<PAGE> 1
AGA SERIES TRUST
ANNUAL REPORT
DECEMBER 31, 1998
The information in this report is intended for informational purposes. This
report is not authorized for distribution to prospective investors unless
preceded or accompanied by current prospectuses for AGA Series Trust and AGA
Separate Account A. The prospectuses contain important information about
American General Annuity Insurance Company and AGA Separate Account A. Please
read the prospectuses carefully before investing.
<PAGE> 2
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<PAGE> 3
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion of the 1998 performance of the Portfolios within
AGA Series Trust supplements the financial statements and related notes found
elsewhere in this report.
The total returns reported are net of portfolio operating expenses but do
not reflect any insurance or administrative charges that apply to the separate
account. Furthermore, the portfolios' performances reflect the absorption of
certain fund expenses by American General Annuity Insurance Company. Had these
expenses not been absorbed, the total returns would have been lower. Performance
data represent past performance and neither guarantee nor predict future
results. The investment return and accumulation value of the portfolios will
fluctuate, and the redemption value may be higher or lower than an investor's
original cost.
As with all money market funds, an investment in the State Street Global
Advisors Money Market Portfolio is neither insured nor guaranteed by the U.S.
Government. Although the Portfolio strives to maintain a stable net asset value
of $1.00 per share, there can be no assurance that this objective will be met.
CREDIT SUISSE GROWTH AND INCOME PORTFOLIO
(formerly BEA Growth & Income Portfolio)
The total return for 1998 was 14.2%, lagging the 28.6% and 8.7% of its
benchmarks, the Standard and Poor's 500 Stock Index ("S&P 500 Index") and Lehman
Aggregate Bond Index ("Lehman Aggregate"), respectively.
Nineteen ninety-eight was a difficult year for active equity managers who
seek to maintain broadly diversified portfolios because the performances of a
few of the largest stocks in the S&P 500 Index were responsible for a
disproportionate share of the overall market's gain. Notwithstanding that
large-cap bias, the manager continued to concentrate holdings in mid-cap
companies because he believes, based on long experience, that maintaining a
diversified portfolio of mid-cap equities will provide better returns in the
long run. Furthermore, the Portfolio suffered during the year because it was
underweight in two of the market's strongest sectors, technology (especially
Internet-related) and financial stocks.
The strategy in the equity portion of the Portfolio involves top-down
sector selection combined with bottom-up stock selection within sectors. The
manager believes that three factors drove the bull market in 1998: increased
corporate earnings, rising dividends, and improved P/E ratios. He does not
believe that these factors can continue to produce favorable results, so he
became more cautious in his stock selection and at mid year commenced changing
the portfolio mix from 55% equities/45% debt securities to 45% equities/40%
debt/15% cash at year end. The manager held the relatively-large cash position
because he was wary of both the debt and equity markets.
On the fixed-income side, 1998 was a very difficult year. Driven by
financial instability in many of the world's markets, investors engaged in
several classic "flight to quality" rallies that favored only the safest
securities. As a result, yield spread was far wider than normal during most of
the year, and U.S. Treasuries -- considered the world standard of
creditworthiness -- significantly outperformed all other debt sectors. During
the year, the fixed income manager maintained a slightly long average maturity
and an overweight in mortgage holdings in an effort to attain yield. That
overweight (and corresponding underweight in Treasuries) caused the fixed income
portion of the Portfolio to slightly underperform the Lehman Aggregate.
CREDIT SUISSE INTERNATIONAL EQUITY PORTFOLIO
In 1998 the International Equity Portfolio's total return was a negative
0.9%, significantly worse than the 20.0% return of its benchmark, the Morgan
Stanley Composite Index -- Europe, Australia & Far East (EAFE).
The poor performance has offset earlier superior performance, so that the
Portfolio's inception-to-date return of 7.3% now lags the EAFE benchmark's
10.8%. The manager attributes the current disappointing performance to the same
factors that produced the earlier success; i.e., overweight investment in
emerging
1
<PAGE> 4
markets, principally Eastern and Central Europe. The performance during the year
was driven by the Portfolio's overweight position in the poor-performing
emerging markets (outside of Asia -- the manager anticipated the problems there
and was largely out of that market before the crash). The problem was compounded
by the corresponding underweight in core Europe, the strongest of the world's
markets. The manager erred early in the year when he concluded that Asia's
problems would not depress emerging markets elsewhere. He stuck to his basic
strategy of overweighting investment in emerging markets because he believed
that is where his expertise added the most value. Although the individual stocks
owned did well within their respective markets, the flight of capital out of
emerging markets everywhere was disastrous for the Portfolio. In short, the
manager severely underestimated the systematic risk of straying so far from the
EAFE weightings.
In order to deal with the problems, in the second half of the year the
Portfolio was conservatively restructured with weightings that are much closer
to the EAFE. The emerging market exposure was reduced to less than 10% of the
Portfolio, the Western European exposure was increased and the exposure in Japan
was increased slightly. At year end the Portfolio was overweight in Western
Europe but was still underweight in Japan (although by a smaller margin than
earlier in the year). The manager is not optimistic about Japan, but believes it
dangerous to be so far off the benchmark because he expects the market to move
up very rapidly when it does turn. The manager intends to stick much closer to
the EAFE weightings in the future, and so expects future performance to more
closely parallel the benchmark.
ELITEVALUE PORTFOLIO
(formerly EliteValue Asset Allocation Portfolio)
Although the EliteValue Portfolio objectives and policies permit the
manager to invest in all asset categories, the manager has consistently kept it
almost entirely invested in equities, a strategy that has generally proved very
successful. The Portfolio consists of a relatively small number of stocks of
companies the manager believes will show superior performance, and the turnover
rate is very low. The manager continues to invest in a limited number of
businesses that he feels are inherently worth more than their asking prices and
that will generate excess cash flow that will enhance long-term value for the
shareholders; i.e., the focus is on individual companies prospective long-term
potential rather than on stock market fluctuations.
The Portfolio's 1998 total return of 6.7% fell short of its benchmarks, the
S&P 500 Index and the Lipper Flexible Portfolio Funds Index, which registered
28.6% and 16.5%, respectively. However, the inception-to-date return of 17.9%
remained slightly above the marks. Performance suffered because the manager's
value style of investing was generally out of favor in 1998. Additionally, the
performance was hurt by weakness in stocks of companies doing business in
international markets, and by the fact that the Portfolio's stock selection
process lead the manager away from the technology and electric utility sectors,
two of the strongest performing sectors in 1998.
Among the Portfolio's largest holdings, McDonalds and Freddie Mac had great
success. Major disappointments were Du Pont, Wells Fargo, and Boeing. Boeing
continued to have difficulty dealing with its problems, but the manager believed
that in the long run a well-managed Boeing would be a very strong performer and
good investment. The manager sold Lockheed Martin, Tennoco and Monsanto and
bought ITT, Excel, and Phillip Morris.
The manager is disappointed in his current performance. Nevertheless, he
still strives to attain his goal of a 12-15% return in the long run. He
continues to hold a substantial cash position, as he is still wary of the market
and hasn't found new names that he feels warrant heavy investment.
SALOMON U.S. GOVERNMENT SECURITIES PORTFOLIO
The 1998 total return was 7.5%, lagging its benchmark, One-to-Ten Year
Treasury Index by 1.0%. As noted above, 1998 was a very volatile year in
fixed-income markets. The financial instability in many of the world's markets
caused investors to seek only the safest securities. As a result, the total
return on U.S. Treasuries -- considered the world standard of
creditworthiness -- significantly outperformed all other debt sectors.
2
<PAGE> 5
It is generally difficult for a government bond portfolio to significantly
outperform its index, so the manager maintained a slightly long maturity and an
overweight position in mortgage securities in order to capture yield. It was
that overweight (and corresponding underweight in Treasuries) that caused the
Portfolio to underperform its benchmark.
On January 6, 1999, Salomon Brothers Asset Management, Inc. notified the
Adviser of the termination of its Sub-Advisory relationship as of March 8, 1999.
STATE STREET GLOBAL ADVISORS GROWTH EQUITY PORTFOLIO
(formerly Global Advisors Growth Equity Portfolio)
The Growth Equity Portfolio's 1998 return of 21.6% lagged the 28.6% of its
benchmark, the S&P 500 Index. The Portfolio is an enhanced index fund, that is,
one that tracks the S&P 500 Index by industry classification, but attempts to
pick the best individual stocks within each industry.
Performance suffered in 1998 from the fact that most of the positive
benchmark performance resulted from strong performances by the very largest
"mega-cap" stocks. The mid-cap sector, where most of the Portfolio's assets are
concentrated, was left behind. Additionally, because of the Portfolio's small
size, it held a relatively large cash position, a factor that hampered
performance in a year of rising stock prices.
State Street Global Advisors continues to try to improve performance by
enhancing its computer model. Specifically, it has revised its industry
classifications, and is now linking industries that show similar characteristics
into 24 "clusters." It has also refined its method of following "lead analysts"
for individual stocks and for entire industries. The management team believes
that the modeling process must be constantly enhanced in order to stay ahead of
the competition. That is, if all players in the market have the same analytical
capacity, nobody can have an advantage.
STATE STREET GLOBAL ADVISORS MONEY MARKET PORTFOLIO
(formerly Global Advisors Money Market Portfolio)
The Money Market Portfolio's total return of 5.2% for 1998 exceeded its
benchmark, the 91-day Treasury Auction Average Index, as it has generally done
in recent periods. The Portfolio's small size and volatility (most purchases
initially pass thorough the Portfolio during the "policy free look" period) make
it difficult for the manager to make economic trades while maintaining
sufficient diversity and liquidity.
VAN KAMPEN EMERGING GROWTH PORTFOLIO
(formerly Van Kampen American Capital Emerging Growth Portfolio)
Capped off by its manager's "best quarter ever" in the fourth quarter, the
Emerging Growth Portfolio's 1998 return of 37.4% more than doubled the Russell
Mid-Cap Growth's 17.9% and nearly tripled the Lipper Mid-Cap Fund's 13.9%.
During 1998 the performance was boosted by a heavy overweight position in
the technology sector. Technologies comprised 40% of total assets at year end.
Within that sector, Internet stocks such as AOL and Yahoo were particular
successes. Additionally, heavy positions in "Internet infrastructure" names,
such as Cisco and Network Solutions, also contributed favorably. During the year
the manager increased (already-overweight) holdings in the strong health care
and biotech sectors and bought selectively in electronic and specialty
retailing. Holding nothing in the poor-performing energy sector also proved to
be beneficial.
The Portfolio continues to be structured in a defensive position, and the
manager attributes a large part of his outperformance to the fact that the
Portfolio has avoided any disasters. He believes that his long-term strategy of
staying fully invested in stocks with positive fundamentals continues to be the
right strategy. He still expects that a "snap back" in the valuations of small
and mid-cap issues relative to the very large-cap issues that have led the
market in recent quarters will ultimately benefit future performance.
3
<PAGE> 6
PERFORMANCE GRAPHS
The following graphs illustrate the performance of $10,000 invested in each
of the portfolios in comparison to their respective benchmark returns. The
charts assume investment at each portfolio's inception date and track
performance though December 31, 1998.
4
<PAGE> 7
[GRAPH]
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
----------------------------------------------------
ONE SINCE
YEAR INCEPTION
----------------------------------------------------
<S> <C> <C>
Growth and Income Portfolio 14.16 17.89
S&P 500 Index 28.58 29.03
Lehman Aggregate 8.69 7.86
S&P 500/Lehman 18.63 18.45
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998 FUND FACTS
--------------------------------------------------
<S> <C>
Date of Inception 10/20/95
Net Assets ($000) $16,713
Net Asset Value per Share $ 13.89
Manager Credit Suisse
Asset Management
</TABLE>
* The portfolio total returns reported are net of portfolio operating expenses
but do not reflect any insurance or administrative charges that apply to the
separate account. Furthermore, the portfolio's performance reflects the
absorption of certain fund expenses by American General Annuity Insurance
Company. Had these expenses not been absorbed, the total returns would have
been lower. Performance data represent past performance and neither guarantee
nor predict future results. The investment return and accumulation value of
the portfolios will fluctuate, and the redemption value may be higher or lower
than an investor's original cost. Neither the S&P 500 Index nor the Lehman
Aggregate, nor its composite include any expenses.
5
<PAGE> 8
[GRAPH]
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
----------------------------------------------------
ONE SINCE
YEAR INCEPTION
----------------------------------------------------
<S> <C> <C>
International Equity Portfolio (0.86) 7.27
Morgan Stanley -- EAFE 20.00 10.82
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998 FUND FACTS
-----------------------------------------------------
<S> <C>
Date of Inception 10/20/95
Net Assets ($000) $5,996
Net Asset Value per Share $10.23
Manager Credit Suisse Asset
Management, Ltd.
</TABLE>
* The portfolio total returns reported are net of portfolio operating expenses
but do not reflect any insurance or administrative charges that apply to the
separate account. Furthermore, the portfolio's performance reflects the
absorption of certain fund expenses by American General Annuity Insurance
Company. Had these expenses not been absorbed, the total returns would have
been lower. Performance data represent past performance and neither guarantee
nor predict future results. The investment return and accumulation value of
the portfolios will fluctuate, and the redemption value may be higher or lower
than an investor's original cost. The Morgan Stanley Composite Index -- EAFE
does not include any expenses.
6
<PAGE> 9
[GRAPH]
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
----------------------------------------------------
ONE SINCE
YEAR INCEPTION
----------------------------------------------------
<S> <C> <C>
EliteValue Portfolio 6.72 17.86
S&P 500 Index 28.58 16.27
Lipper Flex 16.52 16.27
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998 FUND FACTS
---------------------------------------------------
<S> <C>
Date of Inception 1/2/96
Net Assets $20,620
Net Asset Value per Share $ 14.95
Manager OpCap Advisors
</TABLE>
* The portfolio total returns reported are net of portfolio operating expenses
but do not reflect any insurance or administrative charges that apply to the
separate account. Furthermore, the portfolio's performance reflects the
absorption of certain fund expenses by American General Annuity Insurance
Company. Had these expenses not been absorbed, the total returns would have
been lower. Performance data represent past performance and neither guarantee
nor predict future results. The investment return and accumulation value of
the portfolios will fluctuate, and the redemption value may be higher or lower
than an investor's original cost. The S&P 500 Index does not include any fund
expenses.
7
<PAGE> 10
[GRAPH]
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
----------------------------------------------------
ONE SINCE
YEAR INCEPTION
----------------------------------------------------
<S> <C> <C>
U.S. Government Securities 7.49 6.79
Portfolio
Treasury 1 to 10 Yr. Index 8.49 7.38
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998 FUND FACTS
----------------------------------------------------
<S> <C>
Date of Inception 2/6/96
Net Assets $8,679
Net Asset Value per Share $10.23
Manager Salomon Brothers
Asset Management, Inc.
</TABLE>
* The portfolio total returns reported are net of portfolio operating expenses
but do not reflect any insurance or administrative charges that apply to the
separate account. Furthermore, the portfolio's performance reflects the
absorption of certain fund expenses by American General Annuity Insurance
Company. Had these expenses not been absorbed, the total returns would have
been lower. Performance data represent past performance and neither guarantee
nor predict future results. The investment return and accumulation value of
the portfolios will fluctuate, and the redemption value may be higher or lower
than an investor's original cost. The Treasury 1-to-10 Year Index does not
include any fund expenses.
8
<PAGE> 11
[GRAPH]
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
----------------------------------------------------
ONE SINCE
YEAR INCEPTION
----------------------------------------------------
<S> <C> <C>
Growth Equity Portfolio 21.60 24.74
S&P 500 Index 28.58 28.33
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998 FUND FACTS
----------------------------------------------------
<S> <C>
Date of Inception 10/20/95
Net Assets $15,500
Net Asset Value per Share $ 16.57
Manager State Street
Global Advisors
</TABLE>
* The portfolio total returns reported are net of portfolio operating expenses
but do not reflect any insurance or administrative charges that apply to the
separate account. Furthermore, the portfolio's performance reflects the
absorption of certain fund expenses by American General Annuity Insurance
Company. Had these expenses not been absorbed, the total returns would have
been lower. Performance data represent past performance and neither guarantee
nor predict future results. The investment return and accumulation value of
the portfolios will fluctuate, and the redemption value may be higher or lower
than an investor's original cost. The S&P 500 Stock Index does not include any
fund expenses.
9
<PAGE> 12
[GRAPH]
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
----------------------------------------------------
ONE SINCE
YEAR INCEPTION
----------------------------------------------------
<S> <C> <C>
Money Market Portfolio 5.23 5.30
91-day Treasury Index 4.88 5.09
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998 FUND FACTS
----------------------------------------------------
<S> <C>
Date of Inception 10/10/95
Net Assets $9,254
Net Asset Value per Share $ 1.00
Manager State Street
Global Advisors
</TABLE>
* The portfolio total returns reported are net of portfolio operating expenses
but do not reflect any insurance or administrative charges that apply to the
separate account. Furthermore, the portfolio's performance reflects the
absorption of certain fund expenses by American General Annuity Insurance
Company. Had these expenses not been absorbed, the total returns would have
been lower. Performance data represent past performance and neither guarantee
nor predict future results. The investment return and accumulation value of
the portfolios will fluctuate, and the redemption value may be higher or lower
than an investor's original cost. The 91-day Treasury Index does not include
any expenses.
As with all money market funds, an investment in the Global Advisors The Money
Market Portfolio is neither insured nor guaranteed by the U.S. Government.
Although the Portfolio strives to maintain a stable net asset value of $1.00
per share, there can be no assurance that this objective will be met.
10
<PAGE> 13
[GRAPH]
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
----------------------------------------------------
ONE SINCE
YEAR INCEPTION
----------------------------------------------------
<S> <C> <C>
Emerging Growth Portfolio 37.43 25.38
Russell Mid Cap Growth 17.86 19.81
Lipper Mid Cap 13.92 16.49
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998 FUND FACTS
----------------------------------------------------
<S> <C>
Date of Inception 1/2/96
Net Assets $11,674
Net Asset Value per Share $ 19.05
Manager Van Kampen
Asset Management Inc.
</TABLE>
* The portfolio total returns reported are net of portfolio operating expenses
but do not reflect any insurance or administrative charges that apply to the
separate account. Furthermore, the portfolio's performance reflects the
absorption of certain fund expenses by American General Annuity Insurance
Company. Had these expenses not been absorbed, the total returns would have
been lower. Performance data represent past performance and neither guarantee
nor predict future results. The investment return and accumulation value of
the portfolios will fluctuate, and the redemption value may be higher or lower
than an investor's original cost. The Russell Mid Cap Growth does not include
any expenses.
