[ FRONT COVER ]
THE WOODWARD VARIABLE ANNUITY
PATHMAKER
SEMI-ANNUAL REPORT JUNE 30, 1996
o ITT HARTFORD LIFE & ANNUITY INSURANCE COMPANY
SEPARATE ACCOUNT SIX
o THE WOODWARD VARIABLE ANNUITY FUND
KEEPING YOU ON THE RIGHT FINANCIAL PATH
[ WOODWARD FUNDS LOGO ART ]
<PAGE>
ECONOMIC COMMENTS FOR THE PATHMAKER SEMIANNUAL REPORT
Dear Contract Holders:
Economic growth showed as marked acceleration in the second quarter,
as the gross domestic product (GDP), after adjustment for inflation, grew
at an annual rate of 4.8 percent. This was a significant increase from the
first quarter, when the growth rate was 2.0 percent, and from the fourth
quarter of 1995 when the growth rate was a mere 0.3 percent. Industrial
production was also strong, with the Federal Reserve's index of industrial
production rising at an annual rate of over 6.0 percent. Inflation was
moderate, as the consumer price index (CPI) increased from March to June at
a seasonally adjusted annual rate of slightly over 3.0 percent. The
unemployment rate, which has been gradually declining since the early
stages of the recovery from the last recession, declined again during the
second quarter, to end the quarter at 5.3 percent, its lowest rate since
1990.
For 1997, we expect growth of about 2.5 percent. Exports are likely
to be the strongest major sector of the economy as they benefit from the
competitive strength of U.S. manufacturing and an acceleration in the
growth rates of major foreign economies. Another strong sector is likely
to be capital equipment spending, as businesses attempt to improve the
efficiency of their operations. Inflation is expected to remain benign,
and, as measured by the CPI, to be just over 3.0 percent for the year.
Limited pricing power has raised incentives to improve efficiency in
both manufacturing plants and offices. Businesses are viewing capital
equipment spending as a key component in their drive to improve
productivity. However, with spending on equipment up close to 50 percent
over the past four years, the most urgent needs in this area have been
largely met. As a result, the rate of growth of spending on equipment is
likely to be about five percent in 1997, in line with the projected growth
rate in 1996, but substantially below the ten percent rate of gain recorded
in 1995. Within capital equipment spending, the strongest subcomponent is
likely to be high technology equipment. This sector includes computers,
telecommunications equipment, instruments and photocopiers.
Relatively low inflation and a low unemployment rate are likely to
have a positive influence on consumers' willingness to spend. A significant
negative in the outlook for consumer spending is the high level of
installment and credit card debt; with the large recent increases in credit
card delinquencies and bankruptcies suggesting that consumers are under
increasing financial stress. This is likely to bring a small decline in the
growth rate of consumer spending.
Corporate profits are expected to show good growth in 1997, although
the rate of gain is likely to be below that in 1996. For the year,
operating earnings on the Standard & Poor's 500 Stock Index are expected
to show an increase in a range of 5 to 10 percent compared to an estimated
gain of about 10 percent in 1996.
We hope that you have found our thoughts on the economy useful and
informative, and thank you for your continued interest and support.
Sincerely,
/s/ George T. Abel
George T. Abel
<PAGE>
<TABLE>
<CAPTION>
ITT Hartford Life & Annuity Insurance Company
Separate Account Six
Statements of Assets & Liabilities
June 30, 1996 (Unaudited)
<S> <C>
Assets:
PCM Global
Growth Fund
Shares 22,382
Cost $ 320,708
Market Value $ 353,637
PCM Global
Asset
Allocation Fund
Shares 304,202
Cost $4,588,574
Market Value $4,824,644
PCM U.S.
Government
and High
Quality Fund
Shares 136,476
Cost $1,765,851
Market Value $1,707,314
PCM Diversified
Income Fund
Shares 159,874
Cost $1,685,425
Market Value $1,678,674
Woodward
Balanced
Fund
Shares 930,270
Cost $10,102,712
Market Value $10,712,059
Woodward
Growth/Value
Fund
Shares 376,073
Cost $4,167,175
Market Value $4,708,440
Woodward
Opportunity
Fund
Shares 457,630
Cost $4,936,905
Market Value $5,564,320
Woodward
Capital
Growth Fund
Shares 600,984
Cost $6,437,240
Market Value $7,315,172
Woodward
Money
Market Fund
Shares 782,998
Cost $ 782,998
Market Value $ 782,998
<CAPTION>
U.S.
Global Government Woodward Woodward
Global Asset and High Diversified Woodward Woodward Woodward Capital Money
Growth Allocation Quality Bond Income Balanced Growth/Value Opportunity Growth Market
Fund Fund Fund Fund Fund Fund Fund Fund Fund
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Value $ 353,637 $4,824,644 $1,707,314 $1,678,314 $10,712,059 $4,708,440 $5,564,320 $7,315,172 $ 783,438
Dividends
receivable -- -- -- -- -- -- -- -- 309
Due from ITT
Hartford Life
and Annuity
Insurance
Company 2,823 5,115 -- 1,065 7,750 15,773 8,923 13,254 --
Receivable from
fund shares
sold -- -- 513 -- -- -- -- -- 276
---------- ---------- ---------- ---------- ----------- ---------- --------- ---------- ----------
Total Assets 356,460 4,829,759 1,707,827 1,679,739 10,719,809 4,724,213 5,573,243 7,328,526 783,583
---------- ---------- ---------- ---------- ----------- ---------- --------- ---------- ----------
Liabilities:
Due to ITT
Hartford
Life & Annuity
Insurance Co. -- -- 509 -- -- -- -- -- 145
Payable for
fund shares
purchased 2,823 5,115 -- 1,065 8,460 6,021 8,938 10,108 --
---------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------
Total
Liabilities 2,823 5,115 509 1,065 8,460 6,021 8,938 10,108 145
---------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------
Net Assets
(variable)
annuity
contract
liabilities) $ 353,637 $4,824,644 $1,707,318 $1,678,674 $10,711,349 $4,718,192 $5,564,305 $7,318,418 $ 783,438
========== ========== ========== ========== =========== ========== ========== ========== ==========
Deferred Annuity
contracts
in the
accumulation
period:
Units Owned 27,569 390,863 156,295 149,082 907,816 375,043 461,914 601,951 748,079
Unit Price $12.827138 $12.343571 $10.923704 $11.260082 $ 11.799029 $12.580406 $12.046183 $12.157827 $ 1.047267
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
2
<PAGE>
ITT Hartford Life & Annuity Insurance Company
Separate Account Six
<TABLE>
<CAPTION>
Statements of Operations Global
For the Six Months Ended June 30, 1996 (Unaudited) Global Asset U.S. Government Diversified
Growth Allocation and High Quality Income
Fund Fund Bond Fund Fund
Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment Income:
Dividends ......................................... $ 6,372 $ 204,195 $ 99,711 $ 84,920
Capital gains ..................................... 9,282 133,995 -- --
Expenses:
Mortality and expense
undertakings .................................... (2,061) (30,268) (10,797) (9,433)
--------- ---------- ---------- ----------
Net realized and unrealized
gain (loss) on investments:
Net realized gain (loss) on
securities transactions........................... 15 425 (190) 17
Net unrealized appreciation
(depreciation) on investments
during the period ................................ 11,590 (69,160) (146,098) (65,935)
--------- ---------- ---------- ----------
Net gain (losses)
on investments ................................... 11,605 (68,735) (146,288) (65,918)
--------- ---------- ---------- ----------
Net increase (decrease) in
net assets resulting from operations ............. $ 25,198 $ 239,187 $ (57,374) $ 9,569
========= ========== ========== ==========
<CAPTION>
Woodward
Woodward Woodward Woodward Capital Woodward
Balanced Growth/Value Opportunity Growth Money Market
Fund Fund Fund Fund Fund
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends ......................................... $ 161,597 $ 9,916 $ (8,166) $ (8,498) $ 17,530
Capital gains ..................................... -- -- -- -- --
Expenses:
Mortality and expense
undertakings .................................... (64,895) (27,990) (34,816) (46,510) (5,119)
----------- ---------- ---------- ---------- --------
Net realized and unrealized
gain (loss) on investments:
Net realized gain (loss) on
securities transactions........................... 611 544 1,862 721 --
Net unrealized appreciation
(depreciation) on investments
during the period ................................. 198,562 294,452 494,839 444,804 --
----------- ---------- ---------- ---------- --------
Net gain (losses)
on investments ................................... 199,173 294,996 496,701 445,525 --
----------- ---------- ---------- ---------- --------
Net increase (decrease) in
net assets resulting from operations ............. $ 295,875 $ 276,922 $ 453,719 $ 390,517 $ 12,411
=========== ========== ========== ========== ========
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
ITT Hartford Life & Annuity Insurance Company
Separate Account Six
Statements of Changes in Net Assets
For the Six Months Ended Global Asset
June 30, 1996 (Unaudited) Allocation U.S. Government
Global Growth Fund Fund and High Quality Bond
Sub-Account Sub-Account Fund Sub-Account
-------------------- --------------------- ---------------------
Six Months Period Six Months Period Six Months Period
Ended Ended Ended Ended Ended Ended
June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31,
1996 1995 1996 1995 1996 1995
---------- -------- ---------- --------- ---------- ---------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (loss) .. $ 4,311 $ (1,539) $ 173,927 $ (21,635) $ 88,914 $ (7,716)
Capital gains income .......... 9,282 133,995 --
Net realized gain (loss)
on security transactions .... 15 (83) 425 220 (190) 149
Net unrealized appreciation
(depreciation) of
investments during the
period ...................... 11,590 21,338 (69,160) 305,251 (146,098) (87,562)
Net increase (decrease)
in net assets resulting
from operations ............. 25,198 19,716 239,187 283,816 (57,374) 79,995
Unit transactions:
Premiums....................... 30,928 153,142 557,857 3,409,768 395,692 1,236,786
Net transfers ................. 47,038 78,454 277,021 232,158 90,652 13,399
Surrenders .................... (724) (115) (140,062) (35,101) (36,611) (15,221)
Total increase (decrease)
in net assets resulting
from unit transactions ...... 77,242 231,481 694,816 3,606,825 449,733 1,234,964
Total increase (decrease)
in net assets ............... 102,440 251,197 934,003 3,890,641 392,359 1,314,959
Net Assets:
Beginning of Period ........... 251,197 -- 3,890,641 -- 1,314,959 --
End of Period ................. $353,637 $251,197 $4,824,644 $3,890,641 $1,707,318 $1,314,959
<CAPTION>
Woodward Balanced Woodward
Diversified Income Fund Growth/Value Fund
Fund Sub-Account Sub-Account Sub-Account
-------------------- --------------------- ---------------------
Six Months Period Six Months Period Six Months Period
Ended Ended Ended Ended Ended Ended
June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31,
1996 1995 1996 1995 1996 1995
---------- -------- ---------- --------- ---------- ---------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (loss) .. $ 75,487 $ (5,681) $ 96,702 $ 76,181 $ (18,074) $ 8,682
Capital gains income .......... -- -- --
Net realized gain (loss)
