LONDON PACIFIC LIFE & ANNUITY COMPANY
LPT VARIABLE INSURANCE SERIES TRUST
REGENCY SERIES
FLEXIBLE CONTRIBUTION DEFERRED VARIABLE ANNUITY
ANNUAL REPORT
For the Year Ended December 31, 1997
This Annual Report has been prepared to provide information to the owners of
London Pacific Life & Annuity Company's Regency Series Variable Annuity. If it
is used for any other purpose, it must be accompanied or preceded by a current
Regency Series prospectus, which discloses any charges and other important
information about LPLA Separate Account One, together with the current
prospectus for the LPT Variable Insurance Series Trust.
CONTENTS
Message from the President................................................. 2
LPT Variable Insurance Series Trust:
Individual Portfolio Review................................................ 3-9
Statements of Assets & Liabilities......................................... 10
Statements of Operations................................................... 11
Statements of Changes in Net Assets........................................12-13
Financial Highlights.......................................................14-15
Schedules of Investments...................................................16-46
Notes to Financial Statements..............................................47-56
Report of Independent Accountants.......................................... 57
MESSAGE FROM THE PRESIDENT
Dear Contract Owner:
We are pleased to provide you with the Annual Report for LPT Variable Insurance
Series Trust for the period ending December 31, 1997. Thank you for investing
with us!
As you will see below, the 1997 year-end performance* of the underlying LPT
Variable Insurance Series Trust Portfolios was very good. The Portfolios
performed well as compared to their indices and we are pleased with the
performance of four new additions to the Trust in 1997.
Harris Associates Value Portfolio was up 25.56% as compared to the Lipper Growth
& Income Index* which was up 26.96% for the same period. The Robertson Stephens
Diversified Growth Portfolio was up 19.12% as compared to the Russell 2000 Small
Company Index, which was up 22.24%. Furthermore, it was interesting to note that
Robertson Stephens Diversified Growth Portfolio, for the eight-month period
ending December 31, 1997 (Robertson Stephens Investment Management began
managing this fund on May 1, 1997), was up over 53.22%. Berkeley U. S. Quality
Bond Portfolio, formerly the Salomon U. S. Quality Bond Portfolio was up 9.45%
as compared to the Lipper Government Intermediate Index*, which was up 8.21%.
MFS Total Return Portfolio was up 21.18% for the period as compared to the
Lipper Balanced Fund Index*, which was up 20.05%. Strong Growth Portfolio was up
25.56% as compared to the Russell 2000 Small Company Index*, which was up
22.24%. Strong International Stock Portfolio was down 11.62% as compared to the
Morgan Stanley EAFE Index*, which was up 1.78%. Lexington Corporate Leaders
Portfolio, was up 24.71% as compared to the Lipper Growth & Income Index*, which
was up 26.96%.
A major goal for the Regency Variable Annuity is to bring you the best
investment options available in the market today. Accordingly, in May of 1998,
several important and positive announcements will be made regarding your
investment options. A letter will be sent out to you in April outlining how you
can take advantage of these exciting new fund choices.
With the appreciable gains in 1997, we hope that you benefited from the rising
market and from the LPT Variable Insurance Series Trust Portfolio. Remember, as
we progress into 1998, please keep in touch with your financial advisor and as
in any retirement savings instrument, invest for the long term.
Thank you for selecting the Regency Variable Annuity. We appreciate the
confidence that you have placed in us, and we look forward to serving your
investment needs for the future.
Mark E. Prillaman
President
LPT Variable Insurance Series Trust
*Past performance of unmanaged indexes or of the LPT Variable Insurance Series
Trust Portfolios is no guarantee of future results. Investment return and
principal value of the investment will fluctuate so that the investor's shares,
when redeemed, may be worth more or less than their original cost. Performance
numbers are net of all portfolio operating expenses, however they do not reflect
the deduction of insurance charges against assets.
HARRIS ASSOCIATES VALUE PORTFOLIO
INVESTMENT SUB-ADVISOR
Harris Associates L.P.
ABOUT THE PORTFOLIO
Invests primarily in equity securities that are believed to have long-term
capital appreciation potential.
PERFORMANCE
Net total return for the year ended December 31, 1997:
Harris Value Portfolio 25.56%*
S&P 500 Index 33.36%
Lipper Growth &
Income Index 26.96%
The Standard & Poor's 500 Composite Stock Price Index ("S&P 500 Index") is an
unmanaged index of 500 leading stocks. Results for the S&P 500 Index do not
reflect the expenses and investment management fees incurred by the Portfolio.
The Lipper Growth & Income Index is a nonweighted index of 139 funds investing
in stocks and corporate and government bonds. Results for the Lipper Growth &
Income Index do not reflect expenses and investment management fees incurred by
the Portfolio.