11
<PAGE> 14
AGA SERIES TRUST
FINANCIAL SCHEDULES
DECEMBER 31, 1998
<PAGE> 15
AGA SERIES TRUST
CREDIT SUISSE GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ---------- -----------
<S> <C> <C>
COMMON STOCKS -- 45.7%
AIR TRAVEL -- 0.9%
AMR Corporation(a)..................................... 2,500 $ 148,438
-----------
BROADCASTING -- 2.8%
Fox Entertainment Group Incorporated(a)................ 10,000 251,875
MediaOne Group Incorporated............................ 4,500 211,500
-----------
463,375
-----------
BUSINESS SERVICES -- 1.7%
Automatic Data Processing Incorporated................. 3,500 280,656
-----------
CHEMICALS -- 3.1%
Monsanto Company....................................... 6,000 285,000
Scotts Company(a)...................................... 6,000 230,625
-----------
515,625
-----------
COMMUNICATION SERVICES -- 1.3%
AirTouch Communications Incorporated(a)................ 3,000 216,375
-----------
COMPUTERS & BUSINESS EQUIPMENT -- 3.7%
DST Systems Incorporated(a)............................ 2,000 114,125
Sun Microsystems Incorporated(a)....................... 3,000 256,875
Symbol Technologies Incorporated....................... 4,000 255,750
-----------
626,750
-----------
CONTAINERS & GLASS -- 1.1%
Owens Illinois Incorporated(a)......................... 6,000 183,750
-----------
DRUGS & HEALTH CARE -- 3.3%
Pharmacia & Upjohn Incorporated........................ 3,000 169,875
SmithKline Beecham PLC ADR............................. 3,000 208,500
Warner-Lambert Company................................. 2,400 180,450
-----------
558,825
-----------
ELECTRIC UTILITIES -- 1.2%
Public Service Enterprise Group........................ 5,000 200,000
-----------
ELECTRICAL EQUIPMENT -- 1.1%
Emerson Electric Company............................... 3,000 181,500
-----------
FINANCE & BANKING -- 0.1%
Citigroup Incorporated................................. 250 13,250
-----------
FOOD & BEVERAGES -- 2.8%
Hershey Foods Corporation.............................. 2,500 155,469
Sysco Corporation...................................... 5,000 137,187
Wrigley (WM) Jr. Company............................... 2,000 179,125
-----------
471,781
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-2
<PAGE> 16
AGA SERIES TRUST
CREDIT SUISSE GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ---------- -----------
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
INDUSTRIAL MACHINERY -- 1.8%
Tyco International Limited............................. 4,000 $ 301,750
-----------
INSURANCE -- 2.4%
American International Group Incorporated.............. 2,500 241,563
CNA Financial Corporation(a)........................... 4,000 161,000
-----------
402,563
-----------
INTERNATIONAL OIL -- 1.3%
Exxon Corporation...................................... 3,000 219,375
-----------
MANUFACTURING -- 2.0%
General Electric Company............................... 1,600 163,300
Illinois Tool Works Incorporated....................... 3,000 174,000
-----------
337,300
-----------
MULTIMEDIA -- 2.5%
Media General Incorporated............................. 4,000 212,000
Time Warner Incorporated............................... 3,400 211,012
-----------
423,012
-----------
PUBLISHING -- 0.7%
Hollinger International Incorporated................... 8,000 111,500
-----------
REAL ESTATE -- 0.4%
TriNet Corporate Realty Trust Incorporated............. 2,500 66,875
-----------
RETAIL TRADE -- 1.2%
Costco Companies Incorporated(a)....................... 2,800 202,125
-----------
SOFTWARE -- 2.1%
Microsoft Corporation(a)............................... 2,500 346,719
-----------
TELECOMMUNICATIONS -- 6.1%
AT&T Corporation....................................... 6,000 451,500
COMSAT Corporation..................................... 5,000 180,000
MCI WorldCom Incorporated(a)........................... 3,000 215,250
Teligent Incorporated(a)............................... 6,000 172,500
-----------
1,019,250
-----------
TRANSPORTATION -- 2.1%
FDX Corporation(a)..................................... 2,500 222,500
Norfolk Southern Corporation........................... 4,000 126,750
-----------
349,250
-----------
TOTAL COMMON STOCKS -- (Cost $6,073,582).......... 7,640,044
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-3
<PAGE> 17
AGA SERIES TRUST
CREDIT SUISSE GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ---------- -----------
<S> <C> <C>
PREFERRED STOCK -- 0.4%
FINANCE & BANKING -- 0.3%
California Federal Preferred Capital Corporation....... 1,075 $ 27,211
NB Capital Corporation................................. 800 20,850
-----------
48,061
-----------
FINANCIAL SERVICES -- 0.1%
Lehman Brothers Holdings Incorporated.................. 310 13,640
-----------
TOTAL PREFERRED STOCK -- (Cost $64,063)........... 61,701
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
----------
<S> <C> <C>
MUNICIPALS -- 0.8%
Florida State Board of Education
4.75%, 06/01/2023.................................... $ 10,000 9,732
Illinois State
4.75%, 06/01/2023.................................... 15,000 14,474
Massachusetts Bay Transport Authority
4.75%, 03/01/2021.................................... 10,000 9,487
Massachusetts Water Resources Authority
4.75%, 08/01/2027.................................... 10,000 9,419
Metropolitan Transportation Authority
4.75%, 04/01/2028.................................... 15,000 14,337
Municipal Electric Authority
5.00%, 01/01/2026.................................... 30,000 29,563
Nevada State
4.75%, 05/15/2026.................................... 25,000 23,821
New York City Municipal Water Finance Authority
4.75%, 06/15/2025.................................... 10,000 9,578
Ohio State Turnpike Commission
4.75%, 02/15/2028.................................... 10,000 9,693
Triborough Bridge & Tunnel Authority
4.75%, 01/01/2024.................................... 10,000 9,618
-----------
TOTAL MUNICIPALS -- (Cost $137,562)............... 139,722
-----------
CORPORATE BONDS -- 7.8%
AIR TRAVEL -- 0.5%
Continental Airlines Incorporated
9.50%, 12/15/2001.................................... 20,000 20,900
Northwest Airlines Incorporated
7.63%, 03/15/2005.................................... 40,000 37,918
U. S. Air Incorporated
9.63%, 02/01/2001.................................... 25,000 25,931
-----------
84,749
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-4
<PAGE> 18
AGA SERIES TRUST
CREDIT SUISSE GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
- -------------------- ---------- -----------
<S> <C> <C>
CORPORATE BONDS -- (CONTINUED)
BROADCASTING -- 0.5%
Belo (A.H.) Corporation
6.88%, 06/01/2002.................................... $ 20,000 $ 20,495
Fox Liberty Networks LLC
8.88%, 08/15/2007.................................... 30,000 30,600
Tele-Communications Incorporated
6.34%, 02/01/2002.................................... 15,000 15,364
Turner Broadcasting Systems Incorporated
7.40%, 02/01/2004.................................... 25,000 26,809
-----------
93,268
-----------
COMPUTERS & BUSINESS EQUIPMENT -- 0.2%
Seagate Technology Incorporated 7.45%, 03/01/2037...... 30,000 29,066
-----------
DRUGS & HEALTH CARE -- 0.7%
Columbia/HCA Healthcare Corporation 8.36%,
04/15/2024............................................ 30,000 31,352
Merck & Company Incorporated 5.76%, 05/03/2037......... 80,000 83,407
-----------
114,759
-----------
ELECTRIC UTILITIES -- 0.7%
Beaver Valley II Funding Corporation 9.00%,
06/01/2017............................................ 30,000 34,614
Connecticut Light & Power Company 7.75%, 06/01/2002.... 10,000 10,322
7.88%, 10/01/2024.................................... 10,000 10,374
Niagara Mohawk Power Corporation 8.75%, 04/01/2022..... 20,000 21,810
North Atlantic Energy Corporation 9.05%, 06/01/2002.... 19,000 19,741
Texas Electrical Capital 8.18%, 01/30/2037............. 20,000 22,363
-----------
119,224
-----------
FINANCE & BANKING -- 1.8%
AT&T Capital Corporation 6.41%, 08/13/1999............. 10,000 10,046
6.48%, 12/03/1999.................................... 25,000 25,277
6.47%, 12/03/2099.................................... 15,000 15,107
Bay View Capital Corporation 9.13%, 08/15/2007......... 15,000 14,475
Bellsouth Capital Funding Corporation 6.04%,
11/15/2026............................................ 80,000 83,252
</TABLE>
The accompanying notes are an integral part of the financial statements
F-5
<PAGE> 19
AGA SERIES TRUST
CREDIT SUISSE GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
- -------------------- ---------- -----------
<S> <C> <C>
CORPORATE BONDS -- (CONTINUED)
Chase Manhattan Corporation 6.38%, 04/01/2008.......... $ 20,000 $ 20,700
6.75%, 09/15/2006.................................... 20,000 21,165
Citicorp 6.38%, 11/15/2008............................. 30,000 31,122
Compagnie Financiere de Paribas 6.95%, 07/22/2013...... 30,000 29,226
First Republic Bank 7.75%, 09/15/2012.................. 10,000 9,784
National Westminster Bancorporation 9.38%,
11/15/2003............................................ 10,000 11,460
The Money Store Trust 6.04%, 08/15/2017................ 25,000 25,013
-----------
296,627
-----------
HOTELS & RESTAURANTS -- 0.1%
Hilton Hotels Corporation 7.95%, 04/15/2007............ 20,000 20,723
INDUSTRIALS -- 0.6%
CSC Holdings Incorporated 7.88%, 12/15/2007............ 20,000 20,732
Dresser Industries Incorporated
7.60%, 08/15/2096.................................... 30,000 35,379
Ford Motor Company
6.63%, 10/01/2028.................................... 40,000 41,155
-----------
97,266
-----------
LEISURE TIME -- 0.8%
Time Warner Incorporated
6.85%, 01/15/2026.................................... 55,000 56,781
8.05%, 01/15/2016.................................... 25,000 29,225
9.13%, 01/15/2013.................................... 35,000 44,308
-----------
130,314
-----------
MINING -- 0.1%
Southern Coal & Iron Corporation
6.27%, 03/25/2019.................................... 25,000 25,139
-----------
PETROLEUM SERVICES -- 0.2%
Petroleum Geo-Services
7.13%, 03/30/2028.................................... 30,000 28,032
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-6
<PAGE> 20
AGA SERIES TRUST
CREDIT SUISSE GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
- -------------------- ---------- -----------
<S> <C> <C>
CORPORATE BONDS -- (CONTINUED)
TELECOMMUNICATIONS -- 1.4%
Diamond Cable Communications PLC
10.75%, 02/15/2007................................... $ 10,000 $ 7,100
GTE Corporation
6.84%, 04/15/2018.................................... 25,000 26,659
6.94%, 04/15/2028.................................... 40,000 43,442
MCI Communications Corporation
6.13%, 04/15/2002.................................... 15,000 15,240
Nextel Communications Incorporated
9.75%, 08/15/2004.................................... 35,000 33,950
Paging Network Incorporated
10.13%, 08/01/2007................................... 10,000 9,650
TCI Communications Financing III
9.65%, 03/31/2027.................................... 20,000 24,697
WorldCom Incorporated
6.95%, 08/15/2028.................................... 40,000 43,011
8.88%, 01/15/2006.................................... 30,000 32,681
-----------
236,430
-----------
TRANSPORTATION -- 0.2%
Norfolk Southern Corporation
7.05%, 05/01/2037.................................... 35,000 37,864
-----------
TOTAL CORPORATE BONDS -- (Cost $1,286,095)........ 1,313,461
-----------
FOREIGN CORPORATE BONDS -- 0.9%
FINANCE & BANKING -- 0.6%
Credit Lyonnais
6.56%, 09/19/2049.................................... 40,000 33,300
Fuji Finance Caymon Limited
7.30%, 03/29/2049.................................... 20,000 13,425
6.55%, 08/29/2049.................................... 50,000 32,562
Sparbanken Sverige
7.50%, 11/29/2049.................................... 10,000 10,013
-----------
89,300
-----------
FINANCIAL SERVICES -- 0.1%
Auxiliaire Credit Foncier
5.00%, 10/18/2002.................................... 10,000 9,588
5.28%, 09/25/2002.................................... 10,000 9,484
-----------
19,072
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-7
<PAGE> 21
AGA SERIES TRUST
CREDIT SUISSE GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
- -------------------- ---------- -----------
<S> <C> <C>
FOREIGN CORPORATE BONDS -- (CONTINUED)
INDUSTRIALS -- 0.2%
Osuuspankkien Kesk
5.74%, 09/29/2049.................................... $ 20,000 $ 19,000
YPF SA
8.00%, 02/15/2004.................................... 20,000 19,100
-----------
38,100
-----------
TRANSPORTATION -- 0.0%
TFM, Sa De Cv
11.75%, 06/15/2009................................... 10,000 4,650
-----------
TOTAL FOREIGN CORPORATE BONDS -- (Cost
$161,811)....................................... 151,122
-----------
FOREIGN GOVERNMENT BONDS -- 1.2%
Government of Poland
5.00%, 10/27/2014.................................... 110,000 102,438
5.00%, 10/27/2014.................................... 20,000 18,626
Republic of Argentina
9.16%, 04/10/2005.................................... 25,000 22,500
Republic of Brazil
6.13%, 04/15/2006.................................... 9,600 6,204
Republic of Colombia
12.24%, 08/13/2005................................... 35,000 32,025
Republic of Venezuela
9.25%, 09/15/2027.................................... 30,000 17,732
-----------
TOTAL FOREIGN GOVERNMENT BONDS -- (Cost
$193,419)....................................... 199,525
-----------
ASSET-BACKED SECURITIES -- 2.1%
FINANCE & BANKING -- 1.5%
Contimortgage Home Equity Loan Trust
Series 1998-CF1, Class A5, 6.43%, 04/15/2016......... 15,000 15,169
Series 1996-4, Class A8, 7.22%, 01/15/2028........... 10,000 10,203
GMAC Commercial Mortgage Security Incorporated
Series 1997-C1, Class A2, 6.85%, 09/15/2006.......... 10,000 10,563
Green Tree Financial Corporation
Series 1998-4, Class A3, 5.98%, 08/01/2008........... 40,000 40,096
Series 1998-C, Class A2, 6.03%, 07/15/2029........... 75,000 75,163
Series 1997-6, Class A3, 6.32%, 01/15/2029........... 9,339 9,374
Series 1997-3, Class A3, 6.73%, 07/15/2028........... 55,000 55,446
</TABLE>
The accompanying notes are an integral part of the financial statements
F-8
<PAGE> 22
AGA SERIES TRUST
CREDIT SUISSE GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
- -------------------- ---------- -----------
<S> <C> <C>
ASSET-BACKED SECURITIES -- (CONTINUED)
IMC Home Equity Loan Trust
Series 1998-3, Class A3, 6.16%, 05/20/2014........... $ 15,000 $ 15,034
New Century Home Equity Loan Trust
Series 1997-6, Class A4, 6.73%, 07/25/2022........... 10,000 9,760
UCFC Loan Trust
Series 1996-B, Class A7, 8.20%, 11/15/2027........... 10,000 10,701
-----------
251,509
-----------
FINANCIAL SERVICES -- 0.6%
First USA Credit Card Master Trust
Series 1997-6, Class A, 6.42%, 03/17/2005............ 45,000 46,350
Green Tree Recreational Equipment
Series 1998-B, Class A3, 6.05%, 10/15/2010........... 20,000 20,258
K Mart Corporation
Series 1995-K, 8.54%, 01/02/2015..................... 14,746 14,987
Nationscredit Grantor Trust
Series 1996-1, Class A, 5.85%, 09/15/2011............ 10,604 10,613
Structured Asset Securities Corporation
Series 1996-CFL, Class A1C, 5.944%, 02/25/2028....... 2,728 2,725
-----------
94,933
-----------
TOTAL ASSET-BACKED SECURITIES -- (Cost
$345,700)....................................... 346,442
-----------
U.S. GOVERNMENT AND AGENCY SECURITIES -- 28.0%
FEDERAL AGENCIES -- 17.0%
Federal National Mortgage Association
0.00%, 02/25/2023.................................... 25,000 20,939
6.00%, 12/01/TBA..................................... 275,000 275,688
6.00%, 12/01/TBA..................................... 130,000 128,293
6.00%, 12/01/TBA..................................... 1,000,000 986,870
6.50%, 12/01/TBA..................................... 325,000 327,132
6.50%, 12/01/TBA..................................... 135,000 136,898
8.00%, 12/01/TBA..................................... 565,000 585,125
Government National Mortgage Association
6.50%, 12/15/TBA..................................... 345,000 348,450
Tennessee Valley Authority
5.88%, 04/01/2036.................................... 20,000 21,223
-----------
2,830,618
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-9
<PAGE> 23
AGA SERIES TRUST
CREDIT SUISSE GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
- -------------------- ---------- -----------
<S> <C> <C>
GOVERNMENT AND AGENCY SECURITIES -- (CONTINUED)
U.S. GOVERNMENT -- 11.0%
United States Treasury Bills
3.82%, 01/07/1999.................................... $ 10,000 $ 9,994
United States Treasury Bonds
6.88%, 08/15/2025.................................... 270,000 327,248
United States Treasury Notes
6.25%, 06/30/2002.................................... 1,310,000 1,375,094
6.25%, 02/15/2007.................................... 120,000 131,624
-----------
1,843,960
-----------
TOTAL U.S. GOVERNMENT AND AGENCY SECURITIES --
(Cost $4,649,510)............................... 4,674,578
-----------
REPURCHASE AGREEMENT -- 28.6%
(Cost $4,784,000)
State Street Bank and Trust Company, 3.25% dated
12/31/1998, to be repurchased at $4,785,728 on
01/04/1999, collateralized by a $4,670,000 par value
U.S. Treasury Note, 6.625% due 06/30/2001, with a
value of $4,880,150................................... 4,784,000 4,784,000
-----------
TOTAL INVESTMENTS -- (COST $17,695,742*) -- 115.5%.......... 19,310,595
-----------
OTHER ASSETS LESS LIABILITIES -- (15.5)%.................... (2,597,469)
-----------
NET ASSETS -- 100.0%........................................ $16,713,126
===========
</TABLE>
SCHEDULE OF OPEN FUTURES CONTRACTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER
OF CONTRACT TOTAL CONTRACT UNREALIZED
CONTRACTS DESCRIPTION VALUE GAIN (LOSS)
- --------- ----------- -------------- -----------
<C> <S> <C> <C>
3 U.S. Treasury 5 Year Note March 1999 (long)............... $ 340,031 $(1,909)
1 U.S. Treasury Bond March 1999 (long)...................... 127,781 49
3 U.S. Treasury 10 Year Note March 1999 (short)............. (357,469) (1,237)
-------
$(3,097)
=======
</TABLE>
- ---------------
(a) Non-income producing security
ADR -- American Depository Receipt
TBA -- To Be Announced
* Aggregate cost for Federal tax purposes is $17,700,610. Aggregate gross
unrealized appreciation for all securities in which there is an excess of
value over tax cost and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over value were $1,748,661
and $138,773, respectively, resulting in net unrealized appreciation of
$1,609,888.