on security transactions .... 17 14 611 (38) 544 (301)
Net unrealized appreciation
(depreciation) of
investments during the
period ...................... (65,935) 60,185 198,562 424,298 294,452 261,174
Net increase (decrease)
in net assets resulting
from operations ............. 9,569 54,518 295,875 500,441 276,922 269,555
Unit transactions:
Premiums....................... 480,579 913,625 2,211,742 6,886,652 1,162,848 2,785,446
Net transfers ................. 199,260 81,213 783,313 427,840 200,939 142,382
Surrenders .................... (32,806) (27,284) (331,396) (63,118) (87,880) (32,020)
Total increase (decrease)
in net assets resulting
from unit transactions ...... 647,033 967,554 2,663,659 7,251,374 1,275,907 2,895,808
Total increase (decrease)
in net assets ............... 656,602 1,022,072 2,959,534 7,751,815 1,552,829 3,165,363
Net Assets:
Beginning of Period ........... 1,022,072 -- 7,751,815 -- 3,165,363 --
End of Period ................. $1,678,664 $1,022,072 $10,711,349 $7,751,815 $4,718,192 $3,165,363
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
ITT Hartford Life & Annuity Insurance Company
Separate Account Six
Statements of Changes in Net Assets (Continued)
Woodward Woodward Woodward
Opportunity Fund Capital Growth Fund Money Market Fund
Sub-Account Sub-Account Sub-Account
-------------------- --------------------- ---------------------
Six Months Period Six Months Period Six Months Period
Ended Ended Ended Ended Ended Ended
June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31,
1996 1995 1996 1995 1996 1995
---------- -------- ---------- --------- ---------- ---------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (loss) .. $ (42,982) $ (11,731) $ (55,008) $ (10,045) $ 12,411 $ 8,439
Capital gains income .......... -- -- --
Net realized gain (loss)
on security transactions .... 1,862 22 721 (153) -- --
Net unrealized appreciation
(depreciation) of
investments during the
period ...................... 494,839 146,983 444,804 446,890 -- --
Net increase (decrease)
in net assets resulting
from operations ............. 453,719 135,274 390,517 436,692 12,411 8,439
Unit transactions:
Premiums....................... 731,418 3,995,211 927,250 5,237,946 121,539 607,825
Net transfers ................. 72,884 322,557 307,058 243,179 16,484 44,272
Surrenders .................... (112,302) (34,456) (169,616) (54,608) (23,050) (4,482)
Total increase (decrease)
in net assets resulting
from unit transactions ...... 692,000 4,283,312 1,064,692 5,426,517 114,973 647,615
Total increase (decrease)
in net assets ............... 1,145,719 4,418,586 1,445,209 5,863,209 127,384 656,054
Net Assets:
Beginning of Period ........... 4,418,586 -- 5,863,209 -- 656,054 --
End of Period ................. $5,564,305 $4,418,586 $7,318,418 $5,863,209 $ 783,438 $ 656,054
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
5
<PAGE>
SEPARATE ACCOUNT SIX
ITT HARTFORD LIFE & ANNUITY
INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(Unaudited)
1. Organization:
Separate Account Six (the Account) is a separate investment account
within ITT Hartford Life & Annuity Insurance Company (the Company) and is
registered with the Securities and Exchange Commission (SEC) as a unit
investment trust under the Investment Company Act of 1940, as amended. Both
the Company and the Account are subject to supervision and regulation by the
Department of Insurance of the State of Connecticut and the SEC. The Account
invests deposits by variable annuity contractholders of the Company in various
mutual funds (The Funds) as directed by the contractholders.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting principles
in the investment company industry:
a) Security Transactions--
Security transactions are recorded on the trade date (date the order
to buy or sell is executed). Cost of investments sold is determined
on the basis of identified cost. Dividend and capital gains income
are accrued as of the ex-dividend date. Capital gains income
represents dividends from the Funds which are characterized as
capital gains under tax regulations.
b) Security Valuation--
The investments in shares of the Woodward Variable Annuity Fund
(Balanced Fund, Growth/Value Fund, Opportunity Fund, Capital Growth
Fund and Money Market Fund) or the Putnam Capital Manager Trust (PCM
Global Growth Fund, PCM Global Asset Allocation Fund, PCM Diversified
Income Fund, PCM U.S. Government and High Quality Bond Fund) are
valued at the closing net asset value per share as determined by the
appropriate Fund as of June 30, 1996.
c) Federal Income Taxes--
The operations of the Account form a part of, and are taxed with, the
total operations of the Company, which is taxed as an insurance
company under the Internal Revenue Code. Under current law, no
federal income taxes are payable with respect to the operations of
the Account.
d) 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 reported amounts of assets and
liabilities as of the date of the financial statements and the
reported amounts of income and expenses during the period. Operating
results in the future could vary from the amounts derived from
management's estimates.
3. Administration of the Account and Related Charges:
a) Mortality and Expense Undertakings--
The Company, as issuer of variable annuity contracts, provides the
mortality and expense undertakings and, with respect to the Account,
receives a maximum annual fee of up to 1.25% of the Account's average
daily net assets. The Company also provides administrative services
and receives an annual fee of 0.15% of the Account's average daily
net assets.
b) Deduction of Annual Maintenance Fee--
Annual maintenance fees are deducted through termination of units of
interest from applicable contract owners' accounts, in accordance
with the terms of the contracts.
6
<PAGE>
<TABLE>
<CAPTION>
THE WOODWARD VARIABLE ANNUITY FUND
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
BALANCED GROWTH/VALUE OPPORTUNITY CAPITAL GROWTH MONEY MARKET
FUND FUND FUND FUND FUND
---------- ------------ ----------- -------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment in securities:
At cost ......................................... $13,478,266 $4,812,908 $5,462,219 $6,922,938 $1,272,856
=========== ========== ========== ========== ==========
At value (Note 2) ....................... ...... $14,281,433 $5,291,452 $6,150,440 $7,879,928 $1,279,748
Cash ................................................ -- -- -- -- --
Receivable for securities sold ...................... 12,109 12,109 -- -- --
Receivable for shares purchased ..................... 8,683 15,764 8,923 13,353 --
Income receivable ................................... 74,490 8,486 5,928 7,717 5,668
Deferred organization costs, net (Note 2) ........... 22,196 22,196 22,196 22,196 22,196
Prepaids and other assets ........................... 24,372 11,508 12,247 13,892 10,264
----------- ---------- ---------- ---------- ----------
TOTAL ASSETS .................................. 14,423,283 5,361,515 6,199,734 7,937,086 1,317,876
----------- ---------- ---------- ---------- ----------
LIABILITIES:
Payable for securities purchased .................... 101,755 -- 17,535 -- --
Accrued investment advisory fees .................... 8,599 3,238 3,773 4,839 483
Accrued custodial fees .............................. 3,114 2,743 2,054 1,202 437
Dividends payable ................................... -- -- -- -- 521
Other payables and accrued expenses ................. 489 372 375 375 374
TOTAL LIABILITIES ............................. 113,957 6,353 23,737 6,416 1,815
----------- ---------- ---------- ---------- ----------
NET ASSETS .................................... $14,309,326 $5,355,162 $6,175,997 $7,930,670 $1,316,061
=========== ========== ========== ========== ==========
Net assets consist of:
Capital shares (unlimited number of shares
authorized, par value $.10 per share) ........... $ 124,257 $ 42,772 $ 50,792 $ 65,158 $ 131,606
Additional paid-in capital .......................... 13,115,191 4,644,208 5,387,488 6,878,351 1,184,455
Accumulated undistributed net investment income ..... (17,817) 2,235 (173) 509 --
Accumulated undistributed net realized gains ........ 284,528 187,403 49,669 29,662 --
Net unrealized appreciation on investments .......... 803,167 478,544 688,221 956,990 --
----------- ---------- ---------- ---------- ----------
TOTAL NET ASSETS .............................. $14,309,326 $5,355,162 $6,175,997 $7,930,670 $1,316,061
=========== ========== ========== ========== ==========
Shares of capital stock outstanding ................. 1,242,567 427,723 507,923 651,570 1,316,061
=========== ========== ========== ========== ==========
Net asset value and redemption price per share ...... $ 11.52 $ 12.52 $ 12.16 $ 12.17 $ 1.00
=========== ========== ========== ========== ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
THE WOODWARD VARIABLE ANNUITY FUND
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 1996
(Unaudited)
BALANCED GROWTH/VALUE OPPORTUNITY CAPITAL GROWTH MONEY MARKET
FUND FUND FUND FUND FUND
--------- ------------ ----------- -------------- ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME (Note 2)
Interest .......................................... $210,899 $ 5,864 $ 5,928 $ 7,462 $ 33,301
Dividends ......................................... 60,670 43,714 24,408 39,545 --
-------- -------- -------- -------- --------
TOTAL INVESTMENT INCOME ....................... 271,569 49,578 30,336 47,007 33,301
EXPENSES (Notes 2, 3 and 5):
Investment advisory fee ........................... 47,917 17,304 20,865 27,183 2,820
Professional fees ................................. 11,742 11,742 11,742 11,742 11,704
Custodial fee ..................................... 23,107 13,775 15,827 6,799 2,907
Transfer and dividend disbursing agent fees ....... 2,224 2,208 2,227 2,224 2,194
Amortization of deferred organization costs ....... 2,959 2,959 2,959 2,959 2,959
Marketing expense ................................. 2,660 2,661 2,660 2,660 2,660
Registration, filing fees and other expenses ...... 1,715 1,845 1,935 985 666
Less: Expense reimbursement ....................... (38,110) (32,928) (34,605) (13,720) (22,778)
-------- -------- -------- -------- --------
NET EXPENSES .................................... 54,214 19,566 23,610 40,832 3,132
-------- -------- -------- -------- --------
NET INVESTMENT INCOME ............................... 217,355 30,012 6,726 6,175 30,169
-------- -------- -------- -------- --------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains ................................ 232,512 155,006 86,963 25,723 --
Net change in unrealized appreciation on
investments ..................................... 49,847 168,379 452,716 445,672 --
-------- -------- -------- -------- --------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 282,359 323,385 539,679 471,395 --
-------- -------- -------- -------- --------
NET INCREASE IN NET ASSETS FROM OPERATIONS .......... $499,714 $353,397 $546,405 $477,570 $ 30,169
======== ======== ======== ======== ========
<FN>
See accompanying notes to financial statements.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
