
(1-800-592-6437)
Legal Counsel
Bell, Boyd & Lloyd
Chicago, Illinois
This report, including the unaudited schedules of investments and financial
statements, is submitted for the general information of the shareholders of the
Wanger Advisors Trust. This report is not authorized for distribution unless
preceded or accompanied by a prospectus.
<PAGE>
Wanger Advisors Trust