Past performance is no guarantee of future results. Investment return and
principal value of an investment will fluctuate so that an investor's shares
when redeemed may be worth more or less than their original cost. Performance
numbers are net of all Portfolio operating expenses, but do not reflect the
deduction of insurance charges.
* During the period noted, London Pacific Life & Annuity Company voluntarily
agreed to reimburse certain operating expenses of the Portfolio. In the absence
of the expense reimbursement, total return would have been lower.
The Harris Associates Value Portfolio earned a total return of 25.56% for the
year ended December 31, 1997. Comparatively, the returns for the S&P 500 Index
and Lipper Growth and Income Index were 33.36% and 26.96%.
Since May 1, 1997, the date Harris Associates began managing the Portfolio, the
Portfolio has been taking on a more concentrated structure, dominated by
companies with competent shareholder-oriented managements whose companies are
trading at a significant discount to their underlying value. With the
restructuring of the Portfolio and transition to our philosophy now complete,
future Portfolio performance should more closely mirror our successful
long-term, value investment process.
Stocks turning in strong performances during the period were cable investments.
Specifically, Telecommunications Inc. and U.S. West Media increased by 94.3% and
68.0%. Other stocks dramatically outperforming the benchmarks during the period
were USG, a building products company (+40.1%), and Mellon Bank (+35.1%).
Examples of stocks sold opportunistically during the period were Borg Warner
Automotive and W.R. Grace, which increased an average of 34.5% in a four to five
month period.
The Portfolio's poorest performing stocks tended to be cyclical stocks or
consumer-spending related stocks. Examples here were General Signal (+1.7%),
Ferro Corp. (-4.4%), UCAR International (-4.0%), Black & Decker (+11.2%) and
DeBeers (-29.7%).
Two positions recently added were Columbia HCA/Healthcare and Mattel. Columbia
was purchased after much of its recent decline due to revelations about the
company's business practices. Despite the controversy, we believe Columbia
represents a company whose assets are worth far more than its stock price. We
also view Columbia's new management as highly motivated to maximize long-term
value. Mattel is a high-quality consumer products company selling at a discount
to its peers and the market. Like Columbia, Mattel's senior managers are
significant stockholders.
Looking forward into 1998, the market's performance will most likely continue to
be influenced by uncertainty over earnings prospects and the ongoing
difficulties in Asia. While we believe the market volatility caused by these
factors presents a challenge, it also presents opportunity for a value-oriented
and stock-picking philosophy such as ours.
$10,000 Hypothetical Investment Since Inception February 9, 1996
________________________________________________________________________________
$18,000 | X Harris Associates Value Portfolio |
| Y S&P 500 index |
| Z Lipper Growth & Income Index |
$16,000 | |
| |Y-$15,355
| |X-$15,162
$14,000 | |Z-$14,576
| |
| |
$12,000 | |
| |
| |
$10,000 |_______________________________________________________|
2/9/96 12/31/96 12/31/97
Inception date
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Harris Associates Value Portfolio, the S&P 500 Index, and
the Lipper Growth & Income Index on February 9, 1996, the inception date of the
Portfolio. The figures for the portfolio, the S&P 500 Index and the Lipper
Growth & Income Index includes reinvestment of dividends.
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/97
1 Year Since Inception
(February 9, 1996)
------------------
Harris Associates Value portfolio 25.56%* 24.59%*
S&P 500 Index 33.36% 25.42%
Lipper Growth 26.96% 22.02%
MFS TOTAL RETURN PORTFOLIO
INVESTMENT SUB-ADVISOR
Massachusetts Financial
Services Company
ABOUT THE PORTFOLIO
Invests in securities which are expected to provide above-average income and
opportunities for growth capital and income, consistent with the prudent
employment of capital.
PERFORMANCE
Net total return for the year ended December 31, 1997:
MFS Total Return
Portfolio 21.18%*
Lehman Brothers
Aggregate Bond Index 9.65%
Lipper Balanced
Fund Index 20.05%
The Lehman Brothers Aggregate Bond Index is an unmanaged index of average yield
U.S. investment grade bonds. Results for the Lehman Brothers Aggregate Bond
Index do not reflect the expenses and investment management fees incurred by the
portfolio.
The Lipper Balanced Fund Index is a nonweighted index of 210 funds investing in
stocks and corporate and government bonds. Results for the Lipper Balanced
FundIndex do not reflect expenses and investment management fees incurred by the
Portfolio.
Past performance is no guarantee of future results. Investment return and
principal value of an investment will fluctuate so that an investor's shares
when redeemed may be worth more or less than their original cost. Performance
numbers are net of all Portfolio operating expenses, but do not reflect the
deduction of insurance charges.