THE WOODWARD VARIABLE ANNUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
BALANCED FUND GROWTH/VALUE FUND OPPORTUNITY FUND
------------------------------ ------------------------------ ------------------------------
Six Months Six Months Six Months
Ended Ended Ended
June 30, 1996 Year Ended June 30, 1996 Year Ended June 30, 1996 Year Ended
(Unaudited) Dec. 31, 1995 (Unaudited) Dec. 31, 1995 (Unaudited) Dec. 31, 1995
------------ ------------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment
income ........... $ 217,355 $ 194,591 $ 30,012 $ 29,537 $ 6,726 $ 14,190
Net realized gains
(losses) ......... 232,512 52,016 155,006 35,828 86,963 (36,276)
Net change in
unrealized
appreciation on
investments ...... 49,847 753,320 168,379 310,165 452,716 235,505
----------- ----------- ---------- ---------- ---------- ----------
Net increase in
net assets from
operations ..... 499,714 999,927 353,397 375,530 546,405 213,419
----------- ----------- ---------- ---------- ---------- ----------
DISTRIBUTIONS TO
SHAREHOLDERS (Note 2):
From net investment
income ........... (236,800) (192,963) (27,799) (29,515) (6,942) (14,147)
From realized gains -- -- -- (3,431) -- --
In excess of
realized gains ... -- -- -- -- -- (1,018)
----------- ----------- ---------- ---------- ---------- ----------
Total
distributions .. (236,800) (192,963) (27,799) (32,946) (6,942) (15,165)
----------- ----------- ---------- ---------- ---------- ----------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold ............. 2,809,356 10,294,774 1,463,753 3,508,134 861,170 4,792,328
Net asset value of
shares issued in
reinvestment of
distributions to
shareholders ..... 236,800 192,963 27,799 32,946 6,942 15,165
----------- ----------- ---------- ---------- ---------- ----------
3,046,156 10,487,737 1,491,552 3,541,080 868,112 4,807,493
Less: payments for
shares redeemed .. (210,620) (83,825) (215,679) (129,973) (203,943) (33,382)
----------- ----------- ---------- ---------- ---------- ----------
Net increase in net
assets from
capital share
transactions ..... 2,835,536 10,403,912 1,275,873 3,411,107 664,169 4,774,111
----------- ----------- ---------- ---------- ---------- ----------
NET INCREASE IN NET
ASSETS .............. 3,098,450 11,210,876 1,601,471 3,753,691 1,203,632 4,972,365
NET ASSETS:
Beginning of period 11,210,876 -- 3,753,691 -- 4,972,365 --
----------- ----------- ---------- ---------- ---------- ----------
End of period ...... $14,309,326 $11,210,876 $5,355,162 $3,753,691 $6,175,997 $4,972,365
=========== =========== ========== ========== ========== ==========
CAPITAL SHARE
TRANSACTIONS:
Shares sold ........ 245,363 985,257 120,598 331,700 73,831 452,879
Shares issued in
reinvestment of
distributions to
shareholders ..... 20,617 17,604 2,251 2,942 577 1,398
----------- ----------- ---------- ---------- ---------- ----------
265,980 1,002,861 122,849 334,642 74,408 454,277
Less: shares
redeemed ......... (18,549) (7,725) (17,928) (11,840) (17,610) (3,152)
----------- ----------- ---------- ---------- ---------- ----------
NET INCREASE IN SHARES
OUTSTANDING ........ 247,431 995,136 104,921 322,802 56,798 451,125
CAPITAL SHARES:
Beginning of period 995,136 -- 322,802 ---- 451,125 --
----------- ----------- ---------- ---------- ---------- ----------
End of period ...... 1,242,567 995,136 427,723 322,802 507,923 451,125
=========== =========== ========== ========== ========== ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
THE WOODWARD VARIABLE ANNUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
CAPITAL GROWTH FUND MONEY MARKET FUND
----------------------------- -----------------------------
Six Months Six Months
Ended Ended
June 30, 1996 Year Ended June 30, 1996 Year Ended
(Unaudited) Dec. 31, 1995 (Unaudited) Dec. 31, 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income ............................. $ 6,175 $ 22,283 $ 30,169 $ 32,000
Net realized gains (losses) ....................... 25,723 8,122 -- --
Net change in unrealized appreciation on
investments ...................................... 445,672 511,318 -- --
---------- ---------- ---------- ----------
Net increase in net assets from operations ...... 477,570 541,723 30,169 32,000
---------- ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS (Note 2):
From net investment income ........................ (5,716) (22,233) (30,169) (32,000)
From realized gains ............................... -- (4,183) -- --
In excess of realized gains ....................... -- -- -- --
---------- ---------- ---------- ----------
Total distributions ............................. (5,716) (26,416) (30,169) (32,000)
---------- ---------- ---------- ----------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ......................... 1,163,203 6,001,443 202,058 1,168,068
Net asset value of shares issued in reinvestment of
distributions to shareholders ................... 5,716 26,416 29,648 31,505
---------- ---------- ---------- ----------
1,168,919 6,027,859 231,706 1,199,573
Less: payments for shares redeemed ................ (145,039) (108,230) (91,537) (23,681)
---------- ---------- ---------- ----------
Net increase in net assets from capital share
transactions ................................ 1,023,880 5,919,629 140,169 1,175,892
---------- ---------- ---------- ----------
NET INCREASE IN NET ASSETS .......................... 1,495,734 6,434,936 140,169 1,175,892
NET ASSETS:
Beginning of period ............................... 6,434,936 -- 1,175,892 --
---------- ---------- ---------- ----------
End of period ..................................... $7,930,670 $6,434,936 $1,316,061 $1,175,892
========== ========== ========== ==========
CAPITAL SHARE TRANSACTIONS:
Shares sold ....................................... 97,374 573,282 202,058 1,168,068
Shares issued in reinvestment of distributions to
shareholders .................................... 471 2,411 29,648 31,505
---------- ---------- ---------- ----------
97,845 575,693 231,706 1,199,573
Less: shares redeemed ............................. (12,112) (9,856) (91,537) (23,681)
---------- ---------- ---------- ----------
NET INCREASE IN SHARES OUTSTANDING .................. 85,733 565,837 140,169 1,175,892
CAPITAL SHARES:
Beginning of period ............................... 565,837 ---- 1,175,892 --
---------- ---------- ---------- ----------
End of period ..................................... 651,570 565,837 1,316,061 1,175,892
========== ========== ========== ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
10
<PAGE>
THE WOODWARD VARIABLE ANNUITY
BALANCED FUND
PORTFOLIO OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Description Face Amount Market Value
----------- ----------- ------------
<S> <C> <C>
TEMPORARY CASH INVESTMENT -- 7.52%
Salomon Brothers, Revolving Repurchase Agreement,
5.53%, 7/1/96 (secured by various U.S. Treasury
Strips with maturities ranging from 2/15/99
through 8/15/00, all held at Chemical Bank) ..... $1,073,427 $1,073,427
----------
(Cost $1,073,427)
U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 37.82%
U.S. Treasury Securities -- 19.94%
Principal Strip from U.S. Treasury Securities
due:
8/15/99 ..................................... 200,000 164,373
5/15/17 ..................................... 90,000 20,479
8/15/17 ..................................... 320,000 71,453
11/15/18 .................................... 100,000 20,436
Strip from U.S. Treasury Securities due:
5/15/13 ..................................... 250,000 76,228
2/15/14 ..................................... 200,000 57,742
U.S. Treasury Bonds:
12.750%, 11/15/10 ........................... 450,000 631,899
10.375%, 11/15/12 ........................... 150,000 190,429
8.750%, 5/15/17 ............................. 50,000 59,344
U.S. Treasury Notes:
6.125%, 7/31/96 ............................. 325,000 325,253
7.875%, 1/15/98 ............................. 120,000 123,224
5.250%, 7/31/98 ............................. 350,000 343,931
7.750%, 11/30/99 ............................ 200,000 208,250
6.375%, 8/15/02 ............................. 100,000 99,094
6.250%, 2/15/03 ............................. 200,000 196,437
7.250%, 5/15/04 ............................. 250,000 258,906
----------
(Cost $2,834,477) 2,847,478
----------
Agency Obligations -- 17.88%
Federal Home Loan Mortgage Corp. Gtd. Multi-Class
Mortgage Participation Ctfs.:
Series 11 Class D, 9.500%, 7/15/19 .......... 50,000 54,311
Series 22 Class C, 9.500%, 4/15/20 .......... 13,811 15,074
Series 47 Class F, 10.000%, 6/15/20 ......... 100,000 110,127
Series 84 Class F, 9.200%, 10/15/20 ......... 50,000 53,132
Series 109 Class I, 9.100%, 1/15/21 ......... 132,000 141,154
Series 1084 Class F, AR, 5/15/21 ............ 100,000 101,929
Series 1084 Class S, IF, 5/15/21 ............ 70,000 80,500
Series 1297 Class H, 7.500%, 1/15/20 ........ 40,711 39,595
Series 1360 Class PK, 10.000%, 12/15/20 ..... 25,000 28,018
Series 1378 Class H, 10.000%, 1/15/21 ....... 50,000 55,861
Series 1378 Class JZ, 7.500%, 11/15/21 ...... 65,770 60,592
Series 1483 Class E, 6.500%, 2/15/20 ........ 40,000 38,350
Series 1489 Class L, 5.500%, 4/15/08 ........ 77,825 73,857
Series 1491 Class MA, 6.750%, 11/15/22 ...... 119,740 109,765
</TABLE>
11
<PAGE>
<TABLE>
<S> <C> <C>
Series 1531 Class K, 6.000%, 4/15/08 ........ 86,704 81,073
Series 1585 Class NB, IF, 9/15/23 ........... 24,166 16,523
Series 1586 Class A, 6.000%, 9/15/08 ........ 33,523 31,068
Series 1604 Class SE, IF, 11/15/08 .......... 46,758 33,783
Series 1606 Class LD, IF, 5/15/08 ........... 30,763 17,323
Series 1686 Class A, 5.000%, 2/15/24 ........ 46,224 37,207
Series 1686 Class SL, IF, 2/15/24 ........... 46,224 33,628
Series 1757 Class A, 9.500%, 5/15/23 ........ 80,478 84,905
Series 1796 Class A, IF, 2/15/09 ............ 25,000 16,500
Series 1825 Class C, 5.799%, 12/15/23 ....... 50,000 42,641
Series 1854 Class C, IF, 4/15/08 ............ 75,000 42,070
Federal Housing Administration Greystone 1996-2
Putable Pool, 7.430%, 11/1/22 ................. 99,824 99,923
Federal National Mortgage Assn. Pass Thru
Securities:
Guaranteed Remic Trust:
1989 Class 69-G, 7.600%, 10/25/19 ........... 50,000 48,578
1990 Class 1-D, 8.800%, 1/25/20 ............. 50,000 52,088
1990 Class 120-H, 9.000%, 10/25/20 .......... 100,000 106,821
1990 Class 143-J, 8.750%, 12/25/20 .......... 75,000 78,011
1991 Class 144-PZ, 8.500%, 6/25/21 .......... 74,239 76,757
1993 Class 32-K, 6.000%, 3/25/23 ............ 35,852 30,555
1993 Class 139-S, IF, 8/25/23 ............... 86,582 45,239
1993 Class 155-LA, 6.500%, 5/25/23 .......... 43,397 42,012
1993 Class 190-SE, IF, 10/25/08 ............. 49,847 34,503
1993 Class 214-L, 6.000%, 12/25/08 .......... 78,750 74,198
1993 Class 223-FB, IF, 12/25/23 ............. 37,914 36,587
1993 Class 223-SB, IF, 12/25/23 ............. 14,582 10,098
1994 Class 19-C, 5.000%, 1/25/24 ............ 41,644 36,329
1995 Class 13-B, 6.500%, 3/25/09 ............ 93,986 88,679
1996 Class 20-L, Zero Coupon, 9/25/08 ....... 30,000 16,003
1992-G Class 42-Z, 7.000%, 7/25/22 .......... 65,719 59,239
1992-G Class 59-C, 6.000%, 12/25/21 ......... 50,000 46,042
1994-G Class 13-ZB, 7.000%, 11/17/24 ........ 55,842 48,152
Government National Mortgage Assn. Pass Thru
Ctfs.