The accompanying notes are an integral part of the financial statements
F-10
<PAGE> 24
AGA SERIES TRUST
CREDIT SUISSE INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ------ ----------
<S> <C> <C>
COMMON STOCKS -- 89.2%
BRAZIL -- 1.5%
Companhia Paranaense De Energia-Copel.................. 12,300 $ 87,637
----------
CANADA -- 0.6%
Rogers Communications Incorporated(a).................. 4,000 35,721
----------
CHILE -- 1.0%
Five Arrows Chile Investment Trust Limited............. 20,000 35,680
Genesis Chile Fund..................................... 1,000 24,750
----------
60,430
----------
CROATIA -- 0.3%
Pliva D.D. GDR......................................... 1,000 16,350
----------
CZECH REPUBLIC -- 0.7%
Ateso AS............................................... 2,000 19,990
Deza Valasske Mezirici AS.............................. 1,000 17,825
Galena AS.............................................. 600 6,317
----------
44,132
----------
DENMARK -- 1.2%
ISS International Service System A/S................... 1,114 72,466
----------
FRANCE -- 10.9%
Alcatel Alsthom SA..................................... 417 51,016
AXA SA................................................. 605 87,650
Carrefour SA........................................... 105 79,234
Cofinec GDR(a)......................................... 3,000 17,850
Lafarge SA............................................. 720 68,381
Rhodia SA(a)........................................... 2,229 33,888
Rhone-Poulenc (India) Limited.......................... 1,558 80,143
Societe BIC SA......................................... 673 37,315
Total SA............................................... 544 55,071
Valeo SA............................................... 739 58,211
Vivendi................................................ 325 84,287
----------
653,046
----------
GERMANY -- 5.3%
Bayerische Motoren Werke (BMW)(a)...................... 16 11,857
Bayerische Motoren Werke AG............................ 69 53,532
Dresdner Bank AG....................................... 856 35,954
Mannesmann AG.......................................... 682 78,160
Preussag AG............................................ 181 81,779
Viag AG................................................ 100 58,622
----------
319,904
----------
HONG KONG -- 0.6%
Hong Kong Telecommunications Limited................... 5,000 8,744
</TABLE>
The accompanying notes are an integral part of the financial statements
F-11
<PAGE> 25
AGA SERIES TRUST
CREDIT SUISSE INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ------ ----------
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
Hutchison Whampoa Limited.............................. 2,000 $ 14,069
Jardine Strategic Holdings Limited..................... 3,000 4,350
Wing Hang Bank Limited................................. 2,500 6,228
----------
33,391
----------
HUNGARY -- 0.5%
BorsodChem GDR......................................... 170 4,412
Matav RT............................................... 320 9,540
MOL Magyar Olaj-es Gazipari GDR........................ 600 16,500
----------
30,452
----------
INDIA -- 1.3%
India Fund............................................. 12,000 75,750
----------
ISRAEL -- 0.4%
Electric Fuel Corporation(a)........................... 2,500 6,875
Koor Industries Limited ADR............................ 1,500 26,156
----------
33,031
----------
ITALY -- 6.3%
Assicurazioni Generali SPA............................. 2,013 84,005
Banco Intesa SPA....................................... 12,425 74,507
Ente Nazionale Idrocarburi SPA......................... 9,350 61,072
Telecom Italia Mobile (TIM) SPA........................ 11,719 86,469
Telecom Italia SPA..................................... 8,650 73,764
----------
379,817
----------
JAPAN -- 17.8%
Acom Company Limited................................... 1,000 64,219
Advantest.............................................. 100 6,333
Amada Company.......................................... 3,000 14,516
Bank of Tokyo Mitsubishi Limited....................... 3,000 31,048
Banyu Pharmaceutical Company........................... 2,000 37,152
Canon Incorporated..................................... 3,000 64,087
Daiwa Securities....................................... 13,000 44,387
East Japan Railway..................................... 6 33,490
Eisai Company.......................................... 1,500 29,191
FamilyMart Company Limited............................. 1,000 49,889
Fanuc.................................................. 1,000 34,233
Honda Motor Company.................................... 1,000 32,817
Japan Airport Terminal................................. 2,000 12,295
Japan Tobacco Incorporated............................. 5 49,978
Maeda Road Construction................................ 2,000 13,428
Mitsubishi Heavy Industries............................ 5,000 19,460
NEC Corporation........................................ 4,000 36,798
Nippon Telegraph & Telephone........................... 9 69,420
</TABLE>
The accompanying notes are an integral part of the financial statements
F-12
<PAGE> 26
AGA SERIES TRUST
CREDIT SUISSE INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ------ ----------
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
Nitto Denko Corporation................................ 2,000 $ 33,260
Olympus Optical Company Limited........................ 6,000 68,943
Santen Pharmaceutical Company.......................... 1,210 23,226
Sanwa Bank Limited..................................... 2,000 15,409
Sony Corporation....................................... 1,000 72,800
Sumitomo Osaka Cement Company Limited.................. 7,000 13,065
Takefuji Corporation................................... 1,200 87,572
Terumo Corporation..................................... 2,000 47,059
Toyota Motor Corporation............................... 2,000 54,312
----------
1,058,387
----------
KOREA -- 0.1%
Pohang Iron & Steel Company Limited.................... 500 8,438
----------
MALAYSIA -- 0.2%
YTL Corporation Berhad................................. 8,000 10,400
----------
NETHERLANDS -- 6.4%
ING Groep NV........................................... 1,100 67,041
Laurus NV.............................................. 2,185 55,128
Oce NV................................................. 1,610 57,846
Philips Electronics NV................................. 1,010 67,738
TNT Post Group NV...................................... 3,130 100,796
Vendex NV.............................................. 1,550 37,622
----------
386,171
----------
NEW ZEALAND -- 0.2%
Telecom Corporation of New Zealand..................... 6,000 13,829
----------
PERU -- 0.6%
Telefonica del Peru ADR................................ 3,000 38,062
----------
PHILIPPINES -- 0.2%
SM Prime Holdings...................................... 55,000 10,463
----------
POLAND -- 0.8%
Elektrim Spolka Akcyjan SA............................. 4,250 46,011
----------
PORTUGAL -- 1.0%
EDP-Electricidade de Portugal SA....................... 2,826 62,248
----------
SINGAPORE -- 0.2%
Singapore Technologies Engineering Limited............. 12,045 11,235
----------
SLOVAKIA -- 0.2%
Vychodoslovenske Zeleziarne AS......................... 2,000 9,508
----------
SPAIN -- 2.4%
Banco Bilbao Vizcaya SA................................ 4,539 71,062
</TABLE>
The accompanying notes are an integral part of the financial statements
F-13
<PAGE> 27
AGA SERIES TRUST
CREDIT SUISSE INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ------ ----------
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
Telefonica de Espana................................... 1,606 $ 71,305
----------
142,367
----------
SWEDEN -- 1.7%
Atlas Copco AB......................................... 1,865 40,400
Electrolux AB.......................................... 3,595 61,725
----------
102,125
----------
SWITZERLAND -- 6.7%
Nestle SA.............................................. 34 74,004
Novartis AG............................................ 39 76,654
Roche Holdings AG...................................... 8 97,605
SchweizerischeRueckversicherungs-Gesellschaft.......... 29 75,598
Zurich Allied AG(a).................................... 106 78,476
----------
402,337
----------
THAILAND -- 0.2%
Electricity Generating Public Company Limited.......... 5,000 13,549
----------
TURKEY -- 0.5%
Turkish Investment Fund Incorporated................... 7,000 30,625
----------
UNITED KINGDOM -- 19.4%
Asda Group PLC......................................... 29,000 77,812
BAA PLC................................................ 6,400 75,175
BG PLC................................................. 10,700 68,797
Boots Company PLC...................................... 4,655 79,581
British Telecom PLC.................................... 4,880 73,861
CGU PLC................................................ 5,090 80,253
Compass Group PLC...................................... 6,520 74,418
GKN PLC................................................ 5,900 78,418
Granada Group PLC...................................... 4,650 81,504
Lloyds TSB Group PLC................................... 5,600 79,734
Pearson PLC............................................ 4,100 81,527
Shell Transport & Trading Company...................... 12,150 74,689
SmithKline Beecham PLC................................. 5,600 77,612
Unilever PLC........................................... 7,200 80,984
Vodafone Group PLC..................................... 4,850 78,806
----------
1,163,171
----------
TOTAL COMMON STOCKS -- (Cost $5,065,292).................... 5,351,053
----------
RIGHTS -- 0.0%
(Cost $990)
SPAIN -- 0.0%
Telefonica SA(a)....................................... 1,606 1,424
----------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-14
<PAGE> 28
AGA SERIES TRUST
CREDIT SUISSE INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ------ ----------
<S> <C> <C>
WARRANTS -- 0.9%
AUSTRALIA -- 0.2%
BT Australian Equity Management Limited(a)............. 3,000 $ 11,048
----------
FRANCE -- 0.0%
Vivendi(a)............................................. 175 454
----------
JAPAN -- 0.7%
Fleming Japan Investor(a).............................. 60,000 748
Schroder Japan Growth Fund(a).......................... 175,000 42,158
----------
42,906
----------
TOTAL WARRANTS -- (Cost $184,325)........................... 54,408
----------
PREFERRED STOCK -- 1.4%
(Cost $57,195)
GERMANY -- 1.4%
Henkel KGaA............................................ 897 80,195
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
--------
<S> <C> <C>
REPURCHASE AGREEMENT -- 8.8%
(Cost $529,000)
State Street Bank and Trust Company, 2.00% dated
12/31/1998, to be repurchased at $529,118 on
01/04/1999, collateralized by a $370,000 par value U.S.
Treasury Note, 9.25% due 02/15/2016, with a value of
$544,420............................................... $529,000 529,000
----------
TOTAL INVESTMENTS -- (COST $5,836,802*) -- 100.3%........... 6,016,080
----------
OTHER ASSETS LESS LIABILITIES -- (0.3)%..................... (20,122)
----------
NET ASSETS -- 100.0%........................................ $5,995,958
==========
</TABLE>
(a) Non-income producing security
GDR -- Global Depository Receipt
ADR -- American Depository Receipt
* Aggregate cost for Federal tax purposes is $5,868,942. Aggregate gross
unrealized appreciation for all securities in which there is an excess of
value over tax cost and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over value were $825,786
and $678,648, respectively, resulting in net unrealized appreciation of
$147,138.
The accompanying notes are an integral part of the financial statements
F-15
<PAGE> 29
AGA SERIES TRUST
CREDIT SUISSE INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY NET ASSETS
- -------- ----------
<S> <C>
Appliances.................................................. 1.0%
Auto Parts.................................................. 0.3
Automobiles................................................. 2.5
Banks....................................................... 6.6
Broadcasting................................................ 0.6
Business Services........................................... 7.0
Chemicals................................................... 2.3
Conglomerates............................................... 2.8
Construction Materials...................................... 1.6
Construction & Mining Equipment............................. 0.7
Drugs & Health Care......................................... 8.2
Electric Utilities.......................................... 2.7
Electrical Equipment........................................ 1.4
Electronics................................................. 1.4
Financial Services.......................................... 6.0
Food & Beverages............................................ 3.3
Household Appliances & Home Furnishings..................... 2.3
Industrial Machinery........................................ 2.8
Insurance................................................... 6.8
Leisure Time................................................ 1.6
Mutual Funds................................................ 2.4
Office Furnishings & Supplies............................... 2.7
Oil & Gas................................................... 1.3
Petroleum Services.......................................... 3.3
Photography................................................. 1.1
Publishing.................................................. 1.4
Railroads & Equipment....................................... 0.6
Real Estate................................................. 0.2
Retail Trade................................................ 6.3
Steel....................................................... 0.3
Telecommunications.......................................... 10.0
-----
TOTAL INVESTMENTS BY INDUSTRY CLASSIFICATION.............. 91.5
Repurchase Agreement........................................ 8.8
-----
TOTAL INVESTMENTS......................................... 100.3%
=====
</TABLE>
The accompanying notes are an integral part of the financial statements
F-16
<PAGE> 30
AGA SERIES TRUST
ELITEVALUE PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ------ ----------
<S> <C> <C>
COMMON STOCKS -- 76.8%
AEROSPACE -- 3.3%
Allied Signal Incorporated............................. 2,300 $ 101,919
Boeing Company......................................... 17,600 574,200
----------
676,119
----------
AIR TRAVEL -- 1.8%
UAL Corporation(a)..................................... 6,200 370,063
----------
BANKS -- 4.0%
BankBoston Corporation................................. 10,000 389,375
M & T Bank Corporation................................. 850 441,097
----------
830,472
----------
BROADCASTING & CABLE -- 1.9%
News Corporation Limited ADR........................... 16,000 395,000
----------
CHEMICALS -- 6.6%
Dow Chemical Company................................... 2,900 263,719
Du Pont (E.I.) de Nemours & Company.................... 11,600 615,525
Hercules Incorporated.................................. 2,600 71,175
Monsanto Company....................................... 5,000 237,500
Solutia Incorporated................................... 8,000 179,000
----------
1,366,919
----------
COMMERCIAL SERVICES -- 2.1%
R.R. Donnelley & Sons Company.......................... 10,000 438,125
----------
CONSTRUCTION & MINING EQUIPMENT -- 1.9%
Caterpillar Incorporated............................... 8,500 391,000
----------
DRUGS & HEALTH CARE -- 0.6%
Becton, Dickinson & Company............................ 3,000 128,063
----------
ELECTRONICS -- 3.4%
Avnet Incorporated..................................... 2,000 121,000
ITT Industries Incorporated............................ 14,500 576,375
----------
697,375
----------
FEDERAL AGENCIES -- 5.3%
Federal Home Loan Mortgage Corporation................. 17,000 1,095,437
----------
FINANCIAL SERVICES -- 8.9%
Citigroup Incorporated................................. 18,750 928,125
Wells Fargo Company.................................... 22,500 898,594
----------
1,826,719
----------
FOOD & BEVERAGES -- 3.8%
Diageo PLC ADR......................................... 16,800 777,000
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-17
<PAGE> 31
AGA SERIES TRUST
ELITEVALUE PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ------ ----------
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
HOTELS & RESTAURANTS -- 5.5%
McDonald's Corporation................................. 14,700 $1,126,387
----------
INSURANCE -- 5.0%
ACE Limited............................................ 10,000 344,375
Exel Limited........................................... 9,200 690,000
----------
1,034,375
----------
MANUFACTURING -- 1.4%
Tenneco Incorporated................................... 3,700 126,031
Varian Associates Incorporated......................... 4,000 151,500
----------
277,531
----------
MULTI INDUSTRY COMPANIES -- 3.4%
Minnesota Mining & Manufacturing Company............... 6,000 426,750
Textron Incorporated................................... 3,700 280,969
----------
707,719
----------
MULTIMEDIA -- 5.1%
Time Warner Incorporated............................... 17,000 1,055,062
----------
OIL & GAS -- 0.9%
Unocal Corporation..................................... 6,000 175,125
----------
PAPER -- 1.6%
Champion International Corporation..................... 8,000 324,000
----------
SOFTWARE -- 1.2%
Computer Associates International Incorporated......... 6,000 255,750
----------
TELECOMMUNICATIONS -- 4.5%
Sprint Corporation..................................... 5,500 462,688
US West Incorporated................................... 7,300 471,762
----------
934,450
----------
TOBACCO -- 3.1%
Philip Morris Companies Incorporated................... 12,000 642,000
----------
TOYS & AMUSEMENTS -- 1.5%
Mattel Incorporated.................................... 13,700 312,531
----------
TOTAL COMMON STOCKS -- (Cost $14,612,863)................... 15,837,222
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-18
<PAGE> 32
AGA SERIES TRUST
ELITEVALUE PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- -----------
<S> <C> <C>
DISCOUNT NOTES -- 23.2%
FEDERAL AGENCIES -- 23.2%
Federal Farm Credit Bank
5.00%, 01/22/1999**.................................. $1,890,000 $ 1,884,487
Federal Home Loan Bank
4.30%, 01/04/1999**.................................. 2,895,000 2,893,963
-----------
TOTAL DISCOUNT NOTES -- (Cost $4,778,450)......... 4,778,450
-----------
TOTAL INVESTMENTS -- (COST $19,391,313*) -- 100.0%.......... $20,615,672
-----------
OTHER ASSETS LESS LIABILITIES -- 0.0%....................... 4,258
-----------
NET ASSETS -- 100.0%........................................ $20,619,930
===========
</TABLE>
(a) Non-income producing security
ADR-American Depository Receipt
* Aggregate cost for Federal tax purposes is $19,430,004. Aggregate gross
unrealized appreciation for all securities in which there is an excess of
value over tax cost and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over value are $2,145,683
and $960,015, respectively, resulting in net unrealized appreciation of
$1,185,668.
** The rate shown reflects the current yield at December 31, 1998.
The accompanying notes are an integral part of the financial statements.