* During the period noted, London Pacific Life & Annuity Company voluntarily
agreed to reimburse certain operating expenses of the Portfolio. In the absence
of the expense reimbursement, total return would have been lower.
For the year ended December 31, 1997, the Portfolio provided a total return of
21.18%. This compares to a 9.65% return for the Lehman Brothers Aggregate Bond
Index and a 20.05% return for the Lipper Balanced Fund Index.
The past 12 months have been fabulous for equity investors due to an extremely
favorable macro environment. We have seen solid growth in GDP and corporate
profits. Inflation is in check and interest rates remained reasonably steady. In
addition, we continue to see strong demand for U.S. equities as households
continue to skew more of their investment dollars towards stocks. As a result of
these factors, stock prices rose throughout the period.
The MFS Total Return Portfolio benefited from the increase in stock prices. In
particular, the Portfolio has been heavily weighted in financial stocks and
energy stocks-both of which did well over the past 12 months. Our stock
selection process is focused on large, dividend paying companies with reasonable
valuations and attractive growth prospects. We continue to find these traits in
the financial, energy, and utility sectors. Our stock selection process also
focuses on reducing volatility. As a result, we are underweighted in
over-the-counter stocks in general and technology stocks in particular. We see
the technology sector as a high reward/high risk area that is often difficult to
value.
Our bond strategy has remained fairly constant throughout the period. We have
overweighted corporate issues vs. treasuries. Approximately 65% of the bond
portion of the Portfolio has been invested in corporate issues over the period.
The duration in the portfolio has been approximately 5.5 years throughout much
of the period. The bond portion of the Portfolio has been positioned to benefit
from strengthening corporate profits while the duration anticipated flat to
slightly lower interest rates.
The last quarter produced increased volatility and falling stock prices. The
currency crises in Asia and concerns over the strength of many international
economies have caused some investors to rethink the outlook for profit growth in
the U. S.
In fact, we have been concerned about the rate of corporate earnings growth for
some time and believe it will slow over the next 12 months. As a result, we have
lowered the equity weighting to just over 55% and our cash position was
increased to 11%.
We anticipate better equity values over the next several months and will likely
spend our cash when these values arise. It is our intent to increase the equity
weighting in the face of a correction because our long-term outlook for equities
continues to be quite positive.
$10,000 Hypothetical Investment Since Inception February 9, 1996
________________________________________________________________________________
$18,000 | X MFS Total Return Portfolio |
| Y Lehman Aggregate Bond Index |
| Z Lipper Balanced Fund Index |
$16,000 | |
| |
| |
$14,000 | |
| |X-$13,301
| |Z-$13,142
$12,000 | |Y-$11,297
| |
| |
$10,000 |_______________________________________________________|
2/9/96 12/31/96 12/31/97
Inception date
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the MFS Total Return Portfolio, the Lehman Brothers
Aggregate, and the Lipper Growth & Income Index on February 9, 1996, the
inception date of the Portfolio. The figures for the portfolio, the S&P 500
Index and the Lipper Growth & Income Index includes reinvestment of dividends.
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/97
1 Year Since Inception
(February 9, 1996)
------------------
MFS Total Return Portfolio 21.18%* 16.26%*
Lehman Brothers Aggregate Bond Index 9.65% 6.65%
Lipper Balanced Fund Index 20.05% 15.53%
BERKELEY U.S. QUALITY BOND PORTFOLIO
INVESTMENT SUB-ADVISOR
Berkeley Capital
Management
ABOUT THE PORTFOLIO
Invests primarily in high quality debt securities of the U.S. Government and its
agencies to obtain a high level of current income.
PERFORMANCE
Net total return for the year ended December 31, 1997:
Berkeley U.S. Quality
Bond Portfolio 9.45%*
Lipper Government
Intermediate Bond Index 8.21%
The Lipper Government Intermediate Bond Index is a nonweighted index of 139
funds investing in stocks and corporate and government bonds. Results for the
Lipper Government Intermediate Bond Index do not reflect expenses and investment
management fees incurred by the Portfolio.
Past performance is no guarantee of future results. Investment return and
principal value of an investment will fluctuate so that an investor's shares
when redeemed may be worth more or less than their original cost. Performance
numbers are net of all Portfolio operating expenses, but do not reflect the
deduction of insurance charges.
* During the period noted, London Pacific Life & Annuity Company voluntarily
agreed to reimburse certain operating expenses of the Portfolio. In the absence
of the expense reimbursement, total return would be lower.
The Berkeley U.S. Quality Bond Portfolio earned a total return of 9.45% for the
year ended December 31, 1997. This return is 1.24 % greater than the Lipper
Intermediate Government Index which returned 8.21% over the same time period.