Guaranteed Remic Series 1994, Class SA, IF,
10/16/22 .................................... 302,600 17,536
Government National Mortgage Assn. Pass Thru
Pool:
#297628, 8.000%, 9/15/22 .................... 35,646 36,175
#313110, 7.500%, 11/15/22 ................... 72,152 71,697
---------
(Cost $2,599,208) 2,554,208
---------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS ........ 5,401,686
---------
(Cost $5,433,685)
</TABLE>
12
<PAGE>
<TABLE>
<S> <C> <C>
CORPORATE BONDS AND NOTES -- 2.12%
Finance -- 2.12%
Ford Credit Grantor Trust Asset Backed Ctf.
Series 1994-A, Class A, 6.350%, 5/15/99 ....... 36,884 37,068
Merrill Lynch MBS Inc. Project Pass Thru Ctf.
Series 144-S FHA Insured, 7.430%, 7/25/24 ..... 91,353 87,698
Nationsbank Auto Grantor Trust Asset Backed Ctf.
Series 1995-A, Class A, 5.85%, 6/15/02 ........ 37,373 37,320
Navistar Financial Corp. Owner Trust Series
1995-1, Class A2, 6.550%, 11/20/01 ............ 40,005 40,631
World Omni Automobile Lease Trust Asset Backed
Pass Thru Ctf., Series 1995-A, Class A, 6.050%,
11/25/01 ...................................... 100,000 100,163
--------
TOTAL CORPORATE BONDS AND NOTES ..................... 302,880
--------
(COST $302,245)
Shares
------
COMMON STOCKS -- 52.54%
Aerospace -- 1.16% ................................
Boeing Co. ...................................... 1,900 165,537
--------
Air Transport -- 0.10%
Air Express International Corp. ................. 500 14,125
--------
Apparel -- 1.07%
Nine West Group, Inc. * ......................... 450 23,006
Russell Corp. ................................... 4,700 129,838
--------
152,844
--------
Banks -- 3.35%
Barnett Banks, Inc. ............................. 2,100 128,100
Charter One Financial, Inc. ..................... 950 33,131
First Tennessee National Corp. .................. 700 21,438
Fleet Financial Group, Inc. ..................... 4,100 178,350
Norwest Corp. ................................... 2,700 94,162
TCF Financial Corp. ............................. 700 23,275
--------
478,456
--------
Business Machines -- 1.18%
Autodesk, Inc. .................................. 2,300 68,712
Compaq Computer Corp. * ......................... 1,100 54,175
Diebold, Inc. ................................... 450 21,713
InterVoice, Inc. * .............................. 300 5,963
Xilinx, Inc. * .................................. 550 17,462
--------
168,025
--------
Business Services -- 5.48%
American Management System, Inc. * .............. 675 19,744
CDI Corp. * ..................................... 500 16,875
Deluxe Corp. .................................... 3,800 134,900
DST Systems, Inc. * ............................. 300 9,600
</TABLE>
12
<PAGE>
<TABLE>
<S> <C> <C>
Dun & Bradstreet Corp. .......................... 2,400 150,000
Electronic Date Systems Corp. ................... 3,400 182,750
G & K Services, Inc. Class A .................... 600 17,100
Interpublic Group of Companies, Inc. ............ 1,300 60,938
Omnicom Group, Inc. ............................. 400 18,600
SunGard Data Systems, Inc. * .................... 700 28,087
WMX Technologies, Inc. .......................... 3,900 127,725
Zilog, Inc. * ................................... 700 16,800
--------
783,119
--------
Chemicals -- 2.44%
Dow Chemical Co. ................................ 1,000 76,000
Great Lakes Chemical Corp. ...................... 1,700 105,825
RPM, Inc. ....................................... 700 10,937
Sigma-Aldrich Corp. ............................. 2,900 155,150
--------
347,912
--------
Construction -- 2.51%
Crane Co. ....................................... 800 32,800
Masco Corp. ..................................... 4,100 124,025
York International Corp. ........................ 3,900 201,825
--------
358,650
--------
Consumer Durables -- 1.26%
Durakon Industries, Inc. * ...................... 400 5,850
Invacare Corp. .................................. 200 4,700
Leggett & Platt, Inc. ........................... 900 24,975
Rubbermaid, Inc. ................................ 5,300 144,425
--------
179,950
--------
Containers -- 1.08%
AptarGroup, Inc. ................................ 500 15,125
Crown Cork & Seal Co., Inc. * ................... 3,100 139,500
--------
154,625
--------
Drugs and Medicine -- 3.83%
Abbott Laboratories Corp. ....................... 2,800 121,800
Bristol-Myers Squibb Co. ........................ 1,700 153,000
Community Health System, Inc. ................... 200 10,350
Health Care & Retirement Corp. * ................ 600 14,250
Scherer (R.P.) Corp. * .......................... 150 6,806
Schering-Plough Corp. ........................... 3,200 200,800
Sybron International Corp. * .................... 900 22,500
Vivra, Inc. * ................................... 550 18,081
--------
547,587
--------
Electronics -- 2.03%
Belden, Inc. .................................... 1,050 31,500
Dynatech Corp. * ................................ 800 26,000
</TABLE>
13
<PAGE>
<TABLE>
<S> <C> <C>
Hewlett Packard Co. ............................. 500 49,812
Intel Corp. ..................................... 800 58,750
Lucent Technology, Inc. ......................... 900 34,087
Microchip Technology, Inc. ...................... 800 19,800
Molex, Inc. Class A Non-Voting .................. 450 13,219
Motorola, Inc. .................................. 900 56,588
--------
289,756
--------
Energy and Utilities -- 3.12%
Enron Corp. ..................................... 3,300 134,888
MCN Corp. ....................................... 6,900 168,187
Pinnacle West Capital Corp. ..................... 4,700 142,762
--------
445,837
--------
Energy Raw Materials -- 1.87%
Apache Corp. .................................... 900 29,588
Noble Affiliates, Inc. .......................... 700 26,425
Schlumberger Ltd. ............................... 2,300 193,775
Southwestern Energy Co. ......................... 1,200 16,950
--------
266,738
--------
Food and Agriculture -- 2.83%
ConAgra, Inc. ................................... 2,200 99,825
CPC International, Inc. ......................... 1,800 129,600
Sysco Corp. ..................................... 4,800 164,400
Universal Foods Corp. ........................... 300 11,063
--------
404,888
--------
Insurance -- 2.30%
American International Group, Inc. .............. 900 88,763
Capital Re Corp. ................................ 600 22,050
Chubb Corp. ..................................... 3,800 189,525
Transatlantic Holdings, Inc. .................... 400 28,050
--------
328,388
--------
International Oil -- 0.75%
Royal Dutch Petroleum Co., N.Y. Registry ........ 700 107,625
--------
Liquor -- 1.10%
Anheuser Busch Companies, Inc. .................. 2,100 157,500
--------
Media -- 2.37%
Banta Corp. ..................................... 850 21,462
Gannett Co., Inc. ............................... 2,200 155,650
Washington Post Co. Class B ..................... 500 162,000
--------
339,112
--------
Miscellaneous and Conglomerates -- 1.95%
ABC Rail Products Corp. * ....................... 400 8,650
Culligan Water Technologies, Inc. * ............. 400 15,200
DENTSPLY International, Inc. .................... 450 19,125
</TABLE>
14
<PAGE>
<TABLE>
<S> <C> <C>
Greenfield Industries, Inc. ..................... 750 24,750
Health Management Associates, Inc. Class A * .... 675 13,669
Duracell International, Inc. .................... 3,600 155,250
Littlefuse, Inc. * .............................. 500 18,750
Wolverine Tube, Inc. * .......................... 650 22,750
--------
278,144
--------
Miscellaneous Finance -- 1.27%
CMAC Investment Corp. ........................... 350 20,125
Edwards (A.G.), Inc. ............................ 800 21,700
Everest Reinsurance Holdings, Inc. .............. 1,000 25,875
Executive Risk, Inc. ............................ 600 22,950
FINOVA Group, Inc. .............................. 750 36,562
Idex Corp. ...................................... 600 22,800
PMI Group, Inc. ................................. 450 19,125
Scotsman Industries, Inc. ....................... 600 12,075
--------
181,212
--------
Motor Vehicles -- 1.17%
Borg Warner Automotive, Inc. .................... 400 15,800
Excel Industries, Inc. .......................... 300 3,750
General Motors Corp. ............................ 2,100 109,988
Harley-Davidson, Inc. ........................... 450 18,506
Myers Industries, Inc. .......................... 630 11,734
Superior Industries International ............... 250 6,625
--------
166,403
--------
Non-Durables and Entertainment -- 0.77%
Cracker Barrel Old Country Store, Inc. .......... 3,900 94,575
Lancaster Colony Corp. .......................... 400 14,950
---------
109,525
---------
Non-Ferrous Metals -- 0.09%
DT Industries, Inc. ............................. 700 12,775
---------
Producer Goods -- 2.11%
General Electric Co. ............................ 1,200 103,800
Hubbell, Inc., Class B .......................... 350 23,187
Juno Lighting, Inc. ............................. 1,200 20,400
Stewart & Stevenson Services, Inc. .............. 5,100 116,025
Teleflex, Inc. .................................. 400 19,100
Trimas Corp. .................................... 800 18,700
---------
301,212
---------
Retail -- 0.98%
Cato Corp. Class A .............................. 1,800 10,800
Kohls Corp. * ................................... 200 7,325
Proffitts, Inc. * ............................... 600 21,300
Talbots, Inc. *.................................. 450 14,569
Toys R Us *...................................... 3,000 85,500
---------
139,494
---------
</TABLE>
15
<PAGE>
<TABLE>
<S> <C> <C>
Telephone -- 3.55%
AT&T Corp. ...................................... 3,100 192,200
Century Telephone Enterprises, Inc. ............. 4,000 127,500
MCI Communications Corp. ........................ 7,300 187,063
-----------
506,763
-----------
Travel and Recreation -- 0.15%
Callaway Golf Co. ............................... 650 21,613
-----------
Trucking and Freight -- 0.67%
Ryder System, Inc. .............................. 3,400 95,625
-----------
TOTAL COMMON STOCKS ................................. 7,503,440
-----------
(Cost $6,668,909)
TOTAL INVESTMENTS ................................... $14,281,433
===========
(Cost $13,478,266)
<FN>
* Non-income producing security.