F-19
<PAGE> 33
AGA SERIES TRUST
SALOMON BROTHERS U.S. GOVERNMENT SECURITIES PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
-------------------- --------- -----
<S> <C> <C>
U.S. GOVERNMENT AND AGENCY SECURITIES -- 80.1%
FEDERAL AGENCIES -- 61.5%
Federal Home Loan Bank
5.80%, 09/02/2008.................................... $ 150,000 $ 154,738
Federal Home Loan Mortgage Corporation
5.89%, 07/24/2000.................................... 225,000 228,024
6.00%, 12/01/TBA..................................... 500,000 493,905
6.247%, 03/17/2021................................... 100,000 102,854
6.50%, 08/01/2013.................................... 474,293 481,560
7.00%, 04/15/2021.................................... 43,057 43,528
8.25%, 04/01/2017.................................... 13,620 14,269
11.75%, 07/01/2006................................... 8,336 9,130
11.75%, 07/01/2013................................... 2,694 2,894
Federal National Mortgage Association
6.00%, 12/01/TBA..................................... 600,000 592,122
6.50%, 08/01/2027.................................... 212,757 214,153
6.50%, 12/01/TBA..................................... 1,100,000 1,107,216
6.53%, 05/25/2030.................................... 150,000 155,633
6.91%, 12/28/2028.................................... 148,828 151,254
7.00%, 05/01/2026.................................... 139,520 142,354
7.00%, 12/01/TBA..................................... 450,000 459,000
9.00%, 10/01/2026.................................... 98,075 103,759
10.00%, 09/01/2020................................... 150,000 162,563
11.50%, 09/01/2019................................... 12,107 13,538
12.00%, 10/01/2015................................... 44,094 49,923
12.00%, 01/15/2016................................... 2,457 2,863
12.50%, 09/20/2015................................... 5,665 6,628
13.00%, 11/15/2015................................... 12,435 14,829
14.50%, 11/15/2014................................... 4,353 5,264
Government National Mortgage Association
7.50%, 05/15/2027.................................... 108,217 111,572
7.50%, 07/15/2027.................................... 160,024 164,984
9.00%, 10/20/2016.................................... 52,238 55,714
Student Loan Marketing Association
7.20%, 11/09/2000.................................... 225,000 233,577
United States Department of Veteran Affairs
7.25%, 10/15/2010.................................... 59,509 59,675
-----------
5,337,523
-----------
U.S. GOVERNMENT -- 18.6%
United States Treasury Bond
5.25%, 11/15/2028.................................... 50,000 51,188
</TABLE>
The accompanying notes are an integral part of the financial statements
F-20
<PAGE> 34
AGA SERIES TRUST
SALOMON BROTHERS U.S. GOVERNMENT SECURITIES PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
-------------------- --------- -----
<S> <C> <C>
U.S. GOVERNMENT AND AGENCY SECURITIES -- (CONTINUED)
United States Treasury Notes
4.50%, 09/30/2000.................................... $ 500,000 $ 498,905
5.63%, 12/31/2002.................................... 50,000 51,664
5.63%, 05/15/2008.................................... 650,000 693,569
5.75%, 04/30/2003.................................... 100,000 104,094
5.88%, 09/30/2002.................................... 100,000 103,937
6.13%, 08/15/2007.................................... 100,000 109,219
-----------
1,612,576
-----------
TOTAL U.S. GOVERNMENT AND AGENCY SECURITIES -- (Cost
$6,891,417)............................................... 6,950,099
-----------
REPURCHASE AGREEMENTS -- 50.4%
J.P. Morgan & Company, 4.68% dated 12/31/1998, to be
repurchased at $375,195 on 01/04/1999, collateralized
by a $314,000 par value U.S. Treasury Note, 6.75% due
8/15/2026, with a value of $383,001................... 375,000 375,000
State Street Bank and Trust Company, 4.85% dated
12/31/1998, to be repurchased at $2,001,078 on
01/04/1999, collateralized by a $1,890,000 par value
U.S. Treasury Note, 6.25% due 02/15/2003, with a value
of $2,043,563......................................... 2,000,000 2,000,000
Swiss Bank, 4.75% dated 12/31/1998, to be repurchased
at $2,001,056 on 01/04/1999, collateralized by a
$1,680,000 par value U.S. Treasury Note, 6.75% due
08/15/2026, with a value of $2,041,200................ 2,000,000 2,000,000
-----------
TOTAL REPURCHASE AGREEMENTS -- (Cost $4,375,000)............ 4,375,000
-----------
TOTAL INVESTMENTS -- (COST $11,266,417*) -- 130.5%.......... 11,325,099
-----------
OTHER ASSETS LESS LIABILITIES -- (30.5)%.................... (2,645,906)
-----------
NET ASSETS -- 100.0%........................................ $ 8,679,193
===========
</TABLE>
TBA -- To Be Announced
* Aggregate cost for Federal tax purposes is identical. Aggregate gross
unrealized appreciation for all securities in which there is an excess of
value over tax cost and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over value were $77,670 and
$18,988, respectively, resulting in net unrealized appreciation of $58,682.
The accompanying notes are an integral part of the financial statements
F-21
<PAGE> 35
AGA SERIES TRUST
STATE STREET GLOBAL ADVISORS GROWTH EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ------- ----------
<S> <C> <C>
COMMON STOCKS -- 97.9%
AEROSPACE -- 2.9%
General Dynamics Corporation........................... 3,700 $ 216,912
Gulfstream Aerospace Corporation(a).................... 3,900 207,675
United Technologies Corporation........................ 300 32,625
----------
457,212
----------
ALUMINUM -- 0.7%
Aluminum Company of America............................ 1,500 111,844
----------
AUTOMOBILES -- 2.0%
Ford Motor Company..................................... 5,100 299,306
PACCAR Incorporated.................................... 300 12,338
----------
311,644
----------
BANKS -- 4.9%
BankAmerica Corporation................................ 1,805 108,526
Chase Manhattan Corporation............................ 3,800 258,637
First Union Corporation................................ 1,400 85,137
Fleet Financial Group Incorporated..................... 5,600 250,250
UnionBanCal Corporation................................ 1,500 51,094
----------
753,644
----------
BUSINESS SERVICES -- 1.0%
Computer Sciences Corporation.......................... 100 6,444
Unisys Corporation(a).................................. 4,200 144,637
----------
151,081
----------
CHEMICALS -- 1.1%
Solutia Incorporated................................... 7,400 165,575
----------
COMMERCIAL SERVICES -- 1.0%
R.R. Donnelley & Sons Company.......................... 3,400 148,963
----------
COMPUTERS & BUSINESS EQUIPMENT -- 9.8%
Dell Computer Corporation(a)........................... 800 58,550
EMC Corporation(a)..................................... 100 8,500
Gateway 2000 Incorporated(a)........................... 1,500 76,781
International Business Machines........................ 2,900 535,775
Lexmark International Group Incorporated(a)............ 2,700 271,350
Quantum Corporation(a)................................. 10,100 214,625
Sun Microsystems Incorporated(a)....................... 2,200 188,375
Tech Data Corporation(a)............................... 4,100 165,025
----------
1,518,981
----------
CONSTRUCTION MATERIALS -- 0.6%
USG Corporation........................................ 1,700 86,594
----------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-22
<PAGE> 36
AGA SERIES TRUST
STATE STREET GLOBAL ADVISORS GROWTH EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ------- ----------
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
DRUGS & HEALTH CARE -- 13.8%
Abbott Laboratories.................................... 700 $ 34,300
American Home Products Corporation..................... 700 39,419
Amgen Incorporated(a).................................. 2,900 303,231
Arterial Vascular Engineering Incorporated(a).......... 3,400 178,500
Becton, Dickinson & Company............................ 2,200 93,912
Bergen Brunswig Corporation............................ 6,600 230,175
Bristol Myers Squibb Company........................... 2,100 281,006
Eli Lilly & Company.................................... 700 62,213
Guidant Corporation.................................... 600 66,150
Johnson & Johnson...................................... 1,100 92,263
McKesson Corporation................................... 100 7,906
Meditrust.............................................. 2,700 40,838
Merck & Company Incorporated........................... 1,500 221,531
Pfizer Incorporated.................................... 1,400 175,612
Schering-Plough Corporation............................ 1,000 55,250
Wellpoint Health Networks Incorporated(a).............. 2,900 252,300
----------
2,134,606
----------
ELECTRIC UTILITIES -- 2.0%
Energy East Corporation................................ 1,000 56,500
GPU Incorporated....................................... 800 35,350
PP&L Resources Incorporated............................ 4,800 133,800
Public Service Enterprise Group........................ 2,200 88,000
----------
313,650
----------
ELECTRONICS -- 3.3%
Arrow Electronics Incorporated(a)...................... 200 5,337
Intel Corporation...................................... 4,300 509,819
----------
515,156
----------
FEDERAL AGENCIES -- 0.9%
Federal National Mortgage Association.................. 1,900 140,600
----------
FINANCIAL SERVICES -- 2.9%
Citigroup Incorporated................................. 2,400 118,800
Countrywide Credit Industries Incorporated............. 1,700 85,319
Lehman Brothers Holdings Incorporated.................. 5,500 242,343
----------
446,462
----------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-23
<PAGE> 37
AGA SERIES TRUST
STATE STREET GLOBAL ADVISORS GROWTH EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ------- ----------
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
FOOD & BEVERAGES -- 3.3%
Coca-Cola Company...................................... 3,000 $ 200,625
General Mills Incorporated............................. 1,100 85,525
IBP Incorporated....................................... 3,600 104,850
Interstate Bakeries Corporation........................ 2,100 55,519
Quaker Oats Company.................................... 1,100 65,450
----------
511,969
----------
GAS & PIPELINE UTILITIES -- 0.9%
Coastal Corporation.................................... 4,100 143,244
----------
HOTELS & RESTAURANTS -- 1.3%
Tricon Global Restaurants Incorporated(a).............. 4,100 205,513
----------
HOUSEHOLD PRODUCTS -- 2.1%
Premark International Incorporated..................... 3,900 135,038
Procter & Gamble Company............................... 2,100 191,756
----------
326,794
----------
INDUSTRIAL MACHINERY -- 0.1%
Ingersoll Rand Company................................. 100 4,694
Sundstrand Corporation................................. 100 5,187
----------
9,881
----------
INSURANCE -- 4.9%
Allstate Corporation................................... 5,600 216,300
American International Group Incorporated.............. 800 77,300
CIGNA Corporation...................................... 2,900 224,206
Everest Reinsurance Holdings Incorporated.............. 200 7,788
Loews Corporation...................................... 2,300 225,975
Old Republic International Corporation................. 150 3,375
Travelers Property Casualty Corporation................ 100 3,100
----------
758,044
----------
INTERNATIONAL OIL -- 2.4%
Exxon Corporation...................................... 3,900 285,187
Mobil Corporation...................................... 1,100 95,838
----------
381,025
----------
LEISURE TIME -- 0.8%
Anchor Gaming(a)....................................... 100 5,638
Carnival Corporation................................... 2,400 115,200
----------
120,838
----------
LIQUOR -- 0.9%
Anheuser Busch Companies Incorporated.................. 2,200 144,375
----------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-24
<PAGE> 38
AGA SERIES TRUST
STATE STREET GLOBAL ADVISORS GROWTH EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ------- ----------
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
MANUFACTURING -- 2.7%
General Electric Company............................... 4,100 $ 418,456
----------
PAPER -- 0.2%
Louisiana Pacific Corporation.......................... 2,000 36,625
----------
PETROLEUM SERVICES -- 0.9%
ENSCO International Incorporated....................... 100 1,069
Tidewater Incorporated................................. 5,800 134,487
----------
135,556
----------
PUBLISHING -- 1.0%
Gannett Company Incorporated........................... 100 6,450
Valassis Communications Incorporated(a)................ 2,800 144,550
----------
151,000
----------
RAILROADS & EQUIPMENT -- 0.0%
CSX Corporation........................................ 100 4,150
----------
RETAIL GROCERY -- 0.8%
Kroger Company(a)...................................... 2,000 121,000
----------
RETAIL TRADE -- 9.8%
Best Buy Company Incorporated(a)....................... 3,300 202,799
Dayton Hudson Corporation.............................. 3,600 195,300
Dillard's Incorporated................................. 5,000 141,875
Home Depot Incorporated................................ 600 36,713
KMart Corporation(a)................................... 13,300 203,656
May Department Stores Company.......................... 3,100 187,162
TJX Companies Incorporated............................. 5,900 171,100
Wal Mart Stores Incorporated........................... 4,700 382,756
----------
1,521,361
----------
SOFTWARE -- 5.9%
BMC Software Incorporated(a)........................... 100 4,456
Microsoft Corporation(a)............................... 3,200 443,800
Oracle Systems Corporation(a).......................... 7,900 340,688
Sterling Software Incorporated(a)...................... 4,800 129,900
----------
918,844
----------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-25
<PAGE> 39
AGA SERIES TRUST
STATE STREET GLOBAL ADVISORS GROWTH EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ------- ----------
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
TELECOMMUNICATIONS -- 10.8%
AT&T Corporation....................................... 5,800 $ 436,450
Bell Atlantic Corporation.............................. 4,920 260,760
BellSouth Corporation.................................. 4,100 204,487
Cisco Systems Incorporated(a).......................... 1,250 116,016
GTE Corporation........................................ 1,000 65,000
Lucent Technologies Incorporated....................... 1,200 132,000
MCI WorldCom Incorporated(a)........................... 1,300 93,275
SBC Communications Incorporated........................ 3,276 175,676
US West Incorporated................................... 2,900 187,412
----------
1,671,076
----------
TOBACCO -- 1.8%
Philip Morris Companies Incorporated................... 5,300 283,550
----------
TRANSPORTATION -- 0.4%
Burlington Northern Santa Fe Corporation............... 1,700 57,375
----------
TOTAL COMMON STOCKS -- (Cost $12,536,879)................... 15,176,688
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
---------
<S> <C> <C>
MUTUAL FUNDS -- 4.3%
Dreyfus Cash Management Plus Fund...................... $664,989 $ 664,989
Waddell & Reed Financial Incorporated.................. 5 118
Waddell & Reed Financial Incorporated(a)............... 24 558
-----------
TOTAL MUTUAL FUNDS -- (Cost $665,549)....................... 665,665
-----------
TOTAL INVESTMENTS -- (COST $13,202,428*) -- 102.2%.......... 15,842,353
-----------
OTHER ASSETS LESS LIABILITIES -- (2.2)%..................... (342,596)
-----------
NET ASSETS -- 100.0%........................................ $15,499,757
===========
</TABLE>
- ---------------
(a) Non-income producing security
* Aggregate cost for Federal tax purposes is $13,224,838. Aggregate gross
unrealized appreciation for all securities in which there is an excess of
value over tax cost and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over value were
$2,832,710 and $215,195, respectively, resulting in net unrealized
appreciation of $2,617,515.
The accompanying notes are an integral part of the financial statements
F-26
<PAGE> 40
AGA SERIES TRUST
STATE STREET GLOBAL ADVISORS MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
- -------------------- ---------- ----------
<S> <C> <C>
DISCOUNT NOTES -- 47.3%
FEDERAL AGENCIES -- 47.3%
Federal Farm Credit Bank
4.83%, 02/26/1999**.................................. $ 69,000 $ 68,482
4.97%, 05/20/1999**.................................. 28,000 27,463
5.25%, 01/14/1999**.................................. 375,000 374,289
Federal Home Loan Bank
4.97%, 03/24/1999**.................................. 217,000 214,544
5.00%, 02/26/1999**.................................. 300,000 297,667
5.05%, 02/16/1999**.................................. 100,000 99,355
5.12%, 01/22/1999**.................................. 250,000 249,253
5.38%, 01/08/1999**.................................. 250,000 249,914
Federal Home Loan Mortgage
4.80%, 05/12/1999**.................................. 250,000 245,633
4.95%, 04/06/1999**.................................. 100,000 98,694
5.00%, 02/05/1999**.................................. 150,000 149,271
5.00%, 02/12/1999**.................................. 198,000 196,845
5.05%, 02/25/1999**.................................. 225,000 223,264
5.20%, 02/25/1999**.................................. 185,000 183,530
5.45%, 02/03/1999**.................................. 400,000 398,088
Federal National Mortgage Association
4.78%, 06/07/1999**.................................. 115,000 112,603
4.78%, 06/10/1999**.................................. 160,000 156,601
4.98%, 03/15/1999**.................................. 250,000 247,475
5.40%, 03/05/1999**.................................. 442,000 437,823
6.19%, 06/07/1999**.................................. 345,000 346,711
----------
TOTAL DISCOUNT NOTES -- (Cost $4,377,505)................... 4,377,505
----------
COMMERCIAL PAPER -- 21.1%
BROKERAGE -- 4.2%
Morgan Stanley Group Incorporated
5.42%, 01/20/1999.................................... 235,000 235,033
Salomon Smith Barney Holdings Incorporated
5.48%, 02/09/1999**.................................. 150,000 149,110
----------
384,143
----------
FINANCE -- 2.2%
General Electric Capital Corporation
5.03%, 01/22/1999**.................................. 200,000 199,413
----------
FINANCE & BANKING -- 1.1%
Branch Banking & Trust Company
6.20%, 09/15/1999.................................... 100,000 100,543
----------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-27
<PAGE> 41
AGA SERIES TRUST
STATE STREET GLOBAL ADVISORS MONEY MARKET PORTFOLIO -- (CONTINUED)
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
- -------------------- ---------- ----------
<S> <C> <C>
COMMERCIAL PAPER -- (CONTINUED)
FINANCE CAPTIVE -- 1.1%
General Motor Acceptance Corporation
6.00%, 01/11/1999.................................... $ 100,000 $ 100,010
----------
FINANCIAL SERVICES -- 7.5%
ABN AMRO North America
5.10%, 03/30/1999**.................................. 300,000 296,260
Ciesco LP
5.30%, 01/13/1999**.................................. 155,000 154,726
PACCAR Financial Corporation
5.05%, 03/18/1999**.................................. 250,000 247,335
----------
698,321
----------
Insurance -- 5.0%
Prudential Funding Corporation
5.07%, 01/26/1999**.................................. 200,000 199,296
USAA Capital Corporation
5.12%, 01/21/1999**.................................. 268,000 267,237
----------
466,533
----------
TOTAL COMMERCIAL PAPER -- (Cost $1,948,963)................. 1,948,963
----------
REPURCHASE AGREEMENTS -- 32.6%
Lehman Brothers Incorporated, 4.97% dated 12/31/1998 to
be repurchased at $1,518,838 on 01/04/1999,
collateralized by a $1,585,000 par value Federal
National Mortgage Association Discount Note, 0.00% due
06/16/1999, with a value of $1,548,360................ 1,518,000 1,518,000
Merrill Lynch & Company Incorporated, 5.20% dated
12/31/1998 to be repurchased at $1,500,867 on
01/04/1999, collateralized by a $1,500,000 par value
Federal Farm Mortgage Note, 5.53% due 12/03/2008, with
a value of $1,530,000................................. 1,500,000 1,500,000
----------
TOTAL REPURCHASE AGREEMENTS -- (Cost $3,018,000)............ 3,018,000
----------
TOTAL INVESTMENTS -- (COST $9,344,468*) -- 101.0%........... 9,344,468
----------
OTHER ASSETS LESS LIABILITIES -- (1.0)%..................... (90,782)
----------
NET ASSETS -- 100.0%........................................ $9,253,686
----------
</TABLE>
- ---------------
* Aggregate cost for Federal tax purposes is identical.