Effective November 3, 1997, we replaced Salomon Brothers Asset Management as the
Portfolio's sub-advisor.
The performance of the U.S. Treasury bond market was characterized by a bullish
flattening of the yield curve in 1997. Long bond yields, as measured by the 30
year Treasury, fell by over 70 bps to 5.92% by year end, while Treasury Bill
rates actually rose. The additional performance over the Lipper index was
attributable to the longer duration of the U.S. Treasury holdings as well as the
larger holding of discount mortgages.
Economic growth moderated in the second half of the year after robust growth in
the fist quarter of 1997. The economy grew at roughly a 4.10% annualized rate in
the first two quarters of 1997, slowed to a 3.10% annualized rate in the third
quarter and the fourth quarter came in at a strong 4.30% annualized rate. The
growth rate of the economy for the entire year ending 1997 was a healthy 3.80%
annualized rate. Although economic growth was relatively strong in 1997,
investors took heart from falling rates of inflation throughout 1997. Producer
prices actually fell by 1.2%, while CPI rose only 1.7%, the best performance
since 1986.
Going forward, it appears that economic growth for 1998 will slow from the 1997
pace, with consensus GDP forecasted at 2.5%. Although the U.S. economy has been
strong, the slowdown in most Asian markets should affect the U.S. GDP, slowing
growth by an estimated .5% to 1% annually. With interest rates hovering near
record lows, we remain concerned that the market has priced in too much economic
slowing. As investor confidence in Asian markets improves and our growth remains
solid, the recent flight to the quality of the U.S. Treasury market may well
reverse itself.
$10,000 Hypothetical Investment Since Inception February 9, 1996
________________________________________________________________________________
$18,000 | X Berkeley U.S. Quality Bond Portfolio |
| Y Lipper Government Intermediate Index |
| |
$16,000 | |
| |
| |
$14,000 | |
| |
| |
$12,000 | |
| |X-$11,194
| |Y-$11,067
$10,000 |_______________________________________________________|
2/9/96 12/31/96 12/31/97
Inception date
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Berkeley U.S. Quality Bond Portfolio, the Lipper
Government Intermediate Bond on February 9, 1996, the inception date of the
Portfolio. The figures for the Portfolio, the S&P 500 Index and the Lipper
Growth & Income Index includes reinvestment of dividends.
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/97
1 Year Since Inception
(February 9, 1996)
------------------
Berkeley U.S. Quality Bond Portfolio 9.45%* 6.14%*
Lipper Government Intermediate Bond Index 8.21% 5.50%
STRONG INTERNATIONAL STOCK PORTFOLIO
INVESTMENT SUB-ADVISOR
Strong Capital Management, Inc.
ABOUT THE PORTFOLIO
Invests primarily in companies located outside of the United States that are
believed to have strong potential for capital growth.
PERFORMANCE
Net total return for the year ended December 31, 1997:
Strong International
Stock Portfolio -11.62%*
Morgan Stanley
EAFE Index 1.78%
Lipper International
Fund Index 7.27%
The Morgan Stanley Europe, Asia, Far East Index is an unmanaged index of leading
international stocks. Results for the Morgan Stanley EAFE Index do not reflect
the expenses and investment management fees incurred by the Portfolio.
The Lipper International Fund Index is a nonweighted index of 115 funds invest
assets in securities whose primary markets are outside the United States.
Results for the Index not reflect expenses and investment management fees
incurred by the Portfolio.
Past performance is no guarantee of future results. Investment return and
principal value of an investment will fluctuate so that an investor's shares
when redeemed may be worth more or less than their original cost. Performance
numbers are net of all Portfolio operating expenses, but do not reflect the
deduction of insurance charges.
* During the period noted, London Pacific Life & Annuity Company voluntarily
agreed to reimburse certain operating expenses of the Portfolio. In the absence
of the expense reimbursement, total return would have been lower.
The Strong International Stock Portfolio earned a total return of -11.62% for
the year ended December 31, 1997, compared to 1.78% for the Morgan Stanley
Europe, Asia, Far East Index and 7.27% for the Lipper International Index.
Although European markets held fairly steady, thanks to their continuing merits
of restructuring, a growing equity culture, a strong dollar, and a flurry of
merger activity, even they could not make progress in the face of the crises in
Asia and emerging markets. While Europe is perceived to have relatively limited
Asian exposure, the contagion that spread throughout Asia moved on to Russia,
Eastern Europe, and Latin America, as the sheer scale of the problems in the Far
East--and the size of the International Monetary Fund bailout required--became
clearer.
The vicious cycle of current account deficits, higher interest rates, mounting
bad debts, slowing economies, and collapsing currencies intensified over the
quarter, resulting in near bankruptcy for Korea, Thailand, and Indonesia, and
diminished prospects even for the stronger nations in the region, such as
Singapore and Hong Kong.