</TABLE>
16
<PAGE>
THE WOODWARD VARIABLE ANNUITY
BALANCED FUND
PORTFOLIO OF INVESTMENTS (Continued)
June 30, 1996
(Unaudited)
Notes to Portfolio of Investments
The Fund invests in securities whose value is derived from an underlying pool
of mortgages or consumer loans. Some of these securities are collateralized
mortgage obligations (CMOs). CMOs are debt securities issued by U.S.
government agencies or by financial institutions and other mortgage lenders
which are collateralized by a pool of mortgages held under an indenture.
Adjustable Rate (AR)
Inverse Floaters (IF) represent securities that pay interest at a rate that
increases (decreases) with a decline (increase) in a specified index.
Interest Only (IO) represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. The face amount shown
represents the par value on the underlying pool. The yields on these
securities are generally higher than prevailing market yields on other
mortgage-backed securities because their cash flow patterns are more volatile
and there is a greater risk that the initial investment will not be fully
recouped. These securities are subject to accelerated principal paydowns as a
result of prepayments or refinancing of the underlying pool of mortgage
instruments. As a result, interest income may be reduced considerably.
High Coupon Bonds (HB) (a.k.a. "IOettes") represent the right to receive
interest payments on an underlying pool of mortgages with similar risks as
those associated with IO securities. Unlike IO's the owner also has a right to
receive a very small portion of principal. The high interest rate results from
taking interest payments from other classes in the REMIC Trust and allocating
them to the small principal of the HB class.
Principal Only (PO) represents the right to receive the principal portion only
on an underlying pool of mortgage loans. The market value of these securities
is extremely volatile in response to changes in market interest rates. As
prepayments on the underlying mortgages of these securities increase, the
yield on these securities increases.
17
<PAGE>
<TABLE>
<CAPTION>
THE WOODWARD VARIABLE ANNUITY
GROWTH/VALUE FUND
PORTFOLIO OF INVESTMENTS
June 30, 1996
(Unaudited)
Description Face Amount Market Value
----------- ----------- ------------
<S> <C> <C>
TEMPORARY CASH INVESTMENT -- 1.45%
Salomon Brothers, Revolving Repurchase Agreement,
5.53%, 7/1/96 (secured by various U.S. Treasury
Strips with maturities ranging from 2/15/99
through 8/15/00, all held at Chemical Bank) ..... $76,646 $ 76,646
--------
(Cost $76,646)
Shares
------
COMMON STOCKS -- 98.55%
Aerospace -- 2.47%
Boeing Co. ...................................... 1,500 130,688
--------
Apparel -- 2.04%
Russell Corp. ................................... 3,900 107,738
--------
Banks -- 6.39%
Barnett Banks, Inc. ............................. 1,800 109,800
Fleet Financial Group, Inc. ..................... 3,400 147,900
Norwest Corp. ................................... 2,300 80,212
--------
337,912
--------
Business Machines -- 1.83%
Autodesk, Inc. .................................. 1,600 47,800
Compaq Computer Corp. ........................... 1,000 49,250
--------
97,050
--------
Business Services -- 10.30%
Deluxe Corp. .................................... 3,100 110,050
Dun & Bradstreet Corp. .......................... 2,000 125,000
Electronic Date Systems Corp. ................... 2,800 150,500
Interpublic Group of Companies, Inc. ............ 1,100 51,562
WMX Technologies, Inc. .......................... 3,300 108,075
--------
545,187
--------
Chemicals -- 5.37%
Dow Chemical Co. ................................ 900 68,400
Great Lakes Chemical Corp. ...................... 1,400 87,150
Sigma-Aldrich Corp. ............................. 2,400 128,400
--------
283,950
--------
Construction -- 5.17%
Masco Corp. ..................................... 3,400 102,850
York International Corp. ........................ 3,300 170,775
--------
273,625
--------
Consumer Durables -- 2.26%
Rubbermaid, Inc. ................................ 4,400 119,900
--------
Containers -- 2.21%
Crown Cork & Seal Co. Inc. * .................... 2,600 117,000
--------
</TABLE>
18
<PAGE>
<TABLE>
<S> <C> <C>
Drugs and Medicine -- 7.64%
Abbott Laboratories Corp. ....................... 2,300 100,050
Bristol-Myers Squibb Co. ........................ 1,500 135,000
Schering-Plough Corp. ........................... 2,700 169,425
--------
404,475
--------
Electronics -- 3.06%
Hewlett Packard Co. ............................. 400 39,850
Intel Corp. ..................................... 700 51,406
Lucent Technology, Inc. ......................... 700 26,513
Motorola, Inc. .................................. 700 44,012
--------
161,781
--------
Energy and Utilities -- 7.03%
Enron Corp. ..................................... 2,800 114,450
MCN Corp. ....................................... 5,700 138,937
Pinnacle West Capital Corp. ..................... 3,900 118,463
--------
371,850
--------
Energy Raw Materials -- 3.02%
Schlumberger Ltd. ............................... 1,900 160,075
Food and Agriculture -- 6.17%
ConAgra, Inc. ................................... 1,800 81,675
CPC International, Inc. ......................... 1,500 108,000
Sysco Corp. ..................................... 4,000 137,000
--------
326,675
--------
Insurance -- 4.51%
American International Group, Inc. .............. 800 78,900
Chubb Corp. ..................................... 3,200 159,600
--------
238,500
--------
International Oil -- 1.74%
Royal Dutch Petroleum Co., N.Y. Registry ........ 600 92,250
--------
Liquor -- 2.55%
Anheuser-Busch Companies, Inc. .................. 1,800 135,000
--------
Media -- 4.86%
Gannett Co., Inc. ............................... 1,800 127,350
Washington Post Co. Class B ..................... 400 129,600
--------
256,950
--------
Miscellaneous & Conglomerates -- 2.45%
Duracell International, Inc. .................... 3,000 129,375
--------
Motor Vehicles -- 1.78%
General Motors Corp. ............................ 1,800 94,275
--------
Non-Durables and Entertainment -- 1.42%
Cracker Barrel Old Country Store, Inc. .......... 3,100 75,175
--------
</TABLE>
19
<PAGE>
<TABLE>
<S> <C> <C>
Producer Goods -- 3.44% ...........................
General Electric Co. ............................ 1,000 86,500
Stewart & Stevenson Services, Inc. .............. 4,200 95,550
----------
182,050
----------
Retail -- 1.35%
Toys R Us Inc.* ................................. 2,500 71,250
----------
Telephone -- 8.00%
A T & T Corp. ................................... 2,600 161,200
Century Telephone Enterprises, Inc. ............. 3,400 108,375
MCI Communications Corp. ........................ 6,000 153,750
----------
423,325
----------
Trucking and Freight -- 1.49%
Ryder System, Inc. .............................. 2,800 78,750
----------
TOTAL COMMON STOCKS ................................. 5,214,806
----------
(Cost $4,736,262)
TOTAL INVESTMENTS ................................... $5,291,452
==========
(Cost $4,812,908)
<FN>
* Non-income producing security.
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
THE WOODWARD VARIABLE ANNUITY
OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS
June 30, 1996
(Unaudited)
Description Face Amount Market Value
----------- ----------- ------------
<S> <C> <C>
TEMPORARY CASH INVESTMENT -- 2.84%
Salomon Brothers, Revolving Repurchase
Agreement, 5.53%, 7/1/96 (secured by various
U.S. Treasury Strips with maturities ranging
from 2/15/99 through 8/15/00,
all held by Chemical Bank) ........................ $174,775 $174,775
--------
(Cost $174,775)
Shares
------
COMMON STOCKS -- 97.16%
Air Transport -- 1.15% ............................
Air Express International Corp. ................. 2,500 70,625
--------
Apparel -- 1.50% ................................
Nine West Group, Inc. * ......................... 1,800 92,025
--------
Banks -- 5.79% ....................................
Charter One Financial, Inc. ..................... 4,150 144,731
First Tennessee National Corp. .................. 3,200 98,000
TCF Financial Corp. ............................. 3,400 113,050
--------
355,781
--------
Business Machines -- 4.20%
Autodesk, Inc. .................................. 1,500 44,812
Diebold, Inc. ................................... 2,300 110,975
InterVoice, Inc. * .............................. 1,100 21,863
Xilinx, Inc. * .................................. 2,550 80,962
--------
258,612
--------
Business Services -- 9.72% ........................