** The rate shown reflects the current yield at December 31, 1998.
The accompanying notes are an integral part of the financial statements
F-28
<PAGE> 42
AGA SERIES TRUST
VAN KAMPEN EMERGING GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ----------- -----------
<S> <C> <C>
COMMON STOCKS -- 95.6%
ADVERTISING -- 1.7%
Interpublic Group of Companies Incorporated............ 850 $ 67,787
Omnicom Group Incorporated............................. 1,450 84,100
Outdoor Systems Incorporated(a)........................ 1,700 51,000
-----------
202,887
-----------
AEROSPACE -- 0.7%
Gulfstream Aerospace Corporation(a).................... 1,550 82,538
-----------
AIR TRAVEL -- 0.6%
Comair Holdings Incorporated........................... 750 25,312
SouthWest Airlines Company............................. 1,750 39,266
-----------
64,578
-----------
APPAREL & TEXTILES -- 0.2%
Shaw Industries Incorporated........................... 1,000 24,250
-----------
AUTO PARTS -- 1.1%
Danaher Corporation.................................... 1,100 59,744
Federal-Mogul Corporation.............................. 850 50,575
Gentex Corporation(a).................................. 650 13,000
-----------
123,319
-----------
BANKS -- 1.8%
AmSouth Bancorporation................................. 475 21,672
Fifth Third Bancorp.................................... 475 33,873
Firstar Corporation.................................... 700 65,275
National Commerce Bancorporation....................... 250 4,703
Northern Trust Corporation............................. 650 56,753
Zions Bancorp.......................................... 500 31,188
-----------
213,464
-----------
BROADCASTING -- 5.1%
Cablevision Systems Corporation(a)..................... 1,400 70,263
Chancellor Media Corporation(a)........................ 3,850 184,319
Clear Channel Communications Incorporated(a)........... 2,400 130,800
Echostar Communications Corporation(a)................. 750 36,281
Jacor Communications Incorporated(a)................... 1,500 96,562
Tele-Communications Liberty Media Group(a)............. 1,700 78,306
-----------
596,531
-----------
BUILDING & RELATED -- 1.0%
Kaufman & Broad Home Corporation....................... 400 11,500
Lowe's Companies Incorporated.......................... 1,950 99,816
-----------
111,316
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-29
<PAGE> 43
AGA SERIES TRUST
VAN KAMPEN EMERGING GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ----------- -----------
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
BUSINESS SERVICES -- 6.1%
Affiliated Computer Services Incorporated(a)........... 450 $ 20,250
American Management Systems Incorporated(a)............ 850 34,000
Ciber Incorporated(a).................................. 1,100 30,731
Concord EFS Incorporated(a)............................ 1,550 65,681
Consolidated Graphics Incorporated(a).................. 475 32,092
CSG Systems International Incorporated(a).............. 1,100 86,900
Education Management Corporation(a).................... 500 11,813
Fiserv Incorporated(a)................................. 650 33,434
IMRglobal Corporation(a)............................... 800 23,550
Keane Incorporated(a).................................. 1,100 43,931
Lason Incorporated(a).................................. 300 17,456
Mastech Corporation(a)................................. 750 21,469
MedQuist Incorporated(a)............................... 500 19,750
Metzler Group Incorporated(a).......................... 750 36,516
Network Solutions Incorporated(a)...................... 300 39,263
Paychex Incorporated................................... 750 38,578
Robert Half International Incorporated(a).............. 750 33,516
SEI Investments Company................................ 250 24,844
Snyder Communications Incorporated(a).................. 500 16,875
SunGuard Data Systems Incorporated(a).................. 1,500 59,531
Sykes Enterprises Incorporated(a)...................... 650 19,825
-----------
710,005
-----------
CHEMICALS -- 0.6%
Waters Corporation(a).................................. 800 69,800
-----------
COMPUTERS & BUSINESS EQUIPMENT -- 13.0%
Apple Computer Incorporated(a)......................... 800 32,750
CDW Computer Centers Incorporated(a)................... 650 62,359
Concord Communications Incorporated(a)................. 400 22,700
Dell Computer Corporation(a)........................... 6,696 490,063
EMC Corporation(a)..................................... 5,000 425,000
Insight Enterprises Incorporated(a).................... 550 27,981
International Network Services(a)...................... 950 63,175
Lexmark International Group Incorporated(a)............ 1,600 160,800
Network Appliance Incorporated(a)...................... 2,800 126,000
Symbol Technologies Incorporated....................... 1,000 63,938
Verisign Incorporated(a)............................... 300 17,738
Xircom Incorporated(a)................................. 750 25,500
-----------
1,518,004
-----------
DRUGS & HEALTH CARE -- 11.3%
Allegiance Corporation................................. 2,600 121,225
</TABLE>
The accompanying notes are an integral part of the financial statements
F-30
<PAGE> 44
AGA SERIES TRUST
VAN KAMPEN EMERGING GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ----------- -----------
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
Allergan Incorporated.................................. 750 $ 48,563
Amgen Incorporated(a).................................. 350 36,597
Biogen Incorporated(a)................................. 2,800 232,400
Biomatrix Incorporated(a).............................. 450 26,213
Biomet Incorporated.................................... 1,000 40,250
Cardinal Health Incorporated........................... 450 34,144
Express Scripts Incorporated(a)........................ 500 33,563
Genzyme Corporation.................................... 1,200 59,700
Guidant Corporation.................................... 1,100 121,275
Henry Schein Incorporated(a)........................... 500 22,375
Immunex Corporation(a)................................. 600 75,487
Medicis Pharmaceutical Corporation(a).................. 400 23,850
MedImmune Incorporated(a).............................. 350 34,803
Medtronic Incorporated................................. 700 51,975
MiniMed Incorporated(a)................................ 550 57,612
Omnicare Incorporated.................................. 1,450 50,387
Pathogensis Corporation(a)............................. 300 17,400
Patterson Dental Company(a)............................ 400 17,400
PSS World Medical Incorporated(a)...................... 300 6,900
Quintiles Transnational Corporation(a)................. 1,300 69,387
VISX Incorporated(a)................................... 100 8,744
Watson Pharmaceuticals Incorporated(a)................. 1,600 100,600
Wellpoint Health Networks Incorporated(a).............. 300 26,100
-----------
1,316,950
-----------
ELECTRICAL EQUIPMENT -- 0.8%
American Power Conversion Corporation(a)............... 2,000 96,875
-----------
ELECTRONICS -- 6.0%
Advanced Micro Devices Incorporated(a)................. 750 21,703
Altera Corporation(a).................................. 1,150 70,006
Applied Micro Circuits Corporation(a).................. 400 13,587
Cree Research Incorporated(a).......................... 300 14,362
Eletronics For Imaging Incorporated(a)................. 650 26,000
Flextronics International Limited(a)................... 750 64,219
Gemstar Group Limited(a)............................... 1,600 91,600
Intel Corporation...................................... 650 77,066
Jabil Circuit Incorporated(a).......................... 1,150 85,819
QLogic Corporation(a).................................. 250 32,719
Sanmina Corporation(a)................................. 300 18,750
Solectron Corporation(a)............................... 700 65,056
Texas Instruments Incorporated......................... 350 29,947
Vitesse Semiconductor Corporation(a)................... 2,000 91,250
-----------
702,084
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-31
<PAGE> 45
AGA SERIES TRUST
VAN KAMPEN EMERGING GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ----------- -----------
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
FINANCIAL SERVICES -- 3.6%
Capital One Financial Corporation...................... 1,000 $ 115,000
Finova Group Incorporated.............................. 600 32,363
Metris Companies Incorporated.......................... 100 5,031
Old Kent Financial Corporation......................... 800 37,200
Providian Financial Corporation........................ 3,100 232,500
-----------
422,094
-----------
FOOD & BEVERAGES -- 0.8%
Adolph Coors Company................................... 500 28,218
Earthgrains Company.................................... 900 27,844
Smithfield Foods Incorporated(a)....................... 400 13,550
U.S. Foodservice(a).................................... 600 29,400
-----------
99,012
-----------
HOMEBUILDERS -- 0.1%
Pulte Corporation...................................... 600 16,688
-----------
HOTELS & RESTAURANTS -- 0.6%
Brinker International Incorporated(a).................. 1,100 31,763
Tricon Global Restaurants Incorporated(a).............. 650 32,581
-----------
64,344
-----------
HOUSEHOLD APPLIANCES & HOME FURNISHINGS -- 0.2%
WestPoint Stevens Incorporated(a)...................... 600 18,938
-----------
INDUSTRIAL MACHINERY -- 1.2%
Tyco International Limited............................. 1,800 135,787
-----------
INSURANCE -- 0.5%
Fidelity National Financial Incorporated............... 220 6,710
Progressive Corporation................................ 150 25,406
Protective Life Corporation............................ 600 23,888
-----------
56,004
-----------
LEISURE TIME -- 0.1%
Hollywood Entertainment Corporation(a)................. 500 13,625
-----------
PETROLEUM SERVICES -- 0.2%
Marine Drilling Companies Incorporated(a).............. 1,250 9,609
National-Oilwell Incorporated(a)....................... 600 6,713
Veritas DGC Incorporated(a)............................ 600 7,800
-----------
24,122
-----------
POLLUTION CONTROL -- 0.6%
Allied Waste Industries Incorporated(a)................ 2,883 68,111
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-32
<PAGE> 46
AGA SERIES TRUST
VAN KAMPEN EMERGING GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ----------- -----------
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
PUBLISHING -- 0.7%
Meredith Corporation................................... 1,050 $ 39,769
Valassis Communications Incorporated(a)................ 850 43,881
-----------
83,650
-----------
RETAIL GROCERY -- 0.9%
Safeway Incorporated(a)................................ 1,800 109,687
-----------
RETAIL TRADE -- 11.1%
Abercrombie & Fitch Company(a)......................... 1,600 113,200
American Eagle Outfitters Incorporated(a).............. 200 13,325
AnnTaylor Stores Corporation(a)........................ 1,100 43,381
Bed Bath & Beyond Incorporated(a)...................... 1,250 42,656
Best Buy Company Incorporated(a)....................... 3,800 233,225
Costco Companies Incorporated(a)....................... 500 36,094
CVS Corporation........................................ 1,300 71,500
Dollar Tree Stores Incorporated(a)..................... 1,000 43,687
Family Dollar Stores Incorporated...................... 2,900 63,800
Gap Incorporated....................................... 1,700 95,625
Home Depot Incorporated................................ 2,300 140,731
Linens 'N Things Incorporated(a)....................... 1,800 71,325
Micro Warehouse Incorporated(a)........................ 300 10,144
Staples Incorporated(a)................................ 3,250 141,984
TJX Companies Incorporated............................. 3,800 110,200
Trans World Entertainment Corporation(a)............... 650 12,391
Williams-Sonoma Incorporated(a)........................ 1,250 50,391
-----------
1,293,659
-----------
SAVINGS & LOAN -- 0.1%
Dime Bancorp Incorporated.............................. 625 16,523
-----------
SOFTWARE -- 20.6%
America Online Incorporated............................ 4,850 776,000
BMC Software Incorporated(a)........................... 2,300 102,494
Citrix Systems Incorporated(a)......................... 1,600 155,300
Compuware Corporation(a)............................... 5,500 429,687
Comverse Technology Incorporated(a).................... 850 60,350
EarthLink Network Incorporated(a)...................... 750 42,750
Legato Systems Incorporated(a)......................... 2,150 141,766
Macromedia Incorporated(a)............................. 1,500 50,531
Mercury Interactive Corporation(a)..................... 700 44,275
Microsoft Corporation(a)............................... 400 55,475
MindSpring Enterprises Incorporated(a)................. 800 48,850
Network Associates Incorporated(a)..................... 950 62,937
New Era Of Networks Incorporated(a).................... 600 26,400
Peregrine Systems Incorporated(a)...................... 200 9,275
</TABLE>
The accompanying notes are an integral part of the financial statements
F-33
<PAGE> 47
AGA SERIES TRUST
VAN KAMPEN EMERGING GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ----------- -----------
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
Rational Software Corporation(a)....................... 1,600 $ 42,400
Sterling Software Incorporated(a)...................... 1,000 27,063
Veritas Software Company(a)............................ 1,550 92,903
Wind River Systems(a).................................. 400 18,800
Yahoo! Incorporated(a)................................. 900 213,244
-----------
2,400,500
-----------
TELECOMMUNICATIONS -- 3.7%
Cisco Systems Incorporated(a).......................... 1,450 134,578
General Instrument Corporation(a)...................... 1,200 40,725
GeoTel Communications Corporation(a)................... 600 22,350
Gilat Satellite Networks Limited(a).................... 400 22,050
Global Crossing Limited(a)............................. 500 22,563
Metromedia Fiber Network Incorporated(a)............... 2,500 83,750
Nokia Oyj.............................................. 700 84,306
Tekelec(a)............................................. 1,150 19,047
-----------
429,369
-----------
TELEPHONE -- 0.6%
Century Telephone Enterprises Incorporated............. 1,000 67,500
-----------
TOTAL COMMON STOCKS -- (Cost $7,284,563).................... 11,152,214
-----------
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
-----------
<S> <C> <C>
REPURCHASE AGREEMENT -- 9.2%
(Cost $1,077,000)
State Street Bank and Trust Company, 4.85% dated
12/31/1998, to be repurchased at $1,077,580 on
01/04/1999, collateralized by a $1,050,000 par value
U.S. Treasury Note, 5.75% due 04/30/2003, with a value
of $1,103,158.......................................... $ 1,077,000 $ 1,077,000
-----------
TOTAL INVESTMENTS -- (COST $8,361,563*) -- 104.8%........... 12,229,214
-----------
OTHER ASSETS LESS LIABILITIES -- (4.8)%..................... (555,182)
-----------
NET ASSETS -- 100.0%........................................ $11,674,032
===========
</TABLE>
- ---------------
(a) Non-income producing security
* Aggregate cost for Federal tax purposes is $8,371,985. Aggregate gross
unrealized appreciation for all securities in which there is an excess of
value over tax cost and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over value were
$3,933,795 and $76,566, respectively, resulting in net unrealized
appreciation of $3,857,229.
The accompanying notes are an integral part of the financial statements
F-34
<PAGE> 48
AGA SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<CAPTION>
CREDIT SALOMON
SUISSE CREDIT BROTHERS
GROWTH SUISSE U.S.
AND INTERNATIONAL GOVERNMENT
INCOME EQUITY ELITEVALUE SECURITIES
----------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments in securities, at value....... $14,526,595 $5,487,080 $20,615,672 $ 6,950,099
Repurchase agreements, at value........... 4,784,000 529,000 -- 4,375,000
----------- ---------- ----------- -----------
Total Investments(a) (Note 1)............. 19,310,595 6,016,080 20,615,672 11,325,099
Cash, including foreign currency, at
value.................................. 3,467 46,222 2,089 1,086
Receivable for securities sold............ 2,861,735 -- 41,917 --
Interest receivable....................... 46,371 57 -- 40,163
Dividends receivable...................... 7,127 13,426 14,949 --
Receivable for fund shares sold........... 39,078 15,430 45,078 16,855
Receivable due from adviser (Note 2)...... 11,067 12,470 7,656 9,095
Prepaid insurance......................... 3,008 3,008 3,008 3,008
----------- ---------- ----------- -----------
TOTAL ASSETS...................... 22,282,448 6,106,693 20,730,369 11,395,306
LIABILITIES
Payable for securities purchased.......... 5,454,613 -- -- 2,651,790
Payable for fund shares repurchased....... 27,898 3,761 31,989 5,982
Payable for forward contracts (Note 5).... -- 31,761 -- --
Payable for futures variation margin...... 78 -- -- --
Accounts payable and accrued expenses..... 86,733 75,213 78,450 58,341
----------- ---------- ----------- -----------
TOTAL LIABILITIES................. 5,569,322 110,735 110,439 2,716,113
----------- ---------- ----------- -----------
NET ASSETS........................ $16,713,126 $5,995,958 $20,619,930 $ 8,679,193
=========== ========== =========== ===========
NET ASSETS CONSIST OF:
Par value (Note 4)........................ $ 12,028 $ 5,863 $ 13,792 $ 8,481
Paid-in capital (Note 4).................. 15,018,473 6,167,234 19,396,357 8,608,549
Undistributed (distributions in excess of)
net investment income.................. (632) 24,298 137 449
Accumulated net realized gain (loss) on
investments, futures, and foreign
currency translations.................. 71,501 (349,546) (14,715) 3,032
Net unrealized appreciation (depreciation)
of:
Investments............................ 1,614,853 179,278 1,224,359 58,682
Futures contracts...................... (3,097) -- -- --
Foreign currency....................... -- (31,169) -- --
----------- ---------- ----------- -----------
NET ASSETS........................ $16,713,126 $5,995,958 $20,619,930 $ 8,679,193
=========== ========== =========== ===========
Shares outstanding at end of period....... 1,202,821 586,308 1,379,156 848,130
Net asset value per share................. $ 13.89 $ 10.23 $ 14.95 $ 10.23
(a) Investments in securities and
repurchase agreements, at cost........ $17,695,742 $5,836,802 $19,391,313 $11,266,417
</TABLE>
The accompanying notes are an integral part of the financial statements
F-35
<PAGE> 49
AGA SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<CAPTION>
STATE STATE
STREET STREET
GLOBAL GLOBAL VAN
ADVISORS ADVISORS KAMPEN
GROWTH MONEY EMERGING
EQUITY MARKET GROWTH
----------- ---------- -----------
<S> <C> <C> <C>
ASSETS
Investments in securities, at value.................. $15,842,353 $6,326,468 $11,152,214
Repurchase agreements, at value...................... -- 3,018,000 1,077,000
----------- ---------- -----------
Total Investments(a) (Note 1)........................ 15,842,353 9,344,468 12,229,214
Cash, including foreign currency, at value........... 91,987 890 395
Receivable for securities sold....................... 218,654 -- 35,119
Interest receivable.................................. -- 8,477 145
Dividends receivable................................. 13,026 -- 1,455
Receivable for fund shares sold...................... 33,114 87,345 22,728
Receivable due from adviser (Note 2)................. 10,859 8,352 10,980
Prepaid insurance.................................... 3,008 3,008 3,008
----------- ---------- -----------
TOTAL ASSETS................................. 16,213,001 9,452,540 12,303,044
LIABILITIES
Payable for securities purchased..................... 619,478 -- 539,507
Payable for fund shares repurchased.................. 13,006 142,597 11,906
Accounts payable and accrued expenses................ 80,760 56,257 77,599
----------- ---------- -----------
TOTAL LIABILITIES............................ 713,244 198,854 629,012
----------- ---------- -----------
NET ASSETS................................... $15,499,757 $9,253,686 $11,674,032
=========== ========== ===========
NET ASSETS CONSIST OF:
Par value (Note 4)................................... $ 9,354 $ 92,537 $ 6,127
Paid-in capital (Note 4)............................. 12,664,889 9,161,149 8,149,844
Undistributed net investment income.................. 4 -- --
Accumulated net realized gain (loss) on investments
and foreign currency translations................. 185,585 -- (349,590)
Net unrealized appreciation of:
Investments....................................... 2,639,925 -- 3,867,651
----------- ---------- -----------
NET ASSETS................................... $15,499,757 $9,253,686 $11,674,032
=========== ========== ===========
Shares outstanding at end of period.................. 935,256 9,253,686 612,682
Net asset value per share............................ $ 16.57 $ 1.00 $ 19.05
(a) Investments in securities and repurchase
agreements, at cost.............................. $13,202,428 $9,344,468 $ 8,361,563
</TABLE>
The accompanying notes are an integral part of the financial statements
F-36
<PAGE> 50
AGA SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
CREDIT SALOMON
SUISSE CREDIT BROTHERS
GROWTH SUISSE U.S.