Although reduced substantially, the Portfolio's exposure to Asia continued to
damage performance in the fourth quarter. As the quarter progressed, we reduced
holdings in Australia and New Zealand and significantly increased weighting in
Europe, which was a stabilizing influence. Two consistent characteristics of the
Portfolio--emphasis on small-capitalization stocks and in emerging
markets--undermined performance relative to broader indices.
We see greater security and earnings visibility in Europe, justifying our
continued confidence there. Although final resolution of the Asian financial
crises could be painful, eventually the potential will exist for strong stock
price rallies. We intend to retain our cautious stance on the more volatile
markets, while remaining alert to concrete signs of turnarounds.
We intend to focus on quality and value in 1998, which we expect will be an
uneven and volatile year. Opportunities will arise for investment in stocks
undervalued relative to assets and earnings flows and in quality companies with
strong balance sheets and stable businesses. Timing will be critical in
reentering some markets, but the patient, discriminating investor could find
reward in later year recoveries.
$10,000 Hypothetical Investment Since Inception February 9, 1996
________________________________________________________________________________
$13,000 | X Strong International Stock Portfolio |
| Y Morgan Stanley EAFE Index |
| Z Lipper International Fund Index |
$12,000 | |
| |Z-$11,912
| |
$11,000 | |
| |Y-$10,733
| |
$10,000 | |
| |X-$9,361
| |
$9,000 |_______________________________________________________|
2/9/96 12/31/96 12/31/97
Inception date
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Strong International Stock Portfolio, the Morgan Stanley
EAFE Index, and the Lipper International Fund Index on February 9, 1996, the
inception date of the Portfolio. The figures for the Portfolio, the S&P 500
Index and the Lipper Growth & Income Index includes reinvestment of dividends.
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/97
1 Year Since Inception
(February 9, 1996)
------------------
Strong International Stock Portfolio -11.62%* -3.43%*
Morgan Stanley EAFE Index 1.78% 3.81%
Lipper International Fund Index 7.27% 9.68%
STRONG GROWTH PORTFOLIO
INVESTMENT SUB-ADVISOR
Strong Capital Management, Inc.
ABOUT THE PORTFOLIO
Invests in equity securities that are believed to have above average capital
growth potential.
PERFORMANCE
Net total return for the year ended December 31, 1997:
Strong Growth Portfolio 25.56%*
Russell 2000 Small
Company Index 22.24%
S&P 500 Index 33.36%
The Standard & Poor's 500 Composite Stock Price Index ("S&P 500 Index") is an
unmanaged index of 500 leading stocks. Results for the S&P 500 Index do not
reflect the expenses and investment management fees incurred by the Portfolio.
The Russell 2000 Small Company Index is an unmanaged index of 2000 small company
stocks. Results for the Russell 2000 Small Company Index do not reflect the
expenses and investment management fees incurred by the Portfolio.
Past performance is no guarantee of future results. Investment return and
principal value of an investment will fluctuate so that an investor's shares
when redeemed may be worth more or less than their original cost. Performance
numbers are net of all Portfolio operating expenses, but do not reflect the
deduction of insurance charges.
* During the period noted, London Pacific Life & Annuity Company voluntarily
agreed to reimburse certain operating expenses of the Portfolio. In the absence
of the waiver and expense reimbursement, total return would have been lower.
The Strong Growth Portfolio earned a total return of 25.56% for the year ended
December 31, 1997, compared to 22.24% for the Russell 2000 Small Company Index
and 33.36% for the S & P 500 Index. The Portfolio benefited from its holdings in
groups oriented to the domestic economy, like media, regional banks, and
retailers, which outperformed overall in the quarter. However, although we
reduced our holdings in companies with Southeast Asian exposure, the Portfolio
was negatively impacted by the sell-off in small-and mid-cap stocks in general
and in most technology and energy stocks.
The market could remain in a trading range over the next six months until the
full effects of the Asian crisis are understood. We are likely to see continued
volatility and swift group rotations in the meantime. Inflation and interest
rates should remain low as the economy and earnings show signs of slowing.
Therefore, we need to pay strict attention to the fundamentals and valuations of
our companies. While we are cautious over the near term, we remain bullish for
the long run.
We believe that outstanding companies with superior earnings and revenue growth
will outperform the market over the long term.
These companies tend to be driven by the following:
Visionary leadership
Innovative new products, markets, or technologies
Secular trends and economic conditions which provide unique advantages for
particular companies or industries
Major changes in key management personnel or corporate structure
OUR GOAL
Pursue capital growth by focusing on stock with favorable prospects for
accelerating earnings growth and selling at reasonable valuations.
