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1996 SEMI-ANNUAL REPORT
UNAUDITED JUNE 30, 1996
[ARTWORK APPEARS HERE]
[LOGO OF
NEW YORK LIFE
APPEARS HERE]
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NEW YORK LIFE
MFA SERIES FUND, INC.
Officers and Directors
Richard M. Kernan, Jr., Chairman, Chief Executive
Officer and Director
Anne F. Pollack, President, Chief Administrative Officer
and Director
Michael J. Drabb, Director
Jill Feinberg, Director
Daniel Herrick, Director
Robert D. Rock, Director and Vice President
Roman L. Weil, Director
Richard W. Zuccaro, Tax Vice President
Anthony W. Polis, Treasurer
A. Thomas Smith III, Secretary
Marc J. Chalfin, Controller
Investment Advisers
MacKay-Shields Financial Corporation
Monitor Capital Advisors, Inc.
New York Life Insurance Company
Administrator
New York Life Insurance and Annuity Corporation
Custodians
The Bank of New York
Chemical Bank
Independent Accountants
Price Waterhouse LLP
Legal Counsel
Jorden Burt Berenson & Johnson LLP
The financial information included herein is taken from the records of the
Funds without examination by the Funds' independent accountants, who do not
express an opinion thereon.
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TABLE OF CONTENTS
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President's Letter..................... 2
MacKay-Shields Financial Corporation
Adviser's Report...................... 3
New York Life Insurance Company
Adviser's Report...................... 5
Portfolio Managers' Comments........... 6
LifeStages /SM/ Separate Account
(Non-Qualified and Tax Qualified Policies)
Statement of Assets and Liabilities.... 20
Statement of Operations................ 22
Statement of Changes in Total Equity... 24
Notes to Financial Statements.......... 28
New York Life MFA Series Fund, Inc.
Chairman's Letter...................... 44
Capital Appreciation Portfolio......... 45
Cash Management Portfolio.............. 49
Government Portfolio................... 53
High Yield Corporate Bond Portfolio.... 57
International Equity Portfolio......... 64
Total Return Portfolio................. 74
Value Portfolio........................ 81
Bond Portfolio......................... 85
Growth Equity Portfolio................ 89
Indexed Equity Portfolio............... 94
Notes to Financial Statements.......... 105
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To the Owners of LifeStagesSM Policies:
I am pleased to present the unaudited Semi-Annual Report for LifeStagesSM
and the MFA Series Fund, Inc. for the six month period ended June 30, 1996.
This semi-annual report contains performance information, financial state-
ments, notes and other pertinent data for each of the MFA Series Fund, Inc.
Portfolios available in LifeStagesSM. A separate Semi-Annual Report relating
to the Acacia Fund portfolio, which is available in LifeStagesSM as the So-
cially Responsible Portfolio, has also been provided.
MID-YEAR REVIEW
The first half of 1996 showed a promising start for the economy despite a
slowdown in 1995. A surge in consumer spending and business investment, and a
revival in home construction led to significant growth during the first two
quarters. Inflation has remained subdued so far, but may rise since the econ-
omy is operating at close to full employment. Bond yields have increased a
full percentage point since December, ending their year long decline. There
are also indications that the Federal Reserve may raise short-term interest
rates during the remainder of the year. Equity markets continued their upward
climb from 1995. Stock prices, as measured by the Dow Jones Industrial Aver-
age, increased another 10.5% as of mid-year, although some economists have ex-
pressed concern that the stock market may be due for some volatility as it di-
gests the gains of the last year and a half.
VARIABLE ANNUITIES IN GENERAL
As more people realize the importance of saving for retirement, variable an-
nuities have become an investment of choice because of their tax deferral,
flexibility, and control. Over 69 million people in the United States are now
over the age of 50, and the majority of them will be retiring earlier and liv-
ing longer than did previous generations. It is projected that over the next
15 years, 3.6 million people will retire each year. As the population ages,
retirement planning has become a priority for many at an earlier age.
Total United States variable annuity sales reached $49 billion in 1995, al-
most triple the amount of sales made in 1990. New York Life Insurance and An-
nuity Corporation received almost $500 million in total variable annuity pre-
miums during the first half of 1996, a 217% increase above the amount received
during the first half of 1995! We expect that variable annuities will continue
to be popular.
COMMITMENT TO YOUR NEEDS
In continuing our tradition of providing you with the best service possible,
we have added some additional features to LifeStagesSM. An "Interest Only" Pe-
riodic Partial Withdrawal feature and an Interest Sweep feature have been
added to allow you even more flexibility in accessing and allocating your mon-
ey. Our goal is to enhance LifeStagesSM with features and benefits that are
suited to your needs.
We thank you for selecting us to be "The Company You Keep(R)" and we look
forward to helping you build a solid foundation for your future.
On the following pages you will find reports from each of the Portfolio Man-
agers of the MFA Series Fund, Inc.
/s/ Seymour Sternberg
Seymour Sternberg
President
NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION
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MACKAY-SHIELDS FINANCIAL CORPORATION
ADVISER'S REPORT
Appearing to pick up where it left off last year, the stock market continued
to forge ahead during the first half of 1996, with the broad indices deliver-
ing returns equal to or in excess of the historical average returns that
stocks provide in a full year. The S&P 500* was up 10.09%, the Dow Jones In-
dustrial Average was up 11.77% and NASDAQ** had a return of 12.63%. Most of
the Dow's return came from the first quarter, while the S&P 500 was more bal-
anced between the two periods, slowing a bit during the second quarter. Small
cap stocks in the NASDAQ index sizzled during the second quarter before cor-
recting during the last two weeks in June.
The strength of this performance masked difficulties along the way: volatil-
ity, shifts in market leadership, some earnings disappointments, inflation
jitters and higher interest rates resulting from a stronger than expected
economy. Investors set yet another new record, however, by pouring more money
into stock funds in the first six months of 1996 ($139.5 billion) than they
did during all of 1995, when they invested $128.1 billion. This also topped
the previous full year record of $129.6 billion set in 1993.
The bond market had a difficult first half. During the first quarter, each
of the Lipper*** domestic bond categories, except for high yield, posted a
negative return, as market psychology shifted from euphoria to despair on
March 8, when the largest gain in non-farm payrolls in 12 years sent the bond
market plummeting. The 30 year Treasury bond fell 3.3% and the Dow fell 217
points, before it closed off at 171 points. The next day, however, the stock
market closed higher. The second quarter proved equally trying for bond in-
vestors. After another higher than expected rise in employment in April, long
rates rose again. Although the average bond investor eked out a modestly posi-
tive return in the second quarter, the volatility was unsettling. The 30 year
Treasury bond yield hit 6.94% before settling at 6.90% by the end of the first
half. High yield bonds, by contrast, had a fairly robust first half, aided by
a stronger than expected economy.
In the stock market, interest rate increases during the first half led to a
correction in financials and consumer non-durables. Conversely, economically
sensitive sectors such as chemicals, retail and consumer cyclicals started to
outperform during the first quarter, but a rotational correction occurred dur-
ing the second quarter as the battle of economic acceleration vs. the linger-
ing effects of inventory slowdowns took place. This caused cyclicals such as
chemicals to underperform. Retail stocks remained strong as the consumer ex-
hibited pockets of strength. Healthcare underperformed during the entire first
half, and technology was generally weak as well, as investors grappled with
excess capacity, inventory adjustments and weaker personal computer demand. To
sum it up, making money during the first half was not as easy as the index re-
turns might suggest. Volatility ran rampant. Stock selection was key.
On the international front, non-U.S. markets continued to lag the U.S. dur-
ing the first quarter, but returns were more competitive with ours during the
second quarter. Latin America posted strong gains and small company funds also
prospered in European markets. Japan performed in line with international av-
erages, but was up 43.5% over the twelve months ended June 30, 1996 based on
signs of an economic recovery. Foreign currencies continued a decisive decline
against the U.S. dollar, led by weakness in the Japanese yen and core European
currencies.
Looking ahead to the second half of the year we believe there is a signifi-
cant opportunity for gains in an international portfolio which is diversified
across a broad array of developed markets. The major risk is that the U.S.
dollar continues to appreciate as we believe it will and we are helping to
control this risk by actively protecting our international portfolios against
further declines in foreign currencies.
Domestically, the key issue facing the bond markets as we move forward is
inflation. Despite positive news on the commodity front, the rate of increase
in wages is more important because labor represents approximately two-thirds
of the cost of production. Wage gains remained moderate until the recently re-
ported June employment statistics on July 5th. Average hourly earnings came in
much higher than projected. Market participants were forced to consider that
corporate downsizing and increases in labor productivity had not held back the
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threat of large wage gains. Going forward we will be closely monitoring the
Fed, the economy, and especially inflationary trends, and if appropriate, will
adjust the duration of our fixed income portfolios tactically around the mar-
ket's neutral point.
With respect to the U.S. stock market, investors should be mindful that the
return of 10.84% for the average diversified stock fund during the first half
is about equal to the return that stocks have delivered in an average year
over a period of several decades. On top of a fabulous 1995, it would be hard
to imagine an equally stellar second half. As is always the case, however,
there are pluses and minuses for the market as we enter the second half of the
year. On the plus side, a strong economy should bode well for earnings, espe-
cially for the cyclicals that should now reverse the 1995 trend of inventory
correction and begin to rebuild inventory, including the autos and the paper
companies. And despite the fact that many believe the market to be expensive,
within the context of reasonably low interest rates and inflation, the S&P 500
P/E ratio of 16 to 17 times earnings is not excessive by historical standards.
Another big potential plus which could lead us into the next leg of this bull
market is the anticipated worldwide 1997 recovery in South America, Europe and
Asia.
In the minus column, a stronger than expected economy could lead to even
higher interest rates, which is not good for stocks. On the other hand, too
much economic weakness could reignite recession fears, which would also be bad
for the stock market. Perhaps the biggest potential negative and a real threat
to earnings is the possibility that inflation will once again, for the first
time in a long time, rear its ugly head. Even with its trending a little high-
er, in the 2 1/2% to 3 1/2% range, which we currently anticipate, the market
could cope. If wage pressures and the confluence of other inflation forces
were to push it up past the 4% level, however, we could be in for a more se-
vere blow to interest rates, earnings and the market. Finally, although li-
quidity remains excellent and a driving force behind the market advance as
baby boomers continue to invest for the future, if these flows slowed down or
stopped at some point, even temporarily, we could see increased volatility.
Whatever the future holds, we will continue our disciplined bottom up ap-
proach to both growth and value investing. Stock selection will continue to be
of paramount importance.
Ravi Akhoury
Chairman and Chief Exective Officer
MacKay-Shields Financial Corporation
*"Standard & Poor's 500 Composite Stock Price Index" and "S&P 500" are
registered trademarks of the Standard & Poor's Corporation. The New York Life
MFA Series Fund, Inc. is neither sponsored by nor affiliated with Standard &
Poor's Corporation. The S&P 500 is an unmanaged index considered generally
representative of the U.S. stock market. Results assume the reinvestment of
all income and capital gains distributions.
**"NASDAQ Composite Index" is an unmanaged index and is considered to be
generally representative of the U.S. small capitalization stock market.
***Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance compa-
nies.
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NEW YORK LIFE INSURANCE COMPANY
ADVISER'S REPORT
During the first half of 1996, the performance of the stock and bond markets
diverged significantly. As the credit markets reacted to stronger than ex-
pected economic growth, the Federal Reserve policymakers changed course from
stimulative to neutral. Thus by the end of June, the yield on the ten year
Treasury reached 6.71%, an increase of 114 basis points.
This pressure on values in the bond market was not paralleled by the stock
market. While most domestic bond portfolios were down, the stock market was up
strongly with the S&P 500* increasing by 10.09%. The stock market responded
favorably to prospects for continued earnings growth--from both domestic con-
sumer demand and worldwide economic growth.
As a consequence, we anticipate a less stable environment for the stock mar-
ket going forward for the next six months. Our fundamental view on the economy
remains favorable and we believe that consumer and internationally oriented
businesses are especially well-positioned. Our outlook for the stock portfolio
is to continue to invest in quality growth stocks which sell at reasonable
valuations.
For the bond market, confidence in Fed policymakers will be a key element in
assuring stability. Although the best performing bond sectors have been high
yield and mortgage-backed securities, our core bond portfolio is
conservatively positioned in high grade corporates and Treasuries.
Jean Hoysradt
Senior Vice President
in charge of the Investment
Department
New York Life Insurance Company
*"Standard & Poor's 500 Composite Stock Price Index" and "S&P 500" are reg-
istered trademarks of the Standard & Poor's Corporation. The New York Life MFA
Series Fund, Inc. is neither sponsored by nor affiliated with Standard &
Poor's Corporation. The S&P 500 is an unmanaged index considered generally
representative of the U.S. stock market. Results assume the reinvestment of
all income and capital gains distributions.
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CAPITAL APPRECIATION PORTFOLIO
After its superb showing in 1995, the Capital Appreciation Portfolio began
1996 with another strong first quarter, both in absolute and relative terms,
and a second quarter that was strong until the last two weeks in June, when it
lost ground. For the first six months of 1996, the Portfolio had a 9.86%* ad-
vance vs. 10.55% for the average Lipper** growth fund. The Portfolio's return
for the six months was only slightly less than the S&P 500*** return of
10.09%. For the one, two, and three year period ended June 30, 1996 the Port-
folio's return was well ahead of the Lipper average fund.
One of the most notable developments late in the first quarter was the
outperformance of many consumer cyclical stocks after a lackluster 1995, such
as Bed Bath & Beyond, Lowe's and Home Depot, as sales of home-related goods
began to show signs of improvement. One of our newer holdings, Nike, (the
Fund's top performing stock in March), is poised to have an excellent year in
1996, given the summer Olympics, accelerating international and apparel sales,
a faltering Reebok, and new product introductions. Nine West Group was also a
strong performer. Consumer stocks continued to outperform the market in the
second quarter. Our top holding, HFS, was also the Portfolio's best stock.
HFS's announced acquisition of Avis adds a widely recognized car rental brand
to HFS's stable of famous hotel and real-estate names. Other strong consumer
stocks in the second quarter included Nike, Mirage Resorts, CUC International
and Nine West Group.
Financial stocks outperformed the market in the first quarter, despite the
volatile and punitive month of March. A surprisingly strong employment report
early in the month derailed any hopes of a near-term cut in interest rates by
the Federal Reserve. Many interest-sensitive bank and insurance stocks suf-
fered on this news, particularly in light of the sharp decline in the bond
market. Given the strong 1995 performance of this group, we took some profits
during the first quarter. As a group, financials also underperformed the mar-
ket in the second quarter, caused by two factors. The first was the volatile
bond market. The second was another credit quality scare, which began when
Bank of New York (which we consequently sold before the end of the quarter)
announced larger-than-expected reserves for bad consumer loans. It is diffi-
cult to ascertain whether consumers are truly overburdened with credit card
debt, or whether certain institutions were too aggressive in their lending
practices and are now paying the price. Green Tree Financial and First USA
were notable underperformers in this environment. On the plus side,
SunAmerica, First Data and Household International all recorded double-digit
gains in the second quarter.
Healthcare stocks modestly outperformed the market during the quarter.
Guidant and Medtronic performed exceptionally well. OrNda HealthCorp. and
Columbia/HCA Healthcare, two hospital consolidators, also recorded strong
gains. The biggest disappointment was Genzyme, which weakened in March when an
FDA panel approved the company's new product, Seprafilm, for applications that
were more limited than some had expected. Drug stocks in general had a rough
time this quarter, with market-trailing performances turned in by Amgen,
Pharmacia & Upjohn and Teva Pharmaceutical Industries, perhaps attributable to
some profit-taking after exceptional gains in 1995. A number of HMOs
preannounced disappointing second quarter earnings, which they attributed to
higher utilization trends and premium pricing pressures. Thus, our HMO stocks,
Humana, United Healthcare and PacifiCare Health Systems underperformed. The
healthcare sector has been out of favor this year as investors shifted their
focus away from the more defensive areas. We believe this pullback has been
more of a sector rotation issue than a change in the fundamental outlook for
the group as a whole, but we will monitor the HMO situation closely and will
take action should fundamentals deteriorate.
Technology stocks also underperformed the market during the first quarter as
investors continued to grapple with excess capacity, inventory adjustments and
weaker demand for personal computers and cellular phones. While several of our
stocks outperformed (EMC, Microsoft and Computer Associates International),
others underperformed (3Com, Lam Research and Vishay Intertechnology). Tech-
nology turned in a mixed performance in the second quarter. Several of our
names recorded exceptional, double-digit advances, led by Sun
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Microsystems, Intel and Oracle. However, the preannouncement of earnings dis-
appointments by certain disk-drive manufacturers and semiconductor companies
caused weakness in our remaining commodity-oriented stocks--chiefly Lam Re-
search and Seagate Technology. We remain primarily focused on software,
networking and database management companies.
After strong gains in April and May, the Portfolio lagged the S&P 500 by
nearly 300 basis points in June, resulting in a subpar second quarter. Two no-
table underperforming stocks were companies in the same business, but differ-
ent issues caused earnings shortfalls. Alco Standard and Danka Business Sys-
tems distribute, service and sell copy machines in the U.S. and Europe. Alco
Standard also has a paper distributor business, which is experiencing margin
pressure as commodity paper prices decline, but this division will be spun off
later this year. Danka Business Systems, in the midst of a rapid growth spurt,
saw costs escalate. Demand for both companies' products and services remains
robust, and we consider the other issues short-term in nature. Thus we will
continue to hold both stocks.
Investor attention will now shift to second quarter earnings reports, which
will begin in the second week of July. Going forward, we believe a low infla-
tion environment and slow but steady economic growth (even with a stronger
than expected economy for now) should provide a positive backdrop for growth
stocks.
Edmund Spelman
Rudy Carryl
Eileen Cook
Portfolio Managers
MacKay-Shields Financial Corporation
*Total returns shown indicate past performance and are not indicative of fu-
ture results. Investment return and principal value will fluctuate so that
shares, upon redemption, may be worth more or less than their original cost.
These results do not reflect any deduction of sales charges, mortality and ex-
pense charges, contract charges or administrative charges. The performance
would be lower had these charges been deducted.
**Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance compa-
nies.
***"Standard & Poor's 500 Composite Stock Price Index" and "S&P 500" are
registered trademarks of the Standard & Poor's Corporation. The New York Life
MFA Series Fund, Inc. is neither sponsored by nor affiliated with Standard &
Poor's Corporation. The S&P 500 is an unmanaged index considered generally
representative of the U.S. stock market. Results assume the reinvestment of
all income and capital gains distributions.
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CASH MANAGEMENT PORTFOLIO
The Cash Management Portfolio had a total return of 2.45%* for the first six
months of 1996, slightly ahead of the Lipper** average fund return of 2.43%.
The Portfolio continued to be managed with a focus on liquidity and preserva-
tion of capital. The rise in interest rates during the second quarter did not
materially affect money market rates. We maintained an average maturity of ap-
proximately 47 days. The quality of the Portfolio remains of paramount impor-
tance, with no second tier securities being held. Going forward, we believe
our conservative approach can meet the needs of our most risk averse invest-
ors.
Ravi Akhoury
Frank Salem
Jessica Terc
Portfolio Managers
MacKay-Shields Financial Corporation
*Total returns shown indicate past performance and are not indicative of fu-
ture results. Investment return and principal value will fluctuate so that
shares, upon redemption, may be worth more or less than their original cost.
These results do not reflect any deduction of sales charges, mortality and ex-
pense charges, contract charges or administrative charges. The performance
would be lower had these charges been deducted.
**Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance compa-
nies.
An investment in the Portfolio is neither insured nor guaranteed by the U.S.
Government and there can be no assurance that the Portfolio will be able to
maintain a stable net asset value of $1.00 per share.
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GOVERNMENT PORTFOLIO
During the first six months of 1996 which proved difficult for bond invest-
ors, the Government Portfolio had a return of -2.03%* only slightly behind the
Lipper** average return of -1.86%. The performance of the Portfolio during the
first quarter was most influenced by our duration position, which was main-
tained in a generally neutral range. The economy continued to experience solid
growth in the second quarter, led by the housing, auto and retail segments of
the market. This strength is what moved yields higher in the bond market. Dur-
ing the second quarter, our slightly short of neutral duration posture and se-
curity selection in the Treasury and mortgage market added to our performance.
After interest rates rose in the second quarter, we moved to a slightly long-
er-than-neutral duration, which also helped the Portfolio outperform its peers
for the quarter.
After 1995, which provided investors with the best return in the past decade
and the third best year since records have been kept, the first quarter of
1996 proved to be the worst performing quarter since 1987. The yield on the 30
year Treasury bond rose 72 basis points, producing a price decline of 8.4%.
The rate rise was triggered by an unexpected surge in the economy, led by au-
tos, housing, non-defense capital goods and even the battered and bruised re-
tail sector. The Federal Reserve began the quarter with a continuation of its
easier monetary policy directive, and the market reacted with a slightly
steeper yield curve. As the quarter progressed, the market's perception of the
Fed's move from an easier policy to a neutral policy caused a partial reversal
of its steepening trend. The yield curve finished the quarter approximately
ten basis points steeper than at year-end.
Security selection was an important component of our first quarter total re-
turn. In the volatile markets of February and March, liquidity was at a pre-
mium and that led to stronger returns for new issue Treasuries. Older issue
Treasuries underperformed due to an increase in supply from heavy investor
selling. As the second quarter progressed, we sold our new Treasury issues and
bought the older issues. With the Fed's neutral environment continuing, we ex-
pected the curve to have a steepening bias and were positioned accordingly.
The value between older issue Treasuries and new issues reversed the first
quarter's trend as new issues underperformed older issues. We believe the
trend for the third quarter will again reverse itself. In anticipation of
this, we will swap our outperforming older issues into the newer issues as the
quarter unfolds.
Perception of the Federal Reserve's next move was the focal point for the
market over the second quarter. During the last 3 months, the market waffled
over whether the Federal Reserve would raise the Fed Funds rate or leave it
unchanged. With all this uncertainty, the yield curve was relatively unchanged
over the quarter. As the third quarter unfolds, we expect the curve to be rel-
atively stable.
With the backup in interest rates, mortgage backed securities lengthened in
duration during the first quarter as refinancing activity dried up. This led
mortgages to underperform Treasuries during the quarter. We viewed the
underperformance as an opportunity to increase our exposure to this sector. We
also swapped adjustable rate mortgages into fixed rate mortgages as limited
new issues allowed adjustable rate mortgage spreads to tighten. During the
second quarter, we continued with the strategy of adding high yielding, high
quality, short-term mortgage assets. Lack of new supply, higher rates and
lower volatility allowed this product to enjoy tighter spreads versus similar
duration Treasuries. We begin the third quarter overweighted in the mortgage
sector as lower volatility enhances the return profile on mortgages.
As the second half of the year unfolds, we will be monitoring Federal Re-
serve policy closely for early signals as to changes in monetary policy. Mean-
while, we will focus on inflationary trends and signals of economic strength
to adjust the portfolio's duration tactically around the market's neutral
point.
Ravi Akhoury
Edward Munshower
Christopher Harms
Portfolio Managers
MacKay-Shields Financial Corporation
*Total returns shown indicate past performance and are not indicative of fu-
ture results. Investment return and principal value will fluctuate so that
shares, upon redemption, may be worth more or less than their original cost.
These results do not reflect any deduction of sales charges, mortality and ex-
pense charges, contract charges or administrative charges. The performance
would be lower had these charges been deducted.
**Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance compa-
nies.
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HIGH YIELD CORPORATE BOND PORTFOLIO
The High Yield Corporate Bond Portfolio achieved competitive performance
during the first half of 1996, with a return which was strong both in absolute
and relative terms. The Portfolio's six month return of 8.26%* was almost dou-
ble that of the average Lipper** fund return of 4.64%. As was the case last
year, the strength of our security selection more than offset the detrimental
effects of holding cash reserves in a generally rising market, allowing us
again to outperform our peers.
With rising interest rates, yield spreads over Treasuries tightened even
further during the first six months. Believing that spreads would return to
historical normal levels in 1996, we continued to maintain a healthy cash po-
sition of 20% or more. Importantly, we also upgraded the credit quality of the
portfolio during the first quarter, taking profits in some of the more specu-
lative issues, such as Waxman Industries and Liggett Group, and focusing upon
more seasoned issuers with strong and improving credit momentum.
Specifically, we focused upon special situations featuring short term events
such as refinancings, including Mesa Petroleum and GPA, and we avoided situa-
tions with negative earnings comparisons, namely cyclicals. One example of an
issue with strong credit momentum which appreciated smartly during the first
quarter was Selmer, a clarinet and piano company. Generally, our high yield
bonds were not as interest rate sensitive as the market, which gave us a com-
petitive advantage in a rising rate environment. Another strategy that added
value was our emphasis on restaurant credits, which outperformed substantially
in January and February; consequently, we took profits and substantially re-
duced our weighting.
We have believed for some time that a cautious posture was appropriate be-
cause spreads were narrow and a weak economy could cause credit quality to de-
teriorate. One of the surprises of this year has been that with some signs of
strength in the economy, the default rate has remained less than 1% and
spreads have narrowed still further as interest rates have risen. Although the
approximate 20% cash position continued to be a performance hindrance in the
strong second quarter market, we more than compensated by strong security se-
lection. Moreover, having some excess cash has, in fact, given us excellent
flexibility on certain deals as they have come to market. We continue to be-
lieve that we are in the latter stages of this economic cycle, and consider
caution to be appropriate. Already having less interest rate sensitive hold-
ings than the market, we have now shortened the duration of the Portfolio.
Specifically we have emphasized shorter term issues such as United Interna-
tional Holdings and G-I Holdings.
Looking ahead, we continue to believe that our emphasis on credit quality is
appropriate, based upon our assumption that the strong credits are likely to
get stronger in this late inning of the economic cycle, and the Portfolio can
benefit from this momentum with companies that have already significantly im-
proved their financial picture by paying down debt. Specifically, we like
broadcasting, newspapers, and international cable. We are taking another look
at paper, but find little value in retail or supermarkets. The market does not
represent compelling relative value as a whole, and we refuse to compromise
our risk averse approach or to stretch for yield by selecting inferior cred-
its. We will continue to hold cash and retain our defensive posture until the
market becomes more attractive, and will seek out select opportunities that
can add value.
Denis Laplaige
Steven Tananbaum
Thomas Hajdukiewicz
Portfolio Managers
MacKay-Shields Financial Corporation
*Total returns shown indicate past performance and are not indicative of fu-
ture results. Investment return and principal value will fluctuate so that
shares, upon redemption, may be worth more or less than their original cost.
These results do not reflect any deduction of sales charges, mortality and ex-
pense charges, contract charges or administrative charges. The performance
would be lower had these charges been deducted.
**Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance compa-
nies.
10
<PAGE>
- -------------------------------------------------------------------------------
INTERNATIONAL EQUITY PORTFOLIO
The International Equity Portfolio decisively outperformed the benchmark
Morgan Stanley Capital International EAFE* index during the first six months
of 1996, with a return of 7.03%** vs. 4.51% for Morgan Stanley Capital Inter-
national EAFE, but trailed the median Lipper*** fund return of 9.27% and the
average return of 10.31%.
In the first quarter, the Portfolio's international diversification bene-
fited from investments in two of the better performing international markets:
in Asia, Hong Kong, and in Europe, France. Hong Kong, which is closely tied to
the growing U.S. economy, was up 11.7%, and France, with continued interest
rate reductions, was up 11.6% (both in local terms). Also in the first quar-
ter, the Portfolio's protection from expensive foreign currencies declining
against the U.S. dollar also contributed to our outperformance. The U.S. dol-
lar continued to appreciate, gaining 3.0% against the Japanese Yen and the
German Mark along with other European currencies. However, due to capital
flows and rising commodity prices, the Australian Dollar gained 5.0% versus
the U.S. Dollar. The Portfolio's Australian equity holdings were not hedged
and consequently, the Portfolio captured this currency gain.
During the second quarter, both country allocation and currency management
strategies rewarded shareholders in the International Equity Portfolio. With
regard to country allocation, the Portfolio had significant investments in the
three top performing equity markets of the second quarter--Spain, up 10.9%,
Italy, up 10.8% and Norway, up 8.8%. These equity markets rallied on the back
of declining inflation and declining interest rate trends locally. The Japa-
nese equity market, the largest market outside of the U.S., performed in line
with the average of international markets in the last three months, but has
surged by 43.5% over the past year on signs of an economic recovery. Also
helping performance was our decision to protect actively against declining
foreign currencies imbedded in international equity investing. Throughout the
entire first half of the year, the Portfolio benefited from our currency man-
agement strategies. Selective hedging helped the Portfolio as expensive for-
eign currencies declined relative to the U.S. dollar. During the second quar-
ter, foreign currencies continued their decline against the U.S. dollar, led
by weakness in the Japanese Yen (-3%) and in the core European currencies such
as the German Mark (-3%) and the Swiss Franc (-5%). Because emerging markets,
Latin America in particular, were strong performers especially during the sec-
ond quarter, the Portfolio lagged others which were invested in these markets,
but our "developed market only" strategy continues to be a part of our risk
controlled approach to international investing. We consider those emerging
markets to be too unstable and volatile for a core portfolio such as ours.
Entering the second half, the International Equity Portfolio will maintain a
diversified exposure in both Asia and Europe. The Portfolio will maintain ex-
posures in the equity markets of Austria, Italy, Spain and France in Europe,
where we see continued interest rate reductions in the face of mounting reces-
sionary malaise. In Asia, the Portfolio will remain invested in Singapore,
which continues to benefit from U.S. economic strength. In Japan, the persis-
tent government policies to promote economic growth continue to make equity
investments attractive. Accordingly, the Portfolio will remain invested in Ja-
pan. We also will maintain our exposure to energy and natural resources. Our
energy exposure is reflected through investments in Norway (Norsk Hydro) and
the Netherlands (Royal Dutch Petroleum), while our natural resource exposure
is reflected in the Pacific markets of Australia (mining and metals) and New
Zealand (forest products).
Going forward, the Portfolio is positioned across a broad array of developed
equity markets, with a tilt in favor of major Asian and peripheral European
markets over the core of European equity markets. We continue to help protect
the Portfolio actively against a decline in foreign currencies against the
U.S. dollar, a decline which could be accelerated by an upcoming round of Fed
tightening. With many believing that the U.S. Fed could be poised to begin an-
other round of rate increases, diversification into developed markets with
11
<PAGE>
- -------------------------------------------------------------------------------
independent central bank policies is looking quite attractive again. The cur-
rency risk of international investing in this environment (U.S. rate hikes
triggering a rise in the U.S. dollar and a decline in foreign currencies) can
be mitigated through active currency management, a strategy pursued by the In-
ternational Equity Portfolio.
Michael Perelstein
Shigemi Takagi
Portfolio Managers
MacKay-Shields Financial Corporation
*Morgan Stanley Capital International EAFE Index is an unmanaged index of
the securities of over 1,000 companies traded on the markets of Europe, Aus-
tralia, New Zealand and the Far East.
**Total returns shown indicate past performance and are not indicative of
future results. Investment return and principal value will fluctuate so that
shares, upon redemption, may be worth more or less than their original cost.
These results do not reflect any deduction of sales charges, mortality and ex-
pense charges, contract charges or administrative charges. The performance
would be lower had these charges been deducted.
***Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance compa-
nies.
12
<PAGE>
- -------------------------------------------------------------------------------
TOTAL RETURN PORTFOLIO
After a competitive 1995, the Total Return Portfolio enjoyed another strong
first quarter and a more challenging second quarter. For the first six months
of 1996 the Portfolio had a return of 5.24%* vs. 4.14% for the average bal-
anced fund in the Lipper** universe.
During the first quarter, both growth and value oriented styles performed
strongly, so that this quarter's competitive advantage on the equity side was
clearly due to individual stock selection. Managed similarly to the Capital
Appreciation Portfolio, the Total Return Portfolio equity component benefited
from the long awaited improving fundamentals of selected consumer cyclicals
such as Bed Bath & Beyond, Lowe's and Home Depot, and a stellar new purchase,
Nike. Consumer stocks remained our best performing sector in the second quar-
ter with top holding HFS turning in the Portfolio's best individual stock per-
formance. Other solid double-digit gainers in the consumer arena included Ni-
ke, Mirage Resorts, CUC International and Nine West Group.
Despite the rise in interest rates and the resulting tumble in bank and in-
surance company stock prices in March, our financial stocks still managed to
outperform the market for the first quarter. Financials lagged in the second
quarter, but performance was mixed. Household International, First Data and
SunAmerica reported double-digit gains, but heightened concerns about consumer
debt burdens, plus generally higher levels of interest rates, hurt the stocks
of Wells Fargo, Green Tree Financial and First USA. We have taken some prof-
its, but remain overweighted in financials.
Healthcare stocks modestly outperformed the market, during the first quar-
ter, but performance was more mixed, with medical devices and hospital manage-
ment companies doing well and defensive drug stocks disappointing (after a
strong 1995). Detracting from the Portfolio's second quarter performance was
continued weakness in the healthcare sector. While there were instances of de-
teriorating fundamentals, most notably Humana, which preannounced disap-
pointing second quarter earnings attributable to increased medical utilization
and premium pricing pressures, most of the group's weakness was due, we be-
lieve, to sector rotation. Mounting evidence that the economy may be a
stronger growth trajectory than was earlier anticipated prompted many invest-
ors to shift their attention away from defensive sectors like healthcare. We
believe that the strong underlying long-term fundamentals that remain intact
for holdings such as Guidant, Medtronic, Amgen,Johnson & Johnson and
HEALTHSOUTH will be rewarded when investors return to stocks that can deliver
consistent earnings growth. We will, however, monitor the HMO situation
closely and will take action should fundamentals deteriorate.
The underperformance of technology stocks during the first quarter resulted
from excess capacity, inventory adjustments and weaker demand for PC's and
cellular phones. Nevertheless, some of our holdings outperformed (EMC,
Microsoft and Computer Associates International). Our technology stocks con-
tinued to underperform in the second quarter due to lower earnings expecta-
tions resulting from excess capacity and weak demand and pricing in the impor-
tant personal computer segment. Still, several of our holdings outperformed,
most notably Intel, Sun Microsystems and Oracle. We continue to maintain an
overweighted position in technology, with particular emphasis on software,
networking and database management companies.
Second quarter performance was hurt primarily by weakness in Alco Standard
and Danka Business Systems. Both of these companies market and service copy
machines worldwide. Alco Standard also has a paper distribution business,
which is suffering from declining commodity paper prices. Danka Business Sys-
tems, in the midst of a rapid growth spurt, is experiencing growing pains that
are being made manifest in escalating overhead costs. We consider both of
these issues relatively short-term in nature. Accordingly, we remain invested
in these names. As interest rates rose markedly in the first quarter, the bond
component of the Portfolio was positioned with a duration in line with the
market. Security selection added value within the Treasury sector. In the
mortgage arena, we increased our weighting at attractive valuation levels as
many issues lengthened dramatically and widened in spread to Treasuries.
Corporates modestly outperformed similar duration Treasuries. Our emphasis on
the bank/finance sector added value, as banks outperformed despite the rise in
interest rates. In the
13
<PAGE>
- -------------------------------------------------------------------------------
bond portion of the portfolio, our maturity position and security selection in
corporates, Treasuries and mortgage-related products added value during the
second quarter. Yankee bonds were a strong performing group as investors began
to recognize values in this under-followed sector. In the mortgage market dur-
ing the second quarter, we added higher yielding, high quality short-term
mortgage assets. The portfolio has an average weighted quality rating of AA+.
As of June 30, 1996, asset allocation for the Total Return Portfolio was as
follows: 55% in stocks; 39% in bonds; 6% in cash equivalents.
Ravi Akhoury
Rudy Carryl
Edmund Spelman
Eileen Cook
Christopher Harms
Portfolio Managers
MacKay-Shields Financial Corporation
*Total returns shown indicate past performance and are not indicative of fu-
ture results. Investment return and principal value will fluctuate so that
shares, upon redemption, may be worth more or less than their original cost.
These results do not reflect any deduction of sales charges, mortality and ex-
pense charges, contract charges or administrative charges. The performance
would be lower had these charges been deducted.
**Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance compa-
nies.
14
<PAGE>
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VALUE PORTFOLIO
The Value Portfolio had an exceptionally strong first quarter both in abso-
lute and relative terms, and a more challenging second quarter. For the six
months of 1996, the Portfolio had a return of 8.95%* only modestly less than
the average growth and income fund in the Lipper** universe, which had a re-
turn of 9.46%. The S&P 500*** had a return of 10.09% during this period.
The long-awaited signs of an economic recovery began to appear in the middle
of the first quarter, including improving auto sales, reasonably strong hous-
ing activity and better retail sales, especially after a difficult January due
to bad weather. These signs translated into rising interest rates which led to
a correction in financials, consumer non-durables, utilities and healthcare.
Conversely, economically sensitive sectors such as chemicals (Lyondell Petro-
chemical, Dow Chemical, Georgia Gulf and FMC), retail (Sears, Roebuck; Dillard
Department Stores; Federated Department Stores) and consumer cyclicals (Masco,
Burlington Industries, Varity, Armstrong World Industries, General Motors)
started outperforming in mid-quarter and helped the overall performance of the
Portfolio. Energy was another sector that outperformed in the first quarter,
aided by very strong natural gas prices (from the cold winter) and strong oil
prices also tied to higher consumption from cold weather, low inventories and
the absence of Iraqi oil back on the market. The capital goods/technology sec-
tor was mixed, with International Business Machines and Case benefiting from
positive earnings surprises and Xerox, Lockheed Martin, McDonnell Douglas and
Intel (which was subsequently sold) being hurt by rotation out of defensive
sectors and/or weaker earnings. Finally, the Portfolio benefited from its own-
ership of Stop & Shop, which was taken over late in the quarter by Ahold, a
large Dutch supermarket chain. Two other supermarket stocks, Kroger and Ameri-
can Stores, also did well in the month of March, as food inflation picked up.
The second quarter exhibited signs of a pickup in economic activity as well
as upward revisions to previous first quarter reported economic data. There
was a continuation in the drawdown of excess inventory levels, declining unem-
ployment levels and moderate inflation. As the second quarter advanced, signs
of improved housing activity and better retail sales became visible. Expecta-
tions are for a continuation of the slow growth economic pattern with an up-
ward bias through the fall of 1996 and into 1997. The stock market experienced
a rotational correction during the second quarter as the battle of economic
acceleration versus inventory corrections/slowdown took place. This heightened
investor concerns toward corporate earnings and the potential for shortfalls
in the second half of 1996. Our outlook remains unchanged although challenged
in the short run. That being the case, the areas with attractive valuations
continue to be consumer cyclicals and materials processing.
As signs of economic improvement unfolded during the second quarter, inter-
est rates ascended and pierced the 7% level. This level had not been chal-
lenged for the past year and led to a correction in financials, consumer non-
durables and economically sensitive issues. The chemical issues were particu-
larly weak (Lyondell Petrochemical, Geon, Georgia Gulf, Dow Chemical). Finan-
cial stocks also experienced weakness led by several regional banks (Wells
Fargo, First Bank System). The HMO sector weakened after Aetna Life & Casualty
announced its buyout of U.S. Healthcare, a previously held position. This con-
tributed to corrections in Humana and FHP International as earnings prospects
for the industry have also come under pressure.