American Management Systems, Inc. * ............. 3,500 102,375
CDI Corp. * ..................................... 2,500 84,375
DST Systems, Inc. * ............................. 1,000 32,000
G & K Services, Inc. Class A .................... 2,300 65,550
Omnicom Group, Inc. ............................. 2,100 97,650
SunGard Data Systems, Inc. * .................... 3,250 130,406
Zilog, Inc. * ................................... 3,550 85,200
--------
597,556
--------
Chemicals -- 0.87%
RPM, Inc. ....................................... 3,425 53,516
--------
Construction -- 2.63%
Crane Co. ....................................... 3,950 161,950
--------
Consumer Durables -- 2.82%
Durakon Industries, Inc. * ...................... 2,700 39,487
Invacare Corp. .................................. 1,100 25,850
Leggett & Platt, Inc. ........................... 3,900 108,225
--------
173,562
--------
Containers -- 1.48%
AptarGroup, Inc. ................................ 3,000 90,750
--------
</TABLE>
21
<PAGE>
<TABLE>
<S> <C> <C>
Drugs and Medicine -- 5.80%
Community Health System, Inc. ................... 1,200 62,100
Health Care & Retirement Corp. * ................ 2,500 59,375
Scherer (R.P.) Corp. * .......................... 800 36,300
Sybron International Corp.* ..................... 4,200 105,000
Vivra, Inc. * ................................... 2,850 93,694
--------
356,469
--------
Electronics -- 6.75%
Belden, Inc. .................................... 5,000 150,000
Dynatech Corp. * ................................ 3,500 113,750
Microchip Technology, Inc. ...................... 3,600 89,100
Molex, Inc. Class A Non-Voting .................. 2,125 62,422
--------
415,272
--------
Energy Raw Materials -- 5.51%
Apache Corp. .................................... 4,300 141,363
Noble Affiliates, Inc. .......................... 3,100 117,025
Southwestern Energy Co. ......................... 5,700 80,512
--------
338,900
--------
Food and Agriculture -- 1.08%
Universal Foods Corp. ........................... 1,800 66,375
--------
Insurance -- 3.50%
Capital RE Corp. ................................ 2,700 99,225
Transatlantic Holdings, Inc. .................... 1,650 115,706
--------
214,931
--------
Media -- 1.68%
Banta Corp. ..................................... 4,100 103,525
--------
Miscellaneous and Conglomerates -- 9.90%
ABC Rail Products Corp. ......................... 2,100 45,412
Culligan Water Technologies, Inc. * ............. 1,800 68,400
DENTSPLY International, Inc. .................... 2,350 99,875
Greenfield Industries, Inc. ..................... 4,150 136,950
Health Management Associates, Inc. Class A * .... 2,775 56,194
Littlefuse, Inc. * .............................. 2,400 90,000
Wolverine Tube, Inc. * .......................... 3,200 112,000
--------
608,831
--------
Miscellaneous Finance -- 14.47%
CMAC Investment Corp. ........................... 1,900 109,250
Edwards (A.G.), Inc. ............................ 4,200 113,925
Everest Reinsurance Holdings, Inc. .............. 4,600 119,025
Executive Risk, Inc. ............................ 3,100 118,575
FINOVA Group, Inc. .............................. 3,350 163,313
Idex Corp. ...................................... 2,950 112,100
</TABLE>
22
<PAGE>
<TABLE>
<S> <C> <C>
PMI Group, Inc. ................................. 2,250 95,625
Scotsman Industries, Inc. ....................... 2,900 58,362
----------
890,175
----------
Motor Vehicles -- 4.03%
Borg Warner Automotive .......................... 1,100 43,450
Excel Industries, Inc. .......................... 1,900 23,750
Harley-Davidson, Inc. ........................... 2,200 90,475
Myers Industries, Inc. .......................... 3,130 58,296
Superior Industries International ............... 1,200 31,800
----------
247,771
----------
Non-Durables and Entertainment -- 1.15%
Lancaster Colony Corp. .......................... 1,900 71,013
----------
Non-Ferrous Metals -- 1.07%
DT Industries, Inc. ............................. 3,600 65,700
----------
Producer Goods -- 6.11%
Hubbell, Inc. Class B ........................... 1,550 102,688
Juno Lighting, Inc. ............................. 5,800 98,600
Teleflex, Inc. .................................. 1,800 85,950
Trimas Corp. .................................... 3,800 88,825
----------
376,063
----------
Retail -- 4.33%
Cato Corp. Class A .............................. 8,500 51,000
Kohls Corp. * ................................... 1,200 43,950
Proffitts, Inc. ................................. 3,100 110,050
Talbots, Inc. ................................... 1,900 61,513
----------
266,513
----------
Travel and Recreation -- 1.62%
Callaway Golf Co. ............................... 3,000 99,750
----------
TOTAL COMMON STOCKS ................................. 5,975,665
----------
(Cost $5,287,444)
TOTAL INVESTMENTS ................................... $6,150,440
==========
(Cost $5,462,219)
<FN>
* Non-income producing security.
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
THE WOODWARD VARIABLE ANNUITY
CAPITAL GROWTH FUND
PORTFOLIO OF INVESTMENTS
June 30, 1996
(Unaudited)
Description Face Amount Market Value
----------- ----------- ------------
<S> <C> <C>
TEMPORARY CASH INVESTMENT -- 3.48%
Salomon Brothers, Revolving Repurchase
Agreement, 5.53%, 7/1/96, (secured by various
U.S. Treasury Strips with maturities ranging
from 2/15/99 through 8/15/00,
all held at Chemical Bank) ...................... $274,081 $274,081
--------
(Cost $274,081)
Shares
------
COMMON STOCKS -- 96.52%
Banks -- 2.78%
Banc One Corp. .................................. 1,320 44,880
Norwest Corp. ................................... 5,000 174,375
--------
219,255
--------
Business Machines -- 7.26%
Electronic Data Systems Corp. ................... 3,500 188,125
Microsoft Corp. * ............................... 2,000 240,250
Silicon Graphics ................................ 6,000 144,000
-------
572,375
--------
Business Services -- 5.25%
Automatic Data Processing, Inc. ................. 2,800 108,150
Interpublic Group of Companies, Inc. ............ 4,000 187,500
WMX Technologies, Inc. .......................... 3,600 117,900
--------
413,550
--------
Chemicals -- 3.88%
Great Lakes Chemical Corp. ...................... 2,500 155,625
Sigma-Aldrich Corp. ............................. 2,800 149,800
--------
305,425
--------
Construction -- 5.12%
Fluor Corp. ..................................... 3,000 196,125
York International Corp. ........................ 4,000 207,000
--------
403,125
--------
Consumer Durables -- 1.94%
Newell Co. ...................................... 5,000 153,125
--------
Containers -- 1.71%
Crown Cork & Seal Co., Inc. * ................... 3,000 135,000
--------
Drugs and Medicine -- 16.78%
Columbia HCA Healthcare Corp. ................... 4,000 213,500
Johnson & Johnson ............................... 4,400 217,800
Medtronic, Inc. ................................. 2,000 112,000
Mylan Laboratories, Inc. ........................ 6,000 103,500
Pall Corp. ...................................... 6,000 144,750
Smithkline Beecham PLC ADR ...................... 4,000 217,500
</TABLE>
24
<PAGE>
<TABLE>
<S> <C> <C>
Stryker Corp. ................................... 6,000 136,500
United Healthcare Corp. ......................... 3,500 176,750
----------
1,322,300
----------
Electronics -- 7.54%
AMP, Inc. ....................................... 2,000 80,250
Hewlett Packard Co. ............................. 2,000 199,250
Intel Corp. ..................................... 3,300 242,344
Lucent Technology, Inc. ......................... 1,900 71,962
----------
593,806
----------
Energy and Utilities -- 2.33%
Enron Corp. ..................................... 4,500 183,937
----------
Energy Raw Materials -- 3.66%
Schlumberger Ltd. ............................... 1,900 160,075
Western Atlas, Inc. * ........................... 2,200 128,150
----------
288,225
----------
Food and Agriculture -- 2.47%
PepsiCo, Inc. ................................... 5,500 194,563
----------
Insurance -- 8.65%
AFLAC, Inc. ..................................... 6,000 179,250
American International Group, Inc. .............. 2,300 226,838
Chubb Corp. ..................................... 2,400 119,700
UNUM Corp. ...................................... 2,500 155,625
----------
681,413
----------
Non-Durables and Entertainment -- 5.07%
Cracker Barrel Old Country Store, Inc. .......... 7,000 169,750
Service Corp International ...................... 4,000 230,000
----------
399,750
----------
Producer Goods -- 3.28%
Illinois Tool Works, Inc. ....................... 1,600 108,200
Ivax Corp. ...................................... 3,000 47,625
Stewart & Stevenson Services, Inc. .............. 4,500 102,375
----------
258,200
----------
Retail -- 5.66%
Albertsons, Inc. ................................ 2,000 82,750
Home Depot, Inc. ................................ 4,000 216,000
Walgreen Co. .................................... 4,400 147,400
----------
446,150
----------
Telephone -- 3.43%
AirTouch Communications, Inc. * ................. 5,500 155,375
MCI Communications Corp. ........................ 4,500 115,312
----------
270,687
----------
</TABLE>
25
<PAGE>
<TABLE>
<S> <C> <C>
Tobacco -- 3.07%
Philip Morris Companies, Inc. ................... 1,500 156,000
UST, Inc. ....................................... 2,500 85,625
----------
241,625
----------
Travel and Recreation -- 6.64%
Carnival Corp. Class A .......................... 5,500 158,812
Disney (Walt) Co. ............................... 3,000 188,625
Gaylord Entertainment Co., Class A .............. 6,227 175,899
----------
523,336
----------
TOTAL COMMON STOCKS ................................. 7,605,847
----------
(Cost $6,648,857)
TOTAL INVESTMENTS ................................... $7,879,928
==========
(Cost $6,922,938)
<FN>
* Non-income producing security
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
THE WOODWARD VARIABLE ANNUITY
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
June 30, 1996
(Unaudited)
Amortized
Cost
Description Face Amount (Note 2)
----------- ----------- --------
<S> <C> <C>
TEMPORARY CASH INVESTMENTS -- 33.41%
American General Finance, Inc. Master Note, 5.60%,
7/1/96 ............................................ $ 25,000 $ 25,000
Paccar Leasing Corp. Master Note, 5.60%, 7/1/96 ..... 25,000 25,000
Pitney Bowes Credit Corp. Master Note, 5.55%,
7/1/96 ............................................ 25,000 25,000
Transamerica Finance Group, Inc., 5.60%, 7/1/96 ..... 25,000 25,000
H.S.B.C Securities Inc., Revolving Repurchase
Agreement, 5.40%, 7/1/96 (secured by U.S.
Treasury Bills with maturities ranging from
3/6/97 through 6/26/97, all held at Chemical
Bank) ............................................. 200,000 200,000
NationsBank Capital Markets, Inc., Revolving
Repurchase Agreement, 5.50%, 7/1/96 (secured by
various U.S. Treasury Obligations with maturities
ranging from 5/15/00 through 5/15/06 at various
interest rates ranging from 0.00% to 7.875%, all
held at Chemical Bank) ............................ 127,508 127,508
--------
427,508
--------
U.S. GOVERNMENT OBLIGATIONS -- 3.15%
U.S. Treasury Securities -- 3.15%
U.S. Treasury Notes:
6.875%, 10/31/96 ................................ 20,000 20,105
7.500%, 1/31/97 ................................. 20,000 20,269
----------
40,374
----------
COMMERCIAL PAPER -- 53.28%
Alcatel Alsthom, Inc., 5.19%, 7/5/96 ................ 50,000 49,971
American Greetings Corp., 5.42%, 7/24/96 ............ 40,000 39,862
Asset Securitization Coop Corp., 5.31%, 7/17/96 ..... 25,000 24,941
Banco Nacioncal De Comerico Exterior, 5.21%,
7/11/96 ........................................... 20,000 19,971
BCI Funding Corp., 5.32%, 7/10/96 ................... 25,000 24,967
Cargill Financial Services Corp., 4.98%, 8/19/96 .... 50,000 49,663
Clipper Receivable Corp., 5.45%, 7/16/96 ............ 45,000 44,898
Duracell. Inc., 5.36%, 7/9/96 ....................... 25,000 24,970
Engelhard Corp. 5.42%, 7/27/96 ...................... 35,000 34,890
English China Clays PLC, 5.34%, 8/15/96 ............. 40,000 39,735
Explorer Pipeline Co., 5.39%, 7/22/96 ............... 25,000 24,922
Ford Motor Credit Corp., 5.17%, 7/3/96 .............. 40,000 39,989
Great Lakes Chemical Corp., 5.42%, 8/7/96 ........... 40,000 39,778
Heinz Co., 5.39%, 7/23/96 ........................... 20,000 19,934
Hercules, Inc., 5.36%, 7/10/96 ...................... 20,000 19,973
National Cooperative Services Corp., 5.32%, 7/23/96.. 35,000 34,887
Pacific Dunlop Holdings, Inc., 5.33%, 8/21/96 ....... 30,000 29,775
Quebec (Province of), 5.33%, 9/23/96 ................ 25,000 24,693
Royal Bank of Canada, 5.48%, 1/17/97 ................ 20,000 19,409
Sunbelt-Dix Inc., 5.36%, 8/6/96 ..................... 25,000 24,867
</TABLE>
27
<PAGE>
<TABLE>
<S> <C> <C>
Westpac Capital, 5.24%, 7/9/96 .................... 30,000 29,965
WMX Technologies, Inc., 5.36%, 9/9/96 ............. 20,000 19,794
----------
681,854
----------
NOTES -- 5.47%
General Electric Capital Corp. Medium Term Note,
5.24%, 1/17/97 .................................. 20,000 19,993
Household Bank, 5.40%, 7/30/96 .................... 30,000 30,000
J.P. Morgan, 5.75%, 8/7/96 ........................ 20,000 19,996
----------
69,989
----------
CERTIFICATES OF DEPOSIT -- 4.69%
Mellon Bank, 5.79%, 9/26/96 ....................... 20,000 20,024
Rabobank Nederland NV Euro, 5.93%, 6/4/97 ......... 20,000 20,002
Societe Generale, 5.78%, 4/11/97 .................. 20,000 19,997
----------
60,023
----------
TOTAL INVESTMENTS ................................... $1,279,748
==========
</TABLE>
28
<PAGE>
THE WOODWARD VARIABLE ANNUITY FUND
NOTES TO FINANCIAL STATEMENT
(Unaudited)
(1) Organization and Commencement of Operations
The Woodward Variable Annuity Fund (the "Trust") was organized as a
Delaware business trust on November 7, 1994, and registered under the
Investment Company Act of 1940, as amended, as an open-end investment company.