Identify attractive companies that are well-managed, globally competitive,
have expanding margins, are gaining market share, and are creating new
products or technologies.
Manage risk by adhering to price disciplines, monitoring company
fundamentals, and building moderate cash reserves as market conditions
warrant.
$10,000 Hypothetical Investment Since Inception February 9, 1996
________________________________________________________________________________
$18,000 | X Strong Growth Portfolio |
| Y Russell 2000 Small Company Index |
| Z S&P 500 Index |
$16,000 | |
| |Z-$15,355
| |X-$15,122
$14,000 | |
| |Y-$13,529
| |
$12,000 | |
| |
| |
$10,000 |_______________________________________________________|
2/9/96 12/31/96 12/31/97
Inception date
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Strong Growth Portfolio, the Russell 2000 Small Company
Index, and the S&P 500 Index on February 9, 1996, the inception date of the
Portfolio. The figures for the portfolio, the S&P 500 Index and the Lipper
Growth & Income Index includes reinvestment of dividends.
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/97
1 Year Since Inception
(February 9, 1996)
------------------
Strong Growth Portfolio 25.56%* 24.42%*
Russell 2000 Small Company Index 22.24% 17.31%
S&P 500 Index 33.36% 25.42%
ROBERTSON STEPHENS DIVERSIFIED GROWTH PORTFOLIO
INVESTMENT SUB-ADVISOR
Robertson Stephens & Company
Investment Management, L.P.
ABOUT THE PORTFOLIO
Invests in securities broadly diversified over industry sectors by focusing on
small and mid-cap companies expected to provide long-term capital appreciation.
PERFORMANCE
Net total return for the year ended December 31, 1997:
Robertson Stephens
Diversified Growth 19.12%*
Russell 2000 Small
Company Index 22.24%
S&P 500 Index 33.36%
The Standard & Poor's 500 Composite Stock Price Index ("S&P 500 Index") is an
unmanaged index of 500 leading stocks. Results for the S&P 500 Index do not
reflect the expenses and investment management fees incurred by the Portfolio.
The Russell 2000 Small Company Index is an unmanaged index of 2000 small company
stocks. Results for the Russell 2000 Small Company Index do not reflect the
expenses and investment management fees incurred by the Portfolio.
Past performance is no guarantee of future results. Investment return and
principal value of an investment will fluctuate so that an investor's shares
when redeemed may be worth more or less than their original cost. Performance
numbers are net of all Portfolio operating expenses, but do not reflect the
deduction of insurance charges.
* During the period noted, London Pacific Life & Annuity Company voluntarily
agreed to reimburse certain operating expenses of the Portfolio. In the absence
of the waiver and expense reimbursement, total return would have been lower.
The Robertson Stephens Diversified Growth Portfolio earned a total return of
19.12% for the year ended December 31, 1997 compared to 22.24% for the Russell
2000 Small Company Index and 33.36% for the S&P 500 Index for the same period.
Effective May 1, 1997, we replaced Berkeley Capital Management as the
Portfolio's sub-advisor.
1997 ended the third year of unprecedented extraordinary gains for major market
indices. Many records were broken and it was the first time ever that we had
three consecutive years of better than 20% gains for the Dow Jones Industrial
Average. Large cap stocks provided the best performance once again. Except for a
brief period this summer, the small cap segment of the market has lagged
considerably for the third year in a row.
Valuations are not the problem. In our opinion, small and mid-cap stocks remain
undervalued relative to the overall market. Concerns over Southeast Asia and
other emerging economies have focused investor's attention to bigger, more
liquid stocks. If small caps are going to reverse their underperformance, the
next several months should be the time. We still believe that many small-cap
stocks offer higher earnings growth potential in 1998 with less foreign exposure
than most large-cap multinationals. While interest rates , monetary policy and
liquidity might put a floor under stocks, earnings disappointments may
accelerate this year. We believe that most investors are underestimating the
potential for increased competition and disinflationary pressures that Asia's
turmoils will bring in 1998.
We continue to be opportunistic and try to take advantage of market volatility.
Some of our big winners in 1997 were bought and sold during the year--others we
continue to hold. Some examples include: AgriBiotech, Herman Miller Inc.,
Corporate Family Solutions, MotivePower Industries and Anchor Gaming. The common
denominator of these winners was the identification of a growth catalyst that
helped drive earnings and valuations above expectations.
We enter 1998 even less bullish than we were 12 months ago. Whether we like it
or not, we are getting later and later in both the economic and bull market
cycles. Market valuations are stretched and we do not believe "It's different
this time"!! The biggest economic news of 1997 was the turmoil in Asia. The big
question for 1998 is what it will mean for the U.S. economy. In all likelihood
it may mean a flood of imports to the United States by spring, a reduction in
GDP growth and pressure on corporate earnings.