Strong performance was exhibited by the tobacco stocks (Philip Morris, RJR
Nabisco Holdings) led by the decertification of the Castano class action. This
has been a significant issue which has held back the valuation levels of this
group. Retail stocks were strong as the consumer continued to exhibit pockets
of strength (Dillard Department Stores, J.C. Penney, Federated Department
Stores). The capital goods/technology sector was mixed with strong perfor-
mances from Xerox, Lockheed Martin and McDonnell Douglas, offset by weakness
in International Business Machines. Finally, the Portfolio benefited from sev-
eral other consumer-related stocks (Premark International, American Stores).
15
<PAGE>
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Ultimately, an improving economy will lead to higher consumer confidence.
Our screens point to metals, papers and consumer cyclical stocks (i.e., auto
parts, building materials). Also, the recent rise in interest rates has cre-
ated an opportunity to add to existing positions in financial stocks. Overall,
these are the areas of corporate America we believe are best positioned for
earnings improvement over the next six months. The Portfolio should benefit
from the expected economic improvement we foresee in the months ahead.
Denis Laplaige
Jeffrey Simon
Judy Secunda
Matthew Sheffler
Portfolio Managers
MacKay-Shields Financial Corporation
*Total returns shown indicate past performance and are not indicative of fu-
ture results. Investment return and principal value will fluctuate so that
shares, upon redemption, may be worth more or less than their original cost.
These results do not reflect any deduction of sales charges, mortality and ex-
pense charges, contract charges or administrative charges. The performance
would be lower had these charges been deducted.
**Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance compa-
nies.
***"Standard & Poor's 500 Composite Stock Price Index" and "S&P 500" are
registered trademarks of the Standard & Poor's Corporation. The New York Life
MFA Series Fund, Inc. is neither sponsored by nor affiliated with Standard &
Poor's Corporation. The S&P 500 is an unmanaged index considered generally
representative of the U.S. stock market. Results assume the reinvestment of
all income and capital gains distributions.
16
<PAGE>
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BOND PORTFOLIO
The Bond Portfolio registered a return of -2.40%* for the six month period
ended June 30, 1996.
During the first half of the year the market experienced a retrenchment from
1995's rally. The yield for the five and ten year U.S. Treasury securities in-
creased 109 and 114 basis points respectively. Many of the positive forces in
the market in 1995 became concerns for higher rates in 1996. Inflation fears
were re-ignited by commodity price increases. Stronger job growth and other
positive economic news curtailed the market's perception of an accommodating
Federal Reserve Bank. The stalled deficit reduction efforts in Washington re-
versed earlier positive expectations and caused much concern in the fixed in-
come market.
We continue to overweight short duration corporate securities. This is con-
sistent with our view of a slow growth economy, implying limited risk from po-
tential spread widening. Overweighting in longer duration U.S. Treasury secu-
rities influenced our relative performance in the first half of the year.
Looking forward, we expect underlying inflationary pressures to appear be-
fore year end. We also anticipate above trend growth in the second half of the
year. We will adjust the portfolio opportunistically, seeking to outperform
the market.
Albert R. Corapi, Jr.
Portfolio Manager
New York Life Insurance Company
*Total returns shown indicate past performance and are not indicative of fu-
ture results. Investment return and principal value will fluctuate so that
shares, upon redemption, may be worth more or less than their original cost.
These results do not reflect any deduction of sales charges, mortality and ex-
pense charges, contract charges or administrative charges. The performance
would be lower had these charges been deducted.
17
<PAGE>
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GROWTH EQUITY PORTFOLIO
The Growth Equity Portfolio reported an exceptional return of 12.88%* for
the six-month period ended June 30, 1996. The Portfolio outperformed both the
S&P 500's** return of 10.09% and the average growth stock fund as ranked by
Lipper Analytical Services*** return of 9.99% by substantial margins. The
Portfolio benefited by the bounce back in consumer spending in the first half
of the year as its holdings in retailing and lodging issues recorded strong
gains. More importantly, the Portfolio's timely positioning into smaller capi-
talization issues proved most profitable as the market rotated toward those
stocks.
The continued vitality of the equity market was surprising as it was
achieved in an environment of rising interest rates. Upon closer inspection,
the market's strength was clearly explained by the record volume of inflows
going into equity mutual funds. In particular, investors stepped up to their
risk tolerance and increased their exposure in more aggressive growth funds.
As a result, small capitalization issues were the best performers in the first
half of the year.
Looking toward the second half of the year, we remain somewhat optimistic on
our outlook for the market. While market valuations are not cheap at current
levels, the continued flow of funds into the market should enable further
gains. We expect the robust economic growth of the first half of the year to
begin showing signs of fading as the year progresses. With expected earnings
growth slowing, we have begun to increase our exposure in stable consumer
growth issues and energy stocks. In addition, we are avoiding the more specu-
lative new stock issuances that absorbed most of the new funds coming into the
market in the first half of the year.
Our investment strategy remains focused on investing in quality growth
stocks which sell at reasonable valuations. We intend to stick to our disci-
plines in individual stock selection while remaining attentive to all external
variables which impact the equity market.
James Agostisi
Patricia Rossi
Portfolio Managers
New York Life Insurance Company
*Total returns shown indicate past performance and are not indicative of fu-
ture results. Investment return and principal value will fluctuate so that
shares, upon redemption, may be worth more or less than their original cost.
These results do not reflect any deduction of sales charges, mortality and ex-
pense charges, contract charges or administrative charges. The performance
would be lower had these charges been deducted.
**"Standard & Poor's 500 Composite Stock Price Index" and "S&P 500" are reg-
istered trademarks of the Standard & Poor's Corporation. The New York Life MFA
Series Fund, Inc is neither sponsored by nor affiliated with Standard & Poor's
Corporation. The S&P 500 is an unmanaged index considered generally represen-
tative of the U.S. stock market. Results assume the reinvestment of all income
and capital gains distributions.
***Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance compa-
nies.
18
<PAGE>
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INDEXED EQUITY PORTFOLIO
After the stock market posted record gains in 1995, many analysts expected
less than spectacular returns this year. However, with only half the year
over, the stock market has already gained over 10%. The driving force behind
last year's spectacular performance--strong corporate profits--showed little
sign of abating. While interest rates did begin to edge higher, investors ap-
peared to be confident that the economy's "soft landing" was a reality. Only
at the very end of June did we see significant signs of impending inflation as
the country approached full employment.
One of the best performing industries in the S&P 500* index was shoes, which
was propelled upward by Nike's 48% return to finish the half with a 41.75%
gain. The shoe industry represents only 0.4% of the S&P 500 index, however,
and as such did not have a major impact on the overall fund return. More of an
impact was felt by Coca-Cola and PepsiCo (with returns of 32.4% and 27.4%, re-
spectively) as they pushed the soft drink beverage industry up 30.8%. This in-
dustry accounts for 3.5% of the index. At the bottom of the pack were truckers
(-16.3%), HMO's (-12.1%) and homebuilding stocks (-12.2%).
The stocks of smaller companies outperformed larger issues throughout the
year. The S&P 500 underperformed both indices and funds that contain a greater
proportion of smaller stocks, like the NASDAQ** Composite Index which returned
12.63%. Although large stocks did not lead the market, the Indexed Equity
Portfolio's return is not far behind that of the average equity fund manager.
The Indexed Equity Portfolio returned 9.88%*** in the first half while the
Lipper**** General Equity Fund category posted a 10.8% return.
Holly V. Cox
James A. Mehling
Portfolio Managers
Monitor Capital Advisors, Inc.
*"Standard & Poor's 500 Composite Stock Price Index" and "S&P 500" are reg-
istered trademarks of the Standard & Poor's Corporation. The New York Life MFA
Series Fund, Inc. is neither sponsored by nor affiliated with Standard &
Poor's Corporation. The S&P 500 is an unmanaged index considered generally
representative of the U.S. stock market. Results assume the reinvestment of
all income and capital gains distributions.
**"NASDAQ Composite Index" is an unmanaged index and is considered to be
generally representative of the U.S. small capitalization stock market.
***Total returns shown indicate past performance and are not indicative of
future results. Investment return and principal value will fluctuate so that
shares, upon redemption, may be worth more or less than their original cost.
These results do not reflect any deduction of sales charges, mortality and ex-
pense charges, contract charges or administrative charges. The performance
would be lower had these charges been deducted.
****Lipper Analytical Services, Inc. is an independent monitor of mutual
fund performance. Its rankings are based on total returns with capital gains
and dividends reinvested. Results do not reflect any deduction of sales
charges. The Lipper Variable Insurance Products Performance Analysis Service
(L-VIPPAS) ranks the portfolios that invest in the separate accounts of insur-
ance companies.
19
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
CAPITAL CASH HIGH YIELD
APPRECIATION MANAGEMENT GOVERNMENT CORPORATE BOND
---------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investment at net asset
value
(Identified Cost:
$49,620,030; $30,403,779;
$6,415,523; $35,840,453;
$4,710,872; $36,496,555;
$22,885,117; $8,004,716;
$13,851,788; $26,324,638;
$736,785, respectively).. $51,869,108 $30,403,652 $ 6,356,216 $37,051,298
LIABILITIES:
Liability for mortality
and
expense risk charges..... 141,240 80,015 20,037 98,909
----------- ----------- ----------- -----------
Total equity............. $51,727,868 $30,323,637 $ 6,336,179 $36,952,389
=========== =========== =========== ===========
TOTAL EQUITY REPRESENTED
BY:
Equity of Policyowners:
Variable accumulation
units
outstanding: 3,989,403;
29,043,203;
616,337; 3,173,015;
415,266; 3,135,624;
1,946,055; 769,230;
1,131,171;
2,158,276; 63,803,
respectively............. $51,727,868 $30,323,637 $ 6,336,179 $36,952,389
=========== =========== =========== ===========
Variable accumulation
unit value............... $ 12.97 $ 1.04 $ 10.28 $ 11.65
=========== =========== =========== ===========
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
20
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
LIFESTAGESSM ANNUITY
SEPARATE ACCOUNT
<TABLE>
<CAPTION>
NTERNATIONAL TOTAL GROWTH INDEXED SOCIALLY
EQUITY RETURN VALUE BOND EQUITY EQUITY RESPONSIBLE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 4,821,269 $37,311,655 $23,901,383 $ 7,902,268 $14,514,250 $27,330,439 $ 734,990
11,969 99,820 64,414 21,623 38,984 70,862 1,877
----------- ----------- ----------- ----------- ----------- ----------- -----------
$ 4,809,300 $37,211,835 $23,836,969 $ 7,880,645 $14,475,266 $27,259,577 $ 733,113
=========== =========== =========== =========== =========== =========== ===========
$ 4,809,300 $37,211,835 $23,836,969 $ 7,880,645 $14,475,266 $27,259,577 $ 733,113
=========== =========== =========== =========== =========== =========== ===========
$ 11.58 $ 11.87 $ 12.25 $ 10.24 $ 12.80 $ 12.63 $ 11.49
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
21
<PAGE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
CAPITAL CASH HIGH YIELD
APPRECIATION MANAGEMENT GOVERNMENT CORPORATE BOND
--------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (LOSS):
Dividend income........... $ -- $ 443,910 $ -- $ --
Mortality and expense risk
charges.................. (204,762) (126,684) (29,549) (141,242)
------------ ------------ ------------ ------------
Net investment income
(loss).................. (204,762) 317,226 (29,549) (141,242)
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED
GAIN (LOSS):
Proceeds from sale of
investments.............. 98,297 42,461,515 905,520 154,170
Cost of investments sold.. (85,389) (42,461,421) (972,618) (146,065)
------------ ------------ ------------ ------------
Net realized gain (loss)
on investments.......... 12,908 94 (67,098) 8,105
Realized gain distribution
received................. -- -- -- --
Change in unrealized
appreciation/depreciation
on investments........... 1,998,474 (127) 27,113 1,343,180
------------ ------------ ------------ ------------
Net gain (loss) on
investments............. 2,011,382 (33) (39,985) 1,351,285
------------ ------------ ------------ ------------
Increase (decrease)
attributable to funds
of New York Life
Insurance and Annuity
Corporation retained by
Separate Account......... (1,344) 3 (29) (2,255)
------------ ------------ ------------ ------------
Net increase (decrease)
in total
equity resulting from
operations.............. $ 1,805,276 $ 317,196 $ (69,563) $ 1,207,788
============ ============ ============ ============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
22
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
LIFESTAGESSM ANNUITY
SEPARATE ACCOUNT
<TABLE>
<CAPTION>
INTERNATIONAL TOTAL GROWTH INDEXED SOCIALLY
EQUITY RETURN VALUE BOND EQUITY EQUITY RESPONSIBLE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 24,340 $ -- $ 1,322 $ 140 $ -- $ -- $ --
(15,901) (144,125) (94,207) (31,658) (55,127) (95,382) (2,729)
------------ ------------ ------------ ------------ ------------ ------------ ------------
8,439 (144,125) (92,885) (31,518) (55,127) (95,382) (2,729)
------------ ------------ ------------ ------------ ------------ ------------ ------------
48,424 691,937 188,574 271,358 78,760 116,044 24,849
(45,427) (640,797) (169,346) (278,531) (83,780) (103,883) (24,934)
------------ ------------ ------------ ------------ ------------ ------------ ------------
2,997 51,140 19,228 (7,173) (5,020) 12,161 (85)
-- -- 16,853 -- -- 93,023 --
109,201 816,889 879,675 (39,294) 833,295 1,045,178 7,904
------------ ------------ ------------ ------------ ------------ ------------ ------------
112,198 868,029 915,756 (46,467) 828,275 1,150,362 7,819
------------ ------------ ------------ ------------ ------------ ------------ ------------
(308) (588) (1,134) 5 (1,046) (1,498) (6)
------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 120,329 $ 723,316 $ 821,737 $ (77,980) $ 772,102 $ 1,053,482 $ 5,084
============ ============ ============ ============ ============ ============ ============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
23
<PAGE>
STATEMENT OF CHANGES IN TOTAL EQUITY
For the six months ended June 30, 1996 (Unaudited)
and the period May 1, 1995 (Commencement of Operations)
through December 31, 1995
<TABLE>
<CAPTION>
CAPITAL APPRECIATION
----------------------------
1996 1995
----------------------------
<S> <C> <C>
INCREASE IN TOTAL EQUITY:
Operations:
Net investment income (loss)...................... $ (204,762) $ 17,730
Net realized gain (loss) on investments........... 12,908 27,997
Realized gain distribution received............... -- --
Change in unrealized appreciation/depreciation
on investments................................... 1,998,474 250,604
Increase (decrease) attributable to funds of New
York
Life Insurance and Annuity Corporation retained
by
Separate Account................................. (1,344) (466)
------------- -------------
Net increase (decrease) in total equity
resulting
from operations................................. 1,805,276 295,865
------------- -------------
Contributions and withdrawals:
Policyowners' premium payments.................... 2,808,715 613,994
Policyowners' surrenders.......................... (142,524) (19,258)
Policyowners' annuity and death benefits.......... (123,424) --
Net transfers from (to) Fixed Account............. 219,667 33,040
Transfers between Investment Divisions............ 35,853,081 10,383,436
------------- -------------
Total contributions and withdrawals (net)........ 38,615,515 11,011,212
------------- -------------
Increase in total equity........................ 40,420,791 11,307,077
TOTAL EQUITY:
Beginning of period............................... 11,307,077 --
------------- -------------
End of period..................................... $ 51,727,868 $ 11,307,077
============= =============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
24
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
LIFESTAGESSM ANNUITY
SEPARATE ACCOUNT
<TABLE>
<CAPTION>
HIGH YIELD
CASH MANAGEMENT GOVERNMENT CORPORATE BOND INTERNATIONAL EQUITY
- ---------------------------- ---------------------------- ---------------------------- -----------------------------
1996 1995 1996 1995 1996 1995 1996 1995
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 317,226 $ 86,036 $ (29,549) $ 125,814 $ (141,242) $ 230,146 $ 8,439 $ 32,091
94 (60) (67,098) 1,438 8,105 8,294 2,997 3,127
-- -- -- -- -- 41,412 -- --
(127) -- 27,113 (86,421) 1,343,180 (132,335) 109,201 1,196
3 (176) (29) (63) (2,255) (277) (308) (62)
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
317,196 85,800 (69,563) 40,768 1,207,788 147,240 120,329 36,352
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
167,923,819 52,879,690 619,838 34,988 2,858,203 283,469 264,495 34,022
(67,858) 3 (561,484) (5,368) (163,895) (18,337) (4,703) (1,851)
-- -- -- -- -- -- -- --
(932,135) (40,722) 13,106 160 (92,721) 132 29,061 (91)
(150,449,488) (39,392,668) 4,456,874 1,806,860 26,124,656 6,605,854 3,673,961 657,725
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
16,474,338 13,446,303 4,528,334 1,836,640 28,726,243 6,871,118 3,962,814 689,805
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
16,791,534 13,532,103 4,458,771 1,877,408 29,934,031 7,018,358 4,083,143 726,157
13,532,103 -- 1,877,408 -- 7,018,358 -- 726,157 --
- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
$ 30,323,637 $ 13,532,103 $ 6,336,179 $ 1,877,408 $ 36,952,389 $ 7,018,358 $ 4,809,300 $ 726,157
============= ============= ============= ============= ============= ============= ============= =============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
25
<PAGE>
STATEMENT OF CHANGES IN TOTAL EQUITY (CONTINUED)
For the six months ended June 30, 1996 (Unaudited)
and the period May 1, 1995 (Commencement of Operations)
through December 31, 1995
<TABLE>
<CAPTION>
TOTAL RETURN VALUE
-------------------------- --------------------------
1996 1995 1996 1995
------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE IN TOTAL EQUITY:
Operations:
Net investment income
(loss)................... $ (144,125) $ 159,502 $ (92,885) $ 28,244
Net realized gain (loss)
on investments........... 51,140 6,015 19,228 9,613
Realized gain distribution
received................. -- -- 16,853 --
Change in unrealized
appreciation/depreciation
on investments........... 816,889 (1,789) 879,675 136,591
Increase (decrease)
attributable to funds of
New York
Life Insurance and
Annuity Corporation
retained by
Separate Account......... (588) (266) (1,134) (292)
------------ ------------ ------------ ------------
Net increase (decrease)
in total equity
resulting
from operations......... 723,316 163,462 821,737 174,156
------------ ------------ ------------ ------------
Contributions and
withdrawals:
Policyowners' premium
payments................. 2,361,042 270,670 1,412,347 115,567
Policyowners' surrenders.. (103,599) (12,611) (55,306) (10,880)
Policyowners' annuity and
death benefits........... -- -- -- --
Net transfers from (to)
Fixed Account............ 286,117 44,775 (30,367) 201
Transfers between
Investment Divisions..... 26,393,674 7,084,989 16,800,097 4,609,417
------------ ------------ ------------ ------------
Total contributions and
withdrawals (net)....... 28,937,234 7,387,823 18,126,771 4,714,305
------------ ------------ ------------ ------------
Increase in total
equity................. 29,660,550 7,551,285 18,948,508 4,888,461
TOTAL EQUITY:
Beginning of period....... 7,551,285 -- 4,888,461 --
------------ ------------ ------------ ------------
End of period............. $ 37,211,835 $ 7,551,285 $ 23,836,969 $ 4,888,461
============ ============ ============ ============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
26
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
LIFESTAGESSM ANNUITY
SEPARATE ACCOUNT
<TABLE>
<CAPTION>
BOND GROWTH EQUITY INDEXED EQUITY SOCIALLY RESPONSIBLE
- --------------------------- -------------------------- -------------------------- --------------------------
1996 1995 1996 1995 1996 1995 1996 1995
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ (31,518) $ 106,909 $ (55,127) $ 24,561 $ (95,382) $ 67,733 $ (2,729) $ 10,729
(7,173) 1,005 (5,020) 12,788 12,161 13,374 (85) 165
-- -- -- 215,561 93,023 109,107 -- 5,463
(39,294) (63,154) 833,295 (170,833) 1,045,178 (39,376) 7,904 (9,699)
5 (67) (1,046) (179) (1,498) (239) (6) (13)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(77,980) 44,693 772,102 81,898 1,053,482 150,599 5,084 6,645
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
504,077 122,959 644,274 76,948 1,627,823 148,405 28,013 231
(17,742) (484) (21,381) (498) (182,036) (2,608) (107) --
-- -- -- -- (8,634) -- -- --
(115,315) -- 30,500 (552) 31,708 2,000 9,937 --
5,762,576 1,657,861 10,297,306 2,594,669 20,591,643 3,847,195 503,136 180,174
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
6,133,596 1,780,336 10,950,699 2,670,567 22,060,504 3,994,992 540,979 180,405
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
6,055,616 1,825,029 11,722,801 2,752,465 23,113,986 4,145,591 546,063 187,050
1,825,029 -- 2,752,465 -- 4,145,591 -- 187,050 --
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 7,880,645 $ 1,825,029 $ 14,475,266 $ 2,752,465 $ 27,259,577 $ 4,145,591 $ 733,113 $ 187,050
============ ============ ============ ============ ============ ============ ============ ============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--Organization and Accounting Policies:
- -------------------------------------------------------------------------------
New York Life Insurance and Annuity Corporation LifeStagesSM Annuity Separate
Account ("Separate Account") was established on November 30, 1994, under
Delaware law by New York Life Insurance and Annuity Corporation, a wholly-
owned subsidiary of New York Life Insurance Company. This account was
established to receive and invest premium payments under Qualified and Non-
Qualified Flexible Premium Variable Retirement Annuity Policies issued by New
York Life Insurance and Annuity Corporation. The qualified policies are
designed to establish retirement benefits for individuals who participate in
qualified pension, profit sharing or annuity plans. The non-qualified policies
are designed to establish retirement benefits to provide individuals with
supplemental retirement income. The policies are offered by NYLIFE
Distributors Inc. and sold by registered representatives of NYLIFE Securities
Inc. and certain banking institutions which have entered into a distribution
agreement with New York Life Insurance Company. NYLIFE Securities Inc. and
NYLIFE Distributors Inc. are wholly-owned subsidiaries of NYLIFE Inc. and are
indirect wholly-owned subsidiaries of New York Life Insurance Company. The
Separate Account is registered under the Investment Company Act of 1940, as
amended, as a unit investment trust. The assets of the Separate Account are
invested in the shares of the New York Life MFA Series Fund, Inc. (the "MFA
Fund"), a diversified open-end management investment company, and in Acacia
Capital Corporation (the "Acacia Fund"). These assets are clearly identified
and distinguished from the other assets and liabilities of New York Life
Insurance and Annuity Corporation.
There are ten Investment Divisions within the Separate Account which invest
solely in the corresponding Portfolios of the MFA Fund: the Capital
Appreciation, Cash Management, Government, High Yield Corporate Bond,
International Equity, Total Return, Value, Bond, Growth Equity and Indexed
Equity Portfolios. There is one Investment Division within the Separate
Account which invests solely in the Acacia Fund's Responsibly Invested
Balanced Portfolio ("Socially Responsible"). Premium payments received, except
those received for the Fixed Account, are allocated to the Cash Management
Investment Division until 15 days after the policy issue date. Thereafter,
premium payments will be allocated to the Investment Divisions of the Separate
Account in accordance with the Policyowner's instructions. In addition, the
Policyowner has the option to transfer amounts between the Investment
Divisions of the Separate Account and the Fixed Account of New York Life
Insurance and Annuity Corporation.
No Federal income tax is payable on investment income or capital gains of the
Separate Account under current Federal income tax law.
Security Valuation--The investments in the MFA Fund and Acacia Fund are
valued at the net asset value of shares of the respective fund portfolios.
Security Transactions--Realized gains and losses from security transactions
are reported on the identified cost basis. Security transactions are accounted
for as of the date the securities are purchased or sold (trade date).
Distributions Received--Dividend income and capital gain distributions are
recorded on the ex-dividend date and reinvested in the corresponding
portfolio.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates.
28
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
LIFESTAGESSM ANNUITY
SEPARATE ACCOUNT
(THIS PAGE INTENTIONALLY LEFT BLANK)
29
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 2--Investments (in 000's):
- --------------------------------------------------------------------------------
At June 30, 1996, the investment in the MFA Fund and Acacia Fund by the
respective Investment Divisions of the Separate Account is as follows:
<TABLE>
<CAPTION>
CAPITAL CASH HIGH YIELD
APPRECIATION MANAGEMENT GOVERNMENT CORPORATE BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------------------------------------
<S> <C> <C> <C> <C>
Number of shares.............. 3,048 30,404 648 3,243
Identified cost*.............. $49,620 $30,404 $6,416 $35,840
* The cost stated also represents the aggregate cost for Federal income tax
purposes.
Transactions in MFA Fund and Acacia Fund shares for the six months ended June
30, 1996, were as follows:
<CAPTION>
CAPITAL CASH HIGH YIELD
APPRECIATION MANAGEMENT GOVERNMENT CORPORATE BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------------------------------------
<S> <C> <C> <C> <C>
Purchases..................... $38,626 $59,308 $5,421 $28,823
Proceeds from sales........... 98 42,462 906 154
</TABLE>
30
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
LIFESTAGESSM ANNUITY
SEPARATE ACCOUNT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL TOTAL GROWTH INDEXED SOCIALLY
EQUITY RETURN VALUE BOND EQUITY EQUITY RESPONSIBLE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
445 2,674 1,896 603 747 1,848 419
$4,711 $36,497 $22,885 $8,005 $13,852 $26,325 $737
<CAPTION>
INTERNATIONAL TOTAL GROWTH INDEXED SOCIALLY
EQUITY RETURN VALUE BOND EQUITY EQUITY RESPONSIBLE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$4,030 $29,570 $18,293 $6,392 $11,007 $22,236 $564
48 692 189 271 79 116 25
</TABLE>
31
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 3--Mortality and Expense Risk Charges:
- -------------------------------------------------------------------------------
The Separate Account is charged for administrative services provided and the
mortality and expense risks assumed by New York Life Insurance and Annuity
Corporation. These charges are made at an annual rate of 1.40% of the daily
net asset value of each Investment Division. The amounts of these charges
retained in the Investment Divisions represent funds of New York Life
Insurance and Annuity Corporation. Accordingly, New York Life Insurance and
Annuity Corporation participates in the results of each Investment Division
ratably with the Policyowners.
- -------------------------------------------------------------------------------
NOTE 4--Distribution of Net Income:
- -------------------------------------------------------------------------------
The Separate Account does not expect to declare dividends to Policyowners from
accumulated net investment income and realized gains. The income and gains are
distributed to Policyowners as part of withdrawals of amounts (in the form of
surrenders, death benefits, transfers, or annuity payments) in excess of the
net premium payments.
32
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
LIFESTAGESSM ANNUITY
SEPARATE ACCOUNT
(THIS PAGE INTENTIONALLY LEFT BLANK)
33
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 5--Cost to Policyowners (in 000's):
- --------------------------------------------------------------------------------
At June 30, 1996, the cost to Policyowners for accumulation units outstanding,
with adjustments for net investment income, market appreciation/depreciation
and deduction for expenses is as follows:
<TABLE>
<CAPTION>
CAPITAL CASH HIGH YIELD
APPRECIATION MANAGEMENT GOVERNMENT CORPORATE BOND
----------------------------------------
<S> <C> <C> <C> <C>
Cost to Policyowners (net of
withdrawals)................ $49,627 $29,921 $ 6,365 $35,597
Accumulated net investment
income (loss)............... (187) 402 96 89
Accumulated net realized gain
(loss) on investments and
realized gain distributions
received.................... 41 1 (66) 58
Unrealized
appreciation/depreciation on
investments................. 2,249 -- (59) 1,211
Decrease attributable to
funds
of New York Life Insurance
and Annuity
Corporation retained by
Separate Account............ (2) -- -- (3)
------- ------- ------- -------
Net amount applicable to
Policyowners................ $51,728 $30,324 $ 6,336 $36,952
======= ======= ======= =======
</TABLE>
34
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
LIFESTAGESSM ANNUITY
SEPARATE ACCOUNT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL TOTAL GROWTH INDEXED SOCIALLY
EQUITY RETURN VALUE BOND EQUITY EQUITY RESPONSIBLE
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 4,652 $36,326 $22,841 $ 7,914 $13,622 $26,056 $ 721
41 15 (65) 75 (31) (28) 8
6 57 46 (6) 223 228 6
110 815 1,016 (102) 662 1,006 (2)
-- (1) (1) -- (1) (2) --
------- ------- ------- ------- ------- ------- -------
$ 4,809 $37,212 $23,837 $ 7,881 $14,475 $27,260 $ 733
======= ======= ======= ======= ======= ======= =======
</TABLE>
35
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 6--Unit Transactions (in 000's):
- --------------------------------------------------------------------------------
Transactions in accumulation units for the six months ended June 30, 1996 and
the period May 1, 1995 (Commencement of Operations) through December 31, 1995,
were as follows:
<TABLE>
<CAPTION>
CAPITAL CASH
APPRECIATION MANAGEMENT GOVERNMENT
------------------ ------------------ ------------------
1996 1995 1996 1995 1996 1995
------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Units issued on premium
payments............... 219 53 162,006 51,863 60 3
Units redeemed on
annuity benefits....... (9) -- -- -- -- --
Units redeemed on
surrenders............. (11) (2) (65) -- (55) (1)
Units issued (redeemed)
on net transfers from
(to)
Fixed Account.......... 17 3 (855) (40) -- --
Units issued (redeemed)
on transfers between
Investment Divisions... 2,822 897 (145,233) (38,633) 433 176
-------- -------- -------- -------- -------- --------
Net increase........... 3,038 951 15,853 13,190 438 178
Units outstanding,
beginning of period.... 951 -- 13,190 -- 178 --
-------- -------- -------- -------- -------- --------
Units outstanding, end
of period.............. 3,989 951 29,043 13,190 616 178
======== ======== ======== ======== ======== ========
</TABLE>
36
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
LIFESTAGESSM ANNUITY
SEPARATE ACCOUNT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH YIELD INTERNATIONAL
CORPORATE BOND EQUITY TOTAL RETURN VALUE BOND
- ------------------ ------------------ ------------------ ------------------ ------------------
1996 1995 1996 1995 1996 1995 1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
251 27 23 3 203 24 119 11 49 12
-- -- -- -- -- -- -- -- -- --
(14) (2) (1) -- (9) (1) (5) (1) (2) --
(8) -- 3 -- 11 4 (3) -- (11) --
2,296 623 323 64 2,266 638 1,403 422 560 161
- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
2,525 648 348 67 2,471 665 1,514 432 596 173
648 -- 67 -- 665 -- 432 -- 173 --
- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
3,173 648 415 67 3,136 665 1,946 432 769 173
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
</TABLE>
37
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 6--Unit Transactions (in 000's) (Continued):
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH INDEXED SOCIALLY
EQUITY EQUITY RESPONSIBLE
------------------ ------------------ -----------------
1996 1995 1996 1995 1996 1995
--------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Units issued on premium
payments............... 53 7 133 13 2 --
Units redeemed on
annuity benefits....... -- -- (1) -- -- --
Units redeemed on
surrenders............. (2) -- (15) -- -- --
Units issued on net
transfers from
Fixed Account.......... 3 -- 1 -- 1 --
Units issued on
transfers between
Investment Divisions... 836 234 1,682 345 44 17
-------- -------- -------- -------- -------- --------
Net increase........... 890 241 1,800 358 47 17
Units outstanding,
beginning of period.... 241 -- 358 -- 17 --
-------- -------- -------- -------- -------- --------
Units outstanding, end
of period.............. 1,131 241 2,158 358 64 17
======== ======== ======== ======== ======== ========
</TABLE>
38
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
LIFESTAGESSM ANNUITY
SEPARATE ACCOUNT
(THIS PAGE INTENTIONALLY LEFT BLANK)
39
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 7--Selected Per Unit Data+:
- --------------------------------------------------------------------------------
The following table presents selected per accumulation unit income and capital
changes (for an accumulation unit outstanding throughout each period) with
respect to each Investment Division of the Separate Account:
<TABLE>
<CAPTION>
CAPITAL CASH
APPRECIATION MANAGEMENT GOVERNMENT
--------------- --------------- ---------------
1996 1995(A) 1996 1995(A) 1996 1995(A)
-------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
period....................... $11.89 $10.00 $ 1.03 $ 1.00 $10.57 $10.00
Net investment income (loss).. (0.09) 0.06 0.02 0.02 (0.07) 2.49
Net realized and unrealized
gains (losses) on security
transactions and realized
capital gain distributions
received (includes the effect
of capital share
transactions)................ 1.17 1.83 (0.01) 0.01 (0.22) (1.92)
------ ------ ------ ------ ------ ------
Unit value, end of period.... $12.97 $11.89 $ 1.04 $ 1.03 $10.28 $10.57
====== ====== ====== ====== ====== ======
</TABLE>
+ Per unit data based on average monthly units outstanding during the period.
(a) For the period May 1, 1995 (Commencement of Operations) through December
31, 1995.
40
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
LIFESTAGESSM ANNUITY
SEPARATE ACCOUNT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH YIELD INTERNATIONAL
CORPORATE BOND EQUITY TOTAL RETURN VALUE BOND
- ------------------ -------------- --------------- --------------- ---------------
1996 1995(A) 1996 1995(A) 1996 1995(A) 1996 1995(A) 1996 1995(A)
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 10.83 $ 10.00 $10.90 $10.00 $11.36 $10.00 $11.32 $10.00 $10.57 $10.00
(0.08) 1.15 0.04 1.36 (0.08) 0.79 (0.08) 0.20 (0.07) 2.16
0.90 (0.32) 0.64 (0.46) 0.59 0.57 1.01 1.12 (0.26) (1.59)
- ------- ------- ------ ------ ------ ------ ------ ------ ------ ------
$ 11.65 $ 10.83 $11.58 $10.90 $11.87 $11.36 $12.25 $11.32 $10.24 $10.57
======= ======= ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
41
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 7--Selected Per Unit Data+ (Continued):
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SOCIALLY
GROWTH EQUITY INDEXED EQUITY RESPONSIBLE
--------------- --------------- ---------------
1996 1995(A) 1996 1995(A) 1996 1995(A)
-----------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
period....................... $11.42 $10.00 $11.58 $10.00 $11.22 $10.00
Net investment income (loss).. (0.09) 0.35 (0.08) 0.62 (0.08) 1.60
Net realized and unrealized
gains (losses) on security
transactions and realized
capital gain distributions
received (includes the effect
of capital share
transactions)................ 1.47 1.07 1.13 0.96 0.35 (0.38)
------ ------ ------ ------ ------ ------
Unit value, end of period.... $12.80 $11.42 $12.63 $11.58 $11.49 $11.22
====== ====== ====== ====== ====== ======
</TABLE>
+ Per unit data based on average monthly units outstanding during the period.
(a) For the period May 1, 1995 (Commencement of Operations) through December
31, 1995.
42
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
LIFESTAGESSM ANNUITY
SEPARATE ACCOUNT
(THIS PAGE INTENTIONALLY LEFT BLANK)
43
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
- -------------------------------------------------------------------------------
To Policyowners:
The assets of NYLIAC Variable Universal Life Separate Account I, NYLIAC
Variable Annuity Separate Account I, NYLIAC Variable Annuity Separate Account
II, NYLIAC LifeStagesSM Separate Account, New York Life Insurance and Annuity
Corporation MFA Separate Account I, New York Life Insurance and Annuity Corpo-
ration MFA Separate Account II and New York Life Insurance and Annuity Corpo-
ration VLI Separate Account are invested in shares of New York Life MFA Series
Fund, Inc. In addition, the assets of NYLIAC Variable Annuity Separate Account
I, NYLIAC Variable Annuity Separate Account II and NYLIAC LifeStagesSM Sepa-
rate Account may be invested in Acacia Capital Corporation, which is not af-
filiated with New York Life MFA Series Fund, Inc. or NYLIAC and any of its
subsidiaries.
At the Annual Meeting of the Board of Directors of the Fund held on February
22, 1996, executive officers of the Fund were elected. At a meeting of the
Board of Directors held on May 14, 1996, the Board declared a dividend distri-
bution which was paid on May 15, 1996, to NYLIAC Variable Universal Life Sepa-
rate Account I, NYLIAC Variable Annuity Separate Account I, NYLIAC Variable
Annuity Separate Account II, NYLIAC LifeStagesSM Separate Account, New York
Life Insurance and Annuity Corporation MFA Separate Account I, New York Life
Insurance and Annuity Corporation MFA Separate Account II and New York Life
Insurance and Annuity Corporation VLI Separate Account as the sole sharehold-
ers of record of New York Life MFA Series Fund, Inc.
The financial information included herein as of June 30, 1996, and for the
period then ended, is taken from the records of the Fund without examination
by independent accountants who do not express an opinion thereon.
/s/ Richard M Kerman Jr.
Chairman of the Board
and Chief Executive Officer
NEW YORK LIFE MFA SERIES FUND, INC.
44
<PAGE>
NEW YORK LIFE
CAPITAL APPRECIATION PORTFOLIO MFA SERIES FUND, INC.
