2000 Semiannual Report
Wanger U.S. Small Cap
Wanger International Small Cap
Wanger Twenty
Wanger Foreign Forty
Logo: Wanger Advisors Funds
managed by Wanger Asset Management L.P.
<PAGE>
Logo: Wanger Advisors Trust
2000 Semiannual Report
Contents
2 When Railroads were
the "New Economy"
4 Funds at a Glance
6 Performance Review
Wanger U.S. Small Cap
8 Performance Review
Wanger International
Small Cap
10 Performance Review
Wanger Twenty
12 Performance Review
Wanger Foreign Forty
14 Statement of Investments
Wanger U.S. Small Cap
18 Statement of Investments
Wanger International
Small Cap
22 Portfolio Diversification
Wanger International
Small Cap
23 Statement of Investments
Wanger Twenty
25 Statement of Investments
Wanger Foreign Forty
27 Portfolio Diversification
Wanger Foreign Forty
28 Statements of Assets
and Liabilities
29 Statements of Operations
30 Statements of Changes in
Net Assets
32 Financial Highlights
Wanger U.S. Small Cap
33 Financial Highlights
Wanger International
Small Cap
34 Financial Highlights
Wanger Twenty
35 Financial Highlights
Wanger Foreign Forty
36 Notes to Financial Statements
38 Prospectus Supplement
WANGER ASSET MANAGEMENT, L.P. ("WAM") IS ONE OF THE LEADING GLOBAL SMALL-CAP
EQUITY MANAGERS IN THE U.S. WITH 29 YEARS OF SMALL-CAP INVESTMENT EXPERIENCE.
WAM MANAGES OVER $9 BILLION IN EQUITIES AND IS THE INVESTMENT ADVISER TO WANGER
U.S. SMALL CAP, WANGER INTERNATIONAL SMALL CAP, WANGER TWENTY, WANGER FOREIGN
FORTY AND THE ACORN FAMILY OF FUNDS.
WAM USES A UNIQUE STYLE OF CATCHING TRENDS WITH SMALL, ATTRACTIVELY PRICED
NICHE COMPANIES. FOR MORE COMPLETE INFORMATION ABOUT OUR FUNDS, INCLUDING THE
ACORN FUNDS, OR OUR FEES AND EXPENSES, CALL WAM BROKERAGE SERVICES, L.L.C.,
DISTRIBUTOR, AT 1-800-5-WANGER FOR A PROSPECTUS. READ IT CAREFULLY BEFORE YOU
INVEST OR SEND MONEY.
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Wanger Advisors Trust 2000 Semiannual Report
LOGO: SQUIRREL CHATTER:
WHEN RAILROADS WERE THE "NEW ECONOMY"
Watching the boom and bust cycle of Internet stocks in recent months, I thought
it might be interesting to review what happened when "New Economy" industries
took over 150 years ago. The predecessor to today's Information Revolution (the
Internet, the cell phone and the personal computer) was the industrial
Revolution. The steam locomotive, invented in 1829 in England, was the pivotal
invention of the Industrial Age. Soon after the first locomotive ran from
Manchester to Liverpool, "dot.rr" ventures began to spring up. By the end of
1845, 1,428 railway ventures had been proposed and were waiting to receive
Parliamentary permission to raise capital./1/ A great IPO boom occurred in
Britain, with all the greed, hype, and chicanery we know and love today. As
always, the bubble burst shortly thereafter, bringing the usual losses and
complaints.
BUILDING THE UNION PACIFIC
In America, railroads were built with equal enthusiasm. In 1830 there were only
32 miles of U.S. railroad track. By 1870 that number reached 125,000 miles. The
need for a transcontinental railroad was visualized as early as 1840, at a time
when railroads were primitive and the West was only inhabited by Indians, who
were considered to be hostile savages. The discovery of gold in California in
1848, followed by additional gold and silver strikes in Colorado and Nevada,
made a railroad more desirable, although it was clear that any construction
still would have to be subsidized by the government. In the mid-1850s, Congress
debated building a railroad from the Midwest to California, but the slavery
issue blocked any decision. The Southern states wanted a route through Texas and
Arizona. The North, intent on blocking the extension of slavery into the West,
wanted a central route through Nebraska and Colorado.
When the Civil War started, the Southerners left Congress, allowing the
remaining Northern government to build the central route. The route was to be
from the Missouri River (eventually Omaha) through Nebraska and Wyoming to
Ogden, Utah. The Central Pacific Railroad was to build east from California
through the Sierra Nevada Mountains and link up to the Union Pacific.
The chief construction engineer of the Union Pacific was General Granville M.
Dodge. He was experienced in railroad building and had also been a successful
combat commander in the Union Army. Building a railroad through uninhabited
areas, fighting Indians along the way, matched Dodge's abilities perfectly. The
railroad "army" Dodge commanded was made up of 10,000 workmen plus 10,000 draft
animals. Advance parties of surveyors located the route. Graders, who could
grade three miles a day on level plains, followed them. The graders operated
several hundred miles ahead of the tracklayers. Bridge building gangs could
construct major bridges in 30 days or less. To accommodate the workers, a
floating civilian population of gamblers, bartenders and prostitutes built
temporary towns along the route. During 1867 and 1868, the Union Pacific had
periods in which they laid four to seven miles of track per day!/2/
OPENING THE WEST
Low freight rates transformed the country (cheap communication is doing the same
thing today). In the 1850s it cost $0.30 per pound to ship goods from St.
Joseph, Missouri to Ogden, Utah, a 1,000-mile trip ($0.60 per ton-mile). At this
rate, only the most valuable and essential items were worth shipping. The Union
Pacific was finished in 1869. By 1880, freight rates were down to $0.02 per
ton-mile, one-thirtieth of pre-rail costs. A dozen years later, the rate was
less than a penny as competition between railroads forced rates ever lower. New
industries were created as the agricultural bounty of the Midwest was made
accessible. The introduction of an inexpensive means to ship grain, cattle, coal
and mineral ore to the East brought prosperity and wealth to the West. New
cities sprung up and old ones withered./3/ Charles F. Adams, Jr., of the
Massachusetts Adams', was a serious scholar of the railroads and later became
president of the Union Pacific. He wrote in 1871:
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[The railroad] makes the grass grow in the once busy streets of small
commercial centers like Nantucket, Salem and Charleston. ... It threatens
to make a solitude of the once busy wharves of Boston, and it fills New
Hampshire with deserted farms. ... Meanwhile San Francisco and Chicago
spring up like a very palace of Aladdin.
Adams was right about San Francisco and Chicago. In 1835, San Francisco was only
one shanty. In 1869 it was a big city of 170,000 and booming. The statistics for
Chicago are even more remarkable. In 1830 no more that 100 souls survived in "an
uninviting swamp." By 1847, there was a town of 8,000; ten years later, 100,000;
and in 1869 it was a major city of 300,000 and the fastest growing city in
America./4/
Investors "downstream from the railroads" -- those that used, rather than ran,
the railroads -- made some impressive fortunes. But how successful were the
mighty railway companies themselves? Not very. Over the 70 years that marked the
strongest period in rail history (1860-1930), most railways went broke at least
once because of fierce competition. The different rail companies tried to
collude to keep rates up, but always one competitor would break ranks and
re-ignite a rate war. Bankruptcies were frequent (as with the airlines today)
but the railroads continued to operate in receivership. The Union Pacific itself
went bust in 1893./5/ Adams wrote the following about railroad investments. If
you care to, read it twice replacing "railroad" with "Internet". Either way, it
works.
People continuously refer to the brilliant successes in railroad
enterprises; they do not so often count the failures. ... The profits upon
railroad enterprises, as a whole, are not excessive; the business is one
which affords in this country even less than the average return upon the
capital invested in it. [His estimate: no more than 6.8% return on assets,
and this was before the depression of 1873.]/6/
Railroads were the dominant industry from 1860 to 1930 but have been displaced
by truck lines. Today, the railroad industry makes up only 0.4% of the S&P 500.
Pop quiz: Name one of the manufacturers of steam locomotives in 1900./7/
The Internet is promoting growth in much the same way the railroads did.
Competition among Internet companies is preventing them from making substantial
profits but companies that have learned how to use the Internet to improve their
operations -- many of those stodgy "Old Economy" names -- are discovering new
avenues for growth and profits.
Photo of: Ralph Wanger
RALPH WANGER
Chief Investment Officer
Wanger Asset Management, L.P.
---------------------------------------------------------------
A.M. Kelly in New York has published a series of historic
business books referenced in this essay. They include:
/1/ The Commercial Crisis 1847-48 (1840), Evans, D. Morier,
1969, p. 23-38.
/2/ History of the Union Pacific (1923), Trottman, Nelson, 1966,
p. 7, 22, 61.
/3/ History of the Union Pacific Railway (1895), White, Henry K,
1973, p. 71.
/4/ Chapters of Erie (1871), Adams, Charles F. and Henry, 1967,
p. 346-347.
/5/ History of the Union Pacific Railway (1895), op. cit., p. 61.
/6/ Chapters of Erie (1871), op. cit., p. 410.
/7/ Locomotive manufacturers in 1900 included Baldwin and
American Locomotive. Both still exist today as part of
holding companies, but they are not major names.
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Wanger Advisors Trust 2000 Semiannual Report
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FUNDS AT A GLANCE
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WANGER U.S. SMALL CAP
RESULTS TO JUNE 30, 2000
2nd Year to Last 12
quarter date months
Wanger U.S. Small Cap -12.15% -14.59% -3.14%
Russell 2000 -3.78% 3.04% 14.32%
S&P MidCap 400 -3.30% 8.97% 16.98%
S&P 500 -2.66% -0.42% 7.25%
WANGER U.S. SMALL CAP N.A.V. AS OF 6/30/00: $18.59
The Russell 2000 is formed by taking the 3,000 largest U.S. companies and then
eliminating the largest 1,000, leaving a mainly small company index. The S&P
MidCap 400 is a market value-weighted index of 400 U.S. stocks that are in the
next tier down from the S&P 500. The S&P 500 is a broad market-weighted average
of blue-chip U.S. companies. All indexes are unmanaged and include reinvested
dividends.
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WANGER U.S. SMALL CAP TOP 5 INDUSTRIES
As a % of net assets, as of 6/30/00
Information 48.7%
Energy/Minerals 10.7%
Finance 9.9%
Health Care 8.9%
Industrial Goods/Services 6.4%
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WANGER U.S. SMALL CAP TOP 10 HOLDINGS
1. Dynegy 4.0%
Natural Gas & Electric Processing,
Production and Marketing
2. Telephone and
Data Systems 3.5%
Cellular & Telephone Services
3. JDA Software Group 3.3%
Applications/Software &
Services for Retailers
4. First Health 3.1%
PPO Network
5. Lincare Holdings 3.0%
Home Health Care Services
6. Perkin Elmer 3.0%
Analytical Instruments for
Biotech/Telecom
7. Commonwealth
Telephone 3.0%
Rural Phone Franchises & CLEC
8. Tektronix 2.9%
Analytical Instruments
9. Aspect
Telecommunications 2.7%
Call Center Equipment
10. Insurance Auto
Auctions 2.4%
Auto Salvage Services
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WANGER INTERNATIONAL SMALL CAP
RESULTS TO JUNE 30, 2000
2nd Year to Last 12
quarter date months
WANGER INTERNATIONAL
SMALL CAP -18.55% -3.13% 75.67%
EMI World ex-U.S. -1.74% 0.25% 14.98%
EAFE -3.96% -4.06% 17.16%
Lipper International Small
Cap Funds Index -9.79% -0.41% 37.74%
Lipper International
Funds Index -4.70% -4.11% 23.63%
WANGER INTERNATIONAL SMALL CAP N.A.V. AS OF 6/30/00: $38.30
The EMI is Salomon Smith Barney's index of the bottom 20% of
institutionally investable capital of non-U.S. countries, as selected by
Salomon. EAFE is Morgan Stanley's Europe, Australasia and Far East
Index, an index of companies throughout the world in proportion to
world stock market capitalization, excluding the U.S. and Canada.
Lipper Indexes include the largest funds tracked by Lipper, Inc. in the
named category. The Lipper International Small Cap Funds Index is
made up of the 10 largest non-U.S. funds investing in small-cap
companies. The Lipper International Funds Index consists of the 30
largest non-U.S. funds, not including non-U.S. small-cap funds. All
indexes are unmanaged and returns include reinvested dividends.
