<PAGE> 1
[FIGURE 1]
VARIABLE ANNUITY REPORT
SEMI-ANNUAL
REPORT
FOR THE PERIOD ENDED
JUNE 30, 1995
<PAGE> 2
CHAIRMAN'S
MESSAGE FOR THE
GALAXY VIP FUND
TRUSTEES
AND OFFICERS
Dwight E. Vicks, Jr.
Chairman and Trustee
John T. O'Neill
President, Treasurer
and Trustee
Louis DeThomasis,
F.S.C., Ph.D.
Trustee
Donald B. Miller
Trustee
James M. Seed
Trustee
Bradford S. Wellman
Trustee
W. Bruce
McConnel, III, Esq.
Secretary
Neil Forrest
Vice President &
Assistant Treasurer
Louis J. Russo
Assistant Treasurer
INVESTMENT ADVISOR
Fleet Investment
Advisors Inc.
45 East Avenue
Rochester, New York
14604
DISTRIBUTOR
440 Financial
Distributors, Inc.
290 Donald Lynch Blvd.
Marlboro,
Massachusetts 01752
ADMINISTRATOR
440 Financial
290 Donald Lynch Blvd.
Marlboro,
Massachusetts 01752
Dear Variable Annuity Policyowner:
Enclosed is your report on the performance of The Galaxy VIP Fund for the six
months ended June 30, 1995. Over the last six months, the prices of stocks and
bonds staged dramatic comebacks from losses they suffered last year. By the end
of the period, stock prices had reached new highs and bond prices were
significantly stronger than they were when the Federal Reserve Board ("the
Fed") began to raise interest rates.
Although the economy has weakened, the Fed seems to have met its goal
of slower, sustainable growth. This should mean additional declines in interest
rates and further gains in bond prices. As lower rates stimulate new growth at
year's end, stock prices should also move higher.
These exceptional changes in market direction offer important lessons
for shareholders in The Galaxy VIP Fund. By remaining invested during the
temporary market downturns, shareholders were in a position to earn attractive
returns once stocks and bonds began to rally. Over time, longer-term market
gains have generally offset short-term market fluctuations. Investors may make
the most of these gains, and improve the chance of reaching their financial
goals, by staying with a well-diversified investment strategy.
The Market Overview and Portfolio Reviews that follow explain what
happened to the financial markets in the first half of 1995 and show how Fleet
Investment Advisors Inc. ("Fleet") managed the portfolios of The Galaxy VIP Fund
to take advantage of this environment. You will also read how Fleet expects the
markets to perform in the next six months and how this may affect the management
of The Galaxy VIP Fund portfolios.
As always, we would be happy to discuss this report with you in
greater detail. You may contact our Galaxy Investment Specialists 24 hours a
day at 800-628-0414.
Sincerely,
/s/ DWIGHT E. VICKS, JR.
------------------------
Dwight E. Vicks, Jr.
<PAGE> 3
MARKET OVERVIEW
PERFORMANCE
AT-A-GLANCE
Average Annual Returns as
of June 30, 1995
Variable Account E
[FIGURE 2]
2.4%*
4.3%
8.1%
15.8%*
20.4%
23.5%
17.5%*
19.3%
19.8%
14.4%*
13.8%
12.0%
The performance data quoted represents past performance and the investment
return and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost. The
Administrator and the Advisor are presently waiving fees. Without such waivers,
performance would be lower. An investment in the Money Market Fund is neither
insured nor guaranteed by the U.S. Government. There can be no assurance that
the Money Market Fund will be able to maintain a stable net asset value of $1.00
per share. The Variable Account E sub-accounts purchase shares of the Galaxy VIP
Funds. These results reflect the experience of the sub-accounts of Variable
Account E of American Skandia Life Assurance Corporation and include all
management fees and expenses and insurance costs and accordingly will be
different from the results of the Galaxy VIP Funds. The sub-accounts are GAL
Money Market, GAL Equity, GAL High Quality Bond, and GAL Asset Allocation.
* Total Return
MARKET OVERVIEW
BY FLEET INVESTMENT ADVISORS INC.
Stock prices rose to record highs in the first half of 1995, driven by
strong corporate earnings, moderate inflation and falling interest rates. As
rates fell, bond prices soared, retracing all and more of the ground lost last
year. By investing heavily in high-quality growth stocks, which led the stock
rally, and emphasizing longer-maturity bonds, we believe The Galaxy VIP Fund
delivered exceptional returns for the six months ended June 30, 1995.
After growing strongly for most of 1994, the economy weakened
substantially in the first half of 1995. Increasingly, investors became
convinced higher interest rates imposed by the Federal Reserve Board ("the Fed")
would control inflation and provide a soft landing for the economy. Once the Fed
raised short-term rates again in February, long-term bond prices skyrocketed and
long-term yields fell. By the end of June, the yield on 30-year Treasury bonds
had dropped from 7.95% to 6.65%. After rising in the first quarter, yields on
3-month Treasury bills also declined, reaching 5.44% by the end of June.
The lower yields on bonds improved corporate profits and made stocks
more appealing to investors. With companies reporting earnings that were much
stronger than analysts expected, stock prices started to rise surpassing
previous market highs by March. By the end of June, the Dow Jones Industrial
Average had reached 4556, for a six-month gain of 19%.
INVESTMENT STRATEGIES
Last fall, when it was clear higher interest rates would slow the
economy, Fleet Investment Advisors Inc. increased its commitment to
high-quality growth stocks. In a slowing economy, investors have historically
favored growth stocks, whose earnings depend less on economic improvement.
In selecting growth companies, we gave extra weight to technology
companies. As continued weakness in the dollar made U.S. technology firms more
competitive overseas, corporate restructuring increased the demand for personal
computers. These factors helped make technology stocks the undisputed leader of
the recent rally. During the first half of 1995, the prices of technology
stocks rose nearly 40% more than doubling returns for the stock market as a
whole.
Given the uncertainties of a slowing economy, investors also favored
the consumer staples sector, whose earnings move without regard to economic
growth. Having purchased consumer staples issues when they were undervalued in
1994, our equity portfolios enjoyed strong returns as these stocks rebounded in
the recent rally. Other top performers included airlines stocks, also
1
<PAGE> 4
MARKET OVERVIEW
PERFORMANCE
AT-A-GLANCE
Total Returns as
of June 30, 1995
Variable Account B-Class 3
[FIGURE 3]
0.7%
4.8%
6.3%
6.4%
The performance data quoted represents past performance and the investment
return and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost. The
Administrator and the Adviser are presently waiving fees. Without such waivers,
performance would be lower. An investment in the Money Market Fund is neither
insured nor guaranteed by the U.S. Government. There can be no assurance that
the Money Market Fund will be able to maintain a stable net asset value of $1.00
per share. The Class 3 sub-accounts purchase shares of the Galaxy VIP Funds.
These results reflect the experience of the Class 3 sub-accounts of Variable
Account B of American Skandia Life Assurance Corporation and include all
management fees and expenses and insurance costs and accordingly, will be
different from the results of the Galaxy VIP Funds. The sub-accounts are GAL
Money Market 3, GAL Equity 3, GAL High Quality Bond 3, and GAL Asset Allocation
3.
bought at attractive prices, and the stocks of energy companies, which
benefited as oil prices improved.
Expecting a rebound in bond prices, we were heavily weighted in
longer-maturity issues as 1995 began. In addition to giving shareholders extra
income, these issues produced stronger gains as bond prices rose.
During the period we increased investments in U.S. government and
agency bonds. Strong corporate earnings, and a weak supply of new issues,
helped the prices for corporates rise more than the prices for government
bonds. This made corporate yields less attractive than those for government
securities, in light of the extra credit risk that corporates carry.
MARKET OUTLOOK
After improving at an annual rate of 5.1% in the fourth quarter of
1994, economic growth has now slowed to less than 1%. With inventories rising
and consumption weakening, we expect the economy to grow at this level for the
next few months.
While slower growth should restrain inflation, it will likely cause
disappointments in earnings. With the recent improvement in stock prices, the
market indices are now yielding an average 2.5%, the lowest level in 95 years.
This historically high valuation could lead to a temporary price correction of
10% or more.
To make the most of this environment, we've taken profits in some of
the top performing stocks in our equity portfolios and increased their cash
reserves. If there is a correction and stock prices become more attractive,
these reserves would provide the money for new investment opportunities. In
addition to certain technology issues, we'll watch for opportunities in the
retail, capital goods and financial services sectors. We believe these groups
have the potential for solid gains in a period of slow, sustainable economic
growth.
As the economy continues to weaken, interest rates may edge lower in
the next few months. Although it's unlikely rates will drop as much as they have
in recent quarters, we believe the yield for 30-year Treasuries could fall to
6.5%. This should provide additional gains in bond prices.
To protect shareholders against a bond price reversal, we've
significantly reduced investments in longer-maturity issues. When interest
rates fall, the prices of longer-term issues tend to suffer more than the prices
of shorter-maturity issues. In addition, we're watching the yields of government
and corporate issues. If the economy slows and earnings weaken, the prices on
corporate bonds may soften sooner than the prices of government issues. If that
happens, corporate yields could become more attractive and we may increase our
investments in that sector.
2
<PAGE> 5
PORTFOLIO REVIEWS
GALAXY VIP MONEY MARKET FUND
Investment Manager
Pat Galuska
[FIGURE 4]
By making the most of recent changes in short-term interest rates, the
Galaxy VIP Money Market Fund earned a competitive return for its shareholders
in the six months ended June 30, 1995. During that time, the Fund had a total
return of 2.66%. That compares with 2.80% for money market funds tracked by
Donoghue's Money Market Fund/All-Taxable Average.
GALAXY VIP MONEY
MARKET FUND
Portfolio Distribution
as of June 30, 1995
[FIGURE 5]
Commercial Paper 54%
U.S. Government and Agency Obligations 46%
KEEPING PACE WITH CHANGING YIELDS
As the Federal Reserve Board raised short-term rates in the first part
of 1995, we lengthened the average maturity of the Fund's investments from 25
days to 35 days. This allowed us to lock in the higher yields that became
available. Then, the economy weakened, investors began to expect the Federal
Reserve Board to begin cutting rates, and money market yields began to fall. As
that happened, the yields on money market instruments maturing in three months
to one year fell to levels that were nearly the same or slightly less than the
yields for shorter-maturity issues. Because there was little advantage to
investing in longer-term securities, we focused our investments on shorter-term
issues. By the end of the period, this gave the Fund an average maturity of 22
days.
In addition, we sought securities that matured a week later than the
dates when investors expected the Federal Reserve Board to move interest rates.
Because there was less demand for these securities, their prices and yields
were especially attractive. Throughout the period, we continued to stagger the
dates on which the Fund's investments matured and made substantial investments
in overnight repurchase agreements. These strategies gave us extra flexibility
in making the most of changes in yields.
During the period we raised the Fund's investments in Treasury bills
from 19.87% of the portfolio as of December 31, 1994 to 20.29% on June 30, 1995.
We placed less emphasis on commercial
GALAXY VIP MONEY MARKET FUND
7-Day Average Yields
[FIGURE 6]
- - Galaxy VIP Money Market Fund
- - Donoghue's Money Market Fund/
All-Taxable Average
* Donoghue's Money Market Fund/All-Taxable Average reflects the average
current investment rate paid by over 620 money market funds.
3
<PAGE> 6
PORTFOLIO REVIEWS
[FIGURE 7]
Harold A. Mackinney
paper and the obligations of U.S. government agencies because their yields were
less attractive compared to the yields for Treasury issues.
GOING FORWARD
We believe the economy will continue to weaken in coming months,
prompting the Federal Reserve Board to stimulate growth by lowering short-term
interest rates. Because longer-maturity issues still offer little yield
advantage, we expect to keep the Fund's average maturity relatively short for
now. The yields on longer-term issues may become more attractive as rates fall.
If that happens, we would probably lengthen the average maturity of the Fund's
investments to maximize income for shareholders.
GALAXY VIP EQUITY FUND
Portfolio Distribution
as of June 30, 1995
[FIGURE 8]
Consumer Staples 23%
Consumer Cyclical 12%
Tech. 11%
U.S. Treasury Bills 10%
Cash & Equiv. & Other Assets & Liabilities 9%
Basic Materials 7%
Capital Goods 7%
Financial 7%
Energy 6%
Trans. 4%
Other Common Stocks 2%
Utilities 2%
Pat Galuska assumed management for the Galaxy VIP Money Market Fund in
September 1994. She also has managed the Galaxy Tax-Exempt Money Market Fund
since 1988.
GALAXY VIP EQUITY FUND
Investment Manager
Harold A. Mackinney
The Galaxy VIP Equity Fund seeks long-term growth by investing in
stocks of companies that Fleet Investment Advisors Inc. believes have the
potential for above-average earnings. Typically, this means emphasizing stocks
whose prices are attractive compared to their prospective earnings and to
prices for stocks as a whole.
This strategy worked especially well in recent months, as stock prices
established new highs. By concentrating on attractive valuations, the Fund
enjoyed exceptional gains from many holdings and produced strong returns for
shareholders. For the six months ended June 30, 1995, the Fund had a total
return of 16.15%. During the same period, the Standard & Poor's 500 Index ("S&P
500 Index") had a total return of 20.09%.
FOCUS ON MARKET LEADERS
By focusing on stocks with outstanding potential, we invested heavily
in sectors that led the market during the recent rally. During the period we
more than doubled the Fund's investments in the high-flying technology sector,
increasing many existing positions and adding new holdings such as Motorola.
In addition, we raised the Fund's commitment to consumer staples and
consumer cyclical stocks increasing shares of Gillette, Ford, Pepsico, and Home
Depot, among others. Our search for value also boosted the Fund's holdings in
transportation and airlines stocks. During the period we increased the holding
in Boeing and added AMR Corporation, the parent company of American Airlines, to
the portfolio.
Believing that the market as a whole is now overpriced and vulnerable
to a temporary correction, we now have about 20% of the Fund's portfolio in
cash.
4
<PAGE> 7
PORTFOLIO REVIEWS
LOOKING AHEAD
We expect that the chances for a correction will increase in coming
months. The prices of most stocks do not yet reflect the disappointments in
corporate earnings that are likely to occur with further weakening in the
economy. If earnings results are disappointing, stock prices could drop by 10%
or more.
We believe such a correction could be temporary and would provide us
with the chance to put the Fund's cash reserves back to work. Because we like
the Fund's current diversification, we would probably use this cash to increase
existing positions. We would also be looking for new investment opportunities
that a correction might bring.
GALAXY VIP EQUITY FUND
Growth of $10,000 investment*
[FIGURE 9]
$13,321
$12,517
- - S&P 500 Index
- - Galaxy VIP Equity Fund
* Since inception on 1/11/93. The S&P 500 Index is an unmanaged index of 500
leading stocks. Results for the S&P 500 Index do not reflect the expenses
and investment management fees incurred by the Fund.
We expect that stock prices will recover by year's end. The Federal
Reserve Board may force interest rates lower to stimulate growth, which should
benefit the Fund's investments in consumer cyclical, basic materials and capital
goods stocks. A pickup in growth should also help the Fund's retail stocks,
which have lagged the market in recent months.
Harold A. Mackinney has managed the Galaxy VIP Equity Fund since its inception.
He has been Chairman of the Fleet Investment Advisors Investment Policy
Committee since 1973.
GALAXY VIP ASSET ALLOCATION FUND
Investment Manager
Don Jones
The Galaxy VIP Asset Allocation Fund seeks a high total return by
providing both current income that is greater than that for popular stock
market averages and long-term growth in the value of its assets. The Fund
invests in a diversified portfolio of equity, bond and money market
investments.
During the first half of 1995, the Fund made the most of twin rallies
in stocks and bonds by investing heavily in top-performing sectors. Large
investments in technology and consumer staples stocks, as well as bonds with
longer maturities, helped the Fund earn a total return of 17.79% for the six
months ended June 30, 1995. That compares to 14.2% for the average balanced
fund tracked by Lipper Analytical Services and 20.1% for the Standard & Poor's
500 Index.
MARKET WINNERS
As technology stocks produced returns that doubled the market average,
the Fund benefited from a 98.4% gain in Intel, its largest equity holding. The
Fund also earned strong gains from American Power Conversion, up 43% during the
period. In the consumer staples sector, which rebounded as investors went
shopping for value, the Fund had strong returns from Johnson & Johnson, Merck,
Bristol Myers, McDonalds and PepsiCo. Other strong performers included the
Fund's financial stocks, as well as individual issues like Ford, Dow Chemical
and Thermo Electron.
5
<PAGE> 8
PORTFOLIO REVIEWS
[FIGURE 10]
Don Jones
In the second quarter, we took profits in some of these stocks. We
also sold shares of Telephones de Mexico, Fruit of the Loom and Conseco
Insurance, which had not met our expectations. Although we added a position in
Boeing, we reduced stocks from 63% of Fund assets to 59% and raised cash to
about 11%. This gave the Fund protection against a correction in stock prices
and the flexibility to use new opportunities a correction could bring.
We kept bonds at 30% of assets, but adjusted their average maturity
several times. As 1995 began, the Fund's bonds had an average maturity of about
14 years, and roughly 60% of the Fund's bonds matured in 10 or more years. As
interest rates fell, the prices of these issues improved substantially more
than the prices of shorter-term issues.
GALAXY VIP ASSET
ALLOCATION FUND
Growth of $10,000 investment*
[FIGURE 11]
$13,260
$12,141
- - S&P 500 Index
- - Galaxy VIP Asset Allocation Fund
* Since inception on 2/6/93. The S&P 500 Index is an unmanaged index of 500
stocks. Results for the S&P 500 Index do not reflect the expenses and
investment management fees incurred by the Fund.
As it looked like rates might be bottoming, we reduced the Fund's
investments in longer-term bonds. In doing so, we maximized income for
shareholders by selling bonds with lower yields. By the end of June,
longer-term issues represented about 40% of the bond portfolio, the Fund had an
average maturity of 11 years, and the Fund's SEC 30-day yield was 6.99%.
NEW OPPORTUNITIES
If earnings disappointments cause a temporary correction in stock
prices, as we expect, there should be many attractive sectors where we can
reinvest the Fund's cash. In addition to technology, which still has strong
growth potential, we'll look for new opportunities in the capital goods group
which should benefit as lower interest rates stimulate the economy at year's
end. Lower rates should also benefit financial stocks.
As interest rates get closer to bottoming, we'll continue to cut the
Fund's longer-term bonds, which would suffer most as interest rates and bond
prices change course. We expect to keep three quarters of the Fund's
investments in government bonds, until the yields on corporates become
attractive enough to outweigh the extra price risk the bonds carry.
Don Jones has managed the Galaxy VIP Asset Allocation Fund since its inception.
He has managed investment portfolios for Fleet Investment Advisors Inc., and
its predecessors, since 1988.
GALAXY VIP ASSET
ALLOCATION FUND
Portfolio Distribution
as of June 30, 1995
[FIGURE 12]
Common Stocks 59%
U.S. Government and Agency Obligations 22%
Cash Equivalents & Net Other Assets & Liabilities 12%
Corporate Bonds 7%
6
<PAGE> 9
PORTFOLIO REVIEWS
GALAXY VIP HIGH QUALITY BOND FUND
Investment Manager
Mary McGoldrick
[FIGURE 13]
The Galaxy VIP High Quality Bond Fund seeks a high level of current
income consistent with the prudent risk of capital. The Fund invests primarily
in government securities and high-quality corporate issues rated in the two
highest rating categories by Moody's or Standard & Poor's.
As interest rates fell and bond prices rose in the first half of 1995,
the prices of longer-term bonds improved more than the prices for shorter-term
issues, and the prices of corporate bonds gained more than the prices of
government bonds. With an above average weighting in long-term corporate
issues, the Fund produced a total return of 14.67% for the six months ended
June 30, 1995. That compares to 11.80% for the Lehman Brothers
Government/Corporate Bond Index.
INVESTMENT STRATEGY
Late in 1994, when it looked like interest rates might be peaking, we
purchased a significant number of longer-term corporate bonds for the
portfolio. In addition to giving the Fund strong price gains as rates fell in
the first quarter of 1995, these bonds had high coupon rates that boosted the
Fund's yield. The bonds were also "noncallable" securities, which meant their
issuers couldn't redeem them when interest rates fell. This feature added to
the price gains the bonds enjoyed.
As the period started, about 50% of the Fund was invested in bonds
maturing in 10 years or more. After interest rates had dropped sharply, we
reduced
GALAXY VIP HIGH QUALITY BOND FUND
Growth of $10,000 investment*
[FIGURE 14]
$11,796
$11,449
- - Lehman Brothers Government/
Corporate Bond Index
- - Galaxy VIP High
Quality Bond Fund
* Since inception on 1/21/93. The Lehman Brothers Government/Corporate Bond
Index is an unmanaged index of U.S. Treasury obligations and the debt of
U.S. Government agencies as well as all publicly issued, fixed rate,
non-convertible investment grade, dollar-denominated, SEC-registered
corporate debt. Results for the Lehman Brothers Government/Corporate Bond
Index do not reflect the expenses and investment management fees incurred
by the Fund.
7
<PAGE> 10
PORTFOLIO REVIEWS
GALAXY VIP HIGH
QUALITY BOND FUND
Portfolio Distribution
as of June 30, 1995
[FIGURE 15]
U.S. Government and Agency Obligations 61%
Corporate Bonds 26%
Cash Equivalents & Net Other Assets & Liabilities 13%
the Fund's commitment to longer-term issues to protect the Fund from a reversal
in rates and bond prices. By the end of June, about 40% of the Fund was
invested in longer-term issues. As a result, the average maturity of the Fund's
investments fell from 14 years to about 12 years. This was still longer,
however, than the 9.5-year average maturity for the Lehman Brothers
Government/Corporate Bond Index.