PORTFOLIO OF INVESTMENTS
June 30, 1996 (Unaudited)
COMMON STOCKS (90.9%)+
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
AIRLINES (1.3%)
Atlantic Southeast Airlines, Inc...................... 35,200 $ 994,400
Southwest Airlines Co................................. 127,300 3,707,612
------------
4,702,012
------------
AUTO PARTS (0.9%)
Lear Seating Corp. (a)................................ 99,500 3,507,375
------------
BANKS (2.3%)
NationsBank Corp...................................... 43,500 3,594,188
Wells Fargo & Co...................................... 20,566 4,912,703
------------
8,506,891
------------
BROKERAGE (0.8%)
Schwab (Charles) Corp................................. 120,400 2,949,800
------------
BUILDINGS (1.0%)
Lennar Corp........................................... 26,850 671,250
Oakwood Homes Corp.................................... 148,000 3,052,500
------------
3,723,750
------------
COMPUTERS & OFFICE EQUIPMENT (6.2%)
Alco Standard Corp.................................... 125,400 5,674,350
Danka Business Systems Plc ADR (b) 91,500 2,676,375
EMC Corp. (a)......................................... 75,000 1,396,875
Hewlett-Packard Co.................................... 52,000 5,180,500
Seagate Technology, Inc. (a).......................... 43,300 1,948,500
Sun Microsystems, Inc. (a)............................ 101,800 5,993,475
------------
22,870,075
------------
CONSUMER DURABLES (1.2%)
Black & Decker Corp................................... 114,100 4,407,112
------------
CONSUMER FINANCIAL SERVICES (1.3%)
First Data Corp....................................... 59,000 4,697,875
------------
CONSUMER SERVICES (2.5%)
CUC International Inc. (a)............................ 114,800 4,075,400
Service Corp. International........................... 93,000 5,347,500
------------
9,422,900
------------
DOMESTIC OILS (1.0%)
Triton Energy Ltd. Class A (a)........................ 75,400 3,666,325
------------
DRUGS (7.5%)
Amgen Inc. (a)........................................ 114,600 6,188,400
Elan Corp. Plc ADR (a)(b)............................. 68,000 3,884,500
Genzyme Corp. (a)..................................... 66,400 3,336,600
</TABLE>
- --------
+Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
DRUGS (Continued)
Mylan Laboratories Inc. .............................. 88,950 $ 1,534,387
Pharmacia & Upjohn, Inc............................... 104,200 4,623,875
Schering-Plough Corp. ................................ 86,200 5,409,050
Teva Pharmaceutical Industries Ltd. ADR (b)........... 73,000 2,764,875
------------
27,741,687
------------
ELECTRONICS (1.3%)
Harman International
Industries, Inc. .................................... 50,000 2,462,500
Vishay Intertechnology, Inc. (a)...................... 105,861 2,500,966
------------
4,963,466
------------
ENERGY (0.7%)
Abacan Resource Corp. (a)............................. 652,000 2,720,062
------------
FINANCE (7.5%)
Federal National
Mortgage Association................................. 110,800 3,711,800
Green Tree Financial Corp............................. 227,400 7,106,250
Household International Inc. ......................... 78,500 5,966,000
MGIC Investment Corp.................................. 76,800 4,310,400
Travelers Group Inc................................... 147,249 6,718,236
------------
27,812,686
------------
FINANCIAL SERVICES (3.2%)
First USA, Inc........................................ 88,700 4,878,500
SunAmerica Inc. ...................................... 126,600 7,152,900
------------
12,031,400
------------
FOOD DISTRIBUTOR (0.5%)
Richfood Holdings, Inc................................ 57,000 1,852,500
------------
HEALTH CARE (7.6%)
Columbia/HCA Healthcare Corp. ........................ 87,812 4,686,966
HealthCare COMPARE Corp. (a).......................... 70,800 3,451,500
HEALTHSOUTH Corp. (a)................................. 128,000 4,608,000
Humana Inc. (a)....................................... 128,000 2,288,000
OrNda HealthCorp. (a)................................. 155,500 3,732,000
PacifiCare Health Systems, Inc. Class B (a)........... 38,900 2,635,475
Unison HealthCare Corp. (a)........................... 104,000 1,449,500
United Healthcare Corp................................ 103,000 5,201,500
------------
28,052,941
------------
INSURANCE (1.5%)
American International Group, Inc. 55,750 5,498,344
------------
LEISURE (0.9%)
Mirage Resorts, Inc. (a).............................. 63,500 3,429,000
------------
MACHINERY (0.9%)
U.S. Robotics Corp. (a)............................... 41,000 3,505,500
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
45
<PAGE>
CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
MEDICAL EQUIPMENT (6.0%)
Guidant Corp.......................................... 87,600 $ 4,314,300
Heartport, Inc. (a)................................... 63,000 1,905,750
Johnson & Johnson..................................... 118,462 5,863,869
Medtronic, Inc........................................ 108,800 6,092,800
Waters Corp. (a)...................................... 129,000 4,257,000
------------
22,433,719
------------
PUBLISHING (0.8%)
News Corp. Ltd. ADR (b)............................... 128,300 3,015,050
------------
RESTAURANTS &
LODGING (4.7%)
HFS Inc. (a).......................................... 198,000 13,860,000
Lone Star Steakhouse &
Saloon, Inc. (a)..................................... 90,000 3,397,500
------------
17,257,500
------------
RETAIL (9.7%)
AutoZone, Inc. (a).................................... 103,200 3,586,200
Bed Bath & Beyond, Inc. (a)........................... 70,000 1,872,500
Gymboree Corp. (a).................................... 50,000 1,525,000
Home Depot, Inc. (The)................................ 84,000 4,536,000
Kohl's Corp. (a)...................................... 116,000 4,248,500
Kroger Co. (The) (a).................................. 104,000 4,108,000
Lowe's Cos., Inc...................................... 105,900 3,825,637
Oakley, Inc. (a)...................................... 60,000 2,730,000
Office Depot, Inc. (a)................................ 135,975 2,770,491
Safeway Inc. (a)...................................... 148,500 4,900,500
Sunglass Hut International, Inc. (a) 82,000 1,998,750
------------
36,101,578
------------
SOFTWARE (6.0%)
Computer Associates
International, Inc................................... 115,450 8,225,813
Microsoft Corp. (a)................................... 28,200 3,387,525
Oracle Corp. (a)...................................... 162,000 6,388,875
Sterling Software, Inc. (a)........................... 57,000 4,389,000
------------
22,391,213
------------
TECHNOLOGY (7.3%)
Cisco Systems, Inc. (a)............................... 78,500 4,445,062
Electronic Data Systems Corp.......................... 69,000 3,708,750
Intel Corp............................................ 64,800 4,758,750
Lam Research Corp. (a)................................ 69,000 1,794,000
Linear Technology Corp................................ 81,000 2,430,000
Motorola, Inc......................................... 35,500 2,232,063
3Com Corp. (a)........................................ 166,400 7,612,800
------------
26,981,425
------------
TELECOMMUNICATION EQUIPMENT (0.2%)
General Instrument Corp. (a).......................... 31,500 909,563
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
---------------------------
<S> <C> <C>
TELECOMMUNICATION SERVICES (1.9%)
WorldCom, Inc. (a)................................ 123,894 $ 6,860,630
------------
TEXTILE & APPAREL (4.2%)
Nike Inc. Class B................................. 57,900 5,949,225
Nine West Group Inc. (a).......................... 88,100 4,504,113
Warnaco Group, Inc. (The) Class A 123,600 3,182,700
Wolverine World Wide, Inc......................... 57,000 1,852,500
------------
15,488,538
------------
Total Common Stocks
(Cost $258,488,644).............................. 337,500,917
------------
PREFERRED STOCK (0.2%)
PUBLISHING (0.2%)
News Corp. Ltd. ADR
Preference Shares (b)............................ 28,500 573,562
------------
Total Preferred Stock
(Cost $455,577).................................. 573,562
------------
SHORT-TERM
INVESTMENTS (8.7%)
<CAPTION>
PRINCIPAL
AMOUNT
-------------
<S> <C> <C>
COMMERCIAL PAPER (8.7%)
American Express Credit Corp.
5.39%, due 7/5/96................................ $ 8,043,000 8,043,000
5.45%, due 7/2/96................................ 6,796,000 6,796,000
Ford Motor Credit Co.
5.37%, due 7/1/96................................ 10,614,000 10,614,000
Smith Barney Inc.
5.45%, due 7/3/96................................ 7,000,000 7,000,000
------------
Total Short-Term Investments (Cost $32,453,000)... 32,453,000
------------
Total Investments
(Cost $291,397,221) (c).......................... 99.8% 370,527,479 (d)
Cash and Other Assets,
Less Liabilities................................. 0.2 608,513
----------- ------------
Net Assets........................................ 100.0% $371,135,992
=========== ============
</TABLE>
- --------
(a) Non-incoming producing securities.
(b) ADR--American Depository Receipt.
(c) The cost stated also represents the aggregate cost for Federal income tax
purposes.
(d) At June 30, 1996 net unrealized appreciation was $79,130,258, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess
of market value over cost of $84,975,775 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $5,845,517.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
46
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 1996 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2)
(identified cost $291,397,221).................................. $370,527,479
Cash............................................................. 389
Receivables:
Investment securities sold....................................... 7,651,823
Fund shares sold................................................. 1,111,658
Dividends and interest........................................... 160,853
------------
Total assets................................................... 379,452,202
------------
LIABILITIES:
Payables:
Investment securities purchased.................................. 8,043,000
Adviser.......................................................... 107,757
NYLIAC........................................................... 41,897
Administrator.................................................... 29,933
Custodian........................................................ 7,054
Accrued expenses................................................. 86,569
------------
Total liabilities.............................................. 8,316,210
------------
Net assets applicable to
outstanding shares.............................................. $371,135,992
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
50 million shares authorized.................................... $ 218,069
Additional paid-in capital....................................... 294,716,813
Accumulated undistributed net
investment income............................................... 269,533
Accumulated net realized loss
on investments.................................................. (3,198,681)
Net unrealized appreciation
on investments.................................................. 79,130,258
------------
Net assets applicable to
outstanding shares.............................................. $371,135,992
============
Shares of capital stock outstanding.............................. 21,806,891
============
Net asset value per share outstanding............................ $ 17.02
============
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996 (Unaudited)
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a).................................................... $ 772,391
Interest......................................................... 610,723
------------
Total income................................................... 1,383,114
------------
Expenses: (Note 2)
Advisory (Note 3)................................................ 549,163
Administration (Note 3).......................................... 305,091
Recordkeeping.................................................... 241,301
Auditing......................................................... 39,645
Shareholder communication........................................ 37,663
Custodian........................................................ 19,442
Directors........................................................ 11,354
Legal............................................................ 9,432
Miscellaneous.................................................... 11,138
------------
Total expenses
before reimbursement.......................................... 1,224,229
Expense reimbursement from
Administrator (Note 3).......................................... (110,648)
------------
Net expenses................................................... 1,113,581
------------
Net investment income............................................ 269,533
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments................................. 4,139,426
Net change in unrealized appreciation
on investments.................................................. 22,267,805
------------
Net realized and unrealized gain
on investments.................................................. 26,407,231
------------
Net increase in net assets resulting
from operations................................................. $ 26,676,764
============
</TABLE>
- --------
(a) Dividends recorded net of foreign withholding taxes in the amount of
$4,064.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
47
<PAGE>
CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996 (Unaudited)
and the year ended December 31, 1995
<TABLE>
<CAPTION>
1996 1995
--------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income............................. $ 269,533 $ 966,842
Net realized gain (loss) on investments........... 4,139,426 (4,093,457)
Net change in unrealized appreciation on invest-
ments............................................ 22,267,805 52,411,784
------------ ------------
Net increase in net assets resulting from opera-
tions............................................ 26,676,764 49,285,169
------------ ------------
Dividends to shareholders:
From net investment income........................ -- (967,677)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.................. 102,240,623 92,210,559
Net asset value of shares issued to shareholders
in reinvestment of dividends..................... -- 967,677
------------ ------------
102,240,623 93,178,236
Cost of shares redeemed........................... (2,317,213) (10,959,038)
------------ ------------
Increase in net assets derived from capital share
transactions.................................... 99,923,410 82,219,198
------------ ------------
Net increase in net assets....................... 126,600,174 130,536,690
NET ASSETS:
Beginning of period............................... 244,535,818 113,999,128
------------ ------------
End of period..................................... $371,135,992 $244,535,818
============ ============
Accumulated undistributed net investment income... $ 269,533 $ --
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
JANUARY 29,
SIX MONTHS 1993 (A)
ENDED THROUGH
JUNE 30, YEAR ENDED DECEMBER 31 DECEMBER 31,
1996* 1995 1994 1993
--------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at be-
ginning of period...... $ 15.49 $ 11.45 $ 12.03 $ 10.00
------------ ------------ ------------ ------------
Net investment income... 0.01 0.06 0.05 0.02
Net realized and
unrealized gain (loss)
on investments......... 1.52 4.04 (0.58) 2.03
------------ ------------ ------------ ------------
Total from investment
operations............. 1.53 4.10 (0.53) 2.05
------------ ------------ ------------ ------------
Less dividends:
From net investment in-
come.................. -- (0.06) (0.05) (0.02)
------------ ------------ ------------ ------------
Net asset value at end
of period.............. $ 17.02 $ 15.49 $ 11.45 $ 12.03
============ ============ ============ ============
Total investment return
(b).................... 9.86% 35.78% (4.38%) 20.54%
Ratios (to average net
assets)/Supplemental
Data:
Net investment income.. 0.18%+ 0.57% 0.63% 0.46%+
Net expenses........... 0.73%+ 0.73% 0.73% 0.73%+
Expenses (before reim-
bursement)............ 0.80%+ 0.90% 0.91% 1.15%+
Portfolio turnover rate. 8% 35% 39% 28%
Average commission rate
paid................... $ 0.0600 (c) (c) (c)
Net assets at end of pe-
riod (in 000's)........ $ 371,136 $ 244,536 $ 113,999 $ 43,485
</TABLE>
- --------
(a) Commencement of Operations.
(b) Total return is not annualized.
(c) Disclosure of amount required for fiscal years beginning on or after Sep-
tember 1, 1995.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
48
<PAGE>
NEW YORK LIFE
CASH MANAGEMENT PORTFOLIO MFA SERIES FUND, INC.
PORTFOLIO OF INVESTMENTS
June 30, 1996 (Unaudited)
SHORT-TERM INVESTMENTS (100.1%)+
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT COST
--------------------------
<S> <C> <C>
BANK NOTES (4.8%)
Bank of America-Illinois
5.82%, due 3/24/97 (c)............................... $ 1,500,000 $ 1,500,000
First National Bank of Maryland
5.13%, due 2/26/97 (b)(c)............................ 1,000,000 1,000,158
Fleet National Bank-Province, Rhode Island
5.61%, due 10/30/96 (b)(c)........................... 1,700,000 1,700,000
PNC Bank N.A.-
Pittsburgh, Pennsylvania
5.52%, due 2/6/97 (b)(c)............................. 1,000,000 999,619
------------
5,199,777
------------
CERTIFICATES OF
DEPOSIT (4.6%)
Bayerische Vereinsbank AG
5.80%, due 4/29/97 (c)............................... 2,500,000 2,500,000
First National Bank of Maryland
5.69%, due 10/23/96 (b)(c)........................... 2,000,000 2,000,000
Mercantile Safe Deposit & Trust Co., Baltimore,
Maryland
5.68%, due 12/23/96 (b)(c)........................... 500,000 500,122
------------
5,000,122
------------
MEDIUM-TERM NOTES (9.5%)
Abbey National Treasury
Services Plc
5.05%, due 3/3/97 (c)................................ 3,300,000 3,297,622
Associates Corp. of North America
7.50%, due 10/15/96 (c).............................. 1,375,000 1,382,254
Bankers Trust Corp.-New York
5.27%, due 2/14/97 (b)(c)............................ 1,500,000 1,500,000
First Security Bank of Idaho
6.88%, due 10/4/96 (c)............................... 2,000,000 2,006,002
Ford Motor Credit Corp.
5.66%, due 1/6/97 (b)(c)............................. 1,000,000 1,001,095
International Lease Finance Corp.
6.80%, due 9/30/96 (c)............................... 1,000,000 1,002,318
------------
10,189,291
------------
COMMERCIAL PAPER (81.2%)
Atlantic Asset Securitization Corp.
5.37%, due 7/11/96 (a)............................... 3,800,000 3,794,332
Banca CRT Financial Corp.
4.94%, due 8/8/96.................................... 1,500,000 1,492,178
5.06%, due 9/3/96.................................... 2,000,000 1,982,009
5.08%, due 9/3/96.................................... 1,350,000 1,337,808
Bancomer S.A.
5.37%, due 9/13/96................................... 1,000,000 988,962
5.42%, due 7/11/96................................... 1,000,000 998,494
Central Corporate Credit Union
5.37%, due 7/12/96................................... 1,900,000 1,896,882
</TABLE>
- --------
+Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT COST
--------------------------
<S> <C> <C>
COMMERCIAL PAPER (Continued)
Centric Funding Corp.
5.35%, due 7/10/96................................... $ 5,000,000 $ 4,993,312
Cheltenham & Gloucester Plc
5.28%, due 7/3/96.................................... 3,000,000 2,999,120
COSCO (Cayman) Co. Ltd.
5.34%, due 7/29/96................................... 1,000,000 995,847
Credito Italiano (DE) Inc.
5.01%, due 8/27/96................................... 1,975,000 1,959,333
5.25%, due 7/3/96.................................... 2,000,000 1,999,417
Duracell Inc.
5.38%, due 7/26/96................................... 2,400,000 2,391,033
Eastern Realty Investment Corp.
5.38%, due 7/12/96................................... 1,336,000 1,333,804
Enterprise Funding Corp.
5.33%, due 7/8/96 (a)................................ 2,100,000 2,097,824
5.42%, due 7/22/96 (a)............................... 2,000,000 1,993,677
Goldman Sachs & Co.
5.32%, due 7/10/96................................... 3,000,000 2,996,010
Halliburton Co.
5.35%, due 7/9/96.................................... 2,800,000 2,796,671
Korea Development Bank
5.40%, due 9/4/96.................................... 3,900,000 3,861,975
Lyon Short Term Funding Corp.
5.35%, due 7/8/96 (a)................................ 1,400,000 1,398,544
Merrill Lynch-Australia
5.37%, due 7/17/96................................... 5,000,000 4,988,067
Mitsubishi Motors Credit of America Inc. Series C
5.40%, due 7/15/96................................... 2,500,000 2,494,750
5.45%, due 7/25/96................................... 2,450,000 2,441,098
Morgan Stanley Group Inc.
5.63%, due 7/1/96.................................... 3,050,000 3,050,000
MPS U.S. Commercial Paper Corp.
5.29%, due 7/8/96.................................... 3,000,000 2,996,914
5.42%, due 9/19/96................................... 2,000,000 1,975,911
Nacional Financiera SNC
Series A
5.30%, due 7/1/96.................................... 900,000 900,000
Series B
5.33%, due 7/2/96.................................... 2,500,000 2,499,630
National Bank of Pakistan
5.38%, due 10/25/96.................................. 1,000,000 982,664
Petroleo Brasileiro S.A.-Petrobras
5.42%, due 1/14/97................................... 2,000,000 1,940,681
Receivables Capital Corp.
5.31%, due 7/2/96 (a)................................ 1,500,000 1,499,779
Redland Finance Inc.
5.32%, due 7/3/96.................................... 1,000,000 999,704
Songs Fuel Co.
5.15%, due 7/5/96.................................... 1,000,000 999,428
SRD Finance Inc.
5.50%, due 7/18/96................................... 5,000,000 4,987,014
State Bank of New South
Wales Ltd.
5.62%, due 7/1/96.................................... 165,000 165,000
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
49
<PAGE>
CASH MANAGEMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
SHORT-TERM
INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT COST
----------------------------
<S> <C> <C>
COMMERCIAL PAPER (Continued)
Triple-A One Funding Corp.
5.35%, due 7/9/96 (a)............................... $ 2,725,000 $ 2,721,760
UNIfunding Inc.
4.94%, due 8/9/96................................... 2,000,000 1,989,297
Wood Street Funding Corp.
5.40%, due 7/12/96 (a).............................. 300,000 299,505
Working Capital Management
Co. L.P.
5.52%, due 7/19/96.................................. 5,300,000 5,285,372
------------
87,523,806
------------
Total Short-Term Investments
(Amortized Cost $107,912,996) (d) 100.1% 107,912,996
Liabilities in Excess of
Cash and Other Assets............................... (0.1) (114,731)
----------- ------------
Net Assets........................................... 100.0% $107,798,265
=========== ============
</TABLE>
- --------
(a) May be sold to institutional investors only.
(b) Floating rate. Rate shown is the rate in effect at June 30, 1996.
(c) Coupon interest bearing security.
(d) The cost stated also represents the aggregate cost for Federal income tax
purposes.
The table below sets forth the
diversification of Cash Management
Portfolio investments by industry.
SHORT-TERM INVESTMENTS
<TABLE>
<CAPTION>
AMORTIZED
COST PERCENT +
-------------------------
<S> <C> <C>
Banks #................................................. $ 73,361,810 68.1%
Brokerage............................................... 11,034,077 10.3
Construction & Engineering.............................. 999,704 0.9
Consumer Financial Services............................. 1,001,095 0.9
Electrical Equipment.................................... 2,391,033 2.2
Energy.................................................. 2,796,671 2.6
Finance................................................. 15,329,178 14.2
Utilities-Gas........................................... 999,428 0.9
------------ -----
107,912,996 100.1
Liabilities in Excess of
Cash and Other Assets.................................. (114,731) (0.1)
------------ -----
Net Assets.............................................. $107,798,265 100.0%
============ =====
</TABLE>
- --------
+ Percentages indicated are based on Fund net assets.
# The Fund will invest more than 25% of the market value of its total assets
in the securities of banks and bank holding companies, including certifi-
cates of deposit, bankers' acceptances and securities guaranteed by banks
and bank holding companies.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
50
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
CASH MANAGEMENT PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 1996 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2) (amortized cost
$107,912,996).................................................. $107,912,996
Cash............................................................ 102,685
Receivables:
Investment securities sold...................................... 3,111,002
Fund shares sold................................................ 423,690
Interest........................................................ 384,983
NYLIAC.......................................................... 7,947
------------
Total assets.................................................. 111,943,303
------------
LIABILITIES:
Payables:
Investment securities purchased................................. 3,213,493
Fund shares redeemed............................................ 409,332
Adviser......................................................... 20,737
Recordkeeping................................................... 14,794
Administrator................................................... 8,295
Custodian....................................................... 2,200
Directors....................................................... 1,056
Accrued expenses................................................ 71,844
Dividend payable................................................ 403,287
------------
Total liabilities............................................. 4,145,038
------------
Net assets applicable to
outstanding shares............................................. $107,798,265
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
200 million shares authorized.................................. $ 1,078,000
Additional paid-in capital...................................... 106,721,483
Accumulated net realized loss
on investments................................................. (1,218)
------------
Net assets applicable to
outstanding shares............................................. $107,798,265
============
Shares of capital stock outstanding............................. 107,799,988
============
Net asset value per share outstanding........................... $ 1.00
============
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996 (Unaudited)
<S> <C>
INVESTMENT INCOME:
Income:
Interest......................................................... $ 2,461,011
------------
Expenses: (Note 2)
Advisory (Note 3)................................................ 111,489
Administration (Note 3).......................................... 89,191
Recordkeeping (Note 3)........................................... 34,574
Custodian........................................................ 7,202
Auditing......................................................... 7,003
Shareholder communication........................................ 3,859
Directors........................................................ 3,081
Legal............................................................ 3,040
Miscellaneous.................................................... 951
------------
Total expenses ................................................ 260,390
------------
Net investment income............................................ 2,200,621
------------
REALIZED GAIN ON INVESTMENTS:
Net realized gain on investments................................. 115
------------
Net increase in net assets resulting
from operations................................................. $ 2,200,736
============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
51
<PAGE>
CASH MANAGEMENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996 (Unaudited)
and the year ended December 31, 1995
<TABLE>
<CAPTION>
1996 1995
--------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income............................. $ 2,200,621 $ 3,649,839
Net realized gain (loss) on investments........... 115 (949)
------------ ------------
Net increase in net assets resulting from opera-
tions............................................ 2,200,736 3,648,890
------------ ------------
Dividends to shareholders:
From net investment income........................ (2,200,621) (3,649,839)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.................. 123,072,907 128,846,016
Net asset value of shares issued to shareholders
in reinvestment of dividends..................... 2,161,316 3,587,829
------------ ------------
125,234,223 132,433,845
Cost of shares redeemed........................... (105,275,417) (115,709,733)
------------ ------------
Increase in net assets derived from capital share
transactions.................................... 19,958,806 16,724,112
------------ ------------
Net increase in net assets....................... 19,958,921 16,723,163
NET ASSETS:
Beginning of period............................... 87,839,344 71,116,181
------------ ------------
End of period..................................... $107,798,265 $ 87,839,344
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
JANUARY 29,
SIX MONTHS 1993 (A)
ENDED THROUGH
JUNE 30, YEAR ENDED DECEMBER 31 DECEMBER 31,
1996* 1995 1994 1993
-------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at be-
ginning of period...... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------
Net investment income... 0.03 0.05 0.04 0.02
------------ ------------ ------------ ------------
Less dividends:
From net investment in-
come.................. (0.03) (0.05) (0.04) (0.02)
------------ ------------ ------------ ------------
Net asset value at end
of period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ============ ============ ============
Total investment return
(b).................... 2.45% 5.59% 3.82% 2.40%
Ratios (to average net
assets)/Supplemental
Data:
Net investment income.. 4.93%+ 5.44% 3.97% 2.65%+
Net expenses........... 0.58%+ 0.62% 0.62% 0.62%+
Expenses (before reim-
bursement)............ 0.58%+ 0.94% 0.89% 1.10%+
Net assets at end of pe-
riod (in 000's)........ $ 107,798 $ 87,839 $ 71,116 $ 26,733
</TABLE>
- --------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
52
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
GOVERNMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 1996 (Unaudited)
LONG-TERM U.S. GOVERNMENT
& FEDERAL AGENCIES (104.5%)+
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
FEDERAL HOME LOAN
MORTGAGE CORPORATION (COLLATERALIZED
MORTGAGE
OBLIGATIONS) (11.5%)
Series 1604 Class C
5.00%, due 2/15/03................................. $ 600,000 $ 594,000
Series 1625 Class CA
5.125%, due 2/15/03................................ 1,625,000 1,609,774
Series 1678 Class PC
5.20%, due 7/15/03................................. 1,450,000 1,433,687
Series 1645 Class ZA
5.50%, due 4/15/05................................. 1,261,745 1,210,884
Series 1627 Class PZ
5.60%, due 8/15/17................................. 862,424 829,549
Series 1858 Class B
6.00%, due 6/15/11................................. 925,000 904,474
Series 1817 Class AB
6.50%, due 2/15/14................................. 638,754 634,162
Series 1783-A Class A
8.00%, due 2/15/00................................. 780,636 797,404
------------
8,013,934
------------
FEDERAL HOME LOAN
MORTGAGE CORPORATION (MORTGAGE PASS-
THROUGH SECURITY) (2.0%)
6.00%, due 8/1/24.................................. 1,491,433 1,365,825
------------
FEDERAL HOME LOAN
MORTGAGE CORPORATION
GOLD (MORTGAGE PASS-
THROUGH SECURITIES) (5.3%)
7.00%, due 2/1/26-5/1/26........................... 3,879,215 3,736,189
------------
FEDERAL NATIONAL
MORTGAGE
ASSOCIATION (1.6%)
8.50%, due 2/1/05.................................. 1,075,000 1,123,439
------------
FEDERAL NATIONAL
MORTGAGE ASSOCIATION (COLLATERALIZED
MORTGAGE
OBLIGATIONS) (3.6%)
Series 1993-224 Class PD
5.25%, due 8/25/15................................. 1,000,000 983,750
Series 1993-93 Class C
5.50%, due 2/25/06................................. 1,581,666 1,553,006
------------
2,536,756
------------
</TABLE>
- --------
+Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
FEDERAL NATIONAL
MORTGAGE ASSOCIATION
(MORTGAGE PASS-
THROUGH SECURITIES) (7.3%)
6.50%, due 7/1/24..................................... $ 1,151,346 $ 1,083,520
7.00%, due 7/1/11 TBA (b)............................. 3,080,500 3,039,591
9.00%, due 6/1/25..................................... 974,797 1,017,288
------------
5,140,399
------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION I
(MORTGAGE PASS-THROUGH SECURITIES) (15.5%)
6.50%, due 7/1/26 TBA (b)............................. 1,650,000 1,546,363
7.50%, due 6/15/26 (a)................................ 1,225,000 1,207,397
8.00%, due 7/1/26 TBA (b)............................. 8,025,000 8,100,275
------------
10,854,035
------------
UNITED STATES TREASURY
BONDS (20.9%)
6.25%, due 8/15/23.................................... 7,675,000 6,957,848
8.875%, due 8/15/17................................... 3,425,000 4,112,123
11.25%, due 2/15/15................................... 2,450,000 3,535,644
------------
14,605,615
------------
UNITED STATES TREASURY
NOTES (36.8%)
5.50%, due 11/15/98 (a)............................... 7,490,000 7,371,808
6.375%, due 3/31/01................................... 1,200,000 1,194,744
6.375%, due 8/15/02................................... 700,000 694,421
6.50%, due 5/15/05.................................... 5,475,000 5,403,113
7.75%, due 12/31/99................................... 2,525,000 2,630,722
8.125%, due 2/15/98................................... 245,000 252,656
9.00%, due 5/15/98.................................... 7,825,000 8,219,928
------------
25,767,392
------------
Total Long-Term U.S. Government & Federal Agencies
(Cost $73,730,560).................................... 73,143,584
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
53
<PAGE>
GOVERNMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
SHORT-TERM
U.S. GOVERNMENT (12.2%)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-------------------------------
<S> <C> <C>
UNITED STATES TREASURY
NOTE (12.2%)
6.25%, due 8/31/96 (a)........................... $ 8,500,000 $ 8,509,265
------------
Total Short-Term
U.S. Government
(Cost $8,510,520)................................ 8,509,265
------------
Total Investments
(Cost $82,241,080) (c)........................... 116.7% 81,652,849 (d)
Liabilities in Excess of
Cash and Other Assets............................ (16.7) (11,661,158)
----------- ------------
Net Assets........................................ 100.0% $ 69,991,691
=========== ============
</TABLE>
- --------
(a) Segregated or partially segregated as collateral for TBA.
(b) TBA: Securities purchased on a forward commitment basis with an approximate
principal amount and maturity date. The actual principal amount and matu-
rity date will be determined upon settlement.
(c) The cost for Federal income tax purposes is $82,380,748.
(d) At June 30, 1996 gross unrealized depreciation was $727,899, based on cost
for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $107,649 and aggregated gross unrealized depreci-
ation for all investments on which there was excess of cost over market
value of $835,548.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
54
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
GOVERNMENT PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 1996 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2)
(identified cost $82,241,080)................................... $ 81,652,849
Cash............................................................. 4,236
Receivables:
Investment securities sold....................................... 3,251,835
Interest......................................................... 1,044,564
Fund shares sold................................................. 6,744
------------
Total assets................................................... 85,960,228
------------
LIABILITIES:
Payables:
Investment securities purchased.................................. 15,794,020
Fund shares redeemed............................................. 101,600
Adviser.......................................................... 17,068
NYLIAC........................................................... 12,218
Administrator.................................................... 5,689
Custodian........................................................ 3,480
Directors........................................................ 778
Accrued expenses................................................. 33,684
------------
Total liabilities.............................................. 15,968,537
------------
Net assets applicable to
outstanding shares.............................................. $ 69,991,691
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
50 million shares authorized.................................... $ 71,404
Additional paid-in capital....................................... 73,248,861
Accumulated undistributed net
investment income............................................... 2,285,988
Accumulated net realized loss
on investments.................................................. (5,026,331)
Net unrealized depreciation
on investments.................................................. (588,231)
------------
Net assets applicable to
outstanding shares.............................................. $ 69,991,691
============
Shares of capital stock outstanding.............................. 7,140,362
============
Net asset value per share outstanding............................ $ 9.80
============
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996 (Unaudited)
<S> <C>
INVESTMENT INCOME:
Income:
Interest........................................................ $ 2,512,641
------------
Expenses: (Note 2)
Advisory (Note 3)............................................... 101,355
Administration (Note 3)......................................... 67,570
Recordkeeping................................................... 45,657
Custodian....................................................... 8,807
Shareholder communication....................................... 8,792
Auditing........................................................ 7,518
Legal........................................................... 2,242
Directors....................................................... 2,106
Portfolio pricing............................................... 855
Miscellaneous................................................... 3,318
------------
Total expenses
before reimbursement......................................... 248,220
Expense reimbursement from
Administrator (Note 3)......................................... (21,567)
------------
Net expenses.................................................. 226,653
------------
Net investment income........................................... 2,285,988
------------
REALIZED AND UNREALIZED LOSS
ON INVESTMENTS:
Net realized loss on investments................................ (1,566,233)
Net change in unrealized appreciation
on investments................................................. (2,089,622)
------------
Net realized and unrealized loss
on investments................................................. (3,655,855)
------------
Net decrease in net assets resulting
from operations................................................ $ (1,369,867)
============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
55
<PAGE>
GOVERNMENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996 (Unaudited)
and the year ended December 31, 1995
<TABLE>
<CAPTION>
1996 1995
-----------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income............................. $ 2,285,988 $ 4,519,231
Net realized gain (loss) on investments........... (1,566,233) 1,575,754
Net change in unrealized appreciation (deprecia-
tion) on investments............................. (2,089,622) 2,860,304
------------ ------------
Net increase (decrease) in net assets resulting
from operations.................................. (1,369,867) 8,955,289
------------ ------------
Dividends to shareholders:
From net investment income........................ -- (4,482,125)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.................. 11,848,894 12,152,261
Net asset value of shares issued to shareholders
in reinvestment of dividends..................... -- 4,482,125
------------ ------------
11,848,894 16,634,386
Cost of shares redeemed........................... (5,299,714) (17,936,046)
------------ ------------
Increase (decrease) in net assets derived from
capital share transactions...................... 6,549,180 (1,301,660)
------------ ------------
Net increase in net assets....................... 5,179,313 3,171,504
NET ASSETS:
Beginning of period............................... 64,812,378 61,640,874
------------ ------------
End of period..................................... $ 69,991,691 $ 64,812,378
============ ============
Accumulated undistributed net investment income... $ 2,285,988 $ --
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
JANUARY 29,
SIX MONTHS 1993 (A)
ENDED THROUGH
JUNE 30, YEAR ENDED DECEMBER 31 DECEMBER 31,
1996* 1995 1994 1993
--------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at be-
ginning of period...... $ 10.01 $ 9.21 $ 10.15 $ 10.00
------------ ------------ ------------ ------------
Net investment income... 0.32 0.75 0.75 0.82
Net realized and
unrealized gain (loss)
on investments......... (0.53) 0.80 (0.94) (0.25)
------------ ------------ ------------ ------------
Total from investment
operations............. (0.21) 1.55 (0.19) 0.57
------------ ------------ ------------ ------------
Less dividends:
From net investment in-
come.................. -- (0.75) (0.75) (0.42)
------------ ------------ ------------ ------------
Net asset value at end
of period.............. $ 9.80 $ 10.01 $ 9.21 $ 10.15
============ ============ ============ ============
Total investment return
(b).................... (2.03%) 16.72% (1.84%) 5.63%
Ratios (to average net
assets)/Supplemental
Data:
Net investment income.. 6.79%+ 7.80% 8.16% 8.46%+
Net expenses........... 0.67%+ 0.67% 0.67% 0.67%+
Expenses (before reim-
bursement)............ 0.73%+ 0.82% 0.87% 1.02%+
Portfolio turnover rate. 172% 592% 483% 501%
Net assets at end of pe-
riod (in 000's)........ $ 69,992 $ 64,812 $ 61,641 $ 46,766
</TABLE>
- --------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
56
<PAGE>
NEW YORK LIFE
HIGH YIELD CORPORATE BOND PORTFOLIO MFA SERIES FUND, INC.
PORTFOLIO OF INVESTMENTS
June 30, 1996 (Unaudited)
LONG-TERM BONDS (57.0%)+
CONVERTIBLE BONDS (1.4%)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
COMPUTERS & OFFICE
EQUIPMENT (0.3%)
Apple Computer, Inc.
6.00%, due 6/1/01 (c)................................. $ 300,000 $ 285,750
------------
RETAIL (0.6%)
Michaels Stores, Inc.
6.75%, due 1/15/03.................................... 730,000 621,413
------------
TELECOMMUNICATION
SERVICES (0.5%)
Petersburg Long Distance, Inc. 9.00%, due 6/1/06 (c)... 500,000 600,000
------------
Total Convertible Bonds
(Cost $1,383,566)..................................... 1,507,163
------------
CORPORATE BONDS (43.2%)
AEROSPACE (0.9%)
K&F Industries, Inc.
11.875%, due 12/1/03.................................. 75,000 80,250
13.75%, due 8/1/01.................................... 550,000 572,000
Sequa Corp.
9.625%, due 10/15/99.................................. 400,000 402,500
------------
1,054,750
------------
AUTO PARTS (1.0%)
Great Dane Holdings, Inc.
12.75%, due 8/1/01.................................... 620,000 592,100
J.B. Poindexter & Co.
12.50%, due 5/15/04................................... 600,000 519,000
------------
1,111,100
------------
BUILDING MATERIALS (0.5%)
Associated Materials, Inc.
11.50%, due 8/15/03................................... 650,000 549,250
------------
BUILDINGS (1.1%)
NVR, Inc.
11.00%, due 4/15/03................................... 1,200,000 1,212,000
------------
CABLE (1.5%)
United International Holdings, Inc. Series B
(zero coupon), due 11/15/99........................... 1,600,000 1,056,000
(zero coupon), due 11/15/99........................... 850,000 561,000
------------
1,617,000
------------
CASINOS (4.1%)
Argosy Gaming Co.
13.25%, due 6/1/04 (c)................................ 2,000,000 2,030,000
</TABLE>
- --------
+Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
CASINOS (Continued)
Casino Magic Finance Corp.
11.50%, due 10/15/01.................................. $ 900,000 $ 927,000
Colorado Gaming &
Entertainment Co.
12.00%, due 6/1/03 (h)................................ 5,000 4,564
El Comandante Capital Corp.
11.75%, due 12/15/03.................................. 800,000 752,000
Horseshoe Gaming LLC, Series B 12.75%, due 9/30/00..... 500,000 536,250
President Riverboat Casinos, Inc.
13.00%, due 9/15/01................................... 400,000 328,000
------------
4,577,814
------------
CELLULAR TELEPHONE (2.6%)
Centennial Cellular Corp.
8.875%, due 11/1/01................................... 500,000 462,500
10.125%, due 5/15/05.................................. 500,000 480,000
Occidente y Caribe Celular, S.A.
(zero coupon), due 3/15/04
14.00%, beginning 3/15/01 (c)(k1) 3,700 1,887,000
PriCellular Wireless Corp., Series B
(zero coupon), due 11/15/01
14.00%, beginning 11/15/97............................ 50,000 45,500
------------
2,875,000
------------
CHEMICALS (0.7%)
Uniroyal Chemical Co., Inc.
9.00%, due 9/1/00..................................... 800,000 808,000
------------
CHILD CARE SERVICES (0.9%)
La Petite Holdings Corp.
9.625%, due 8/1/01.................................... 1,100,000 1,014,750
------------
CONSUMER DURABLES (1.6%)
Samsonite Corp.
11.125%, due 7/15/05.................................. 700,000 710,500
Selmer Co., Inc.
11.00%, due 5/15/05................................... 1,000,000 1,055,000
------------
1,765,500
------------
CONTAINERS (0.3%)
Americold Corp.
12.875%, due 5/1/08................................... 350,000 357,000
------------
DEFENSE ELECTRONICS (0.5%)
Tracor, Inc.
10.875%, due 8/15/01.................................. 500,000 527,500
------------
DOMESTIC OIL & GAS (0.3%)
Mesa Capital Corp.
12.75%, due 6/30/98................................... 325,000 328,250
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
57
<PAGE>
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
CORPORATE BONDS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
EQUIPMENT FINANCING (1.5%)
Atlas Air, Inc.
12.25%, due 12/1/02.................................. $ 650,000 $ 706,875
GPA Delaware, Inc.
8.75%, due 12/15/98.................................. 1,000,000 1,000,000
------------
1,706,875
------------
FOOD, BEVERAGES & TOBACCO (1.5%)
Great American Cookie Co.
Series B
10.875%, due 1/15/01................................. 450,000 337,500
National Tobacco Holdings, LLC
13.50%, due 5/17/03
16.50%, beginning 6/1/01 (c)(e)(g) 1,777,778 1,348,784
------------
1,686,284
------------
INDUSTRIAL (4.0%)
G-I Holdings, Inc.
Series B
(zero coupon), due 10/1/98........................... 1,300,000 1,043,250
Monarch Marking Systems, Inc.
12.50%, due 7/1/03................................... 1,400,000 1,491,000
Newflo Corp., Series B
13.25%, due 11/15/02................................. 350,000 374,500
Thermadyne Holdings Corp.
10.75%, due 11/1/03.................................. 1,500,000 1,522,500
------------
4,431,250
------------
LEISURE (0.3%)
Bally's Health & Tennis
13.00%, due 1/15/03.................................. 450,000 387,000
------------
MEDIA (9.1%)
Affiliated Newspaper Investments, Inc.
(zero coupon), due 7/1/06
13.25%, beginning 7/1/99............................. 1,500,000 1,050,000
Allbritton Communications Co.
Series B
9.75%, due 11/30/07.................................. 1,500,000 1,372,500
American Media, Inc.