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WANGER INTERNATIONAL SMALL CAP TOP 5 COUNTRIES
As a % of net assets, as of 6/30/00
United Kingdom 9.9%
Sweden 9.2%
Japan 8.6%
Netherlands 8.5%
Canada 7.4%
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WANGER INTERNATIONAL SMALL CAP TOP 10 HOLDINGS
1. Omni Industries 2.8%
Contract Electronics
Manufacturer-Singapore
2. ERG 2.6%
Smart Card Systems for Public
Transportation-Australia
3. Informa Group 2.1%
Business Information
Provider-United Kingdom
4. Enitel 2.0%
Telecommunication Services-Norway
5. Selecta Group 1.8%
Vending Machine
Owner/Operator-Switzerland
6. GFK 1.8%
Market Research
Services-Germany
7.Telindus Group 1.8%
Network Integration
Services-Belgium
8. Kempen 1.8%
Stock Brokerage/Investment
Management-Netherlands
9. Datacraft Asia 1.5%
Network Integrator-Singapore
10. Class Editore 1.5%
Newspapers & On-line Financial
Data-Italy
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Wanger Advisors Trust 2000 Semiannual Report
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FUNDS AT A GLANCE
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WANGER TWENTY
RESULTS TO JUNE 30, 2000
2nd Year to Last 12
quarter date months
WANGER TWENTY 0.91% 2.92% 10.31%
Russell 2000 -3.78% 3.04% 14.32%
S&P MidCap 400 -3.30% 8.97% 16.98%
S&P 500 -2.66% -0.42% 7.25%
Lipper Mid Cap Funds Index -5.22% 8.68% 39.91%
WANGER TWENTY N.A.V. AS OF 6/30/00: $13.24
The Russell 2000 is formed by taking the 3,000 largest U.S. companies and then
eliminating the largest 1,000, leaving a mainly small-company index. The S&P
MidCap 400 is a market value-weighted index of 400 U.S. stocks that are in the
next tier down from the S&P 500. The S&P 500 is a broad market-weighted average
of blue-chip U.S. companies. The Lipper Mid Cap Funds Index measures the
performance of the 30 largest mid-cap funds tracked by Lipper. All indexes are
unmanaged and include reinvested dividends.
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WANGER TWENTY TOP 5 INDUSTRIES
As a % of net assets, as of 6/30/00
Information 48.1%
Health Care 12.8%
Consumer Goods/Services 10.7%
Industrial Goods/Services 5.9%
Energy/Minerals 5.4%
Finance 4.2%
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WANGER TWENTY TOP 10 HOLDINGS
1. Tektronix 8.7%
Analytical Instruments
2. Techne 7.6%
Cytokines, Antibodies, other
Reagents for Life Sciences
3. Perkin Elmer 6.4%
Analytical Instruments for
Biotech/Telecom
4. Dynegy 5.4%
Natural Gas & Electric Processing,
Production and Marketing
5. Jabil Circuit 5.1%
Electronic Manufacturing Services
6. Getty Images 4.8%
Photographs for Publications &
Electronic Media
7. First Health 4.6%
PPO Network
8. Pinnacle Holdings 4.5%
Towers for Cellular, PCS & Paging
9. Harley-Davidson 4.3%
Motorcycles & Related Merchandise
10. SEI Investments 4.2%
Mutual Fund Administration
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Each fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statements of Investments for complete lists of a
fund's holdings, including those described under Performance Review. Past
performance does not guarantee future results. The investment return and
principal value of an investment in the Funds will fluctuate so that Fund
shares, when redeemed, may be worth more or less than their original cost.
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WANGER FOREIGN FORTY
RESULTS TO JUNE 30, 2000
2nd Year to Last 12
quarter date months
WANGER FOREIGN FORTY -3.16% 9.81% 77.92%
EAFE -3.96% -4.06% 17.16%
SSB World ex U.S.
Cap Range $2-10B -0.54% -1.25% 15.14%
WANGER FOREIGN FORTY N.A.V. AS OF 6/30/00: $19.29
EAFE is Morgan Stanley's Europe, Australasia and Far East Index, a widely
recognized international benchmark that comprises 20 major markets in Europe,
Australia and the Far East. The SSB World ex U.S. Cap Range $2-10B is a subset
of Salomon Smith Barney's Broad Market Index, representing a mid-cap developed
market index excluding the U.S. All indexes are unmanaged and returns include
reinvested dividends.
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WANGER FOREIGN FORTY TOP 5 COUNTRIES
As a % of net assets, as of 6/30/00
United Kingdom 17.2%
Israel 11.2%
Australia 7.7%
Japan 6.8%
Canada 6.7%
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WANGER FOREIGN FORTY TOP 10 HOLDINGS
1. Amdocs 5.5%
Telecommunications Billing &
Customer Care Software-Israel
2. Audiofina 4.6%
TV & Radio Broadcaster-Belgium
3. ERG 4.2%
Smart Card Systems for Public
Transportation-Australia
4. Comverse Technology 4.1%
Voicemail & Related Systems-
Israel
5. Irish Life & Permanent 3.8%
Savings Products-Ireland
6. Celestica 3.5%
Electronic Manufacturing
Services-Canada
7. Computershare 3.4%
Financial Software/Services-
Australia
8. Clearnet
Communications 3.2%
Mobile Communications-Canada
9. Venture
Manufacturing 3.2%
Electronic Manufacturing
Services-Singapore
10. Star Cruises 2.9%
Cruise Line-Singapore
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Wanger Advisors Trust 2000 Semiannual Report
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LOGO: PERFORMANCE REVIEW WANGER U.S. SMALL CAP
Hitting its first rough patch since its launch five years ago, Wanger U.S. Small
Cap fell 14.6% during the first half of the year vs. the Russell 2000, up 3.0%.
While short-term performance lagged, the Fund's 19.9% average annual return
outscores the Russell's 15.3% average annual gain since the Fund's inception
(5/3/95 - 6/30/00).
What happened? As you might expect, the (mis)behavior of our technology holdings
hurt the Fund's overall performance. In an unfortunate reversal, the tech names
that have punished us so far in 2000 are the same stocks that pushed the Fund to
the top of our peer group during the second half of last year.
Internet businesses are difficult to value so most investors let the stock
market dictate value and follow its lead. We know Internet stocks are worth
something. Our goal is to buy them at reasonable values. We paid reasonable
prices for the "real world" businesses of Micros Systems, Project Software and
Aztec Technology, without having to pay much for the upside potential of their
Internet ventures. During the Internet rally in the second half of 1999, these
companies doubled or tripled as the market fell in love with every Internet
possibility. Last quarter, however, the romance was over. These same businesses
were hurt by their Internet association and are essentially back where they
started. In addition, revenue shortfalls announced by Micros Systems, RCN and
Sykes Enterprises crushed their stock prices.
While our technology exposure has hurt Fund performance, we want to assure
shareholders that we are not being overly aggressive in this area. As of June
30, 22% of the Fund's assets were invested in technology stocks, with an
additional 13% in communications stocks, some of which mimic the techs (RCN, a
new age fiber optics telecom network) and some of which act nothing like a tech
stock (Commonwealth Telephone, a local phone company). Overall, our tech
weighting has been, and remains, close to the weighting of the Russell 2000
Index.
Despite the wrenching readjustment we've been through, many of our top holdings
are strong growth companies trading at record-low valuations. When investors
start looking for quality, we think these names should get attention, pushing
valuations back upward.
Photo of: Robert A. Mohn
ROBERT A. MOHN
Portfolio Manager
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Wanger Advisors Trust 2000 Semiannual Report
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WANGER U.S. SMALL CAP RESULTS TO JUNE 30, 2000
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THE VALUE OF A $10,000 INVESTMENT IN TOTAL RETURN FOR EACH PERIOD
WANGER U.S. SMALL CAP MAY 3, 1995 THROUGH JUNE 30, 2000
Line Chart:
WANGER
U.S. RUSSELL
SMALL CAP 2000
5/3/95 10000 10000
6/30/95 10770 10707
12060 11765
12/31/95 11600 12020
13297 12633
6/30/96 15351 13265
15792 13310
12/31/96 17004 14003
16366 13279
6/30/97 19093 15431
22395 17728
12/31/97 22005 17134
24865 18858
6/30/98 25361 17978
20875 14356
12/31/98 23916 16697
22388 15792
6/30/99 26375 18248
25389 17094
12/31/99 29909 20247
29077 21682
6/30/00 25545 20862
AVERAGE ANNUAL
TOTAL RETURN
1 Year: -3.14%
3 Years: 10.18%
5 Years: 18.83%
Life: 19.90%
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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, 2000 with the
Russell 2000. Dividends and capital gains are reinvested. The performance data
quoted is past performance 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. Due
to ongoing market volatility, performance is subject to substantial short-term
fluctuations. Wanger U.S. Small Cap is a diversified fund that invest primarily
in the stocks of small- and medium-size U.S. companies. Smaller company stocks
are often more volatile or less liquid than the stocks of larger companies.
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Wanger Advisors Trust 2000 Semiannual Report
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LOGO: PERFORMANCE REVIEW WANGER INTERNATIONAL SMALL CAP
Wanger International Small Cap was off 3.1% for the first six-months of the
year, faring better than the 4.1% decline of the EAFE Index but finishing behind
the EMI World ex U.S., which eked out a 0.3% return for the period. With U.S.
market volatility rippling across foreign borders, small-cap stocks around the
globe lost ground during the period, but we remain excited about the portfolio's
prospects going forward.
For instance, although Omni Industries put a damper on short-term returns, our
conviction in the stock -- historically an excellent long-term performer for the
Fund -- remains intact. A Singapore-based contract manufacturer, Omni declined
amid concerns about component shortages. Despite this set back, we think Omni
has what it takes to address these issues and maintain the profitable niche it
has established within the technology outsourcing arena.
Internet consultants, such as FI Systems (France) and Icon Medialab (Sweden),
retreated as foreign investors followed the lead of their U.S. counterparts and
sold off technology names indiscriminately. We believe that these premier
consultants are set to prosper, regardless of which businesses ultimately
dominate the Internet. The consultants are not unlike the shovel salesmen in a
gold rush: Only a few miners strike it rich but all need shovels for digging.
On the upside, UK-based electronics firm Chloride Group surged, propelled by
strong earnings as well as by management's optimistic outlook for increased
demand. Also in the technology camp, German semiconductor manufacturer Dialog
Semiconductor rocketed upwards, thanks to strong demand for its mobile phone
chips.
Outsourcing, a key portfolio theme, was also represented among the Fund's
leading names. Dutch temporary employment provider Unique International rose
briskly, as did Patheon, a Canadian provider of outsourced drug manufacturing
and development services.
As always, we remain committed to finding the best small companies in the world
to include in the Wanger International Small Cap portfolio. Our philosophy is to
own these stocks through up and down market cycles, allowing the value to build
over time. Despite the bumpy road we traveled this period, we remain very
positive about what lies ahead. International markets are changing faster than
we ever expected as an emerging local interest in equities is helping to expand
and support the pool of investment options.
Photo of: Marcel P. Houtzager
MARCEL P. HOUTZAGER
Lead Portfolio Manager
Photo of: Peter Zaldivar
PETER ZALDIVAR
Co-Portfolio Manager
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Wanger Advisors Trust 2000 Semiannual Report
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WANGER INTERNATIONAL SMALL CAP RESULTS TO JUNE 30, 2000
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THE VALUE OF A $10,000 INVESTMENT IN TOTAL RETURN FOR EACH PERIOD
WANGER INTERNATIONAL SMALL CAP MAY 3, 1995 THROUGH JUNE 30, 2000
Line Chart:
WANGER EMI
INTERNATIONAL WORLD
SMALL CAP EX-U.S.
5/3/95 10000 10000
6/30/95 10970 9556
12910 9933
12/31/95 13450 10123
15499 10704
6/30/96 17183 11177
17023 10924
12/31/96 17755 10855
18357 10656
6/30/97 19568 11422
19363 10960
12/31/97 17496 9835
21307 11526
6/30/98 21410 11485
17437 9747
12/31/98 20352 11030
21564 11187
6/30/99 25404 11875
12/31/99 46072 13619
54789 13896
6/30/00 44628 13653
AVERAGE ANNUAL
TOTAL RETURN
1 Year: 75.67%
3 Years: 31.60%
5 Years: 32.36%
Life: 33.57%
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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,
2000 with the EMI World ex-U.S. Dividends and capital gains are reinvested. The
performance data quoted is past performance 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. Due to ongoing market volatility, performance is
subject to substantial short-term fluctuations. The Fund's performance,
particularly during 1999, was achieved during a period of very favorable market
conditions, particularly for European companies and for companies worldwide in
the technology, media and telecommunications industries. These conditions may
not continue, and performance at the levels the Fund achieved during 1999 is
unlikely to be repeated. Wanger International Small Cap is a diversified fund
that invests primarily in the stocks of non-U.S. companies with capitalizations
of less than $2 billon. Smaller company stocks are often more volatile or less
liquid than the stocks of larger companies. Wanger International Small Cap
invests in foreign securities, which involve risks including currency
fluctuation, sometimes lower liquidity, economic and political risks and
different accounting methods.