Many of the bonds we sold were corporate issues. This was because the
strong price gains for corporates had made their yields less attractive
compared to those for U.S. government securities. By selling issues with lower
coupons, we were able to maximize the Fund's yield. At the end of June the Fund
had an SEC 30-day yield of 5.86%.
ANTICIPATING HIGHER RATES
Although we expect the Federal Reserve Board to protect the economy by
bringing interest rates lower in coming months, we don't expect rates to drop
much below current levels. With inflation likely to remain around 3%, there's
only so much room for interest rates to fall. The low interest rates of the
third quarter should renew economic growth by the fourth quarter. As that
happens, interest rates should start to rise.
To further protect the Fund from falling bond prices, we will probably
cut its long-term holdings even more. For now, we're directing most new
investments in the funds to bonds with maturities of 5 to 7 years.
Mary McGoldrick has managed the Galaxy VIP High Quality Bond Fund since its
inception. She has managed investment portfolios at Fleet Investment Advisors
Inc., and its predecessors and other investment management companies for eight
years.
8
<PAGE> 11
VIP MONEY MARKET FUND
THE GALAXY PORTFOLIO OF INVESTMENTS
VIP FUND JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
------------ -------------
<S> <C>
COMMERCIAL PAPER (A) - 54.42%
CONSUMER STAPLES - 16.19%
$ 650,000 Anheuser-Busch Cos., Inc.
4.57%, 07/14/95 . . . . . . . . $ 648,373
450,000 Kellogg, Inc.
5.02%, 07/06/95 . . . . . . . . 449,629
600,000 PepsiCo, Inc.
5.98%, 07/03/95 (B) . . . . . . 599,803
600,000 Pfizer, Inc.
5.76%, 07/26/95 . . . . . . . . 597,538
----------
2,295,343
----------
FINANCIAL SERVICES - 12.66%
600,000 MetLife Funding, Inc.
5.80%, 07/28/95 . . . . . . . . 597,332
600,000 State Street Bank & Trust Co.
5.41%, 07/10/95 . . . . . . . . 599,111
600,000 USAA Capital Corp.
5.75%, 07/24/95 . . . . . . . . 597,731
----------
1,794,174
----------
UTILITIES AND TELECOMMUNICATIONS - 8.45%
600,000 Bell Atlantic Corp.
5.16%, 07/07/95 . . . . . . . . 599,406
600,000 GTE California, Inc.
5.73%, 07/19/95 . . . . . . . . 598,209
----------
1,197,615
----------
TECHNOLOGY - 5.87%
600,000 AT&T Capital Corp.
5.71%, 07/20/95 . . . . . . . . 598,122
235,000 Xerox Credit Corp.
5.08%, 07/07/95 . . . . . . . . 234,771
----------
832,893
----------
BASIC MATERIALS - 4.22%
600,000 Weyerhaeuser Mortgage Co.
5.49%, 07/13/95 . . . . . . . . 598,826
----------
CAPITAL GOODS - 4.22%
600,000 Raytheon Corp.
5.75%, 07/24/95 . . . . . . . . 597,731
----------
MISCELLANEOUS - 2.81%
400,000 Knight-Ridder
5.68%, 07/18/95 . . . . . . . . 398,880
----------
TOTAL COMMERCIAL PAPER . . . . . 7,715,462
(Cost $7,715,462)
U.S. GOVERNMENT AND
AGENCY OBLIGATIONS (A) - 46.29%
U.S. TREASURY BILLS - 20.29%
492,000 4.75%, 07/06/95 . . . . . . . . 491,616
478,000 5.54%, 08/03/95 . . . . . . . . 475,534
596,000 5.51%, 08/17/95 . . . . . . . . 591,680
649,000 5.55%, 08/31/95 . . . . . . . . 642,883
682,000 5.65%, 09/07/95 . . . . . . . . 674,722
----------
2,876,435
----------
FEDERAL HOME LOAN BANK - 15.27%
370,000 6.15%, 07/03/95 (B) . . . . . . 369,875
600,000 5.11%, 07/07/95 . . . . . . . . 599,412
600,000 5.61%, 07/18/95 . . . . . . . . 598,340
600,000 5.51%, 08/02/95 . . . . . . . . 597,013
----------
2,164,640
----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION - 6.51%
555,000 5.52%, 07/14/95 . . . . . . . . 553,824
370,000 5.62%, 07/18/95 . . . . . . . . 368,974
----------
922,798
----------
FEDERAL FARM CREDIT BANK - 4.22%
600,000 5.46%, 07/12/95 . . . . . . . . 598,922
----------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS . . . . . . 6,562,795
(Cost $6,562,795) ----------
TOTAL INVESTMENTS - 100.71% . . . . . . . . . . . . 14,278,257
(Cost $14,278,257)**
NET OTHER ASSETS AND LIABILITIES - (0.71)% . . . . (100,855)
----------
NET ASSETS - 100.00% . . . . . . . . . . . . . . . $14,177,402
===========
</TABLE>
- ---------------------------------------------
** Aggregate cost for Federal tax purposes.
(A) Annualized yields to maturity.
(B) Annualized yields at time of purchase.
See Notes to Financial Statements.
9
<PAGE> 12
VIP EQUITY FUND
THE GALAXY PORTFOLIO OF INVESTMENTS
VIP FUND JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------------ -------------
<S> <C>
COMMON STOCKS - 81.08%
CONSUMER STAPLES - 23.15%
6,000 Anheuser-Busch Cos., Inc. . . . . . . $ 341,250
6,000 Bristol Myers Squibb Co. . . . . . . . 408,750
6,000 General Mills, Inc. . . . . . . . . . 308,250
14,000 Gillette Co. . . . . . . . . . . . . . 624,750
8,000 Johnson & Johnson . . . . . . . . . . 541,000
14,000 Mcdonald's Corp. . . . . . . . . . . . 547,750
10,000 Merck & Co., Inc. . . . . . . . . . . 490,000
11,000 PepsiCo, Inc. . . . . . . . . . . . . 501,875
10,000 Pfizer, Inc. . . . . . . . . . . . . . 461,875
6,000 Procter & Gamble Co. . . . . . . . . . 431,250
14,000 Rubbermaid, Inc. . . . . . . . . . . . 388,500
15,000 Sara Lee Corp. . . . . . . . . . . . . 427,500
14,000 Sysco Corp. . . . . . . . . . . . . . 413,000
----------
5,885,750
----------
CONSUMER CYCLICAL - 12.34%
9,000 Armstrong World Industries, Inc. . . . 451,125
7,000 Dayton Hudson Corp. . . . . . . . . . 502,250
9,000 Disney (Walt) Co. . . . . . . . . . . 500,625
14,000 Ford Motor Co. . . . . . . . . . . . . 416,500
11,000 Home Depot, Inc. . . . . . . . . . . . 446,875
11,000 Sherwin-Williams Co. . . . . . . . . . 391,875
16,000 Wal-Mart Stores, Inc. . . . . . . . . 428,000
----------
3,137,250
----------
TECHNOLOGY - 11.30%
12,000 AMP, Inc. . . . . . . . . . . . . . . 507,000
8,000 Automatic Data Processing, Inc. . . . . 503,000
12,000 Intel Corp. . . . . . . . . . . . . . 759,750
7,000 Microsoft Corp.* . . . . . . . . . . . 632,625
7,000 Motorola, Inc. . . . . . . . . . . . . 469,875
----------
2,872,250
----------
CAPITAL GOODS - 7.45%
8,000 Boeing Co. . . . . . . . . . . . . . . 501,000
8,000 Caterpillar, Inc. . . . . . . . . . . 514,000
5,000 Deere & Co. . . . . . . . . . . . . . 428,125
8,000 General Electric Co. . . . . . . . . . 451,000
----------
1,894,125
----------
BASIC MATERIALS - 6.97%
8,000 Air Products & Chemicals, Inc. . . . . 446,000
8,000 Consolidated Papers, Inc. . . . . . . 461,000
6,000 Dow Chemical Co. . . . . . . . . . . . 431,250
5,000 Georgia-Pacific Corp. . . . . . . . . 433,750
----------
1,772,000
----------
FINANCIAL SERVICES - 6.94%
4,000 American International Group, Inc.. . . 456,000
5,000 Federal National
Mortgage Association . . . . . . . 471,875
9,000 H & R Block, Inc. . . . . . . . . . . 370,125
8,000 Suntrust Banks, Inc. . . . . . . . . . 466,000
----------
1,764,000
----------
ENERGY - 5.60%
3,000 Atlantic Richfield Co. . . . . . . . . 329,250
5,000 Exxon Corp. . . . . . . . . . . . . . 353,125
10,000 Halliburton Co. . . . . . . . . . . . 357,500
4,000 Mobil Corp. . . . . . . . . . . . . . 384,000
----------
1,423,875
----------
TRANSPORTATION AND SERVICES - 3.50%
6,000 AMR Corp.* . . . . . . . . . . . . . . 447,750
8,000 Union Pacific Corp. . . . . . . . . . 443,000
----------
890,750
----------
UTILITIES AND TELECOMMUNICATIONS - 2.28%
7,000 American Telephone &
Telegraph Co. . . . . . . . . . . . 371,875
7,000 Telefonos De Mexico, Series L, ADR 207,375
----------
579,250
----------
CONGLOMERATES - 1.55%
12,000 Corning, Inc. . . . . . . . . . . . . 393,000
----------
TOTAL COMMON STOCKS . . . . . . . . . 20,612,250
(Cost $16,772,654) ----------
</TABLE>
See Notes to Financial Statements
10
<PAGE> 13
VIP EQUITY FUND
THE GALAXY PORTFOLIO OF INVESTMENTS (CONTINUED)
VIP FUND JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
------------ -------------
<S> <C>
U.S. TREASURY BILLS - 9.58%
$ 500,000 6.22%, 9/21/95 (A) . . . . . . . $ 492,923
1,000,000 5.76%, 11/16/95 (B) . . . . . . 968,885
1,000,000 5.41%, 12/21/95 (A) . . . . . . . 974,208
-----------
TOTAL U.S. TREASURY BILLS . . . 2,436,016
(Cost $2,436,016) -----------
REPURCHASE AGREEMENTS - 13.67%
3,476,465 Chase Securities, Inc.
6.05%, due 7/03/95, dated 6/30/95,
Repurchase Price $3,478,218
(Collateralized by U.S. Treasury Note
7.50%, due 1996;Total Par $3,475,000;
Market Value $3,548,844) . . . . 3,476,465
-----------
TOTAL REPURCHASE AGREEMENTS . . 3,476,465
(Cost $3,476,465) -----------
TOTAL INVESTMENTS - 104.33% . . . . . . . . . . . 26,524,731
(Cost $22,685,135)** -----------
NET OTHER ASSETS AND LIABILITIES - (4.33)% . . . . (1,101,733)
-----------
NET ASSETS - 100.00% . . . . . . . . . . . . . . . $25,422,998
===========
</TABLE>
- ------------------------------------------
* Non income producing security.
** Aggregate cost for Federal tax purposes.
(A) Annualized yield to maturity.
(B) Annualized yield at time of purchase.
ADR American Depository Receipts.
See Notes to Financial Statements
11
<PAGE> 14
VIP ASSET ALLOCATION
THE GALAXY PORTFOLIO OF INVESTMENTS
VIP FUND JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------------ -------------
<S> <C>
COMMON STOCKS - 58.65%
CONSUMER STAPLES - 14.87%
3,000 Bristol Myers Squibb Co. . . . . $ 204,375
2,000 Coca-Cola Co. . . . . . . . . . 127,498
2,000 General Mills, Inc. . . . . . . 102,750
6,000 Gillette Co. . . . . . . . . . . 267,750
4,000 Johnson & Johnson . . . . . . . 270,500
4,000 Mcdonald's Corp. . . . . . . . . 156,500
5,000 Merck & Co., Inc. . . . . . . . 245,000
5,000 Pepsico, Inc. . . . . . . . . . 228,125
5,000 Sara Lee Corp. . . . . . . . . . 142,500
4,000 Sysco Corp. . . . . . . . . . . 118,000
----------
1,862,998
----------
CONSUMER CYCLICALS - 9.76%
5,000 Armstrong World Industries, Inc 250,625
2,500 Dillard Department Stores, Inc.,
Class A . . . . . . . . . . . 73,438
5,000 Disney (Walt) Co. . . . . . . . 278,125
10,000 Ford Motor Co. . . . . . . . . . 297,500
4,000 Home Depot, Inc. . . . . . . . . 162,500
6,000 Wal-Mart Stores, Inc. . . . . . 160,500
----------
1,222,688
----------
TECHNOLOGY - 7.56%
6,000 American Power Conversion Corp.* 137,250
3,000 Automatic Data Processing, Inc. 188,625
4,000 General Motors Corp., Class E . 174,000
6,000 Intel Corp . . . . . . . . . . . 379,875
1,000 Motorola, Inc. . . . . . . . . . 67,125
----------
946,875
----------
CAPITAL GOODS - 7.52%
3,000 Boeing Co. . . . . . . . . . . . 187,875
2,000 Deere & Co. . . . . . . . . . . 171,250
5,000 General Electric Co. . . . . . . 281,875
7,500 Thermo Electron Corp.* . . . . . 301,875
----------
942,875
----------
FINANCIAL SERVICES - 6.12%
2,000 American International Group, Inc. 228,000
4,000 Banc One Corp. . . . . . . . . . 129,000
3,000 Citicorp . . . . . . . . . . . . 173,625
2,500 Federal National
Mortgage Association . . . . 235,938
----------
766,563
----------
BASIC MATERIALS - 4.78%
3,000 Air Products & Chemicals, Inc. . 167,250
5,000 Consolidated Papers, Inc. . . . 288,125
2,000 Dow Chemical Co. . . . . . . . . 143,750
----------
599,125
----------
ENERGY - 4.49%
1,000 Amoco Corp. . . . . . . . . . . 66,625
1,700 Atlantic Richfield Co. . . . . . 186,575
1,500 Exxon Corp. . . . . . . . . . . 105,938
3,000 Halliburton Co. . . . . . . . . 107,250
1,000 Mobil Corp. . . . . . . . . . . 96,000
----------
562,388
----------
<CAPTION>
UTILITIES AND TELECOMMUNICATIONS - 1.44%
<S> <C>
2,000 American Telephone &
Telegraph Co. . . . . . . . . 106,250
2,500 Telefonos De Mexico, Series L, ADR 74,063
----------
180,313
----------
TRANSPORTATION - 1.33%
3,000 Union Pacific Corp. . . . . . . 166,125
----------
CONGLOMERATES - 0.78%
3,000 Corning, Inc. . . . . . . . . . 98,250
----------
TOTAL COMMON STOCKS . . . . . . 7,348,200
(Cost $6,098,374) ----------
</TABLE>
See Notes to Financial Statements.
12
<PAGE> 15
VIP ASSET ALLOCATION
THE GALAXY PORTFOLIO OF INVESTMENTS (CONTINUED)
VIP FUND JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
------------ -------------
<S> <C>
U.S. GOVERNMENT AND
AGENCY OBLIGATIONS - 22.18%
U.S. TREASURY NOTES - 5.03%
$ 250,000 6.25%, 05/31/00 . . . . . . . . . . . . $ 252,608
350,000 7.50%, 05/15/02 . . . . . . . . . . . . 377,321
----------
629,929
----------
FEDERAL HOME LOAN BANK - 4.78%
200,000 8.22%, 12/22/97 . . . . . . . . . . . . 201,468
100,000 8.05%, 04/26/00 . . . . . . . . . . . . 100,142
200,000 7.00%, 06/12/00 . . . . . . . . . . . . 200,482
100,000 6.41%, 12/29/03 . . . . . . . . . . . . 96,641
----------
598,733
----------
U.S. TREASURY BONDS - 4.43%
250,000 7.63%, 02/15/07 . . . . . . . . . . . . 266,697
250,000 8.00%, 11/15/21 . . . . . . . . . . . . 288,907
----------
555,604
----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 4.40%
100,000 6.40%, 03/25/03 . . . . . . . . . . . . 97,788
150,000 6.31%, 08/25/03 . . . . . . . . . . . . 145,171
200,000 7.55%, 06/10/04 . . . . . . . . . . . . 203,618
100,000 8.18%, 04/15/24 . . . . . . . . . . . . 103,960
----------
550,537
----------
STUDENT LOAN MARKETING ASSOCIATION - 2.72%
350,000 5.08%, 03/02/99+ . . . . . . . . . . . . 340,714
----------
FEDERAL HOME LOAN MORTGAGE CORP. - 0.82%
100,000 7.88%, 04/28/04 . . . . . . . . . . . . 102,662
----------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS . . . . . . . . . . . 2,778,179
(Cost $2,718,934) ----------
CORPORATE NOTES AND BONDS - 7.46%
200,000 Citicorp
8.63%, 11/01/04 . . . . . . . . . . . . 213,000
150,000 Dow Chemical Co.
6.85%, 08/15/13 . . . . . . . . . . . . 140,625
200,000 Duke Power Co.
8.75%, 03/01/21 . . . . . . . . . . . . 220,000
250,000 Ford Motor Credit Corp.
6.38%, 12/15/05 . . . . . . . . . . . . 240,000
125,000 NBD Bank N.A.
6.25%, 08/15/03 . . . . . . . . . . . . 121,406
----------
TOTAL CORPORATE NOTES AND BONDS . . . . . 935,031
(Cost $925,508) ----------
REPURCHASE AGREEMENTS - 11.16%
1,398,561 Chase Securities, Inc.
6.05%, due 7/03/95, dated 6/30/95,
Repurchase Price $1,399,267
(Collateralized by U.S. Treasury Note
7.50% due 1996; Total Par $1,400,000;
Market Value $1,429,750) . . . . . . . . 1,398,561
-----------
TOTAL REPURCHASE AGREEMENTS . . . . . . 1,398,561
(Cost $1,398,561) -----------
TOTAL INVESTMENTS - 99.45% . . . . . . . . . . . . . . . . 12,459,971
(Cost $11,141,377)** -----------
NET OTHER ASSETS AND LIABILITIES - 0.55% . . . . . . . . . 68,880
-----------
NET ASSETS - 100.00% . . . . . . . . . . . . . . . . . . . $ 12,528,851
===========
</TABLE>
- -------------------------------------------
* Non income producing security.
** Aggregate cost for Federal tax purposes.
+ Interest rate steps up periodically.
The interest rate shown reflects the rate
at period end.
ADR American Depository Receipts.
See Notes to Financial Statements.
13
<PAGE> 16
VIP HIGH QUALITY BOND FUND
THE GALAXY PORTFOLIO OF INVESTMENTS
VIP FUND JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
PAR VALUE (NOTE 2)
------------ -------------
<S> <C>
U.S. GOVERNMENT AND
AGENCY OBLIGATIONS - 61.05%
U.S. TREASURY BONDS - 22.49%
$ 100,000 7.63%, 02/15/07 . . . . . . . . . . . . $ 106,679
500,000 7.25%, 05/15/16 . . . . . . . . . . . . 531,190
850,000 7.50%, 11/15/16 . . . . . . . . . . . . 926,559
500,000 7.25%, 08/15/22 . . . . . . . . . . . . 533,459
----------
2,097,887
----------
U.S. TREASURY NOTES - 15.49%
250,000 4.75%, 10/31/98 . . . . . . . . . . . . 241,115
300,000 6.00%, 10/15/99 . . . . . . . . . . . . 300,303
100,000 6.38%, 01/15/00 . . . . . . . . . . . . 101,426
100,000 5.50%, 04/15/00 . . . . . . . . . . . . 98,059
200,000 6.38%, 08/15/02 . . . . . . . . . . . . 202,544
500,000 6.25%, 02/15/03 . . . . . . . . . . . . 501,755
----------
1,445,202
----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 10.66%
500,000 6.38%, 07/08/03 . . . . . . . . . . . . 485,980
500,000 7.55%, 06/10/04 . . . . . . . . . . . . 509,044
----------
995,024
----------
FEDERAL HOME LOAN MORTGAGE CORP. - 7.09%
200,000 6.80%, 09/18/02 . . . . . . . . . . . . 198,404
500,000 6.20%, 09/08/08 . . . . . . . . . . . . 462,629
----------
661,033
----------
U.S. GOVERNMENT BACKED BONDS - 5.32%
300,000 Tennessee Valley Authority, Series C
6.13%, 07/15/03 . . . . . . . . . . . . 292,125
200,000 Tennessee Valley Authority, Series F
6.88%, 08/01/02 . . . . . . . . . . . . 204,000
----------
496,125
----------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS . . . . . . . . . . . 5,695,271
(Cost $5,736,041) ----------
CORPORATE NOTES AND BONDS - 26.13%
300,000 Aetna Life & Casualty Co.
6.75%, 09/15/13 . . . . . . . . . . . . . 266,625
300,000 Associates Corp. of North America
5.25%, 03/30/00 . . . . . . . . . . . . . 285,375
100,000 Associates Corp. of North America
6.88%, 02/01/03 . . . . . . . . . . . . . 102,750
300,000 Coca-Cola Enterprises
8.50%, 02/01/22 . . . . . . . . . . . . . 341,625
50,000 Duke Power Co.
7.00%, 09/01/05 . . . . . . . . . . . . . 50,813
250,000 Duke Power Co.
8.75%, 03/01/21 . . . . . . . . . . . . . 275,000
300,000 General Electric Capital Corp.
5.50%, 11/01/01 . . . . . . . . . . . . . 283,500
250,000 International Business Machines Corp.
7.50%, 06/15/13 . . . . . . . . . . . . . 255,000
50,000 Mcdonald's Corp.
6.75%, 02/15/03 . . . . . . . . . . . . . 50,187
100,000 Norwest Financial, Inc.
7.00%, 01/15/03 . . . . . . . . . . . . . 101,875
50,000 Pacific Bell
6.25%, 03/01/05 . . . . . . . . . . . . . 47,813
300,000 Southwestern Bell Telephone Co.