As of June 30, 1996, the Trust consisted of five separate series of which
there were four Equity Funds and one Money Market Fund, as described below.
Equity Funds:
Woodward Variable Annuity Balanced Fund
Woodward Variable Annuity Growth/Value Fund
Woodward Variable Annuity Opportunity Fund
Woodward Variable Annuity Capital Growth Fund
Money Market Fund:
Woodward Variable Annuity Money Market Fund
The Trust commenced operations on March 30, 1995. Shares of the Trust
are made available to serve as the underlying investment media of the variable
annuity contracts issued by Separate Account Six of the ITT Hartford Life &
Annuity Insurance Company. Orders for the Trust's shares are executed in
accordance with the investment instructions of the contract owners.
(2) Significant Accounting Policies
The following is a summary of significant accounting policies followed
in the preparation of the financial statements. The policies are in conformity
with generally accepted accounting principles for investment companies.
Following generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date
of the financial statements and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Investments
The Equity Funds value investment securities at market value which is
determined by a pricing service based upon quoted market prices or dealer
quotes. Securities for which market prices or dealer quotes are not readily
available are valued by the investment advisor, NBD Bank (NBD) in accordance
with procedures approved by the Board of Trustees.
Pursuant to Rule 2a-7 of the Investment Company Act of 1940, the Money
Market Fund utilizes the amortized cost method to determine the carrying value
of investment securities. Under this method, investment securities are valued
for both financial reporting and federal tax purposes at amortized cost and
any discount or premium is amortized from the date of acquisition to maturity.
The use of this method results in a carrying value which approximates market
value. Market value is determined based upon quoted market prices or dealer
quotes.
Investment security purchases and sales are accounted for on the day
after trade date by the Equity Funds and on the trade date for the Money
Market Fund.
The Trust invests in securities subject to repurchase agreements. Such
transactions are entered into only with institutions included on the Federal
Reserve System's list of institutions with whom the Federal Reserve open
market desk will do business. NBD, acting under the supervision of the Board
of Trustees, has established the following additional policies and procedures
relating to the Trust's investments in securities subject to repurchase
agreements: 1) the value of the underlying collateral is required to equal
29
<PAGE>
or exceed 102% of the funds advanced under the repurchase agreement including
accrued interest; 2) collateral is marked to market daily by NBD to assure its
value remains at least equal to 102% of the repurchase agreement amount: and
3) funds are not disbursed by the Trust or its agent unless collateral is
presented or acknowledged by the collateral custodian.
Investment Income
Interest income is recorded daily on the accrual basis adjusted for
amortization of premium and accretion of discount on debt instruments. Bond
premiums and discounts are amortized/accreted as required by the Internal
Revenue Code. Premiums and discounts on mortgage-backed securities are
amortized/accreted using the effective interest rate method. As prepayments on
the underlying mortgages increase or decrease the expected life, the yield is
adjusted to amortize/accrete the security to its new expected life. Dividends
are recorded on the ex-dividend date.
Federal Income Taxes
It is Woodward's policy to comply with the requirements of Subchapter M
of the Internal Revenue Code, as amended, applicable to regulated investment
companies and to distribute net investment income and realized gains to its
shareholders. Therefore, no federal income tax provision is required in the
accompanying financial statements.
Net realized gains differ for financial statement and tax purposes
primarily because of the recognition of wash sale transactions and
post-October 31 capital losses. Also, due to the timing of dividend
distributions, the fiscal year in which amounts are distributed may differ
from the year that the income or realized gains were recorded by the funds.
Certain book-to-tax timing differences for the funds are reflected as excess
distributions in the Statements of Changes in Net Assets. These distributions
do not constitute a tax return of capital.
Shareholder Dividends
Dividends from net investment income are declared and paid quarterly by
the Equity Funds. Net realized capital gains are distributed annually.
Distributions from net investment income and net realized gains are made
during each year to avoid the 4% excise tax imposed on regulated investment
companies by the Internal Revenue Code.
On each business day except those holidays the new York Stock Exchange
(Exchange), NBD or its bank affiliates observe, the Money Market Fund
net investment income is declared as a dividend, at the close of the Exchange,
to shareholders of record at such close. Such dividends are paid monthly.
Deferred Organization Costs
Organization costs are being amortized on a straight-line basis over the
five year period beginning with the commencement of operations of each series.
Expenses
Expenses are charged daily as a percentage of the respective Fund's net
assets. The Trust monitors the rate at which expenses are charged to ensure
that a proper amount of expense is charged to income each year. This
percentage is subject to revision if there is a change in the estimate of the
future net assets of Woodward or a change in expectations as to the level of
actual expenses.
30
<PAGE>
(3) Transactions with Affiliates
First of Michigan Corporation (FoM) and Essex National Securities, Inc.
(Essex) act as sponsors and co-distributors of Woodward's shares. Neither FoM
nor Essex is entitled to any fee pursuant to their Distribution Agreement with
the Trust.
NBD is the investment advisor pursuant to the Advisory Agreement. For
its advisory services to the Trust, NBD is entitled to a fee, computed daily
and payable monthly. Under the Advisory Agreement, NBD also provides the Trust
with certain administrative services, such as maintaining the Trust's general
ledger and assisting in the preparation of various regulatory reports. NBD
receives no additional compensation for such services.
NBD has agreed that it may waive its fees in whole or in part; and, if
in part, may specify the particular fund to which such waiver relates as may
be required to satisfy any expense limitation imposed by state securities laws
or other applicable laws. At present, no restrictive expense limitation is
imposed on the Trust. Restrictive limitations could be imposed as a result of
changes in current state laws and regulations in those states where the Trust
has qualified its shares, or by a decision of the Trustees to qualify the
shares in other states having restrictive expense limitations. For the period
ended June 30, 1996, NBD reimbursed the Balanced Fund, Growth/Value Fund,
Opportunity Fund, Capital Growth Fund and the Money Market Fund for certain
expenses in the amounts of $38,110, $32,928, $34,605, $13,720 and $22,778,
respectively.
See Note 5 for a summary of fee rates and expenses pursuant to these
agreements.
(4) Investment Securities Transactions
Information with respect to investment securities and security
transactions based on the aggregate cost of investments for federal income tax
purposes, excluding short-term securities, is as follows:
<TABLE>
<CAPTION>
BALANCED GROWTH/VALUE OPPORTUNITY
FUND FUND FUND
-------- ------------ -----------
<S> <C> <C> <C>
Gross Unrealized Gains ......... $ 879,986 $ 559,887 $ 851,813
Gross Unrealized Losses ........ (76,819) (81,343) (163,592)
----------- ---------- ----------
$ 803,167 $ 478,544 $ 688,221
=========== ========== ==========
Federal Income Tax Cost ........ $13,479,108 $4,812,202 $5,479,097
Purchases ...................... $ 5,129,119 $2,399,884 $2,186,083
Sales & Maturities ............. $ 1,760,041 $ 911,337 $1,393,281
<CAPTION>
CAPITAL GROWTH MONEY MARKET
FUND FUND
-------------- ------------
<S> <C> <C>
Gross Unrealized Gains ......... $1,088,942 $ --
Gross Unrealized Losses ........ (131,952) --
---------- ----------
$ 956,990 $ --
========== ==========
Federal Income Tax Cost ........ $6,922,938 $1,276,948
Purchases ...................... $1,949,814 $6,140,864
Sales & Maturities ............. $ 991,736 $5,984,950
</TABLE>
31
<PAGE>
(5) Expenses
Following is a summary of total expense rates charged, advisory fee
rates payable to NBD, and amounts paid to NBD, pursuant to the agreements
described in Note 3 for the period ended June 30, 1996. The rates shown are
stated as a percentage of each fund's average net assets.
<TABLE>
<CAPTION>
BALANCED GROWTH/VALUE
Effective Date FUND FUND OPPORTUNITY
-------------- -------- ------------ -----------
<S> <C> <C> <C>
Expense Rates:
January 1 ............................ 0.85% 0.85% 0.85%
NBD Advisory Fee:
January 1 ............................ 0.75% 0.75% 0.75%
Amounts Paid:
Advisory Fee to NBD .................. $47,917 $17,304 $20,865
Other Fees & Out of Pocket
Expenses to NBD .................... $25,331 $15,983 $18,054
Expense
Reimbursements by NBD ................ $(38,110) $(32,928) $(34,605)
<CAPTION>
CAPITAL GROWTH MONEY MARKET
Effective Date FUND FUND
-------------- -------------- ------------
<S> <C> <C>
Expense Rates:
January 1 ............................ 0.85% 0.50%
NBD Advisory Fee:
January 1 ............................ 0.75% 0.45%
Amounts Paid:
Advisory Fee to NBD .................. $27,183 $ 2,820
Other Fees & Out of Pocket
Expenses to NBD .................... $ 9,023 $ 5,101
Expense
Reimbursements by NBD ................ $(13,720) $(22,778)
</TABLE>
(6) Equity of Affiliates:
As of June 30, 1996, Hartford Life Insurance Company held direct
interest in shares as follows:
<TABLE>
<CAPTION>
Percent
of Total
Shares Shares
------ -------
<S> <C> <C>
Woodward Balanced Fund ..................... 312,297 25.13%
Woodward Growth/Value Fund ................. 51,650 12.08%
Woodward Opportunity Fund .................. 50,293 9.90%
Woodward Capital Growth Fund ............... 50,586 7.76%
Woodward Money Market Fund ................. 533,063 40.50%
</TABLE>
32
<PAGE>
THE WOODWARD VARIABLE ANNUITY FUND
(Unaudited)
The Financial Highlights present a per share analysis of how the
Variable Annuity Fund's net asset values have changed during the periods
presented. Additional quantitative measures expressed in ratio form analyze
important relationships between certain items presented in the financial
statements. These financial highlights have been derived from the financial
statements of the Funds and other information for the periods presented.