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Wanger Advisors Trust 2000 Semiannual Report
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LOGO: PERFORMANCE REVIEW WANGER TWENTY
Wanger Twenty was up 2.9% for the first half of the year while the S&P MidCap
400 gained 9.0% and the Lipper Mid Cap Funds Index returned 8.7%. The S&P 500
was off 0.4%. The market's focus on growth stocks, particularly in technology,
hurt our more value-oriented portfolio in the first quarter but we regained some
ground in the second quarter (up 0.9% while both mid-cap indexes declined more
than 3%) when the tech bubble burst.
Several of the Fund's winners shared a common theme: They provide tools to
high-growth industries like technology, telecommunications, and the life
sciences. Techne, for example, rose 88% during the quarter as investors realized
biotech and drug companies will likely increase spending on the company's
cytokines (cellular proteins used to test drug/cell interaction) and reagents
(enzymes used in chemical reactions as catalysts) for research and development
now that the human genome has been sequenced. Similarly, Waters gained 31% as
growth accelerates in its mass spectrometry (a devise used to measure the
molecular weight of a substance using light) business due to increased protein
analysis following the gene-sequencing breakthrough. Tektronix, a winner last
quarter, rose 32% after reporting strong results in its test and measurement
instrument business, which sells products to the high-growth technology and
telecommunications industries.
Two significant losers during the quarter were Reynolds & Reynolds, a
manufacturer of business forms and computer systems used by car dealers, and H&R
Block, a familiar name in tax preparation services. Reynolds & Reynolds lost 32%
after announcing a dilutive equity transaction with partner General Motors. H&R
Block fell 27% on disappointing earnings news that followed this year's tax
season. Both of these names have strong franchises in growing industries and
generate significant cash flow. Therefore, we are willing to be patient until
the market comes to appreciate the value of their businesses.
Following our "downstream from technology" theme, Wanger Twenty chose to invest
in companies benefiting from technology while avoiding pure technology names.
This theme is not only prevalent in stocks mentioned previously, but also in
more prosaic industries. Herman Miller, for example, manufactures office
furniture, hardly a high-tech industry. Miller does, however, use technology
extensively to provide customers with three-dimensional product models on its
web page. By taking advantage of technology's increasing power and decreasing
price, Miller has become the premier company within its industry.
Ending the quarter on a high note, Wanger Twenty was up 8.9% in June. The market
appears to be favoring mid-cap stocks, as this group has outperformed large- and
small-cap stocks so far this year.* This environment should prove favorable to
the Fund's concentrated, mid-cap approach going forward.
*From January 1 through June 30, 2000, the S&P MidCap 400 was up 9.0% while the
large-cap focused S&P 500 was down 0.4% and the small-cap Russell 2000 Index
posted a 3.0% return.
Part of the performance shown is due to the Fund's purchases of securities in
IPOs. Some of those securities were held as investments in the Fund and others
were sold soon after purchase. It is anticipated that the Fund's purchases of
securities in IPOs may continue in the future, but continuation is not certain
and the impact of IPO purchases is likely to decline as the Fund grows larger.
Photo of: John H. Park
JOHN H. PARK
Portfolio Manager
10
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Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
WANGER TWENTY RESULTS TO JUNE 30, 2000
--------------------------------------------------------------------------------
THE VALUE OF A $10,000 INVESTMENT IN TOTAL RETURN FOR THE PERIOD
WANGER TWENTY FEBRUARY 1, 1999 THROUGH JUNE 30, 2000
Line Chart:
WANGER S & P MIDCAP
TWENTY 400
2/1/99 10000 10000
3/31/99 10530 9741
6/30/99 12530 11120
9/30/99 11410 10186
12/31/99 13430 11937
3/31/00 13697 13451
6/30/00 13822 13008
AVERAGE ANNUAL
TOTAL RETURN
Year to date: 2.92%
1 Year: 10.31%
Life of Fund: 25.73%
--------------------------------------------------------------------------------
This graph compares the results of $10,000 invested in Wanger Twenty on February
1, 1999 through June 30, 2000, to the S&P MidCap 400 Index, with dividends and
capital gains reinvested. The performance data quoted is past performance 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. Due to ongoing market volatility,
performance is subject to substantial short-term fluctuations. Part of the
performance shown is due to the Fund's purchase of securities in IPOs. The
impact of IPO purchases declines as a Fund grows large. Wanger Twenty is a
non-diversified fund that invests primarily in the stocks of medium- to
larger-size U.S. companies. Each stock may represent a significant part of its
overall portfolio. The performance of each of these larger holdings will have a
greater impact on Wanger Twenty's total return and may make the fund's returns
more volatile than a more diversified fund. Mid-cap stocks are more volatile and
may be less liquid than large-cap stocks.
11
<PAGE>
Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
LOGO: PERFORMANCE REVIEW WANGER FOREIGN FORTY
Wanger Foreign Forty gained 9.8% during the first half of the year, strongly
outperforming the EAFE Index, off 4.1%, and the SSB World ex-U.S. Cap Range
Index, down 1.3%. As of June 30, the Fund's total return ranked first among the
129 funds in the Lipper Variable Annuity International Funds category for the
one-year period ended June 30, 2000.
Recent additions from Australia served the Fund well. ERG Limited, a producer of
smart cards used in public transportation and telecommunications, was up 74%,
and Computershare, a financial software company, saw a 30% gain. The Fund also
benefited from participation in the initial public offering of Bookham
Technology, a UK manufacturer of optical components used in telecom networks.*
Among our veteran holdings, Amdocs, an Israeli billing software developer, rose
116%, and Belgium's Audiofina, a European broadcast media leader, increased 72%.
Several of our strong, long-term performers gave back some ground over the six
months. Singapore-based Star Cruises hit choppy water, sinking 47% on news of
slowing demand across the cruise industry. However, we feel Star will see a
turnaround as Asia's middle class expands. Telecommunication stocks declined in
the second quarter hurting UK telecom company Thus, off 40%, and Japanese call
center operator Bellsystem24, down 43%.
The world of equity investing outside the United States is changing faster than
we ever imagined it would. In Europe, for example, new equity issues are
breaking all previous records. Much of this cash is funding young, fast-growing
enterprises that are going public for the first time. As buyers of small- to
mid-cap stocks, we should benefit from a larger pool of stocks and a growing
local interest in investing.
*Part of the performance shown is due to the Fund's purchases of securities in
IPOs. Some of those securities were held as investments in the Fund and others
were sold soon after purchase. It is anticipated that the Fund's purchases of
securities in IPOs may continue in the future, but continuation is not certain
and the impact of IPO purchases is likely to decline as the Fund grows larger.
Photo of: Marcel P. Houtzager
MARCEL P. HOUTZAGER
Co-Portfolio Manager
Photo of: Roger D. Edgley
ROGER D. EDGLEY
Co-Portfolio Manager
12
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Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
WANGER FOREIGN FORTY RESULTS TO JUNE 30, 2000
--------------------------------------------------------------------------------
THE VALUE OF A $10,000 INVESTMENT IN TOTAL RETURN FOR THE PERIOD
WANGER FOREIGN FORTY FEBRUARY 1, 1999 THROUGH JUNE 30, 2000
Line Chart:
WANGER
FOREIGN
FORTY EAFE
2/1/99 10000 10000
3/31/99 10190 10169
6/30/99 11350 10428
9/30/99 11650 10885
12/31/99 18390 12734
3/31/00 20853 12721
6/30/00 20193 12217
AVERAGE ANNUAL
TOTAL RETURN
Year to Date: 9.81%
1 Year: 77.92%
Life of Fund: 64.40%
--------------------------------------------------------------------------------
This graph compares the results of $10,000 invested in Wanger Foreign Forty on
February 1, 1999 through June 30, 2000, to the EAFE Index, with dividends and
capital gains reinvested. The performance data quoted is past performance 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. Due to ongoing market volatility,
performance is subject to substantial short-term fluctuations. The Fund's
performance, particularly during 1999, was achieved during a period of very
favorable conditions, particularly for European companies and for companies
worldwide in the technology, media and telecommunications industries. Those
conditions may not continue, and performance at the levels of 1999 is unlikely
to be repeated. Part of the performance shown is due to the Fund's purchases of
securities in IPOs. The impact of IPO purchases declines as a Fund grows large.
Wanger Foreign Forty is a non-diversified fund that invest in the stocks of
medium- to larger-size companies with market capitalizations of $5 billion to
$15 billion. Each stock may represent a significant part of its overall
portfolio. The performance of each of these larger holdings will have a greater
impact on Wanger Foreign Forty's total return and may make the fund's returns
more volatile than a more diversified international fund. Mid-cap stocks are
more volatile and may be less liquid than large-cap stocks. Wanger Foreign Forty
invests in foreign securities, which involve risks including currency
fluctuation, sometimes lower liquidity, economic and political risks and
different accounting methods.
13
<PAGE>
Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
WANGER U.S. SMALL CAP STATEMENT OF INVESTMENTS (unaudited) JUNE 30, 2000
--------------------------------------------------------------------------------
Number of Value
Shares
Common Stocks-89.9%
Information-48.7%
--------------------------------------------------------------------------------
Broadcasting-0.1%
18,000 Young Broadcasting (b) $462,375
Television Stations
--------------------------------------------------------------------------------
Television Programming-1.5%
305,000 Mediacom Communications (b) 4,689,375
Cable Television Franchises
65,000 Classic Communications (b) 580,937
Cable Television in Rural Areas
--------------------------------------------------------------------------------
5,270,312
--------------------------------------------------------------------------------
Radio-0.8%
308,300 Salem Communications (b) 2,861,409
Radio Stations for Religious Programming
--------------------------------------------------------------------------------
Telecommunications/Wireline Communications-4.9%
228,300 Commonwealth Telephone (b) 10,744,368
Rural Phone Franchises & CLEC
282,000 RCN (b) 7,155,750
Metro Market CLEC: Voice, Video &
Internet Services
--------------------------------------------------------------------------------
17,900,118
--------------------------------------------------------------------------------
Mobile Communications-7.5%
128,000 Telephone & Data Systems (b) 12,832,000
Cellular & Telephone Services
234,500 COMARCO (b) (c) 7,621,250
Wireless Network Testing
154,400 Price Communications (b) 3,638,050
Cellular Telephone Services
262,000 Diversinet (b) 3,111,250
Wireless PKI Security
--------------------------------------------------------------------------------
27,202,550
--------------------------------------------------------------------------------
Telecommunications Equipment-2.9%
245,800 Aspect Telecommunications (b) 9,663,012
Call Center Equipment
168,100 Ezenia (b) 745,943
Video Servers
--------------------------------------------------------------------------------
10,408,955
--------------------------------------------------------------------------------
Number of Value
Shares
--------------------------------------------------------------------------------
Business Information/Marketing Services-5.2%
102,700 Getty Images (b) $3,806,318
Photographs for Publications &
Electronic Media
151,000 PRIMEDIA (b) 3,435,250
Specialty Magazines & Other Publications
147,900 CACI International (b) 2,884,050
Technology Services for Government
597,000 Telespectrum Worldwide (b) 2,723,812
Call & Web Center Services
142,300 Reynolds & Reynolds (b) 2,596,975
Business Forms & Computer Systems
for Car Dealers
48,400 Information Holdings (b) 1,790,800
Scientific & Medical Publications,
Patent Information
61,000 Acxiom 1,662,250
Database Marketing Services
--------------------------------------------------------------------------------
18,899,455
--------------------------------------------------------------------------------
Business Software-4.1%
620,000 JDA Software Group (b) 11,896,250
Applications/Software & Services for Retailers
76,000 Project Software (b) 1,368,000
Enterprise Maintenance Software
91,000 Objective System Integrators (b) 972,562
Telecom Network Management
25,000 Hyperion Solutions (b) 810,937
Application Software
--------------------------------------------------------------------------------
15,047,749
--------------------------------------------------------------------------------
Transaction Processors-3.1%
309,300 National Data 7,113,900
Credit Card & Health Claims Processor
164,500 Concord EFS (b) 4,277,000
Credit Card Processor
--------------------------------------------------------------------------------
11,390,900
--------------------------------------------------------------------------------
Computer Hardware/Related Systems-6.4%
424,900 Micros Systems (b) 7,887,206
Information Systems for Restaurants & Hotels
See accompanying notes to financial statements.