5.75%, 09/01/04 . . . . . . . . . . . . . 277,125
100,000 Wal-Mart Stores, Inc.
6.50%, 06/01/03 . . . . . . . . . . . . . 99,375
----------
TOTAL CORPORATE NOTES AND BONDS 2,437,063
(Cost $2,455,275) ----------
REPURCHASE AGREEMENTS - 11.05%
1,031,237 Chase Securities
6.05%, due 7/03/95, dated 6/30/95,
Repurchase Price $1,031,756
(Collateralized by U.S. Treasury Note
7.50%, due 1996; Total Par $1,030,000;
Market Value $1,051,888) . . . . . . . . 1,031,237
----------
TOTAL REPURCHASE AGREEMENTS . . . . . . 1,031,237
(Cost $1,031,237) ----------
TOTAL INVESTMENTS - 98.23% . . . . . . . . . . . . . . . . 9,163,571
(Cost $9,222,553)** ----------
NET OTHER ASSETS AND LIABILITIES - 1.77% . . . . . . . . . 164,823
----------
NET ASSETS - 100.00% . . . . . . . . . . . . . . . . . . . $ 9,328,394
==========
</TABLE>
- -------------------------------------------
** Aggregate cost for Federal tax purposes.
See Notes to Financial Statements.
14
<PAGE> 17
THE GALAXY STATEMENTS OF ASSETS AND LIABILITIES
VIP FUND JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY MARKET EQUITY ASSET ALLOCATION HIGH QUALITY
FUND FUND FUND BOND FUND
------------- -------------- ----------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost . . . . . . . . . . . . . $ 14,278,257 $ 19,208,670 $ 9,742,816 $ 8,191,316
Repurchase agreements . . . . . . . . . . . . -- 3,476,465 1,398,561 1,031,237
Net unrealized appreciation (depreciation) . . -- 3,839,596 1,318,594 (58,982)
------------- ------------- ------------- -------------
Total investments at value . . . . . . . . 14,278,257 26,524,731 12,459,971 9,163,571
Cash . . . . . . . . . . . . . . . . . . . . . 2,753 -- -- 12
Receivable for investments sold . . . . . . . . . -- 54,648 -- --
Receivable for shares sold . . . . . . . . . . . -- 42,061 29,807 32,182
Interest and dividend receivables . . . . . . . . -- 29,432 59,570 148,176
Receivable from investment adviser (Note 4) . . . -- -- 5,152 --
Deferred organizational expense (Note 2) . . . . 8,448 8,288 8,484 8,341
------------- ------------- ------------- -------------
Total Assets . . . . . . . . . . . . . . . 14,289,458 26,659,160 12,562,984 9,352,282
------------- ------------- ------------- -------------
LIABILITIES:
Payable for investments purchased . . . . . . . . -- 1,182,613 -- --
Payable for shares repurchased . . . . . . . . . 83,567 -- 112 --
Advisory fee payable (Note 3 & 4) . . . . . . . . 1,468 15,317 -- 150
Payable to TSSG (Note 3 & 4) . . . . . . . . . . 4,413 12,865 13,825 5,856
Trustees' fees and expenses payable (Note 3) . . 831 831 831 831
Accrued expenses and other payables . . . . . . . 21,777 24,536 19,365 17,051
------------- ------------- ------------- -------------
Total Liabilities . . . . . . . . . . . . . 112,056 1,236,162 34,133 23,888
------------- ------------- ------------- -------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . $ 14,177,402 $ 25,422,998 $ 12,528,851 $ 9,328,394
============= ============= ============= =============
NET ASSETS CONSIST OF:
Par value (Note 5) . . . . . . . . . . . . . . . $ 14,177 $ 2,119 $ 1,098 $ 935
Paid-in capital in excess of par value . . . . . 14,163,121 21,778,456 11,386,227 9,589,713
Undistributed net investment income . . . . . . . 284 10,288 14,247 --
Accumulated net realized gain (loss) on
investments sold . . . . . . . . . . . . . . . (180) (207,461) (191,315) (203,272)
Net unrealized appreciation (depreciation) . . .
of investments . . . . . . . . . . . . . . . . -- 3,839,596 1,318,594 (58,982)
------------- ------------- ------------- -------------
TOTAL NET ASSETS . . . . . . . . . . . . . . . . . . $ 14,177,402 $ 25,422,998 $ 12,528,851 $ 9,328,394
============= ============= ============= =============
SHARES OF BENEFICIAL INTEREST OUTSTANDING . . . . . . 14,177,298 2,119,276 1,098,246 935,113
NET ASSET VALUE,
offering and redemption price per share
(Net Assets / Shares Outstanding) . . . . . . . . $ 1.00 $ 12.00 $ 11.41 $ 9.98
============= ============= ============= =============
</TABLE>
See Notes to Financial Statements.
15
<PAGE> 18
STATEMENTS OF OPERATIONS
THE GALAXY FOR THE SIX MONTHS ENDED JUNE 30, 1995
VIP FUND (UNAUDITED)
<TABLE>
<CAPTION>
MONEY MARKET EQUITY ASSET ALLOCATION HIGH QUALITY
FUND FUND FUND BOND FUND
------------- -------------- ----------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest (Note 2) . . . . . . . . . . . . . . . . $ 390,354 $ 195,589 $ 143,536 $ 294,055
Dividends (Note 2) . . . . . . . . . . . . . . . -- 104,597 74,740 35
----------- ----------- ----------- -----------
Total investment income . . . . . . . . . . . 390,354 300,186 218,276 294,090
----------- ----------- ----------- -----------
EXPENSES:
Investment advisory fee (Note 3) . . . . . . . . 26,045 81,898 40,821 23,235
Administration fee (Note 3) . . . . . . . . . . . 12,397 12,397 12,397 12,397
Custody fee . . . . . . . . . . . . . . . . . . . 6,494 4,637 5,082 3,740
Fund accounting fee (Note 3) . . . . . . . . . . 12,851 14,028 14,898 15,195
Legal fee (Note 3) . . . . . . . . . . . . . . . 9,186 13,039 6,510 5,934
Audit fee . . . . . . . . . . . . . . . . . . . . 5,148 5,148 5,148 5,148
Trustees' fees and expenses (Note 3) . . . . . . 1,837 1,837 1,837 1,837
Amortization of organization costs (Note 2) . . . 1,614 1,614 1,614 1,614
Reports to shareholders . . . . . . . . . . . . . 2,782 6,996 2,454 2,074
Registration fees . . . . . . . . . . . . . . . . 253 2,225 201 72
Insurance . . . . . . . . . . . . . . . . . . . . 592 535 437 394
Miscellaneous . . . . . . . . . . . . . . . . . . 176 176 176 176
----------- ----------- ----------- -----------
Total Expenses before
reimbursement/waiver . . . . . . . . . . . 79,375 144,530 91,575 71,816
Less: Reimbursement/waiver
(Notes 3 & 4) . . . . . . . . . . . . . . . (34,785) ( 6,749) (18,837) (37,271)
----------- ----------- ----------- -----------
Total Expenses net of reimbursement/
waiver . . . . . . . . . . . . . . . . . . 44,590 137,781 72,738 34,545
----------- ----------- ----------- -----------
NET INVESTMENT INCOME . . . . . . . . . . . . . . . . 345,764 162,405 145,538 259,545
----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Net realized gain (loss) on investments sold . . (26) ( 18,061) 2,180 (26,647)
Net change in unrealized appreciation
(depreciation) of investments . . . . . . . . -- 3,121,407 1,645,729 930,512
----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS . . . . . . . . . . . . . . . . (26) 3,103,346 1,647,909 903,865
----------- ----------- ----------- -----------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS . . . . . . . . . . . . . . . . . . . $ 345,738 $ 3,265,751 $ 1,793,447 $ 1,163,410
==========- =========== =========== ===========
</TABLE>
See Notes to Financial Statements.
16
<PAGE> 19
THE GALAXY
VIP FUND STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MONEY MARKET FUND EQUITY FUND
----------------------------------- -----------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31, JUNE 30, 1995 DECEMBER 31,
(UNAUDITED) 1994 (UNAUDITED) 1994
---------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD:. . . . . . . . . . $ 13,276,092 $ 10,863,791 $ 19,391,332 $ 12,908,871
------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income . . . . . . . . . . . . . . 345,764 480,223 162,405 346,429
Net realized gain (loss) on investments sold . . (26) (47) (18,061) (124,453)
Net change in unrealized appreciation
(depreciation) of investments . . . . . . . . -- -- 3,121,407 356,961
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . 345,738 480,176 3,265,751 578,937
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income . . . . . . . . . . . . . . (345,764) (479,939) (152,111) (346,423)
In excess of net investment income . . . . . . . -- -- -- (6)
Net realized gain on investments . . . . . . . . -- (284) -- --
Return of capital . . . . . . . . . . . . . . . . -- -- -- (267)
------------- ------------- ------------- -------------
Total Distributions . . . . . . . . . . . . . (345,764) (480,223) (152,111) (346,696)
------------- ------------- ------------- -------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares . . . . . . . . 4,779,822 11,407,186 3,276,689 8,162,524
Issued to shareholders in reinvestment
of dividends . . . . . . . . . . . . . . . . . 345,764 480,223 152,111 346,696
Costs of shares repurchased . . . . . . . . . . . (4,224,250) (9,475,061) (510,774) (2,259,000)
------------- ------------- ------------- -------------
Net increase (decrease) from share
transactions. . . . . . . . . . . . . . . . 901,336 2,412,348 2,918,026 6,250,220
------------- ------------- ------------- -------------
Net increase (decrease) in net assets . . . . 901,310 2,412,301 6,031,666 6,482,461
------------- ------------- ------------- -------------
NET ASSETS AT END OF PERIOD: . . . . . . . . . . . . $ 14,177,402 $ 13,276,092 $ 25,422,998 $ 19,391,332
============= ============= ============= =============
Accumulated undistributed net
investment income . . . . . . . . . . . . . . . . $ 284 $ 284 $ 10,288 $ (6)
============= ============= ============= =============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold . . . . . . . . . . . . . . . . . . . . . 4,779,822 11,407,186 287,723 791,455
Issued to shareholders in reinvestment
of dividends. . . . . . . . . . . . . . . . . 345,764 480,223 13,198 33,267
Repurchased. . . . . . . . . . . . . . . . . . . (4,224,250) (9,475,061) (45,659) (220,435)
------------- ------------- ------------- -------------
Net increase (decrease) in shares outstanding 901,336 2,412,348 255,262 604,287
============= ============= ============= =============
</TABLE>
See Notes to Financial Statements.
17
<PAGE> 20
THE GALAXY STATEMENTS OF CHANGES IN NET ASSETS
VIP FUND (CONTINUED)
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND HIGH QUALITY BOND FUND
----------------------------------- -----------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31, JUNE 30, 1995 DECEMBER 31,
(UNAUDITED) 1994 (UNAUDITED) 1994
---------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD:. . . . . . . . . . $ 10,571,573 $ 11,800,291 $ 8,011,781 $ 9,801,629
-------------- ------------- -------------- --------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment income . . . . . . . . . . . . . . 145,538 363,472 259,545 546,555
Net realized gain (loss) on investments sold . . 2,180 (193,495) (26,647) (176,625)
Net change in unrealized appreciation . . . . . .
(depreciation) of investments . . . . . . . . 1,645,729 (431,751) 930,512 (975,502)
-------------- ------------- -------------- --------------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . 1,793,447 (261,774) 1,163,410 (605,572)
-------------- ------------- -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income . . . . . . . . . . . . . . (131,291) (363,472) (259,545) (546,555)
Net realized gain on investments . . . . . . . . -- -- -- --
Return of capital . . . . . . . . . . . . . . . . -- (638) -- --
-------------- ------------- -------------- --------------
Total Distributions . . . . . . . . . . . . . (131,291) (364,110) (259,545) (546,555)
-------------- ------------- -------------- --------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares . . . . . . . . 1,755,962 3,054,961 987,411 2,118,130
Issued to shareholders in reinvestment
of dividends . . . . . . . . . . . . . . . . . 131,291 364,110 259,545 546,555
Costs of shares repurchased . . . . . . . . . . . (1,592,131) (4,021,905) (834,208) (3,302,406)
-------------- ------------- -------------- --------------
Net increase (decrease) from share
transactions. . . . . . . . . . . . . . . . 295,122 (602,834) 412,748 (637,721)
-------------- ------------- -------------- --------------
Net increase (decrease) in net assets . . . . 1,957,278 (1,228,718) 1,316,613 (1,789,848)
-------------- ------------- -------------- --------------
NET ASSETS AT END OF PERIOD: . . . . . . . . . . . . $ 12,528,851 $ 10,571,573 $ 9,328,394 $ 8,011,781
============== ============= ============== ==============
Accumulated undistributed net
investment income . . . . . . . . . . . . . . . . $ 14,247 $ -- $ -- $ --
============== ============= ============== ==============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold . . . . . . . . . . . . . . . . . . . . . 159,993 301,150 102,761 221,295
Issued to shareholders in reinvestment
of dividends. . . . . . . . . . . . . . . . . 12,011 36,287 27,240 58,399
Repurchased. . . . . . . . . . . . . . . . . . . (152,717) (400,957) (88,138) (356,260)
-------------- ------------- -------------- --------------
Net increase (decrease) in shares outstanding 19,287 (63,520) 41,863 (76,566)
============== ============= ============== ==============
</TABLE>
See Notes to Financial Statements.
18
<PAGE> 21
VIP MONEY MARKET FUND
THE GALAXY FINANCIAL HIGHLIGHTS
VIP FUND FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
JUNE 30, 1995 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1994 1993(A)
-------------- --------------- --------------
<S> <C> <C> <C>
Net Asset Value, Beginning of period . . . . . . . . $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------
Income from Investment Operations: . . . . . . . . .
Net investment income (B) . . . . . . . . . . . . 0.03 0.04 0.03
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . -- -- --
------------ ------------ ------------
Total from Investment Operations: . . . . . . 0.03 0.04 0.03
------------ ------------ ------------
Less Distributions:
Dividends from net investment income . . . . . . (0.03) (0.04) (0.03)
Distributions from net realized capital gains . . -- -- --
------------ ------------ ------------
Total Distributions: . . . . . . . . . . . . . (0.03) (0.04) (0.03)
------------ ------------ ------------
Net increase (decrease) in net asset value . . . . . -- -- --
------------ ------------ ------------
Net Asset Value, End of period . . . . . . . . . . . $ 1.00 $ 1.00 $ 1.00
============ ============ ============
Total Return . . . . . . . . . . . . . . . . . . . . 2.66%+ 3.89% 2.74%+
Ratios/Supplemental Data:
Net Assets, End of Period (000's) . . . . . . . . . . $ 14,177 $ 13,276 $ 10,864
Ratios to average net assets:
Net investment income . . . . . . . . . . . . . . 5.31%* 3.85% 3.00%*
Operating expenses (B) . . . . . . . . . . . . . 0.68%* 0.42% 0.13%*
</TABLE>
- ---------------------------------
* Annualized
+ Not annualized
(A) The Fund commenced operations on February 2, 1993.
(B) Net investment income (loss) per share and the annualized operating
expense ratios before waiver and reimbursement of fees by
the investment adviser and administrator for the six months ended
June 30, 1995, for the year ended December 31, 1994 and for the period
ended December 31, 1993 were $0.02 and 1.22%, $0.03 and 1.21%, and $0.01
and 2.00%, respectively.
See Notes to Financial Statements.
19
<PAGE> 22
VIP EQUITY FUND
THE GALAXY FINANCIAL HIGHLIGHTS
VIP FUND FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
JUNE 30, 1995 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1994 1993(A)
-------------- --------------- --------------
<S> <C> <C> <C>
Net Asset Value, Beginning of period . . . . . . . . $ 10.40 $ 10.25 $ 10.00
------------ ------------ ------------
Income from Investment Operations: . . . . . . . . .
Net investment income (B) . . . . . . . . . . . . 0.08 0.20 0.16
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . 1.60 0.15 0.25
------------ ------------ ------------
Total from Investment Operations: . . . . . . 1.68 0.35 0.41
------------ ------------ ------------
Less Distributions:
Dividends from net investment income . . . . . . (0.08) (0.20) (0.16)
Distributions from net realized capital gains . . -- -- --
------------ ------------ ------------
Total Distributions: . . . . . . . . . . . . . (0.08) (0.20) (0.16)
------------ ------------ ------------
Net increase (decrease) in net asset value . . . . . 1.60 0.15 0.25
------------ ------------ ------------
Net Asset Value, End of period . . . . . . . . . . . $ 12.00 $ 10.40 $ 10.25
============ ============ ============
Total Return . . . . . . . . . . . . . . . . . . . . 16.15%+ 3.47% 4.15%+
Ratios/Supplemental Data:
Net Assets, End of Period (000's) . . . . . . . . . . $ 25,423 $ 19,391 $ 12,909
Ratios to average net assets:
Net investment income . . . . . . . . . . . . . . 1.49%* 2.06% 2.23%*
Operating expenses (B) . . . . . . . . . . . . . 1.26%* 0.71% 0.20%*
Portfolio Turnover Rate . . . . . . . . . . . . . . . 2% 2% 5%
</TABLE>
- ---------------------------------
* Annualized
+ Not annualized
(A) The Fund commenced operations on January 11, 1993.
(B) Net investment income (loss) per share and the annualized operating
expense ratios before waiver and reimbursement of fees by the investment
adviser and administrator for the six months ended June 30, 1995, for the
year ended December 31, 1994 and for the period ended December 31, 1993
were $0.08 and 1.32%, $0.13 and 1.42%, and $(0.02) and 2.60%, respectively.
See Notes to Financial Statements.
20
<PAGE> 23
VIP ASSET ALLOCATION FUND
THE GALAXY FINANCIAL HIGHLIGHTS
VIP FUND FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
JUNE 30, 1995 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1994 1993(A)
-------------- --------------- --------------
<S> <C> <C> <C>
Net Asset Value, Beginning of period . . . . . . . . $ 9.80 $ 10.33 $ 10.00
------------ ------------ ------------
Income from Investment Operations:
Net investment income (B) . . . . . . . . . . . 0.14 0.31 0.18
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . 1.60 (0.53) 0.35
------------ ------------ ------------
Total from Investment Operations: . . . . . . 1.74 (0.22) 0.53
------------ ------------ ------------
Less Distributions:
Dividends from net investment income . . . . . . (0.13) (0.31) (0.18)
Distributions from net realized capital gains . . -- -- (0.02)
------------ ------------ ------------
Total Distributions: . . . . . . . . . . . . . (0.13) (0.31) (0.20)
------------ ------------ ------------
Net increase (decrease) in net asset value . . . . . 1.61 (0.53) 0.33
------------ ------------ ------------
Net Asset Value, End of period . . . . . . . . . . . $ 11.41 $ 9.80 $ 10.33
============ ============ ============
Total Return . . . . . . . . . . . . . . . . . . . . 17.79%+ (2.15)% 5.33%+
Ratios/Supplemental Data:
Net Assets, End of Period (000's) . . . . . . . . . . $ 12,529 $ 10,572 $ 11,800
Ratios to average net assets:
Net investment income . . . . . . . . . . . . . . 2.67%* 3.02% 3.01%*
Operating expenses (B) . . . . . . . . . . . . . 1.34%* 0.78% 0.26%*
Portfolio Turnover Rate . . . . . . . . . . . . . . . 18% 28% 10%
</TABLE>
- ----------------------------------------------------
* Annualized
+ Not annualized
(A) The Fund commenced operations on February 6, 1993.
(B) Net investment income (loss) per share and the annualized operating
expense ratios before waiver and reimbursement of fees by the investment
adviser and administrator for the six months ended June 30, 1995, for the
year ended December 31, 1994 and for the period ended December 31, 1993
were $0.12 and 1.68%, $0.22 and 1.68%, and $0.01 and 3.11%, respectively.
See Notes to Financial Statements.
21
<PAGE> 24
VIP HIGH QUALITY BOND FUND
THE GALAXY FINANCIAL HIGHLIGHTS
VIP FUND FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
JUNE 30, 1995 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1994 1993(A)
-------------- --------------- --------------
<S> <C> <C> <C>
Net Asset Value, Beginning of period . . . . . . . . $ 8.97 $ 10.11 $ 10.00
------------ ------------ ------------
Income from Investment Operations:
Net investment income (B) . . . . . . . . . . . . 0.29 0.56 0.47
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . . . 1.01 (1.14) 0.12
------------ ------------ ------------
Total from Investment Operations: . . . . . . 1.30 (0.58) 0.59
------------ ------------ ------------
Less Distributions:
Dividends from net investment income . . . . . . (0.29) (0.56) (0.47)
Distributions from net realized capital gains . . -- -- (0.01)
------------ ------------ ------------
Total Distributions: . . . . . . . . . . . . . (0.29) (0.56) (0.48)
------------ ------------ ------------
Net increase (decrease) in net asset value . . . . . 1.01 (1.14) 0.11
------------ ------------ ------------
Net Asset Value, End of period . . . . . . . . . . . $ 9.98 $ 8.97 $ 10.11
============ ============ ============
Total Return . . . . . . . . . . . . . . . . . . . . 14.67%+ (5.85)% 6.04%+
Ratios/Supplemental Data:
Net Assets, End of Period (000's) . . . . . . . . . . $ 9,328 $ 8,012 $ 9,802
Ratios to average net assets:
Net investment income . . . . . . . . . . . . . . 6.14%* 5.90% 5.30%*
Operating expenses (B) . . . . . . . . . . . . . 0.82%* 0.57% 0.22%*
Portfolio Turnover Rate . . . . . . . . . . . . . 0% 32% 7%
</TABLE>
- ---------------------------------------------------
* Annualized
+ Not annualized
(A) The Fund commenced operations on January 21, 1993.