Series XW
(zero coupon), due 5/15/97........................... 750,000 673,125
Comcast Cellular Corp.
Series A
(zero coupon), due 3/5/00............................ 800,000 546,000
Continental Cablevision, Inc.
11.00%, due 6/1/07................................... 1,350,000 1,515,375
Garden State Newspapers, Inc.
12.00%, due 7/1/04................................... 300,000 316,500
General Media, Inc.
10.625%, due 12/31/00................................ 1,300,000 1,014,000
Park Communications, Inc.
13.75%, due 5/15/04 (c)(h)(k2)....................... 1,000 1,050,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
MEDIA (Continued)
Park Newspapers, Inc.
11.875%, due 5/15/04 (c)............................. $ 1,000,000 $ 1,010,000
Spanish Broadcasting System, Inc.
7.50%, due 6/15/02
12.50%, beginning 6/15/97............................ 250,000 247,500
12.25%, due 6/1/01 (c)............................... 845,000 845,000
Telemundo Group, Inc.
7.00%, due 2/15/06
10.50%, beginning 2/15/99............................ 500,000 452,500
------------
10,092,500
------------
PAPER & FOREST
PRODUCTS (0.1%)
Gaylord Container Corp.
11.50%, due 5/15/01.................................. 100,000 102,250
------------
POLLUTION & RELATED (0.8%)
ICF Kaiser International, Inc.
13.00%, due 12/31/03................................. 200,000 191,000
13.00%, due 12/31/03 (k3)............................ 700 672,000
------------
863,000
------------
RECREATION &
ENTERTAINMENT (2.1%)
Affinity Group, Inc.
11.50%, due 10/15/03................................. 2,000,000 2,045,000
Stratosphere Corp.
14.25%, due 5/15/02.................................. 300,000 333,000
------------
2,378,000
------------
RESTAURANTS &
LODGING (0.7%)
American Restaurant Group, Inc.
12.00%, due 9/15/98.................................. 200,000 178,000
Family Restaurant, Inc.
9.75%, due 2/1/02.................................... 1,025,000 630,375
------------
808,375
------------
RETAIL (2.8%)
Brylane L.P., Series B
10.00%, due 9/1/03................................... 400,000 388,000
Guitar Center Management Co.
11.00%, due 7/1/06 (c)............................... 500,000 510,000
IHF Holdings, Inc.
Series B
(zero coupon), due 11/15/04
15.00%, beginning 11/15/99........................... 500,000 346,250
Mothers Work, Inc.
12.625%, due 8/1/05.................................. 1,150,000 1,214,687
Petro PSC Properties L.P.
12.50%, due 6/1/02................................... 400,000 386,000
Waban, Inc.
11.00%, due 5/15/04.................................. 250,000 260,000
------------
3,104,937
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
58
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
CORPORATE BONDS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
STEEL, ALUMINUM &
OTHER METALS (1.4%)
Maxxam Group, Inc.
(zero coupon), due 8/1/03
12.25%, beginning 8/1/98............................. $ 725,000 $ 514,750
Weirton Steel Corp.
11.375%, due 7/1/04 (c).............................. 1,000,000 985,000
------------
1,499,750
------------
TELECOMMUNICATION SERVICES (2.0%)
Microcell Telecommunications, Inc.
(zero coupon), due 6/1/06
14.00%, beginning 12/1/01 (c)(k4) 3,800 1,852,500
Petersburg Long Distance, Inc.
(zero coupon), due 6/1/04
14.00%, beginning 6/1/99 (c)(k5) 415 327,850
------------
2,180,350
------------
TEXTILE & APPAREL (0.5%)
Hosiery Corp. of America, Inc.
13.75%, due 8/1/02................................... 500,000 542,500
------------
UTILITIES (0.4%)
Consolidated Hydro, Inc.
(zero coupon), due 7/15/03
12.00%, beginning 7/15/98............................ 2,100,000 493,500
------------
Total Corporate Bonds
(Cost $47,322,847)................................... 48,074,485
------------
U.S. GOVERNMENT &
FEDERAL AGENCY (6.0%)
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (5.0%)
Series B
12.00%, due 6/26/98.................................. 5,000,000 5,533,000
------------
UNITED STATES TREASURY NOTE (1.0%)
9.125%, due 5/15/99.................................. 1,100,000 1,179,926
------------
Total U.S. Government &
Federal Agency
(Cost $6,703,192).................................... 6,712,926
------------
YANKEE BONDS (6.4%)
CABLE (1.5%)
Telewest, Plc
(zero coupon), due 10/1/07
11.00%, beginning 10/1/00............................ 2,710,000 1,598,900
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------
<S> <C> <C>
COMPUTERS & OFFICE EQUIPMENT (1.0%)
International Semi-Technology Corp.
(zero coupon), due 8/15/03
11.50%, beginning 8/15/00............................ $ 2,000,000 $ 1,145,000
------------
FINANCIAL (1.8%)
Hollinger, Inc.
(zero coupon), due 10/5/13........................... 6,000,000 2,010,000
------------
MEDIA (1.4%)
Grupo Televisa, S.A.
(zero coupon), due 5/15/08
13.25%, beginning 5/15/01 (c)........................ 1,300,000 705,250
Le Groupe Videotron Ltee
10.625%, due 2/15/05................................. 800,000 836,000
------------
1,541,250
------------
REAL ESTATE (0.7%)
Trizec Finance Ltd.
10.875%, due 10/15/05................................ 800,000 804,000
------------
Total Yankee Bonds
(Cost $7,106,847).................................... 7,099,150
------------
Total Long-Term Bonds
(Cost $62,516,452)................................... 63,393,724
------------
COMMON STOCKS (7.1%)
<CAPTION>
SHARES
-------------
<S> <C> <C>
BANKS (0.5%)
Wells Fargo & Co...................................... 2,150 513,581
------------
BUILDINGS (0.4%)
NVR, Inc. (a)......................................... 40,000 445,000
------------
CABLE (0.2%)
United International Holdings, Inc.
Class A (a).......................................... 12,500 171,875
------------
CASINOS (0.1%)
Casino America, Inc. (a).............................. 5,619 46,357
Colorado Gaming &
Entertainment Co. (a)................................ 12,488 31,220
------------
77,577
------------
COMPUTERS & OFFICE
EQUIPMENT (0.3%)
Wallace Computer Services, Inc........................ 5,500 329,313
------------
CONGLOMERATES (0.4%)
Hanson, Plc ADR (d)................................... 34,500 491,625
------------
ELECTRICAL EQUIPMENT (0.5%)
Berg Electronics Corp. (a)............................ 23,500 558,125
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
59
<PAGE>
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
FOOD, BEVERAGES &
TOBACCO (0.3%)
RJR Nabisco Holdings Corp.............................. 11,600 $ 359,600
------------
GAS UTILITIES (0.1%)
UGI Corp............................................... 6,000 132,000
------------
MEDIA (2.5%)
Comcast Corp., Class A................................. 42,500 780,938
Matav-Cable Systems Media
Ltd. ADR (a)(d)....................................... 24,500 407,313
Metromedia International
Group, Inc. (a)....................................... 99,400 1,217,650
New World Communications Group, Inc., Class A (a)...... 28,000 409,500
------------
2,815,401
------------
RESTAURANTS &
LODGING (0.1%)
Bob Evans Farms, Inc................................... 10,000 170,000
------------
RETAIL (0.6%)
Limited, Inc. (The).................................... 10,000 215,000
Melville Corp.......................................... 11,400 461,700
------------
676,700
------------
TELECOMMUNICATION SERVICES (1.1%)
Clearnet Communications, Inc. Class A (a).............. 40,000 670,000
QUALCOMM, Inc. (a)..................................... 3,000 159,375
Rogers Communications, Inc.
Class B (a)........................................... 40,000 374,899
------------
1,204,274
------------
TEXTILE & APPAREL (0.0%) (b)
Hosiery Corp. of America, Inc. (a)..................... 500 2,500
------------
Total Common Stocks
(Cost $7,886,038)..................................... 7,947,571
------------
PREFERRED STOCKS (2.1%)
CABLE (0.0%) (b)
Cablevision Systems Corp.
11.75%, Series H (g).................................. 184 17,756
------------
EQUIPMENT FINANCING (0.3%)
GPA Group, Plc (a)(c).................................. 1,000,000 360,000
------------
FOOD, BEVERAGES &
TOBACCO (0.2%)
National Tobacco Holdings, LLC
14.50% (c)(e)(h)(l)................................... 222,222 222,222
------------
MEDIA (0.8%)
Spanish Broadcasting System, Inc.
Series A (a)(c)....................................... 905 841,650
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
PUBLISHING (0.8%)
Time Warner, Inc.
10.25%, Series K (c)(g).............................. 915 $ 896,641
------------
Total Preferred Stocks
(Cost $2,279,303).................................... 2,338,269
------------
WARRANTS (0.7%)
CASINOS (0.0%) (b)
Casino America, Inc.
expire 5/3/01 (a).................................... 1,249 1,249
------------
DOMESTIC OIL & GAS (0.1%)
TransAmerican Refining Corp.
expire 2/15/02 (a)................................... 50,000 75,000
------------
FOOD, BEVERAGES &
TOBACCO (0.4%)
Cookies USA, Inc.
expire 1/15/01 (a)................................... 81 405
National Tobacco Holdings, LLC
Class A
expire 5/17/06 (c)(e)(m)............................. 617,283 428,993
expire 5/17/06 (a)(c)(e)(n).......................... 79,410 0
------------
429,398
------------
MEDIA (0.2%)
General Media, Inc.
expire 12/31/96 (a).................................. 600 3,000
Spanish Broadcasting System, Inc.
expire 6/29/99 (a)(c)................................ 1,100 198,000
------------
201,000
------------
POLLUTION & RELATED (0.0%) (b)
ICF Kaiser International, Inc.
expire 12/31/98 (a).................................. 960 600
------------
RETAIL (0.0%) (b)
Petro PSC Properties L.P.
expire 6/1/97 (a).................................... 400 13,200
------------
Total Warrants
(Cost $774,091)...................................... 720,447
------------
PURCHASED PUT OPTION (0.0%) (B)
<CAPTION>
NOTIONAL
AMOUNT
-------------
<S> <C> <C>
FOOD, BEVERAGES &
TOBACCO (0.0%) (b)
Underlying security
RJR Nabisco, Inc.
8.75%, due 8/15/05
expire 8/26/96 (f)................................... $ 500,000 500
------------
Total Purchased Put Option
(Cost $10,000)....................................... 500
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
60
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
SHORT-TERM
INVESTMENT (33.8%)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------
<S> <C> <C>
U.S. GOVERNMENT (33.8%)
United States Treasury Note
8.50%, due 4/15/97............................... $36,825,000 $ 37,601,639
------------
Total Short-Term Investment
(Cost $37,712,244)............................... 37,601,639
------------
Total Investments
(Cost $111,178,128) (i).......................... 100.7% 112,002,150 (j)
Liabilities in Excess of
Cash and Other Assets............................ (0.7) (794,399)
----------- ------------
Net Assets........................................ 100.0% $111,207,751
=========== ============
</TABLE>
- --------
(a) Non-income producing securities.
(b) Less than one tenth of a percent.
(c) May be sold to institutional investors only.
(d) ADR--American Depository Receipt.
(e) Fair valued securities. (See Note 2)
(f) Purchased put option is based on spread between the risk/duration of RJR
Nabisco, Inc., 8.75%, due 8/15/05, multiplied by the yield on the RJR Na-
bisco bond less the yield on the U.S. Treasury Note 6.50%, due 8/15/05,
less 3%, multiplied by the notional principal.
(g) CIK ("Cash in Kind") interest or dividend payment is made with cash or ad-
ditional securities.
(h) PIK ("Payment in Kind") interest or dividend payment is made with addi-
tional securities.
(i) The cost stated also represents the aggregate cost for Federal income tax
purposes.
(j) At June 30, 1996 net unrealized appreciation was $824,022, based on cost
for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $1,647,914 and aggregate gross unrealized depre-
ciation for all investments on which there was an excess of cost over mar-
ket value of $823,892.
(k1) 3,700 Units--each unit reflects $1,000 principal amount of Senior Dis-
counted Notes, plus 4 warrants to acquire 5,709 shares of Class B common
stock at a future date.
(k2) 1,000 Units--each unit reflects $1,000 principal amount of Senior Payment
in Kind Notes, plus 1 warrant to acquire 10 shares of common stock at a
future date.
(k3) 700 Units--each unit reflects $1,000 principal amount of 12.00% Senior
Subordinated Notes, plus warrants to acquire 4.8 shares of common stock at
$5.00 per share at a future date.
(k4) 3,800 Units--each unit reflects $1,000 principal amount of Senior Dis-
counted Notes, plus 4 warrants to acquire 3,702 shares of Class B common
stock at a future date.
(k5) 415 Units--each unit reflects $1,000 principal amount of Senior Discounted
Notes, plus 1 warrant to acquire 34 shares of common stock at a future
date.
(l) The preferred membership interest entitles the Fund to a Payment in Kind
dividend of 14.50% for the first five years and 17.50% for the sixth and
seventh year.
(m) The warrants entitle the Fund to 3.45% of the voting rights and dividend
payments.
(n) The redeemable warrants can be redeemed by National Tobacco Corp. for nomi-
nal consideration during the first five years, only on a pro-rata basis
with prepayment of the Subordinated Notes.
The notes to the financial statements are an integral part of, and should
be read in conjunction with, the financial statements.
61
<PAGE>
HIGH YIELD CORPORATE BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 1996 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2)
(identified cost $111,178,128).................................. $112,002,150
Cash............................................................. 24,943
Receivables:
Dividends and interest........................................... 1,762,498
Investment securities sold....................................... 1,529,069
Fund shares sold................................................. 1,158,839
NYLIAC........................................................... 10,113
Unamortized organization expense
(Note 2)........................................................ 56,305
------------
Total assets................................................... 116,543,917
------------
LIABILITIES:
Payables:
Investment securities purchased.................................. 5,197,630
Organization..................................................... 72,839
Adviser.......................................................... 25,339
Administrator.................................................... 8,567
Custodian........................................................ 6,833
Directors........................................................ 1,000
Accrued expenses................................................. 23,958
------------
Total liabilities.............................................. 5,336,166
------------
Net assets applicable to
outstanding shares.............................................. $111,207,751
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
100 million shares authorized................................... $ 97,355
Additional paid-in capital....................................... 105,346,346
Accumulated undistributed net
investment income............................................... 3,355,829
Accumulated undistributed net realized gain on investments....... 1,584,199
Net unrealized appreciation
on investments.................................................. 824,022
------------
Net assets applicable to
outstanding shares.............................................. $111,207,751
============
Shares of capital stock outstanding.............................. 9,735,460
============
Net asset value per share outstanding............................ $ 11.42
============
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996 (Unaudited)
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a).................................................... $ 50,395
Interest......................................................... 3,553,521
------------
Total income................................................... 3,603,916
------------
Expenses: (Note 2)
Advisory (Note 3)................................................ 111,022
Administration (Note 3).......................................... 74,014
Recordkeeping.................................................... 64,607
Auditing......................................................... 10,452
Shareholder communication........................................ 8,487
Legal............................................................ 7,449
Amortization of organization expense............................. 7,329
Custodian........................................................ 5,556
Portfolio pricing................................................ 2,646
Directors........................................................ 2,392
Miscellaneous.................................................... 1,253
------------
Total expenses
before reimbursement.......................................... 295,207
Expense reimbursement from
Administrator (Note 3).......................................... (47,120)
------------
Net expenses................................................... 248,087
------------
Net investment income............................................ 3,355,829
------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments................................. 1,673,725
Net change in unrealized appreciation
on investments.................................................. 303,189
------------
Net realized and unrealized gain
on investments.................................................. 1,976,914
------------
Net increase in net assets resulting
from operations................................................. $ 5,332,743
============
</TABLE>
- --------
(a) Dividends recorded net of foreign withholding taxes in the amount of $218.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
62
<PAGE>
NEW YORK LIFE
HIGH YIELD CORPORATE BOND PORTFOLIO MFA SERIES FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996 (Unaudited)
and the period May 1, 1995 (Commencement of Operations)
through December 31, 1995
<TABLE>
<CAPTION>
1996 1995
---------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income.......................... $ 3,355,829 $ 1,500,585
Net realized gain on investments............... 1,673,725 172,097
Net change in unrealized appreciation on in-
vestments..................................... 303,189 520,833
------------ ------------
Net increase in net assets resulting from oper-
ations........................................ 5,332,743 2,193,515
------------ ------------
Dividends and distributions to shareholders:
From net investment income..................... -- (1,500,585)
From net realized gain on investments.......... -- (172,097)
In excess of net realized gain on investments.. -- (89,526)
------------ ------------
Total dividends and distributions to share-
holders...................................... -- (1,762,208)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares............... 63,692,443 31,553,312
Net asset value of shares issued to sharehold-
ers in reinvestment of dividends and distribu-
tions......................................... -- 1,762,208
------------ ------------
63,692,443 33,315,520
Cost of shares redeemed........................ (1,131,906) (432,356)
------------ ------------
Increase in net assets derived from capital
share transactions........................... 62,560,537 32,883,164
------------ ------------
Net increase in net assets.................... 67,893,280 33,314,471
NET ASSETS:
Beginning of period............................ 43,314,471 10,000,000
------------ ------------
End of period.................................. $111,207,751 $ 43,314,471
============ ============
Accumulated undistributed net investment in-
come.......................................... $ 3,355,829 $ --
============ ============
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<CAPTION>
MAY 1,
SIX MONTHS 1995 (A)
ENDED THROUGH
JUNE 30, DECEMBER 31,
1996* 1995
---------------------------
<S> <C> <C>
Net asset value at beginning of period.......... $ 10.55 $ 10.00
------------ ------------
Net investment income........................... 0.35 0.37
Net realized and unrealized gain on investments. 0.52 0.61
------------ ------------
Total from investment operations................ 0.87 0.98
------------ ------------
Less dividends and distributions:
From net investment income..................... -- (0.37)
From net realized gain on investments.......... -- (0.04)
In excess of net realized gain on investments.. -- (0.02)
------------ ------------
Total dividends and distributions............... -- (0.43)
------------ ------------
Net asset value at end of period................ $ 11.42 $ 10.55
============ ============
Total investment return (b)..................... 8.26% 10.06%
Ratios (to average net assets)/Supplemental Da-
ta:
Net investment income.......................... 9.07%+ 10.02%+
Net expenses................................... 0.67%+ 0.67%+
Expenses (before reimbursement)................ 0.80%+ 1.25%+
Portfolio turnover rate......................... 105% 95%
Average commission rate paid.................... $ 0.0643 (c)
Net assets at end of period (in 000's).......... $ 111,208 $ 43,314
</TABLE>
- --------
(a) Commencement of Operations.
(b) Total return is not annualized.
(c) Disclosure of amount required for fiscal years beginning on or after Sep-
tember 1, 1995.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
63
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 1996 (Unaudited)
COMMON STOCKS (91.1%)+
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
--------------------------
AUSTRALIA (4.5%)
Amcor, Ltd.
(forest products & paper)............................ 13,000 $ 88,504
Boral, Ltd.
(building materials &
components).......................................... 15,000 38,959
Brambles Industries, Ltd.
(business & public services)......................... 4,300 59,835
Broken Hill Proprietary Co., Ltd.
(energy sources)..................................... 19,400 268,273
Coles Myer, Ltd.
(merchandising)...................................... 6,770 24,617
CRA, Ltd.
(metals-nonferrous).................................. 3,225 49,648
CSR, Ltd.
(multi-industry)..................................... 19,200 67,850
Foster's Brewing Group, Ltd.
(beverages & tobacco)................................ 28,920 49,848
Mount Isa Mines Holdings, Ltd.
(metals-nonferrous).................................. 22,461 28,992
National Australia Bank, Ltd.
(banking)............................................ 13,700 126,696
News Corp., Ltd.
(broadcasting & publishing).......................... 17,039 96,690
Pacific Dunlop, Ltd.
(multi-industry)..................................... 3,600 8,104
Santos, Ltd.
(energy sources)..................................... 15,500 53,677
Westpac Banking Corp., Ltd.
(banking)............................................ 19,400 85,964
WMC, Ltd.
(metals-nonferrous).................................. 14,600 104,568
------------
1,152,225
------------
AUSTRIA (2.8%)
Austrian Airlines Oesterreichische Luftverkehrs AG
(transportation-airlines) (a)........................ 150 23,090
Bank Austria AG
(banking)............................................ 2,050 164,576
Creditanstalt-Bankverein Stamm
(banking)............................................ 1,000 66,185
EA-Generali AG
(insurance).......................................... 350 103,735
Oesterreichische
Brau-Beteiligungs AG
(beverages & tobacco)................................ 750 42,708
OMV AG
(energy sources)..................................... 1,050 106,349
Verbundgesellschaft-Oesterreichische
Elektrizitatswirtschafts AG Class A
(utilities-electrical & gas)......................... 1,350 103,024
Wienerberger Baustoffindustrie AG (building materials
&
components).......................................... 500 100,958
------------
710,625
------------
</TABLE>
- --------
+Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
--------------------------
FRANCE (9.3%)
Alcatel Alsthom
(electrical & electronics)........................... 1,323 $ 115,388
AXA
(insurance).......................................... 1,303 71,274
Carrefour, SA
(merchandising)...................................... 355 198,874
Compagnie de Saint Gobain
(misc.-materials & commodities) 1,095 146,551
Compagnie de Suez, SA
(banking)............................................ 2,017 73,775
Compagnie Financiere de Paribas, SA Class A
(banking)............................................ 601 35,490
Compagnie Generale des Eaux
(business & public services)......................... 1,307 145,982
Elf Aquitaine, SA
(energy sources)..................................... 2,212 162,675
Eridania Beghin-Say, SA
(food & household products).......................... 180 28,181
Groupe Danone
(food & household products).......................... 1,086 164,332
Havas, SA
(business & public services)......................... 444 36,309
Lafarge, SA
(building materials &
components).......................................... 839 50,766
L'Air Liquide
(chemicals).......................................... 1,294 228,482
L'Oreal
(health & personal care)............................. 670 222,419
LVMH-Moet Hennessy
Louis Vuitton
(beverages & tobacco)................................ 720 170,766
Lyonnaise des Eaux, SA
(multi-industry)..................................... 733 69,996
Michelin (CGDE) Class B
(tire & rubber)...................................... 320 15,639
Pernod-Ricard
(beverages & tobacco)................................ 430 27,564
Pinault-Printemps-Redoute, SA
(building materials &
components).......................................... 110 38,482
PSA Peugeot, SA
(automobiles)........................................ 150 20,075
Rhone-Poulenc Class A
(chemicals).......................................... 1,439 37,819
Schneider, SA
(machinery & engineering)............................ 400 20,979
Societe Generale
(banking)............................................ 1,134 124,676
Thomson CSF, SA
(aerospace & military technology) 1,956 54,978
Total, SA Class B
(energy sources)..................................... 1,514 112,284
------------
2,373,756
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
64
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
--------------------------
GERMANY (3.8%)
Allianz AG Holding
(insurance).......................................... 100 $ 173,112
BASF AG
(chemicals).......................................... 100 28,578
Bayer AG
(chemicals).......................................... 1,000 35,312
Daimler-Benz AG
(automobiles) (a).................................... 200 107,020
Daimler-Benz AG Rights
(automobiles) (a).................................... 200 28
Deutsche Bank AG
(banking)............................................ 3,200 151,366
Dresdner Bank AG
(banking)............................................ 950 23,873
Karstadt AG
(merchandising)...................................... 50 20,218
Linde AG
(machinery & engineering)............................ 50 32,520
Mannesmann AG
(machinery & engineering)............................ 50 17,278
Preussag AG
(multi-industry)..................................... 50 12,647
RWE AG
(utilities-electrical & gas)......................... 500 19,479
Siemens AG
(electrical & electronics)........................... 1,850 98,812
Thyssen AG
(metals-steel)....................................... 50 9,135
VEBA AG
(utilities-electrical & gas)......................... 3,200 170,013
Viag AG
(multi-industry)..................................... 150 59,817
Volkswagen AG
(automobiles)........................................ 50 18,576
------------
977,784
------------
HONG KONG (3.5%)
Cheung Kong (Holdings) Ltd.
(real estate)........................................ 21,000 151,250
China Light & Power Co. Ltd.
(utilities-electrical & gas)......................... 17,000 77,088
Hang Seng Bank Ltd.
(banking)............................................ 12,400 124,954
Hong Kong
Telecommunications Ltd.
(telecommunications)................................. 76,000 136,477
Hutchison Whampoa Ltd.
(multi-industry)..................................... 24,000 150,999
Sun Hung Kai Properties Ltd.
(real estate)........................................ 16,000 161,747
Swire Pacific Ltd. Class A
(multi-industry)..................................... 11,000 94,148
------------
896,663
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
--------------------------
ITALY (4.7%)
Assicurazioni Generali
(insurance).......................................... 10,800 $ 248,921
Banca Commerciale Italiana
(banking)............................................ 28,000 56,228
Benetton Group SPA
(textiles & apparel)................................. 4,000 51,638
Credito Italiano
(banking)............................................ 12,000 14,052
Edison SPA
(energy sources)..................................... 4,000 24,124
Fiat SPA
(automobiles)........................................ 38,000 127,225
Fiat SPA di Risp
(automobiles)........................................ 6,000 10,249
Istituto Bancario San Paolo di
Torino SPA
(banking)............................................ 9,000 58,093
Italgas SPA
(utilities-electrical & gas)......................... 5,000 18,664
Mediobanca SPA
(financial services)................................. 10,000 63,472
Montedison SPA
(multi-industry) (a)................................. 31,000 18,009
Olivetti Group SPA
(data processing &
reproduction) (a).................................... 30,000 16,176
Parmalat Finanziaria SPA
(food & household products).......................... 35,000 47,009
Pirelli SPA
(industrial components).............................. 26,000 43,482
Riunione Adriatica di Sicurta SPA
(insurance).......................................... 5,200 53,721
Sirti SPA
(telecommunications)................................. 3,000 19,267
Telecom Italia SPA
(telecommunications)................................. 70,000 150,384
Telecom Italia SPA di Risp
(telecommunications)................................. 8,000 13,796
Telecom Italia Mobile SPA
(telecommunications)................................. 67,000 149,618
Telecom Italia Mobile SPA di Risp
(telecommunications)................................. 6,000 8,176
------------
1,192,304
------------
JAPAN (37.4%)
Ajinomoto Co., Inc.
(food & household products).......................... 3,000 35,830
Asahi Bank, Ltd.
(banking)............................................ 17,000 196,836
Asahi Chemical Industry Co., Ltd.
(chemicals).......................................... 19,000 135,460
Asahi Glass Co., Ltd.
(misc.-materials & components) 10,000 119,433
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
65
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
--------------------------
JAPAN (Continued)
Bank of Tokyo-Mitsubishi Ltd.
(banking)............................................ 22,600 $ 523,863
Bridgestone Corp.
(industrial components).............................. 3,000 57,164
Canon, Inc.
(recreation & other
consumer goods)...................................... 8,000 166,294
Chiba Bank, Ltd.
(banking)............................................ 6,000 52,842
Dai Nippon Printing Co., Ltd.
(business & public services)......................... 5,000 96,640
Daiei, Inc.
(merchandising)...................................... 10,000 120,344
Daiwa House Industry Co., Ltd.
(construction & housing)............................. 13,000 201,486
Fanuc Co., Ltd.
(electronic components &
instruments)......................................... 2,000 79,500
Fuji Bank, Ltd.
(banking)............................................ 13,000 279,710
Fuji Photo Film Co., Ltd.
(recreation & other
consumer goods)...................................... 2,000 63,090
Fujitsu, Ltd.
(data processing &
reproduction)........................................ 11,000 100,287
Furukawa Electric Co., Ltd.
(industrial components).............................. 15,000 89,575
Hankyu Corp.
(transportation-road & rail)......................... 3,000 17,559
Hitachi, Ltd.
(electrical & electronics)........................... 20,000 185,987
Honda Motor Co., Ltd.
(automobiles)........................................ 6,000 155,354
Industrial Bank of Japan, Ltd.
(banking)............................................ 11,000 272,781
Ito-Yokado Co., Ltd.
(merchandising)...................................... 3,000 180,790
Itochu Corp.
(wholesale &
international trade)................................. 30,000 209,509
Japan Air Lines
(transportation-airlines) (a)........................ 9,000 72,781
Japan Energy Corp.
(energy sources)..................................... 28,000 103,897
Joyo Bank
(banking)............................................ 3,000 22,729
Kajima Corp.
(construction & housing)............................. 2,000 20,604
Kansai Electric Power Co., Inc.
(utilities-electrical & gas)......................... 3,000 68,651
Kao Corp.
(food & household products).......................... 23,000 310,343
Kawasaki Steel Corp.
(metals-steel)....................................... 6,000 21,607
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
--------------------------
JAPAN (Continued)
Kinki Nippon Railway Co., Ltd.
(transportation-road & rail)......................... 7,000 $ 50,353
Kirin Brewery Co., Ltd.
(beverages & tobacco)................................ 11,000 134,385
Komatsu, Ltd.
(machinery & engineering)............................ 10,000 98,464
Kubota Corp.
(machinery & engineering)............................ 5,000 32,958
Marubeni Corp.
(wholesale &
international trade)................................. 17,000 92,993
Marui Co., Ltd.
(merchandising)...................................... 2,000 44,309
Matsushita Electric Industrial
Co., Ltd.
(appliances &
household durables).................................. 8,000 148,789
Mitsubishi Chemical Corp.
(chemicals).......................................... 10,000 46,132
Mitsubishi Corp.
(multi-industry)..................................... 5,000 65,642
Mitsubishi Electric Corp.
(electrical & electronics)........................... 35,000 243,789
Mitsubishi Estate Co., Ltd.
(construction & housing)............................. 3,000 41,300
Mitsubishi Heavy Industries, Ltd.
(machinery & engineering)............................ 15,000 130,327
Mitsubishi Trust & Banking
(financial services)................................. 11,000 185,531
Mitsui Engineering & Shipbuilding
Co., Ltd.
(machinery & engineering) (a)........................ 21,000 63,947
Mitsui Fudosan Co., Ltd.
(construction & housing)............................. 6,000 80,959
Mitsui Marine & Fire Insurance
Co., Ltd.
(insurance).......................................... 15,000 119,114
Mitsui Trust & Banking Co., Ltd.
(financial services)................................. 3,000 35,009
Mitsukoshi, Ltd.
(merchandising)...................................... 3,000 32,001
NEC Corp.
(electrical & electronics)........................... 8,000 86,794
New Oji Paper Co., Ltd.
(forest products & paper)............................ 2,000 17,249
Nippon Express Co., Ltd.
(transportation-road & rail)......................... 3,000 29,266
Nippon Oil Co., Ltd.
(energy sources)..................................... 8,000 54,191
Nippon Paper Industries Co.
(forest products & paper)............................ 6,000 37,471
Nippon Steel Corp.
(metals-steel)....................................... 11,000 37,708
Nippon Yusen Kabushiki Kaish
(transportation-shipping)............................ 5,000 28,901
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
66
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
--------------------------
JAPAN (Continued)
Nippondenso Co., Ltd.
(industrial components).............................. 8,000 $ 173,588
Nissan Motor Co., Ltd.
(automobiles)........................................ 5,000 44,354
NKK Corp.
(metals-steel) (a)................................... 10,000 30,268
Nomura Securities Co., Ltd.
(financial services)................................. 6,000 117,062
Obayashi Corp.
(construction & housing)............................. 5,000 45,175
Osaka Gas Co., Ltd.
(utilities-electrical & gas)......................... 6,000 21,935
Sakura Bank, Ltd.
(banking)............................................ 18,000 200,209
Sankyo Co., Ltd.
(health & personal care)............................. 2,000 51,785
Sanyo Electric Co., Ltd.
(appliances &
household durables).................................. 6,000 36,596
Sekisui Chemical Co.
(building materials &
components).......................................... 2,000 24,434
Sekisui House, Ltd.
(construction & housing)............................. 2,000 22,792
Sharp Corp.
(appliances &
household durables).................................. 5,000 87,523
Shimizu Corp.
(construction & housing)............................. 4,000 44,126
Shiseido Co., Ltd.
(health & personal care)............................. 8,000 102,110
Sony Corp.
(appliances &
household durables).................................. 1,000 65,734
Sumitomo Bank
(banking)............................................ 14,000 270,593
Sumitomo Chemical Co., Ltd.
(chemicals).......................................... 6,000 28,609
Sumitomo Corp.
(wholesale &
international trade)................................. 14,000 124,319
Sumitomo Electric Industries
(industrial components).............................. 12,000 171,764
Sumitomo Marine & Fire
(insurance).......................................... 7,000 60,947
Sumitomo Metal Industries, Ltd.
(metals-steel)....................................... 8,000 24,506
Sumitomo Metal Mining Co., Ltd.
(metals-nonferrous).................................. 4,000 34,608
Taisei Corp.
(construction & housing)............................. 19,000 134,767
Taisho Pharmaceutical Co., Ltd.
(health & personal care)............................. 1,000 21,607
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
--------------------------
JAPAN (Continued)
Takeda Chemical Industries
(health & personal care)............................. 6,000 $ 106,122
Teijin, Ltd.
(chemicals).......................................... 31,000 168,163
Tobu Railway Co., Ltd.
(transportation-road & rail)......................... 14,000 91,772
Tohoku Electric Power Co., Inc. (utilities-electrical
& gas)............................................... 1,010 22,560
Tokai Bank
(banking)............................................ 11,000 142,408
Tokio Marine & Fire Insurance Co.
(insurance).......................................... 9,000 119,797
Tokyo Dome Corp.
(leisure & tourism).................................. 2,000 40,297
Tokyo Electric Power
(utilities-electrical & gas)......................... 6,000 152,072
Tokyo Gas Co., Ltd.
(utilities-electrical & gas)......................... 15,000 54,702
Tokyu Corp.
(transportation-road & rail)......................... 5,000 38,063
Toppan Printing Co., Ltd.
(business & public services)......................... 8,000 116,698
Tostem Corp.
(building materials &
components).......................................... 1,000 29,448
Toto, Ltd.
(building materials &
components).......................................... 1,000 15,043
Toyoda Automatic Loom
Works
(machinery & engineering)............................ 1,000 19,966
Toyota Motor Corp.
(automobiles)........................................ 13,000 324,748
Yamaichi Securities
(financial services)................................. 15,000 102,840
Yamanouchi Pharmaceutical
(health & personal care)............................. 3,000 65,095
Yamazaki Baking Co., Ltd.
(food & household products).......................... 1,000 18,507
Yasuda Trust & Banking
(financial services)................................. 15,000 94,771
------------
9,561,011
------------
MALAYSIA (2.9%)
AMMB Holdings Berhad
(financial services)................................. 2,000 28,053
DCB Holdings Berhad
(financial services)................................. 5,000 17,133
Edaran Otomobil Nasional Berhad
(automobiles)........................................ 2,000 19,156
Golden Hope Plantations Berhad
(misc.-materials & commodities) 28,000 43,539
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
67
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
--------------------------
MALAYSIA (Continued)
Hume Industries Berhad
(building materials &
components).......................................... 5,000 $ 24,447
Malayan Banking Berhad
(banking)............................................ 9,000 86,565
Malaysia International
Shipping Berhad
(transportation-shipping)............................ 9,000 27,953
Malaysian Resources Corp. Berhad
(real estate)........................................ 7,000 17,113
Resorts World Berhad
(leisure & tourism).................................. 15,000 85,964
Rothmans of Pall Mall Berhad
(beverages & tobacco)................................ 4,000 42,080
Sime Darby Berhad
(multi-industry)..................................... 26,000 71,897
Technology Resources
Industries Berhad
(multi-industry) (a)................................. 7,000 24,407
Telekom Malaysia Berhad
(telecommunications)................................. 11,000 97,867
Tenaga Nasional Berhad
(utilities-electrical & gas)......................... 16,000 67,328
United Engineers Ltd.
(machinery & engineering)............................ 9,000 62,399
YTL Corp. Berhad
(multi-industry)..................................... 3,000 15,630
------------
731,531
------------
NETHERLANDS (1.2%)
Elsevier NV
(broadcasting & publishing).......................... 1,500 22,759
ING Groep NV
(insurance).......................................... 1,270 37,870
Koninklijke PTT Nederland NV
(forest products & paper)............................ 1,000 37,845
Philips Electronics NV
(appliances &
household durables).................................. 600 19,508
Royal Dutch Petroleum Co.
(energy sources)..................................... 900 138,983
Unilever NV
(food & household products).......................... 300 43,410
Wolters Kluwer CVA NV
(broadcasting & publishing).......................... 100 11,359
------------
311,734
------------
NEW ZEALAND (1.0%)
Brierley Investments Ltd.
(multi-industry)..................................... 35,900 33,940
Carter Holt Harvey Ltd.
(forest products & paper)............................ 26,400 60,226
Fletcher Challenge Building
(building materials &
components).......................................... 4,975 9,713
Fletcher Challenge Energy
(energy sources)..................................... 4,975 10,974
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
---------------------------
NEW ZEALAND (Continued)
Fletcher Challenge Paper
(forest products & paper)............................ 9,950 $ 19,222
Lion Nathan Ltd.
(beverages & tobacco)................................ 9,300 24,274
Telecom Corp. of New Zealand Ltd.
(telecommunications)................................. 25,100 105,235
------------
263,584
------------
NORWAY (1.6%)
Bergesen d.y. ASA Class A
(transportation-shipping)............................ 900 18,703
Bergesen d.y. ASA Class B
(transportation-shipping)............................ 500 10,083
Dyno Industrier ASA
(chemicals).......................................... 500 11,083
Hafslund ASA Class A
(energy sources)..................................... 1,000 7,235
Hafslund ASA Class B
(energy sources)..................................... 600 3,787
Kvaerner ASA Class B
(machinery & engineering)............................ 400 15,455
Norsk Hydro ASA
(energy sources)..................................... 4,700 230,068
Norske Skogindustrier ASA Class A
(forest products & paper)............................ 1,300 39,222
Nycomed ASA Class A
(health & personal care) (a)......................... 1,000 14,393
Nycomed ASA Class B
(health & personal care) (a)......................... 600 8,312
Orkla ASA Class A
(multi-industry)..................................... 900 47,380
------------
405,721
------------
SINGAPORE (5.2%)
City Developments, Ltd.
(real estate)........................................ 16,000 124,695
DBS Land, Ltd.
(real estate)........................................ 23,000 78,870
Development Bank of Singapore, Ltd. Foreign Registered
(banking)............................................ 12,000 149,634
Fraser & Neave, Ltd.
(beverages & tobacco)................................ 12,000 124,128
Keppel Corp., Ltd.
(machinery & engineering)............................ 12,000 100,323
Oversea-Chinese Banking Corp., Ltd. Foreign Registered
(banking)............................................ 16,000 187,043
Oversea-Chinese Banking Corp., Ltd. Foreign Registered
Rights
(banking) (a)........................................ 1,600 12,809
Singapore Airlines, Ltd.
Foreign Registered
(transportation-airlines)............................ 22,000 232,244
Singapore Press Holdings, Ltd.
Foreign Registered
(broadcasting & publishing).......................... 6,400 125,602
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
68
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
--------------------------
SINGAPORE (Continued)
Straits Steamship Land, Ltd.