14
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Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
WANGER U.S. SMALL CAP STATEMENT OF INVESTMENTS (unaudited) JUNE 30, 2000
--------------------------------------------------------------------------------
Number of Value
Shares
--------------------------------------------------------------------------------
Computer Hardware/Related Systems-6.4% (cont)
298,200 Kronos (b) $7,753,200
Labor Management Solutions
165,000 American Power Conversion (b) 6,734,062
Uninterruptible Power Systems
301,205 SensAble Technologies (b) 1,000,000
Sensory Devices for Computer Based Sculpting
--------------------------------------------------------------------------------
23,374,468
--------------------------------------------------------------------------------
Semiconductors/Related Equipment-2.0%
127,900 DSP Group (b) 7,162,400
Telecom Semiconductors
--------------------------------------------------------------------------------
Instrumentation-5.9%
163,000 Perkin Elmer 10,778,375
Analytical Instruments for Biotech/Telecom
144,000 Tektronix 10,656,000
Analytical Instruments
--------------------------------------------------------------------------------
21,434,375
--------------------------------------------------------------------------------
Computer Services-3.2%
439,900 Sykes Enterprises (b) 5,663,712
Call Center Services
170,000 Pomeroy Computer Resources (b) 2,507,500
Network Integration Services
301,800 RCM Technologies (b) 2,225,775
Technology Staffing Services
535,000 Aztec Technology Partners (b) 1,170,328
Technology Staffing Services
--------------------------------------------------------------------------------
11,567,315
--------------------------------------------------------------------------------
Internet Related-1.1%
350,000 MSI Holdings (b) 2,537,500
Web Hosting
205,000 Online Resources (b) 1,319,687
Internet Banking Technology
--------------------------------------------------------------------------------
3,857,187
--------------------------------------------------------------------------------
INFORMATION-TOTAL 176,839,568
--------------------------------------------------------------------------------
Number of Value
Shares
Health Care-8.9%
--------------------------------------------------------------------------------
Biotechnology/Drug Delivery-2.6%
55,000 Myriad Genetics (b) $8,144,297
Gene Discovery & Diagnostic Products
55,000 Genzyme Molecular Oncology Division (b) 763,125
Gene Expression Technology & Cancer Drugs
26,000 Genset (b) 601,250
Genomics
--------------------------------------------------------------------------------
9,508,672
--------------------------------------------------------------------------------
Services-6.3%
339,000 First Health (b) 11,123,437
PPO Network
448,000 Lincare Holdings (b) 11,032,000
Home Health Care Services
592,700 Magellan Health Services (b) 740,875
Mental Health Services
--------------------------------------------------------------------------------
22,896,312
--------------------------------------------------------------------------------
HEALTH CARE-TOTAL 32,404,984
Consumer Goods/Services-2.5%
--------------------------------------------------------------------------------
Nondurables-0.1%
91,700 NuSkin Enterprises (b) 527,275
Personal Care/Herbal Products
--------------------------------------------------------------------------------
Retail-1.0%
50,500 Whole Foods Market (b) 2,086,281
Natural Food Supermarkets
120,000 Gadzooks (b) 1,393,125
Teen Apparel Retailer
--------------------------------------------------------------------------------
3,479,406
--------------------------------------------------------------------------------
Casinos-0.2%
115,200 Monarch Casino & Resort (b) 662,400
Casino/Hotel in Reno
See accompanying notes to financial statements.
15
<PAGE>
Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
WANGER U.S. SMALL CAP STATEMENT OF INVESTMENTS (unaudited) JUNE 30, 2000
--------------------------------------------------------------------------------
Number of Value
Shares
--------------------------------------------------------------------------------
Consumer Services-1.2%
245,000 ITT Educational Services (b) $4,302,812
Technology Oriented Post Secondary Degree
Programs
--------------------------------------------------------------------------------
CONSUMER GOODS/SERVICES-TOTAL 8,971,893
Finance-9.9%
--------------------------------------------------------------------------------
Banks/Savings & Loans-1.7%
90,000 Texas Regional Bancshares 2,283,750
TexMex Bank
84,400 Chittenden 2,062,525
Vermont & Western Massachusetts Bank
46,000 TCF Financial 1,181,625
Great Lakes Bank
41,500 Peoples Bank Bridgeport 762,562
Connecticut Savings & Loan
--------------------------------------------------------------------------------
6,290,462
--------------------------------------------------------------------------------
Finance Companies-2.6%
489,400 AmeriCredit (b) 8,319,800
Auto Lending
232,000 World Acceptance (b) 1,218,000
Personal Loans
--------------------------------------------------------------------------------
9,537,800
--------------------------------------------------------------------------------
Insurance-2.8%
586,600 UICI (b) 3,849,562
Insurance/Specialty
92,000 Leucadia National 2,098,750
Insurance Holding Company
403,900 Acceptance Insurance (b) 2,019,500
Crop Insurance
44,000 Protective Life 1,171,500
Life/Dental Insurance
8,000 Markel (b) 1,133,000
Specialty Insurance
--------------------------------------------------------------------------------
10,272,312
--------------------------------------------------------------------------------
Number of Value
Shares
--------------------------------------------------------------------------------
Money Management-2.8%
153,000 SEI Investments $6,091,312
Mutual Fund Administration
74,600 Neuberger Berman 3,468,900
Major Asset Management Company
27,900 BKF Capital Group 442,912
Institutional Money Manager
--------------------------------------------------------------------------------
10,003,124
--------------------------------------------------------------------------------
FINANCE-TOTAL 36,103,698
Industrial Goods/Services-6.4%
--------------------------------------------------------------------------------
Steel-0.1%
73,400 Atchison Casting (b) 422,050
Steel Foundries
--------------------------------------------------------------------------------
Specialty Chemicals-1.4%
166,600 Lilly Industries, Cl. A 5,008,412
Industrial Coatings
--------------------------------------------------------------------------------
Other Industrial Services-4.9%
412,100 Insurance Auto Auctions (b) 8,705,612
Auto Salvage Services
516,400 Wackenhut, Cl. B (b) 4,841,250
Prison Management
174,000 Hub Group (b) 2,599,125
Truck & Rail Freight Forwarder
138,000 Labor Ready (b) 914,250
Temporary Manual Labor
19,700 EGL (b) 605,775
Domestic Freight Forwarder
--------------------------------------------------------------------------------
17,666,012
--------------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES-TOTAL 23,096,474
Energy/Minerals-10.7%
--------------------------------------------------------------------------------
Independent Power-0.9%
68,000 AES Corporation (b) 3,102,500
Global Electric Producer
See accompanying notes to financial statements.
16
<PAGE>
Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
WANGER U.S. SMALL CAP STATEMENT OF INVESTMENTS (unaudited) JUNE 30, 2000
--------------------------------------------------------------------------------
Number of Value
Shares
--------------------------------------------------------------------------------
Oil/Gas Producers-2.0%
700,900 Tesoro Petroleum (b) $7,096,612
Oil Refinery/Gas Producer
--------------------------------------------------------------------------------
Oil Services-1.3%
401,000 Newpark Resources (b) 3,784,437
Oilfield Fluid Management & Equipment Rental
31,300 Carbo Ceramics 1,099,412
Manufacturer of Ceramic Pellets for Gas Wells
--------------------------------------------------------------------------------
4,883,849
--------------------------------------------------------------------------------
Distribution/Marketing/Refining-6.5%
211,700 Dynegy 14,461,756
Natural Gas & Electric Processing,
Production & Marketing
128,000 Equitable Resources 6,176,000
Natural Gas Utility & Producer
168,000 Atmos Energy 2,940,000
Natural Gas Utility
--------------------------------------------------------------------------------
23,577,756
--------------------------------------------------------------------------------
ENERGY/MINERALS-TOTAL 38,660,717
Other Industries-2.8%
--------------------------------------------------------------------------------
Real Estate-0.6%
47,000 The Rouse Company 1,163,250
Regional Shopping Malls
10,647 Equity Office Properties 293,457
Largest Owner of Office Buildings
12,900 Gaylord Entertainment 277,350
Opryland Hotel & Other Assets
21,400 Consolidated Tomoka 259,475
16,000 Acres of Florida Land
--------------------------------------------------------------------------------
1,993,532
--------------------------------------------------------------------------------
Principal Amount or Value
Number of Shares
--------------------------------------------------------------------------------
Regulated Utilities-2.2%
523,000 Conectiv $8,139,187
Electric Utility in New Jersey,
Delaware & Maryland
--------------------------------------------------------------------------------
OTHER INDUSTRIES- TOTAL 10,132,719
Total Common Stocks-89.9% 326,210,053
--------------------------------------------------------------------------------
(COST: $315,386,768)
Short-Term Obligations-9.8%
--------------------------------------------------------------------------------
Yield 6.70%-6.82% Maturing 7/3-7/6/00
$15,668,000 GE International 15,653,311
10,708,000 Ford Motor 10,703,943
9,013,000 Citigroup 9,006,291
--------------------------------------------------------------------------------
(AMORTIZED COST: $35,363,545) 35,363,545
Total Investments-99.7% $361,573,598
--------------------------------------------------------------------------------
(COST: $350,750,313)
Cash and Other Assets Less Liabilities-0.3% 1,259,260
--------------------------------------------------------------------------------
Total Net Assets-100% $362,832,858
================================================================================
NOTES TO STATEMENT OF INVESTMENTS:
(a) At June 30, 2000, for federal income tax purposes cost of investments was
$351,348,867 and net unrealized appreciation was $10,224,731 consisting of
gross unrealized appreciation of $87,223,041 and gross unrealized
depreciation of $76,998,310.
(b) Non-income producing security.
(c) On June 30, 2000, the Fund held the 5.36% of the outstanding voting shares
of COMARCO. The aggregate cost and value of investments in this company at
June 30, 2000, was $4,123,854 and $7,621,250, respectively. The market
value of this security represents 2.10% of the total net assets at June 30,
2000. There were no purchases, proceeds from sales or dividends received
from this company during the six months ended June 30, 2000.
See accompanying notes to financial statements.
17
<PAGE>
Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
WANGER INTERNATIONAL SMALL CAP
STATEMENT OF INVESTMENTS (unaudited) JUNE 30, 2000
--------------------------------------------------------------------------------
Number of Value
Shares
Common Stocks-95.7%
Europe-55.4%
--------------------------------------------------------------------------------
Germany-5.3%
125,000 GFK $6,170,987
Market Research Services
70,000 Entrium (b) 3,623,507
Telephone & Internet Bank
43,000 Austria Technologies (b) 3,297,583
Printed Circuit Board Manufacturer
56,000 Dialog Semiconductor (b) 2,845,124
Custom Semiconductors for Cell Phones
8,000 Teleplan International (b) 1,219,339
Warranty Repair Services
100,000 Norddeutsche Affinerie 1,085,135
Copper Smelter
16,815 Takkt 157,964
Mail Order Retailer of Office Furniture
--------------------------------------------------------------------------------
18,399,639
--------------------------------------------------------------------------------
Denmark-0.7%
140,000 Sondagavisen 2,302,631
Free Sunday Newspaper
--------------------------------------------------------------------------------
Netherlands-8.5%
115,748 Kempen 5,825,191
Stock Brokerage/Investment Management
155,769 Hunter Douglas 4,233,226
Decorative Window Coverings
153,333 Unique International 3,689,323
Human Resources
151,327 Computer Service Solutions 3,525,008
Computer Services
61,200 Fugro 3,505,312
Survey & GPS Services
59,000 Pink Roccade (b) 3,082,378
Computer Services/Outsourcing
64,000 Versatel (b) 2,699,417
Telecom Services for Business Parks
107,500 UCC 1,669,401
Computer Services/Consulting
32,000 SNT Group (b) 1,128,847
Call Center Operator
--------------------------------------------------------------------------------
29,358,103
--------------------------------------------------------------------------------
Number of Value
Shares
--------------------------------------------------------------------------------
Finland-1.3%
260,000 Talentum $2,405,127
Trade Journals & Internet Services
175,000 F-Secure (b) 2,031,513
Security Software
--------------------------------------------------------------------------------
4,436,640
--------------------------------------------------------------------------------
Norway-3.3%
175,925 Enitel (b) 6,853,659
3,100 Enitel Warrants 10/26/04 (b) 52,405
Telecommunication Services
500,000 Visma (b) 2,544,544
Business Software for Ships
612,300 Stepstone (b) 2,027,222
On-line Job Postings
--------------------------------------------------------------------------------
11,477,830
--------------------------------------------------------------------------------
Sweden-9.2%
385,000 Icon Medialab (b) 4,872,306
Internet Consulting
622,200 Adcore (formerly known as
Information Highway) (b) 4,823,805
Internet Consulting
100,000 Modern Times Group (b) 4,788,507
TV, Newspapers & Electronic Commerce
250,000 Semcon 4,788,507
Technical Consultant
148,000 Micronic Laser Systems (b) 3,020,408
Electronics Production Equipment
80,000 ProOffice 2,152,548
Temporary Employment Agency
95,000 Utfors (b) 2,112,073
Telecommunication Services
120,000 Framtidsfabriken (b) 1,662,296
Internet Consulting
207,000 Mandator 1,357,028
Computer & Internet Consulting
325,000 IBS (b) 1,126,439
Business Software
230,000 Effnet Group (b) 996,465
Telecommunications Equipment
--------------------------------------------------------------------------------
31,700,382
See accompanying notes to financial statements.