AND INTERNATIONAL GOVERNMENT
INCOME EQUITY ELITEVALUE SECURITIES
---------- ------------- ---------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest income............................. $ 282,660 $ 9,975 $ 151,143 $ 325,319
Dividend income**........................... 56,741 65,308 198,089 --
---------- --------- --------- ---------
TOTAL INVESTMENT INCOME............. 339,401 75,283 349,232 325,319
EXPENSES
Investment advisory fees (Note 2)........... 27,886 12,782 36,103 13,661
Investment sub-advisory fees (Note 2)....... 55,771 33,237 57,765 12,295
Sub-administration fees..................... 53,600 53,600 53,600 53,600
Audit fees.................................. 12,600 13,150 13,675 10,763
Custodian fees and expenses................. 61,720 67,358 28,783 30,818
Trustee's fees (Note 2)..................... 6,351 6,351 6,351 6,351
Transfer agent fees......................... 4,181 4,147 4,642 4,191
Insurance expense........................... 4,014 4,014 4,014 4,014
Registration and filing fees................ 3 3 3 3
Miscellaneous expenses...................... 180 180 180 234
---------- --------- --------- ---------
Total operating expenses before
waivers and reimbursements........ 226,306 194,822 205,116 135,930
Fees waived and expenses reimbursed (Note
2)....................................... (136,257) (146,508) (103,149) (107,001)
---------- --------- --------- ---------
NET EXPENSES........................ 90,049 48,314 101,967 28,929
---------- --------- --------- ---------
NET INVESTMENT INCOME............... 249,352 26,969 247,265 296,390
---------- --------- --------- ---------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENTS AND FOREIGN CURRENCY
Net realized gain (loss) on:
Investments and futures contracts........ 422,709 (335,423) 198,448 65,391
Foreign currency transactions............ -- (14,341) -- --
Net change in unrealized appreciation
(depreciation) of:
Investments.............................. 868,206 319,494 293,534 21,558
Futures contracts........................ (3,097) -- -- --
Foreign currency......................... -- (41,527) -- --
---------- --------- --------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS)............................ 1,287,818 (71,797) 491,982 86,949
---------- --------- --------- ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS................... $1,537,170 $ (44,828) $ 739,247 $ 383,339
========== ========= ========= =========
** Net of foreign withholding taxes of...... $ 396 $ 12,429 $ 290 $ --
========== ========= ========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements
F-37
<PAGE> 51
AGA SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
STATE STATE
STREET STREET
GLOBAL GLOBAL VAN
ADVISORS ADVISORS KAMPEN
GROWTH MONEY EMERGING
EQUITY MARKET GROWTH
---------- --------- ----------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest income........................................ $ 2,454 $ 301,805 $ 29,230
Dividend income........................................ 159,043 -- 13,910
---------- --------- ----------
TOTAL INVESTMENT INCOME........................ 161,497 301,805 43,140
EXPENSES
Investment advisory fees (Note 2)...................... 26,185 13,464 18,923
Investment sub-advisory fees (Note 2).................. 37,706 10,779 37,847
Sub-administration fees................................ 53,600 53,600 53,600
Audit fees............................................. 13,675 10,394 12,100
Custodian fees and expenses............................ 61,172 30,183 63,559
Trustee's fees (Note 2)................................ 6,351 6,351 6,351
Transfer agent fees.................................... 4,132 4,143 4,099
Insurance expense...................................... 4,014 4,014 4,014
Registration and filing fee............................ 3 3 3
Miscellaneous expenses................................. 122 180 180
---------- --------- ----------
Total operating expenses before waivers and
reimbursements............................... 206,960 133,111 200,676
Fees waived and expenses reimbursed (Note 2)........... (137,450) (106,873) (140,046)
---------- --------- ----------
NET EXPENSES................................... 69,510 26,238 60,630
---------- --------- ----------
NET INVESTMENT INCOME (LOSS)................... 91,987 275,567 (17,490)
---------- --------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain (loss) on:
Investments......................................... 557,763 -- (187,014)
Net change in unrealized appreciation of:
Investments......................................... 1,554,162 -- 3,018,535
---------- --------- ----------
NET REALIZED AND UNREALIZED GAIN............... 2,111,925 -- 2,831,521
---------- --------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..... $2,203,912 $ 275,567 $2,814,031
========== ========= ==========
</TABLE>
The accompanying notes are an integral part of the financial statements
F-38
<PAGE> 52
AGA SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
CREDIT SUISSE CREDIT SUISSE
GROWTH AND INCOME INTERNATIONAL EQUITY ELITEVALUE
--------------------------- --------------------------- ---------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997 1998 1997
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income............... $ 249,352 $ 140,680 $ 26,969 $ 25,979 $ 247,265 $ 86,775
Net realized gain (loss) on:
Investments and futures
contracts....................... 422,709 295,529 (335,423) 258,493 198,448 201,702
Foreign currency transactions..... -- -- (14,341) (7,339) -- --
Net change in unrealized
appreciation (depreciation) of:
Investments....................... 868,206 522,340 319,494 (239,805) 293,534 621,441
Future contracts.................. (3,097) -- -- -- -- --
Foreign currency.................. -- -- (41,527) (11,172) -- --
----------- ---------- ---------- ---------- ----------- -----------
Net increase (decrease) in net
assets resulting from
operations.................... 1,537,170 958,549 (44,828) 26,156 739,247 909,918
Distributions to shareholders (Note
1):
From net investment income........ (251,869) (139,024) (15,131) (44,337) (247,142) (86,761)
In excess of net investment
income.......................... -- -- (1,293) (81,524) -- --
From net realized gains........... (392,447) (237,747) -- (174,639) (201,075) (213,790)
Fund share transactions (Note
4).............................. 8,432,304 3,661,091 1,746,993 1,857,579 10,858,279 6,554,216
----------- ---------- ---------- ---------- ----------- -----------
Total increase in net assets.... 9,325,158 4,242,869 1,685,741 1,583,235 11,149,309 7,163,583
NET ASSETS:
Beginning of period................... 7,387,968 3,145,099 4,310,217 2,726,982 9,470,621 2,307,038
----------- ---------- ---------- ---------- ----------- -----------
End of period(a)...................... $16,713,126 $7,387,968 $5,995,958 $4,310,217 $20,619,930 $ 9,470,621
=========== ========== ========== ========== =========== ===========
(a) Including undistributed
(distributions in excess) net
investment income................. $ (632) $ 2,697 $ 24,298 $ (11,838) $ 137 $ 14
=========== ========== ========== ========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements
F-39
<PAGE> 53
AGA SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
SALOMON BROTHERS U.S. STATE STREET GLOBAL STATE STREET GLOBAL
GOVERNMENT SECURITIES ADVISORS GROWTH EQUITY ADVISORS MONEY MARKET
--------------------------- --------------------------- ---------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997 1998 1997
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income............... $ 296,390 $ 159,857 $ 91,987 $ 69,786 $ 275,567 $ 159,789
Net realized gain on:
Investments....................... 65,391 23,149 557,763 622,295 -- --
Net change in unrealized
appreciation of investments....... 21,558 38,894 1,554,162 676,633 -- --
---------- ---------- ----------- ---------- ---------- ----------
Net increase in net assets
resulting from operations..... 383,339 221,900 2,203,912 1,368,714 275,567 159,789
Distributions to shareholders (Note
1):
From net investment income........ (309,413) (160,062) (91,978) (69,791) (275,567) (159,789)
From net realized gains........... (32,231) -- (357,781) (636,692) -- --
Fund share transactions (Note
4).............................. 4,651,600 1,577,343 6,418,498 3,244,409 4,153,422 3,809,240
---------- ---------- ----------- ---------- ---------- ----------
Total increase in net assets.... 4,693,295 1,639,181 8,172,651 3,906,640 4,153,422 3,809,240
NET ASSETS:
Beginning of period................... 3,985,898 2,346,717 7,327,106 3,420,466 5,100,264 1,291,024
---------- ---------- ----------- ---------- ---------- ----------
End of period(a)...................... $8,679,193 $3,985,898 $15,499,757 $7,327,106 $9,253,686 $5,100,264
========== ========== =========== ========== ========== ==========
(a) Including undistributed net
investment income................. $ 449 $ 139 $ 4 $ -- $ -- $ --
========== ========== =========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements
F-40
<PAGE> 54
AGA SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
VAN KAMPEN
EMERGING GROWTH
---------------------------
YEAR YEAR
ENDED ENDED
DECEMBER 31, DECEMBER 31,
1998 1997
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income (loss)............................ $ (17,490) $ 8,180
Net realized loss on:
Investments........................................... (187,014) (102,237)
Net change in unrealized appreciation of Investments.... 3,018,535 704,593
----------- -----------
Net increase in net assets resulting from
operations........................................... 2,814,031 610,536
Distributions to shareholders (Note 1):
From net investment income............................ (481) (7,882)
Fund share transactions (Note 4)...................... 3,361,948 3,014,043
----------- -----------
Total increase in net assets........................ 6,175,497 3,616,697
NET ASSETS:
Beginning of period....................................... 5,498,534 1,881,837
----------- -----------
End of period(a).......................................... $11,674,032 $ 5,498,534
=========== ===========
(a) Including undistributed net investment income......... $ -- $ 298
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements
F-41
<PAGE> 55
AGA SERIES TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CREDIT SUISSE GROWTH AND INCOME
---------------------------------------------------------
YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1996 1995*
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET ASSET VALUE
Net asset value, beginning of period.......... $ 12.72 $11.04 $10.46 $10.00
------- ------ ------ ------
INVESTMENT OPERATIONS
Net investment income(1)...................... 0.27 0.33 0.47 0.14
Net realized and unrealized gain.............. 1.52 2.11 0.96 0.51
------- ------ ------ ------
Total from investment operations.............. 1.79 2.44 1.43 0.65
------- ------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income......................... (0.28) (0.33) (0.47) (0.14)
Net realized gains............................ (0.34) (0.43) (0.38) --
In excess of net realized gains............... -- -- -- (0.05)
------- ------ ------ ------
Total distributions to shareholders........... (0.62) (0.76) (0.85) (0.19)
------- ------ ------ ------
Net asset value, end of period................ $ 13.89 $12.72 $11.04 $10.46
======= ====== ====== ======
TOTAL RETURN.................................. 14.16% 22.33% 13.82% 6.57%(2)
RATIOS AND SUPPLEMENTAL DATA
Expenses to average net assets(3)............. 0.81% 0.62% 0.49% 0.12%(4)
Net investment income to average net assets... 3.04% 2.87% 4.65% 6.99%(4)
Portfolio turnover rate....................... 151% 191% 217% 75%
Net assets, end of period (000's)............. $16,713 $7,388 $3,145 $2,136
</TABLE>
- ---------------
* The Credit Suisse Growth and Income Portfolio commenced operations on
October 20, 1995.
(1) Net investment income is after waiver of fees and reimbursement of certain
expenses by the Investment Adviser, the Sub-administrator and American
General Annuity Insurance Company, an affiliate of the Adviser (see Note 2
to the financial statements). If the Investment Adviser and the
Sub-administrator had not waived fees and American General Annuity Insurance
Company had not reimbursed expenses for the periods ended December 31, 1998,
December 31, 1997, December 31, 1996, and December 31, 1995, net investment
income (loss) per share would have been $0.16, $0.10, $0.00 and $(0.06),
respectively, for the Credit Suisse Growth and Income Portfolio.
(2) Total return represents aggregate total return for the period indicated and
is not annualized.
(3) If the Investment Adviser and the Sub-administrator had not waived fees and
American General Annuity Insurance Company had not reimbursed expenses for
the periods ended December 31, 1998, December 31, 1997, December 31, 1996,
and December 31, 1995, the ratio of operating expenses to average net assets
would have been 2.01%, 3.26%, 5.15% and 9.95%, respectively, for the Credit
Suisse Growth and Income Portfolio.
(4) Annualized.
The accompanying notes are an integral part of the financial statements
F-42
<PAGE> 56
AGA SERIES TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CREDIT SUISSE INTERNATIONAL EQUITY
---------------------------------------------------------
YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1996 1995*
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET ASSET VALUE
Net asset value, beginning of period.......... $10.35 $10.67 $10.33 $10.00
------ ------ ------ ------
INVESTMENT OPERATIONS
Net investment income(1)...................... 0.06 0.08 0.15 0.06
Net realized and unrealized gain (loss)....... (0.15) 0.37 1.56 0.33
------ ------ ------ ------
Total from investment operations.............. (0.09) 0.45 1.71 0.39
------ ------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income......................... (0.03) (0.12) (0.15) (0.06)
In excess of net investment income............ -- (0.20) -- --
Net realized gains............................ -- (0.45) (0.24) --
In excess of net realized gains............... -- -- (0.98) --
------ ------ ------ ------
Total distributions to shareholders........... (0.03) (0.77) (1.37) (0.06)
------ ------ ------ ------
Net asset value, end of period................ $10.23 $10.35 $10.67 $10.33
====== ====== ====== ======
TOTAL RETURN.................................. (0.86)% 4.30% 16.50% 3.93%(2)
RATIOS AND SUPPLEMENTAL DATA
Expenses to average net assets(3)............. 0.94% 0.77% 0.60% 0.12%(4)
Net investment income to average net assets... 0.53% 0.71% 1.09% 2.89%(4)
Portfolio turnover rate....................... 61% 6% 79% 2%
Net assets, end of period (000's)............. $5,996 $4,310 $2,727 $2,083
</TABLE>
- ---------------
* The Credit Suisse International Equity Portfolio commenced operations on
October 20, 1995.
(1) Net investment income is after waiver of fees and reimbursement of certain
expenses by the Investment Adviser, the Sub-administrator and American
General Annuity Insurance Company, an affiliate of the Adviser (see Note 2
to the financial statements). If the Investment Adviser and the
Sub-administrator had not waived fees and American General Annuity Insurance
Company had not reimbursed expenses for the periods ended December 31, 1998,
December 31, 1997, December 31, 1996, and December 31, 1995, net investment
loss per share would have been $(0.19), $(0.29), $(1.25) and $(0.18),
respectively, for the Credit Suisse International Equity Portfolio.
(2) Total return represents aggregate total return for the period indicated and
is not annualized.
(3) If the Investment Adviser and the Sub-administrator had not waived fees and
American General Annuity Insurance Company had not reimbursed expenses for
the periods ended December 31, 1998, December 31, 1997, December 31, 1996,
and December 31, 1995, the ratio of operating expenses to average net assets
would have been 3.78%, 5.06%, 6.41% and 11.83%, respectively, for the Credit
Suisse International Equity Portfolio.
(4) Annualized.
The accompanying notes are an integral part of the financial statements
F-43
<PAGE> 57
AGA SERIES TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
ELITEVALUE
------------------------------------------
YEAR YEAR PERIOD
ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1996*
------------ ------------ ------------
<S> <C> <C> <C>
NET ASSET VALUE
Net asset value, beginning of period..................... $ 14.38 $12.32 $10.00
------- ------ ------
INVESTMENT OPERATIONS
Net investment income(1)................................. 0.25 0.19 0.18
Net realized and unrealized gain......................... 0.72 2.39 2.48
------- ------ ------
Total from investment operations......................... 0.97 2.58 2.66
------- ------ ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment loss...................................... (0.25) (0.19) (0.18)
Net realized gains....................................... (0.15) (0.33) (0.16)
------- ------ ------
Total distributions to shareholders...................... (0.40) (0.52) (0.34)
------- ------ ------
Net asset value, end of period........................... $ 14.95 $14.38 $12.32
======= ====== ======
TOTAL RETURN............................................. 6.72% 21.08% 26.70%(2)
RATIOS AND SUPPLEMENTAL DATA
Expenses to average net assets(3)........................ 0.71% 0.52% 0.36%(4)
Net investment income to average net assets.............. 2.42% 1.58% 1.74%(4)
Portfolio turnover rate.................................. 39% 29% 21%
Net assets, end of period (000's)........................ $20,620 $9,471 $2,307
</TABLE>
- ---------------
* The EliteValue Portfolio commenced operations on January 2, 1996.