(B) Net investment income (loss) per share and the annualized operating expense
ratios before waiver and reimbursement of fees by the investment adviser
and administrator for the fiscal six months ended June 30, 1995, for the
year ended December 31, 1994, and for the period ended December 31, 1993
were $0.25 and 1.70%, and $0.46 and 1.63%,, and $0.23 and 2.92%,
respectively.
See Notes to Financial Statements.
22
<PAGE> 25
THE GALAXY
VIP FUND NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION
The Galaxy VIP Fund, a Massachusetts business trust, (the "Trust"), is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end, diversified, management investment company for the
purpose of providing a vehicle for the investment of assets of various separate
accounts established exclusively for the purpose of providing an investment
vehicle for variable annuity contracts and variable life insurance policies.
Currently, shares of the Trust are offered only to separate accounts funding
variable annuity contracts issued by American Skandia Life Assurance
Corporation and its affiliated life assurance companies. The accompanying
financial statements and financial highlights are those of the Money Market,
Equity, Asset Allocation and High Quality Bond Funds (individually a "Fund,"
collectively, the "Funds"), the four managed investment portfolios offered by
the Trust as of the date of this report.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies in
conformity with generally accepted accounting principles consistently followed
by the Trust in the preparation of its financial statements.
PORTFOLIO VALUATION: Investments in securities which are traded on a
recognized stock exchange are valued at the last sale price on the securities
exchange on which such securities are primarily traded, or at the last sale
price on the national securities market. Also, securities traded on
over-the-counter markets are valued at the last bid price. Short-term
obligations that mature in 60 days or less are valued at amortized cost.
Corporate debt securities and debt securities of U.S. issuers (other than
short-term investments), including municipal securities, are valued by an
independent pricing service approved by the Board of Trustees. When, in the
judgement of the service, quoted bid prices for securities are readily
available and are representative of the bid side of the market, these
investments are valued at the mean between quoted bid prices and asked prices.
Investments with prices that cannot be readily obtained, if any, are carried at
fair value as determined by the service based on methods which include
consideration of yields or prices of bonds of comparable quality, coupon
maturity and type, indications as to values from dealers, and general market
conditions. The investments of the Money Market Fund are valued utilizing the
amortized cost valuation method permitted in accordance with Rule 2a-7 under
the 1940 Act. This method involves valuing a portfolio security initially at
its cost and thereafter assuming a constant amortization to maturity of any
discount or premium. All other securities and assets are appraised at their
fair value as determined in good faith under consistently applied procedures
established by and under the general supervision of the Board of Trustees.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions
are recorded on a trade date basis. Net realized gains and losses on sales of
securities are determined by the identified cost method. Interest income is
recorded on the accrual basis. Dividend income is recorded on the ex-dividend
date.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net
investment income are declared daily and paid monthly with respect to the Money
Market and High Quality Bond Funds, and declared and paid quarterly with
respect to the Equity and Asset Allocation Funds. Net realized capital gains,
if any, are distributed at least annually.
23
<PAGE> 26
THE GALAXY NOTES TO FINANCIAL STATEMENTS (CONTINUED)
VIP FUND (UNAUDITED)
Income distributions and capital gains distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
FEDERAL INCOME TAXES: The Trust treats each Fund as a separate entity
for Federal income tax purposes. Each Fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended. By so qualifying, each Fund will not be subject to Federal
income taxes to the extent it distributes substantially all of its taxable or
tax-exempt income, if any, for the tax year ending December 31. In addition,
by distributing during each calendar year substantially all of its net
investment income, capital gains and certain other amounts, if any, each Fund
will not be subject to a Federal excise tax. Therefore, no Federal income tax
provision is required.
EXPENSES: The Trust accounts separately for the assets, liabilities
and operations of each Fund. Expenses directly attributable to a Fund are
charged to the Fund, while expenses which are attributable to more than one
Fund of the Trust are allocated among the respective Funds.
ORGANIZATION COSTS: Each Fund bears all costs in connection with its
organization, including the fees and expenses of registering and qualifying its
shares for distribution under Federal and state securities laws. All such costs
are being amortized using the straight-line method over a period of five years
beginning with the commencement of each Fund's operation.
3. INVESTMENT ADVISORY, ADMINISTRATION AND
OTHER RELATED PARTY TRANSACTIONS
The Trust and Fleet Investment Advisors Inc. (the "Investment
Adviser"), an indirect subsidiary of Fleet Financial Group, Inc., are parties
to an investment advisory agreement under which the Investment Adviser provides
services for a fee, computed daily and paid monthly, at an annual rate based
upon the following percentages of average daily net asset value: 0.40% for the
Money Market Fund, 0.75% for the Equity and Asset Allocation Funds and 0.55%
for the High Quality Bond Fund.
Effective March 31, 1995, the Trust and The Shareholder Services
Group, Inc., doing business as 440 Financial ("TSSG"), a wholly-owned
subsidiary of First Data Corporation ("First Data"), are parties to an
administration agreement under which TSSG (the "Administrator") provides
services for a fee, computed daily and paid monthly, at the annual rate of
0.085% of the first $1 billion of the combined average daily net assets of the
Funds, plus 0.078% of the next $1.5 billion of the combined average daily net
assets of the Funds, plus 0.073% of the combined average daily net assets of
the Funds in excess of $2.5 billion. The minimum aggregate annual fee payable
for administration of the Funds is $100,000. In addition, TSSG receives a
separate annual fee from each Fund for certain fund accounting services. Prior
to March 31, 1995, the administration and fund accounting services described
above were provided by 440 Financial Group of Worcester, Inc., a wholly-owned
subsidiary of State Mutual Life Assurance of America ("State Mutual"), for the
same annual fees. On that date, TSSG acquired substantially all the assets of
440 Financial Group of Worcester, Inc.
Effective March 31, 1995, 440 Financial Distributors, Inc. ("the Distributor"),
a wholly-owned subsidiary of TSSG and an indirect wholly-owned subsidiary of
First Data, acts as the exclusive distributor of the Trust's shares. Prior to
March 31, 1995, the Distributor was a wholly-owned subsidiary of 440 Financial
Group of Worcester, Inc. and an indirect
24
<PAGE> 27
THE GALAXY NOTES TO FINANCIAL STATEMENTS (CONTINUED)
VIP FUND (UNAUDITED)
wholly-owned subsidiary of State Mutual. Prior to March 1, 1994, Allmerica
Investments, Inc., a wholly-owned subsidiary of State Mutual, served as the
Trust's distributor.
Certain officers of the Trust are also officers of the Administrator
and/or Distributor. Such officers receive no compensation from the Trust for
serving in their respective roles. No officer, director or employee of the
Investment Adviser serves as an officer, Trustee or employee of the Trust.
Prior to June 1, 1995, each Trustee was entitled to receive $2,000 per annum
plus certain other fees for attending or participating in meetings as well as
reimbursement for expenses incurred in attending meetings. The Chairman of the
Board of Trustees is entitled to an additional annual fee of $1,000 and the
Trust's President and Treasurer each receive an additional annual fee of $500
for their services in these capacities. Effective June 1, 1995, each Trustee
is entitled to receive $3,000 per annum plus certain other fees for attending
or participating in meetings as well as reimbursement for expenses incurred in
attending meetings.
Expenses for the six months ended June 30, 1995 include legal fees
paid to Drinker Biddle & Reath. A partner of that firm is Secretary to the
Trust.
At June 30, 1995 with the exception of the initial shares, the
separate accounts owned all of the outstanding shares of the four Funds as
investment accounts for the life assurance policies offered by American Skandia
Life Assurance Corporation.
4. WAIVER OF FEES AND REIMBURSEMENT OF
EXPENSES
The Investment Adviser and Administrator may waive all or a portion of
the fees payable to them by the Funds, either voluntarily or pursuant to
applicable statutory expense limitations. The Investment Adviser and
Administrator may, at their discretion, revise or discontinue the voluntary
limitations.
For the six months ended June 30, 1995, the Investment Adviser and
Administrator voluntarily waived advisory, administration, fund accounting and
custody fees as follows:
<TABLE>
<CAPTION>
FEES WAIVED BY FEES WAIVED BY
FUND INVESTMENT ADVISER ADMINISTRATOR
- ----------------------------------------------------------------------
<S> <C> <C>
Money Market $ 16,278 $ 16,709
Equity -- 806
Asset Allocation 365 2,349
High Quality Bond 16,856 17,494
</TABLE>
The Investment Adviser may, from time to time, agree to reimburse a
Fund for expenses above a specified percentage of average net assets. For the
six months ended June 30, 1995, the Investment Adviser voluntarily agreed to
reimburse the Money Market, Equity, Asset Allocation, and High Quality Bond
Funds in the amount of $1,798, $5,943, $16,123 and $2,921, respectively.
5. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust authorizes the Trustees to issue an
unlimited number of shares of beneficial interest, each with a par value of
$0.001. Shares of the Trust are currently classified into four classes of
shares including: Class A - Money Market Fund; Class B - Equity Fund; Class C -
Asset Allocation Fund; and Class D - High Quality Bond Fund. Each share
represents an equal proportionate interest in the respective Fund, bears the
same fees and expenses and is entitled to such dividends and distributions of
income earned as are declared at the discretion of the Trust's Board of
Trustees. Shareholders are entitled to one vote for each full share held and
will vote in the aggregate and not by class, except as otherwise expressly
required by law or when the Board of Trustees determines that the matter to be
voted on affects only the interests of shareholders of a particular class.
25
<PAGE> 28
THE GALAXY NOTES TO FINANCIAL STATEMENTS (CONTINUED)
VIP FUND (UNAUDITED)
6. PURCHASES AND SALES OF SECURITIES
The cost of purchases and proceeds from sales of securities, excluding
short-term investments, for the six months ended June 30, 1995, were as
follows:
<TABLE>
<CAPTION>
PURCHASES SALES
--------------------------------------------------------------------------
FUND OTHER GOVERNMENT OTHER GOVERNMENT
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Equity $ 2,188,550 $ -- $ 275,333 $ --
Asset Allocation 840,678 1,022,918 1,869,866 1,095,258
High Quality Bond -- -- 556,231 --
</TABLE>
The aggregate gross unrealized appreciation and depreciation, net
unrealized appreciation (depreciation) and cost for all securities, as computed
on a Federal income tax basis, at June 30, 1995 for each Fund is as follows:
<TABLE>
<CAPTION>
FUND APPRECIATION (DEPRECIATION ) NET COST
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Equity $ 4,157,633 $ (318,037) $ 3,839,596 $ 22,685,135
Asset Allocation 1,502,861 (184,267) 1,318,594 11,141,377
High Quality Bond 164,610 (223,592) (58,982) 9,222,553
</TABLE>
7. CAPITAL LOSS CARRYFORWARD
At December 31, 1994, the following funds had capital loss
carryforwards:
<TABLE>
<CAPTION>
Fund Amount Expiration
- ---- ------ ----------
<S> <C> <C>
Money Market $ 154 2002
Equity 64,947 2001
124,453 2002
Asset Allocation 142,569 2002
High Quality Bond 155,797 2002
</TABLE>
26
<PAGE> 29
AMERICAN SKANDIA TRUST
SEMI-ANNUAL REPORT
JUNE 30, 1995
(UNAUDITED)
INVESCO EQUITY INCOME PORTFOLIO
FOUNDERS CAPITAL APPRECIATION PORTFOLIO
T. ROWE PRICE INTERNATIONAL EQUITY PORTFOLIO
AST SCUDDER INTERNATIONAL BOND PORTFOLIO
27
<PAGE> 30
AMERICAN SKANDIA TRUST
INVESCO EQUITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C>
COMMON STOCK -- 65.1%
AEROSPACE -- 2.2%
Boeing Co. ...................... 17,000 $ 1,064,625
Lockheed Martin Corp. ........... 20,000 1,262,500
----------
2,327,125
----------
AUTOMOBILES -- 0.5%
Chrysler Corp. .................. 10,000 478,750
----------
AUTOMOTIVE PARTS-EQUIPMENT -- 2.2%
Borg Warner Automotive Corp. .... 40,000 1,140,000
Eaton Corp. ..................... 20,000 1,162,500
----------
2,302,500
----------
BANKING -- 2.9%
Bank of New York Co., Inc. ...... 20,000 807,500
Chase Manhattan Corp. ........... 30,000 1,410,000
Citicorp......................... 15,000 868,125
----------
3,085,625
----------
BEVERAGES -- 1.3%
Seagram Co. LTD. ................ 40,000 1,385,000
----------
BROADCASTING -- 1.0%
CBS, Inc. ....................... 15,000 1,005,000
----------
CHEMICALS -- 3.3%
Dupont (E.I.) de Nemours......... 10,000 687,500
Lawter International, Inc. ...... 100,000 1,200,000
PPG Industries, Inc. ............ 15,000 645,000
Vigoro Corp. .................... 22,000 913,000
----------
3,445,500
----------
COMPUTERS -- 3.2%
Apple Computer, Inc. ............ 15,000 696,563
Honeywell, Inc. ................. 25,000 1,078,125
International Business
Machines Corp. ................ 17,000 1,632,000
----------
3,406,688
----------
COMPUTER SERVICES & SOFTWARE -- 0.6%
Computer Associates
International.................. 10,000 677,500
----------
CONGLOMERATES -- 0.5%
Tenneco, Inc. ................... 11,000 506,000
----------
CONSUMER STAPLES-TOBACCO -- 1.1%
Philip Morris Cos., Inc. ........ 15,000 1,115,625
----------
ELECTRICAL EQUIPMENT -- 1.3%
General Electric Co. ............ 17,000 958,375
General Signal Corp. ............ 11,000 437,250
----------
1,395,625
----------
ELECTRONICS -- 1.5%
Intel Corp. ..................... 25,000 1,582,813
----------
ENGINEERING & CONSTRUCTION -- 0.7%
Fluor Corp. ..................... 14,000 728,000
----------
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C>
ENTERTAINMENT -- 1.8%
Time Warner, Inc. ............... 25,000 $ 1,028,125
Walt Disney Co. ................. 15,000 834,375
----------
1,862,500
----------
FINANCIAL SERVICES -- 3.2%
Beneficial Corp. ................ 30,000 1,320,000
H. & R. Block, Inc. ............. 30,000 1,233,750
PMI Group, Inc. ................. 20,000 867,500
----------
3,421,250
----------
FOODS -- 3.6%
CPC International, Inc. ......... 12,000 741,000
General Mills, Inc. ............. 16,000 822,000
Heinz, H.J. Co. ................. 20,000 887,500
Kellogg Co. ..................... 10,000 713,750
Quaker Oats...................... 20,000 657,500
----------
3,821,750
----------
GOLD MINING -- 0.3%
Newmont Mining Corp. ............ 7,994 334,749
----------
HOTELS/MOTELS -- 1.5%
Hilton Hotels Corp. ............. 23,000 1,615,750
----------
HOUSEHOLD FURNITURE &
APPLIANCES -- 0.7%
Armstrong World Industries,
Inc. .......................... 15,000 751,875
----------
INSURANCE -- 2.4%
Allmerica Property & Casualty,
Inc. .......................... 70,000 1,548,750
Ohio Casualty Corp. ............. 30,000 945,000
----------
2,493,750
----------
MACHINERY & HEAVY EQUIPMENT -- 2.3%
Caterpillar, Inc. ............... 10,000 642,500
Cummins Engine, Inc. ............ 10,000 436,250
Deere & Co. ..................... 10,000 856,250
Ingersoll-Rand Co. .............. 12,000 459,000
----------
2,394,000
----------
MANUFACTURING -- 5.5%
Allied-Signal, Inc. ............. 18,000 801,000
Eastman Kodak Co. ............... 25,000 1,515,625
Minnesota Mining &
Manufacturing Co. ............. 20,000 1,145,000
Trinova Corp. ................... 20,000 700,000
Tyco International LTD. ......... 15,000 810,000
Whitman Corp. ................... 40,000 775,000
----------
5,746,625
----------
MEDICAL -- 0.7%
Baxter International, Inc. ...... 20,000 727,500
----------
METALS & MINING -- 0.7%
ASARCO, Inc. .................... 25,000 762,500
----------
</TABLE>
28
<PAGE> 31
AMERICAN SKANDIA TRUST
INVESCO EQUITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C>
MINING -- 1.1%
Potash Corp. of Saskatchewan,
Inc. .......................... 20,000 $ 1,117,500
----------
NATURAL GAS -- 0.3%
El Paso Natural Gas Co. ......... 12,000 342,000
----------
OIL -- 4.2%
Amoco Corp. ..................... 14,000 932,750
Apache Corp. .................... 13,700 375,038
Atlantic Richfield Co. .......... 8,000 878,000
Chevron Corp. ................... 20,000 932,500
Exxon Corp. ..................... 12,000 847,500
Mobil Corp. ..................... 5,000 480,000
----------
4,445,788
----------
OIL EQUIPMENT & SERVICES -- 2.4%
Dresser Industries, Inc. ........ 35,000 778,750
Halliburton Co. ................. 30,000 1,072,500
Schlumberger LTD. ............... 11,000 683,375
----------
2,534,625
----------
PHARMACEUTICAL -- 3.1%
Abbott Laboratories.............. 20,000 810,000
American Home Products Corp. .... 12,000 928,500
Upjohn Co. ...................... 40,000 1,515,000
----------
3,253,500
----------
PUBLISHING -- 1.0%
Donnelley & Sons Co., R.R. ...... 30,000 1,080,000
----------
RAILROADS -- 1.2%
Kansas City Southern Industries,
Inc. .......................... 20,000 745,000
Union Pacific Corp. ............. 9,000 498,375
----------
1,243,375
----------
RETAIL MERCHANDISING -- 0.7%
Sears Roebuck & Co. ............. 12,000 718,500
----------
RETAIL SPECIALTY -- 2.2%
Jostens, Inc. ................... 30,000 637,500
Limited, Inc. ................... 30,000 660,000
Melville Corp. .................. 30,000 1,027,500
----------
2,325,000
----------
SURFACE TRANSPORTATION -- 0.3%
Overseas Shipholding Group,
Inc. .......................... 17,000 352,750
----------
TELEPHONES -- 3.6%
AT&T Corp. ...................... 25,000 1,328,125
Bell Atlantic Corp. ............. 10,000 560,000
NYNEX Corp. ..................... 15,000 603,750
U.S. West, Inc. ................. 30,000 1,248,750
----------
3,740,625
----------
TOTAL COMMON STOCK
(COST $61,248,053)................. 68,527,663
----------
PREFERRED STOCK -- 0.7%
GOLD MINING
Amax Gold, Inc. $3.75 Cl-B PFD.
(COST $750,000)................ 15,000 723,750
----------
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C>
AMERICAN DEPOSITORY RECEIPTS -- 0.6%
TELECOMMUNICATIONS
Cable and Wireless
(COST $615,075)................ 30,000 $ 615,000
----------
</TABLE>
<TABLE>
<CAPTION>
PAR
MATURITY (000)
-------- ------
<S> <C> <C> <C>
CORPORATE BONDS -- 13.5%
AIRLINES -- 0.5%
Delta Air Lines
9.30%................... 01/02/11 $ 500 570,067
------------
AUTOMOBILES & RELATED -- 0.3%
Auburn Hills Trust
12.00%.................. 05/01/20 250 364,063
------------
BROADCASTING -- 1.5%
Act III Broadcasting, Inc.
9.63%................... 12/15/03 500 491,250
Allbritton Communications
Co. Senior Subordinate
Debenture
11.50%.................. 08/15/04 500 531,250
SCI Television, Inc.
Senior Notes
11.00%.................. 06/30/05 500 521,875
------------
1,544,375
------------
BUILDING & BUILDING
SUPPLIES -- 1.2%
USG Corp.
9.25%................... 09/15/01 600 604,500
8.75%................... 03/01/17 750 695,625
------------
1,300,125
------------
CABLE TELEVISION -- 1.4%
Century Communications
9.50%................... 03/01/05 500 503,750
CF Cable TV, Inc.
11.63%.................. 02/15/05 250 266,250
Jones Intercable, Senior
Subordinate Debenture
10.50%.................. 03/01/08 250 264,688
Viacom, Inc., Subordinate
Debenture
8.00%................... 07/07/06 500 487,500
------------
1,522,188
------------
</TABLE>
29
<PAGE> 32
AMERICAN SKANDIA TRUST
INVESCO EQUITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ------ ------------
<S> <C> <C> <C>
CHEMICALS -- 1.2%
Borden Chemicals &
Plastics
9.50%................... 05/01/05 $ 500 $ 507,500
Rexene Corp.
11.75%.................. 12/01/04 250 267,188
Sifto Canada, Inc.
8.50%................... 07/15/00 500 474,375
------------
1,249,063
------------
CONSUMER PRODUCTS -- 0.5%
Philip Morris Cos., Inc.
9.80%................... 12/15/98 500 508,125
------------
FINANCIAL -- 1.9%
Associates Corp. of North
America
8.55%................... 07/15/09 425 490,344
Chrysler Financial Corp.
6.50%................... 06/15/98 500 500,000
General Motors Acceptance
Corp.
7.13%................... 06/01/99 500 508,750
Westinghouse Credit Corp.
8.88%................... 06/14/14 500 528,125
------------
2,027,219
------------
FOREIGN GOVERNMENT -- 0.6%
Province of Newfoundland
9.00%................... 06/01/19 500 593,125
------------
GAMING -- 0.5%
GNS Finance Corp.
9.25%................... 03/15/03 500 525,625
------------
HEALTHCARE -- 0.7%
Hillhaven Corp.