18
<PAGE>
Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
WANGER INTERNATIONAL SMALL CAP
STATEMENT OF INVESTMENTS (unaudited) JUNE 30, 2000
--------------------------------------------------------------------------------
Number of Value
Shares
--------------------------------------------------------------------------------
France/Belgium-8.2%
50,000 Telindus Group (Belgium)
(formerly known as Telinfo) $6,053,558
Network Integration Services
83,200 Prosodie 4,386,553
Automated Call Centers
40,000 Ipsos 4,217,839
Market Research
130,860 Fininfo 4,076,877
Data Feeds for French Banks & Brokers
70,000 LVL Medical Groupe (b) 2,945,777
Home Healthcare
35,196 Cegedim 2,857,683
Medical Market Research
60,000 FI System (b) 2,421,423
Internet Consulting
20,000 Ubizen (Belgium) (b) 709,363
Internet Security Services/Software
23,600 Genset (b) 545,750
Genomics
--------------------------------------------------------------------------------
28,214,823
--------------------------------------------------------------------------------
United Kingdom-9.9%
688,000 Informa Group 7,119,080
Business Information Provider
1,727,600 Chloride Group 4,995,437
Electrical Equipment Manufacturer/Retailer
1,225,000 Taylor Nelson 4,886,677
Market Research Services
600,000 Expro International 3,755,983
Offshore Oil Field Services
1,352,000 Incepta 2,722,232
Business Information & Marketing Services
600,000 Photobition Group 2,602,392
Production of Graphics for Exhibits
350,000 Mitie Group (b) 1,926,058
Facilities Management
150,000 Bloomsbury Publishing 1,856,418
Publishing
--------------------------------------------------------------------------------
Number of Value
Shares
--------------------------------------------------------------------------------
United Kingdom-9.9% (cont)
160,000 Baltimore Technologies (b) $1,211,119
Security Software
129,000 Edinburgh Fund Managers 1,077,040
Investment Management
142,000 Oxford Asymmetry (b) 1,057,670
Chemical Products & Services
275,000 St. James Capital 1,036,642
Life Insurance
52,000 Orchestream Holdings (b) 248,763
Network Management Software
--------------------------------------------------------------------------------
34,495,511
--------------------------------------------------------------------------------
Spain/Portugal-3.9%
375,000 Red Electrica 4,313,699
Power Grid
143,000 Cortefiel 3,114,453
Apparel Retailer
200,000 Prosegur 2,348,569
Security Guards
40,000 Ibersol (Portugal) 1,840,511
Fast Food Retailer
33,000 PT Multimedia (Portugal) (b) 1,644,957
Cable & Satellite Operator
33,000 PT Multimedia.com (Portugal) (b) 254,019
Internet Service Provider
--------------------------------------------------------------------------------
13,516,208
--------------------------------------------------------------------------------
Switzerland-3.0%
20,000 Selecta Group 6,223,479
Vending Machine Owner/Operator
1,950 Bachem 4,149,191
Drug Manufacturer
--------------------------------------------------------------------------------
10,372,670
--------------------------------------------------------------------------------
Italy-2.1%
345,000 Class Editore 5,073,198
Newspapers & On-Line Financial Data
232,000 Italdesign Giugiaro 2,074,947
Automotive Designers
--------------------------------------------------------------------------------
7,148,145
--------------------------------------------------------------------------------
EUROPE-TOTAL 191,422,582
See accompanying notes to financial statements.
19
<PAGE>
Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
WANGER INTERNATIONAL SMALL CAP
STATEMENT OF INVESTMENTS (unaudited) JUNE 30, 2000
--------------------------------------------------------------------------------
Number of Value
Shares
Asia-22.3%
--------------------------------------------------------------------------------
Hong Kong-0.2%
4,952,000 E-New Media (b) $647,959
Telecommunication Services
--------------------------------------------------------------------------------
Japan-8.6%
40,000 Venture Link 3,137,847
Retail Franchises
28,000 Moshi Moshi Hotline 3,016,870
Telemarketing
16,000 Don Quijote 2,797,599
Retail Franchises
183,000 Diamond Leasing 2,371,277
Leasing
110,000 Densei Lambda 2,271,631
Power Supplies
12,000 C-Two Network 2,269,457
Discount Food Retailer
60,000 Wilson Learning 2,268,323
Corporate Training
14,000 Trans Cosmos 2,106,516
Information Technology Services
& Investments
58,000 Shobunsha 2,033,741
Map Publisher
200,000 Bodysonic (b) 1,814,659
Media Content Provider
16,200 Union Tool 1,760,786
Precision Drill Bit Manufacturer
11,800 Drake Beam Morin 1,639,431
Employment Outplacement Services
11,000 Stella Chemifa 852,511
Specialty Chemicals
29,000 Pasona Softbank 794,858
Temporary Employment Services
40,000 Optex 378,053
Industrial Sensors
--------------------------------------------------------------------------------
29,513,559
--------------------------------------------------------------------------------
Number of Value
Shares
--------------------------------------------------------------------------------
Taiwan-4.9%
320,000 Faraday Technology (b) $3,522,077
Application Specific Integrated
Circuits (ASIC's)
903,000 Systex (b) 3,166,363
Systems Integrator & Internet Services
1,687,500 Phoenixtec Power 3,068,181
Uninterruptible Power Supply
Manufacturer
1,248,000 Chroma Ate 2,795,844
Test & Measurement Instruments
690,000 Hitron Technology (b) 2,744,318
Network Integration & Internet Services
657,720 Cosmo Electronics (b) 1,644,357
Relay & Opto-Coupler Manufacturer
--------------------------------------------------------------------------------
16,941,140
--------------------------------------------------------------------------------
Singapore-5.5%
5,900,000 Omni Industries 9,725,274
Contract Electronics Manufacturer
598,000 Datacraft Asia 5,262,400
Network Integrator
750,000 Star Cruises 4,050,000
Cruise Line
--------------------------------------------------------------------------------
19,037,674
--------------------------------------------------------------------------------
South Korea-3.1%
249,863 S1 Corporation 3,697,441
Home/Business Security Services
20,000 Cheil Communications 2,609,806
Advertising
185,000 Medison 2,015,874
Medical Equipment
32,000 Cheil Jedang 1,466,514
Consumer Staples
275,300 Korea Technology Investment 987,601
Venture Capital
--------------------------------------------------------------------------------
10,777,236
--------------------------------------------------------------------------------
ASIA-TOTAL 76,917,568
See accompanying notes to financial statements.
20
<PAGE>
Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
WANGER INTERNATIONAL SMALL CAP
STATEMENT OF INVESTMENTS (unaudited) JUNE 30, 2000
--------------------------------------------------------------------------------
Number of Value
Shares
Latin America-2.1%
--------------------------------------------------------------------------------
Mexico-1.2%
1,000,000 Corp Interamericana
de Entretenimiento (b) $3,941,687
Special Events & Live Entertainment
--------------------------------------------------------------------------------
Brazil-0.9%
40,000 Tele Celular 1,810,000
Mobile Communications
100,000 Globo Cabo 1,387,500
Cable Television
--------------------------------------------------------------------------------
3,197,500
--------------------------------------------------------------------------------
LATIN AMERICA-TOTAL 7,139,187
Other Countries-15.9%
--------------------------------------------------------------------------------
Australia-6.7%
660,000 ERG 5,139,544
400,000 ERG, Pfd. 3,965,042
Smart Card Systems for Public Transportation
4,250,000 Open Telecommunications (b) 4,342,994
Computer Services
575,000 Keycorp (b) 3,234,805
Smart Card Technology
1,200,000 Novogen (b) 2,881,920
Pharmaceuticals
750,000 AAPT (b) 2,467,644
Telecommunications Provider
800,000 Powerlan (b) 838,638
Computer Services
315,000 Infomedia (b) 189,126
Publisher of Electronic Catalog for Auto Parts
200,000 BMC Media.com (b) 81,654
Advertising
--------------------------------------------------------------------------------
23,141,367
--------------------------------------------------------------------------------
Canada-7.4%
200,000 Penn West Petroleum (b) 4,940,271
Oil & Gas Producer
630,000 Patheon (b) 4,166,835
Pharmaceuticals
150,000 Corus Entertainment (b) 3,998,785
CATV Programming & Radio Stations
--------------------------------------------------------------------------------
Principal Amount or Value
Number of Shares
--------------------------------------------------------------------------------
Canada-7.4% (cont)
900,000 AltaGas Services (b) $3,705,203
Natural Gas Gatherer and Processor
300,000 Mosaic (b) 3,644,462
Outsourced Marketing Services
185,600 Teklogix International (b) 2,818,384
Wireless Logistics Tracking Systems
92,000 MDSI Mobil Data Solutions (b) 2,116,000
Wireless Software
--------------------------------------------------------------------------------
25,389,940
--------------------------------------------------------------------------------
Israel-1.8%
60,000 DSP Group (b) 3,360,000
Telecom Semiconductors
400,000 Paradigm Geophysical (b) 2,387,500
Seismic Software
20,000 Radware (b) 530,000
Internet Infrastructure & Internet Traffic
--------------------------------------------------------------------------------
6,277,500
--------------------------------------------------------------------------------
OTHER-TOTAL 54,808,807
Total Common Stocks-95.7% 330,288,144
--------------------------------------------------------------------------------
(COST: $262,612,846)
Short-Term Obligations-1.6%
--------------------------------------------------------------------------------
$5,620,000 First Capital 6.90% Maturing 7/3/00 5,617,845
--------------------------------------------------------------------------------
(AMORTIZED COST: $5,617,845)
Total Investments-97.3% 335,905,989
--------------------------------------------------------------------------------
(COST: $268,230,691)
Cash and Other Assets Less Liabilities-2.7% 9,411,624
--------------------------------------------------------------------------------
Total Net Assets-100% $345,317,613
================================================================================
NOTES TO STATEMENT OF INVESTMENTS:
(a) At June 30, 2000, for federal income tax purposes cost of investments was
$268,230,691 and net unrealized appreciation was $67,675,298 consisting of
gross unrealized appreciation of $96,507,253 and gross unrealized
depreciation of $28,831,955.
(b) Non-income producing security.
(c) At June 30, 2000 $101,073,558 or 29.3% of the Fund's net assets was
denominated in the Euro currency.
See accompanying notes to financial statements.
21
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Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
WANGER INTERNATIONAL SMALL CAP PORTFOLIO DIVERSIFICATION JUNE 30, 2000
At June 30, 2000 the Fund's portfolio of investments as a
percentage of net assets was diversified as follows:
Value Percent
--------------------------------------------------------------------------------
Information
Business Information &
Marketing Services $28,656,483 8.3%
Telephone Services 26,471,063 7.7
Computer Services 26,404,967 7.6
Business Software 19,179,068 5.6
Publishing 18,648,751 5.4
Internet Related 17,084,448 4.9
Semiconductors & Related Equipment 12,747,611 3.7
Transaction Processors 12,339,393 3.6
Advertising 10,472,109 3.0
Contract Manufacturing 9,725,275 2.8
Computer Hardware &
Related Equipment 9,190,058 2.7
Radio 6,110,859 1.8
Instrumentation 5,910,297 1.7
Mobile Communications 4,633,043 1.3
Telecommunications Equipment 2,744,318 0.8
Telecom 2,699,418 0.7
Domestic Consumer Software 2,116,000 0.6
TV Broadcasting 81,654 0.1
--------------------------------------------------------------------------------
215,214,815 62.3
--------------------------------------------------------------------------------
Health Care
Pharmaceuticals 7,048,756 2.0
Medical Equipment 2,945,778 0.9
Hospital/Laboratory Supplies 2,015,874 0.6
Biotechnology/Drug Delivery 1,603,420 0.5
--------------------------------------------------------------------------------
13,613,828 4.0
--------------------------------------------------------------------------------
Consumer Goods/Services
Consumer Services 13,862,608 4.0
Entertainment 5,262,400 1.5
Durable Goods 4,233,227 1.2
Travel 4,050,000 1.2
Food 3,735,972 1.1
Retail 2,955,564 0.9
Nondurables 1,840,512 0.5
--------------------------------------------------------------------------------
35,940,283 10.4
Value Percent
-------------------------------------------------------------------------------
Finance
Brokerage $5,825,192 1.7%
Banks 3,623,508 1.0
Finance Companies 2,371,277 0.7
Money Management 2,064,642 0.6
Insurance 1,036,643 0.4
--------------------------------------------------------------------------------
14,921,262 4.4
--------------------------------------------------------------------------------
Industrial Goods/Services
Outsourcing & Training Services 10,911,360 3.2
Electrical Components 7,591,570 2.2
Specialty Chemicals 5,001,703 1.4
Machinery 1,760,786 0.5
Industrial Services 1,639,431 0.5
--------------------------------------------------------------------------------
26,904,850 7.8
--------------------------------------------------------------------------------
Energy/Minerals
Oil Services 13,354,000 3.9
Oil/Gas Producers 4,940,271 1.4
Non-Ferrous Metals 1,085,135 0.3
--------------------------------------------------------------------------------
19,379,406 5.6
--------------------------------------------------------------------------------
Other
Regulated Utilities 4,313,700 1.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total Common Stocks 330,288,144 95.7
--------------------------------------------------------------------------------
Short-Term Obligations 5,617,845 1.6
--------------------------------------------------------------------------------
Total Investments 335,905,989 97.3
--------------------------------------------------------------------------------
Cash and Other Assets
Less Liabilities 9,411,624 2.7
--------------------------------------------------------------------------------
Net Assets $345,317,613 100.0%
================================================================================
See accompanying notes to financial statements.