(multi-industry)..................................... 10,000 $ 33,441
United Overseas Bank, Ltd.
Foreign Registered
(banking)............................................ 16,000 153,035
------------
1,321,824
------------
SPAIN (4.5%)
Acerinox, SA
(metals-steel)....................................... 110 11,454
Autopistas Concesionaria
Espanola, SA
(business & public services)......................... 1,376 15,992
Banco Bilbao Vizcaya, SA
(banking)............................................ 2,350 95,133
Banco Central
Hispanoamericano, SA
(banking)............................................ 680 13,843
Banco Santander, SA
(banking)............................................ 1,490 69,499
Corporacion Bancaria
de Espana, SA
(banking)............................................ 1,410 61,479
Corporacion Mapfre, SA
(insurance).......................................... 220 11,223
Empresa Nacional de
Electricidad, SA
(utilities-electrical & gas)......................... 3,420 213,141
Fomento de Construcciones y Contratas, SA
(construction & housing)............................. 460 38,033
Gas Natural SDG
(utilities-electrical & gas)......................... 330 69,241
Iberdrola, SA
(utilities-electrical & gas)......................... 14,620 149,957
Repsol, SA
(energy sources)..................................... 5,220 181,390
Telefonica de Espana
(telecommunications)................................. 12,160 223,841
------------
1,154,226
------------
UNITED KINGDOM (8.7%)
Abbey National Plc
(banking)............................................ 7,790 65,483
Barclays Plc
(banking)............................................ 6,765 81,254
Bass Plc
(beverages & tobacco)................................ 1,680 21,118
B.A.T Industries Plc
(beverages & tobacco)................................ 6,671 51,931
BOC Group Plc
(chemicals).......................................... 1,206 17,315
Boots Co. Plc
(merchandising)...................................... 1,724 15,510
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
--------------------------
UNITED KINGDOM (Continued)
British Airways Plc
(transportation-airlines)............................ 1,471 $ 12,662
British Gas Plc
(energy sources)..................................... 11,990 33,534
British Petroleum Co. Plc
(energy sources)..................................... 21,035 184,502
British Telecommunications Plc
(telecommunications)................................. 11,110 59,729
BTR Plc
(multi-industry)..................................... 16,831 66,295
Cable & Wireless Plc
(telecommunications)................................. 8,950 59,242
Commercial Union Plc
(insurance).......................................... 1,803 16,249
General Electric Co. Plc
(electrical & electronics)........................... 8,700 46,908
GKN Plc
(machinery & engineering)............................ 657 10,086
Glaxo Wellcome Plc
(health & personal care)............................. 11,369 153,069
Granada Group Plc
(leisure & tourism).................................. 5,010 67,103
Grand Metropolitan Plc
(multi-industry)..................................... 10,835 71,887
Great Universal Stores Plc
(merchandising)...................................... 12,200 123,975
Guinness Plc
(beverages & tobacco)................................ 15,670 113,949
Hanson Plc
(multi-industry)..................................... 31,877 89,403
HSBC Holdings Plc (GBP par)
(financial services)................................. 2,450 38,373
Imperial Chemical Industries Plc
(chemicals).......................................... 830 10,162
Kingfisher Plc
(merchandising)...................................... 1,090 10,958
Lloyds TSB Group Plc
(banking)............................................ 12,655 61,938
Marks & Spencer Plc
(merchandising)...................................... 10,167 74,327
MEPC Plc
(real estate)........................................ 1,050 6,624
National Power Plc
(utilities-electrical & gas)......................... 8,580 69,324
Peninsular & Oriental Steam
Navigation Co. Deferred Stock
(transportation-shipping)............................ 4,355 32,887
Prudential Corp. Plc
(insurance).......................................... 9,120 57,533
Rank Organisation Plc
(leisure & tourism).................................. 5,210 40,315
Redland Plc
(building materials &
components).......................................... 1,573 9,801
Reed International Plc
(broadcasting & publishing).......................... 8,270 138,394
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
69
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
---------------------------
UNITED KINGDOM (Continued)
Reuters Holdings Plc
(broadcasting & publishing)...................... 5,820 $ 70,446
RMC Group Plc
(building materials &
components)...................................... 700 11,018
RTZ Corp. Plc
(metals-nonferrous).............................. 4,143 61,348
Sainsbury Plc
(merchandising).................................. 4,820 28,384
Scottish Power Plc
(utilities-electrical & gas)..................... 7,100 33,537
Thorn Emi Plc
(appliances &
household durables).............................. 990 27,596
Unilever Plc
(food & household products)...................... 2,820 56,086
Vodafone Group Plc
(multi-industry)................................. 3,962 14,744
------------
2,214,999
------------
Total Common Stocks
(Cost $22,818,352)............................... 23,267,987
------------
PREFERRED STOCK (0.1%)
AUSTRIA (0.1%)
Creditanstalt-Bankverein Vorzug
(banking)........................................ 600 30,385
------------
Total Preferred Stock
(Cost $35,245)................................... 30,385
------------
SHORT-TERM
INVESTMENT (2.8%)
<CAPTION>
PRINCIPAL
AMOUNT
--------------
<S> <C> <C>
COMMERCIAL PAPER (2.8%)
UNITED STATES (2.8%)
A.I. Credit Corp.
5.47%, due 7/1/96................................ $ 725,000 725,000
------------
Total Short-Term Investment
(Cost $725,000).................................. 725,000
------------
Total Investments
(Cost $23,578,597) (b)........................... 94.0% 24,023,372 (c)
Cash and Other Assets,
Less Liabilities................................. 6.0 1,526,131
----------- ------------
Net Assets........................................ 100.0% $ 25,549,503
=========== ============
</TABLE>
- --------
(a) Non-income producing securities.
(b) The cost for Federal income tax purposes is $23,616,729.
(c) At June 30, 1996 net unrealized appreciation for securities was $406,643,
based on cost for Federal income tax purposes. This consisted of aggregate
gross unrealized appreciation for all investments on which there was an ex-
cess of market value over cost of $1,236,536 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $829,893.
(d) Forward Foreign Currency Contracts Open at June 30, 1996:
<TABLE>
<CAPTION>
GROSS
CONTRACT IN DELIVERY UNREALIZED
TO DELIVER EXCHANGE FOR DATE APPRECIATION
- ---------------- --------------- -------- ------------
<S> <C> <C> <C>
A$ 245,000 $ 193,011 8/28/96 $ 862
AS 6,639,890 (Pounds)410,000 7/12/96 16,677
DK 970,500 $ 167,907 7/30/96 2,217
DM 784,173 (Pounds)345,000 7/2/96 20,768
DM 2,540,000 $ 1,782,456 7/5/96 113,127
DM 224,136 SP 19,000,000 7/22/96 537
DM 585,000 $ 396,798 8/5/96 11,606
DM 172,291 DK 665,000 8/9/96 110
DM 1,690,000 $ 1,167,934 8/20/96 54,083
DM 680,000 $ 465,865 9/23/96 16,771
DM 809,715 (Pounds)345,000 10/2/96 745
DM 1,808,000 $ 1,208,881 10/18/96 12,876
DM 1,165,000 $ 778,743 12/20/96 4,889
FF 1,365,000 DM 403,739 8/2/96 233
FF 500,000 DM 147,793 10/30/96 155
(Yen)104,745,200 $ 1,026,691 7/2/96 71,205
(Yen)584,078,950 $ 5,564,579 8/5/96 210,327
(Yen)272,100,000 $ 2,595,669 10/28/96 71,125
N$ 400,000 $ 272,760 8/7/96 121
$ 291,600 A$ 375,000 7/2/96 3,494
--------
611,928
--------
<CAPTION>
GROSS
CONTRACT IN DELIVERY UNREALIZED
TO DELIVER EXCHANGE FOR DATE DEPRECIATION
- ---------------- --------------- -------- ------------
<S> <C> <C> <C>
A$ 180,000 $ 141,300 7/2/96 345
DK 665,000 DM 172,093 8/9/96 241
DM 335,000 $ 219,961 9/23/96 1,284
DM 1,260,000 $ 829,132 10/18/96 4,366
DM 1,535,000 $ 1,013,758 11/4/96 2,785
FF 1,151,000 DM 339,979 8/2/96 108
IL 938,000,000 DM 898,826 7/23/96 19,286
(Pounds) 345,000 DM 814,545 7/2/96 811
SP 74,300,000 DM 875,344 7/22/96 2,854
$ 1,180,000 DM 1,726,871 7/5/96 45,073
$ 166,210 DK 970,500 7/30/96 520
$ 1,195,000 DM 1,749,480 8/5/96 43,057
$ 392,523 (Yen)42,000,000 8/5/96 7,509
$ 500,000 DM 754,250 10/18/96 1,058
--------
129,297
--------
Net Appreciation....................................... $482,631
========
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
70
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
(e) Foreign cash held at June 30, 1996:
<TABLE>
<CAPTION>
CURRENCY COST VALUE
- --------------- ---------- ----------
<S> <C> <C>
A$ 5,044 $ 4,003 $ 3,970
AS 92,664 8,624 8,650
BF 7,325 233 234
DK 1,620 275 276
DM 7,633 4,972 4,523
FF 42,455 8,243 10,111
HK 44,740 5,783 5,780
IL 15,348,670 9,898 10,007
(Yen) 180,172 1,655 1,643
MK 3,880 1,553 1,555
NG 6,113 3,534 3,581
N$ 3,095 2,085 2,120
NK 47,090 7,152 7,249
(Pounds)653,207 988,719 1,014,958
S$ 3,730 2,648 2,642
SP 381,084 2,962 2,972
---------- ----------
$1,052,339 $1,080,271
========== ==========
</TABLE>
(f) The following abbreviations are used in footnotes (d) & (e):
A$--Australian Dollar
AS--Austrian Schilling
BF--Belgian Franc
DK--Danish Krone
DM--Deutsche Mark
FF--French Franc
HK--Hong Kong Dollar
IL--Italian Lira
(Yen)--Japanese Yen
MK--Malaysian Ringgit
NG--Netherland Guilder
N$--New Zealand Dollar
NK--Norwegian Krone
(Pounds)--Pound Sterling
S$--Singapore Dollar
SP--Spanish Peseta
$--U.S. Dollar
COMMON STOCKS, PREFERRED STOCK &SHORT-TERM INVESTMENT
The table below sets forth the diversification of
International Equity Portfolio investments by industry.
<TABLE>
<CAPTION>
VALUE PERCENT +
-----------------------
<S> <C> <C>
Aerospace & Military Technology........................... $ 54,978 0.2%
Appliances & Household Durables........................... 385,746 1.5
Automobiles............................................... 826,785 3.2
Banking................................................... 4,135,998 16.2
Beverages & Tobacco....................................... 802,750 3.1
Broadcasting & Publishing................................. 465,251 1.8
Building Materials & Components........................... 353,069 1.4
Business & Public Services................................ 471,456 1.8
Chemicals................................................. 747,117 2.9
Construction & Housing.................................... 629,243 2.5
Data Processing & Reproduction............................ 116,463 0.5
Electrical & Electronics.................................. 777,676 3.0
Electronic Components
& Instruments............................................ 79,500 0.3
Energy Sources............................................ 1,675,943 6.6
Financial Services........................................ 682,245 2.7
Food & Household Products................................. 703,698 2.8
Forest Products & Paper................................... 299,739 1.2
Health & Personal Care.................................... 744,912 2.9
Industrial Components..................................... 535,572 2.1
Insurance................................................. 1,798,495 7.0
Leisure & Tourism......................................... 233,678 0.9
Machinery & Engineering................................... 604,702 2.4
Merchandising............................................. 874,307 3.4
Metals-Nonferrous......................................... 279,164 1.1
Metals-Steel.............................................. 134,680 0.5
Miscellaneous-Materials
& Commodities............................................ 190,090 0.7
Miscellaneous-Materials
& Components............................................. 119,433 0.5
Multi-Industry............................................ 1,016,235 4.0
Real Estate............................................... 540,299 2.1
Recreation & Other
Consumer Goods........................................... 229,384 0.9
Telecommunications........................................ 1,023,631 4.0
Textiles & Apparel........................................ 51,638 0.2
Tire & Rubber............................................. 15,639 0.1
Transportation-Airlines................................... 340,778 1.3
Transportation-Road & Rail................................ 227,013 0.9
Transportation-Shipping................................... 118,526 0.5
Utilities-Electrical & Gas................................ 1,310,717 5.1
Wholesale & International Trade........................... 426,822 1.7
----------- -----
24,023,372 94.0
Cash and Other Assets,
Less Liabilities......................................... 1,526,131 6.0
----------- -----
Net Assets................................................ $25,549,503 100.0%
=========== =====
</TABLE>
- --------
+ Percentages indicated are based on Fund net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
71
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 1996 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2) (identified cost
$23,578,597)................................................... $ 24,023,372
Cash denominated in foreign currencies (identified cost
$1,052,339).................................................... 1,080,271
Cash............................................................ 200,888
Receivables:
Investment securities sold...................................... 955,000
Dividends and interest.......................................... 94,788
Fund shares sold................................................ 72,922
NYLIAC.......................................................... 56,036
Unrealized appreciation on foreign
currency contracts............................................. 611,928
Unamortized organization expense
(Note 2)....................................................... 56,345
------------
Total assets.................................................. 27,151,550
------------
LIABILITIES:
Payables:
Investment securities purchased................................. 1,361,070
Organization.................................................... 72,839
Adviser......................................................... 11,999
Custodian....................................................... 5,241
Administrator................................................... 2,000
Directors....................................................... 231
Accrued expenses................................................ 19,370
Unrealized depreciation on foreign
currency contracts............................................. 129,297
------------
Total liabilities............................................. 1,602,047
------------
Net assets applicable to
outstanding shares............................................. $ 25,549,503
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
100 million shares authorized.................................. $ 23,591
Additional paid-in capital...................................... 24,197,616
Accumulated distribution in excess of
net investment income.......................................... (18,710)
Accumulated undistributed net realized gain on investments ..... 5,852
Accumulated undistributed net realized gain on foreign currency
transactions................................................... 391,045
Net unrealized appreciation
on investments................................................. 444,775
Net unrealized appreciation on
translation of assets and liabilities in
foreign currencies............................................. 505,334
------------
Net assets applicable to
outstanding shares............................................. $ 25,549,503
============
Shares of capital stock outstanding............................. 2,359,061
============
Net asset value per share outstanding........................... $ 10.83
============
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996 (Unaudited)
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a)................................................... $ 199,063
Interest........................................................ 39,864
------------
Total income.................................................. 238,927
------------
Expenses: (Note 2)
Advisory (Note 3)............................................... 57,301
Recordkeeping................................................... 32,889
Custodian....................................................... 24,568
Administration (Note 3)......................................... 19,100
Portfolio pricing............................................... 10,121
Amortization of organization expense............................ 7,329
Auditing........................................................ 2,360
Shareholder communication....................................... 2,288
Legal........................................................... 572
Directors....................................................... 455
Miscellaneous................................................... 1,240
------------
Total expenses
before reimbursement......................................... 158,223
Expense reimbursement from
Administrator (Note 3)......................................... (65,586)
------------
Net expenses.................................................. 92,637
------------
Net investment income........................................... 146,290
------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain from:
Security transactions........................................... 47,153
Foreign currency transactions................................... 286,206
------------
Net realized gain on investments and foreign currency
transactions................................................... 333,359
------------
Net change in unrealized appreciation
on investments:
Security transactions........................................... 300,688
Translation of assets and liabilities in
foreign currencies............................................. 468,807
------------
Net unrealized gain on investments and
foreign currencies............................................. 769,495
------------
Net realized and unrealized gain
on investments and foreign
currency transactions.......................................... 1,102,854
------------
Net increase in net assets resulting
from operations................................................ $ 1,249,144
============
</TABLE>
- --------
(a) Dividends recorded net of foreign withholding taxes in the amount of
$28,832.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
72
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO NEW YORK LIFE
STATEMENT OF CHANGES IN NET ASSETS MFA SERIES FUND, INC.
For the six months ended June 30, 1996 (Unaudited)
and the period May 1, 1995 (Commencement of Operations)
through December 31, 1995
<TABLE>
<CAPTION>
1996 1995
-------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income........................... $ 146,290 $ 82,369
Net realized gain (loss) on investments......... 47,153 (41,301)
Net realized gain on foreign currency transac-
tions.......................................... 286,206 702,174
Net change in unrealized appreciation on invest-
ments.......................................... 300,688 144,087
Net change in unrealized appreciation on trans-
lation of assets and liabilities in
foreign currencies............................. 468,807 36,527
------------ ------------
Net increase in net assets resulting from opera-
tions.......................................... 1,249,144 923,856
------------ ------------
Dividends and distributions to shareholders:
From net investment income...................... (165,000) (82,369)
From net realized gain on investments and for-
eign currency transactions..................... -- (597,335)
------------ ------------
Total dividends and distributions to sharehold-
ers........................................... (165,000) (679,704)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares................ 9,879,882 4,168,978
Net asset value of shares issued to shareholders
in reinvestment of dividends................... 165,000 679,704
------------ ------------
10,044,882 4,848,682
Cost of shares redeemed......................... (210,233) (462,124)
------------ ------------
Increase in net assets derived from capital
share transactions............................ 9,834,649 4,386,558
------------ ------------
Net increase in net assets..................... 10,918,793 4,630,710
NET ASSETS:
Beginning of period............................. 14,630,710 10,000,000
------------ ------------
End of period................................... $ 25,549,503 $ 14,630,710
============ ============
Accumulated distribution in excess of net in-
vestment income................................ $ (18,710) $ --
============ ============
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<CAPTION>
MAY 1,
SIX MONTHS 1995 (A)
ENDED THROUGH
JUNE 30, DECEMBER 31,
1996* 1995
-------------------
<S> <C> <C>
Net asset value at beginning of period........... $ 10.20 $ 10.00
------------ ------------
Net investment income............................ 0.07 0.64
Net realized and unrealized gain on investments.. 0.20 0.01
Net realized and unrealized gain on foreign cur-
rency transactions.............................. 0.44 0.05
------------ ------------
Total from investment operations................. 0.71 0.70
------------ ------------
Less dividends and distributions:
From net investment income...................... (0.08) (0.06)
From net realized gain on investments and for-
eign currency transactions..................... -- (0.44)
------------ ------------
Total dividends and distributions................ (0.08) (0.50)
------------ ------------
Net asset value at end of period................. $ 10.83 $ 10.20
============ ============
Total investment return (b)...................... 7.03% 6.96%
Ratios (to average net assets)/Supplemental Data:
Net investment income........................... 1.53%+ 1.07%+
Net expenses.................................... 0.97%+ 0.97%+
Expenses (before reimbursement)................. 1.66%+ 2.51%+
Portfolio turnover rate.......................... 12% 14%
Average commission rate paid..................... $ 0.0429 (c)
Net assets at end of period (in 000's)........... $ 25,550 $ 14,631
</TABLE>
- --------
(a) Commencement of Operations.
(b) Total return is not annualized.
(c) Disclosure of amount required for fiscal years beginning on or after Sep-
tember 1, 1995.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
73
<PAGE>
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 1996 (Unaudited)
LONG-TERM BONDS (38.6%)+
ASSET-BACKED SECURITIES (6.0%)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-------------------------
<S> <C> <C>
AIRPLANE LEASES (0.4%)
Aircraft Lease Portfolio Securitization
Series 1996-1 Class C
6.788%, due 6/15/06 (c)(e)........................... $ 1,200,000 $ 1,200,000
------------
AUTO FINANCE (0.2%)
WFS Financial Owner Trust
Series 1996-B Class A3
6.65%, due 8/20/00................................... 550,000 552,189
------------
AUTO LOANS (0.8%)
Chevy Chase Auto
Receivables Trust
Series 1995-2 Class A
5.80%, due 6/15/02................................... 534,063 530,309
NationsBank Auto Grantor Trust
Series 1995-A Class A
5.85%, due 6/15/02................................... 840,897 837,609
Olympic Automobile
Receivables Trust
Series 1996-B Class A4
6.70%, due 3/15/02................................... 800,000 803,504
------------
2,171,422
------------
CREDIT CARD
RECEIVABLES (0.3%)
Standard Credit Card Master Trust
Series 1995-4 Class A
5.60%, due 2/15/00 (e)............................... 725,000 725,362
------------
EQUIPMENT LOANS (0.4%)
Case Equipment Loan Trust
Series 1995-B Class A3
6.15%, due 9/15/02................................... 1,050,000 1,044,666
------------
MORTGAGE LOANS (3.4%)
Asset Securitization Corp.
Series 1996-D2 Class A1
6.92%, due 2/14/29................................... 870,249 842,375
Capstead Securities Corp. IV
Series 1992-1 Class G
8.75%, due 1/25/20................................... 1,100,000 1,122,341
Mortgage Capital Funding, Inc.
Series 1996-MC1 Class A2A
7.35%, due 7/15/05................................... 900,000 903,798
Nomura Asset Securities Corp.
Series 1996-MD5 Class A1B
7.12%, due 4/13/36................................... 1,050,000 1,024,737
Residential Asset
Securitization Trust
Series 1996-A5 Class A3
7.75%, due 7/31/26................................... 800,000 803,664
Series 1996-A2 Class A3
9.00%, due 6/25/26................................... 664,120 679,999
</TABLE>
- --------
+Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-------------------------
<S> <C> <C>
MORTGAGE LOANS (Continued)
Residential Funding Mortgage
Securities I
Series 1994-S12 Class A1
6.50%, due 4/25/09................................... $ 602,190 $ 600,118
Series 1996-S13 Class A1
7.00%, due 5/25/11................................... 944,431 942,806
Structured Asset Securities Corp.
Series 1996-CFL Class A1A
5.711%, due 2/25/28.................................. 366,313 363,222
Series 1996-CFL Class A1B
5.751%, due 2/25/28.................................. 775,000 759,864
Series 1996-2 Class A1
7.00%, due 8/25/26................................... 975,000 978,052
------------
9,020,976
------------
RECREATIONAL LOANS (0.5%)
Fleetwood Credit Corp.
Grantor Trust
Series 1996-A Class A
6.75%, due 10/17/11.................................. 613,153 612,669
Green Tree Recreational,
Equipment & Consumer Trust
Series 1996-A Class A1
5.55%, due 2/15/18................................... 905,730 888,322
------------
1,500,991
------------
Total Asset-Backed Securities
(Cost $16,305,465)................................... 16,215,606
------------
BRADY BOND (0.4%)
EURO BOND (0.4%)
Poland-Global Registered
2.75%, due 10/27/24 (e).............................. 2,150,000 1,212,063
------------
Total Brady Bond
(Cost $1,194,385).................................... 1,212,063
------------
CERTIFICATE OF DEPOSIT (0.2%)
BANKS (0.2%)
Mercantile Safe Deposit & Trust
Co., Baltimore, Maryland
5.16%, due 1/30/98................................... 575,000 565,288
------------
Total Certificate of Deposit
(Cost $575,000)...................................... 565,288
------------
CORPORATE BONDS (3.8%)
BANKS (1.4%)
Bankers Trust Corp.-New York
7.50%, due 11/15/15.................................. 625,000 600,025
Capital One Bank
8.125%, due 2/27/98.................................. 500,000 510,965
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
74
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
CORPORATE BONDS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
BANKS (Continued)
First Union Corp.
7.50%, due 4/15/35................................... $ 600,000 $ 614,838
First USA Bank
6.25%, due 10/9/98................................... 775,000 766,080
Regions Financial Corp.
7.75%, due 9/15/24................................... 1,125,000 1,177,222
------------
3,669,130
------------
BROKERAGE (1.0%)
Lehman Brothers Holdings Inc.
7.375%, due 5/15/07.................................. 1,225,000 1,243,890
Merrill Lynch & Co.
6.65%, due 1/15/99................................... 950,000 950,494
Salomon Inc.
6.70%, due 12/1/98................................... 525,000 524,039
------------
2,718,423
------------
FINANCE (0.8%)
Associates Corp. of North America
7.75%, due 2/15/05................................... 1,450,000 1,527,546
Chrysler Financial Corp.
5.66%, due 1/16/98................................... 650,000 643,604
------------
2,171,150
------------
INDUSTRIAL (0.3%)
Philip Morris Cos. Inc.
6.95%, due 6/1/06.................................... 700,000 701,092
------------
RETAIL (0.3%)
Sears Roebuck Acceptance Corp.
5.82%, due 12/7/98................................... 950,000 936,063
------------
Total Corporate Bonds
(Cost $10,352,237)................................... 10,195,858
------------
U.S. GOVERNMENT &
FEDERAL AGENCIES (23.7%)
FEDERAL AGENCY (0.8%)
Tennessee Valley Authority
7.25%, due 7/15/43................................... 2,425,000 2,257,166
------------
FEDERAL HOME LOAN MORTGAGE
CORPORATION (0.7%)
6.82%, due 6/29/05................................... 975,000 941,801
7.61%, due 5/24/06................................... 1,075,000 1,070,163
------------
2,011,964
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
FEDERAL HOME LOAN MORTGAGE CORPORATION
(COLLATERALIZED
MORTGAGE
OBLIGATIONS) (0.8%)
Series 1709 Class B
5.50%, due 4/15/19................................... $ 961,521 $ 941,243
Series 1627 Class PZ
5.60%, due 8/15/17................................... 1,149,899 1,106,065
------------
2,047,308
------------
FEDERAL HOME LOAN
MORTGAGE CORPORATION
(MORTGAGE PASS-
THROUGH SECURITY) (0.5%)
6.00%, due 8/1/24.................................... 1,515,107 1,387,505
------------
FEDERAL HOME LOAN
MORTGAGE CORPORATION
GOLD (MORTGAGE PASS-
THROUGH SECURITIES) (1.5%)
7.00%, due 2/1/26-5/1/26............................. 4,205,916 4,049,368
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (0.2%)
7.85%, due 9/10/04................................... 525,000 532,676
------------
FEDERAL NATIONAL
MORTGAGE ASSOCIATION
(COLLATERALIZED MORTGAGE
OBLIGATIONS) (1.0%)
Series 1993-29 Class PE
6.00%, due 11/25/19.................................. 950,000 934,563
Series 1993-118 Class A
6.50%, due 7/25/98................................... 1,625,868 1,626,372
------------
2,560,935
------------
FEDERAL NATIONAL
MORTGAGE ASSOCIATION
(MORTGAGE PASS-
THROUGH SECURITIES) (2.9%)
6.50%, due 7/1/24.................................... 1,567,790 1,475,431
7.00%, due 7/19/11 TBA (b)........................... 3,933,950 3,881,707
7.00%, due 10/1/23................................... 1,051,462 1,016,963
9.00%, due 6/1/25.................................... 1,389,085 1,449,635
------------
7,823,736
------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION I
(MORTGAGE PASS-
THROUGH SECURITIES) (5.5%)
6.50%, due 7/22/26 TBA (b)........................... 2,400,000 2,249,256
7.50%, due 6/15/26................................... 1,760,000 1,734,709
8.00%, due 7/22/26 TBA (b)........................... 10,680,000 10,780,178
------------
14,764,143
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
75
<PAGE>
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
U.S. GOVERNMENT &
FEDERAL AGENCIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
UNITED STATES TREASURY
BONDS (4.5%)
6.25%, due 8/15/23 (d)............................... $ 5,100,000 $ 4,623,456
6.875%, due 8/15/25.................................. 1,275,000 1,262,046
8.875%, due 8/15/17 (d).............................. 3,525,000 4,232,185
11.25%, due 2/15/15.................................. 1,020,000 1,471,982
11.625%, due 11/15/04................................ 345,000 452,436
------------
12,042,105
------------
UNITED STATES TREASURY NOTES (5.3%)
5.50%, due 11/15/98.................................. 1,330,000 1,309,013
5.625%, due 11/30/00................................. 1,850,000 1,791,891
6.375%, due 3/31/01.................................. 900,000 896,058
7.75%, due 12/31/99.................................. 1,675,000 1,745,132
7.875%, due 11/15/99................................. 900,000 940,077
7.875%, due 11/15/04................................. 1,200,000 1,289,808
8.125%, due 2/15/98 (d).............................. 5,950,000 6,135,938
------------
14,107,917
------------
Total U.S. Government &
Federal Agencies
(Cost $63,443,698)................................... 63,584,823
------------
YANKEE BONDS (4.5%)
African Development Bank
8.80%, due 9/1/19.................................... 1,425,000 1,638,137
China International Trust &
Investing Corp.
9.00%, due 10/15/06.................................. 775,000 827,684
City of Naples
7.52%, due 7/15/06................................... 1,000,000 1,025,420
Financiera Ener Nacional
9.375%, due 6/15/06 (c).............................. 1,000,000 1,011,540
Ford Capital BV
9.00%, due 8/15/98................................... 675,000 707,785
Grand Metropolitan
Investment Corp.
7.45%, due 4/15/35................................... 600,000 620,022
Hydro-Quebec
8.05%, due 7/7/24.................................... 800,000 850,608
Korea Electric Power
6.375%, due 12/1/03.................................. 1,400,000 1,329,062
Korea Telecom
7.50%, due 6/1/06.................................... 425,000 426,016
People's Republic of China
7.375%, due 7/3/01................................... 925,000 927,211
Republic of Columbia
7.25%, due 2/15/03................................... 1,000,000 934,520
Santander Financial Issuances
6.80%, due 7/15/05................................... 975,000 934,196
7.75%, due 5/15/05................................... 410,000 417,983
Wharf Capital International Ltd.
8.875%, due 11/1/04.................................. 350,000 361,560
------------
Total Yankee Bonds
(Cost $11,956,465)................................... 12,011,744
------------
Total Long-Term Bonds
(Cost $103,827,250).................................. 103,785,382
------------
</TABLE>
COMMON STOCKS (55.2%)
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
AIRLINES (0.7%)
Atlantic Southeast Airlines, Inc...................... 18,000 $ 508,500
Southwest Airlines Co................................. 51,450 1,498,481
------------
2,006,981
------------
AUTO PARTS (0.5%)
Lear Seating Corp. (a)................................ 40,000 1,410,000
------------
BANKS (1.3%)
NationsBank Corp...................................... 16,100 1,330,263
Wells Fargo & Co...................................... 9,100 2,173,762
------------
3,504,025
------------
BROKERAGE (0.5%)
Schwab (Charles) Corp................................. 52,700 1,291,150
------------
BUILDINGS (0.7%)
Lennar Corp........................................... 17,200 430,000
Oakwood Homes Corp.................................... 64,400 1,328,250
------------
1,758,250
------------
COMMERCIAL SERVICES (0.9%)
Service Corp. International........................... 41,000 2,357,500
------------
COMPUTERS & OFFICE
EQUIPMENT (4.4%)
Alco Standard Corp.................................... 57,700 2,610,925
Danka Business Systems Plc ADR (f) 42,800 1,251,900
Electronic Data Systems Corp.......................... 25,000 1,343,750
EMC Corp. (a)......................................... 35,000 651,875
Hewlett-Packard Co.................................... 22,700 2,261,488
Seagate Technology, Inc. (a).......................... 19,100 859,500
Sun Microsystems, Inc. (a)............................ 46,800 2,755,350
------------
11,734,788
------------
CONSUMER DURABLES (0.7%)
Black & Decker Corp................................... 47,000 1,815,375
------------
CONSUMER FINANCIAL
SERVICES (0.8%)
First Data Corp....................................... 25,800 2,054,325
------------
CONSUMER SERVICES (0.5%)
CUC International Inc. (a)............................ 39,400 1,398,700
------------
DRUGS (4.5%)
Amgen Inc. (a)........................................ 49,400 2,667,600
Elan Corp. Plc ADR (a)(f)............................. 28,400 1,622,350
Genzyme Corp. (a)..................................... 25,500 1,281,375
Mylan Laboratories Inc................................ 42,800 738,300
Pharmacia & Upjohn, Inc............................... 43,600 1,934,750
Schering-Plough Corp.................................. 40,000 2,510,000
Teva Pharmaceutical Industries
Ltd. ADR (f)......................................... 31,500 1,193,063
------------
11,947,438
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
76
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
ELECTRONICS (0.9%)
General Instrument Corp. (a).......................... 15,500 $ 447,563
Harman International
Industries, Inc...................................... 21,000 1,034,250
Vishay Intertechnology, Inc. (a)...................... 42,392 1,001,511
------------
2,483,324
------------
FINANCE (4.4%)
Federal National
Mortgage Association................................. 51,800 1,735,300
Green Tree Financial Corp............................. 105,000 3,281,250
Household International Inc........................... 30,800 2,340,800
MGIC Investment Corp.................................. 31,000 1,739,875
Travelers Group Inc................................... 61,800 2,819,625
------------
11,916,850
------------
FINANCIAL SERVICES (2.0%)
First USA, Inc........................................ 40,000 2,200,000
SunAmerica Inc........................................ 54,250 3,065,125
------------
5,265,125
------------
FOOD (0.3%)
Richfood Holdings, Inc................................ 28,100 913,250
------------
HEALTH CARE (3.1%)
Columbia/HCA Healthcare Corp.......................... 36,369 1,941,195
HealthCare COMPARE Corp. (a).......................... 27,400 1,335,750
Humana, Inc. (a)...................................... 52,200 933,075
Pacificare Health Systems, Inc.
Class B (a).......................................... 15,600 1,056,900
Sunrise Assisted Living, Inc. (a)..................... 30,200 724,800
United Healthcare Corp................................ 45,900 2,317,950
------------
8,309,670
------------
HOSPITAL MANAGEMENT
& SERVICES (1.7%)
HEALTHSOUTH Corp. (a)................................. 57,000 2,052,000
OrNda HealthCorp (a).................................. 68,500 1,644,000
Unison HealthCare Corp. (a)........................... 51,000 710,812
------------
4,406,812
------------
INSURANCE (1.0%)
American International Group, Inc. 26,150 2,579,044
------------
LEISURE (0.6%)
Mirage Resorts, Inc. (a).............................. 27,900 1,506,600
------------
MACHINERY (0.6%)
U.S. Robotics Corp. (a)............................... 18,000 1,539,000
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
MEDICAL EQUIPMENT (3.6%)
Guidant Corp.......................................... 38,000 $ 1,871,500
Heartport, Inc. (a)................................... 27,000 816,750
Johnson & Johnson..................................... 49,552 2,452,824
Medtronic, Inc........................................ 49,200 2,755,200
Waters Corp. (a)...................................... 56,800 1,874,400
------------
9,770,674
------------
OIL & GAS
EXPLORATION (0.6%)
Triton Energy Ltd. Class A (a)........................ 32,300 1,570,588
------------
PUBLISHING (0.5%)
News Corp. Ltd. ADR (f)............................... 61,700 1,449,950
------------
RESTAURANTS &
LODGING (3.1%)
HFS Inc. (a).......................................... 98,400 6,888,000
Lone Star Steakhouse &
Saloon, Inc. (a)..................................... 39,000 1,472,250
------------
8,360,250
------------
RETAIL (6.6%)
AutoZone, Inc. (a).................................... 45,600 1,584,600
Bed Bath & Beyond, Inc. (a)........................... 34,000 909,500
Gymboree Corp. (a).................................... 20,000 610,000
Home Depot, Inc. (The)................................ 36,500 1,971,000
Kohl's Corp. (a)...................................... 44,200 1,618,825
Kroger Co. (The) (a).................................. 38,800 1,532,600
Lowe's Cos., Inc...................................... 52,000 1,878,500
Nike Inc. Class B..................................... 23,000 2,363,250
Oakley, Inc. (a)...................................... 26,000 1,183,000
Office Depot, Inc. (a)................................ 48,950 997,356
Safeway Inc. (a)...................................... 66,800 2,204,400
Sunglass Hut International, Inc. (a) 39,000 950,625
------------
17,803,656
------------
SOFTWARE (2.0%)
Computer Associates
International, Inc................................... 52,900 3,769,125
Microsoft Corp. (a)................................... 13,800 1,657,725
------------
5,426,850
------------
TECHNOLOGY (5.3%)
Cisco Systems, Inc. (a)............................... 28,100 1,591,162
IDT Corp. (a)......................................... 146,000 1,405,250
Intel Corp............................................ 25,700 1,887,344
Lam Research Corp. (a)................................ 31,850 828,100
Linear Technology Corp................................ 36,000 1,080,000
Motorola, Inc......................................... 17,500 1,100,313
Oracle Corp. (a)...................................... 74,625 2,943,023
3Com Corp. (a)........................................ 74,200 3,394,650
------------
14,229,842
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
77
<PAGE>
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
TELECOMMUNICATION SERVICES (1.1%)
WorldCom, Inc. (a).................................... 53,716 $ 2,974,523
------------
TEXTILE & APPAREL (1.5%)
Nine West Group Inc. (a).............................. 37,700 1,927,412
Warnaco Group, Inc. (The) Class A 49,500 1,274,625
Wolverine World Wide, Inc............................. 28,000 910,000
------------
4,112,037
------------
TURNKEY & SOFTWARE SYSTEMS (0.8%)
Sterling Software, Inc. (a)........................... 28,500 2,194,500
------------
Total Common Stocks
(Cost $107,392,114).................................. 148,091,077
------------
PREFERRED STOCK (0.1%)
PUBLISHING (0.1%)
News Corp. Ltd. ADR
Preference Shares (f)................................ 18,900 380,363
------------
Total Preferred Stock
(Cost $302,632)...................................... 380,363
------------
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENTS (11.9%)
PRINCIPAL
AMOUNT VALUE
---------------------------
<S> <C> <C>
COMMERCIAL PAPER (11.0%)
American Express Credit Corp.
5.32%, due 7/1/96................................ $ 5,000,000 $ 5,000,000
5.45%, due 7/1/96................................ 2,290,000 2,290,000
Ford Motor Credit Co.
5.37%, due 7/2/96................................ 10,000,000 10,000,000
Travelers Group Inc.
5.43%, due 7/1/96................................ 12,145,000 12,145,000
------------
Total Commercial Paper
(Cost $29,435,000)............................... 29,435,000
------------
U.S. GOVERNMENT (0.9%)
United States Treasury Note
6.25%, due 8/31/96 (d)........................... 2,400,000 2,402,616
------------
Total U.S. Government
(Cost $2,402,906)................................ 2,402,616
------------
Total Short-Term Investments
(Cost $31,837,906)............................... 31,837,616
------------
Total Investments
(Cost $243,359,902) (g).......................... 105.8% 284,094,438 (h)
Liabilities in Excess of
Cash and Other Assets............................ (5.8) (15,649,149)
----------- ------------
Net Assets........................................ 100.0% $268,445,289
=========== ============
</TABLE>
- --------
(a) Non-income producing securities.
(b) TBA: Securities purchased on a forward commitment basis with an approxi-
mate principal amount and maturity date. The actual principal amount and
maturity date will be deter- mined upon settlement.
(c) May be sold to institutional investors only.
(d) Segregated as collateral for TBA.
(e) Floating rate. Rate shown is the rate in effect at June 30, 1996.
(f) ADR--American Depository Receipt.
(g) The cost for Federal income tax purposes is $243,368,627.