(1) Net investment income is after waiver of fees and reimbursement of certain
expenses by the Investment Adviser, the Sub-administrator and American
General Annuity Insurance Company, an affiliate of the Adviser (see Note 2
to the financial statements). If the Investment Adviser and the
Sub-administrator had not waived fees and American General Annuity Insurance
Company had not reimbursed expenses for the periods ended December 31, 1998,
December 31, 1997 and December 31, 1996, net investment income (loss) per
share would have been $0.17, $0.00 and $(0.54), respectively, for the
EliteValue Portfolio.
(2) Total return represents aggregate total return for the period indicated and
is not annualized.
(3) If the Investment Adviser and the Sub-administrator had not waived fees and
American General Annuity Insurance Company had not reimbursed expenses for
the periods ended December 31, 1998, December 31, 1997 and December 31,
1996, the ratio of operating expenses to average net assets would have been
1.41%, 2.76% and 7.45%, respectively, for the EliteValue Portfolio.
(4) Annualized.
The accompanying notes are an integral part of the financial statements
F-44
<PAGE> 58
AGA SERIES TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SALOMON BROTHERS U.S. GOVERNMENT SECURITIES
---------------------------------------------
YEAR YEAR PERIOD
ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1996*
------------- ------------- -------------
<S> <C> <C> <C>
NET ASSET VALUE
Net asset value, beginning of period..................... $10.07 $ 9.79 $10.00
------ ------ ------
INVESTMENT OPERATIONS
Net investment income(1)................................. 0.52 0.57 0.53
Net realized and unrealized gain (loss).................. 0.22 0.28 (0.21)
------ ------ ------
Total from investment operations......................... 0.74 0.85 0.32
------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.................................... (0.54) (0.57) (0.53)
Net realized gains....................................... (0.04) -- --
------ ------ ------
Total distributions to shareholders...................... (0.58) (0.57) (0.53)
------ ------ ------
Net asset value, end of period........................... $10.23 $10.07 $ 9.79
====== ====== ======
TOTAL RETURN............................................. 7.49% 8.89% 3.40%(2)
RATIOS AND SUPPLEMENTAL DATA
Expenses to average net assets(3)........................ 0.53% 0.35% 0.22%(4)
Net investment income to average net assets.............. 5.95% 6.25% 5.91%(4)
Portfolio turnover rate.................................. 24% 615% 297%
Net assets, end of period (000's)........................ $8,679 $3,986 $2,347
</TABLE>
* The Salomon Brothers U.S. Government Securities Portfolio commenced
operations on February 6, 1996.
(1) Net investment income is after waiver of fees and reimbursement of certain
expenses by the Investment Adviser, the Sub-administrator and American
General Annuity Insurance Company, an affiliate of the Adviser (see Note 2
to the financial statements). If the Investment Adviser and the
Sub-administrator had not waived fees and American General Annuity Insurance
Company had not reimbursed expenses for the periods ended December 31, 1998,
December 31, 1997, and December 31, 1996, net investment income per share
would have been $0.40, $0.28 and $0.10, respectively, for the Salomon
Brothers U.S. Government Securities Portfolio.
(2) Total return represents aggregate total return for the period indicated and
is not annualized.
(3) If the Investment Adviser and the Sub-administrator had not waived fees and
American General Annuity Insurance Company had not reimbursed expenses for
the periods ended December 31, 1998, December 31, 1997, and December 31,
1996, the ratio of operating expenses to average net assets would have been
2.46%, 4.84% and 5.26%, respectively, for the Salomon Brothers U.S.
Government Securities Portfolio.
(4) Annualized.
The accompanying notes are an integral part of the financial statements
F-45
<PAGE> 59
AGA SERIES TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
STATE STREET GLOBAL ADVISORS GROWTH EQUITY
---------------------------------------------------------
YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1996 1995*
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET ASSET VALUE
Net asset value, beginning of period.......... $ 14.07 $11.85 $10.31 $10.00
------- ------ ------ ------
INVESTMENT OPERATIONS
Net investment income(1)...................... 0.13 0.17 0.20 0.05
Net realized and unrealized gain.............. 2.89 3.56 1.99 0.31
------- ------ ------ ------
Total from investment operations.............. 3.02 3.73 2.19 0.36
------- ------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income......................... (0.13) (0.17) (0.20) (0.05)
Net realized gains............................ (0.39) (1.34) (0.45) --
------- ------ ------ ------
Total distributions to shareholders........... (0.52) (1.51) (0.65) (0.05)
------- ------ ------ ------
Net asset value, end of period................ $ 16.57 $14.07 $11.85 $10.31
======= ====== ====== ======
TOTAL RETURN.................................. 21.60% 31.67% 21.36% 3.57%(2)
RATIOS AND SUPPLEMENTAL DATA
Expenses to average net assets(3)............. 0.66% 0.48% 0.39% 0.12%(4)
Net investment income to average net assets... 0.88% 1.34% 1.80% 2.46%(4)
Portfolio turnover rate....................... 140% 111% 89% 9%
Net assets, end of period (000's)............. $15,500 $7,327 $3,420 $2,073
</TABLE>
* The State Street Global Advisors Growth Equity Portfolio commenced
operations on October 20, 1995.
(1) Net investment income is after waiver of fees and reimbursement of certain
expenses by the Investment Adviser, the Sub-administrator and American
General Annuity Insurance Company, an affiliate of the Adviser (see Note 2
to the financial statements). If the Investment Adviser and the
Sub-administrator had not waived fees and American General Annuity Insurance
Company had not reimbursed expenses for the periods ended December 31, 1998,
December 31, 1997, December 31,1996 and December 31, 1995, the net
investment loss per share would have been $(0.02), $(0.11), $(0.29) and
$(0.15), respectively, for the State Street Global Advisor Growth Equity
Portfolio.
(2) Total return represents aggregate total return for the period indicated and
is not annualized.
(3) If the Investment Adviser and the Sub-administrator had not waived fees and
American General Annuity Insurance Company had not reimbursed expenses for
the periods ended December 31, 1998, December 31, 1997, December 31, 1996
and December 31, 1995, the ratio of operating expenses to average net assets
would have been 1.96%, 3.29%, 4.83% and 9.94%, respectively, for the State
Street Global Advisor Growth Equity Portfolio.
(4) Annualized.
The accompanying notes are an integral part of the financial statements
F-46
<PAGE> 60
AGA SERIES TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
STATE STREET GLOBAL ADVISORS MONEY MARKET
---------------------------------------------------------
YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1996 1995*
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET ASSET VALUE
Net asset value, beginning of period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------
INVESTMENT OPERATIONS
Net investment income(1)...................... 0.05 0.05 0.05 0.01
------ ------ ------ ------
Total from investment operations.............. 0.05 0.05 0.05 0.01
------ ------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income......................... (0.05) (0.05) (0.05) (0.01)
------ ------ ------ ------
Total distributions to shareholders........... (0.05) (0.05) (0.05) (0.01)
------ ------ ------ ------
Net asset value, end of period................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ======
TOTAL RETURN.................................. 5.23% 5.50% 5.19% 1.17%(2)
RATIOS AND SUPPLEMENTAL DATA
Expenses to average net assets(3)............. 0.49% 0.32% 0.29% 0.12%(4)
Net investment income to average net assets... 5.12% 5.41% 5.23% 5.25%(4)
Net assets, end of period (000's)............. $9,254 $5,100 $1,291 $ 126
</TABLE>
* The State Street Global Advisors Money Market Portfolio commenced operations
on October 10, 1995.
(1) Net investment income is after waiver of fees and reimbursement of certain
expenses by the Investment Adviser, the Sub-administrator and American
General Annuity Insurance Company, an affiliate of the Adviser (see Note 2
to the financial statements). If the Investment Adviser and the
Sub-administrator had not waived fees and American General Annuity Insurance
Company had not reimbursed expenses for the periods ended December 31, 1998,
December 31, 1997, December 31, 1996, and December 31, 1995, net investment
income (loss) per share would have been $0.04, $0.03, $(0.08) and $(0.35),
respectively, for the State Street Global Advisors Money Market Portfolio.
(2) Total return represents aggregate total return for the period indicated and
is not annualized.
(3) If the Investment Adviser and the Sub-administrator had not waived fees and
American General Annuity Insurance Company had not reimbursed expenses for
the periods ended December 31, 1998, December 31, 1997, December 31, 1996,
and December 31, 1995, the ratio of operating expenses to average net assets
would have been 2.44%, 4.17%, 14.15% and 161.83%, respectively, for the
State Street Global Advisors Money Market Portfolio.
(4) Annualized.
The accompanying notes are an integral part of the financial statements
F-47
<PAGE> 61
AGA SERIES TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
VAN KAMPEN EMERGING GROWTH
------------------------------------------
YEAR YEAR PERIOD
ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1996*
------------ ------------ ------------
<S> <C> <C> <C>
NET ASSET VALUE
Net asset value, beginning of period..................... $ 13.87 $11.54 $10.00
------- ------ ------
INVESTMENT OPERATIONS
Net investment income (loss)(1).......................... (0.03) 0.03 0.05
Net realized and unrealized gain......................... 5.21 2.33 1.86
------- ------ ------
Total from investment operations......................... 5.18 2.36 1.91
------- ------ ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.................................... -- (0.03) (0.05)
Net realized gains....................................... -- -- (0.32)
------- ------ ------
Total distributions to shareholders...................... -- (0.03) (0.37)
------- ------ ------
Net asset value, end of period........................... $ 19.05 $13.87 $11.54
======= ====== ======
TOTAL RETURN............................................. 37.43% 20.45% 19.06%(2)
RATIOS AND SUPPLEMENTAL DATA
Expenses to average net assets(3)........................ 0.80% 0.62% 0.46%(4)
Net investment income (loss) to average net assets....... (0.57)% 0.23% 0.40%(4)
Portfolio turnover rate.................................. 107% 107% 154%
Net assets, end of period (000's)........................ $11,674 $5,499 $1,882
</TABLE>
* The Van Kampen Emerging Growth Portfolio commenced operations on January 2,
1996.
(1) Net investment income is after waiver of fees and reimbursement of certain
expenses by the Investment Adviser, the Sub-administrator and American
General Annuity Insurance Company, an affiliate of the Adviser (see Note 2
to the financial statements). If the Investment Adviser and the
Sub-administrator had not waived fees and American General Annuity Insurance
Company had not reimbursed expenses for the periods ended December 31, 1998,
December 31, 1997 and December 31, 1996, net investment loss per share would
have been $(0.26), $(0.42) and $(1.29), respectively, for the Van Kampen
Emerging Growth Portfolio.
(2) Total return represents aggregate total return for the period indicated and
is not annualized.
(3) If the Investment Adviser and the Sub-administrator had not waived fees and
American General Annuity Insurance Company had not reimbursed expenses for
the periods ended December 31, 1998, December 31, 1997 and December 31,
1996, the ratio of operating expenses to average net assets would have been
2.64%, 5.65% and 11.22%, respectively, for the Van Kampen Emerging Growth
Portfolio.
(4) Annualized.
The accompanying notes are an integral part of the financial statements
F-48
<PAGE> 62
AGA SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
AGA Series Trust, formerly WNL Series Trust, (the "Trust") is an open-end,
diversified series management investment company established as a Massachusetts
business trust under a Declaration of Trust dated December 12, 1994, as amended
April 19, 1995 and May 1, 1998. The Trust currently offers shares of beneficial
interest in seven series (the "Portfolios"), each of which has a different
investment objective and represents the entire interest in a separate portfolio
of investments. The Portfolios are: Credit Suisse Growth and Income Portfolio,
formerly BEA Growth and Income Portfolio, (the "Growth and Income Portfolio"),
Credit Suisse International Equity Portfolio (the "International Equity
Portfolio"), EliteValue Portfolio, Salomon Brothers U.S. Government Securities
Portfolio (the "U.S. Government Securities Portfolio"), State Street Global
Advisors Growth Equity Portfolio, formerly Global Advisors Growth Equity
Portfolio, (the "Growth Equity Portfolio"), State Street Global Advisors Money
Market Portfolio, formerly Global Advisors Money Market Portfolio, (the "Money
Market Portfolio"), and Van Kampen Emerging Growth Portfolio, formerly Van
Kampen American Capital Emerging Growth Portfolio, (the "Emerging Growth
Portfolio"). The Portfolios are currently available to the public only through
variable annuity contracts ("VA Contracts") issued by American General Annuity
Insurance Company, formerly Western National Life Insurance Company, (the "Life
Company"), an indirect wholly-owned subsidiary of American General Corporation.
1. SIGNIFICANT ACCOUNTING POLICIES
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 these estimates. The following is a
summary of significant accounting policies followed by the Trust in the
preparation of its financial statements in accordance with generally accepted
accounting principles.
(a) VALUATION OF SECURITIES -- All securities are valued as of the close of
regular trading on the New York Stock Exchange (normally 4:00 p.m. New York
time). Securities traded on a national securities exchange or quoted on the
NASDAQ National Market System are valued at their last-reported sale price on
the principal exchange or reported by NASDAQ or, if there is no reported sale,
and in the case of over-the-counter securities not included in the NASDAQ
National Market System, at a bid price estimated by a broker or dealer. Debt
securities, including zero-coupon securities, and certain foreign securities
will be valued by a pricing service approved by the Trustees. Other foreign
securities will be valued by the Trust's custodian. The value of a foreign
security is determined in its national currency as of the close of trading on
the foreign exchange on which it is traded or as of 4:00 p.m. New York time, if
that is earlier, and that value is then converted into its U.S. dollar
equivalent at the foreign exchange rate in effect at noon, New York time, on the
day the value of the foreign security is determined. Securities for which
current market quotations are not readily available and all other assets are
valued at fair value as determined in good faith by the Trustees.
The Money Market Portfolio values all securities using the amortized cost
method which approximates market value. Under this method, which does not take
into account unrealized securities gains or losses, an instrument is initially
valued at its cost and thereafter assumes a constant amortization or accretion
to maturity of any discount or premium.
(b) REPURCHASE AGREEMENTS -- A repurchase agreement is a contract under
which the Portfolio acquires a security for a relatively short period (usually
not more than a week) subject to the obligation of the seller to repurchase and
the Portfolio to resell such security at a fixed time and price. The collateral
for such agreements will be held by the Portfolio's custodian. The Portfolio
will enter into repurchase agreements only with banks and broker-dealers that
have been determined to be creditworthy by the Trust's Board of Trustees. The
seller under a repurchase agreement would be required to maintain the value of
the collateral subject to the repurchase agreement at not less than the
repurchase price. Default by the seller would expose the Portfolio to possible
loss because of adverse market action or delay in connection with the
disposition of the
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AGA SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998
underlying collateral. In addition, if bankruptcy proceedings are commenced with
respect to the seller of the obligations, the Portfolio may be delayed or
limited in its ability to sell the collateral.
(c) WHEN ISSUED TRANSACTIONS -- The Portfolio may enter into a when-issued
transaction for the purpose of acquiring portfolio securities and not for the
purpose of leverage, although a Portfolio may dispose of a when-issued security
or forward commitment prior to settlement if it is deemed appropriate to do so.
In such transactions, delivery of the securities occurs beyond the normal
settlement periods, but no payment or delivery is made by, and no interest
accrues to, the Portfolio prior to the actual delivery or payment by the other
party to the transaction. Due to fluctuations in the value of securities
purchased on a when-issued or a delayed-delivery basis, the yields obtained on
such securities may be higher or lower than the yields available in the market
on the dates when the investments are actually delivered to the buyers.
(d) DOLLAR ROLL TRANSACTIONS -- Certain Portfolios seeking a high level of
current income may enter into dollar rolls in which the Portfolio sells
securities (usually Mortgage-Backed Securities) and simultaneously contracts to
purchase, typically in 30 to 60 days, substantially similar but not identical,
securities on a specified future date through a TBA purchase commitment. The
proceeds of the initial sale of securities in such transaction may be used to
purchase long-term securities which will be held during the dollar roll period.
During the roll period the Portfolio foregoes principal and interest paid on the
security sold at the beginning of the roll period. The Portfolio may be
compensated by; (a) the difference between the current sale price and the
forward price for the future purchase plus the interest earned on the cash
proceeds of the initial sale; or (b) a set fee determined at the time the
transaction is entered into; or (c) a combination of these two methods. Dollar
rolls involve the risk that the market value of the securities the Portfolio is
obligated to repurchase under the agreement may decline below the repurchase
price.
(e) TBA PURCHASE COMMITMENTS -- Certain Portfolios may enter into "TBA" (to
be announced) purchase commitments to purchase securities for a fixed unit price
at a future date beyond customary settlement time. Although the unit price has
been established, the principal value has not been finalized. The Portfolio
holds, and maintains until settlement date, cash or high-grade debt obligations
in an amount sufficient to meet the purchase price, or the Portfolio may enter
into offsetting contracts for the forward sale of other securities it owns.
Income on the securities will not be earned until settlement date. TBA purchase
commitments may be considered securities in themselves, and involve a risk of
loss if the value of the security to be purchased declines prior to the
settlement date, which risk is in addition to the risk of decline in the value
of the Portfolio's other assets. Unsettled TBA purchase commitments are valued
at the current market value of the underlying securities, according to the
procedures described under "Valuation of Securities" above. The Portfolio may
dispose of the commitment prior to settlement if the Advisor deems it
appropriate to do so.
(f) FOREIGN INVESTMENTS -- Certain Portfolios may invest in securities of
foreign issuers. There are certain risks involved in investing in foreign
securities, including those resulting from fluctuations in currency exchange
rates, devaluation of currencies, future political or economic developments and
the possible imposition of currency exchange control or other foreign
governmental laws or restrictions, reduced availability of public information
concerning issuers, and the fact that foreign companies are not generally
subject to uniform accounting, auditing and financial reporting standards or to
other regulatory practices and requirements comparable to those applicable to
domestic companies. The Portfolios' foreign investments may be less liquid and
their prices may be more volatile than comparable investments in securities of
U.S. companies.
(g) FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- Certain Portfolios may
engage in forward foreign currency exchange contracts ("forward contracts").
Portfolios may enter into forward contracts to convert U.S. Dollars to and from
different foreign currencies. A Portfolio can either enter into these
transactions on a spot (i.e., cash) basis at the spot rate prevailing in the
foreign currency exchange market, or use forward contracts to purchase or sell
foreign currencies. Forward foreign currency contracts are valued at the
exchange rate and are marked-to-market daily. The change in the market value is
recorded by the Portfolio as an
F-50
<PAGE> 64
AGA SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998
unrealized gain or loss. When the contract is closed, the Portfolio records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed.