22
<PAGE>
Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
WANGER TWENTY STATEMENT OF INVESTMENTS (unaudited) JUNE 30, 2000
--------------------------------------------------------------------------------
Number of Value
Shares
Common Stocks-89.8%
Information-48.1%
--------------------------------------------------------------------------------
Television Programming-2.5%
8,600 Liberty Media Group, AT&T $208,550
CATV & Satellite Dish Programming
--------------------------------------------------------------------------------
Telephone Services-2.5%
10,200 McLeod USA, Inc. (b) 211,012
Super Regional CLEC: Local,
Long Distance & Internet Services
--------------------------------------------------------------------------------
Mobile Communications-4.5%
7,100 Pinnacle Holdings (b) 383,400
Towers for Cellular, PCS & Paging
--------------------------------------------------------------------------------
Business Information/Marketing Services-11.2%
11,000 Getty Images (b) 407,687
Photographs for Publications & Electronic Media
17,800 Reynolds & Reynolds 324,850
Computer Systems for Car Dealers
6,900 H & R Block 223,387
Tax Preparation
--------------------------------------------------------------------------------
955,924
--------------------------------------------------------------------------------
Internet Related-0.7%
1,650 MasTec (b) 63,009
Telecom Infrastructure Construction
--------------------------------------------------------------------------------
Computer Hardware/Related Systems-3.1%
6,500 American Power Conversion (b) 265,281
Uninterruptible Power Systems
--------------------------------------------------------------------------------
Contract Manufacturing-5.1%
8,800 Jabil Circuit 436,700
Electronic Manufacturing Services
--------------------------------------------------------------------------------
Instrumentation-18.5%
10,000 Tektronix 740,000
Analytical Instruments
8,300 Perkin Elmer 548,837
Analytical Instruments for Biotech/Telecom
--------------------------------------------------------------------------------
Number of Value
Shares
--------------------------------------------------------------------------------
Instrumentation-18.5% (cont)
2,300 Waters $287,068
Chromatography, Mass Spectrometry,
Thermal Analysis
--------------------------------------------------------------------------------
1,575,905
--------------------------------------------------------------------------------
INFORMATION-TOTAL 4,099,781
Health Care-12.8%
--------------------------------------------------------------------------------
Biotechnology/Drug Delivery-0.6%
600 Incyte Genomics (b) 49,312
Gene Sequencing
--------------------------------------------------------------------------------
Hospital/Laboratory Supplies-7.6%
5,000 Techne (b) 650,000
Cytokines, Antibodies, Other Reagents
for Life Sciences
--------------------------------------------------------------------------------
Services-4.6%
12,000 First Health (b) 393,750
PPO Network
--------------------------------------------------------------------------------
HEALTH CARE-TOTAL 1,093,062
Consumer Goods/Services-10.7%
--------------------------------------------------------------------------------
Furniture-3.6%
12,000 Herman Miller 310,500
Office Furniture
--------------------------------------------------------------------------------
Manufacturers-2.8%
10,000 Jones Apparel (b) 235,000
Women's Apparel
--------------------------------------------------------------------------------
Leisure Vehicles-4.3%
9,560 Harley Davidson 368,060
Motorcycles & Related Merchandise
--------------------------------------------------------------------------------
CONSUMER GOODS/SERVICES-TOTAL 913,560
See accompanying notes to financial statements.
23
<PAGE>
Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
WANGER TWENTY STATEMENT OF INVESTMENTS (unaudited) JUNE 30, 2000
--------------------------------------------------------------------------------
Number of Value
Shares
Finance-4.2%
--------------------------------------------------------------------------------
Money Management-4.2%
9,000 SEI Investments $358,312
Mutual Fund Administration
--------------------------------------------------------------------------------
FINANCE-TOTAL 358,312
Industrial Goods/Services-5.9%
--------------------------------------------------------------------------------
Logistics-3.9%
7,000 Expeditors International of Washington 332,505
International Freight Forwarder
--------------------------------------------------------------------------------
Other Industrial Services-2.0%
15,000 ServiceMaster 170,625
Facilities Management
--------------------------------------------------------------------------------
Industrial Goods/Services-Total 503,130
Energy/Minerals-5.4%
--------------------------------------------------------------------------------
Distribution/Marketing/Refining-5.4%
6,762 Dynegy 461,929
Natural Gas & Electric Processing,
Production & Marketing
--------------------------------------------------------------------------------
ENERGY/MINERALS-TOTAL 461,929
--------------------------------------------------------------------------------
Principal Amount or Value
Number of Shares
Real Estate-2.7%
--------------------------------------------------------------------------------
7,300 General Growth Properties $231,775
Shopping Malls REIT
--------------------------------------------------------------------------------
REAL ESTATE-TOTAL 231,775
Total Common Stocks-89.8% 7,661,549
--------------------------------------------------------------------------------
(COST: $6,189,197)
Short-Term Obligations-10.0%
--------------------------------------------------------------------------------
Yield 6.50%-6.63% Maturing 7/3-7/5/00
$547,000 First Capital 546,597
309,000 GE Capital 308,888
--------------------------------------------------------------------------------
(AMORTIZED COST: $855,485) 855,485
Total Investments-99.8% 8,517,034
--------------------------------------------------------------------------------
(COST: $7,044,682)
Cash and Other Assets Less Liabilities-0.2% 14,510
--------------------------------------------------------------------------------
Total Net Assets-100% $8,531,544
================================================================================
NOTES TO STATEMENT OF INVESTMENTS:
(a) At June 30, 2000, for federal income tax purposes cost of investments was
$7,044,682 and net unrealized appreciation was $1,472,352 consisting of
gross unrealized appreciation of $1,804,912 and gross unrealized
depreciation of $332,560.
(b) Non-income producing security.
See accompanying notes to financial statements.
24
<PAGE>
Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
WANGER FOREIGN FORTY STATEMENT OF INVESTMENTS (unaudited) JUNE 30, 2000
--------------------------------------------------------------------------------
Number of Value
Shares
Common Stocks-90.1%
Europe-49.9%
--------------------------------------------------------------------------------
Germany-3.6%
2,400 MobilCom $240,877
Telecommunications Services
4,000 Rhoen Klinikum 159,127
Hospital Management
--------------------------------------------------------------------------------
400,004
--------------------------------------------------------------------------------
Belgium-4.6%
4,000 Audiofina 517,643
TV & Radio Broadcaster
--------------------------------------------------------------------------------
Netherlands-5.1%
16,000 Getronics 247,702
Computer Services
4,090 ASR Verzekeringsgroep 212,892
Auto/Life Insurance
7,500 Fox Kids Europe (b) 118,626
Cartoons
--------------------------------------------------------------------------------
579,220
--------------------------------------------------------------------------------
Finland-1.8%
10,000 Comptel 202,264
Telephone Billing Software
--------------------------------------------------------------------------------
Sweden-2.8%
3,500 Modern Times Group (b) 167,597
TV, Newspapers & Electronic Commerce
2,000 Netcom (b) 148,443
Telecommunication Services
--------------------------------------------------------------------------------
316,040
--------------------------------------------------------------------------------
France-1.7%
2,000 M6 Metropole TV 121,933
Television Broadcaster
700 Atos (b) 65,759
Computer Services/Transaction Processing
--------------------------------------------------------------------------------
187,692
--------------------------------------------------------------------------------
Number of Value
Shares
--------------------------------------------------------------------------------
United Kingdom/Ireland-21.0%
50,000 Irish Life & Permanent (Ireland) $423,221
Savings Products
8,000 Energis (b) 300,115
Telecommunication Services
30,000 Peninsular & Oriental (b) 257,060
Cruise Line
30,000 Serco Group 237,303
Facilities Management
16,000 Sema Group (b) 227,690
Computer Software & Services
40,000 Hays 223,148
Outsourcing Services
20,000 SSL International 215,730
Medical & Footcare Products
45,000 Thus (b) 188,707
Emerging Telecommunications
5,000 Logica 118,386
Computer Software & Services
1,562 NTL (b) 93,524
Voice, Video & Data Services
5,000 WPP Group (b) 73,045
Advertising
--------------------------------------------------------------------------------
2,357,929
--------------------------------------------------------------------------------
Spain-0.8%
4,000 Indra Sistemas 91,872
Computer Services
--------------------------------------------------------------------------------
Switzerland-3.2%
70 Julius Baer 277,658
Private Banking, Brokerage & Mutual Funds
20 Pargesa Holdings 45,753
Industrial & Media Conglomerate
15 Cie Fin Richemont 40,541
Luxury Goods, Tobacco & Pay TV
--------------------------------------------------------------------------------
363,952
See accompanying notes to financial statements.
25
<PAGE>
Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
WANGER FOREIGN FORTY STATEMENT OF INVESTMENTS (unaudited) JUNE 30, 2000
--------------------------------------------------------------------------------
Number of Value
Shares
--------------------------------------------------------------------------------
Italy-5.3%
45,000 Saipem $267,449
Offshore Construction & Drilling
14,000 Banca Fideuram 212,042
Life Insurance/Mutual Funds
10,000 Editoriale L'Espresso 118,866
Newspapers & Magazines
--------------------------------------------------------------------------------
598,357
--------------------------------------------------------------------------------
EUROPE-TOTAL 5,614,973
Asia-12.9%
--------------------------------------------------------------------------------
Japan-6.8%
600 Bellsystem 24 294,882
Call Centers
500 Fast Retailing 209,819
Discount Apparel Retailer
1,200 Orix 177,496
Finance Leasing
500 Nintendo 87,519
Video Games
--------------------------------------------------------------------------------
769,716
--------------------------------------------------------------------------------
Singapore-6.1%
35,000 Venture Manufacturing 356,275
Electronic Manufacturing Services
61,000 Star Cruises (b) 329,400
Cruise Line
--------------------------------------------------------------------------------
685,675
--------------------------------------------------------------------------------
ASIA-TOTAL 1,455,391
Other Countries-27.3%
--------------------------------------------------------------------------------
Australia-7.7%
60,000 ERG 467,231
Smart Card Systems for Public Transportation
75,000 Computershare 386,807
Financial Software/Services
22,000 Infomedia (b) 13,208
Publisher of Electronic Catalog for Auto Parts
--------------------------------------------------------------------------------
867,246
--------------------------------------------------------------------------------
Principal Amount or Value
Number of Shares
--------------------------------------------------------------------------------
Canada-6.7%
8,000 Celestica (b) $389,282
Electronic Manufacturing Services
13,000 Clearnet Communications (b) 359,721
Mobile Communications
--------------------------------------------------------------------------------
749,003
--------------------------------------------------------------------------------
Israel-11.2%
8,000 Amdocs (b) 614,000
Telecommunications Billing &
Customer Care Software
5,000 Comverse Technology (b) 465,000
Voicemail & Related Systems
2,700 Gilat Satellite Network (b) 187,312
Satellite Communications Equipment
--------------------------------------------------------------------------------
1,266,312
--------------------------------------------------------------------------------
United States-1.7%
16,000 Global TeleSystems (b) 193,023
Telecommunications Services
--------------------------------------------------------------------------------
OTHER-TOTAL 3,075,584
Total Common Stocks-90.1% 10,145,948
--------------------------------------------------------------------------------
(COST: $ 9,513,249)
Short-Term Obligations-8.9%
--------------------------------------------------------------------------------
$1,003,000 First Capital 6.90% Maturing 7/3/00 1,002,615
--------------------------------------------------------------------------------
(AMORTIZED COST: $1,002,615)
Total Investments-99.0% 11,148,563
--------------------------------------------------------------------------------
(COST: $10,515,864)
Cash and Other Assets Less Liabilities-1.0% 106,926
--------------------------------------------------------------------------------
Total Net Assets-100% $11,255,489
================================================================================
NOTES TO STATEMENT OF INVESTMENTS:
(a) At June 30, 2000, for federal income tax purposes cost of investments was
$10,520,544 and net unrealized appreciation was $628,019 consisting of
gross unrealized appreciation of $1,875,702 and gross unrealized
depreciation of $1,247,683.
(b) Non-income producing security.
(c) At June 30, 2000, $2,577,052 or 22.9% of the Fund's net assets was
denominated in the Euro currency.
See accompanying notes to financial statements.