The big question for 1998 is what it will mean for the U.S. economy. In all
likelihood it may mean a flood of imports to the United States by spring, a
reduction in GDP growth and pressure on corporate earnings.
Pricing power has not been good in general and should become more negative for
companies exposed to Asian competition.
Over the next several months, earnings preannouncements should give us a first
cut at quantifying the market environment. From time to time, we may reduce
(increase) our equity exposure by purchasing puts (calls) on the S&P 500.
$10,000 Hypothetical Investment Since Inception February 9, 1996
________________________________________________________________________________
$18,000 | X Robertson Stephens Diversified Growth Portfolio |
| Y Russell 2000 Small Company Index |
| Z S&P 500 Index |
$16,000 | |Z-$15,355
| |
| |
$14,000 | |Y-$13,529
| |
| |X-$12,199
$12,000 | |
| |
| |
$10,000 |_______________________________________________________|
2/9/96 12/31/96 12/31/97
Inception date
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Robertson Stephens Diversified Growth Portfolio, Russell
2000 Small Company Index, and the S&P 500 Index on February 9, 1996, the
inception date of the Portfolio. The figures for the portfolio, the S&P 500
Index and the Lipper Growth & Income Index includes reinvestment of dividends.
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/97
1 Year Since Inception
(February 9, 1996)
-----------------
Robertson Stephens Diversified Growth Portfolio 19.12%* 11.07%*
Russell 200 Small Company Index 22.24% 17.31%
S&P 500 Index 33.36% 25.42%
LEXINGTON CORPORATE LEADERS PORTFOLIO
INVESTMENT SUB-ADVISOR
Lexington Management Corporation
ABOUT THE PORTFOLIO
Invests in large well-established companies believed to have long-term potential
for strong capital growth and earnings.
PERFORMANCE
Net total return for the year ended December 31, 1997:
Lexington Corporate
Leaders Portfolio 24.71%*
S&P 500 Index 33.36%
Lipper Growth &
Income Index 26.96%
The Standard & Poor's 500 Composite Stock Price Index ("S&P 500 Index") is an
unmanaged index of 500 leading stocks. Results for the S&P 500 Index do not
reflect the expenses and investment management fees incurred by the Portfolio.
The Lipper Growth & Income Index is a nonweighted index of 139 funds investing
in stocks and corporate and government bonds. Results for the Lipper Growth &
Income Index do not reflect expenses and investment management fees incurred by
the Portfolio.
Past performance is no guarantee of future results. Investment return and
principal value of an investment will fluctuate so that an investor's shares
when redeemed may be worth more or less than their original cost. Performance
numbers are net of all Portfolio operating expenses, but do not reflect the
deduction of insurance charges.
* During the period noted, London Pacific Life & Annuity Company voluntarily
agreed to reimburse certain operating expenses of the Portfolio. In the absence
of the expense reimbursement, total return would have been lower.
The Lexington Corporate Leaders Portfolio earned a total return of 24.71% for
the year ended December 31, 1997 compared to 33.36% for the S&P 500 Index and
26.92% for the Lipper Growth & Income Index.
Stocks turned in a record performance in 1997. However, the market turned
decidedly more volatile in the second half and since the beginning of August
returned only 2.4%. The chief culprit for the change in sentiment was the
unfolding currency and economic crisis in several Asian and other emerging
markets. The Portfolio underperformed its benchmark indices due to several
factors some of which we believe were one time events that will lead to improved
performance in 1998. These include Kodak which announced it would cut its
payroll by 19,000 employees in 1997/1998 to better compete and Union Pacific
which became the largest rail system in the nation with its acquisition of
Southern Pacific Railroad. Finally, weakness in the oil sector, in which the
Portfolio currently has more than an 18% weighting, also put a drag on
performance.
Economic conditions in the U.S. are quite good, maybe even too good to keep the
Federal Reserve from raising interest rates. The labor market is very tight with
unemployment at the lowest rate in 25 years and wage rates continuing to creep
upward. Economic growth remained above the Fed's stated target range. Thus,
despite continued low reported inflation rates, domestic conditions would very
likely tempt the Fed to raise rates, at least modestly.
The U.S. economy, however, does not exist in a vacuum. The events in Asia this
fall will have significant effects on the world economies. The "Asian Tiger"
economies, together with China and Japan, had represented one of the fastest
growing regions of the world. As a result of the currency and market upheavals,
and the heavy dose of International Monetary Fund " medicine", many of these
economies will likely be in recession through 1998. Given the relatively low
trade and high services components of our economy, the U.S. should be only
moderately affected.