10.13%.................. 09/01/01 250 255,938
National Medical
Enterprises
9.63%................... 09/01/02 500 531,250
------------
787,188
------------
PAPER & PAPER PRODUCTS -- 0.5%
Repap New Brunswick
10.63%.................. 04/15/05 500 507,500
------------
PUBLISHING -- 0.8%
News America Holdings
8.50%................... 02/23/25 250 272,813
Valassis Communications
9.55%................... 12/01/03 500 555,625
------------
828,438
------------
RECREATIONAL -- 0.5%
Royal Caribbean Cruises
Note
11.38%.................. 05/15/02 $ 250 $ 274,063
United Artists Theatre
11.50%.................. 05/01/02 175 187,469
------------
461,532
------------
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ------ ------------
<S> <C> <C> <C>
TELECOMMUNICATIONS -- 1.2%
Allnet Communication
Services, Inc.
9.00%................... 05/15/03 750 802,500
Centennial Cellular,
Senior Notes
8.88%................... 11/01/01 500 485,000
------------
1,287,500
------------
UTILITIES -- 0.2%
Commonwealth Edison Corp.
6.38%................... 10/01/98 175 174,781
------------
TOTAL CORPORATE BONDS
(COST $13,671,728).......... 14,250,914
------------
ZERO COUPON BONDS -- 1.7%
CABLE TELEVISION -- 0.5%
Marcus Cable Operating Co.
6.00%................... 08/01/99 900 571,500
------------
GAMING -- 0.2%
Resorts International
7.70%................... 06/30/00 250 222,500
------------
BEVERAGES -- 1.0%
Dr. Pepper/Seven-Up Cos.
1.71%................... 11/01/02 1,125 997,031
------------
TOTAL ZERO COUPON BONDS
(COST $1,774,811)........... 1,791,031
------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS -- 7.5%
FEDERAL FARM CREDIT
BANK -- 0.5%
6.65%................... 05/01/96 500 502,930
------------
FEDERAL HOME LOAN MORTGAGE
CORP. -- 4.6%
6.50%................... 01/01/00 1,000 985,620
7.50%................... 07/01/09 942 958,321
7.00%................... 04/01/24 995 980,127
7.00%................... 07/01/24 974 958,745
8.00%................... 12/01/24 992 1,011,623
------------
4,894,436
------------
</TABLE>
30
<PAGE> 33
AMERICAN SKANDIA TRUST
INVESCO EQUITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ------ ------------
<S> <C> <C> <C>
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION -- 1.9%
7.50%................... 10/15/23 $1,963 $ 1,975,938
------------
TENNESSEE VALLEY AUTHORITY
NOTES -- 0.5%
6.82%................... 05/19/97 500 500,000
------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS
(COST $7,571,488).................... 7,873,304
------------
U.S. TREASURY NOTES -- 6.1%
7.75%................... 11/30/99 1,000 1,066,814
6.75%................... 04/30/00 1,500 1,545,720
6.25%................... 05/31/00 1,000 1,011,562
5.88%................... 02/15/04 750 732,390
6.50%................... 05/15/05 2,000 2,043,580
------------
TOTAL U.S. TREASURY NOTES
(COST $6,285,443).................... 6,400,066
------------
COMMERCIAL PAPER -- 2.8%
General Motors
Acceptance Corp.
6.03%
(COST $2,997,993)..... 07/05/95 3,000 2,997,993
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
SHORT TERM INVESTMENTS -- 3.2%
Temporary Investment Cash
Fund......................... 1,665,584 $ 1,665,584
Temporary Investment Fund...... 1,665,583 1,665,583
------------
(COST $3,331,167)............ 3,331,167
------------
TOTAL INVESTMENTS
(COST $98,245,758*) -- 101.2%.... 106,510,888
LIABILITIES IN EXCESS OF
OTHER ASSETS -- (1.2%)........... (1,222,371)
------------
NET ASSETS -- 100%................. $105,288,517
===========
The aggregate unrealized appreciation (depreciation) on a tax
basis is
as follows:
Gross appreciation......................... $ 8,745,500
Gross depreciation......................... (480,370)
------------
Net appreciation........................... $ 8,265,130
===========
</TABLE>
- --------------------------------------------------------------------------------
* Also cost for Federal income tax purposes.
See Notes to Financial Statements.
31
<PAGE> 34
AMERICAN SKANDIA TRUST
FOUNDERS CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
COMMON STOCK -- 84.0%
AUTO-PARTS/EQUIPMENT -- 0.6%
Tops Source Technologies,
Inc.*......................... 46,000 $ 319,125
-----------
BROADCASTING -- 0.5%
Comcast U.K. Cable Partners*.... 15,000 241,875
-----------
BROADCASTING & PUBLISHING -- 1.0%
SFX Broadcasting Cl-A........... 18,700 500,225
-----------
BUILDING & BUILDING SUPPLIES -- 2.1%
Cameron Ashley, Inc.*........... 20,000 265,000
Harsco Corp. ................... 15,000 791,250
-----------
1,056,250
-----------
BUSINESS SERVICES -- 2.1%
Insurance Auto Auctions,
Inc.*......................... 25,000 731,250
Norrell Corp. .................. 17,000 323,000
-----------
1,054,250
-----------
COMMUNICATION EQUIPMENT -- 1.9%
Anadigics, Inc.*................ 17,250 336,375
Tellabs, Inc.*.................. 12,000 577,500
-----------
913,875
-----------
COMPUTERS -- 13.4%
Adobe Systems, Inc. ............ 13,000 754,000
Alantec Corp.*.................. 14,000 479,500
Cerner Corp.*................... 6,000 367,500
HCIA, Inc.*..................... 8,000 250,000
Informix Corp.*................. 19,500 494,812
Network General Corp.*.......... 9,000 245,250
Opti, Inc.*..................... 55,750 1,268,312
Parametric Technology Corp.*.... 14,000 696,500
Pri Automation, Inc. ........... 15,000 491,250
Pyxis Corp.*.................... 18,000 407,250
Sterling Software, Inc.*........ 21,000 808,500
Stormedia Inc. ................. 9,750 307,123
-----------
6,569,997
-----------
COMPUTER SOFTWARE & SERVICES -- 4.2%
Arcsys, Inc.*................... 12,600 428,400
Broadway & Sey*................. 16,150 335,113
Dendrite International, Inc. ... 19,125 308,391
Eagle Point Software Corp. ..... 32,200 547,400
Trident Microsystems, Inc.*..... 21,875 453,906
-----------
2,073,210
-----------
CONSUMER GOODS & SERVICES -- 1.1%
Quicksilver, Inc.*.............. 20,000 525,000
-----------
DRUGS -- 1.4%
Watson Pharmaceuticals*......... 17,275 673,725
-----------
ELECTRICAL EQUIPMENT -- 2.6%
Microchip Technology, Inc.*..... 26,000 945,750
Sanmina*........................ 9,000 342,000
-----------
1,287,750
-----------
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
ELECTRONICS -- 9.0%
Alliance Semiconductor Corp. ... 20,000 $ 980,000
Altera Corp. ................... 14,100 609,825
DSP Group, Inc.*................ 24,000 600,375
LAM Research Corp.*............. 10,000 640,000
LSI Logic Corp.*................ 20,000 782,500
Orbit Semiconductor, Inc. ...... 23,800 505,750
Tower Semiconductor LTD. ....... 11,250 326,250
-----------
4,444,700
-----------
ENTERTAINMENT -- 1.9%
Anchor Gaming................... 16,375 364,344
Movie Gallery*.................. 8,000 280,500
WMS Industries, Inc.*........... 16,000 314,000
-----------
958,844
-----------
FINANCIAL -- 1.1%
Banco Latinoamericano de
Exportaciones, SA*............ 4,000 132,500
Mercury Finance Co. ............ 20,000 385,000
-----------
517,500
-----------
FOODS -- 0.9%
General Nutrition Center,
Inc.*......................... 12,000 421,500
-----------
FUNERAL SERVICES -- 1.7%
Loewen Group, Inc. ............. 23,000 819,375
-----------
HEALTHCARE -- 0.5%
Healthsource, Inc.*............. 7,000 245,000
-----------
HOME FURNISHINGS/HOUSEWARES -- 1.7%
Catalina Lighting, Inc.......... 22,150 127,363
Williams-Sonoma, Inc.*.......... 35,000 770,000
-----------
897,363
-----------
HOTEL/GAMING -- 1.7%
Trump Hotels & Casino Resort*... 61,700 825,238
-----------
INSURANCE -- 1.0%
HCC Insurance Holdings*......... 18,000 468,000
-----------
LEISURE TIME -- 0.8%
Golf Enterprises, Inc.*......... 30,000 370,313
-----------
MANUFACTURING -- 5.3%
Asyst Technologies, Inc.*....... 25,000 928,125
Authentic Fitness Corp. ........ 40,000 670,000
Bolle America, Inc.*............ 24,000 159,000
Plantronics*.................... 14,000 374,500
Wolverine World Wide, Inc. ..... 22,500 466,875
-----------
2,598,500
-----------
</TABLE>
32
<PAGE> 35
AMERICAN SKANDIA TRUST
FOUNDERS CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
MEDICAL & MEDICAL SERVICES -- 5.2%
Coram Healthcare Corp.*......... 20,000 $ 282,500
Gulf South Medical*............. 29,000 696,000
Hillhaven Corp.*................ 14,000 395,500
Horizon Healthcare Corp.*....... 19,725 352,584
Multicare Companies, Inc.*...... 26,000 451,750
Orthodontic Centers of
America, Inc. ................ 16,000 388,000
-----------
2,566,334
-----------
METALS & MINING -- 0.6%
Easco, Inc.*.................... 24,950 305,638
-----------
OFFICE EQUIPMENT -- 0.9%
Boise Cascade Office
Products*..................... 20,000 445,000
-----------
OIL & GAS -- 1.4%
Seitel, Inc.*................... 23,000 713,000
-----------
PHARMACEUTICAL -- 3.0%
Biogen, Inc.*................... 8,000 356,000
Circa Pharmaceuticals, Inc.*.... 35,000 1,115,625
-----------
1,471,625
-----------
RESTAURANTS -- 1.8%
Doubletree Corp.*............... 21,400 461,438
Uno Restaurant Corp.*........... 40,000 415,000
-----------
876,438
-----------
RETAILING -- 4.6%
Fusion System Corp.*............ 11,000 376,750
Proffitt's, Inc.*............... 13,475 400,881
Strouds, Inc.*.................. 70,000 420,000
The Sports Authority*........... 30,000 611,250
Trendlines*..................... 30,000 450,000
-----------
2,258,881
-----------
TELECOMMUNICATIONS -- 3.8%
ALC Communications Corp.*....... 22,000 992,750
Intelcom Group*................. 17,100 152,831
LCI International, Inc.*........ 24,125 738,828
-----------
1,884,409
-----------
TRANSPORTATION -- 1.0%
Mark VII, Inc. ................. 30,000 491,250
-----------
TEXTILES -- 1.5%
Nautica*........................ 20,000 725,000
-----------
TOYS -- 0.7%
Happiness Express, Inc.*........ 25,000 331,250
-----------
TRUCKING -- 0.9%
Celadon Group*.................. 28,000 427,000
-----------
UTILITIES-TELEPHONE -- 2.1%
Intermedia Communications of
Florida, Inc.*................ 32,000 360,000
Worldcom, Inc. ................. 25,000 675,000
-----------
1,035,000
-----------
TOTAL COMMON STOCK
(COST $33,057,956)................ 41,312,440
-----------
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
AMERICAN DEPOSITORY RECEIPTS -- 1.0%
DRUGS
Teva Pharmaceutical
Industries LTD.
(COST $304,524)............. 13,000 $ 487,500
-----------
FOREIGN SECURITIES -- 5.0%
BROADCASTING -- 1.0%
Flextech PLC -- (UK)*........... 87,000 507,914
-----------
MANUFACTURING -- 1.0%
Hunter Douglas -- (NETH)........ 11,022 480,083
-----------
MANUFACTURING-OPTICAL GLASS -- 1.2%
Hoya Corp. -- (JPN)............. 20,000 590,145
-----------
RETAIL MERCHANDISING -- 1.0%
Next PLC Ord -- (UK)............ 86,000 467,191
-----------
TRANSPORTATION EQUIPMENT -- 0.8%
IHC Caland -- (NETH)............ 14,000 397,496
-----------
TOTAL FOREIGN SECURITIES
(COST $2,245,855)................. 2,442,829
-----------
</TABLE>
<TABLE>
<CAPTION>
PAR
MATURITY (000)
-------- ------
<S> <C> <C> <C>
COMMERCIAL PAPER -- 13.5%
AUTOMOBILES -- 0.6%
Ford Motor Credit Co.
5.97%................ 07/03/95 $ 310 309,897
DIVERSIFIED -- 0.8%
General Electric
Capital Corp.
6.03%................ 07/11/95 400 399,330
ELECTRONICS -- 0.8%
Hitachi America, LTD.
5.97%................ 07/05/95 400 399,735
FINANCIAL -- 0.3%
Ciesco 6.05%........... 07/14/95 150 149,672
FOODS -- 2.0%
Golden Peanuts Co.
5.97%................ 07/06/95 1,000 999,171
</TABLE>
33
<PAGE> 36
AMERICAN SKANDIA TRUST
FOUNDERS CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ------ -----------
<S> <C> <C> <C>
INSURANCE (LIFE) -- 2.2%
Met Life Funding Corp.
6.00%................ 07/07/95 $1,060 $ 1,058,940
-----------
RETAIL-MERCHANDISING -- 2.5%
Wal-Mart Stores Inc.
5.95%................ 07/10/95 1,225 1,223,178
-----------
TELECOMMUNICATION -- 0.3%
AT&T Capital Corp.
5.95%................ 07/14/95 165 164,645
-----------
TRANSPORTATION -- 1.6%
PHH Corp
6.00%................ 07/13/95 800 798,400
-----------
UTILITIES-ELECTRIC -- 2.4%
New England Power Co.
6.05%................ 07/10/95 420 419,365
6.00%................ 07/12/95 745 743,634
-----------
1,162,999
TOTAL COMMERCIAL PAPER
(COST $6,665,967)................... 6,665,967
-----------
TOTAL INVESTMENTS
(COST $42,274,302**) -- 103.5%...... 50,908,736
-----------
LIABILITIES IN EXCESS OF
OTHER ASSETS -- (3.5%).............. (1,707,136)
-----------
NET ASSETS -- 100.0%.................. $49,201,600
===========
The aggregate unrealized appreciation (depreciation) on a tax
basis is
as follows:
Gross appreciation................ $ 9,596,045
Gross depreciation................ (961,611)
-----------
Net appreciation.................. $ 8,634,434
===========
COUNTRY ABBREVIATIONS
- --------------------------------------------------------------------------------
NETH - Netherlands
JPN - Japan
UK - United Kingdom
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing securities.
** Also cost for Federal income tax purposes.
See Notes to Financial Statements.
34
<PAGE> 37
AMERICAN SKANDIA TRUST
T. ROWE PRICE INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
FOREIGN SECURITIES -- 90.4%
ARGENTINA -- 0.1%
Naviera Perez Companc............ 27,194 $ 114,215
Sociedad Comercial del Plata..... 14,380 35,519
Telecom Argentina Stet-Fran Tel
SA "B"......................... 10,450 47,652
-----------
197,386
-----------
AUSTRALIA -- 2.1%
Australian Gas Light Co. ........ 89,321 283,670
Broken Hill Proprietary Co.,
LTD. .......................... 23,334 287,137
Burns Philip..................... 59,783 124,875
Coca-Cola Amatil................. 20,057 123,976
Coca-Cola Amatil Rights*......... 5,014 0
Fletcher Challange LTD. ......... 12,000 33,591
Lend Lease Corp. ................ 9,000 114,970
Mayne Nickless................... 29,289 120,485
MIM Holdings LTD. ............... 35,000 43,267
News Corp. ...................... 58,130 324,618
News Corp., PFD. ................ 29,148 144,342
Publishing & Broadcasting........ 47,300 139,127
Sydney Harbour Casino
Holdings*...................... 130,000 134,386
Tab Corp. ....................... 56,000 115,780
TNT LTD Conv. PFD. Cl-A.......... 96,000 132,320
TNT LTD.*........................ 135,000 177,442
Western Mining Corp. ............ 40,377 221,750
Westpac Banking Corp. ........... 30,000 108,490
Woodside Petroleum LTD. ......... 53,000 207,858
-----------
2,838,084
-----------
AUSTRIA -- 0.1%
Creditanstalt-Bankverein PFD. ... 550 31,734
Flughafen Wien AG................ 971 51,731
Oesterreichsche Elekrizitats..... 1,180 86,652
-----------
170,117
-----------
BELGIUM -- 1.3%
Fortis AG........................ 1,080 114,304
Generale Banque.................. 890 286,027
Krediet Bank NPV................. 2,760 653,122
Societe Generale de Belgique..... 220 16,013
U.C.B. NPV....................... 669 668,059
-----------
1,737,525
-----------
BRAZIL -- 0.5%
Brazil Fund, Inc.***............. 25,110 630,889
-----------
CANADA -- 0.4%
Alcan Aluminum................... 11,370 343,075
Macmillan Bloedel................ 5,780 81,283
Royal Bank of Canada............. 5,140 114,857
-----------
539,215
-----------
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
CHILE -- 0.4%
Five Arrows Chile Investment
Trust***....................... 54,120 $ 159,383
Genesis Chile Fund***............ 5,130 187,245
The Chile Fund***................ 3,847 206,776
-----------
553,404
-----------
DENMARK -- 0.3%
Den Danske Bank AB............... 2,340 146,941
Teledanmark Series Cl-B.......... 1,180 65,683
Unidanmark....................... 3,310 162,480
-----------
375,104
-----------
FINLAND -- 0.2%
Nokia Series Cl-A................ 5,304 310,175
-----------
FRANCE -- 7.9%
Accor............................ 3,680 490,333
Assurances Generales de France... 1,600 51,284
Carrefour........................ 1,670 855,960
Charguers SA..................... 1,744 339,929
Ecco Ste Ord. ................... 3,379 530,375
Generale des Eaux................ 13,150 1,464,637
GTM Entrepose.................... 2,100 165,547
L'Oreal.......................... 710 178,221
Lafarge-Coppee SA................ 5,210 405,340
Lapeyre.......................... 4,775 314,177
Legrand.......................... 2,600 412,928
Louis Vuitton Moet Hennessy...... 3,620 651,828
Peugeot.......................... 965 133,953
Pinault Printemps Redoute........ 1,933 414,644
Poliet........................... 4,250 386,141
Primagaz (Cie des Gaz Petrole)... 425 74,072
Rexel............................ 925 160,262
Societe Generale................. 1,110 129,813
Societe Nationale Elf
Aquitaine...................... 6,680 493,942
Sodexho SA....................... 1,150 259,730
St. Gobain....................... 6,750 815,853
Television Francais.............. 8,370 824,346
Total Cl-B....................... 7,660 461,341
Valeo............................ 14,630 711,841
-----------
10,726,497
-----------
GERMANY -- 5.1%
Allianz AG Holdings Warrants*.... 70 63,282
Allianz Rfd. .................... 24 17,357
Allianz Holdings Reg'd. ......... 347 622,126
Altana AG........................ 232 125,757
Ava Allgemeine Handels........... 255 102,354
Bayer AG......................... 1,908 474,275
Bayerische Motoren Werke......... 166 91,122
Bilfinger & Berger Bau AG........ 630 291,148
Buderus AG....................... 216 106,227
Deutsche Bank AG................. 8,390 413,220
</TABLE>
35
<PAGE> 38
AMERICAN SKANDIA TRUST
T. ROWE PRICE INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
GERMANY (CONT'D)
Fielmann......................... 3,712 $ 169,130
Gehe............................. 1,626 750,263
Gehe AG Def del*................. 406 184,399
Hoechst AG....................... 1,280 276,329
Hornbach......................... 208 279,800
Hornbach Baumarkt AG............. 130 87,908
Krones AG PFD. .................. 456 217,661
Mannesmann....................... 2,412 737,015
Rhoen-Klinicum AG................ 360 424,387
Schering AG...................... 7,820 546,897
Schering (Axel) Verlag AG*....... 245 138,208
Veba AG.......................... 816 320,451
Veba AG Warrants*................ 1,220 161,908
Volkswagen AG.................... 775 223,358
Volkswagen International Finance
Warrants*...................... 370 27,562
-----------
6,852,144
-----------
HONG KONG -- 2.7%
Great Eagle*..................... 84,200 179,538
Hong Kong Land Holdings
(Singapore Reg.)............... 328,184 597,295
Hopewell Holdings Ord. .......... 3,402 2,880
Hutchison Whampoa................ 198,000 956,967
Shanghai Petrochemical Co.,
LTD. .......................... 778,000 243,810
Swire Pacific LTD. Cl-A.......... 67,000 510,842
Wharf Holdings................... 295,000 962,595
Yizheng Chemical Fibre Co. ...... 708,000 247,034
-----------
3,700,961
-----------
ITALY -- 2.0%
Assicurazioni Generali........... 30,756 723,062
Banca Fideuram................... 126,770 144,016
Danieli & Co. ................... 14,954 45,488
Danieli Warrants*................ 875 642
Instituto Mobiliare Italiano..... 7,000 42,843
Instituto National
Assicurazioni.................. 57,480 76,476
Italgas Ord. .................... 45,936 119,369
Ras Ord. ........................ 2,410 25,529
Rinascente....................... 16,800 95,479
Sasib di Risp.................... 35,260 94,645
SME (Meridionale di
Finanziara).................... 39,100 97,541
Stet di Risp..................... 46,220 102,727
Stet Ord. ....................... 134,480 372,071
Stet Warrants*................... 1,000 15,592
Telecom Italia SPA Ord. ......... 162,773 441,393
Telecom Italia SPA Risp.......... 100,718 213,075
Union Cem March Emil SPA......... 8,642 51,519
-----------
2,661,467
-----------
JAPAN -- 22.8%
Advantest Co., LTD. ............. 8,000 302,154
Alps Electric Co., LTD. ......... 27,000 282,986
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
Amada Co. ....................... 53,000 $ 453,526
Canon, Inc. ..................... 53,000 863,263
Citizen Watch Co. ............... 29,000 179,699
Dai Ichi Seiyaku................. 49,000 717,144
Dai Nippon Screen
Manufacturing.................. 42,000 282,561
Daifuku Co., LTD. ............... 11,000 123,210
Daiwa House Industry Co. ........ 47,000 721,157
DDI Corp. ....................... 30 240,779
East Japan Railway............... 138 708,528
Fanuc Co. ....................... 11,000 475,184
Hitachi LTD. .................... 80,000 797,875