26
<PAGE>
Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
WANGER FOREIGN FORTY PORTFOLIO DIVERSIFICATION JUNE 30, 2000
At June 30, 2000 the Fund's portfolio of investments as a percentage of net
assets was diversified as follows:
Value Percent
--------------------------------------------------------------------------------
Information
Telephone Services $1,366,026 12.1%
Transaction Processors 854,039 7.6
Computer Services 659,540 5.9
Telecommunications Equipment 652,313 5.8
TV Broadcasting 639,578 5.7
Business Software 614,000 5.5
Mobile Communications 359,722 3.2
Contract Manufacturing 356,275 3.2
Publishing 299,673 2.7
Television Programming 118,627 1.1
CATV 93,525 0.8
Business Information &
Marketing Services 91,872 0.7
Advertising 73,046 0.6
--------------------------------------------------------------------------------
6,178,236 54.9
--------------------------------------------------------------------------------
Health Care
Pharmaceuticals 215,731 1.9
Hospital Management 159,128 1.4
--------------------------------------------------------------------------------
374,859 3.3
--------------------------------------------------------------------------------
Consumer Goods/Services
Travel 329,400 2.9
Retail 209,820 1.9
Leisure Products 202,265 1.7
International Consumer Software 87,519 0.8
Entertainment 40,542 0.4
--------------------------------------------------------------------------------
869,546 7.7
--------------------------------------------------------------------------------
Finance
Insurance 636,114 5.7
Banks 277,657 2.5
Money Management 212,042 1.9
Investment Companies 177,496 1.5
Closed End Funds 45,754 0.4
--------------------------------------------------------------------------------
1,349,063 12.0
Value Percent
--------------------------------------------------------------------------------
Industrial Goods/Services
Outsourcing and Training Services $460,452 4.0%
Electrical Components 389,283 3.5
--------------------------------------------------------------------------------
849,735 7.5
--------------------------------------------------------------------------------
Energy/Minerals
Oil Services 267,449 2.4
--------------------------------------------------------------------------------
Other
Transportation 257,060 2.3
--------------------------------------------------------------------------------
Total Common Stocks 10,145,948 90.1
--------------------------------------------------------------------------------
Short-Term Obligations 1,002,615 8.9
--------------------------------------------------------------------------------
Total Investments 11,148,563 99.0
--------------------------------------------------------------------------------
Cash and Other Assets
Less Liabilities 106,926 1.0
--------------------------------------------------------------------------------
Net Assets $11,255,489 100.0%
================================================================================
See accompanying notes to financial statements.
27
<PAGE>
Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (unaudited) JUNE 30, 2000
<TABLE>
<CAPTION>
Wanger Wanger Wanger Wanger
U.S. Small Cap International Twenty Foreign
Small Cap Forty
==========================================================================================================
<S> <C> <C> <C> <C>
ASSETS
Investments, at value (cost: Wanger U.S.
Small Cap $350,750,313; Wanger International $361,573,598 $335,905,989 $8,517,034 $11,148,563
Small Cap $268,230,691; Wanger Twenty
$7,044,682; Wanger Foreign Forty $10,515,864)
Cash 224 1,119,233 515 677
Receivable for:
Securities sold 2,061,473 8,715,146 -- 97,594
Fund shares sold 857,006 4,929,102 62,356 70,516
Dividends and interest 30,400 343,116 2,332 9,798
Other assets 1,145 649 65 31
-----------------------------------------------------------------------------------------------------------
Total assets 364,523,846 351,013,235 8,582,302 11,327,179
LIABILITIES AND NET ASSETS
Payable for:
Securities purchased 1,647,994 4,073,757 -- 13,246
Fund shares redeemed 10,473 1,555,381 42,156 49,406
Other 32,521 66,484 8,602 9,038
-----------------------------------------------------------------------------------------------------------
Total liabilities 1,690,988 5,695,622 50,758 71,690
-----------------------------------------------------------------------------------------------------------
Net assets applicable to Fund shares outstanding $362,832,858 $345,317,613 $8,531,544 $11,255,489
===========================================================================================================
Fund shares outstanding 19,520,312 9,016,962 644,503 583,597
===========================================================================================================
PRICING OF SHARES
Net asset value, offering price and
redemption price per share $18.59 $38.30 $13.24 $19.29
===========================================================================================================
ANALYSIS OF NET ASSETS
Paid-in capital $346,484,730 $208,529,288 $7,489,987 $9,176,922
Undistributed net realized gain (loss) 5,416,704 70,115,099 (420,202) 1,435,828
on sales of investments and foreign
currency transactions
Net unrealized appreciation of investments 10,823,285 67,667,369 1,472,352 628,710
and foreign currency transactions
(net of unrealized PFIC
gains of $4,013 for Wanger Foreign Forty)
Net investment income (loss) 108,139 (994,143) (10,593) 14,029
-----------------------------------------------------------------------------------------------------------
Net assets applicable to Fund shares outstanding $362,832,858 $345,317,613 $8,531,544 $11,255,489
===========================================================================================================
</TABLE>
See accompanying notes to financial statements.
28
<PAGE>
Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (unaudited)
<TABLE>
<CAPTION>
Wanger Wanger Wanger Wanger
U.S. Small Cap International Twenty Foreign
Small Cap Forty
Six months ended Six months ended Six months ended Six months ended
June 30, 2000 June 30, 2000 June 30, 2000 June 30, 2000
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes of
$169,743 for Wanger $880,829 $1,073,952 $21,690 $47,663
International Small Cap and $6,629
for Wanger Foreign Forty)
Interest 1,124,612 434,952 16,289 25,613
------------------------------------------------------------------------------------------------------------------------------
Total investment income 2,005,441 1,508,904 37,979 73,276
EXPENSES:
Investment advisory 1,786,976 2,128,186 34,180 43,465
Custodian 27,322 310,903 3,024 11,242
Legal and audit 36,710 27,205 7,900 7,950
Reports to shareholders 6,372 5,826 6,250 6,250
Amortization of organization costs 5,010 6,677 -- --
Transfer agent 10,920 10,556 9,750 9,750
Trustees' 15,834 11,982 250 221
Insurance 2,264 1,283 43 43
Other 10,880 4,836 246 76
-------------------------------------------------------------------------------------------------------------------------------
Total expenses 1,902,288 2,507,454 61,643 78,997
Less custodian fees paid indirectly (5,118) (4,407) (2,884) (42)
Less reimbursement of expenses by advisor -- -- (10,187) (15,930)
-------------------------------------------------------------------------------------------------------------------------------
Net expenses 1,897,170 2,503,047 48,572 63,025
-------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 108,271 (994,143) (10,593) 10,251
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on sales of investments 6,307,250 70,129,645 (406,218) 1,442,557
Net change in unrealized appreciation (66,257,453) (83,670,143) 702,833 (1,013,285)
-------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (59,950,203) (13,540,498) 296,615 429,272
-------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations $(59,841,932) $(14,534,641) $286,022 $439,523
===============================================================================================================================
</TABLE>
See accompanying notes to financial statements.
29
<PAGE>
Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (unaudited)
<TABLE>
<CAPTION>
Wanger U.S. Small Cap Wanger International Small Cap
Six months ended Year ended Six months ended Year ended
June 30, 2000 December 31, 1999 June 30, 2000 December 31, 1999
===================================================================================================================================
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $108,271 $481,843 $(994,143) $(881,145)
Net realized gain (loss) on sales of investments 6,307,250 49,157,155 70,129,645 47,468,114
Net change in unrealized appreciation (66,257,453) 26,975,880 (83,670,143) 124,783,648
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations (59,841,932) 76,614,878 (14,534,641) 171,370,617
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (481,975) -- -- (2,396,217)
Net realized gain (49,642,946) (31,015,042) (39,240,076) --
-----------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders (50,124,921) (31,015,042) (39,240,076) (2,396,217)
FROM FUND SHARE TRANSACTIONS:
Reinvestment of dividends and capital gain distributions 50,085,126 30,987,684 39,173,838 2,391,782
Proceeds from other shares sold 52,998,741 39,307,491 133,138,790 30,696,445
-----------------------------------------------------------------------------------------------------------------------------------
103,083,867 70,295,175 172,312,628 33,088,227
Payments for shares redeemed (20,993,629) (64,304,419) (84,551,270) (31,984,964)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from Fund share transactions 82,090,238 5,990,756 87,761,358 1,103,263
-----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (27,876,615) 51,590,592 33,986,641 170,077,663
NET ASSETS:
Beginning of period 390,709,473 339,118,881 311,330,972 141,253,309
-----------------------------------------------------------------------------------------------------------------------------------
End of period $362,832,858 $390,709,473 $345,317,613 $311,330,972
-----------------------------------------------------------------------------------------------------------------------------------
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $108,139 $481,843 $ (994,143) --
===================================================================================================================================
See accompanying notes to financial statements.
30
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Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (unaudited)
Wanger Twenty Wanger Foreign Forty
Inception Inception
Six months ended February 1 through Six months ended February 1 through
June 30, 2000 December 31, 1999 June 30, 2000 December 31, 1999
===================================================================================================================================
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $(10,593) $(28,532) $10,251 $(2,048)
Net realized gain (loss) on sales of investments (406,218) 308,673 1,442,557 401,583
Net change in unrealized appreciation 702,833 769,519 (1,013,285) 1,646,008
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 286,022 1,049,660 439,523 2,045,543
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- -- -- --
Net realized gain (294,125) -- (406,499) --
-----------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders (294,125) -- (406,499) --
FROM FUND SHARE TRANSACTIONS:
Reinvestment of dividends and capital
gain distributions 294,123 -- 406,494 --
Proceeds from other shares sold 3,482,530 6,997,548 7,486,822 4,072,887
-----------------------------------------------------------------------------------------------------------------------------------
3,776,653 6,997,548 7,893,316 4,072,887
Payments for shares redeemed (1,807,137) (1,477,077) (2,496,979) (292,302)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from Fund
share transactions 1,969,516 5,520,471 5,396,337 3,780,585
-----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 1,961,413 6,570,131 5,429,361 5,826,128
NET ASSETS:
Beginning of period 6,570,131 -- 5,826,128 --
-----------------------------------------------------------------------------------------------------------------------------------
End of period $8,531,544 $6,570,131 $11,255,489 $5,826,128
-----------------------------------------------------------------------------------------------------------------------------------
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ (10,593) -- $ 14,029 $ 3,778
===================================================================================================================================
</TABLE>
31
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Wanger Advisors Trust 2000 Semiannual Report
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WANGER U.S. SMALL CAP FINANCIAL HIGHLIGHTS (unaudited)
<TABLE>
<CAPTION>
Six months Year Year Year Year May 3, 1995
ended ended ended ended ended through
June 30, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2000 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $24.88 $22.18 $21.46 $16.97 $11.60 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (c) .01 .03 (.05) (.02) (.06) (.05)
Net realized and unrealized gain
(loss) on investments (3.21) 4.79 1.93 4.90 5.46 1.65
---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (3.20) 4.82 1.88 4.88 5.40 1.60
LESS DISTRIBUTIONS
Dividends from net investment income (.03) -- -- -- -- --
Distributions from net realized gain (3.06) (2.12) (1.16) (.39) (.03) --
---------------------------------------------------------------------------------------------------------------------------------
Total distributions (3.09) (2.12) (1.16) (.39) (.03) --
NET ASSET VALUE, END OF PERIOD $18.59 $24.88 $22.18 $21.46 $16.97 $11.60
=================================================================================================================================
TOTAL RETURN (14.59%) 25.06% 8.68% 29.41% 46.59% 16.00%
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average
net assets (a) (b) 1.01%* 1.02% 1.02% 1.06% 1.21% 2.08%*
Ratio of net investment income (loss)
to average net assets (b) .06%* .14% (.25%) (.10%) (.41%) (1.44%)*
Portfolio turnover rate 48%* 35% 34% 34% 46% 59%*
Net assets at end of period $362,832,858 $390,709,473 $339,118,881 $270,865,827 $128,957,911 $21,903,536
</TABLE>
-------------------------------------------------------------------------------
*Annualized
(a) In accordance with a requirement of the Securities and Exchange Commission,
this ratio reflects total expenses prior to the reduction of custodian fees
for cash balances it maintains with the custodian ("custodian fees paid
indirectly"). This ratio net of custodian fees paid indirectly would have
been 1.04% for the year ended December 31, 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 (prior to custodian fees paid indirectly) 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 2.35% and (1.71%), respectively.
(c) Net investment income (loss) per share for the six months ended June 30,
2000 and the years ended December 31, 1999, 1998, 1997 and 1996 was based
upon the average shares outstanding during the period.
See accompanying notes to financial statements.