<TABLE>
<CAPTION>
Balanced Fund Growth/Value Fund Opportunity Fund
----------------------------- ---------------------------- ---------------------------
Six Months Six Months Six Months
Ended Ended Ended
June 30, 1996 Period Ended June 30, 1996 Period Ended June 30,1996 Period Ended
(Unaudited) Dec. 31, 1995 (Unaudited) Dec. 31, 1995 (Unaudited) Dec. 31, 1995
------------ ------------- ------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........... $ 11.27 $ 10.00 $ 11.63 $ 10.00 $ 11.02 $ 10.00
----------- ----------- ---------- ---------- -------- ---------
Income from investment
operations:
Net investment income ....... 0.19 0.25 0.08 0.13 0.01 0.05
Net realized and unrealized
gains on investments ...... 0.26 1.27 0.88 1.63 1.14 1.02
----------- ----------- ---------- ---------- -------- ---------
Total from investment
operations .................... 0.45 1.52 0.96 1.76 1.15 1.07
Less distributions:
From net investment income .. (0.20) (0.25) (0.07) (0.13) (0.01) (0.05)
From realized gains ......... -- -- -- (0.00) -- --
In excess of realized gains.. -- -- -- -- -- (0.00)
----------- ----------- ---------- ---------- -------- ---------
Total distributions .......... (0.20) (0.25) (0.07) (0.13) (0.01) (0.05)
----------- ----------- ---------- ---------- -------- ---------
Net asset value, end of period... $ 11.52 $ 11.27 $ 12.52 $ 11.63 $ 12.16 $ 11.02
Total Return (b) ................ 8.03%(a) 20.15%(a) 16.55%(a) 22.75%(a) 20.91%(a) 14.20%(a)
=========== =========== ========== ========== ========== ==========
Ratios/Supplemental Data
Net assets, end of period ....... $14,309,326 $11,210,876 $5,355,162 $3,753,691 $6,175,997 $4,972,365
Ratio of expenses to average
net assets .................... 0.85%(a) 0.85%(a) 0.85%(a) 0.85%(a) 0.85%(a) 0.85%(a)
Ratio of net investment income
to average net assets.......... 3.39%(a) 3.61%(a) 1.30%(a) 1.78%(a) 0.23%(a) 0.67%(a)
Ratio of expenses to average
net assets without fee
waivers/reimbursed expenses.... 1.45%(a) 2.34%(a) 2.28%(a) 4.93%(a) 2.08%(a) 4.64%(a)
Ratio of net investment income
to average net assets
without fee waivers/
reimbursed expenses ........... 2.79%(a) 2.12%(a) (0.13)%(a) (2.30)%(a) (1.00)%(a) (3.12)%(a)
Portfolio turnover rate ......... 15.97% 14.05% 20.76% 17.47% 25.87% 32.11%
Average commission rate ......... $ 0.08 $ 0.10 $ 0.11 $ 0.14 $ 0.07 $ 0.11
<FN>
(a) Annualized for periods less than one year for comparability purposes.
Actual annual values may be less than or greater than those shown.
(b) Total returns as presented do not include any applicable sales load.
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
Capital Growth Fund Money Market Fund
----------------------------- -----------------------------
Six months Six months
Ended Ended
June 30, 1996 Period Ended June 30, 1996 Period Ended
(Unaudited) Dec. 31, 1995 (Unaudited) Dec. 31, 1995
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................ $ 11.37 $ 10.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income ............................. 0.01 0.05 0.02 0.03
Net realized and unrealized gains
on investments ................................. 0.80 1.38 -- --
---------- ---------- ---------- ----------
Total from investment operations .................... 0.81 1.43 0.02 0.03
---------- ---------- ---------- ----------
Less distributions:
From net investment income ........................ (0.01) (0.05) (0.02) (0.03)
From realized gains ............................... -- (0.01)
In excess of realized gains ....................... -- -- -- --
---------- ---------- ---------- ----------
Total distributions ................................. (0.01) (0.06) (0.02) (0.03)
---------- ---------- ---------- ----------
Net asset value, end of period ...................... $ 12.17 $ 11.37 $ 1.00 $ 1.00
========== ========== ========== ==========
Total Return (b) .................................... 14.21%(a) 18.82%(a) 4.84%(a) 5.41%(a)
Ratios/Supplemental Data
Net assets, end of period ........................... $7,930,670 $6,434,936 $1,316,061 $1,175,892
Ratio of expenses to average net assets ............. 0.85%(a) 0.85%(a) 0.50%(a) 0.50%(a)
Ratio of net investment income to average
net assets........................................ 0.17%(a) 0.81%(a) 4.79%(a) 5.27%(a)
Ratio of expenses to average net assets without fee
waivers/ reimbursed expenses ...................... 1.23%(a) 3.15%(a) 4.15%(a) 10.48%(a)
Ratio of net investment income to average net assets
without fee waivers/reimbursed expenses ........... (0.21)%(a) (1.49)%(a) 1.18%(a) (4.71)%(a)
Portfolio turnover rate ............................. 14.19% 4.46% N/A N/A
Average commission rate ............................. $ 0.05 $ 0.11 N/A N/A
</TABLE>
<PAGE>
RESULTS OF SPECIAL SHAREHOLDER MEETING (Unaudited)
On July, 10,1996, a special meeting of the shareholders of The Woodward
Variable Annuity Funds was held to approve the following proposals.
The shareholders approved these proposals with respect to The Woodward
Variable Annuity Funds as follows:
1. To approve a new investment advisory agreement ("New Advisory Agreement")
between each Trust, NBD Bank
("NBD") and First Chicago Investment Management Company ("FCIMCO")
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
VA Balanced 1,065,421 9,981 64,060
VA Growth/Value 363,264 9,935 9,079
VA Opportunity 430,828 2,537 41,784
VA Capital Growth 547,409 2,427 58,591
VA Money Market 1,230,799 16,191 7,211
</TABLE>
2. To approve a change to the fundamental investment limitations of each
Fund of the Trust with regard to the following:
a) investment in commodities
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
VA Balanced 1,033,755 26,093 79,614
VA Growth/Value 365,814 4,338 12,125
VA Opportunity 407,840 16,497 50,812
VA Capital Growth 528,664 11,432 68,332
VA Money Market 1,230,799 16,191 7,211
</TABLE>
b) expanded power to borrow
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
VA Balanced 1,003,138 57,827 78,497
VA Growth/Value 364,900 4,476 12,901
VA Opportunity 391,965 33,141 50,042
VA Capital Growth 511,311 28,620 68,496
VA Money Market 1,230,799 16,191 7,211
</TABLE>
c) issuing senior securities
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
VA Balanced 1,042,108 27,404 69,951
VA Growth/Value 365,814 4,338 12,125
VA Opportunity 416,364 12,045 46,740
VA Capital Growth 530,452 11,657 66,318
VA Money Market 1,230,799 16,191 7,211
</TABLE>
<PAGE>
3. To approve a change to the fundamental investment policies and
limitations of certain Funds of the Trusts, as follows:
c) to approve a change to the fundamental investment limitation
concerning concentration of investments in a
particular industry with respect to the Funds
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
VA Balanced 999,822 50,398 89,242
VA Growth/Value 367,274 5,925 9,079
VA Opportunity 394,959 20,740 59,450
VA Capital Growth 516,629 22,158 69,640
VA Money Market 1,230,799 16,191 7,211
</TABLE>
4. To approve a change of the following fundamental policies and
limitations to non-fundamental policies and limitations:
b) limitation on investment in other investment companies
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
VA Balanced 1,042,996 14,653 81,813
VA Growth/Value 364,174 3,417 14,687
VA Opportunity 412,130 8,315 54,704
VA Capital Growth 530,008 9,838 68,582
VA Money Market 1,230,799 16,191 7,211
</TABLE>
c) limitation on illiquid securities
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
VA Balanced 1,036,980 21,285 81,198
VA Growth/Value 350,852 16,740 14,687
VA Opportunity 412,287 7,735 55,126
VA Capital Growth 530,032 9,905 68,490
VA Money Market 1,230,799 16,191 7,211
</TABLE>
d) limitation on purchasing securities on margin
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
VA Balanced 1,015,820 35,688 87,955
VA Growth/Value 354,575 9,189 18,513
VA Opportunity 402,585 16,616 55,948
VA Capital Growth 522,774 17,163 68,490
VA Money Market 1,230,799 16,191 7,211
</TABLE>
e) limitation on purchasing securities of companies for the purpose
of exercising control
<PAGE>
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
VA Balanced 1,020,173 38,092 81,198
VA Growth/Value 354,579 13,012 14,687
VA Opportunity 405,711 14,734 54,704
VA Capital Growth 524,916 15,338 68,174
VA Money Market 1,230,799 16,191 7,211
</TABLE>
f) limitation on writing or selling put options, call options,
straddles, spreads, or any combinations thereof
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
VA Balanced 1,012,425.017 33,295.133 93,743.690
VA Growth/Value 357,465.514 8,673.916 16,139.830
VA Opportunity 400,798.664 12,306.389 62,045.108
VA Capital Growth 518,570.165 13,470.619 76,388.267
</TABLE>
5. To approve certain changes to fundamental investment objectives of
VA Growth/Value, VA Opportunity Funds, and VA Capital Growth Funds
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
VA Growth/Value 365,959 3,417 12,901
VA Opportunity 403,103 17,076 54,970
VA Capital Growth 519,677 18,709 70,042
</TABLE>
6. To ratify the appointment of two Trustees to the Board of Trustees
of each Trust.
Elected Trustees Current Trustees
Ms. Marilyn McCoy Mr. Will M. Caldwell Mr. Donald B. Sutherland
Mr. John P. Gould Dr. Nicholas J. DeGrazia Mr.Donald L. Tuttle
Mr.Julius L. Pallone
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
VA Balanced 1,054,904 5,195 79,363
VA Growth/Value 373,200 0 9,079
VA Opportunity 420,203 5,136 49,809
VA Capital Growth 537,796 4,222 66,410
VA Money Market 1,230,799 16,191 7,211
</TABLE>
8. To transact such other business as may properly come before the
Meetings or any adjournment thereof.
<TABLE>
<CAPTION>
Fund Affirmative Against Abstain
<S> <C> <C> <C>
VA Balanced 1,050,437 4,523 84,502
VA Growth/Value 370,325 1,425 10,527
VA Opportunity 422,750 2,394 50,004
VA Capital 540,169 2,166 66,093
VA Money Market 1,246,991 0 7,211
</TABLE>
<PAGE>
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Woodward Form No.: WVA 08