Hitachi Zosen.................... 45,000 181,647
Honda Motor Co. ................. 20,000 306,875
Inax............................. 27,000 260,360
Ishihara Sangyo Kaisha LTD. ..... 24,000 71,384
Ito-Yokado Co. .................. 15,000 791,384
Kawada Kogyo..................... 9,000 72,765
Kokuyo Co., LTD. ................ 20,000 448,510
Komatsu LTD. .................... 77,000 588,008
Komori Corp. .................... 19,000 387,961
Kumagai Gumi Co. ................ 52,000 217,881
Kuraray Co., LTD. ............... 49,000 532,653
Kyocera.......................... 20,000 1,647,684
Makita Electric.................. 35,000 479,197
Matsushita Electric.............. 52,000 810,150
Mauri Co. ....................... 44,000 701,092
Mitsubishi Corp. ................ 31,000 353,084
Mitsubishi Heavy Industry........ 168,000 1,142,142
Mitsubishi Paper Mills LTD. ..... 38,000 200,035
Mitsui Fudosan................... 77,000 882,467
Mitsui Petrochemical
Industries..................... 22,000 166,704
Murata Manufacturing Co. ........ 15,000 568,309
National House Industrial Co. ... 12,000 222,366
NEC Corp. ....................... 70,000 767,542
Nippon Denso..................... 53,000 963,352
Nippon Hodo...................... 14,000 246,208
Nippon Steel Corp. .............. 244,000 794,854
Nomura Securities................ 31,000 541,517
Pioneer Electronic Corp. ........ 29,000 492,889
Sangetsu Co. .................... 9,000 239,009
Sankyo Pharmaceuticals........... 24,900 578,967
Sega Enterprises................. 9,700 344,609
Sekisui Chemical Co., LTD. ...... 61,000 719,976
Sekisui House.................... 43,000 532,901
Seven Eleven Japan Co., LTD. .... 6,000 429,861
Sharp Corp. ..................... 57,000 753,497
Shin-Etsu Chemical Co. .......... 26,000 457,244
Sony Corp. ...................... 15,400 739,782
Sumitomo Corp. .................. 88,000 801,841
</TABLE>
36
<PAGE> 39
AMERICAN SKANDIA TRUST
T. ROWE PRICE INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
JAPAN (CONT'D)
Sumitomo Electric Industries..... 75,000 $ 894,069
Sumitomo Forestry Co., LTD. ..... 27,000 449,336
Taisho Pharmaceutical Co. ....... 7,000 135,497
TDK Corp. ....................... 14,000 637,828
Teijin........................... 91,000 436,070
Tokio Marine & Fire Insurance
Co. ........................... 28,000 321,228
Tokyo Electron................... 14,000 479,197
Tokyo Steel Manufacturing........ 17,000 290,941
Toppan Printing.................. 19,000 248,923
Yurtec Corp. .................... 12,000 263,441
-----------
30,741,303
-----------
KOREA -- 1.0%
Hanil Securities Co.*............ 2,060 23,598
Korea Electric Power Corp. ...... 6,600 254,438
Pohang Iron & Steel Co. ......... 4,000 400,143
Samsung Electronics Co. ......... 1,040 181,473
Samsung Electronics Co. Def
del*........................... 205 35,168
Samsung Electronics Co. Def del
PFD.*.......................... 593 55,469
Samsung Electronics Co. PFD. .... 3,000 280,620
Yukong*.......................... 3,471 147,174
Yukong Def del*.................. 284 11,835
-----------
1,389,918
-----------
MALAYSIA -- 3.4%
Affin Holdings Berhad............ 397,000 700,349
Affin Holdings Warrants*......... 72,600 45,868
Aokam Perdana.................... 92,000 228,349
Berjaya Sports Toto.............. 181,000 320,788
Commerce Asset Holdings Berhad
Warrants*...................... 33,000 87,323
Multi-Purpose Holdings........... 305,000 538,051
Renong Berhad.................... 324,000 603,471
Technology Resources Industry*... 314,000 901,744
United Engineers................. 178,000 1,131,897
-----------
4,557,840
-----------
MEXICO -- 0.6%
Cemex SA C1-B.................... 30,169 108,039
Fomento Ecenomico Mexicano SA.... 26,269 61,735
Gruma SA de CV Bcp*.............. 22,333 62,340
Grupo Embotellador de Mexico C1-B
NPV............................ 3,360 5,254
Grupo Embotellador de Mexico def
del CPO (C1-B/D/L)............. 32,797 170,408
Grupo Fin Banamex "L"............ 736 1,115
Grupo Financiero Banamex Accivl
C1-B........................... 14,739 22,323
Grupo Financiero Bancomer C1-L... 86 22
Grupo Industrial Maseca SA de
CV C1-B........................ 109,015 72,851
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
Grupo Sidek SA de CV............. 36,774 $ 32,218
Tolmex Class C1-B2............... 61,010 237,993
-----------
774,298
-----------
NETHERLANDS -- 9.8%
ABN AMRO Holdings NV............. 10,260 395,914
Ahold NV......................... 8,060 288,656
AKZO Nobel NV.................... 4,189 500,615
CSM.............................. 15,774 695,208
Elsevier NV...................... 223,520 2,639,489
Fortis Amev NV................... 6,817 371,708
Hagemeyer........................ 3,472 154,814
International Nederlanden Groep
NV............................. 15,140 837,258
Koninklijke Nederland............ 8,324 299,185
Nutricia Verenigde Bedrijven..... 2,570 178,276
Polygram......................... 18,005 1,063,082
Royal Dutch Petroleum............ 15,370 1,876,495
Unilever......................... 5,850 761,025
Wolters Kluwer................... 36,654 3,233,272
-----------
13,294,997
-----------
NEW ZEALAND -- 1.0%
Air New Zealand LTD. ............ 113,000 328,504
Carter Holt Harvey............... 64,000 156,543
Fernz Corp. ..................... 29,100 83,625
Fletcher Challange............... 85,000 238,584
Fletcher Challenge Forest
Division....................... 77,000 101,375
New Zealand Telecom.............. 110,000 411,674
-----------
1,320,305
-----------
NORWAY -- 1.5%
Bergesen C1-A Ord. .............. 3,710 84,291
Kvaerner Industrier.............. 5,230 237,650
Norsk Hydro AS................... 22,420 940,534
Orkla Class C1-A................. 14,990 671,412
Saga Petroleum................... 3,650 48,276
-----------
1,982,163
-----------
PORTUGAL -- 0.3%
Jeronimo Martins................. 7,140 361,519
-----------
SINGAPORE -- 2.4%
DBS Land......................... 88,000 275,906
Far East-Levingston.............. 30,000 143,880
Jurong Shipyard.................. 35,000 250,537
Keppel Corporation............... 16,000 130,565
Neptune Orient Lines............. 76,000 88,132
Overseas Union Bank LTD.
Foreign........................ 19,000 119,685
Overseas Union Enterprises....... 40,000 244,810
Sembawang Shipyard............... 41,000 249,463
Singapore International
Airlines....................... 34,000 313,958
Singapore Land................... 56,000 366,786
Singapore Press Holdings
Foreign........................ 18,000 269,291
United Industrial Corp. ......... 134,000 129,492
</TABLE>
37
<PAGE> 40
AMERICAN SKANDIA TRUST
T. ROWE PRICE INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
SINGAPORE (CONT'D)
United Overseas Bank............. 63,400 $ 599,055
United Overseas Bank Warrants*... 17,092 80,750
-----------
3,262,310
-----------
SPAIN -- 2.3%
Banco de Santander SA............ 7,440 293,409
Banco Popular Espanol............ 1,280 190,287
Centros Comerciales Pryca
Ord. .......................... 22,506 418,223
Empresa Nacional de Electric..... 13,768 679,985
Fomentos de Construcciones Y
Contra......................... 2,360 200,760
Gas Natural SDG.................. 3,523 420,735
Iberdrola SA..................... 35,623 268,320
Repsol SA........................ 13,924 438,144
Sevillana de Electricidad........ 22,045 135,642
-----------
3,045,505
-----------
SWEDEN -- 2.1%
AGA AB C1-B (Zurich Reg.)........ 2,500 29,860
ASEA AB C1-A..................... 3,260 281,050
Astra AB C1-B.................... 29,990 903,065
Atlas Copco AB C1-B.............. 18,700 259,694
Electrolux Co. .................. 9,860 448,749
Esselte.......................... 3,080 38,326
Frigoskandia C1-B................ 500 2,097
Hennes & Mauritz AB C1-B......... 4,180 244,841
Sandvik AB C1-A.................. 3,610 65,024
Sandvik AB C1-B.................. 19,140 347,388
Scribona C1-B.................... 1,510 11,108
Stora Kopparbergs C1-B........... 13,500 182,839
-----------
2,814,041
-----------
SWITZERLAND -- 3.9%
Brown, Boveri & Cie C1-A......... 1,167 1,208,360
Ciba Geigy AG.................... 420 307,922
CS Holdings...................... 3,310 303,340
Nestle SA........................ 968 1,008,193
Roche Holdings AG................ 175 1,127,953
Sandoz AG........................ 807 556,600
Swiss Bank Corp. ................ 1,340 474,913
Union Bank of Switzerland........ 280 290,167
-----------
5,277,448
-----------
THAILAND -- 1.2%
Advanced Information
Services -- Foreign............ 7,900 117,132
Bangkok Bank..................... 32,500 358,112
Bank of Ayudhya.................. 31,000 151,955
Land and House Public Co. ....... 4,400 92,688
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
Siam Cement Public Co. .......... 4,300 274,531
Siam Commercial Bank............. 17,300 $ 165,396
Thai Farmer Bank Foreign......... 29,200 279,165
United Communications
Industries -- Foreign.......... 8,900 129,795
-----------
1,568,774
-----------
UNITED KINGDOM -- 15.0%
Abbey National................... 113,000 841,258
Argos............................ 69,160 475,273
Argyll Group..................... 97,660 521,988
Asda Group....................... 290,450 438,935
British Airports Authorities..... 15,440 120,842
British Gas...................... 74,210 341,756
British Petroleum Co. ........... 43,840 314,174
Cable & Wireless................. 113,000 772,951
Cadbury Schweppes................ 93,456 682,378
Caradon PLC...................... 187,700 704,663
Clyde Petroleum.................. 45,090 30,126
Coats Viyella.................... 53,270 157,616
Compass Group PLC................ 22,000 129,838
East Midlands Electricity........ 44,385 453,290
Eastern Electricity.............. 13,140 135,867
First National Finance Corp.,
PFD. .......................... 12,820 18,354
First National Finance Corp. .... 5,000 12,130
Glaxo Wellcome PLC............... 70,000 859,090
Grand Metropolitan Ord. ......... 124,300 762,255
Guinness Ord. ................... 102,640 772,294
Heath............................ 10,000 32,292
Heywood Williams Group Ord. ..... 22,010 78,778
Hillsdown Holdings............... 55,160 157,943
Kingfisher....................... 84,950 574,324
Ladbroke Group................... 83,000 223,136
Laing (John)..................... 60,000 197,572
London Electricity Ord. ......... 62,770 641,050
National Westminster Ord. ....... 182,670 1,586,590
Rank Organisation PLC, Reg'd. ... 92,120 581,767
Reed International............... 109,370 1,536,257
Rolls-Royce...................... 46,140 128,079
RTZ Corp Ord., Reg'd. ........... 49,600 646,994
Sears Holdings................... 44,490 70,419
Shell Transport & Trading Co.,
Ord. .......................... 73,630 879,629
Smith David Holdings............. 41,950 432,426
Smithkline Beecham............... 179,220 1,590,837
South Western Electricity........ 12,850 136,957
Spring Ram Corp. ................ 12,000 6,872
T & N Corp. ..................... 115,680 310,072
Tesco............................ 83,000 382,896
</TABLE>
38
<PAGE> 41
AMERICAN SKANDIA TRUST
T. ROWE PRICE INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
UNITED KINGDOM (CONT'D)
Tomkins Ord. .................... 231,220 $ 827,585
United News and Media PLC........ 75,470 624,285
-----------
20,191,838
-----------
TOTAL FOREIGN SECURITIES
(COST $118,492,896)................ 121,875,227
-----------
AMERICAN DEPOSITORY RECEIPTS -- 2.7%
A.F.P. Provida SA*............... 1,152 30,960
Banco de Galicia Buenos Aires
SA............................. 5,261 82,861
Buenos Aires Embotelladora....... 2,878 72,310
Chilectra Metropolitana SA....... 2,386 121,166
Chilgener SA..................... 2,020 63,883
Cifra SA de CV NPV............... 358,754 494,722
Companhia Energetica de Minas
Geras.......................... 6,068 119,873
Compania de Telefonos de Chile
SA............................. 699 56,881
Electrobras-Centrais Eletr
Bras........................... 11,248 152,613
Empresa National de Electricidad
SA............................. 7,797 206,621
Enersis SA....................... 2,324 68,558
Enron Global Power & Pipeline.... 1,356 32,205
Huaneng Power International
Inc. .......................... 14,000 257,250
Panamerica Beverages............. 5,210 156,300
Repsol SA........................ 110 3,479
Sociedad Comercial del Plata*.... 1,640 40,521
Telebras......................... 23,183 791,375
Telecome Argentina C1B.......... 941 42,816
Telecomunicacoes Brasileiras
SA............................. 217 7,408
Telefonica de Argentina*......... 11,020 272,745
Telefonos de Mexico.............. 20,594 610,097
-----------
TOTAL AMERICAN DEPOSITORY RECEIPTS
(COST $4,702,373).................. 3,684,644
-----------
AMERICAN DEPOSITORY SECURITIES -- 0.4%
Banco Frances del Rio de la
Plata.......................... 2,299 41,382
Cervecerias Unidas............... 3,628 96,596
Cesp-Cia Energetica de Sao
Paolo*......................... 5,020 57,128
Sociedad Anoni................... 11,440 215,930
Transportadora de Gas del Sur.... 2,632 27,636
Usinas Siderurgicas de Minas
Gerais SA...................... 11,096 124,164
-----------
TOTAL AMERICAN DEPOSITORY SECURITIES
(COST $664,465).................... 562,836
-----------
<CAPTION>
SHARES VALUE
------- -----------
<S> <C> <C>
GLOBAL DEPOSITORY RECEIPTS -- 0.3%
Samsung Electronics Co. *........ 605 $ 32,216
Samsung Electronics Co. def
del*........................... 7,060 375,945
-----------
TOTAL GLOBAL DEPOSITORY RECEIPTS
(COST $381,285).................... 408,161
-----------
GLOBAL DEPOSITORY SECURITIES -- 0.2%
Grupo Financiero Bancomer SA
C1B........................... 2,330 13,689
Grupo Televisia.................. 10,789 219,826
-----------
TOTAL GLOBAL DEPOSITORY SECURITIES
(COST $533,840).................... 233,515
-----------
</TABLE>
PRINCIPAL
IN LOCAL
CURRENCY****
MATURITY (000)
--------- ------------
FOREIGN BONDS -- 0.0%
BELGIUM 0.0%
Kredietbank NV
5.75%............ 11/30/03 900 28,522
------------
ITALY 0.0%
Danieli & Co.
7.25%............ 01/01/00 5,250 2,631
------------
TOTAL FOREIGN BONDS
(COST $29,722)................. 31,153
------------
TOTAL INVESTMENTS (COST
$124,804,581**) -- 94.0%....... 126,795,536
OTHER ASSETS LESS
LIABILITIES -- 6.0%............ 8,103,021
------------
NET ASSETS -- 100.0%............. $134,898,557
===========
The aggregate unrealized appreciation (depreciation) on a tax
basis is as follows:
Gross appreciation......................... $ 10,592,173
Gross depreciation......................... (8,601,218)
------------
Net appreciation........................... $ 1,990,955
===========
- --------------------------------------------------------------------------------
* Non-income producing securities.
** Also cost for Federal income tax purposes.
*** Closed-end funds.
**** Currency of countries indicated.
See Notes to Financial Statements.
39
<PAGE> 42
AMERICAN SKANDIA TRUST
AST SCUDDER INTERNATIONAL BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
IN LOCAL
CURRENCY**
MATURITY (000) VALUE
--------- ---------- -----------
<S> <C> <C> <C>
FOREIGN BONDS -- 84.8%
AUSTRALIA -- 5.7%
Australian Government
10.50%.............. 09/15/95 305 $ 217,926
6.75%............... 11/15/06 1,150 675,179
10.00%.............. 10/15/07 350 261,807
Treasury Corp. of
Victoria
8.25%............... 10/15/03 495 335,861
----------
1,490,773
-----------
CANADA -- 2.7%
Canadian Government
8.50%............... 03/01/00 410 309,373
Canadian Mortgage
Backed #96403720
9.875%.............. 05/01/96 250 184,654
Canadian Mortgage
Backed #96404611
8.25%............... 12/01/96 284 208,595
-----------
702,622
-----------
DENMARK -- 5.9%
Denmark Government
9.00%............... 11/15/00 4,800 927,013
8.00%............... 05/15/03 2,400 435,032
7.00%............... 12/15/04 1,000 168,195
-----------
1,530,240
-----------
FINLAND -- 2.1%
Finland Government
8.75% .............. 10/17/01 400 548,092
-----------
FRANCE -- 10.5%
French O.A.T.
8.50%............... 03/28/00 1,000 216,983
6.75%............... 04/25/02 275 344,244
8.50%............... 04/25/23 3,700 789,388
6.00%............... 10/25/25 1,300 202,945
French O.A.T.
Principal Strip
0.00%............... 10/25/19 32,000 884,031
Societe National des
Chemin Fee
8.88%............... 08/11/23 1,400 303,326
-----------
2,740,917
-----------
GERMANY -- 11.6%
German Government
8.38%............... 05/21/01 3,115 2,437,434
6.25%............... 01/04/24 970 593,234
-----------
3,030,668
-----------
<CAPTION>
PRINCIPAL
IN LOCAL
CURRENCY**
MATURITY (000) VALUE
--------- ---------- -----------
<S> <C> <C> <C>
ITALY -- 5.8%
Italian Government
10.50%.............. 04/15/98 2,150,000 $ 1,273,798
8.50%............... 01/01/99 415,000 229,589
-----------
1,503,387
-----------
JAPAN -- 13.6%
Japan Development Bank
6.50%............... 09/20/01 41,000 596,381
World Bank Euro
4.75%............... 12/20/04 106,900 1,468,701
World Bank Note
5.25%............... 03/20/02 106,700 1,473,398
-----------
3,538,480
-----------
NETHERLANDS -- 4.3%
Netherland Government
7.75%............... 01/15/00 700 479,954
6.50%............... 04/15/03 1,000 634,413
-----------
1,114,367
-----------
NEW ZEALAND -- 3.3%
New Zealand Government
8.00%............... 04/15/04 555 380,459
8.00%............... 11/15/06 700 482,135
-----------
862,594
-----------
NORWAY -- 1.6%
Kingdom of Norway
9.00%............... 07/01/96 300 408,454
-----------
POLAND -- 1.4%
Poland Government
Discount FRN
7.13%............... 10/27/24 150 115,219
Poland Government
PDI FRN
3.25%............... 10/27/14 400 240,000
-----------
355,219
-----------
PORTUGAL -- 0.9%
Portugal Government
7.70%............... 06/07/05 1,100 224,048
-----------
SPAIN -- 1.7%
Spanish Government
7.40%............... 07/30/99 63,000 451,427
-----------
</TABLE>
40
<PAGE> 43
AMERICAN SKANDIA TRUST
AST SCUDDER INTERNATIONAL BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
IN LOCAL
CURRENCY**
MATURITY (000) VALUE
--------- ---------- -----------
<S> <C> <C> <C>
SWEDEN -- 3.6%
Swedish Government
11.00%.............. 01/21/99 3,000 $ 418,065
10.25%.............. 05/05/00 3,800 516,852
-----------
934,917
-----------
UNITED KINGDOM -- 10.1%
European Investment
Bank
9.50%............... 12/09/09 150 251,869
International Bank
Reconstructive &
Development
9.25%............... 07/20/07 100 163,534
United Kingdom
Government Bonds
9.13%............... 02/21/01 425 597,918
8.50%............... 12/07/05 455 725,832
8.00%............... 12/07/15 575 876,385
-----------
2,615,538
-----------
TOTAL FOREIGN BONDS
(COST $21,535,407)................. 22,051,743
-----------
OPTIONS -- 0.2%
Call option on British Pounds,
strike price GBP 1.5808, expire
7/22/95.......................... (6,015)
Put option on Deutschemark, strike
price DEM 1.45, expire 8/19/95... 2,800
Put option on Deutschemark, strike
price DEM 1.47, expire
10/21/95......................... 4,346
Put option on Deutschemark, strike
price
DEM 1.41, expire 8/19/95......... 6,276
Put option on Deutschemark, strike
price
DEM 1.465, expire 8/19/95........ 1,425
Call option on Deutschemark, strike
price DEM 1.335, expire
9/16/95.......................... (8,758)
Put option on Deutschemark, strike
price
DEM 1.47, expire 11/18/95........ 6,327
Call option on French Francs,
strike price FRF 4.79, expire
8/19/95.......................... (15,216)
Put option on French Francs, strike
price
FRF 5.214, expire 8/19/95........ 1,192
<CAPTION>
VALUE
-----------
<S> <C> <C>
Put option on French Francs, strike
price
FRF 5.22, expire 1/20/96......... $ 8,700
Put option on Yen, strike price
JPY 86.57, expire 7/22/95........ 44,108
Call option on Yen, strike price
JPY 74.50, expire 10/21/95....... (1,567)
Put option on Yen, strike price
JPY 88.52, expire 10/21/95....... 14,071
Put option on Yen, strike price
JPY 88.00, expire 12/16/95....... 7,634
Call option on Swedish Krona,
strike price SEK 7.4875, expire
7/22/95.......................... (10,393)
Call option on Swedish Krona,
strike price SEK 7.3145, expire
8/19/95.......................... (10,626)
-----------
TOTAL OPTIONS
(COST $171,814)...................... 44,304
----------
</TABLE>
<TABLE>
<CAPTION>
PAR
MATURITY (000)
--------- -----
<S> <C> <C> <C>
COMMERCIAL PAPER -- 11.6%
American Express Co.