A forward contract is an obligation by a Portfolio to purchase or sell a
specific currency at a future date. The Portfolio maintains with its custodian,
in a segregated account, high-grade liquid assets in an amount at least equal to
its obligations under each contract. Neither spot transactions nor forward
contracts eliminate fluctuations in the prices of the Portfolio's securities or
in foreign exchange rates, or prevent loss if the prices of these securities
should decline.
A Portfolio may enter into forward contracts for hedging purposes as well
as for non-hedging purposes. Transactions are entered into for hedging purposes
in an attempt to protect against changes in foreign currency exchange rates that
would adversely affect a portfolio position or an anticipated portfolio
position. Although these transactions tend to minimize the risk of loss due to a
decline in the value of the hedged currency, at the same time they tend to limit
any potential gain that might be realized should the value of the hedged
currency increase.
A Portfolio may enter into forward contracts for other than hedging
purposes which present greater profit potential but also involves increased
risk.
(h) FOREIGN CURRENCY TRANSLATIONS -- The books and records of the
Portfolios are maintained in U.S. dollars. Foreign currencies, investments and
other assets and liabilities are translated into U.S. dollars at the exchange
rates prevailing at the end of the period, and purchases and sales of investment
securities, income and expenses are translated on the respective dates of such
transactions. The eligible Portfolios do not isolate that portion of the results
of operations from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
changes and fluctuations are included with net realized and unrealized gain or
loss from investments. Foreign exchange gain (loss) is treated as ordinary
income for federal income tax purposes to the extent constituting "Section 988
Transactions" pursuant to the Internal Revenue Code, including currency gains
(losses) related to the sale of debt securities, forward foreign currency
exchange contracts, payments of liabilities, and collections of receivables.
(i) FUTURES CONTRACTS -- Certain Portfolios may enter into futures
contracts. Upon entering into a futures contract, the Portfolio is required to
deposit with the broker an amount of cash or cash equivalents equal to a certain
percentage of the contract amount. This is known as the initial margin.
Subsequent payments ("variation margin") are made or received by the Portfolio
each day, depending on the daily fluctuation of the value of the contract. The
daily changes in the contract are recorded as unrealized gains or losses. The
Portfolio recognizes a realized gain or loss when the contract is closed.
The use of futures contracts as a hedging device involves several risks.
The change in value of futures contracts primarily corresponds with the value of
their underlying instruments, which may not correlate with the change in value
of the hedged investments. In addition, the Portfolio may not be able to enter
into a closing transaction because of an illiquid secondary market.
(j) SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities
transactions are recorded as of the trade date. Realized gains and losses on
sales of investments are recorded on the identified cost basis. Interest income
is recorded daily on the accrual basis. Dividend income is recorded on the
ex-date.
(k) EXPENSE ALLOCATION -- Expenses with respect to any two or more
Portfolios may be allocated in proportion to the net assets of the respective
Portfolios except where allocations of direct expenses can otherwise be fairly
made.
(l) DIVIDENDS AND DISTRIBUTIONS -- The Money Market Portfolio will declare
a dividend of its net ordinary income daily and distribute such dividends
monthly. Each of the other Portfolios will declare and
F-51
<PAGE> 65
AGA SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998
distribute dividends from net ordinary income quarterly and will distribute its
net realized capital gains, if any, at least annually.
Income dividends and capital gain distributions are determined in
accordance with Federal tax regulations which may differ from generally accepted
accounting principles. These differences are primarily due to differing
treatments of income and gains on various investment securities held by the
Portfolios, timing differences and differing characterization of distributions
made by the Portfolios. As a result, net investment income (loss) and net
realized gain (loss) on investment transactions for a reporting period may
differ significantly from distributions during such period. Accordingly, each
Portfolio may periodically make reclassifications among certain of its capital
accounts without impacting the net asset value of the Portfolio.
(m) FEDERAL INCOME TAXES -- Each Portfolio of the Trust intends to qualify
and elects to be treated as a regulated investment company that is taxed under
the rules of Subchapter M of the Internal Revenue Code. As an electing regulated
investment company, a Portfolio will not be subject to federal income tax on its
net ordinary income and net realized capital gains to the extent such income and
gains are distributed to the separate account of the Life Company which holds
its shares.
2. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under an Investment Advisory Agreement (the "Agreement"), AGA Investment
Advisory Services, Inc., formerly WNL Investment Advisory Services, Inc., (the
"Adviser"), an indirect wholly-owned subsidiary of American General Corporation,
manages the business and affairs of the Portfolios and the Trust, subject to the
control of the Trustees. Under the Agreement, the Adviser is obligated to
formulate a continuing program for the investment of the assets of each
Portfolio of the Trust in a manner consistent with each Portfolio's investment
objectives, policies and restrictions and to determine from time to time
securities to be purchased, sold, retained or lent by the Trust and to implement
those decisions. The Agreement also provides that the Adviser shall provide such
services required for effective administration of the Trust.
As full compensation for its services under the Agreement, the Trust will
pay the Adviser a monthly fee at the following rates based on the average daily
net assets of each Portfolio:
<TABLE>
<S> <C>
Credit Suisse Growth and Income............................. 0.75%
Credit Suisse International Equity.......................... 0.90%
EliteValue.................................................. 0.65%
Salomon Brothers U.S. Government Securities................. 0.475%
State Street Global Advisors Growth Equity.................. 0.61%
State Street Global Advisors Money Market................... 0.45%
Van Kampen Emerging Growth.................................. 0.75%
</TABLE>
Through April 30, 1998 the Adviser waived that portion of its advisory fee
in excess of the amount payable by the Adviser to each Sub-adviser pursuant to
the respective sub-advisory agreements for each Portfolio. Beginning on May 1,
1998 the advisory fees are being charged to each Portfolios as shown in table
above.
F-52
<PAGE> 66
AGA SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998
The Adviser pays each Sub-adviser the following fees:
<TABLE>
<S> <C>
Credit Suisse Growth and Income............................. 0.50%
Credit Suisse International Equity.......................... 0.65%
EliteValue.................................................. 0.40%
Salomon Brothers U.S. Government Securities................. 0.225%
State Street Global Advisors Growth Equity.................. 0.36%
State Street Global Advisors Money Market................... 0.20%
Van Kampen Emerging Growth.................................. 0.50%
</TABLE>
In addition, the Life Company, an affiliate of the Adviser, has undertaken
to bear until May 1, 1999 all operating expenses of each Portfolio, excluding
the compensation of the Adviser, that exceed 0.12% of each Portfolio's average
daily net assets. The Life Company has reserved the right to withdraw or modify
its policy of expense reimbursement for the Trust.
In accordance with each Portfolio's investment objective and policies and
under the supervision of the Adviser and the Trust's Board of Trustees, each
Portfolio's Sub-adviser is responsible for the day-to-day investment management
of the Portfolio, to make investment decisions for the Portfolio and to place
orders on behalf of the Portfolio to effect the investment decisions made as
provided in separate Sub-advisory Agreements. The Sub-advisers to the Portfolios
are: Credit Suisse Asset Management, formerly BEA Associates, for the Growth and
Income Portfolio; Credit Suisse Asset Management, Ltd. for the International
Equity Portfolio; OpCap Advisors for the EliteValue Portfolio; Salomon Brothers
Asset Management Inc. for the U.S. Government Securities Portfolio; State Street
Global Advisors for the Growth Equity and Money Market Portfolios; and Van
Kampen Asset Management Inc. for the Emerging Growth Portfolio.
The Trust's Sub-administrator, custodian, transfer and dividend-paying
agent is State Street Bank and Trust Company.
For the year ended December 31, 1998, the Adviser waived advisory fees and
the Life Company reimbursed operating expenses as follows:
<TABLE>
<CAPTION>
ADVISORY
FEES EXPENSES
WAIVED REIMBURSED TOTAL
-------- ---------- --------
<S> <C> <C> <C>
Credit Suisse Growth and Income....................... $6,992 $129,265 $136,257
Credit Suisse International Equity.................... 3,842 142,666 146,508
EliteValue............................................ 9,231 93,918 103,149
Salomon Brothers U.S. Government Securities........... 3,584 103,417 107,001
State Street Global Advisors Growth Equity............ 6,950 130,500 137,450
State Street Global Advisors Money Market............. 4,461 102,412 106,873
Van Kampen Emerging Growth............................ 5,221 134,825 140,046
</TABLE>
AGA Brokerage Services, Inc., formerly WNL Brokerage Services, Inc., an
indirect wholly-owned subsidiary of American General Corporation, is the
distributor and underwriter of the VA Contracts. Each Trustee of the Trust who
is not an interested person of the Trust or Adviser or Sub-adviser receives an
annual fee of $7,500 and an additional fee of $750 for each Trustees' meeting
attended. In addition, disinterested Trustees who are members of any Board
committees will receive a separate $750 fee for attendance at any committee
meeting that is held on a day on which no Board meeting is held.
F-53
<PAGE> 67
AGA SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998
3. SECURITIES TRANSACTIONS
The aggregate cost of purchases and proceeds from sales of securities,
excluding short-term investments, for the year ended December 31, 1998 were as
follows:
<TABLE>
<CAPTION>
U.S. PROCEEDS FROM
GOVERNMENT PROCEEDS FROM U.S. GOVERNMENT
PURCHASES PURCHASES SALES SALES
----------- ---------- ------------- ---------------
<S> <C> <C> <C> <C>
Credit Suisse Growth and Income......... $ 9,049,134 $7,948,695 $ 7,295,352 $7,570,270
Credit Suisse International Equity...... 4,381,274 -- 2,736,485 --
EliteValue.............................. 11,726,391 510,430 4,167,588 178,783
Salomon Brothers U.S. Government
Securities............................ 118,045 3,581,380 -- 1,144,543
State Street Global Advisors Growth
Equity................................ 19,283,192 138,536 13,359,264 228,203
State Street Global Advisors Money
Market................................ -- -- -- --
Van Kampen Emerging Growth.............. 10,192,545 35,218 6,849,316 32,863
</TABLE>
4. SHARES OF BENEFICIAL INTEREST
The Trust has an unlimited authorized number of shares of beneficial
interest with a par value of $0.01. The tables below summarize transactions in
Trust shares.
CREDIT SUISSE GROWTH AND INCOME PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Capital stock sold............................ 792,134 $10,722,666 364,640 $ 4,535,552
Capital stock issued upon reinvestment of
dividends and distributions................. 46,708 644,316 30,006 376,771
Capital stock redeemed........................ (216,635) (2,934,678) (98,914) (1,251,232)
-------- ----------- -------- -----------
Net increase........................ 622,207 $ 8,432,304 295,732 $ 3,661,091
======== =========== ======== ===========
</TABLE>
CREDIT SUISSE INTERNATIONAL EQUITY PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Capital stock sold............................ 272,097 $ 2,783,727 177,329 $ 2,089,267
Capital stock issued upon reinvestment of
dividends and distributions................. 1,499 16,424 28,680 300,498
Capital stock redeemed........................ (103,928) (1,053,158) (45,050) (532,186)
-------- ----------- -------- -----------
Net increase........................ 169,668 $ 1,746,993 160,959 $ 1,857,579
======== =========== ======== ===========
</TABLE>
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<PAGE> 68
AGA SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998
ELITEVALUE PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Capital stock sold............................ 989,195 $14,792,557 562,538 $ 7,853,515
Capital stock issued upon reinvestment of
dividends and distributions................. 29,857 448,216 21,013 300,551
Capital stock redeemed........................ (298,572) (4,382,494) (112,176) (1,599,850)
-------- ----------- -------- -----------
Net increase........................ 720,480 $10,858,279 471,375 $ 6,554,216
======== =========== ======== ===========
</TABLE>
SALOMON BROTHERS U.S. GOVERNMENT SECURITIES PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Capital stock sold............................ 589,383 $ 6,067,048 167,218 $ 1,688,562
Capital stock issued upon reinvestment of
dividends and distributions................. 33,449 341,645 16,187 160,062
Capital stock redeemed........................ (170,600) (1,757,093) (27,188) (271,281)
-------- ----------- -------- -----------
Net increase........................ 452,232 $ 4,651,600 156,217 $ 1,577,343
======== =========== ======== ===========
</TABLE>
STATE STREET GLOBAL ADVISORS GROWTH EQUITY PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Capital stock sold............................ 544,056 $ 8,356,169 239,753 $ 3,380,388
Capital stock issued upon reinvestment of
dividends and distributions................. 27,475 449,775 50,305 706,482
Capital stock redeemed........................ (157,065) (2,387,446) (57,888) (842,461)
-------- ----------- -------- -----------
Net increase........................ 414,466 $ 6,418,498 232,170 $ 3,244,409
======== =========== ======== ===========
</TABLE>
STATE STREET GLOBAL ADVISORS MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Capital stock sold......................... 46,307,126 $ 46,307,126 27,649,529 $ 27,649,529
Capital stock issued upon reinvestment of
dividends and distributions.............. 275,567 275,567 159,789 159,789
Capital stock redeemed..................... (42,429,271) (42,429,271) (24,000,078) (24,000,078)
----------- ------------ ----------- ------------
Net increase..................... 4,153,422 $ 4,153,422 3,809,240 $ 3,809,240
=========== ============ =========== ============
</TABLE>
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<PAGE> 69
AGA SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998
VAN KAMPEN EMERGING GROWTH PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Capital stock sold............................ 357,277 $ 5,569,032 387,792 $ 4,961,448
Capital stock issued upon reinvestment of
dividends and distributions................. 30 481 617 7,882
Capital stock redeemed........................ (141,146) (2,207,565) (154,969) (1,955,287)
-------- ----------- -------- -----------
Net increase........................ 216,161 $ 3,361,948 233,440 $ 3,014,043
======== =========== ======== ===========
</TABLE>
5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
At December 31, 1998, the outstanding forward foreign currency exchange
contracts, which contractually obligate the Trust to deliver currencies at a
specified date, were as follows:
Credit Suisse International Equity Portfolio
<TABLE>
<CAPTION>
U.S. DOLLAR
PRICE ON U.S. DOLLAR
CURRENCY SETTLEMENT ORIGINATION CURRENT UNREALIZED
SOLD DATE DATE VALUE (DEPRECIATION)
- -------- ---------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
FRF 2/25/1999 $133,655 $136,616 $ (2,961)
JPY 3/09/1999 554,135 580,199 (26,064)
NLG 2/25/1999 120,549 123,285 (2,736)
$808,339 $840,100 $(31,761)
-------- -------- --------
</TABLE>
7. TAX INFORMATION
For Federal income tax purposes capital loss carryforwards (exclusive of
certain capital losses incurred after October 31) of $84,949 and $254,219 is
available to the extent provided by regulations to offset future realized
capital gains of the Van Kampen Emerging Growth Portfolio. These losses will
expire in 2005 and 2006, respectively. In addition, $317,406 is available to the
extent provided by regulations to offset future realized capital gains of Credit
Suisse International Equity Portfolio and this loss expires in 2006.
Additionally, certain capital losses incurred after October 31, within the
taxable year, are deemed to arise on the first business day of the Portfolio's
next taxable year. During the year ended December 31, 1998, the Credit Suisse
International Equity Portfolio elected to defer a net capital loss of $4,727.
8. SUBSEQUENT EVENT
On January 6, 1999, Salomon Brothers Asset Management Inc., notified the
Adviser of the termination of their Sub-Advisory relationship as of March 8,
1999.
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<PAGE> 70
AGA SERIES TRUST
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1998
9. YEAR 2000 RISK (UNAUDITED)
Like other mutual funds, financial and business organizations and
individuals around the world, the Trust could be adversely affected if the
computer systems of the Adviser and the sub-advisers and other service
providers, over which the Trust may have no control, do not properly process and
calculate date-related information and data from and after January 1, 2000. This
is commonly referred to as the "Year 2000 Problem." The Adviser is taking steps
that it believes are reasonably designed to address the Year 2000 Problem with
respect to computer systems that it uses. The Adviser is also seeking assurances
that its sub-advisers and other service providers are taking similar steps as
well. However, it is impossible to know exactly how the Year 2000 Problem will
affect the administration of the Trust, performance of the Trust's portfolios or
securities markets in general.
F-57
<PAGE> 71
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Trustees and Contract Owners of
AGA Series Trust
We have audited the accompanying statement of assets and liabilities,
including the schedules of investments, of AGA Series Trust (comprising,
respectively, the Credit Suisse Growth and Income, Credit Suisse International
Equity, EliteValue, Salomon Brothers U.S. Government Securities, State Street
Global Advisors Growth Equity, State Street Global Advisors Money Market, and
Van Kampen Emerging Growth Portfolios) as of December 31, 1998, the related
statements of operations, changes in net assets and financial highlights for the
year then ended. These financial statements and financial highlights are the
responsibility of AGA Series Trust management. Our responsibility is to express
an opinion on the financial statements and financial highlights based on our
audit. The statements of changes in net assets of AGA Series Trust for the year
ended December 31, 1997 and the financial highlights for each of the three years
in the period ended December 31, 1997 were audited by other auditors whose
report dated February 13, 1998 expressed an unqualified opinion on these
financial statements and financial highlights.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1998, by correspondence with the custodian and brokers or by other
appropriated auditing procedures where replies from brokers were not received.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the respective portfolios constituting AGA Series Trust at December 31,
1998, the results of their operations, the changes in their net assets and
financial highlights for the year then ended in conformity with generally
accepted accounting principles.
ERNST & YOUNG LLP
Boston, Massachusetts
February 5, 1999
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<PAGE> 72
AGA SERIES TRUST
PROXY VOTING RESULTS (UNAUDITED)
The following proposal was voted upon at a special meeting of shareholders
on April 16, 1998. The results were as shown below.
PROPOSAL 1.
To approve a new Sub-Advisory Agreement between Salomon Brothers Asset
Management, Inc., AGA Investment Advisory Services, Inc. and AGA Series Trust.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
------- ------- -------
<S> <C> <C> <C>
Record Date Shares (429,327)
Salomon Brothers U.S. Government Securities Portfolio....... 311,976 20,209 97,142
</TABLE>
F-59
<PAGE> 73
<TABLE>
<S> <C>
AMERICAN GENERAL ANNUITY INSURANCE COMPANY ----------------
VARIABLE ANNUITY SERVICE CENTER
BULK RATE
205 E. 10TH AVENUE U.S. POSTAGE
AMARILLO, TEXAS 79101 PAID
Permit No. 6748
Houston, Texas
VALIC
----------------
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VER 12/31/98 Recycled Paper LOGO