(h) At June 30, 1996 net unrealized appreciation was $40,725,811, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess
of market value over cost of $43,575,206 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $2,849,395.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
78
<PAGE>
NEW YORK LIFE
TOTAL RETURN PORTFOLIO MFA SERIES FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 1996 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2) (identified cost
$243,359,902).................................................. $284,094,438
Cash............................................................ 27,056
Receivables:
Investment securities sold...................................... 22,539,284
Dividends and interest.......................................... 1,447,713
Fund shares sold................................................ 984,561
------------
Total assets.................................................. 309,093,052
------------
LIABILITIES:
Payables:
Investment securities purchased................................. 40,426,523
Adviser......................................................... 69,513
NYLIAC.......................................................... 49,309
Administrator................................................... 21,574
Custodian....................................................... 3,928
Directors....................................................... 2,756
Accrued expenses................................................ 74,160
------------
Total liabilities............................................. 40,647,763
------------
Net assets applicable to
outstanding shares............................................. $268,445,289
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
50 million shares authorized................................... $ 192,387
Additional paid-in capital...................................... 228,582,910
Accumulated undistributed net
investment income.............................................. 2,836,536
Accumulated net realized loss
on investments................................................. (3,901,080)
Net unrealized appreciation
on investments................................................. 40,734,536
------------
Net assets applicable to
outstanding shares............................................. $268,445,289
============
Shares of capital stock outstanding............................. 19,238,702
============
Net asset value per share outstanding........................... $ 13.95
============
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996 (Unaudited)
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a).................................................... $ 350,172
Interest......................................................... 3,273,919
------------
Total income................................................... 3,624,091
------------
Expenses: (Note 2)
Advisory (Note 3)................................................ 365,243
Administration (Note 3).......................................... 228,277
Recordkeeping.................................................... 156,706
Auditing......................................................... 32,089
Shareholder communication........................................ 28,703
Custodian........................................................ 16,332
Directors........................................................ 8,141
Legal............................................................ 7,232
Miscellaneous.................................................... 9,661
------------
Total expenses
before reimbursement.......................................... 852,384
Expense reimbursement from
Administrator (Note 3).......................................... (64,829)
------------
Net expenses................................................... 787,555
------------
Net investment income............................................ 2,836,536
------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments................................. 297,329
Net change in unrealized appreciation
on investments.................................................. 8,156,381
------------
Net realized and unrealized gain
on investments.................................................. 8,453,710
------------
Net increase in net assets resulting
from operations................................................. $ 11,290,246
============
</TABLE>
- --------
(a) Dividends recorded net of foreign withholding taxes in the amount of
$1,973.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
79
<PAGE>
TOTAL RETURN PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996 (Unaudited)
and the year ended December 31, 1995
<TABLE>
<CAPTION>
1996 1995
---------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income............................. $ 2,836,536 $ 4,619,451
Net realized gain on investments.................. 297,329 1,771,355
Net change in unrealized appreciation on invest-
ments............................................ 8,156,381 29,979,674
------------ ------------
Net increase in net assets resulting from opera-
tions............................................ 11,290,246 36,370,480
------------ ------------
Dividends to shareholders:
From net investment income........................ -- (4,571,400)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.................. 64,548,605 52,019,281
Net asset value of shares issued to shareholders
in reinvestment of dividends..................... -- 4,571,400
------------ ------------
64,548,605 56,590,681
Cost of shares redeemed........................... (2,286,968) (15,828,916)
------------ ------------
Increase in net assets derived from capital share
transactions.................................... 62,261,637 40,761,765
------------ ------------
Net increase in net assets....................... 73,551,883 72,560,845
NET ASSETS:
Beginning of period............................... 194,893,406 122,332,561
------------ ------------
End of period..................................... $268,445,289 $194,893,406
============ ============
Accumulated undistributed net investment income... $ 2,836,536 $ --
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
JANUARY 29,
SIX MONTHS 1993 (A)
ENDED THROUGH
JUNE 30, YEAR ENDED DECEMBER 31 DECEMBER 31,
1996* 1995 1994 1993
--------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at be-
ginning of period...... $ 13.26 $ 10.58 $ 11.32 $ 10.00
------------ ------------ ------------ ------------
Net investment income... 0.14 0.31 0.27 0.16
Net realized and
unrealized gain (loss)
on investments......... 0.55 2.69 (0.72) 1.34
------------ ------------ ------------ ------------
Total from investment
operations............. 0.69 3.00 (0.45) 1.50
------------ ------------ ------------ ------------
Less dividends and dis-
tributions:
From net investment in-
come.................. -- (0.32) (0.29) (0.16)
In excess of net real-
ized gain on invest-
ments................. -- -- -- (0.02)
------------ ------------ ------------ ------------
Total dividends and dis-
tributions............. -- (0.32) (0.29) (0.18)
------------ ------------ ------------ ------------
Net asset value at end
of period.............. $ 13.95 $ 13.26 $ 10.58 $ 11.32
============ ============ ============ ============
Total investment return
(b).................... 5.24% 28.33% (3.99%) 15.04%
Ratios (to average net
assets)/Supplemental
Data:
Net investment income.. 2.49%+ 3.06% 3.50% 3.48%+
Net expenses........... 0.69%+ 0.69% 0.69% 0.69%+
Expenses (before reim-
bursement)............ 0.75%+ 0.81% 0.88% 1.07%+
Portfolio turnover rate. 102% 253% 297% 197%
Average commission rate
paid................... $ 0.0600 (c) (c) (c)
Net assets at end of pe-
riod (in 000's)........ $ 268,445 $ 194,893 $ 122,333 $ 55,548
</TABLE>
- --------
(a) Commencement of Operations.
(b) Total return is not annualized.
(c) Disclosure of amount required for fiscal years beginning on or after Sep-
tember 1, 1995.
+Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
80
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 1996 (Unaudited)
COMMON STOCKS (80.8%)+
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
--------------------------
AEROSPACE (1.1%)
McDonnell Douglas Corp................................ 15,600 $ 756,600
------------
AUTO MANUFACTURING (1.3%)
General Motors Corp................................... 16,000 838,000
------------
AUTO PARTS (2.6%)
Dana Corp............................................. 22,000 682,000
Magna International Inc............................... 9,100 418,600
Varity Corp. (a)...................................... 13,600 654,500
------------
1,755,100
------------
BANKS (6.9%)
Bankers Trust New York Corp........................... 13,500 997,313
Boatmen's Bancshares, Inc............................. 21,000 842,625
First Bank System, Inc................................ 14,100 817,800
National City Corp.................................... 7,700 270,462
PNC Bank Corp......................................... 24,000 714,000
Wells Fargo & Co...................................... 4,000 955,500
------------
4,597,700
------------
BUILDING MATERIALS (2.7%)
Armstrong World Industries, Inc....................... 16,300 939,287
Masco Corp............................................ 29,400 889,350
------------
1,828,637
------------
CAPITAL GOODS (2.6%)
Case Corp............................................. 6,500 312,000
Coltec Industries Inc. (a)............................ 38,000 541,500
Xerox Corp............................................ 16,800 898,800
------------
1,752,300
------------
CHEMICALS (8.9%)
Agrium, Inc........................................... 34,800 456,206
Arcadian Corp......................................... 38,800 766,300
Dow Chemical Co. (The)................................ 11,600 881,600
FMC Corp. (a)......................................... 10,700 698,175
Geon Co. (The)........................................ 9,600 216,000
Georgia Gulf Corp..................................... 16,800 491,400
IMC Global, Inc....................................... 34,400 1,294,300
Lyondell Petrochemical Co............................. 28,300 682,738
PPG Industries, Inc................................... 1,900 92,625
Terra Industries Inc.................................. 31,300 387,337
------------
5,966,681
------------
COMPUTERS & OFFICE
EQUIPMENT (1.0%)
Gateway 2000, Inc. (a)................................ 20,000 680,000
------------
CONGLOMERATES (1.4%)
Hanson Plc ADR (b).................................... 67,700 964,725
------------
DEFENSE ELECTRONICS (0.7%)
Litton Industries, Inc. (a)........................... 5,700 247,950
Lockheed Martin Corp.................................. 2,900 243,600
------------
491,550
------------
</TABLE>
- --------
+Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
--------------------------
DOMESTIC OILS (2.3%)
Enron Oil & Gas Co.................................... 11,700 $ 326,138
Parker & Parsley Petroleum Co......................... 13,400 371,850
Unocal Corp. ......................................... 24,000 810,000
------------
1,507,988
------------
ENERGY (3.4%)
Coastal Corp.......................................... 19,400 809,950
Horsham Corp.......................................... 4,000 55,500
MAPCO, Inc............................................ 12,900 727,238
PanEnergy Corp........................................ 13,600 447,100
Tosco Corp............................................ 4,400 221,100
------------
2,260,888
------------
FINANCE (1.4%)
Travelers Group Inc................................... 21,050 960,406
------------
FOOD (2.6%)
Archer Daniels Midland Co............................. 46,170 883,001
IBP, Inc. ............................................ 30,800 850,850
------------
1,733,851
------------
FOOD, BEVERAGES & TOBACCO (4.6.%)
American Brands, Inc.................................. 17,000 771,375
Philip Morris Cos. Inc. .............................. 11,800 1,227,200
RJR Nabisco Holdings Corp. ........................... 34,200 1,060,200
------------
3,058,775
------------
HEALTH CARE (0.4%)
FHP International Corp. (a)........................... 5,500 150,563
Humana Inc. (a)....................................... 6,500 116,187
------------
266,750
------------
HOME BUILDERS (1.2%)
Kaufman and Broad Home Corp........................... 55,000 797,500
------------
HOUSEHOLD PRODUCTS (1.6%)
Premark International, Inc............................ 17,600 325,600
Tupperware Corp. (a).................................. 17,600 743,600
------------
1,069,200
------------
INSURANCE (9.0%)
Aetna Life and Casualty Co............................ 16,400 1,172,600
Allstate Corp. (The).................................. 28,000 1,277,500
American International Group, Inc. 10,000 986,250
Chubb Corp. (The)..................................... 19,400 967,575
SAFECO Corp........................................... 14,200 502,325
St. Paul Cos., Inc. (The)............................. 11,000 588,500
Torchmark Corp........................................ 11,100 485,625
------------
5,980,375
------------
INTERNATIONAL OILS (2.0%)
British Petroleum Co.,
Plc ADR (b).......................................... 3,026 323,404
Occidental Petroleum Corp............................. 40,300 997,425
------------
1,320,829
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
81
<PAGE>
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
--------------------------
PAPER & FOREST
PRODUCTS (4.3%)
Bowater Inc........................................... 26,200 $ 985,775
Chesapeake Corp....................................... 20,200 530,250
Rayonier, Inc......................................... 13,800 524,400
Stone Container Corp. ................................ 42,600 585,750
Temple-Inland Inc. ................................... 5,000 233,750
------------
2,859,925
------------
RAILROADS (3.9%)
Conrail Inc........................................... 13,900 922,613
Illinois Central Corp................................. 29,150 827,131
Union Pacific Corp.................................... 12,100 845,487
------------
2,595,231
------------
REAL ESTATE (0.3%)
Meditrust............................................. 6,000 200,250
------------
RETAIL (3.7%)
American Stores Co.................................... 10,200 420,750
Dillard Department Stores, Inc........................ 20,000 730,000
Federated Department
Stores, Inc. (a)..................................... 7,000 238,875
Kroger Co. (The) (a).................................. 19,900 786,050
Penney (J.C.) Co., Inc................................ 4,000 210,000
Sears, Roebuck and Co................................. 1,200 58,350
------------
2,444,025
------------
TECHNOLOGY (1.9%)
International Business
Machines Corp. ...................................... 13,100 1,296,900
------------
TELECOMMUNICATION EQUIPMENT (1.8%)
AT&T Corp............................................. 19,100 1,184,200
------------
TEXTILE & APPAREL (2.3%)
Burlington Industries, Inc. (a)....................... 45,000 635,625
Reebok International Ltd.............................. 3,700 124,413
Spring Industries, Inc................................ 15,800 797,900
------------
1,557,938
------------
TIRE & RUBBER (1.8%)
Goodyear Tire & Rubber Co. (The) 25,200 1,215,900
------------
UTILITIES--ELECTRIC (3.1%)
Entergy Corp.......................................... 25,000 709,375
Long Island Lighting Co............................... 36,000 603,000
Pinnacle West Capital Corp............................ 7,300 221,737
Unicom Corp........................................... 19,000 529,625
------------
2,063,737
------------
Total Common Stocks
(Cost $50,926,799)................................... 54,005,961
------------
</TABLE>
SHORT-TERM
INVESTMENTS (19.2%)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
------------------------------
COMMERCIAL PAPER (19.2%)
American General Finance Corp.
5.37%, due 7/2/96............................ $ 3,000,000 $ 3,000,000
Beneficial Corp.
5.32%, due 7/1/96............................ 1,030,000 1,030,000
Chevron Oil Finance Co.
5.33%, due 7/3/96............................ 2,489,000 2,489,000
Ford Motor Credit Co.
5.42%, due 7/3/96............................ 3,000,000 3,000,000
General Electric Capital Corp.
5.35%, due 7/1/96............................ 3,000,000 3,000,000
Norwest Corp.
5.30%, due 7/2/96............................ 328,000 328,000
------------
Total Short-Term Investments
(Cost $12,847,000)........................... 12,847,000
------------
Total Investments
(Cost $63,773,799) (d)....................... 100.0% 66,852,961 (e)
Liabilities in Excess of
Cash and Other Assets........................ (0.0)(c) (47,657)
----------- ------------
Net Assets.................................... 100.0% $ 66,805,304
=========== ============
</TABLE>
- --------
(a) Non-income producing securities.
(b) ADR--American Depository Receipt.
(c) Less than one tenth of a percent.
(d) The cost for Federal income tax purposes is $63,777,178.
(e) At June 30, 1996 net unrealized appreciation was $3,075,783, based on cost
for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess
of market value over cost of $3,885,403 and aggregate gross unrealized de-
preciation for all investments on which there was an excess of cost over
market value of $809,620.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
82
<PAGE>
VALUE PORTFOLIO NEW YORK LIFE
STATEMENT OF ASSETS AND LIABILITIES MFA SERIES FUND, INC.
As of June 30, 1996 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2) (identified cost
$63,773,799).................................................... $ 66,852,961
Cash............................................................. 711
Receivables:
Investment securities sold....................................... 4,959,334
Fund shares sold................................................. 584,012
Dividends and interest........................................... 180,740
NYLIAC........................................................... 13,782
Unamortized organization expense
(Note 2)........................................................ 56,305
------------
Total assets................................................... 72,647,845
------------
LIABILITIES:
Payables:
Investment securities purchased.................................. 5,727,852
Organization..................................................... 73,173
Adviser.......................................................... 18,382
Administrator.................................................... 5,106
Custodian........................................................ 3,422
Accrued expenses................................................. 14,606
------------
Total liabilities.............................................. 5,842,541
------------
Net assets applicable to
outstanding shares.............................................. $ 66,805,304
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
100 million shares authorized................................... $ 53,004
Additional paid-in capital....................................... 62,035,722
Accumulated undistributed net
investment income............................................... 497,214
Accumulated undistributed net realized gain
on investments.................................................. 1,140,202
Net unrealized appreciation
on investments.................................................. 3,079,162
------------
Net assets applicable to
outstanding shares.............................................. $ 66,805,304
============
Shares of capital stock outstanding.............................. 5,300,371
============
Net asset value per share outstanding............................ $ 12.60
============
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996 (Unaudited)
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a).................................................... $ 459,422
Interest......................................................... 199,910
------------
Total income................................................... 659,332
------------
Expenses: (Note 2)
Advisory (Note 3)................................................ 78,116
Administration (Note 3).......................................... 43,398
Recordkeeping.................................................... 37,425
Custodian........................................................ 9,586
Shareholder communication........................................ 7,964
Amortization of organization expense............................. 7,329
Auditing......................................................... 5,838
Directors........................................................ 1,341
Legal............................................................ 1,193
Miscellaneous.................................................... 1,540
------------
Total expenses
before reimbursement.......................................... 193,730
Expense reimbursement from
Administrator (Note 3).......................................... (35,481)
------------
Net expenses................................................... 158,249
------------
Net investment income............................................ 501,083
------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments................................. 1,144,240
Net change in unrealized appreciation
on investments.................................................. 1,560,155
------------
Net realized and unrealized gain
on investments.................................................. 2,704,395
------------
Net increase in net assets resulting
from operations................................................. $ 3,205,478
============
</TABLE>
- --------
(a) Dividends recorded net of foreign withholding taxes in the amount of $426.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
83
<PAGE>
VALUE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996 (Unaudited)
and the period May 1, 1995 (Commencement of Operations)
through December 31, 1995
<TABLE>
<CAPTION>
1996 1995
-----------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income......................... $ 501,083 $ 196,798
Net realized gain on investments.............. 1,144,240 46,962
Net change in unrealized appreciation on in-
vestments.................................... 1,560,155 1,519,007
------------ ------------
Net increase in net assets resulting from op-
erations..................................... 3,205,478 1,762,767
------------ ------------
Dividends and distributions to shareholders:
From net investment income.................... (4,000) --
From net realized gain on investments......... (51,000) (196,667)
------------ ------------
Total dividends and distributions to share-
holders.................................... (55,000) (196,667)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.............. 39,524,293 17,977,153
Net asset value of shares issued to share-
holders in reinvestment of dividends and
distributions................................ 55,000 196,667
------------ ------------
39,579,293 18,173,820
Cost of shares redeemed....................... (353,917) (310,470)
------------ ------------
Increase in net assets derived from capital
share transactions.......................... 39,225,376 17,863,350
------------ ------------
Net increase in net assets................... 42,375,854 19,429,450
NET ASSETS:
Beginning of period........................... 24,429,450 5,000,000
------------ ------------
End of period................................. $ 66,805,304 $ 24,429,450
------------ ------------
Accumulated undistributed net investment in-
come......................................... $ 497,214 $ 131
============ ============
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<CAPTION>
MAY 1,
SIX MONTHS 1995 (A)
ENDED THROUGH
JUNE 30, DECEMBER 31,
1996* 1995
-------------------
<S> <C> <C>
Net asset value at beginning of period......... $ 11.58 $ 10.00
------------ ------------
Net investment income.......................... 0.09 0.10
Net realized and unrealized gain on invest-
ments......................................... 0.94 1.58
------------ ------------
Total from investment operations............... 1.03 1.68
------------ ------------
Less dividends and distributions:
From net investment income.................... (0.00)(c) (0.10)
From net realized gain on investments......... (0.01) --
------------ ------------
Total dividends and distributions.............. (0.01) (0.10)
------------ ------------
Net asset value at end of period............... $ 12.60 $ 11.58
============ ============
Total investment return (b).................... 8.95% 16.76%
Ratios (to average net assets)/Supplemental Da-
ta:
Net investment income......................... 2.31%+ 2.57%+
Net expenses.................................. 0.73%+ 0.73%+
Expenses (before reimbursement)............... 0.89%+ 1.45%+
Portfolio turnover rate........................ 17% 20%
Average commission rate paid................... $ 0.0596 (d)
Net assets at end of period (in 000's)......... $ 66,805 $ 24,429
</TABLE>
- --------
(a) Commencement of Operations.
(b) Total return is not annualized.
(c) Less than one cent per share.
(d) Disclosure of amount required for fiscal years beginning on or after Sep-
tember 1, 1995.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
84
<PAGE>
BOND PORTFOLIO NEW YORK LIFE
PORTFOLIO OF INVESTMENTS MFA SERIES FUND, INC.
June 30, 1996 (Unaudited)
LONG-TERM BONDS (96.1%)+
CORPORATE BONDS (45.6%)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-------------------------
<S> <C> <C>
BANKS (7.0%)
BankAmerica Corp.
7.75%, due 7/15/02................................... $ 4,000,000 $ 4,125,000
First Union Corp.
9.45%, due 6/15/99................................... 5,000,000 5,362,500
Golden West Financial Corp.
10.25%, due 12/1/00.................................. 1,000,000 1,125,000
Republic New York Corp.
7.75%, due 5/15/09................................... 5,000,000 5,150,000
------------
15,762,500
------------
CONGLOMERATE
/DIVERSIFIED (0.9%)
Harcourt General, Inc.
9.50%, due 3/15/00................................... 2,000,000 2,152,500
------------
CONTAINERS (1.7%)
Federal Paper Board Inc.
10.00%, due 4/15/11.................................. 3,100,000 3,758,750
------------
DATA PROCESSING (1.3%)
International Business
Machines Corp.
6.375%, due 6/15/00.................................. 3,000,000 2,966,250
------------
DIVERSIFIED UTILITIES (5.0%)
Consumers Power Co.
7.375%, due 9/15/23.................................. 5,000,000 4,575,000
Long Island Lighting Co.
8.75%, due 2/15/97 (a)............................... 2,000,000 2,022,500
Niagara Mohawk Power Corp.
7.375%, due 8/1/03................................... 2,000,000 1,777,500
Public Service Co. of Colorado
6.00%, due 1/1/01.................................... 3,000,000 2,910,000
------------
11,285,000
------------
ELECTRIC UTILITIES (1.5%)
Commonwealth Edison Co.
9.75%, due 2/15/20................................... 1,450,000 1,555,125
Southern California Edison Corp.
5.875%, due 2/1/98................................... 2,000,000 1,985,000
------------
3,540,125
------------
FINANCE (11.5%)
American General Finance Corp.
7.00%, due 10/1/97................................... 7,000,000 7,059,290
Chrysler Financial Corp.
8.125%, due 12/15/96 (a)............................. 6,000,000 6,064,260
Ford Motor Credit Co.
6.25%, due 2/26/98................................... 3,000,000 2,996,250
General Motors Acceptance Corp.
5.625%, due 2/15/01.................................. 6,000,000 5,707,500
9.625%, due 12/15/01................................. 1,000,000 1,118,750
</TABLE>
- --------
+Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
FINANCE (Continued)
Mellon Financial Co.
7.625%, due 11/15/99................................. $ 3,000,000 $ 3,090,000
------------
26,036,050
------------
FOOD (0.5%)
ConAgra, Inc.
9.875%, due 11/15/05................................. 1,000,000 1,167,500
------------
FOREIGN (3.5%)
British Telecommunications Plc
9.375%, due 2/15/99.................................. 4,200,000 4,483,500
9.625%, due 2/15/19.................................. 1,000,000 1,103,750
National Westminster Bancorp, Inc.
9.375%, due 11/15/03................................. 2,000,000 2,262,500
------------
7,849,750
------------
LEISURE/AMUSEMENT (2.6%)
Walt Disney Co. (The)
6.75%, due 3/30/06................................... 6,000,000 5,820,000
------------
OIL & GAS (0.5%)
Phillips Petroleum Co.
9.18%, due 9/15/21................................... 1,200,000 1,290,552
------------
PAPER/PRODUCTS (2.2%)
Champion International Corp.
9.875%, due 6/1/00................................... 4,500,000 4,938,750
------------
RAILROADS (1.1%)
CSX Corp.
9.00%, due 8/15/06................................... 2,200,000 2,469,500
------------
RETAIL STORES (5.4%)
Price/Costco, Inc.
7.125%, due 6/15/05.................................. 5,000,000 4,887,500
Sears Roebuck & Co.
8.45%, due 11/1/98................................... 7,000,000 7,297,500
------------
12,185,000
------------
TELECOMMUNICATIONS (0.9%)
AT&T Corp.
8.625%, due 12/1/31.................................. 2,000,000 2,110,000
------------
Total Corporate Bonds
(Cost $100,743,979).................................. 103,332,227
------------
U.S. GOVERNMENT &
FEDERAL AGENCIES (50.5%)
FEDERAL HOME LOAN MORTGAGE
CORPORATION (4.4%)
6.655%, due 5/20/99.................................. 10,000,000 9,996,900
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
85
<PAGE>
BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
U.S. GOVERNMENT &
FEDERAL AGENCIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
FEDERAL NATIONAL
MORTGAGE
ASSOCIATION (6.7%)
4.95%, due 9/30/98................................... $10,000,000 $ 9,718,100
8.70%, due 6/10/99................................... 5,000,000 5,298,100
------------
15,016,200
------------
UNITED STATES TREASURY BONDS (16.7%)
6.00%, due 2/15/26................................... 5,000,000 4,431,600
6.875%, due 8/15/25.................................. 17,000,000 16,828,980
7.625%, due 2/15/07.................................. 10,000,000 10,377,400
10.75%, due 5/15/03.................................. 5,000,000 6,130,850
------------
37,768,830
------------
UNITED STATES TREASURY NOTES (22.7%)
6.25%, due 2/15/03................................... 15,000,000 14,742,450
6.875%, due 5/15/06.................................. 8,000,000 8,082,480
7.125%, due 2/29/00.................................. 5,000,000 5,114,400
7.50%, due 2/15/05................................... 5,000,000 5,258,400
7.875%, due 4/15/98.................................. 6,000,000 6,180,120
8.50%, due 11/15/00.................................. 11,200,000 12,063,184
------------
51,441,034
------------
Total U.S. Government &
Federal Agencies
(Cost $114,268,017).................................. 114,222,964
------------
Total Long-Term Bonds
(Cost $215,011,996).................................. 217,555,191
------------
</TABLE>
SHORT-TERM
INVESTMENTS (2.4%)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------
<S> <C> <C>
COMMERCIAL PAPER (2.4%)
Associates Corp. of North America
5.286%, due on demand (b)........................ $ 461,000 $ 461,000
PHH Corp.
5.60%, due 7/1/96................................ 5,000,000 5,000,000
------------
Total Short-Term Investments
(Cost $5,461,000)................................ 5,461,000
------------
Total Investments
(Cost $220,472,996) (c).......................... 98.5% 223,016,191 (d)
Cash and Other Assets,
Less Liabilities................................. 1.5 3,293,210
----------- ------------
Net Assets........................................ 100.0% $226,309,401
=========== ============
</TABLE>
- --------
(a) Long-term securities maturing within the subsequent twelve month period.
(b) Adjustable rate. Rate shown is the rate in effect at June 30, 1996.
(c) The cost stated also represents the aggregate cost for Federal income tax
purposes.
(d) At June 30, 1996 net unrealized appreciation was $2,543,195, based on cost
for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess
of market value over cost of $5,663,386 and aggregate gross unrealized de-
preciation for all investments on which there was an excess of cost over
market value of $3,120,191.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
86
<PAGE>
BOND PORTFOLIO NEW YORK LIFE
STATEMENT OF ASSETS AND LIABILITIES MFA SERIES FUND, INC.
As of June 30, 1996 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2)
(identified cost $220,472,996)................................ $ 223,016,191
Cash........................................................... 2,568
Receivables:
Investment securities sold..................................... 5,129,000
Interest....................................................... 3,808,066
Fund shares sold............................................... 110,717
NYLIAC......................................................... 11,366
-------------
Total assets................................................. 232,077,908
-------------
LIABILITIES:
Payables:
Investment securities purchased................................ 4,997,667
Fund shares redeemed........................................... 242,893
Recordkeeping.................................................. 162,499
Adviser........................................................ 143,319
Administrator.................................................. 18,342
Directors...................................................... 2,510
Accrued expenses............................................... 201,277
-------------
Total liabilities............................................ 5,768,507
-------------
Net assets applicable to
outstanding shares............................................ $226,309,401
=============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
100 million shares authorized................................. $ 172,810
Additional paid-in capital..................................... 220,159,947
Accumulated undistributed net
investment income............................................. 7,151,286
Accumulated net realized loss
on investments................................................ (3,717,837)
Net unrealized appreciation
on investments................................................ 2,543,195
-------------
Net assets applicable to
outstanding shares............................................ $ 226,309,401
=============
Shares of capital stock outstanding............................ 17,280,988
=============
Net asset value per share outstanding.......................... $ 13.10
=============
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996 (Unaudited)
<S> <C>
INVESTMENT INCOME:
Income:
Interest........................................................ $ 7,852,532
------------
Expenses: (Note 2)
Advisory (Note 3)............................................... 284,867
Administration (Note 3)......................................... 227,893
Recordkeeping (Note 3).......................................... 139,849
Shareholder communication....................................... 69,973
Auditing........................................................ 25,750
Legal........................................................... 10,208
Directors....................................................... 7,644
Portfolio pricing............................................... 1,956
Miscellaneous................................................... 5,097
------------
Total expenses
before reimbursement......................................... 773,237
Expense reimbursement from
Administrator (Note 3)......................................... (73,534)
------------
Net expenses.................................................. 699,703
------------
Net investment income........................................... 7,152,829
------------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss on investments................................ (969,629)
Net change in unrealized appreciation
on investments................................................. (11,847,511)
------------
Net realized and unrealized loss
on investments................................................. (12,817,140)
------------
Net decrease in net assets resulting
from operations................................................ $ (5,664,311)
============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
87
<PAGE>
BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996 (Unaudited)
and the year ended December 31, 1995
<TABLE>
<CAPTION>
1996 1995
--------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income............................. $ 7,152,829 $ 14,495,255
Net realized gain (loss) on investments........... (969,629) 4,716,932
Net change in unrealized appreciation
(depreciation) on investments.................... (11,847,511) 17,768,492
------------ ------------
Net increase (decrease) in net assets resulting
from operations.................................. (5,664,311) 36,980,679
------------ ------------
Dividends to shareholders:
From net investment income........................ (5,000) (14,491,993)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.................. 14,068,594 22,956,887
Net asset value of shares issued to shareholders
in reinvestment of dividends..................... 5,000 14,491,993
------------ ------------
14,073,594 37,448,880
Cost of shares redeemed........................... (17,125,326) (31,593,131)
------------ ------------
Increase (decrease) in net assets derived from
capital share transactions...................... (3,051,732) 5,855,749
------------ ------------
Net increase (decrease) in net assets............ (8,721,043) 28,344,435
NET ASSETS:
Beginning of period............................... 235,030,444 206,686,009
------------ ------------
End of period..................................... $226,309,401 $235,030,444
============ ============
Accumulated undistributed net investment income... $ 7,151,286 $ 3,457
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31
1996* 1995 1994 1993 1992 1991
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at
beginning of period..... $ 13.42 $ 12.09 $ 13.43 $ 12.91 $ 12.77 $ 11.86
---------- ---------- ---------- ---------- ---------- ----------
Net investment income.... 0.42 0.88 0.88 0.95 0.92 1.02
Net realized and
unrealized gain (loss)
on investments.......... (0.74) 1.33 (1.34) 0.53 0.13 0.91
---------- ---------- ---------- ---------- ---------- ----------
Total from investment
operations.............. (0.32) 2.21 (0.46) 1.48 1.05 1.93
---------- ---------- ---------- ---------- ---------- ----------
Less dividends:
From net investment
income................. (0.00)(b) (0.88) (0.88) (0.96) (0.91) (1.02)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value at end of
period.................. $ 13.10 $ 13.42 $ 12.09 $ 13.43 $ 12.91 $ 12.77
========== ========== ========== ========== ========== ==========
Total investment return
(a)..................... (2.40%) 18.31% (3.39%) 11.40% 8.26% 16.27%
Ratios (to average net
assets)/Supplemental
Data:
Net investment income... 6.35%+ 6.55% 6.53% 6.79% 7.54% 8.22%
Net expenses............ 0.62%+ 0.62% 0.62%# 0.27%# 0.25% 0.25%
Expenses (before
reimbursement)......... 0.69%+ 0.91% 0.67%# 0.27%# 0.25% 0.25%
Portfolio turnover rate.. 35% 81% 88% 41% 10% 57%
Net assets at end of
period (in 000's)....... $ 226,309 $ 235,030 $ 206,686 $ 228,683 $ 203,947 $ 164,124
</TABLE>
- --------
(a) Total return is not annualized.
(b) Less than one cent per share.
# At the MFA Series Fund, Inc.'s shareholders meeting on December 14, 1993, the
shareholders voted to have the Bond Portfolio assume certain administrative
and operating expenses of the Fund previously borne by New York Life.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
88
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
GROWTH EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 1996 (Unaudited)
COMMON STOCKS (96.4%)+
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
AEROSPACE/DEFENSE (4.8%)
Boeing Co. (The)...................................... 60,000 $ 5,227,500
Coltec Industries Inc. (a)............................ 370,000 5,272,500
Lockheed Martin Corp.................................. 61,200 5,140,800
Loral Space &
Communications Ltd. (a).............................. 196,000 2,670,500
Northrop Grumman Corp. ............................... 80,000 5,450,000
------------
23,761,300
------------
AUTO & AUTO SERVICES (1.0%)
Ford Motor Co......................................... 150,000 4,856,250
------------
BANKS (3.4%)
AmSouth Bancorp....................................... 62,400 2,254,200
Bankers Trust New York Corp........................... 75,000 5,540,625
Chase Manhattan Corp. (The)........................... 93,600 6,610,500
Commerce Bancshares Inc............................... 74,550 2,544,019
------------
16,949,344
------------
BEVERAGES (2.6%)
Anheuser-Busch Cos., Inc.............................. 68,500 5,137,500
Pepsico Inc........................................... 216,800 7,669,300
------------
12,806,800
------------
BUILDING &
MAINTENANCE (1.0%)
ADT Ltd. (a).......................................... 250,000 4,718,750
------------
BUILDING PRODUCTS (0.9%)
Sherwin-Williams Co. (The)............................ 100,000 4,650,000
------------
CHEMICALS (3.4%)
Engelhard Corp........................................ 80,800 1,858,400
Morton International, Inc. ........................... 125,000 4,656,250
Praxair, Inc.......................................... 100,000 4,225,000
Sealed Air Corp. (a).................................. 182,500 6,136,562
------------
16,876,212
------------
COMMERCIAL SERVICES (2.6%)
Alco Standard Corp.................................... 54,800 2,479,700
Career Horizons, Inc. (a)............................. 114,500 4,007,500
Service Corp. International........................... 110,000 6,325,000
------------
12,812,200
------------
COMMUNICATIONS (3.1%)
ADC Telecommunications Inc. (a) 90,000 4,050,000
Andrew Corp. (a)...................................... 70,000 3,762,500
AT&T Corp............................................. 100,000 6,200,000
Teleport Communications
Group Inc. (a)....................................... 73,500 1,405,687
------------
15,418,187
------------
</TABLE>
- --------
+Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
COMPUTER & BUSINESS EQUIPMENT (7.5%)
Checkfree Corp. (a)................................... 100,000 $ 1,987,500
Computer Sciences Corp. (a)........................... 70,000 5,232,500
Electronic Data Systems Corp.......................... 100,000 5,375,000
First Data Corp....................................... 91,030 7,248,264
FIserv Inc. (a)....................................... 111,000 3,330,000
Intel Corp............................................ 75,000 5,507,813
Sungard Data Systems Inc. (a)......................... 125,000 5,015,625
U.S. Robotics Corp. (a)............................... 40,000 3,420,000
------------
37,116,702
------------
DRUGS (6.3%)
Allergan Inc.......................................... 92,400 3,626,700
American Home Products Corp. ......................... 91,800 5,519,475
Amgen Inc. (a)........................................ 50,000 2,700,000
Elan Corp. Plc ADR (a)(c)............................. 81,000 4,627,125
Eli Lilly & Co........................................ 75,000 4,875,000
Pfizer Inc............................................ 58,800 4,196,850
Warner-Lambert Co..................................... 102,400 5,632,000
------------
31,177,150
------------
ELECTRICAL (4.4%)
Emerson Electric Co................................... 70,000 6,326,250
General Electric Co. ................................. 119,000 10,293,500
Mark IV Industries, Inc. ............................. 223,758 5,062,525
------------
21,682,275
------------
ELECTRONICS (3.4%)
Analog Devices, Inc. (a).............................. 155,000 3,952,500
Hewlett-Packard Co.................................... 30,000 2,988,750
Raytheon Co........................................... 100,000 5,162,500
Rockwell International Corp........................... 83,600 4,786,100
------------
16,889,850
------------
FINANCE (4.6%)
Beneficial Corp....................................... 90,000 5,051,250
Federal National
Mortgage Association................................. 160,000 5,360,000
Great Western Financial Corp.......................... 175,000 4,178,125
Republic New York Corp................................ 80,000 4,980,000
Signet Banking Corp................................... 146,900 3,415,425
------------
22,984,800
------------
FOODS (3.5%)
Chiquita Brands International, Inc. 168,000 2,184,000
Dole Food Co., Inc.................................... 66,200 2,846,600
IBP, Inc.............................................. 100,000 2,762,500
Sara Lee Corp......................................... 144,000 4,662,000
Sysco Corp............................................ 140,000 4,795,000
------------
17,250,100
------------
HOSPITAL & MEDICAL SERVICES (4.9%)
HEALTHSOUTH Corp. (a)................................. 70,100 2,523,600
Medtronic, Inc........................................ 50,000 2,800,000
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
89
<PAGE>
GROWTH EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
HOSPITAL & MEDICAL SERVICES (Continued)
NABI (a).............................................. 245,000 $ 2,327,500
Quorum Health Group, Inc.............................. 100,000 2,637,500
Sybron International Corp. (a)........................ 186,200 4,655,000
Tenet Healthcare Corp. (a)............................ 225,000 4,809,375
U.S. Surgical Corp. .................................. 140,600 4,358,600
------------
24,111,575
------------
HOUSEHOLD PRODUCTS (1.1%)
Colgate-Palmolive Co. ................................ 65,000 5,508,750
------------
INSURANCE-PROPERTY &
CASUALTY (3.4%)
Allstate Corp. (The).................................. 120,000 5,475,000
American International Group, Inc. 70,000 6,903,750
General Re Corp....................................... 30,000 4,567,500
------------
16,946,250
------------
LEISURE/AMUSEMENT (1.7%)
International Game Technology......................... 286,000 4,826,250
MGM Grand, Inc. (a)................................... 86,000 3,429,250
------------
8,255,500
------------
LODGING &
RESTAURANTS (2.7%)
ITT Corp. (New) (a)................................... 80,000 5,300,000
Landry's Seafood Restaurants Inc. (a) 50,000 1,237,500
Marriott International, Inc. ......................... 125,000 6,718,750
------------
13,256,250
------------
MANUFACTURING (2.1%)
AlliedSignal Inc. .................................... 96,000 5,484,000
Minnesota Mining &
Manufacturing Co..................................... 75,000 5,175,000
------------
10,659,000
------------
MEDIA & INFORMATION
SERVICES (2.2%)
Evergreen Media Corp. Class A (a) 70,000 2,992,500
Heritage Media Corp. Class A (a)...................... 130,000 5,183,750
Infinity Broadcasting Corp. (a)....................... 87,000 2,610,000
------------
10,786,250
------------
METALS (1.4%)
Aluminum Co. of America............................... 85,000 4,876,875
Titanuim Metals Corp. (a)............................. 80,000 2,070,000
------------
6,946,875
------------
OIL & ENERGY
SERVICES (4.6%)
Aquila Gas Pipeline Corp. ............................ 107,800 1,401,400
Halliburton Co. ...................................... 57,000 3,163,500
Quaker State Corp. ................................... 333,000 4,995,000
Schlumberger Ltd. .................................... 50,000 4,212,500
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
OIL & ENERGY
SERVICES (Continued)
Smith International, Inc. (a)......................... 180,500 $ 5,437,562
Triton Energy Ltd. Class A (a)........................ 60,000 2,917,500
XCL Ltd. (a).......................................... 1,316,800 411,500
------------
22,538,962
------------
PACKAGING (0.6%)
Crown Cork & Seal Co., Inc............................ 60,000 2,700,000
------------
PAPER & FOREST
PRODUCTS (1.7%)
Georgia Pacific Corp.................................. 35,000 2,485,000
International Paper Co................................ 62,600 2,308,375
Kimberly-Clark Corp. ................................. 50,000 3,862,500
------------
8,655,875
------------
PUBLISHING (1.1%)
Tribune Co............................................ 75,900 5,512,238
------------
REAL ESTATE (2.1%)
Chelsea GCA Realty, Inc. ............................. 96,300 3,057,525
First Industrial Reality Trust, Inc. ................. 175,000 4,112,500
Liberty Property Trust................................ 166,500 3,309,187
------------
10,479,212
------------
RETAIL TRADE &
MERCHANDISING (6.6%)
Consolidated Stores Corp. (a)......................... 125,000 4,593,750
Eckerd Corp. (a)...................................... 200,000 4,525,000
Federated Department
Stores, Inc. (a)..................................... 74,500 2,542,313
Home Depot Inc........................................ 100,000 5,400,000
Kroger Co. (The) (a).................................. 148,000 5,846,000
Price/Costco, Inc. (a)................................ 250,000 5,406,250
Smart & Final, Inc.................................... 163,000 4,176,875
------------
32,490,188
------------
TRANSPORTATION (4.1%)
AMR Corp. (a)......................................... 50,000 4,550,000
Conrail Inc........................................... 63,500 4,214,813
Rollins Truck Leasing Corp............................ 380,500 3,947,687
UNC Inc. (a).......................................... 300,000 2,512,500
Union Pacific Corp.................................... 75,000 5,240,625
------------
20,465,625
------------
UTILITIES--ELECTRIC (0.8%)
CMS Energy Corp....................................... 135,000 4,168,125
------------
UTILITIES--TELEPHONE (2.8%)
Frontier Corp......................................... 130,000 3,981,250
Qualcomm Inc. (a)..................................... 100,000 5,312,500
WorldCom Inc. (a)..................................... 85,300 4,723,487
------------
14,017,237
------------
Total Common Stocks
(Cost $398,611,397).................................. 477,447,832
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
90
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
SHORT-TERM INVESTMENTS (5.5%)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------
<S> <C> <C>
COMMERCIAL PAPER (5.5%)
Associates Corp. of North America
5.33%, due on demand (b)......................... $ 3,120,000 $ 3,120,000
Bemis Co.