5.85%...................... 07/03/95 $ 800 800,000
Ford Motor Credit Co.
5.92%...................... 07/03/95 800 800,000
Household Finance Corp.
5.75%...................... 07/03/95 611 611,000
Prudential Funding Corp.
6.00%...................... 07/03/95 800 800,000
-----------
TOTAL COMMERCIAL PAPER
(COST $3,011,000)............ 3,011,000
-----------
TOTAL INVESTMENTS
(COST
$24,718,221*) -- 96.6%....... 25,107,047
OTHER ASSETS LESS
LIABILITIES -- 3.4%.......... 890,955
-----------
NET ASSETS -- 100.0%........... $25,998,002
===========
The aggregate unrealized appreciation (depreciation) on a tax
basis is as follows:
Gross appreciation.................... $ 641,343
Gross depreciation.................... (252,517)
-----------
Net appreciation...................... $ 388,826
===========
</TABLE>
- --------------------------------------------------------------------------------
* Also cost for Federal income tax purposes.
** Currency of countries indicated.
See Notes to Financial Statements.
41
<PAGE> 44
AMERICAN SKANDIA TRUST
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1995 (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESCO FOUNDERS T. ROWE PRICE AST SCUDDER
EQUITY CAPITAL INTERNATIONAL INTERNATIONAL
INCOME APPRECIATION EQUITY BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------- ---------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities at value (A) (Note 1)............ $106,511 $ 50,909 $ 126,795 $25,107
Cash in bank, including foreign currency holdings.......... 0 2 8,053 214
Receivable for securities sold............................. 255 652 223 2,030
Receivable for dividends and interest...................... 571 26 667 561
Receivable for fund shares sold............................ 267 32 0 302
Other assets............................................... 1 0 2 0
-------- ------- -------- -------
TOTAL ASSETS.......................................... 107,605 51,621 135,740 28,214
-------- ------- -------- -------
LIABILITIES:
Payable for securities purchased........................... 2,217 2,376 327 2,051
Payable for fund shares redeemed........................... 0 0 271 0
Unrealized depreciation on foreign currency exchange
contracts and futures (Note 4)........................... 0 0 0 128
Accrued expenses (Note 2).................................. 99 43 243 37
-------- ------- -------- -------
TOTAL LIABILITIES..................................... 2,316 2,419 841 2,216
-------- ------- -------- -------
NET ASSETS..................................................... $105,289 $ 49,202 $ 134,899 $25,998
======== ======= ======== =======
COMPONENTS OF NET ASSETS
Common stock (unlimited number of shares authorized, $.001 par
value per share)............................................. $ 10 $ 4 $ 14 $ 3
Additional paid-in capital..................................... 95,079 40,913 133,469 25,229
Undistributed net investment income............................ 1,511 1 1,172 868
Accumulated net realized gain (loss) on investments and foreign
currency transactions........................................ 424 (351) (1,760) (369)
Accumulated net unrealized appreciation (depreciation) on
investments, foreign currency transactions, and forward
currency contracts........................................... 8,265 8,635 2,004 267
-------- ------- -------- -------
NET ASSETS..................................................... $105,289 $ 49,202 $ 134,899 $25,998
======== ======= ======== =======
Shares of common stock outstanding............................. 9,456 3,877 13,512 2,569
Net asset value, offering and redemption price per share (Note
1)........................................................... $ 11.13 $ 12.69 $ 9.98 $ 10.12
======== ======= ======== =======
(A) Investments at cost........................................ $98,246 $ 42,274 $ 124,805 $24,718
======== ======= ======== =======
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
42
<PAGE> 45
AMERICAN SKANDIA TRUST
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESCO FOUNDERS T. ROWE PRICE AST SCUDDER
EQUITY CAPITAL INTERNATIONAL INTERNATIONAL
INCOME APPRECIATION EQUITY BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest................................................. $1,138 $ 170 $ 302 $ 872
Dividends (Note 1)....................................... 773 53 1,526 0
-------- ------- ------- ------
Total Investment Income............................. 1,911 223 1,828 872
-------- ------- ------- ------
EXPENSES
Investment advisory fees (Note 2)........................ 308 166 584 102
Shareholder servicing fees (Note 2)...................... 41 18 58 10
Administration and accounting fees....................... 42 37 58 38
Custodian fees........................................... 12 9 97 11
Professional fees........................................ 4 2 7 1
Registration fees........................................ (13) (4) (31) (2)
Trustees' fees and expenses (Note 2)..................... 1 1 2 0
Insurance fees........................................... 2 1 3 0
Miscellaneous expenses (Note 1).......................... 3 2 24 2
-------- ------- ------- ------
Total Expenses...................................... 400 232 802 162
-------- ------- ------- ------
Net Investment Income (Loss)................................. 1,511 (9) 1,026 710
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on investments and foreign
currency transactions.................................. 679 688 (1,495) (115)
Net change in unrealized appreciation (depreciation) on
investments, foreign currency transactions, and forward
currency contracts..................................... 10,013 5,868 5,571 699
-------- ------- ------- ------
Net Increase in Net Assets resulting from Operations..... $12,203 $6,547 $ 5,102 $ 1,294
======== ======= ======= ======
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
43
<PAGE> 46
AMERICAN SKANDIA TRUST
STATEMENTS OF CHANGES IN NET ASSETS
(AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOUNDERS CAPITAL
INVESCO EQUITY INCOME APPRECIATION T. ROWE PRICE INTERNATIONAL AST SCUDDER INTERNATIONAL
PORTFOLIO PORTFOLIO EQUITY PORTFOLIO BOND PORTFOLIO
--------------------------- --------------------------- --------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
JUNE 30, 1995 DECEMBER 31, JUNE 30, 1995 DECEMBER 31, JUNE 30, 1995 DECEMBER 31, JUNE 30, 1995 DECEMBER 31,
(UNAUDITED) 1994(1) (UNAUDITED) 1994(1) (UNAUDITED) 1994(1) (UNAUDITED) 1994(2)
------------- ------------ ------------- ------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FROM
OPERATIONS
Net
investment
income
(loss)... $ 1,511 $ 1,056 $ (9) $ 290 $ 1,026 $ 268 $ 710 $ 421
Net
realized
gain
(loss)
on
investments
and
foreign
currency
transactions.. 679 (255) 688 (1,039) (1,495) (16) (115) (254)
Net change
in
unrealized
appreciation
(depreciation)
on
investments,
foreign
currency
transactions,
and
forward
currency
contracts... 10,013 (1,748) 5,868 2,767 5,571 (3,567) 699 (432)
-------- -------- -------- -------- -------- -------- ------- -------
Net
Increase
(Decrease)
in Net
Assets
from
Operations... 12,203 (947) 6,547 2,018 5,102 (3,315) 1,294 (265)
-------- -------- -------- -------- -------- -------- ------- -------
DIVIDENDS AND
DISTRIBUTIONS
TO
SHAREHOLDERS
Dividends
to
shareholders
from net
investment
income... (1,056) 0 (280) 0 (121) 0 (263) 0
Distributions
to
shareholders
from
capital
gains... 0 0 0 0 (249) 0 0 0
-------- -------- -------- -------- -------- -------- ------- -------
Total
Dividends
and
Distributions
to
Shareholders.. (1,056) 0 (280) 0 (370) 0 (263) 0
CAPITAL SHARE
TRANSACTIONS
Proceeds
from
shares
sold.... 29,454 66,925 17,597 29,373 33,583 122,535 11,762 16,273
Net asset
value of
shares
issued
in
reinvestment
of
dividends
and
distributions... 1,056 0 280 0 370 0 263 0
Cost of
shares
redeemed... (1,569) (777) (3,501) (2,832) (12,537) (10,469) (2,276) (790)
-------- -------- -------- -------- -------- -------- ------- -------
Increase
in Net
Assets
from
Capital
Share
Transactions..28,941 66,148 14,376 26,541 21,416 112,066 9,749 15,483
-------- -------- -------- -------- -------- -------- ------- -------
Total
Increase
in
Net
Assets... 40,088 65,201 20,643 28,559 26,148 108,751 10,780 15,218
-------- -------- -------- -------- -------- -------- ------- -------
NET ASSETS
Beginning
of
Period... 65,201 0 28,559 0 108,751 0 15,218 0
-------- -------- -------- -------- -------- -------- ------- -------
End of
Period... $ 105,289 $ 65,201 $49,202 $ 28,559 $ 134,899 $108,751 $25,998 $ 15,218
======== ======== ======== ======== ======== ======== ======= =======
SHARES ISSUED
AND REDEEMED
Shares
sold.... 2,812 6,769 1,523 2,908 3,473 12,383 1,197 1,654
Shares
issued
in
reinvestment
of
dividends
and
distributions... 105 0 26 0 41 0 27 0
Shares
redeemed... (151) (79) (306) (274) (1,311) (1,074) (228) (81)
-------- -------- -------- -------- -------- -------- ------- -------
Net
Increase
in
Shares
Outstanding... 2,766 6,690 1,243 2,634 2,203 11,309 996 1,573
======== ======== ======== ======== ======== ======== ======= =======
</TABLE>
- --------------------------------------------------------------------------------
(1) Commenced operations on January 4, 1994.
(2) Commenced operations on May 3, 1994.
See Notes to Financial Statements.
44
<PAGE> 47
AMERICAN SKANDIA TRUST
FINANCIAL HIGHLIGHTS
PER SHARE DATA (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESCO EQUITY
INCOME PORTFOLIO
------------------------------
SIX MONTHS FOR THE
ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31,
(UNAUDITED) 1994(2)
------------- ------------
<S> <C> <C>
Net Asset Value at Beginning of Period............................................ $ 9.75 $ 10.00
------- -------
Increase (Decrease) from Investment Operations
Net Investment Income (Loss).................................................. 0.15 0.16
Net Realized & Unrealized Gains (Losses) on Investments and Foreign Currency
Transactions................................................................. 1.38 (0.41)
------- -------
Total Increase (Decrease) From Investment Operations..................... 1.53 (0.25)
------- -------
Less Dividends and Distributions
Dividends from Net Investment Income.......................................... (0.15) 0.00
Distributions from Net Realized Capital Gains................................. 0.00 0.00
------- -------
Total Dividends and Distributions........................................ (0.15) 0.00
------- -------
Net Asset Value at End of Period.................................................. $ 11.13 $ 9.75
------- -------
Total Return...................................................................... 15.82% (2.50%)
Ratios/Supplemental Data
Net Assets at End of Period (in 000's)........................................ $ 105,289 $ 65,201
Ratios of Expenses to Average Net Assets:
After Advisory Fee Waiver and Expense Reimbursement......................... 0.97%(1) 1.14%(1)
Before Advisory Fee Waiver and Expense Reimbursement........................ 0.97%(1) 1.14%(1)
Ratios of Net Investment Income (Loss) to Average Net Assets:
After Advisory Fee Waiver and Expense Reimbursement......................... 3.69%(1) 3.41%(1)
Before Advisory Fee Waiver and Expense Reimbursement........................ 3.69%(1) 3.41%(1)
Portfolio Turnover Rate........................................................... 42.33% 62.87%
</TABLE>
- --------------------------------------------------------------------------------
(1) Annualized.
(2) Commenced operations on January 4, 1994.
See Notes to Financial Statements.
45
<PAGE> 48
AMERICAN SKANDIA TRUST
FINANCIAL HIGHLIGHTS
PER SHARE DATA (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOUNDERS CAPITAL T.ROWE PRICE INTERNATIONAL AST SCUDDER INTERNATIONAL
APPRECIATION PORTFOLIO EQUITY PORTFOLIO BOND PORTFOLIO
---------------------------- ---------------------------- ----------------------------
SIX MONTHS FOR THE SIX MONTHS FOR THE SIX MONTHS FOR THE
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31, JUNE 30, 1995 DECEMBER 31, JUNE 30, 1995 DECEMBER 31,
(UNAUDITED) 1994(2) (UNAUDITED) 1994(2) (UNAUDITED) 1994(3)
------------- ------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value at Beginning of
Period............................. $ 10.84 $ 10.00 $ 9.62 $ 10.00 $ 9.68 $ 10.00
------------- ------------ ------------- ------------ ------------- ------------
Increase (Decrease) from Investment
Operations
Net Investment Income (Loss)..... (0.02) 0.11 0.12 0.02 0.21 0.27
Net Realized & Unrealized Gains
(Losses) on Investments and
Foreign Currency
Transactions................... 1.96 0.73 0.27 (0.40) 0.37 (0.59)
------------- ------------ ------------- ------------ ------------- ------------
Total Increase (Decrease)
From Investment
Operations................. 1.94 0.84 0.39 (0.38) 0.58 (0.32)
------------- ------------ ------------- ------------ ------------- ------------
Less Dividends and Distributions
Dividends from Net Investment
Income......................... (0.09) 0.00 (0.01) 0.00 (0.14) 0.00
Distributions from Net Realized
Capital Gains.................. 0.00 0.00 (0.02) 0.00 0.00 0.00
------------- ------------ ------------- ------------ ------------- ------------
Total Dividends and
Distributions.............. (0.09) 0.00 (0.03) 0.00 (0.14) 0.00
------------- ------------ ------------- ------------ ------------- ------------
Net Asset Value at End of Period..... $ 12.69 $ 10.84 $ 9.98 $ 9.62 $ 10.12 $ 9.68
------------- ------------ ------------- ------------ ------------- ------------
Total Return......................... 18.04% 8.40% 4.10% (3.80%) 6.07% (3.20%)
Ratios/Supplemental Data
Net Assets at End of Period (in
000's)......................... $49,202 $ 28,559 $ 134,899 $108,751 $25,998 $ 15,218
Ratios of Expenses to Average Net
Assets:
After Advisory Fee Waiver and
Expense Reimbursement........ 1.26%(1) 1.30%(1) 1.37%(1) 1.75%(1) 1.60%(1) 1.68%(1)
Before Advisory Fee Waiver and
Expense Reimbursement........ 1.26%(1) 1.55%(1) 1.37%(1) 1.77%(1) 1.60%(1) 1.68%(1)
Ratios of Net Investment Income
(Loss) to Average Net Assets:
After Advisory Fee Waiver and
Expense Reimbursement........ (0.05%)(1) 2.59%(1) 1.76%(1) 0.45%(1) 6.98%(1) 7.03%(1)
Before Advisory Fee Waiver and
Expense Reimbursement........ (0.05%)(1) 2.34%(1) 1.76%(1) 0.43%(1) 6.98%(1) 7.03%(1)
Portfolio Turnover Rate.............. 29.37% 197.93% 9.25% 15.70% 190.94% 163.27%
</TABLE>
- --------------------------------------------------------------------------------
(1) Annualized.
(2) Commenced operations on January 4, 1994.
(3) Commenced operations on May 3, 1994.
See Notes to Financial Statements.
46
<PAGE> 49
AMERICAN SKANDIA TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
American Skandia Trust (the "Trust"), was organized under the laws of the
Commonwealth of Massachusetts on October 31, 1988, as a "Massachusetts Business
Trust". The Trust is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company. The Trust
operates as a series company currently issuing nineteen classes of shares of
beneficial interest, called portfolios. These financial statements report on
four of the nineteen portfolios: INVESCO Equity Income Portfolio ("INVESCO"),
Founders Capital Appreciation Portfolio ("Founders"), T. Rowe Price
International Equity Portfolio ("T. Rowe"), and AST Scudder International Bond
Portfolio ("Scudder") (collectively "the Portfolios").
The following is a summary of the Trust's significant accounting policies:
Security Valuation
INVESCO, Founders, T. Rowe, and Scudder: Securities are valued at the close of
regular trading on each business day the New York Stock Exchange ("NYSE") is
open. Securities, including options written, are valued at the last sale price
on the securities exchange or securities market on which such securities
primarily are traded. Securities not listed on an exchange or securities market,
or securities on which there were no transactions, are valued at the average of
the most recent bid and asked prices. Any securities or other assets for which
recent market quotations are not readily available are valued at fair value as
determined in good faith by the Board of Trustees. For the Portfolios that hold
foreign securities, the value of securities and other assets and liabilities
denominated in foreign currencies is translated daily into U.S. dollars at a
rate of exchange determined prior to the close of the NYSE.
Short-term obligations with less than sixty days remaining to maturity are
valued at amortized cost. Short-term obligations with more than sixty days
remaining to maturity will be valued at current market value until the sixtieth
day prior to maturity, and will then be valued on an amortized cost basis based
on the value on such date.
Foreign Currency Translation and Forward Foreign Currency Contracts
The Trust's investment valuations, other assets, and liabilities initially
expressed in foreign currencies are converted each business day into U.S.
dollars based upon current exchange rates. Purchases and sales of foreign
investments and income and expenses are converted into U.S. dollars based upon
currency exchange rates prevailing on the respective dates of such transactions.
Gains and losses attributable to changes in foreign currency exchange rates are
recorded for financial statement purposes as net realized gains and losses on
investments and foreign currency transactions. Forward foreign currency exchange
contracts are adjusted by the daily exchange rate of the underlying currency and
any gains or losses are recorded for financial statement purposes as unrealized
until the contract settlement date.
Investment Transactions and Investment Income
Security transactions are accounted for on the trade date. Realized gains and
losses from security transactions are recognized on the FIFO cost basis.
Dividend income is recognized on the ex-dividend date. Interest income is
accrued daily. Gains or losses on premiums from expired options are recognized
on the date of expiration.
47
<PAGE> 50
AMERICAN SKANDIA TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
Dividends and Distributions to Shareholders
INVESCO, Founders, T. Rowe, and Scudder: Dividends and distributions arising
from net investment income and net short-term and long-term capital gains, if
any, are declared and paid annually.
Organization Costs
The Trust bears all costs in connection with its organization including the
initial fees and expenses of registering and qualifying its shares for
distribution under Federal and state securities regulations. All such costs are
being amortized on a straight-line basis over a period of five years from May 1,
1992.
Tax Matters
It is the Trust's policy to comply with the requirements of the Internal Revenue
Code pertaining to regulated investment companies and to distribute all of its
taxable income, as well as any net realized gains to its shareholders.
Therefore, no federal income tax provision has been made. Foreign taxes have
been provided for dividend and interest income earned on foreign investments in
accordance with the applicable country's tax rates and, to the extent
unrecoverable, are recorded as a reduction of investment income.
2. INVESTMENT MANAGEMENT AGREEMENTS, INVESTMENT SUB-ADVISORY AGREEMENTS AND
TRANSACTIONS WITH AFFILIATES
The Portfolios have entered into Investment Management Agreements with American
Skandia Investment Services, Inc., formerly American Skandia Life Investment
Management, Inc., ("Investment Manager") which provide that the Investment
Manager will furnish each Portfolio with investment advice and investment
management and administrative services. The Investment Manager has engaged the
following entities as sub-advisors for their respective Portfolios: INVESCO
Trust Co. for INVESCO, Founders Asset Management Inc. for Founders, Rowe
Price-Fleming International, a United Kingdom Corporation, for T. Rowe, and
Scudder, Stevens, and Clark for Scudder. The Investment Manager receives a fee
computed daily and paid monthly based on an annual rate of .75%, .90%, 1.00%,
and 1.00% of the average daily net assets of the INVESCO, Founders, T. Rowe, and
Scudder Portfolios, respectively.
The Investment Manager pays each sub-advisor a fee computed daily and payable
monthly based on an annual rate of .50%, .65%, .75%, and .60% of the average
daily net assets of the INVESCO, Founders, T. Rowe, and Scudder Portfolios,
respectively. The annual rates of the fees payable by the Investment Manager to
the sub-advisors of all Portfolios, other than Scudder, are reduced for
Portfolio net assets in excess of specified levels.
The Investment Manager has agreed to reimburse each Portfolio for the amount, if
any, by which the total operating and management expenses (after fee waivers and
expense reimbursements) of the Portfolio for any fiscal year exceed the most
restrictive state blue sky expense limitation in effect from time to time, to
the extent required by such limitation. The Investment Management Agreement with
each Portfolio provides that the Investment Manager will reimburse the Portfolio
to prevent its expenses from exceeding a specific percentage limit. During the
six months ended June 30, 1995 the Investment Manager did not have to reimburse
any of the Portfolios pursuant to those provisions.
48
<PAGE> 51
AMERICAN SKANDIA TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
The Trust has entered into an agreement for the sale of shares with American
Skandia Life Assurance Corporation ("ASLAC") pursuant to which it pays ASLAC a
shareholder servicing fee at an annual rate of 0.1% of each Portfolio's average
net assets.
Certain officers and/or trustees of the Trust are also officers and/or directors
of the Investment Manager. During the six months ended June 30, 1995, the Trust
made no direct payments to its officers or interested Trustees.