32
<PAGE>
<TABLE>
<CAPTION>
Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
WANGER INTERNATIONAL SMALL CAP FINANCIAL HIGHLIGHTS (unaudited)
Six months Year Year Year Year May 3, 1995
ended ended ended ended ended through
June 30, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2000 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $43.67 $19.62 $17.05 $17.71 $13.45 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (c) (.12) (.13) .03 .02 (.09) (.03)
Net realized and unrealized gain
(loss) on investments (.12) 24.52 2.76 (.26) 4.38 3.48
-----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (.24) 24.39 2.79 (.24) 4.29 3.45
LESS DISTRIBUTIONS
Dividends from net investment income -- (.34) (.22) -- -- --
Distributions from net realized
gain and unrealized
gain reportable for federal
income taxes (5.13) -- -- (.42) (.03) --
-----------------------------------------------------------------------------------------------------------------------------------
Total distributions (5.13) (.34) (.22) (.42) (.03) --
NET ASSET VALUE, END OF PERIOD $38.30 $43.67 $19.62 $17.05 $17.71 $13.45
===================================================================================================================================
TOTAL RETURN (3.13%) 126.37% 16.33% (1.46%) 32.01% 34.50%
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average
net assets (a) (b) 1.41%* 1.49% 1.55% 1.60% 1.79% 2.32%*
Ratio of net investment income (loss)
to average net assets (b) (.56%)* (.49%) .16% .12% (.56%) (.81%)*
Portfolio turnover rate 78%* 75% 56% 60% 50% 14%*
Net assets at end of period $345,317,613 $311,330,972 $141,253,309 $120,660,158 $84,855,082 $11,368,924
</TABLE>
-------------------------------------------------------------------------------
*Annualized
(a) In accordance with a requirement of the Securities and Exchange Commission,
this ratio reflects total expenses prior to the reduction of custodian fees
for cash balances it maintains with the custodian ("custodian fees paid
indirectly"). This ratio net of custodian fees paid indirectly would have
been 1.59% for the year ended December 31, 1997, 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 (prior to custodian fees paid indirectly) 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,
2000 and the years ended December 31, 1999, 1998, 1997 and 1996 was based
upon the average shares outstanding during the period.
See accompanying notes to financial statements.
33
<PAGE>
<TABLE>
<CAPTION>
Wanger Advisors Trust 2000 Semiannual Report
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WANGER TWENTY FINANCIAL HIGHLIGHTS (unaudited)
Six months Feb. 1,
ended 1999 through
June 30, Dec. 31,
2000 1999
-------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $13.43 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (c) (.02) (.08)
Net realized and unrealized gain on investments .38 3.51
-------------------------------------------------------------------------------
Total from investment operations .36 3.43
LESS DISTRIBUTIONS
Dividends from net investment income -- --
Distributions from net realized gain (.55) --
-------------------------------------------------------------------------------
Total distributions (.55) --
-------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $13.24 $13.43
===============================================================================
TOTAL RETURN 2.92% 34.30%
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (a) (b) 1.43%* 1.41%*
Ratio of net investment loss to
average net assets (b) (.29%)* (.77%)*
Portfolio turnover rate 140%* 113%*
Net assets at end of period $8,531,544 $6,570,131
</TABLE>
-------------------------------------------------------------------------------
*Annualized
(a) In accordance with a requirement of the Securities and Exchange Commission,
this ratio reflects total expenses prior to the reduction of custodian fees
for cash balances it maintains with the custodian ("custodian fees paid
indirectly"). This ratio net of custodian fees paid indirectly would have
been 1.35% for the six months ended June 30, 2000 and for the period ended
December 31, 1999.
(b) The fund was reimbursed by the Advisor for certain expenses from February
2, 1999 through June 30, 2000. Without the reimbursement, the ratio of
expenses (prior to custodian fees paid indirectly) to average net assets
and the ratio of net investment income to average net assets would have
been 1.71% and (.58%), respectively, for the six months ended June 30, 2000
and 2.12% and (1.48%), respectively, for the period ended December 31,
1999.
(c) Net investment income (loss) per share for the six months ended June 30,
2000 and the period ended December 31, 1999 was based upon the average
shares outstanding during the period.
See accompanying notes to financial statements.
34
<PAGE>
<TABLE>
<CAPTION>
Wanger Advisors Trust 2000 Semiannual Report
--------------------------------------------------------------------------------
WANGER FOREIGN FORTY FINANCIAL HIGHLIGHTS (unaudited)
Six months Feb. 1,
ended 1999 through
June 30, Dec. 31,
2000 1999
------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $18.39 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (c) .02 (.01)
Net realized and unrealized gain on investments 1.84 8.40
------------------------------------------------------------------------
Total from investment operations 1.86 8.39
LESS DISTRIBUTIONS
Dividends from net investment income -- --
Distributions from net realized gain (.96) --
------------------------------------------------------------------------
Total distributions (.96) --
------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $19.29 $18.39
========================================================================
TOTAL RETURN 9.81% 83.90%
RATIOS/SUPPLEMENTAL DATA
Ratio of expenses to average net assets (a) (b) 1.45%* 1.59%*
Ratio of net investment income (loss) to
average net assets (b) .24%* (.10%)*
Portfolio turnover rate 114%* 91%*
Net assets at end of period $11,255,489 $5,826,128
</TABLE>
------------------------------------------------------------------------
*Annualized
(a) In accordance with a requirement of the Securities and Exchange Commission,
this ratio reflects total expenses prior to the reduction of custodian fees
for cash balances it maintains with the custodian ("custodian fees paid
indirectly"). This ratio net of custodian fees paid indirectly would have
been 1.45% for the period ended December 31, 1999.
(b) The fund was reimbursed by the Advisor for certain expenses from February
2, 1999 through June 30, 2000. Without the reimbursement, the ratio of
expenses (prior to custodian fees paid indirectly) to average net assets
and the ratio of net investment income (loss) to average net assets would
have been 1.82% and (.13%), respectively, for the six months ended June 30,
2000 and 3.45% and (1.96%), respectively, for the period ended December 31,
1999.
(c) Net investment income (loss) per share for the six months ended June 30,
2000 and the period ended December 31, 1999 was based upon the average
shares outstanding during the period.
See accompanying notes to financial statements.
35
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Wanger Advisors Trust 2000 Semiannual Report
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NOTES TO FINANCIAL STATEMENTS (unaudited)
1. NATURE OF OPERATIONS
Wanger US Small Cap, Wanger International Small Cap, Wanger Twenty and Wanger
Foreign Forty ("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.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results may differ from those estimated.
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 shares outstanding.
CUSTODIAN FEES
Custodian fees are reduced based on each Fund's cash balances maintained with
the custodian. The amount is disclosed as a reduction of total expenses in the
Statement of Operations.
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 had no unrealized appreciation from
investments in PFICs at June 30, 2000.
Wanger Foreign Forty 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 had $4,013 of unrealized appreciation from
investments in PFICs at June 30, 2000. Cumulative net unrealized appreciation
recognized in prior years on PFICs sold in 2000 amounted to $1,813.
Dividends and distributions payable to each Fund's shareholders are recorded
by the Fund on the ex-dividend date.
3. TRANSACTIONS WITH AFFILIATES
The Fund's investment advisor, Wanger Asset Management, L.P., ("WAM") furnishes
continuing investment supervision to the Fund and is responsible for overall
management of the Fund's business affairs. Each Fund pays WAM a monthly advisory
fee based upon average daily net assets at the following rates:
WANGER U.S. SMALL CAP
Average Daily Net Assets
For the first $100 million 1.00%
Next $150 million .95%
In excess of $250 million .90%
WANGER INTERNATIONAL SMALL CAP
Average Daily Net Assets
For the first $100 million 1.30%
Next $150 million 1.20%
In excess of $250 million 1.10%
36
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Wanger Advisors Trust 2000 Semiannual Report
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NOTES TO FINANCIAL STATEMENTS (unaudited)
Wanger Twenty
On average daily net assets .95%
Wanger Foreign Forty
On average daily net assets 1.00%
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 a percentage of average net assets. This amount is 1.50%
for Wanger U.S. Small Cap, 1.90% for Wanger International Small Cap, 1.35% for
Wanger Twenty and 1.45% for Wanger Foreign Forty. WAM was not required to
reimburse Wanger U.S. Small Cap or Wanger International Small Cap under these
agreements for the six months ended June 30, 2000. Wanger Twenty and Wanger
Foreign Forty were reimbursed $10,187 and $15,930, respectively, for the six
months ended June 30, 2000.
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. The Funds paid the following trustees' fees and expenses to trustees
not affiliated with WAM:
Six months
ended
June 30, 2000
Wanger U.S. Small Cap $15,834
Wanger International Small Cap 11,982
Wanger Twenty 250
Wanger Foreign Forty 221
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. BORROWING ARRANGEMENTS
The trust participates in a $250,000,000 credit facility which was entered into
to facilitate portfolio liquidity. No amounts have been borrowed under this
facility for the six months ended June 30, 2000.
5. FUND SHARE TRANSACTIONS
Proceeds and payments on Fund shares as shown in the statement of changes in net
assets are in respect of the following numbers of shares:
Wanger U.S. Small Cap Six months ended Year ended
June 30, 2000 December 31, 1999
Shares sold 2,461,249 1,827,456
Shares issued in reinvestment
of dividend and capital gain
distributions 2,321,981 1,675,771
------------------------------------------------------------------------------
4,783,230 3,503,227
Less shares redeemed 967,216 3,089,752
------------------------------------------------------------------------------
Net increase in shares outstanding 3,816,014 413,475
Wanger International
Small Cap Six months ended Year ended
June 30, 2000 December 31, 1999
Shares sold 3,145,361 1,101,093
Shares issued in reinvestment
of dividend and capital gain
distributions 797,188 119,889
------------------------------------------------------------------------------
3,942,549 1,220,982
Less shares redeemed 2,053,949 1,290,574
------------------------------------------------------------------------------
Net increase (decrease) in shares
outstanding 1,888,600 (69,592)
Wanger Twenty Six months ended Year ended
June 30, 2000 December 31, 1999
Shares sold 270,718 612,940
Shares issued in reinvestment
of dividend and capital gain
distributions 23,417 --
------------------------------------------------------------------------------
294,135 612,940
Less shares redeemed 138,937 123,635
------------------------------------------------------------------------------
Net increase in shares outstanding 155,198 489,305
Wanger Foreign Forty Period ended Year ended
December 31, 1999 December 31, 1999
Shares sold 374,604 342,192
Shares issued in reinvestment
of dividend and capital gain
distributions 19,781 --
------------------------------------------------------------------------------
394,385 342,192
Less shares redeemed 127,568 25,412
------------------------------------------------------------------------------
Net increase in shares outstanding 266,817 316,780
6. INVESTMENT TRANSACTIONS
The aggregate costs of purchases and proceeds from sales other than short-term
obligations for the six months ended June 30, 2000 were:
------------------------------------------------------------------------------
WANGER U.S. WANGER WANGER WANGER
SMALL CAP INTERNATIONAL TWENTY FOREIGN FORTY
SMALL CAP
PURCHASES $120,388,237 $171,501,175 $6,031,099 $9,186,291
SALES 81,348,481 130,896,123 4,726,018 4,498,998
37
<PAGE>
WANGER U.S. SMALL CAP
WANGER INTERNATIONAL SMALL CAP
WANGER TWENTY
WANGER FOREIGN FORTY
SUPPLEMENT DATED JULY 7, 2000 TO
PROSPECTUS DATED MAY 1, 1999 OF WANGER ADVISORS TRUST
PROPOSED ADVISORY AGREEMENT. On June 9, 2000, Wanger Asset
Management, L.P. ("WAM"), the Funds' investment adviser, and Wanger
Asset Management, Ltd., the general partner of WAM, entered into an
Agreement and Plan of Merger ("Merger Agreement") with Liberty
Financial Companies, Inc. ("Liberty") and WAM Acquisition L.P., a newly
formed limited partnership ("Liberty Sub"). Under the Merger Agreement,
Liberty Sub would be merged with and into WAM (the "Merger"). WAM would
be the surviving entity and would be a wholly-owned subsidiary of
Liberty. After the merger, WAM will operate under the name Liberty
Wanger Asset Management, L.P. ("Liberty WAM").
On July 6, 2000, the board of trustees of Wanger Advisors
Trust (on behalf of each of the Funds) approved a new investment
advisory agreement with Liberty WAM (the "Proposed Advisory Agreement")
that, if approved by shareholders, will become effective upon the
consummation of the Merger. You will receive a proxy statement
describing the Merger and the Proposed Advisory Agreement in more
detail and seeking approval of the Proposed Advisory Agreement by the
shareholders of each Fund. The Merger Agreement provides that the
Merger is conditioned upon the shareholders of Wanger U.S. Small Cap
and Wanger International Small Cap approving the Proposed Advisory
Agreement and certain other conditions are met.
Subject to the receipt of the necessary shareholder approvals
and the satisfaction of other conditions contained in the Merger
Agreement, it is anticipated that the Merger will occur as soon as
reasonably practicable after the requisite shareholder approvals have
been obtained.
38
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Notes:
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<PAGE>
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Logo: WANGER ADVISORS TRUST
Trustees
Fred D. Hasselbring
Charles P. McQuaid
P. Michael Phelps
Ralph Wanger
Patricia H. Werhane
Officers
Ralph Wanger
President
Charles P. McQuaid
Senior Vice President
Marcel P. Houtzager
Vice President
Robert A. Mohn
Vice President
Leah J. Zell
Vice President
John H. Park
Vice President
Peter Zaldivar
Vice President
Bruce H. Lauer
Vice President and
Treasurer
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, LLC
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
8/00