5.33%, due 7/2/96................................ 5,000,000 4,999,260
Sara Lee Corp.
5.55%, due 7/1/96................................ 19,000,000 19,000,000
------------
27,119,260
------------
Total Short-Term Investments
(Cost $27,119,260)............................... 27,119,260
------------
Total Investments
(Cost $425,730,657) (d).......................... 101.9% 504,567,092 (e)
Liabilities in Excess of
Cash and Other Assets............................ (1.9) (9,440,103)
----------- ------------
Net Assets........................................ 100.0% $495,126,989
=========== ============
</TABLE>
- --------
(a) Non-income producing securities.
(b) Adjustable Rate. Rate shown is the rate in effect at June 30, 1996.
(c) ADR--American Depository Receipt.
(d) The cost stated also represents the aggregate cost for Federal income tax
purposes.
(e) At June 30, 1996 net unrealized appreciation was $78,836,435, based on cost
for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $85,832,659 and aggregate gross unrealized depre-
ciation for all investments on which there was an excess of cost over mar-
ket value of $6,996,224.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
91
<PAGE>
GROWTH EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 1996 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2)
(identified cost $425,730,657).................................. $504,567,092
Cash............................................................. 2,572
Receivables:
Investment securities sold....................................... 23,319,979
Dividends and interest........................................... 636,292
Fund shares sold................................................. 504,755
------------
Total assets................................................... 529,030,690
------------
LIABILITIES:
Payables:
Investment securities purchased.................................. 32,691,380
Recordkeeping.................................................... 306,795
Adviser.......................................................... 306,330
Fund shares redeemed............................................. 175,265
NYLIAC........................................................... 44,296
Administrator.................................................... 40,539
Directors........................................................ 5,396
Accrued expenses................................................. 333,700
------------
Total liabilities.............................................. 33,903,701
------------
Net assets applicable to
outstanding shares.............................................. $495,126,989
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
100 million shares authorized................................... $ 254,680
Additional paid-in capital....................................... 365,511,123
Accumulated undistributed net investment income.................. 1,887,962
Accumulated undistributed net realized gain on investments....... 48,636,789
Net unrealized appreciation
on investments.................................................. 78,836,435
------------
Net assets applicable to outstanding shares...................... $495,126,989
============
Shares of capital stock outstanding.............................. 25,468,033
============
Net asset value per share outstanding............................ $ 19.44
============
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996 (Unaudited)
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a).................................................... $ 2,734,859
Interest......................................................... 579,169
------------
Total income................................................... 3,314,028
------------
Expenses: (Note 2)
Advisory (Note 3)................................................ 575,927
Administration (Note 3).......................................... 460,742
Recordkeeping (Note 3)........................................... 256,383
Shareholder communication........................................ 129,047
Auditing......................................................... 46,979
Legal............................................................ 19,545
Directors........................................................ 15,789
Registration..................................................... 135
Miscellaneous.................................................... 9,090
------------
Total expenses
before reimbursement.......................................... 1,513,637
Expense reimbursement from
Administrator (Note 3).......................................... (87,571)
------------
Net expenses................................................... 1,426,066
------------
Net investment income............................................ 1,887,962
------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments................................. 48,636,789
Net change in unrealized appreciation
on investments.................................................. 5,001,563
------------
Net realized and unrealized gain
on investments.................................................. 53,638,352
------------
Net increase in net assets resulting
from operations................................................. $ 55,526,314
============
</TABLE>
- --------
(a) Dividends recorded net of foreign withholding taxes in the amount of
$1,501.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
92
<PAGE>
NEW YORK LIFE
GROWTH EQUITY PORTFOLIO MFA SERIES FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996 (Unaudited)
and the year ended December 31, 1995
<TABLE>
<CAPTION>
1996 1995
----------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income.............................. $ 1,887,962 $ 4,885,469
Net realized gain on investments................... 48,636,789 34,444,510
Net change in unrealized appreciation on
investments....................................... 5,001,563 56,914,338
------------ ------------
Net increase in net assets resulting from
operations........................................ 55,526,314 96,244,317
------------ ------------
Dividends and distributions to shareholders:
From net investment income......................... -- (4,897,272)
From net realized gain on investments.............. -- (34,471,675)
------------ ------------
Total dividends and distributions to
shareholders.................................... -- (39,368,947)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares................... 33,952,853 35,852,696
Net asset value of shares issued to shareholders
in reinvestment of dividends and distributions.... -- 39,368,947
------------ ------------
33,952,853 75,221,643
Cost of shares redeemed............................ (21,858,999) (34,751,127)
------------ ------------
Increase in net assets derived from capital share
transactions..................................... 12,093,854 40,470,516
------------ ------------
Net increase in net assets........................ 67,620,168 97,345,886
NET ASSETS:
Beginning of period................................ 427,506,821 330,160,935
------------ ------------
End of period...................................... $495,126,989 $427,506,821
============ ============
Accumulated undistributed net investment income.... $ 1,887,962 $ --
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31
1996* 1995 1994 1993 1992 1991
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at
beginning of period.... $ 17.22 $ 14.69 $ 15.64 $ 15.53 $ 15.57 $ 13.00
---------- ---------- ---------- ---------- ---------- ----------
Net investment income... 0.08 0.22 0.22 0.24 0.22 0.27
Net realized and
unrealized gain (loss)
on investments......... 2.14 4.06 (0.03) 1.88 1.72 4.10
---------- ---------- ---------- ---------- ---------- ----------
Total from investment
operations............. 2.22 4.28 0.19 2.12 1.94 4.37
---------- ---------- ---------- ---------- ---------- ----------
Less dividends and
distributions:
From net investment
income................ -- (0.22) (0.22) (0.25) (0.22) (0.29)
From net realized gain
on investments........ -- (1.53) (0.92) (1.76) (1.76) (1.51)
---------- ---------- ---------- ---------- ---------- ----------
Total dividends and
distributions.......... -- (1.75) (1.14) (2.01) (1.98) (1.80)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value at end
of period.............. $ 19.44 $ 17.22 $ 14.69 $ 15.64 $ 15.53 $ 15.57
========== ========== ========== ========== ========== ==========
Total investment return
(a).................... 12.88% 29.16% 1.20% 13.71% 12.42% 33.62%
Ratios (to average net
assets)/Supplemental
Data:
Net investment income.. 0.82%+ 1.29% 1.41% 1.42% 1.50% 1.78%
Net expenses........... 0.62%+ 0.62% 0.62%# 0.27%# 0.27% 0.29%
Expenses (before
reimbursement)........ 0.66%+ 0.91% 0.65%# 0.27%# 0.27% 0.29%
Portfolio turnover rate. 63% 104% 108% 121% 82% 100%
Average commission rate
paid................... $ 0.0593 (b) (b) (b) (b) (b)
Net assets at end of
period (in 000's)...... $ 495,127 $ 427,507 $ 330,161 $ 319,196 $ 272,834 $ 204,147
</TABLE>
- --------
(a) Total return is not annualized.
(b) Disclosure of amount required for fiscal years beginning on or after Sep-
tember 1, 1995.
# At the MFA Series Fund, Inc.'s shareholders meeting on December 14, 1993, the
shareholders voted to have the Growth Equity Portfolio assume certain admin-
istrative and operating expenses of the Fund previously borne by New York
Life.
+Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
93
<PAGE>
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 1996 (Unaudited)
COMMON STOCKS (89.3%)+
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
AEROSPACE/DEFENSE (1.9%)
Boeing Company (The).................................. 8,771 $ 764,173
General Dynamics Corp................................. 1,619 100,378
Lockheed Martin Corp.................................. 5,137 431,508
Loral Space &
Communications Ltd. (a).............................. 3,256 44,363
McDonnell Douglas Corp................................ 5,757 279,215
Northrop Grumman Corp. ............................... 1,266 86,246
Raytheon Company...................................... 6,174 318,733
Rockwell International Corp........................... 5,533 316,764
United Technologies Corp.............................. 3,143 361,445
------------
2,702,825
------------
AIRLINES (0.3%)
AMR Corp. (a)......................................... 2,013 183,183
Delta Air Lines, Inc.................................. 1,276 105,908
Southwest Airlines Co................................. 3,775 109,947
USAir Group, Inc. (a)................................. 1,505 27,090
------------
426,128
------------
ALUMINUM (0.4%)
Alcan Aluminum Limited................................ 5,871 179,066
Aluminum Co. of America............................... 4,612 264,614
Reynolds Metals Company............................... 1,612 84,024
------------
527,704
------------
AUTOMOBILES (1.7%)
Chrysler Corp......................................... 9,749 604,438
Ford Motor Company.................................... 28,864 934,472
General Motors Corp................................... 19,018 996,068
------------
2,534,978
------------
AUTOPARTS--AFTER
MARKET (0.3%)
Cooper Tire & Rubber Company.......................... 2,131 47,415
Echlin Inc............................................ 1,502 56,888
Genuine Parts Company................................. 3,240 148,230
Goodyear Tire & Rubber Company 3,877 187,065
------------
439,598
------------
BEVERAGES--ALCOHOLIC (0.6%)
Anheuser-Busch Companies, Inc......................... 6,484 486,300
Brown-Forman Corp..................................... 1,786 71,440
Coors (Adolph) Co..................................... 988 17,661
Seagram Company Ltd................................... 9,530 320,446
------------
895,847
------------
BEVERAGES--SOFT DRINKS (3.2%)
Coca-Cola Company (The)............................... 64,572 3,155,957
PepsiCo, Inc.......................................... 40,440 1,430,565
------------
4,586,522
------------
</TABLE>
- --------
+Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
BROADCAST/MEDIA (0.4%)
Comcast Corp. Class A................................. 6,111 $ 113,054
Tele-Communications TCI Group, Class A (a)............ 16,727 303,177
U.S. West Media Group (a)............................. 12,013 219,237
------------
635,468
------------
BUILDING MATERIALS (0.2%)
Masco Corp............................................ 4,102 124,086
Owens-Corning Fiberglas Corp. ........................ 1,245 53,535
Sherwin-Williams Company.............................. 2,145 99,742
------------
277,363
------------
CHEMICALS (2.1%)
Air Products & Chemicals, Inc......................... 2,882 166,436
Dow Chemical Company (The)............................ 6,607 502,132
Du Pont (E.I.) De Nemours
& Company............................................ 14,232 1,126,107
Eastman Chemical Co. ................................. 2,124 129,299
Goodrich (B.F.) Company............................... 1,372 51,278
Hercules Inc.......................................... 2,755 152,214
Monsanto Company...................................... 14,529 472,192
Praxair, Inc.......................................... 3,820 161,395
Rohm & Haas Company................................... 1,749 109,750
Union Carbide Corp.................................... 3,450 137,137
------------
3,007,940
------------
CHEMICALS--DIVERSIFIED (0.3%)
Avery Dennison Corp................................... 1,391 76,331
Engelhard Corp........................................ 3,777 86,871
FMC Corp. (a)......................................... 980 63,945
PPG Industries Inc. .................................. 4,883 238,046
------------
465,193
------------
CHEMICALS--SPECIALTY (0.4%)
Grace (W.R.) & Co..................................... 2,587 183,354
Great Lakes Chemical Corp............................. 1,674 104,206
Morton International, Inc............................. 3,777 140,693
Nalco Chemical Company................................ 1,770 55,755
Sigma-Aldrich Corp.................................... 1,264 67,624
------------
551,632
------------
COMMUNICATION--EQUIPMENT
MANUFACTURERS (1.4%)
Andrew Corp. (a)...................................... 1,485 79,819
Bay Networks Inc. (a)................................. 4,799 123,574
Cabletron Systems, Inc. (a)........................... 1,914 131,348
Cisco Systems, Inc. (a)............................... 14,154 801,470
DSC Communications Corp. (a).......................... 2,832 85,314
General Instrument Corp. (a).......................... 3,034 87,607
Northern Telecom Limited.............................. 6,513 354,144
Scientific-Atlanta, Inc............................... 1,983 30,737
Tellabs, Inc. (a)..................................... 2,232 149,265
3Com Corporation (a).................................. 4,277 195,673
------------
2,038,951
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
94
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
COMPUTER--SOFTWARE &
SERVICES (2.8%)
Autodesk, Inc. ....................................... 1,152 $ 34,416
Automatic Data Processing, Inc. ...................... 7,489 289,263
Ceridian Corp. (a).................................... 1,663 83,982
Computer Associates
International Inc.................................... 6,121 436,121
Computer Sciences Corp. (a)........................... 1,482 110,779
First Data Corp....................................... 5,600 445,900
Microsoft Corp. (a)................................... 15,210 1,827,101
Novell Inc. (a)....................................... 9,383 130,189
Oracle Corp. (a)...................................... 16,661 657,068
Shared Medical Systems Corp........................... 624 40,092
------------
4,054,911
------------
COMPUTER SYSTEMS (2.7%)
Amdahl Corp. (a)...................................... 3,005 32,304
Apple Computer Inc. (a)............................... 3,123 65,583
Compaq Computer Corp. (a)............................. 6,825 336,131
Data General Corp. (a)................................ 980 12,740
Digital Equipment Corp. (a)........................... 3,933 176,985
EMC Corportation (a).................................. 5,844 108,844
Hewlett-Packard Company............................... 13,043 1,299,409
Intergraph Corp. (a).................................. 1,149 13,932
International Business
Machines Corp. ...................................... 14,554 1,440,846
Silicon Graphics, Inc. (a)............................ 4,147 99,528
Sun Microsystems Inc. (a)............................. 4,730 278,479
Tandem Computers Inc. (a)............................. 2,888 35,739
Unisys Corp. (a)...................................... 4,379 31,200
------------
3,931,720
------------
CONGLOMERATES (0.3%)
Teledyne, Inc......................................... 1,488 53,754
Tenneco, Inc.......................................... 4,490 229,551
Textron Inc........................................... 2,147 171,492
------------
454,797
------------
CONTAINERS--METAL &
GLASS (0.1%)
Ball Corp............................................. 750 21,563
Crown Cork & Seal Company, Inc. 2,896 130,320
------------
151,883
------------
CONTAINERS--PAPER (0.1%)
Bemis Company, Inc. .................................. 1,370 47,950
Stone Container Corp. ................................ 2,454 33,743
Temple-Inland Inc. ................................... 1,488 69,564
------------
151,257
------------
COSMETICS (0.7%)
Alberto-Culver Company................................ 645 29,912
Avon Products, Inc.................................... 3,354 151,349
Gillette Company...................................... 11,300 704,838
International Flavors &
Fragrances, Inc...................................... 2,767 131,778
------------
1,017,877
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
DRUGS (3.6%)
Eli Lilly & Company................................... 14,085 $ 915,525
Merck & Co., Inc...................................... 31,686 2,047,708
Pfizer Inc............................................ 16,292 1,162,841
Pharmacia & Upjohn, Inc............................... 12,899 572,393
Schering-Plough Corp. ................................ 9,381 588,658
------------
5,287,125
------------
ELECTRIC POWER
COMPANIES (3.0%)
American Electric Power Company, Inc. ................ 4,766 203,151
Baltimore Gas & Electric Company 3,860 109,527
Carolina Power & Light Company 3,926 149,188
Central & South West Corp............................. 5,304 153,816
CINergy Corp. ........................................ 3,969 127,008
Consolidated Edison Company
of New York.......................................... 6,014 175,909
Dominion Resources Inc. .............................. 4,485 179,400
DTE Energy Company.................................... 3,763 116,183
Duke Power Company.................................... 5,260 269,575
Edison International.................................. 11,420 201,277
Entergy Corp.......................................... 5,884 166,959
FPL Group, Inc........................................ 4,756 218,776
General Public Utilities Corp......................... 2,978 104,975
Houston Industries Inc................................ 6,764 166,564
Niagara Mohawk Power Corp............................. 3,747 29,039
Northern States Power Company......................... 1,747 86,258
Ohio Edison Company................................... 3,888 85,050
Pacific Gas & Electric Company........................ 10,821 251,588
PacifiCorp............................................ 7,362 163,805
Peco Energy Company................................... 5,657 147,082
PP&L Resources, Inc. ................................. 3,969 93,768
Public Service Enterprise Group Inc. 6,265 171,504
Southern Company (The)................................ 17,166 422,713
Texas Utilities Company............................... 5,868 250,857
Unicom Corp. ......................................... 5,414 150,915
Union Electric Company................................ 2,637 106,139
------------
4,301,026
------------
ELECTRICAL
EQUIPMENT (3.5%)
AMP Inc. ............................................. 5,602 224,780
Emerson Electric Co................................... 5,670 512,426
General Electric Company.............................. 42,624 3,686,976
General Signal Corp................................... 1,151 43,594
Grainger (W.W.), Inc. ................................ 1,269 98,348
Honeywell Inc......................................... 3,286 179,087
Raychem Corp.......................................... 1,120 80,500
Thomas & Betts Corp. ................................. 618 23,175
Westinghouse Electric Corp. .......................... 10,594 198,638
------------
5,047,524
------------
ELECTRONIC--
DEFENSE (0.0%) (b)
EG&G, Inc............................................. 1,278 27,317
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
95
<PAGE>
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
ELECTRONIC--
INSTRUMENTATION (0.1%)
Perkin-Elmer Corp. (The).............................. 1,137 $ 54,860
Tektronix, Inc........................................ 858 38,396
------------
93,256
------------
ELECTRONIC--
SEMICONDUCTORS (2.2%)
Advanced Micro Devices, Inc. (a)...................... 3,326 45,317
Applied Materials, Inc. (a)........................... 4,566 139,263
Intel Corp............................................ 21,115 1,550,633
LSI Logic Corp. (a)................................... 3,336 86,736
Micron Technology Inc................................. 5,320 137,655
Motorola, Inc......................................... 15,047 946,080
National Semiconductor Corp. (a) 3,226 50,003
Texas Instruments, Inc................................ 4,841 241,445
------------
3,197,132
------------
ENGINEERING &
CONSTRUCTION (0.1%)
Fluor Corp............................................ 2,127 139,052
Foster Wheeler Corp................................... 1,082 48,555
------------
187,607
------------
ENTERTAINMENT (1.3%)
King World Productions, Inc. (a)...................... 885 32,192
Time Warner, Inc...................................... 9,772 383,551
Viacom Inc. Class B (a)............................... 9,442 367,058
Walt Disney Company (The)............................. 17,333 1,089,812
------------
1,872,613
------------
FINANCIAL--
MISCELLANEOUS (1.7%)
American Express Company.............................. 12,430 554,689
American General Corp................................. 5,303 192,896
Federal Home Loan
Mortgage Corp........................................ 4,728 404,244
Federal National
Mortgage Association................................. 27,913 935,086
Green Tree Financial Corp............................. 3,345 104,531
MBNA Corp............................................. 5,698 162,393
Transamerica Corp..................................... 1,687 137,912
------------
2,491,751
------------
FOOD DISTRIBUTORS (0.2%)
Fleming Companies, Inc................................ 984 14,145
SuperValu Inc......................................... 1,777 55,976
Sysco Corp............................................ 4,661 159,639
------------
229,760
------------
FOODS (2.6%)
Archer Daniels Midland Company 13,484 257,882
Campbell Soup Company................................. 6,405 451,553
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
FOODS (Continued)
ConAgra, Inc.......................................... 6,395 $ 290,173
CPC International, Inc................................ 3,771 271,512
General Mills, Inc.................................... 4,135 225,358
Heinz (H.J.) Company.................................. 9,441 286,770
Hershey Foods Corp.................................... 2,041 149,758
Kellogg Company....................................... 5,590 409,468
Quaker Oats Company................................... 3,428 116,980
Ralston Purina Group.................................. 2,739 175,638
Sara Lee Corp......................................... 12,046 401,644
Unilever, N.V......................................... 4,134 599,947
Wrigley (Wm.) Jr. Company............................. 2,898 146,349
------------
3,783,032
------------
GOLD (0.5%)
Barrick Gold Corp..................................... 9,148 248,140
Echo Bay Mines Ltd.................................... 3,297 35,443
Homestake Mining Company.............................. 3,521 60,297
Newmont Mining Corp................................... 2,446 120,771
Placer Dome Inc....................................... 6,028 143,918
Santa Fe Pacific Gold Corp............................ 3,321 46,909
------------
655,478
------------
HARDWARE & TOOLS (0.1%)
Black & Decker Corp................................... 2,136 82,503
Snap-On, Inc.......................................... 1,032 48,891
Stanley Works (The)................................... 2,284 67,949
------------
199,343
------------
HEALTH CARE--
DIVERSIFIED (3.6%)
Abbott Laboratories................................... 20,342 884,877
Allergan Inc.......................................... 1,626 63,820
American Home Products Corp. ......................... 16,016 962,962
Bristol-Myers Squibb Company.......................... 12,953 1,165,770
Johnson & Johnson..................................... 33,372 1,651,914
Mallinckrodt Group, Inc. ............................. 2,002 77,828
Warner-Lambert Company................................ 6,801 374,055
------------
5,181,226
------------
HEALTH CARE--HMO's (0.4%)
Humana Inc. (a)....................................... 4,172 74,576
United Healthcare Corp................................ 4,476 226,038
U.S. Healthcare, Inc.................................. 3,914 215,270
------------
515,884
------------
HEALTH CARE--
MISCELLANEOUS (0.4%)
Alza Corp. (a)........................................ 2,118 57,980
Amgen Inc. (a)........................................ 6,895 372,330
Beverly Enterprises, Inc. (a)......................... 2,436 29,232
Manor Care, Inc....................................... 1,609 63,355
------------
522,897
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
96
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
HEAVY TRUCKS & PARTS (0.3%)
Cummins Engine Company, Inc........................... 1,017 $ 41,061
Dana Corp............................................. 2,616 81,096
Eaton Corp............................................ 1,979 116,019
ITT Industries, Inc................................... 2,903 72,938
Navistar International Corp. (a)...................... 2,006 19,809
Paccar Inc............................................ 1,049 51,401
------------
382,324
------------
HOMEBUILDING (0.0%) (b)
Centex Corp. ......................................... 656 20,418
Kaufman & Broad Home Corp............................. 773 11,209
Pulte Corp............................................ 642 17,173
------------
48,800
------------
HOSPITAL MANAGEMENT (0.5%)
Columbia/HCA Healthcare Corp.......................... 11,392 608,048
Community Psychiatric Centers (a) 1,136 10,792
Tenet Healthcare Corp. (a)............................ 5,236 111,919
------------
730,759
------------
HOTEL--MOTEL (0.4%)
Harrah's Entertainment, Inc. (a)...................... 2,659 75,117
Hilton Hotels Corp.................................... 1,256 141,300
ITT Corp. (New) (a)................................... 2,902 192,257
Marriott International, Inc........................... 3,212 172,645
------------
581,319
------------
HOUSEHOLD--FURNISHINGS &
APPLIANCES (0.1%)
Armstrong World Industries, Inc....................... 984 56,703
Maytag Corp. ......................................... 2,755 57,510
Whirlpool Corp........................................ 1,974 97,960
------------
212,173
------------
HOUSEHOLD PRODUCTS (1.8%)
Clorox Company (The).................................. 1,278 113,263
Colgate-Palmolive Company............................. 3,797 321,796
Kimberly-Clark Corp. ................................. 7,126 550,483
Procter & Gamble Company (The) 17,554 1,590,831
------------
2,576,373
------------
HOUSEWARES (0.2%)
Newell Co. ........................................... 4,125 126,328
Rubbermaid, Inc. ..................................... 4,030 109,818
Tupperware Corp. (a).................................. 1,618 68,360
------------
304,506
------------
INSURANCE BROKERS (0.2%)
Alexander & Alexander
Services, Inc........................................ 1,120 22,120
Aon Corporation....................................... 2,715 137,786
Marsh & McLennan
Companies, Inc....................................... 1,889 182,289
------------
342,195
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
INVESTMENT BANK
/BROKERAGE (1.0%)
Dean Witter Discover & Company 4,293 $ 245,774
Merrill Lynch & Co., Inc.............................. 4,514 293,974
Morgan Stanley Group Inc. ............................ 3,962 194,634
Salomon Inc........................................... 2,756 121,264
Travelers Group Inc................................... 12,192 556,260
------------
1,411,906
------------
LEISURE TIME (0.1%)
Bally Entertainment Corp. (a)......................... 1,252 34,430
Brunswick Corp........................................ 2,496 49,920
Outboard Marine Corp.................................. 510 9,244
------------
93,594
------------
LIFE INSURANCE (0.4%)
Jefferson-Pilot Corp.................................. 1,840 94,990
Lincoln National Corp................................. 2,612 120,805
Providian Corp........................................ 2,502 107,273
Torchmark Corp........................................ 1,787 78,181
UNUM Corp............................................. 1,945 121,077
USLIFE Corp........................................... 986 32,414
------------
554,740
------------
MACHINE TOOLS (0.0%) (b)
Cincinnati Milacron Inc. ............................. 874 20,976
Giddings & Lewis Inc.................................. 872 14,170
------------
35,146
------------
MACHINERY--
DIVERSIFIED (0.8%)
Briggs & Stratton Corp................................ 666 27,389
Case Corporation...................................... 1,777 85,296
Caterpillar Inc....................................... 5,154 349,183
Cooper Industries, Inc................................ 2,781 115,411
Deere & Company....................................... 6,695 267,800
Harnischfeger Industries, Inc......................... 1,170 38,903
Ingersoll-Rand Company................................ 2,753 120,444
Nacco Industries, Inc. ............................... 138 7,642
Timken Company (The).................................. 757 29,334
Varity Corp. (a)...................................... 1,007 48,462
------------
1,089,864
------------
MAJOR REGIONAL
BANKS (3.8%)
Banc One Corp......................................... 11,514 391,476
Bank of Boston Corp. ................................. 2,845 140,828
Bank of New York Company,
Inc. (The)........................................... 5,194 266,193
Barnett Banks, Inc.................................... 2,512 153,232
Boatmen's Bancshares, Inc............................. 4,007 160,781
Comerica Inc.......................................... 3,024 134,946
CoreStates Financial Corp............................. 5,682 218,757
Fifth Third Bancorp................................... 2,408 130,032
First Bank System, Inc................................ 3,749 217,442
First Union Corp...................................... 7,387 449,684
Fleet Financial Group, Inc............................ 6,817 296,539
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
97
<PAGE>
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
MAJOR REGIONAL
BANKS (Continued)
KeyCorp............................................... 6,080 $ 235,600
Mellon Bank Corp. .................................... 3,435 195,795
National City Corp. .................................. 4,109 144,329
NationsBank Corp. .................................... 7,616 629,272
Norwest Corp. ........................................ 9,053 315,723
PNC Bank Corp. ....................................... 8,723 259,509
Republic New York Corp................................ 1,484 92,379
Suntrust Banks, Inc................................... 5,638 208,606
U.S. Bancorp (Portland, OR)........................... 3,890 140,526
Wachovia Corp......................................... 4,363 190,881
Wells Fargo & Company................................. 2,547 608,414
------------
5,580,944
------------
MANUFACTURED
HOUSING (0.0%) (b)
Fleetwood Enterprises, Inc............................ 1,145 35,495
------------
MANUFACTURING--
DIVERSIFIED (0.9%)
AlliedSignal, Inc..................................... 7,272 415,413
Crane Co.............................................. 754 30,914
Dover Corp. .......................................... 2,887 133,163
Illinois Tool Works Inc. ............................. 2,988 202,064
Johnson Controls, Inc................................. 1,109 77,075
Millipore Corp........................................ 1,078 45,141
Pall Corp. ........................................... 2,893 69,794
Parker Hannifin Corp.................................. 1,987 84,199
Trinova Corp.......................................... 647 21,594
Tyco International Ltd................................ 3,886 158,354
------------
1,237,711
------------
MEDICAL PRODUCTS (0.9%)
Bard (C.R.), Inc. .................................... 1,378 46,852
Bausch & Lomb Inc..................................... 1,500 63,750
Baxter International Inc.............................. 6,950 328,387
Becton, Dickinson & Company........................... 1,682 134,981
Biomet Inc. (a)....................................... 2,892 41,572
Boston Scientific Corp. (a)........................... 4,464 200,880
Medtronic, Inc........................................ 6,000 336,000
St. Jude Medical, Inc. (a)............................ 1,736 58,156
United States Surgical Corp. ......................... 1,496 46,376
------------
1,256,954
------------
METALS--
MISCELLANEOUS (0.3%)
Asarco, Inc........................................... 1,114 30,774
Cyprus Amax Minerals Co. ............................. 2,535 57,355
Freeport-McMoRan Copper & Gold Inc.................... 5,206 165,941
INCO Limited.......................................... 3,000 96,750
Phelps Dodge Corp..................................... 1,773 110,591
------------
461,411
------------
MISCELLANEOUS (1.4%)
Airtouch Communications (a)........................... 12,697 358,690
American Greetings Corp............................... 1,979 54,175
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
MISCELLANEOUS (Continued)
Corning Inc........................................... 5,915 $ 226,988
Dial Corp. (The)...................................... 2,499 71,534
Harcourt General, Inc. ............................... 1,899 94,950
Harris Corp. ......................................... 1,006 61,366
Jostens, Inc.......................................... 1,137 22,456
Minnesota Mining & Manufacturing Company.............. 10,825 746,925
Pioneer Hi-Bred International, Inc. 2,179 115,215
TRW Inc............................................... 1,639 147,305
Whitman Corp.......................................... 2,653 64,003
------------
1,963,607
------------
MONEY CENTER BANKS (2.4%)
BankAmerica Corp...................................... 9,470 717,352
Bankers Trust New York Corp. ......................... 2,020 149,228
Chase Manhattan Corp. (The)........................... 11,166 788,599
Citicorp.............................................. 12,481 1,031,243
First Chicago Corp.................................... 8,179 320,003
Morgan (J.P.) & Company, Inc.......................... 4,792 405,523
------------
3,411,948
------------
MULTI-LINE
INSURANCE (1.2%)
Aetna Life & Casualty Company......................... 2,880 205,920
American International Group, Inc. 12,227 1,205,888
CIGNA Corp. .......................................... 1,990 234,571
ITT Hartford Group, Inc............................... 2,902 154,532
------------
1,800,911
------------
NATURAL GAS DISTRIBUTORS & PIPE LINES (0.8%)
Coastal Corp.......................................... 2,648 110,554
Columbia Gas System, Inc.............................. 1,371 71,463
Consolidated Natural
Gas Company.......................................... 2,484 129,789
Eastern Enterprises................................... 517 17,190
Enron Corp. .......................................... 6,476 264,707
Enserch Corp.......................................... 1,749 38,041
Nicor Inc............................................. 1,277 36,235
Noram Energy Corp..................................... 3,248 35,322
Oneok, Inc............................................ 640 16,000
Pacific Enterprises................................... 2,126 62,983
PanEnergy Corp. ...................................... 3,868 127,161
Peoples Energy Corp................................... 874 29,279
Sonat Inc............................................. 2,159 97,155
Williams Companies, Inc. (The)........................ 2,643 130,827
------------
1,166,706
------------
OFFICE EQUIPMENT &
SUPPLIES (0.6%)
Alco Standard Corp.................................... 3,265 147,741
Moore Corp. Ltd....................................... 2,612 49,302
Pitney Bowes Inc...................................... 3,914 186,893
Xerox Corp. .......................................... 8,206 439,021
------------
822,957
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
98
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
OIL & GAS DRILLING (0.0%) (b)
Helmerich & Payne, Inc. .............................. 631 $ 23,110
Rowan Companies, Inc. (a)............................. 2,134 31,477
------------
54,587
------------
OIL--EXPLORATION &
PRODUCTION (0.1%)
Burlington Resources, Inc. ........................... 3,220 138,460
Oryx Energy Company (a)............................... 2,709 44,021
Santa Fe Energy Resources, Inc. (a) 2,259 26,826
------------
209,307
------------
OIL--INTEGRATED
DOMESTIC (1.2%)
Amerada Hess Corp..................................... 2,484 133,205
Ashland Inc........................................... 1,511 59,873
Atlantic Richfield Company............................ 4,133 489,761
Kerr-McGee Corp....................................... 1,265 77,007
Louisiana Land & Exploration Company (The)............ 761 43,853
Occidental Petroleum Corp............................. 8,115 200,846
Pennzoil Company...................................... 1,125 52,031
Phillips Petroleum Company............................ 6,652 278,553
Sun Company, Inc. .................................... 2,008 60,993
Unocal Corp. ......................................... 6,262 211,342
USX-Marathon Group.................................... 7,396 148,844
------------
1,756,308
------------
OIL--INTEGRATED
INTERNATIONAL (5.9%)
Amoco Corp. .......................................... 12,782 925,097
Chevron Corp.......................................... 16,792 990,728
Exxon Corp............................................ 31,850 2,766,969
Mobil Corp............................................ 10,158 1,138,966
Royal Dutch Petroleum Company......................... 13,688 2,104,530
Texaco Inc............................................ 6,847 574,292
------------
8,500,582
------------
OIL--WELL EQUIPMENT &
SERVICES (0.7%)
Baker Hughes Inc...................................... 3,624 119,139
Dresser Industries, Inc............................... 4,663 137,559
Halliburton Company................................... 2,888 160,284
McDermott International, Inc.......................... 1,377 28,745
Schlumberger Limited.................................. 6,162 519,148
Western Atlas, Inc. (a)............................... 1,449 84,404
------------
1,049,279
------------
PAPER & FOREST
PRODUCTS (0.9%)
Boise Cascade Corp.................................... 1,209 44,280
Champion International Corp........................... 2,485 103,749
Georgia-Pacific Corp.................................. 2,470 175,370
International Paper Company........................... 7,634 281,504
James River Corp. of Virginia......................... 2,127 56,100
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
PAPER & FOREST
PRODUCTS (Continued)
Louisiana-Pacific Corp................................ 2,765 $ 61,176
Mead Corp............................................. 1,395 72,366
Potlatch Corp. ....................................... 649 25,392
Union Camp Corp. ..................................... 1,759 85,750
Westvaco Corp......................................... 2,673 79,856
Weyerhaeuser Company.................................. 5,261 223,592
Willamette Industries, Inc............................ 1,483 88,238
------------
1,297,373
------------
PERSONAL LOANS (0.2%)
Beneficial Corp....................................... 1,374 77,116
Household International Inc........................... 2,500 190,000
------------
267,116
------------
PHOTOGRAPHY/IMAGING (0.5%)
Eastman Kodak Company................................. 8,739 679,457
Polaroid Corp. ....................................... 1,148 52,378
------------
731,835
------------
POLLUTION CONTROL (0.4%)
Browning-Ferris Industries Inc........................ 5,390 156,310
Laidlaw, Inc. Class B................................. 7,250 73,406
WMX Technologies, Inc................................. 12,433 407,181
------------
636,897
------------
PROPERTY--CASUALTY
INSURANCE (1.1%)
Allstate Corp. (The).................................. 11,512 525,235
Chubb Corp. (The)..................................... 4,498 224,338
General Re Corp....................................... 2,129 324,140
Loews Corp. .......................................... 2,975 234,653
SAFECO Corp. ......................................... 3,236 114,474
St. Paul Companies, Inc. (The)........................ 2,122 113,527
USF&G Corp. .......................................... 2,587 42,362
------------
1,578,729
------------
PUBLISHING (0.3%)
Dun & Bradstreet Corp. (The).......................... 4,300 268,750
McGraw-Hill Companies, Inc............................ 2,624 120,048
Meredith Corp......................................... 660 27,555
------------
416,353
------------
PUBLISHING--
NEWSPAPER (0.5%)
Dow Jones & Company, Inc.............................. 2,524 105,377
Gannett Company, Inc.................................. 3,644 257,813
Knight-Ridder Inc..................................... 1,176 85,260
New York Times Company (The).......................... 2,591 84,531
Times Mirror Company.................................. 2,736 119,016
Tribune Company....................................... 1,641 119,178
------------
771,175
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
99
<PAGE>
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
RAILROADS (0.9%)
Burlington Northern Santa Fe Corp. 3,672 $ 296,973
Conrail Inc........................................... 2,014 133,679
CSX Corp. ............................................ 5,294 255,436
Norfolk Southern Corp. ............................... 3,303 279,929
Union Pacific Corp.................................... 5,262 367,682
------------
1,333,699
------------
RESTAURANTS (0.7%)
Darden Restaurants, Inc............................... 4,135 44,451
Luby's Cafeterias, Inc................................ 636 14,946
McDonald's Corp. ..................................... 17,790 831,683
Ryan's Family Steak
Houses, Inc. (a)..................................... 1,377 12,737
Shoney's, Inc. (a).................................... 1,111 12,082
Wendy's International, Inc. .......................... 3,054 56,881
------------
972,780
------------
RETAIL STORES--
APPAREL (0.3%)
Charming Shoppes, Inc. (a)............................ 2,639 18,638
Gap, Inc. (The)....................................... 7,307 234,737
Limited, Inc. (The)................................... 6,980 150,070
TJX Companies, Inc. (The)............................. 1,889 63,754
------------
467,199
------------
RETAIL STORES--
DEPARTMENT (0.7%)
Dillard Department Stores, Inc........................ 2,783 101,580
Federated Department
Stores, Inc. (a)..................................... 5,220 178,132
May Department Stores Company......................... 6,384 279,300
Mercantile Stores Company, Inc........................ 982 57,570
Nordstrom, Inc. ...................................... 2,125 94,562
Penney (J.C.) Company, Inc............................ 5,704 299,460
------------
1,010,604
------------
RETAIL STORES--DRUG (0.2%)
Longs Drug Stores Corp................................ 514 22,937
Rite Aid Corp......................................... 2,142 63,725
Walgreen Company...................................... 6,276 210,246
------------
296,908
------------
RETAIL STORES--FOOD
CHAIN (0.5%)
Albertson's, Inc...................................... 6,531 270,220
American Stores Co.................................... 3,766 155,348
Giant Food, Inc....................................... 1,504 53,956
Great Atlantic & Pacific Tea Company, Inc. ........... 988 32,480
Kroger Company (The) (a).............................. 3,177 125,491
Winn-Dixie Stores, Inc. .............................. 3,893 137,715
------------
775,210
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
RETAIL STORES--GENERAL MERCHANDISE (1.6%)
Dayton Hudson Corp.................................... 1,881 $ 193,978
Kmart Corp. .......................................... 11,811 146,161
Sears, Roebuck & Company.............................. 10,076 489,945
Wal-Mart Stores, Inc. ................................ 58,946 1,495,755
------------
2,325,839
------------
RETAIL STORES--
SPECIALTY (1.0%)
Circuit City Stores, Inc. ............................ 2,498 90,240
Home Depot, Inc. (The)................................ 12,201 658,854
Lowe's Companies, Inc................................. 4,107 148,365
Melville Corp......................................... 2,649 107,285
Pep Boys-Manny, Moe & Jack............................ 1,512 51,408
Price/Costco, Inc. (a)................................ 5,036 108,904
Tandy Corp............................................ 1,630 77,221
Toys "R" Us (a)....................................... 7,083 201,866
Woolworth Corp. (a)................................... 3,389 76,251
------------
1,520,394
------------
SAVINGS & LOANS (0.2%)
Ahmanson (H.F.) & Company............................. 3,011 81,297
Golden West Financial Corp............................ 1,512 84,672
Great Western Financial Corp. ........................ 3,395 81,056
------------
247,025
------------
SHOES (0.3%)
Brown Group, Inc...................................... 501 8,705
Nike Inc. ............................................ 3,684 378,531
Reebok International Ltd.............................. 2,026 68,124
Stride Rite Corp. .................................... 1,265 10,436
------------
465,796
------------
SPECIALIZED SERVICES (0.5%)
Block (H & R), Inc.................................... 2,652 86,522
CUC International Inc. (a)............................ 4,590 162,945
Ecolab, Inc........................................... 1,620 53,460
Interpublic Group of Cos., Inc........................ 2,001 93,797
National Service Industries, Inc. .................... 1,162 45,463
Ogden Corp............................................ 1,243 22,529
Safety-Kleen Corp..................................... 1,496 26,180
Service Corp. International........................... 2,882 165,715
------------
656,611
------------
SPECIALTY PRINTING (0.2%)
Deluxe Corp........................................... 2,129 75,579
Donnelley (R.R.) & Sons Company 3,915 136,536
Harland (John H.) Co. (The)........................... 761 18,740
------------
230,855
------------
STEEL (0.2%)
Armco Inc. (a)........................................ 2,747 13,735
Bethlehem Steel Corp. (a)............................. 2,826 33,559
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
100
<PAGE>
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
STEEL (Continued)
Inland Steel Industries, Inc.......................... 1,217 $ 23,884
Nucor Corp. .......................................... 2,263 114,564
USX-U.S. Steel Group Inc.............................. 1,982 56,239
Worthington Industries, Inc. ......................... 2,323 48,493
------------
290,474
------------
TELECOMMUNICATIONS--
LONG DISTANCE (2.5%)
AT&T Corp............................................. 41,073 2,546,526
MCI Communications Corp. ............................. 17,392 445,670
Sprint Corp. ......................................... 9,374 393,708
WorldCom, Inc. (a).................................... 4,906 271,670
------------
3,657,574
------------
TELEPHONE (4.1%)
Alltel Corp........................................... 4,789 147,262
Ameritech Corp........................................ 14,152 840,275
Bell Atlantic Corp. .................................. 11,160 711,450
BellSouth Corp........................................ 25,457 1,078,740
GTE Corp.............................................. 24,865 1,112,709
NYNEX Corp............................................ 10,977 521,408
Pacific Telesis Group................................. 10,867 366,761
SBC Communications, Inc. ............................. 15,649 770,713
US West, Inc.......................................... 12,015 382,978
------------
5,932,296
------------
TEXTILES--APPAREL
MANUFACTURERS (0.2%)
Fruit Of The Loom Inc. Class A (a) 2,019 51,484
Liz Claiborne, Inc.................................... 1,912 66,203
Russell Corp.......................................... 1,107 30,581
Springs Industries, Inc. ............................. 504 25,452
VF Corp............................................... 1,624 96,831
------------
270,551
------------
TOBACCO (1.8%)
American Brands, Inc.................................. 4,079 213,671
Philip Morris Companies, Inc.......................... 21,419 2,227,576
UST Inc............................................... 5,064 173,442
------------
2,614,689
------------
TOYS (0.2%)
Hasbro Inc............................................ 2,148 76,791
Mattel, Inc........................................... 7,206 206,272
------------
283,063
------------
TRANSPORTATION--
MISCELLANEOUS (0.1%)
Federal Express Corp. (a)............................. 1,487 121,934
Ryder System, Inc..................................... 2,005 56,391
------------
178,325
------------
</TABLE>
NEW YORK LIFE
MFA SERIES FUND, INC.