3. PURCHASES AND SALES OF SECURITIES
The cost of security purchases and proceeds from the sales of securities,
excluding short-term obligations, during the six months ended June 30, 1995 were
$60,753,710 and $33,678,535 for INVESCO, $26,042,526 and $9,377,714 for
Founders, $41,660,594 and $9,960,793 for T. Rowe, and $42,180,869 and
$34,097,525 for Scudder.
4. FINANCIAL INSTRUMENTS
Off-Balance Sheet Risk
Certain Portfolios, as permitted by the Trust's prospectus, may trade financial
instruments with off-balance sheet risk in the normal course of investing
activities and to assist in managing exposure to market risks such as changes in
interest rates and foreign currency exchange rates. The financial instruments
include written options and forward foreign currency exchange contracts.
The notional or contractual amounts of these instruments represent the
investment the Trust has in particular classes of financial instruments and do
not necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only
when all related and offsetting transactions are considered.
Derivative Financial Instruments Held or Issued for Purposes Other Than Trading
Scudder entered into foreign currency exchange contracts ("FCECs") during the
six months ended June 30, 1995. The Portfolio will generally enter into forward
foreign currency exchange contracts as a way of managing foreign exchange rate
risk. A Portfolio may enter into these contracts to fix the U.S. dollar value of
a security that it has agreed to buy or sell for the period between the date the
trade was entered into and the date the security is delivered and paid for. A
Portfolio may also use these contracts to hedge, in whole or in part, the U.S.
dollar value of securities it already owns denominated in specific foreign
currencies. Scudder entered into both purchases and sales of put and call
options on currency contracts. These options entitle the holder to decide on or
before a future date whether to enter into such a contract. If the holder
decides not to enter into the contract, the premium received or paid is
recognized as a realized gain or loss. At June 30, 1995, the following
instruments were outstanding:
<TABLE>
<CAPTION>
NUMBER OF
PORTFOLIO DESCRIPTION CONTRACTS FACE AMOUNT
------------------------------------------------ ----------- --------- -----------
<S> <C> <C> <C>
Scudder......................................... FCECs 56 $7,554,338
Options 16 6,090,507
</TABLE>
49
<PAGE> 52
AMERICAN SKANDIA TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
5. CAPITAL LOSS CARRYOVERS
At December 31, 1994, for Federal income tax purposes, the following Portfolios
had capital loss carryovers which may be applied against future net taxable
realized gains of each succeeding year until the earlier of its utilization or
expiration:
<TABLE>
<CAPTION>
EXPIRES IN:
----------------------------
2000 2001 2002
---- ---- ----------
<S> <C> <C> <C>
INVESCO.................................................. $0 $0 $ 255,091
Founders................................................. 0 0 1,024,019
Scudder.................................................. 0 0 90,101
</TABLE>
50
<PAGE> 53
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
VARIABLE ACCOUNT B - CLASS 3
FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JUNE 30, 1995
(UNAUDITED)
51
<PAGE> 54
[INTENTIONALLY LEFT BLANK]
52
<PAGE> 55
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
VARIABLE ACCOUNT B -- CLASS 3
STATEMENT OF ASSETS AND LIABILITIES
AS OF JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in mutual funds at market value (Note 2):
American Skandia Trust (AST):
T. Rowe Price International Equity Portfolio - 14,945 shares (cost
$148,740).................................................... $ 149,148
Founders Capital Appreciation Portfolio - 14,482 shares (cost
$179,473).................................................... 183,774
INVESCO Equity Income Portfolio - 20,175 shares (cost $223,203).... 224,547
Scudder International Bond Portfolio - 4,287 shares (cost
$43,768)..................................................... 43,387
Galaxy VIP Funds (GAL):
Money Market Portfolio - 695,962 shares (cost $695,962)............ 695,962
Equity Portfolio - 39,206 shares (cost $464,085)................... 470,472
High Quality Bond Portfolio - 10,632 shares (cost $106,120)........ 106,110
Asset Allocation Portfolio - 18,954 shares (cost $214,703)......... 216,266
----------
Total Invested Assets.................................. 2,089,666
Receivable from American Skandia Life Assurance Corp.................................... 31,903
----------
Total Assets........................................... $2,121,569
----------
LIABILITIES:
Payable to American Skandia Trust....................................................... $ 21,500
Payable to The Galaxy VIP Funds......................................................... 10,863
----------
Total Liabilities...................................... $ 32,363
----------
</TABLE>
NET ASSETS:
<TABLE>
<CAPTION>
Unit
Contractowners' Equity Units Value
---------------------- ------ ------
<S> <C> <C> <C>
AST - T. Rowe Price International Equity........... 14,814 $10.06 $ 149,094
AST - Founders Capital Appreciation................ 16,849 10.90 183,703
AST - INVESCO Equity Income........................ 21,413 10.48 224,467
AST - Scudder International Bond................... 4,239 10.23 43,353
GAL - Money Market................................. 69,098 10.07 695,863
GAL - Equity....................................... 44,888 10.48 470,424
GAL - High Quality Bond............................ 9,963 10.64 106,036
GAL - Asset Allocation............................. 20,345 10.63 216,266
----------
Total Net Assets............ $2,089,206
==========
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
53
<PAGE> 56
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
VARIABLE ACCOUNT B -- CLASS 3
STATEMENT OF OPERATIONS
FOR THE PERIODS ENDED JUNE 30, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS 3 SUB-ACCOUNTS INVESTING IN:
---------------------------------------------------
AST - FOUNDERS
AST - T. ROWE CAPITAL
EQUITY APPRECIATION
(MAY 30* THRU (MAY 16* THRU
TOTAL JUN. 30, 1995) JUN. 30, 1995)
-------- --------------- ----------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Income
Dividends.............................................. $ 3,850 $ 0 $ 0
Expenses
Mortality and Expense Risks Charges and Administrative
Fees (Note 4)........................................ (1,121) (54) (72)
-------- ----- ------
NET INVESTMENT INCOME (LOSS)................................... 2,729 (54) (72)
-------- ----- ------
REALIZED GAIN ON INVESTMENTS:
Proceeds from Sales........................................ 116,244 0 0
Cost of Securities Sold.................................... 115,890 0 0
-------- ----- ------
Net Gain............................................... 354 0 0
Capital Gain Distributions Received........................ 0 0 0
-------- ----- ------
NET REALIZED GAIN.............................................. 354 0 0
UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Beginning of Period........................................ 0 0 0
End of Period.............................................. 13,612 408 4,301
-------- ----- ------
NET UNREALIZED GAIN (LOSS)..................................... 13,612 408 4,301
-------- ----- ------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS.................................. $ 16,695 $ 354 $4,229
======== ================== =====================
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements
* Date Operations Commenced
54
<PAGE> 57
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS 3 SUB-ACCOUNTS INVESTING IN:
----------------------------------------------------------------------------------------------------------------------
AST - SCUDDER GAL - MONEY GAL GAL - HIGH GAL - ASSET
AST - INVESCO INTERNATIONAL MARKET EQUITY QUALITY BOND ALLOCATION
EQUITY INCOME BOND (MAY 24* THRU (MAY 16* THRU (MAY 31* THRU (MAY 19* THRU
(MAY 22* THRU (MAY 16* THRU JUN. 30, JUN. 30, JUN. 30, JUN. 30,
JUN. 30, 1995) JUN. 30, 1995) 1995) 1995) 1995) 1995)
--------------- --------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
$ 0 $ 0 $ 2,093 $ 803 $ 290 $ 664
(80) (34) (431) (288) (60) (102)
------ ------ ------------- ------ ----- ------
(80) (34) 1,662 515 230 562
------ ------ ------------- ------ ----- ------
0 7,937 99,677 239 0 8,391
0 7,844 99,677 237 0 8,132
------ ------ ------------- ------ ----- ------
0 93 0 2 0 259
0 0 0 0 0 0
------ ------ ------------- ------ ----- ------
0 93 0 2 0 259
0 0 0 0 0 0
1,344 (381) 0 6,387 (10) 1,563
------ ------ ------------- ------ ----- ------
1,344 (381) 0 6,387 (10) 1,563
------ ------ ------------- ------ ----- ------
$ 1,264 $ (322) $ 1,662 $ 6,904 $ 220 $ 2,384
================= =============== ============== ============== ============== ==============
</TABLE>
- --------------------------------------------------------------------------------
55
<PAGE> 58
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
VARIABLE ACCOUNT B -- CLASS 3
STATEMENTS OF CHANGES IN NET ASSETS
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS 3 SUB-ACCOUNTS INVESTING IN:
-------------------------------------------------------
AST - T. ROWE AST - FOUNDERS
TOTAL PRICE INT'L CAPITAL
------------ EQUITY APPRECIATION
PERIOD ENDED ---------------- ---------------
JUN. 30, MAY 30* THRU MAY 16* THRU
1995 JUN. 30, 1995 JUN. 30, 1995
------------ ---------------- ---------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net Investment Income (Loss).................................. $ 2,729 $ (54) $ (72)
Net Realized Gain (Loss)...................................... 354 0 0
Net Unrealized Gain (Loss) on Investments..................... 13,612 408 4,301
------------ -------- ---------------
Net Increase (Decrease) in Net Assets
Resulting from Operations................................... 16,695 354 4,229
------------ -------- ---------------
CAPITAL SHARE TRANSACTIONS:
Transfers of Annuity Fund Deposits............................ 1,940,658 73,029 95,641
Net Transfers Between Sub-accounts............................ 131,747 75,667 83,833
Surrenders.................................................... 106 44 0
------------ -------- ---------------
Net Increase in Net Assets
Resulting from Capital Share Transactions................... 2,072,511 148,740 179,474
------------ -------- ---------------
TOTAL INCREASE IN NET ASSETS...................................... 2,089,206 149,094 183,703
NET ASSETS:
Beginning of Period........................................... 0 0 0
------------ -------- ---------------
End of Period................................................. $2,089,206 $149,094 $ 183,703
============ =================== ===============
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
* Date Operations Commenced
56
<PAGE> 59
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS 3 SUB-ACCOUNTS INVESTING IN:
------------------------------------------------------------------------------------------------------------
AST - SCUDDER GAL - MONEY GAL GAL - ASSET
AST - INVESCO INTERNATIONAL MARKET EQUITY GAL - HIGH ALLOCATION
EQUITY INCOME BOND ------------ ------------ QUALITY BOND ------------
-------------- ------------- MAY 24* THRU MAY 16* THRU ------------ MAY 19* THRU
MAY 22* THRU MAY 16* THRU JUN. 30, JUN. 30, MAY 31* THRU JUN. 30,
JUN. 30, 1995 JUN. 30, 1995 1995 1995 JUN. 30, 1995 1995
-------------- -------------- ------------ ------------ -------------- ------------
<S> <C> <C> <C> <C> <C>
$ (80) $ (34) $ 1,662 $ 515 $ 230 $ 562
0 93 0 2 0 259
1,344 (381) 0 6,387 (10) 1,563
-------------- ------- ------------ ------------ -------------- ------------
1,264 (322) 1,662 6,904 220 2,384
-------------- ------- ------------ ------------ -------------- ------------
195,122 51,379 847,090 391,241 85,750 201,406
28,074 (7,704) (152,902) 72,229 20,066 12,484
7 0 13 50 0 (8)
-------------- ------- ------------ ------------ -------------- ------------
223,203 43,675 694,201 463,520 105,816 213,882
-------------- ------- ------------ ------------ -------------- ------------
224,467 43,353 695,863 470,424 106,036 216,266
0 0 0 0 0 0
-------------- ------- ------------ ------------ -------------- ------------
$224,467 $ 43,353 $ 695,863 $470,424 $106,036 $216,266
================= ============== ============= ============= ============= =============
</TABLE>
- --------------------------------------------------------------------------------
57
<PAGE> 60
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
VARIABLE ACCOUNT B -- CLASS 3
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION
American Skandia Life Assurance Corporation Variable Account B -- Class 3 (the
"Account") is a separate investment account of American Skandia Life Assurance
Corporation ("American Skandia"). The Account is registered with the SEC under
the Investment Company Act of 1940 as a unit investment trust. The Account
commenced operations May 1, 1995.
As of June 30, 1995, the Account consisted of twenty-five sub-accounts. These
financial statements report on eight sub-accounts offered in the Variable
Annuity. Each of the eight sub-accounts invests only in a single corresponding
portfolio of either the Galaxy VIP Fund or the American Skandia Trust (the
"Trusts"). Fleet Investment Advisors Inc. is the advisor for The Galaxy VIP
Fund. American Skandia Investment Services, Incorporated is the investment
manager for American Skandia Trust, while Rowe Price-Fleming International,
Inc., Founders Asset Management, Inc., INVESCO Trust Company and Scudder,
Stevens & Clark, Inc. are the sub-advisors. The investment advisors are paid
fees for their services by the respective Trusts.
The following eight sub-accounts have commenced operations during 1995: the
GAL-Money Market on May 24, 1995; the GAL-Equity on May 16, 1995; the GAL-High
Quality Bond on May 31, 1995; the GAL-Asset Allocation on May 19, 1995; the
AST-T. Rowe Price International Equity on May 30, 1995; the AST-Founders Capital
Appreciation on May 16, 1995; the AST-INVESCO Equity Income on May 22, 1995 and
the AST-Scudder International Bond on May 16, 1995.
2. VALUATION OF INVESTMENTS
The market value of the investments in the sub-accounts is based on the net
asset values of the Trust shares held at the end of the current period.
Transactions are accounted for on the trade date and dividend income is
recognized on an accrual basis. Realized gains and losses on sales of
investments are determined on a first-in first-out basis.
3. INCOME TAXES
American Skandia does not expect to incur any Federal income tax liability on
earnings, or realized capital gains attributable to the Account, therefore, no
charges for Federal income taxes are currently deducted from the Account. If
American Skandia incurs income taxes attributable to the Account, or determines
that such taxes will be incurred, it may make a charge for such taxes against
the Account.
Under current laws, American Skandia may incur state and local income taxes (in
addition to premium tax) in several states. The company does not anticipate that
these will be significant. However, American Skandia may make charges to the
Account in the event that the amount of these taxes change.
4. CONTRACT CHARGES
The following contract charges are paid to American Skandia:
Mortality and Expense Risk Charges -- Charged daily against the
Account at an annual rate of 0.85% of the net assets.
Administrative Fees -- Charged daily against the Account at an annual
rate of .15% of the net assets. A maintenance fee equaling the smaller
of $35 or 2% of the current Account Value is deducted at the end of
each contract year and on surrender.
Transfer Fees -- Charged at a rate of $10 for each transfer after the
fourth in each annuity year.
Contingent Deferred Sales Charges are computed as set forth in the
Variable Annuity. These charges may be imposed on the full, or partial
surrender of certain contracts. There is no contingent deferred sales
charge if all premiums were received at least seven complete years
prior to the date of the full or partial surrender.
58
<PAGE> 61
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
VARIABLE ACCOUNT B -- CLASS 3
NOTES TO FINANCIAL STATEMENTS (CONT'D)
(UNAUDITED)
- --------------------------------------------------------------------------------
5. CHANGES IN THE UNITS OUTSTANDING
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
CLASS 3 SUB-ACCOUNTS INVESTING IN:
----------------------------------------------------------------------------------
AST - T. ROWE AST - FOUNDERS AST - INVESCO AST - SCUDDER
PRICE INT'L EQUITY CAP'L APPRECIATION EQUITY INCOME INTERNATIONAL BOND
------------------ ------------------ ------------- ------------------
MAY, 30* THRU MAY, 16* THRU MAY, 22* THRU MAY, 16* THRU
JUN. 30, 1995 JUN. 30, 1995 JUN. 30, 1995 JUN. 30, 1995
------------------ ------------------ ------------- ------------------
<S> <C> <C> <C> <C>
Units Outstanding Beginning of the Period... 0 0 0 0
Units Purchased............................. 7,163 9,007 18,655 4,986
Units Transferred Between Sub-accounts...... 7,651 7,842 2,758 (747)
Units Surrendered........................... 0 0 0 0
------- ------ ------ ------
Units Outstanding End of the Period......... 14,814 16,849 21,413 4,239
======= ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------
CLASS 3 SUB-ACCOUNTS INVESTING IN:
-------------------------------------------------------------
GAL - MONEY GAL GAL - HIGH GAL - ASSET
MARKET EQUITY QUALITY BOND ALLOCATION
------------- ------------- ------------- -------------
MAY, 24* THRU MAY, 16* THRU MAY, 31* THRU MAY, 19* THRU
JUN. 30, 1995 JUN. 30, 1995 JUN. 30, 1995 JUN. 30, 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Units Outstanding Beginning of the Period... 0 0 0 0
Units Purchased............................. 84,29 9 37,985 8,083 19,170
Units Transferred Between Sub-accounts...... (15,201) 6,903 1,880 1,175
Units Surrendered........................... 0 0 0 0
------- ------ ------ ------
Units Outstanding End of the Period......... 69,098 44,888 9,963 20,345
======= ====== ====== ======
</TABLE>
- --------------------------------------------------------------------------------
*Date Operations Commenced
59
<PAGE> 62
This report is not authorized for distribution to prospective investors
unless accompanied or preceded by an effective prospectus for the Funds
and for the Variable Annuity, which contain more information concerning the
Funds' investment policies, as well as fees and expenses and other pertinent
information. Read the prospectuses carefully before you invest.
[RECYCLE LOGO]
This report was printed on recycled paper.
<PAGE> 63
440 Lincoln Street
Box 7
Worcester, MA 01653-0007
BULK RATE
U. S. POSTAGE PAID
PERMIT NO. 552
HACKENSACK, NJ
8/95
<PAGE> 64
EDGAR APPENDIX
This appendix describes the components of the printed version of this report
that do not translate into a format acceptable to the EDGAR system.
The front cover of the printed version of this report includes a photograph two
men positioned near pillars speaking to one another.
Page 1 includes a chart showing the performance of the Variable Account E
sub-accounts for the annuity for six months, one year and since inception:
<TABLE>
<S> <C>
Galaxy VIP Money Market Fund
six months 2.4%
one year 4.3%
since inception 8.1%
Galaxy VIP Equity Fund
six months 15.8%
one year 20.4%
since inception 23.5%
Galaxy VIP Asset Allocation Fund
six months 17.5%
one year 19.3%
since inception 19.8%
Galaxy VIP High Quality Bond Fund
six months 14.4%
one year 13.8%
since inception 12.0%
</TABLE>
Page 2 includes a chart showing the performance of the Variable
Account B-Class 3 sub-accounts for the annuity since inception:
<TABLE>
<S> <C>
Galaxy VIP Money Market Fund
since inception 0.7%
Galaxy VIP Equity Fund
since inception 4.8%
Galaxy VIP Asset Allocation Fund
since inception 6.3%
Galaxy VIP High Quality Bond Fund
since inception 6.4%
</TABLE>
Page 3 includes a picture of Money Market Fund Manager Pat Galuska, a pie chart
of the fund's holdings (Commercial Paper 54% and US Government & Agency
Obligations 46%), and a line chart showing 7-Day Average Yields of the Fund and
the Donaghue's All Taxable Money Market Fund Average:
<PAGE> 65
<TABLE>
<CAPTION>
Donaghue's Money Market Fund
<S> <C> <C>
1/2/95 5.12% 5.12
2/1/95 5.23 5.14
3/1/95 5.49 5.55
4/1/95 5.53 5.38
5/1/95 5.51 5.36
6/1/95 5.51 5.35
7/1/95 5.46 5.26
</TABLE>
Page 4 includes a picture of Equity Fund Manager Harold MacKinney, and a pie
chart of the fund's holdings (Consumer Staples 23%, Consumer Cyclicals 12%,
Technology 11%, US Treasury Bills 10%, Cash & Cash Equivalents 9%, Basic
Materials 7%, Capital Goods 7%, Financial 7%, Energy 6%, Transportation 4%,
Utilities 2%, Other Common Stocks 2%).
Page 5 includes a mountain chart showing the growth of a $10,000 investment in
the Equity Fund compared to the Standard & Poor's 500 Index:
<TABLE>
<CAPTION>
S&P 500 Equity Fund
<S> <C> <C>
1/15/93 $10,000 $10,000
6/30/93 10,263 9,957
12/31/93 10,951 10,415
6/30/94 10,571 10,345
12/31/94 11,092 10,777
6/30/95 13,321 12,517
</TABLE>
Page 6 includes a picture of Asset Allocation Fund Manager Don Jones, and a
pie chart of the fund's holdings (Common Stocks 59%, Corporate Bonds 7%,
US Government and Agency Obligations 22%, Cash & Cash Equivalents 12%) and a
mountain chart showing the growth of a $10,000 investment in the Asset
Allocation Fund compared to the Standard & Poor's 500 Index:
<TABLE>
<CAPTION>
S&P 500 Asset Allocation Fund
<S> <C> <C>
1/15/93 $10,000 $10,000
6/30/93 10,670 10,152
12/31/93 10,679 10,553
6/30/94 10,314 10,125
12/31/94 10,817 10,307
6/30/95 13,260 12,141
</TABLE>
Page 7 includes a picture of High Quality Bond Fund Manager Mary McGoldrick and
a mountain chart showing the growth of a $10,000 investment in the High
Quality Bond Fund compared to the Lehman Brothers Government/Corporate Bond
Index:
<PAGE> 66
<TABLE>
<CAPTION>
Lehman Brothers
Government/Corporate Bond Index High Quality Bond Fund
------------------------------- ----------------------
<S> <C> <C>
1/15/93 $10,000 $10,000
6/30/93 10,489 10,306
12/31/93 11,549 10,604
6/30/94 10,460 9,996
12/31/94 10,551 9,984
6/30/95 11,796 11,449
</TABLE>
Page 8 includes a pie chart of the High Quality Bond Fund's holdings (Corporate
Bonds 26%, US Government and Agency Obligations 61%, Cash & Cash Equivalents
13%)