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------------
<S> <C> <C>
TRUCKERS (0.0%) (b)
Caliber System, Inc............................... 1,005 $ 34,170
Consolidated Freightways, Inc..................... 1,099 23,216
Yellow Corp. (a).................................. 646 8,560
------------
65,946
------------
Total Common Stocks
(Cost $101,145,525).............................. 129,413,287 (c)
------------
PREFERRED STOCK (0.0%) (B)
CONGLOMERATES (0.0%) (b)
Teledyne, Inc.
$1.20, Series E.................................. 11 169
------------
Total Preferred Stock
(Cost $165)...................................... 169
------------
SHORT-TERM
INVESTMENTS (10.5%)
<CAPTION>
PRINCIPAL
AMOUNT
-------------
<S> <C> <C>
COMMERCIAL PAPER (3.4%)
American Honda Finance Corp.
5.35%, due 7/25/96 (d)........................... $ 500,000 498,217
Dynamic Funding Corp.
5.47%, due 8/5/96 (d)............................ 500,000 497,341
Empire District Electric Co.
5.45%, due 7/29/96 (d)........................... 1,700,000 1,692,794
Hosokawa Micron
International Inc.
5.55%, due 7/29/96 (d)........................... 1,300,000 1,294,388
Sanwa Business Credit Corp.
5.40%, due 7/29/96 (d)........................... 750,000 746,850
Strategic Asset Funding Corp.
5.45%, due 7/8/96 (d)............................ 150,000 149,841
------------
Total Commercial Paper
(Cost $4,879,431)................................ 4,879,431
------------
U.S. GOVERNMENT & FEDERAL AGENCIES (7.1%)
Federal Home Loan Bank
5.24%, due 7/22/96 (d)........................... 2,820,000 2,811,459
Federal Mortgage Corp.
5.33%, due 9/3/96 (d)............................ 2,220,000 2,198,102
United States Treasury Bill
5.13%, due 10/17/96 (d).......................... 5,450,000 5,363,291
------------
Total U.S. Government &
Federal Agencies
(Cost $10,377,167)............................... 10,372,852
------------
Total Short-Term Investments
(Cost $15,256,598)............................... 15,252,283
------------
Total Investments
(Cost $116,402,288) (f).......................... 99.8% 144,665,739 (g)
Cash and Other Assets,
Less Liabilities................................. 0.2 317,936
----------- ------------
Net Assets........................................ 100.0% $144,983,675
=========== ============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
101
<PAGE>
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
FUTURES CONTRACTS (0.0%) (B)
<TABLE>
<CAPTION>
CONTRACTS UNREALIZED
LONG APPRECIATION
--------------------------
<S> <C> <C>
Standard & Poor's 500
September 1996................................... 43 $ 25,200
------------
Total Futures Contracts
(Settlement Value $14,551,200) $ 25,200 (e)
============
</TABLE>
- --------
(a) Non-income producing securities.
(b) Less than one tenth of a percent.
(c) The combined market value of common stocks and Standard & Poor's 500 Index
futures contracts represents 99.3% of net assets.
(d) Segregated as collateral for futures contracts.
(e) Represents the difference between the value of the contracts at the time
they were opened and the value at June 30, 1996.
(f) The cost for Federal income tax purposes is $116,522,250.
(g) At June 30, 1996 net unrealized appreciation was $28,143,489, based on cost
for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $29,500,679 and aggregate gross unrealized depre-
ciation for all investments on which there was an excess of cost over mar-
ket value of $1,357,190.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
102
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
INDEXED EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 1996 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2)
(identified cost $116,402,288).................................. $144,665,739
Cash............................................................. 155,032
Receivables:
Fund shares sold................................................. 431,148
Dividends and interest........................................... 224,036
Investment securities sold....................................... 5,942
NYLIAC........................................................... 1,270
Variation margin receivable on futures contracts................. 176,424
------------
Total assets................................................... 145,659,591
------------
LIABILITIES:
Payables:
Investment securities purchased.................................. 599,271
Administrator.................................................... 11,374
Adviser.......................................................... 11,374
Custodian........................................................ 8,054
Directors........................................................ 1,208
Accrued expenses................................................. 44,635
------------
Total liabilities.............................................. 675,916
------------
Net assets applicable to
outstanding shares.............................................. $144,983,675
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
50 million shares authorized.................................... $ 98,010
Additional paid-in capital....................................... 114,616,111
Accumulated undistributed net
investment income............................................... 1,260,478
Accumulated undistributed net realized gain
on investments.................................................. 720,425
Net unrealized appreciation
on investments.................................................. 28,288,651
------------
Net assets applicable to
outstanding shares.............................................. $144,983,675
============
Shares of capital stock outstanding.............................. 9,800,979
============
Net asset value per share outstanding............................ $ 14.79
============
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996 (Unaudited)
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a).................................................... $ 1,154,105
Interest......................................................... 378,789
------------
Total income................................................... 1,532,894
------------
Expenses: (Note 2)
Administration (Note 3).......................................... 115,922
Recordkeeping.................................................... 82,739
Advisory (Note 3)................................................ 57,961
Auditing......................................................... 19,628
Custodian........................................................ 17,104
Shareholder communication........................................ 13,968
Directors........................................................ 3,993
Legal............................................................ 3,573
Portfolio pricing................................................ 1,491
Miscellaneous.................................................... 5,655
------------
Total expenses
before reimbursement.......................................... 322,034
Expense reimbursement from
Administrator (Note 3).......................................... (49,618)
------------
Net expenses................................................... 272,416
------------
Net investment income............................................ 1,260,478
------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain from:
Securities transactions.......................................... 324,956
Futures transactions............................................. 851,556
------------
Net realized gain on investments................................. 1,176,512
------------
Net change in unrealized appreciation
on investments:
Securities transactions.......................................... 8,809,148
Futures transactions............................................. (303,650)
------------
Net unrealized gain on investments............................... 8,505,498
------------
Net realized and unrealized gain
on investments.................................................. 9,682,010
------------
Net increase in net assets resulting
from operations................................................. $ 10,942,488
============
</TABLE>
- --------
(a) Dividends recorded net of foreign withholding taxes in the amount of
$14,724.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
103
<PAGE>
INDEXED EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996 (Unaudited)
and the year ended December 31, 1995
<TABLE>
<CAPTION>
1996 1995
--------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income............................. $ 1,260,478 $ 2,018,769
Net realized gain on investments.................. 1,176,512 3,180,447
Net change in unrealized appreciation on
investments...................................... 8,505,498 19,351,538
------------ ------------
Net increase in net assets resulting from
operations....................................... 10,942,488 24,550,754
------------ ------------
Dividends and distributions to shareholders:
From net investment income........................ -- (2,044,642)
From net realized gain on investments............. (590,000) (2,898,925)
------------ ------------
Total dividends and distributions to
shareholders.................................... (590,000) (4,943,567)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.................. 51,101,194 32,292,361
Net asset value of shares issued to shareholders
in reinvestment of dividends and distributions... 590,000 4,943,567
------------ ------------
51,691,194 37,235,928
Cost of shares redeemed........................... (22,230,539) (14,837,036)
------------ ------------
Increase in net assets derived from capital share
transactions.................................... 29,460,655 22,398,892
------------ ------------
Net increase in net assets....................... 39,813,143 42,006,079
NET ASSETS:
Beginning of period............................... 105,170,532 63,164,453
------------ ------------
End of period..................................... $144,983,675 $105,170,532
============ ============
Accumulated undistributed net investment income... $ 1,260,478 $ --
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
JANUARY 29,
SIX MONTHS 1993 (A)
ENDED THROUGH
JUNE 30, YEAR ENDED DECEMBER 31 DECEMBER 31,
1996* 1995 1994 1993
-------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at
beginning of period.... $ 13.53 $ 10.38 $ 10.58 $ 10.00
------------ ------------ ------------ ------------
Net investment income... 0.13 0.27 0.24 0.19
Net realized and
unrealized gain (loss)
on investments......... 1.20 3.55 (0.15) 0.67
------------ ------------ ------------ ------------
Total from investment
operations............. 1.33 3.82 0.09 0.86
------------ ------------ ------------ ------------
Less dividends and
distributions:
From net investment
income................ -- (0.28) (0.24) (0.19)
From net realized gain
on investments........ (0.07) (0.39) (0.05) (0.08)
In excess of net
realized gain on
investments........... -- -- -- (0.01)
------------ ------------ ------------ ------------
Total dividends and
distributions.......... (0.07) (0.67) (0.29) (0.28)
------------ ------------ ------------ ------------
Net asset value at end
of period.............. $ 14.79 $ 13.53 $ 10.38 $ 10.58
============ ============ ============ ============
Total investment return
(b).................... 9.88% 36.89% 0.76% 8.53%
Ratios (to average net
assets)/Supplemental
Data:
Net investment income.. 2.18%+ 2.52% 2.61% 2.54%+
Net expenses........... 0.47%+ 0.47% 0.47% 0.47%+
Expenses (before
reimbursement)........ 0.56%+ 0.62% 0.68% 0.96%+
Portfolio turnover rate. 1% 5% 8% 7%
Average commission rate
paid................... $ 0.0500 (c) (c) (c)
Net assets at end of
period (in 000's)...... $ 144,984 $ 105,171 $ 63,164 $ 43,081
</TABLE>
- --------
(a) Commencement of Operations.
(b) Total return is not annualized.
(c) Disclosure of amount required for fiscal years beginning on or after Sep-
tember 1, 1995.
+ Annualized.
* Unaudited.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
104
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--Organization and Business:
- -------------------------------------------------------------------------------
New York Life MFA Series Fund, Inc. (the "Company") was incorporated under
Maryland law on June 3, 1983. The Company is registered under the Investment
Company Act of 1940, as amended, ("Investment Company Act") as an open-end
diversified management investment company. High Yield Corporate Bond,
International Equity and Value Portfolios, which commenced operations on May
1, 1995, Capital Appreciation, Cash Management, Government, Total Return and
Indexed Equity Portfolios, which commenced operations on January 29, 1993, and
Bond and Growth Equity Portfolios, which commenced operations on January 23,
1984, (the "Funds") are separate series of the Company. Shares of the Funds
are currently offered only to New York Life Insurance and Annuity Corporation
("NYLIAC"), a wholly owned subsidiary of New York Life Insurance Company ("New
York Life"). NYLIAC allocates shares of the Funds to, among others, New York
Life Insurance and Annuity Corporation's LifeStagesSM Annuity Separate
Account. The Separate Account is used to fund flexible premium retirement
annuity policies.
Effective May 2, 1994, the name of the New York Life MFA Series Fund, Inc.
Common Stock Portfolio changed to New York Life MFA Series Fund, Inc. Growth
Equity Portfolio.
The investment objectives for each of the Portfolios of the Company are as
follows:
Capital Appreciation: to seek long-term growth of capital.
Cash Management: to seek as high a level of current income as is considered
consistent with the preservation of capital and liquidity.
Government: to seek a high level of current income, consistent with safety
of principal.
High Yield Corporate Bond: to maximize current income through investment in
a diversified portfolio of high yield, high risk debt securities which are
ordinarily in the lower rating categories of recognized rating agencies.
International Equity: to seek long-term growth of capital by investing in a
portfolio consisting primarily of non-U.S. equity securities.
Total Return: to realize current income consistent with reasonable opportu-
nity for future growth of capital and income.
Value: to realize maximum long-term total return from a combination of cap-
ital growth and income.
Bond: to seek the highest income over the long term consistent with preser-
vation of principal.
Growth Equity: to seek long-term growth of capital with income as a second-
ary consideration.
Indexed Equity: to seek to provide investment results that correspond to
the total return performance (reflecting reinvestment of dividends) of
common stocks in the aggregate, as presented by the S&P 500.
- -------------------------------------------------------------------------------
NOTE 2--Significant Accounting Policies:
- -------------------------------------------------------------------------------
The following is a summary of significant accounting policies followed by the
Company:
(A)
VALUATION OF FUND SHARES. The net asset value per share of each Fund is
calculated on every day the New York Stock Exchange is open for trading,
except the day after Thanksgiving and Christmas Eve. Net asset value per share
is calculated as of the regular close of the New York Stock Exchange (normally
4:00 P.M., Eastern time) for each Fund by dividing the current market value
(amortized cost, in the case of Cash Management Portfolio) of the Fund's total
assets, less liabilities, by the total number of outstanding shares of that
Fund.
105
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(B)
SECURITIES VALUATION. Portfolio securities of Cash Management Portfolio are
valued at amortized cost, which approximates market value. This method
involves initially valuing an instrument at its cost and thereafter amortizing
the premium or accreting the discount to income over the life of the security.
Securities of each of the other Funds are stated at value determined (a) by
appraising common and preferred stocks which are traded on the New York Stock
Exchange at the last sale price on that day or, if no sale occurs, at the mean
between the closing bid and asked prices, (b) by appraising common and
preferred stocks traded on other United States national securities exchanges
or foreign securities exchanges as nearly as possible in the manner described
in (a) by reference to their principal exchange, including the National
Association of Securities Dealers National Market System, (c) by appraising
over-the-counter securities quoted on the National Association of Securities
Dealers NASDAQ system (but not listed on the National Market System) at the
bid price supplied through such system, (d) by appraising over-the-counter
securities not quoted on the NASDAQ system and securities listed or traded on
certain foreign exchanges whose operations are similar to the U.S. over-the-
counter market, at prices supplied by the pricing agent or brokers selected by
the Adviser if these prices are deemed to be representative of market values
at the regular close of business of the New York Stock Exchange, (e) by
appraising debt securities at prices supplied by a pricing agent selected by
the Adviser, whose prices reflect broker/dealer supplied valuations and
electronic data processing techniques if those prices are deemed by the
Adviser to be representative of market values at the regular close of business
of the New York Stock Exchange, (f) by appraising options and futures
contracts at the last sale price on the market where such options or futures
contracts are principally traded, and (g) by appraising all other securities
and other assets, including debt securities for which prices are supplied by a
pricing agent but are not deemed by the Adviser to be representative of market
values, but excluding money market instruments with a remaining maturity of
sixty days or less and including restricted securities and securities for
which no market quotations are available, at fair value in accordance with
procedures approved by the Directors. Short-term securities which mature in
more than 60 days are valued at current market quotations. Short-term
securities which mature in 60 days or less are valued at amortized cost if
their term to maturity at purchase was 60 days or less, or by amortizing the
difference between market value on the 61st day prior to maturity and value on
maturity date if their original term to maturity at purchase exceeded 60 days.
Events affecting the values of certain portfolio securities that occur
between the close of trading on the principal market for such securities
(foreign exchanges and over-the-counter markets) and the regular close of the
New York Stock Exchange will not be reflected in the Funds' calculations of
net asset values unless the Adviser believes that the particular event would
materially affect net asset value, in which case an adjustment would be made.
(C)
FORWARD CURRENCY CONTRACTS. A forward currency contract is an agreement to buy
or sell currencies of different countries on a specified future date at a
specified rate. During the period the forward contract is open, changes in the
value of the contract are recognized as unrealized gains or losses by "marking
to market" such contract on a daily basis to reflect the market value of the
contract at the end of each day's trading. When the forward contract is
closed, the Portfolio records a realized gain or loss equal to the difference
between the proceeds from (or cost of) the closing transaction and the
Portfolio's basis in the contract. The International Equity Portfolio enters
into forward foreign currency exchange contracts in order to hedge its foreign
currency denominated investments and receivables and payables against adverse
movements in future foreign exchange rates.
The use of forward contracts involves, to varying degrees, elements of
market risk in excess of the amount recognized in the statement of assets and
liabilities. The contract or notional amounts reflect the extent of the
Portfolio's involvement in these financial instruments. Risks arise from the
possible movements in the foreign exchange rates underlying these instruments.
The unrealized appreciation on forward contracts reflects the Portfolio's
exposure at period end to credit loss in the event of a counterparty's failure
to perform its obligations.
106
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
(D)
FUTURES CONTRACTS. A futures contract is an agreement to purchase or sell a
specified quantity of an underlying instrument at a specified future date, or
to make or receive a cash payment based on the value of a securities index.
During the period the futures contract is open, changes in the value of the
contract are recognized as unrealized gains or losses by "marking to market"
such contract on a daily basis to reflect the market value of the contract at
the end of each day's trading. The Portfolio agrees to receive from or pay to
the broker an amount of cash equal to the daily fluctuation in the value of
the contract. Such receipts or payments are known as "variation margin". When
the futures contract is closed, the Portfolio records a realized gain or loss
equal to the difference between the proceeds from (or cost of) the closing
transaction and the Portfolio's basis in the contract. The Indexed Equity
Portfolio invests in stock index futures contracts to gain full exposure to
changes in stock market prices to fulfill its investment objective.
The use of futures contracts involves, to varying degrees, elements of
market risk in excess of the amount recognized in the statement of assets and
liabilities. The contract or notional amounts and variation margin reflect the
extent of the Portfolio's involvement in long futures positions. Risks arise
from the possible imperfect correlation in movements in the price of futures
contracts and the underlying hedged assets, and the possible inability of
counterparties to meet the terms of their contracts. However, the Portfolio's
activities in futures contracts are conducted through regulated exchanges
which minimize counterparty credit risks.
(E)
REPURCHASE AGREEMENTS. At the time the Funds enter into a repurchase
agreement, the value of the underlying security, including accrued interest,
will be equal to or exceed the value of the repurchase agreement and, in the
case of repurchase agreements exceeding one day, the value of the underlying
security, including accrued interest, is required during the term of the
agreement to be equal to or exceed the value of the repurchase agreement. The
underlying securities for all repurchase agreements are held in a segregated
account of the respective Funds' custodian. In the case of repurchase
agreements exceeding one day, the market value of the underlying securities
are monitored by the Adviser by pricing them daily. (Also see Note 5).
(F)
SECURITY TRANSACTIONS AND INVESTMENT INCOME. The Company records security
transactions on the trade date. Realized gains and losses on security
transactions are determined using the identified cost method and include gains
and losses from repayments of principal on mortgage backed securities.
Dividend income is recognized on the ex-dividend date and interest income is
accrued daily except when collection is not expected. Discounts on securities
purchased for all Funds are accreted on the constant yield method over the
life of the respective securities or, if applicable, over the period to the
first date of call.
(G)
FOREIGN CURRENCY INVESTING. The books and records of the Company are kept in
U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the
mean between the buying and selling rates last quoted by any major U.S. bank
at the following dates:
(i) market value of investment securities, other assets and
liabilities--at the valuation date,
(ii) purchases and sales of investment securities, income and expenses--
at the date of such transactions.
The assets and liabilities of International Equity Portfolio are presented
at the exchange rates and market values at the close of the period. The
changes in net assets arising from fluctuations in exchange rates and the
changes in net assets resulting from changes in market prices are not
separately presented. However, gains and losses from certain foreign currency
transactions are treated as ordinary income for Federal income tax purposes.
107
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Net realized gain (loss) on foreign currency transactions represents net
gains and losses on forward currency contracts, net currency gains or losses
realized as a result of differences between the amounts of securities sale
proceeds or purchase cost, dividends, interest and withholding taxes recorded
on the Fund's books and the U.S. dollar equivalent amount actually received or
paid. Net currency gains or losses from valuing foreign currency denominated
assets and liabilities at period-end exchange rates are reflected in
unrealized foreign exchange gains.
There are certain risks involved in investing in foreign securities that are
in addition to the usual risks inherent in domestic instruments. These risks
include those resulting from future adverse political and economic
developments and possible imposition of currency exchange blockages or other
foreign governmental laws or restrictions.
(H)
MORTGAGE DOLLAR ROLLS. The Funds enter into mortgage dollar roll transactions
("MDRs") in which they sell mortgage backed securities ("MBS") from their
portfolio to a counterparty from whom they simultaneously agree to buy a
similar security on a delayed delivery basis. The MDR transactions of the
Funds are classified as purchase and sale transactions. The securities sold in
connection with the MDR are removed from the portfolio and a realized gain or
loss is recognized. The securities the Funds have agreed to acquire are
included at market value in the portfolio of investments and liability for
such purchase commitments is included as payables for investments purchased.
(I)
FEDERAL INCOME TAXES. Each of the Funds is treated as a separate entity for
Federal income tax purposes. The Company's policy is to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of the taxable income to the shareholders of
each Fund within the allowable time limits. Therefore, no Federal income tax
provision is required.
Investment income received by a Fund from foreign sources may be subject to
foreign income taxes withheld at the source.
(J)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions are
recorded on the ex-dividend date. For Cash Management Portfolio, dividends are
declared daily and paid monthly. Each of the other Funds intends to declare
and pay, as a dividend, substantially all of their net investment income and
net realized gains no less frequently than once a year.
Income dividends and capital gain distributions are determined in accordance
with Federal income tax regulations which may differ from generally accepted
accounting principles.
(K)
ORGANIZATION COSTS. Costs incurred in connection with the initial organization
and registration of a Portfolio of the Company are amortized over 60 months
beginning with the commencement of operations of the respective Portfolio.
Organization costs for High Yield Corporate Bond, International Equity and
Value Portfolios, paid by, and reimbursable to, NYLIAC, aggregated
approximately $220,500. Such costs are being amortized beginning with the
commencement of operations of the respective Portfolios on May 1, 1995.
Organization costs for Capital Appreciation, Cash Management, Government,
Total Return and Indexed Equity Portfolios, paid by, and reimbursable to,
NYLIAC, aggregated approximately $253,500. Such costs are being amortized
beginning with the commencement of operations of the respective Portfolio on
January 29, 1993. In the event that any of the initial shares purchased by
NYLIAC are redeemed, proceeds of such redemption will be reduced by the
proportionate amount of the unamortized deferred organizational expenses which
the number of shares redeemed bears to the total number of initial shares
purchased.
108
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
All of the initial shares purchased by NYLIAC in Capital Appreciation, Cash
Management, Government and Total Return Portfolios were redeemed on
February 21, 1995. All of the initial shares purchased by NYLIAC in Indexed
Equity Portfolio were redeemed between February 14, 1995 and February 21,
1996. (Also see Note 7 for further discussion of these redemptions).
(L)
EXPENSES. Expenses with respect to the Company are allocated to the individual
Funds in proportion to the net assets of the respective Funds when the
expenses are incurred except where allocations of direct expenses can
otherwise fairly be made.
(M)
USE OF ESTIMATES. The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
- -------------------------------------------------------------------------------
NOTE 3--Fees and Related Party Policies:
- -------------------------------------------------------------------------------
(A)
INVESTMENT ADVISORY AND ADMINISTRATION FEES. MacKay-Shields Financial
Corporation ("MacKay-Shields") acts as investment adviser to Capital
Appreciation, Cash Management, Government, High Yield Corporate Bond,
International Equity, Total Return and Value Portfolios under an Investment
Advisory Agreement. MacKay-Shields is a registered investment adviser, a
wholly-owned subsidiary of NYLIFE Inc. and an indirect wholly-owned subsidiary
of New York Life Insurance Company ("New York Life"). New York Life acts as
investment adviser to Bond and Growth Equity Portfolios under an Investment
Advisory agreement. Monitor Capital Advisors Inc. ("Monitor") acts as
investment adviser to Indexed Equity Portfolio under an Investment Advisory
Agreement. Monitor is a registered investment adviser, a wholly-owned
subsidiary of NYLIFE Inc. and an indirect wholly-owned subsidiary of New York
Life.
NYLIAC is Administrator for the Company.
The Company, on behalf of each Fund, pays the Advisers and Administrator a
monthly fee for the services performed and the facilities furnished at an
approximate annual rate of the average daily net assets of each Fund as
follows:
<TABLE>
<CAPTION>
ADVISER ADMINISTRATOR
------- -------------
<S> <C> <C>
Capital Appreciation Portfolio............................ .36% .20%
Cash Management Portfolio................................. .25% .20%
Government Portfolio...................................... .30% .20%
High Yield Corporate Bond Portfolio....................... .30% .20%
International Equity Portfolio............................ .60% .20%
Total Return Portfolio.................................... .32% .20%
Value Portfolio........................................... .36% .20%
Bond Portfolio............................................ .25% .20%
Growth Equity Portfolio................................... .25% .20%
Indexed Equity Portfolio.................................. .10% .20%
</TABLE>
The Administrator has voluntarily agreed to assume the Funds' operating
expenses through December 31, 1996, which on an annualized basis exceed the
percentages indicated below, after which, the voluntary expense limitation may
be terminated at any time.
109
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<S> <C>
Capital Appreciation Portfolio............................................. .73%
Cash Management Portfolio.................................................. .62%
Government Portfolio....................................................... .67%
High Yield Corporate Bond Portfolio........................................ .67%
International Equity Portfolio............................................. .97%
Total Return Portfolio..................................................... .69%
Value Portfolio............................................................ .73%
Bond Portfolio............................................................. .62%
Growth Equity Portfolio.................................................... .62%
Indexed Equity Portfolio................................................... .47%
</TABLE>
In connection with the expense limitation the Administrator assumed certain
of the expenses of the Funds for the six months ended June 30, 1996 as shown
on the Statement of Operations.
(B)
DISTRIBUTOR. NYLIFE Distributors Inc. ("NYLIFE Distributors"), a wholly-owned
subsidiary of NYLIFE Inc. and an indirect wholly-owned subsidiary of New York
Life serves as the Company's distributor and principal underwriter (the
"Distributor") pursuant to a Distribution agreement. NYLIFE Distributors is
not obligated to sell any specific amount of the Company's shares, and
receives no compensation from the Company pursuant to the Distribution
Agreement.
(C)
DIRECTORS FEES. Directors, other than those affiliated with New York Life,
MacKay-Shields, Monitor, NYLIFE Distributors or NYLIFE Securities, are paid an
annual fee of $16,000 and $750 for each Board meeting attended plus
reimbursement for travel and out-of-pocket expenses. The Company allocates
this expense in proportion to the net assets of the respective Funds.
(D)
CAPITAL. At June 30, 1996 NYLIAC held shares of each Portfolio with a net
asset value as follows:
<TABLE>
<S> <C>
High Yield Corporate Bond Portfolio................................ $11,818,096
International Equity Portfolio..................................... 11,354,223
Value Portfolio.................................................... 6,308,613
</TABLE>
(E)
RECORDKEEPING FEES. NYLIAC provides recordkeeping services for Cash
Management, Bond and Growth Equity Portfolios. For the four months ended April
30, 1996, the Portfolios accrued recordkeeping fees as follows:
<TABLE>
<S> <C>
Cash Management Portfolio............................................. $ 5,223
Bond Portfolio........................................................ 111,341
Growth Equity Portfolio............................................... 208,472
</TABLE>
Effective May 1, 1996, these fees are paid by NYLIAC.
110
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
NOTE 4--Federal Income Tax:
- -------------------------------------------------------------------------------
At December 31, 1995, for Federal income tax purposes, capital loss
carryforwards, as shown in the table below, are available to the extent
provided by regulations to offset future realized gains of each respective
Portfolio through the years indicated. To the extent that these loss
carryforwards are used to offset future capital gains, it is probable that the
capital gains so offset will not be distributed to shareholders. Additionally,
as shown in the table below, certain Funds intend to elect, to the extent
provided by regulations, to treat certain qualifying capital losses that arose
during the year ended December 31, 1995 as if they arose on January 1, 1996.
<TABLE>
<CAPTION>
CAPITAL LOSS CAPITAL LOSS
AVAILABLE THROUGH AMOUNT (000'S) DEFERRED (000'S)
----------------- -------------- ----------------
<S> <C> <C> <C>
Capital Appreciation Portfo-
lio......................... 2001 $ 116
2002 3,049
2003 3,133
------
$6,298 $1,038
====== ======
Cash Management Portfolio.... 2003 $ 1 $ 0
====== ======
Government Portfolio......... 2002 $3,261 $ 0
====== ======
High Yield Corporate Bond
Portfolio................... $ 0 $ 82
====== ======
International Equity Portfo-
lio......................... 2003 $ 24 $ 3
====== ======
Total Return Portfolio....... 2002 $4,183 $ 0
====== ======
Value Portfolio.............. $ 0 $ 3
====== ======
Bond Portfolio............... 2002 $2,748 $ 0
====== ======
</TABLE>
- -------------------------------------------------------------------------------
NOTE 5--Financial Investments:
- -------------------------------------------------------------------------------
High Yield Corporate Bond Portfolio invests primarily in high yield bonds.
These bonds may involve special risks in addition to the risks associated with
investment in higher rated debt securities. High yield bonds may be more
susceptible to real or perceived adverse economic and competitive industry
conditions than higher grade bonds. Also, the secondary market on which high
yield bonds are traded may be less liquid than the market for higher grade
bonds.
Each Portfolio may enter into repurchase agreements to earn income. In the
event of the bankruptcy of the seller or the failure of the seller to
repurchase the securities as agreed, a Portfolio could suffer losses,
including loss of interest on or principal of the security and costs
associated with delay and enforcement of the repurchase agreement.
- -------------------------------------------------------------------------------
NOTE 6--Acquisition of Money Market Portfolio:
- -------------------------------------------------------------------------------
On March 31, 1994, Cash Management Portfolio acquired all the net assets of
Money Market Portfolio pursuant to a plan of reorganization approved by the
shareholders of Cash Management and Money Market Portfolios on December 14,
1993. The acquisition was accomplished by a tax-free exchange of 37,601,126
shares of Cash Management Portfolio (valued at $37,601,126) for the 3,759,941
shares of Money Market Portfolio outstanding on March 31, 1994. Money Market's
net assets at that date ($37,597,525) were combined with those of Cash
Management Portfolio. The aggregate net assets of Cash Management and Money
Market Portfolios immediately before the acquisition were $28,516,066 and
$37,597,525, respectively. The combined net assets of Cash Management and
Money Market Portfolios immediately after the acquisition were $66,113,591.
111
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 7--Redemption by NYLIAC of Initial Investment:
- --------------------------------------------------------------------------------
On February 21, 1995, NYLIAC redeemed all of its initial investment in Capital
Appreciation, Cash Management, Government and Total Return Portfolios. In
connection with the redemption of the initial shares, NYLIAC reimbursed each of
the above listed Funds $28,042, which represented the unamortized deferred
organization expense of the respective Funds on the date of the redemption.
Additionally, between February 14, 1995 and February 21, 1996, NYLIAC redeemed
all of its initial investment in Indexed Equity Portfolio. NYLIAC reimbursed
Indexed Equity Portfolio $20,892 which represented the proportionate amount of
the unamortized deferred organization expense which the number of shares
redeemed bears to the total number of initial shares purchased between the
dates above.
112
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
(THIS PAGE INTENTIONALLY LEFT BLANK)
113
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 8--Purchases and Sales of Securities (in 000's):
- --------------------------------------------------------------------------------
During the six month period ended June 30, 1996, purchases and sales of
securities, other than securities subject to repurchase transactions and short-
term securities, were as follows:
<TABLE>
<CAPTION>
HIGH YIELD INTERNATIONAL
CAPITAL APPRECIATION GOVERNMENT CORPORATE BOND EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Government Securi-
ties................... $ -- $ -- $131,445 $117,160 $ 6,703 $ -- $ -- $ --
All others.............. 110,920 23,574 -- -- 85,087 45,670 11,771 2,142
------------------------------------------------------------------------------
Total................... $ 110,920 $ 23,574 $131,445 $117,160 $91,790 $45,670 $11,771 $2,142
------------------------------------------------------------------------------
------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
NOTE 9--Capital Share Transactions (in 000's):
- --------------------------------------------------------------------------------
Transactions in capital shares for the six month period ended June 30, 1996 and
the year ended December 31, 1995 were as follows:
<TABLE>
<CAPTION>
HIGH YIELD
CAPITAL APPRECIATION CASH MANAGEMENT GOVERNMENT CORPORATE BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
1996 1995 1996 1995 1996 1995 1996 1995 (A)
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold............. 6,162 6,644 123,075 128,846 1,208 1,197 5,733 2,979
Shares issued in
reinvestment of
dividends and
distributions.......... -- 62 2,161 3,588 -- 448 -- 167
-------------------------------------------------------------------
6,162 6,706 125,236 132,434 1,208 1,645 5,733 3,146
Shares redeemed......... 139 874 105,277 115,710 544 1,859 103 41
-------------------------------------------------------------------
Net increase (decrease). 6,023 5,832 19,959 16,724 664 (214) 5,630 3,105
-------------------------------------------------------------------
-------------------------------------------------------------------
</TABLE>
- --------
(a)For the period May 1, 1995 (Commencement of Operations) through December 31,
1995.
114
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN VALUE BOND GROWTH EQUITY INDEXED EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$188,232 $181,832 $ -- $ -- $71,453 $63,332 $ -- $ -- $ -- $ --
95,350 40,680 38,379 6,353 14,772 10,877 294,426 282,474 30,714 1,197
- -------------------------------------------------------------------------------------------
$283,582 $222,512 $38,379 $6,353 $86,225 $74,209 $294,426 $282,474 $30,714 $1,197
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
EQUITY TOTAL RETURN VALUE BOND GROWTH EQUITY INDEXED EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
1996 1995 (A) 1996 1995 1996 1995 (A) 1996 1995 1996 1995 1996 1995
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
928 414 4,709 4,196 3,216 1,621 1,073 1,732 1,829 2,118 3,561 2,580
15 67 -- 345 4 17 -- 1,080 -- 2,286 40 367
- ---------------------------------------------------------------------------------------------
943 481 4,709 4,541 3,220 1,638 1,073 2,812 1,829 4,404 3,601 2,947
19 46 169 1,404 30 28 1,306 2,397 1,184 2,060 1,576 1,259
- ---------------------------------------------------------------------------------------------
924 435 4,540 3,137 3,190 1,610 (233) 415 645 2,344 2,025 1,688
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
115
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
116
<PAGE>
[ARTWORK APPEARS HERE]
LIFESTAGES/SM/ SEPARATE ACCOUNT AND
NEW YORK LIFE MFA SERIES FUND, INC.
This is a Report by the MFA Series Fund, Inc., for the general
information of LifeStages/SM/ policyowners. It must be accompanied or
preceded by a current prospectus if it is given to anyone who is not an
owner of a LifeStages/SM/ policy. This Report does not offer for sale or
solicit orders to purchase securities.
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
(A DELAWARE CORPORATION)
51 MADISON AVENUE
NEW YORK, NY 10010
Issued by: New York Life Insurance and Annuity Corporation
Distributed by: New York Life Distributors Inc.
Member NASD
[RECYCLING LOGO APPEARS HERE]
Printed on recycled paper 18530(896)