Although growth may be slowed somewhat in the U.S., the economy remains quite
strong and current low interest rates will help sustain that growth. The larger
issue for investors will be the outlook for corporate earnings. Analyst's
estimates for 1998 appeared too optimistic to us even before the Asian crisis.
Estimates have already begun to come down for the fourth quarter of 1997, but
have not yet to drop materially for 1998. As estimates are reduced over the next
few months, the market will likely remain volatile. On the other hand, lower
interest rates provide a floor under stock prices preventing a significant
decline. The key to performance in this environment will be avoiding companies
with significant earnings disappointments.
By the second half of the year we believe the environment could flip around. By
then, economic conditions around the world should stabilized and earnings
expectations will have been reduced to more realistic levels. With the U.S.
economy still on a moderate growth track, interest rates will likely be somewhat
higher. Altogether probably a healthier backdrop for stocks.
$10,000 Hypothetical Investment Since Inception February 9, 1996
________________________________________________________________________________
$18,000 | X Lexington Corporate Leaders Portfolio |
| Y S&P 500 Index |
| Z Lipper Growth & Income Index |
$16,000 | |
| |Y-$15,355
| |Z-$14,576
$14,000 | |X-$14,082
| |
| |
$12,000 | |
| |
| |
$10,000 |_______________________________________________________|
2/9/96 12/31/96 12/31/97
Inception date
The chart above illustrates the growth in value of a hypothetical $10,000
investment made in the Lexington Corporate Leaders Portfolio, the S&P 500 Index,
and the Lipper Growth & Income Index on February 9, 1996, the inception date of
the Portfolio. The figures for the Portfolio, the S&P 500 Index and the Lipper
Growth & Income Index includes reinvestment of dividends.
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/97
1 Year Since Inception
(February 9, 1996)
------------------
Lexington Corporate Leaders Portfolio 24.71%* 19.82%*
S&P 500 Index 33.36% 25.42%
Lipper Growth 26.96% 22.02%
<TABLE>
<CAPTION>
LPT VARIABLE INSURANCE SERIES TRUST
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
HARRIS STRONG
ASSOCIATES BERKELEY U.S. BERKELEY MONEY INTERNATIONAL
VALUE MFS TOTAL RETURN QUALITY BOND MARKET STOCK
ASSETS PORTFOLIO(1) PORTFOLIO PORTFOLIO(2) PORTFOLIO(3) PORTFOLIO
---------------- ----------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C> <C>
Investments at value, see accompanying $3,164,702 $5,141,580 $1,070,607 $1,574,270 $1,494,219
schedules
Repurchase agreements at cost and value 431,000 1,147,000 0 0 0
Cash 81 79 20,408 1,424 21,275
Foreign currency at value 0 1,370 0 0 14,380
Unrealized appreciation on forward
foreign
currency contracts (Note 2) 0 0 0 0 4,395
Dividends and/or interest receivable 3,519 30,175 13,324 0 2,136
Receivable for investments securities 0 5,896 0 0 6,824
sold
Receivable for Trust shares sold 2,005 56,611 0 0 2,004
Expense reimbursements receivable
15,050 6,263 14,410 15,078 12,767
Other assets
2,010 2,010 2,010 2,010 2,010
----- ----- ----- ----- -----
TOTAL ASSETS $3,618,367 $6,390,984 $1,120,759 $1,592,782 $1,560,010
Investments at cost $2,841,440 $4,732,528 $1,041,258 $1,574,270 $1,580,000
Foreign currency at cost $0 $1,399 $0 $0 $14,696
LIABILITIES
Payable for investments securities $0 $337,340 $0 $0 $34,725
purchased
Payable for Trust shares redeemed 65,865 46,681 11,476 191,983 1,518
Unrealized depreciation on forward
foreign
currency contracts (Note 2) 0 0 0 0 339
Custodian fees payable 5,311 8,545 5,316 5,493 8,559
Advisory fees payable 3,031 3,785 561 642 993
Accrued legal and audit fees 15,930 15,930 15,930 15,930 15,930
Accrued expenses and other liabilities 5,578 5,695 5,577 5,577 5,656
----- ----- ----- ----- -----
TOTAL LIABILITIES 95,715 417,976 38,860 219,625 67,720
Net Assets $3,522,652 $5,973,008 $1,081,899 $1,373,157 $1,492,290
========== ========== ========== ========== ==========
COMPONENTS OF NET ASSETS:
Paid-in capital $3,199,390 $5,527,683 $1,056,490 $1,373,157 $1,700,650
Undistributed net investment 0 996 0 0 (345)
income (loss)
Accumulated net realized gain (loss)
on securities
and foreign currency transactions 0 35,306 (3,940) 0 (125,974)
Net unrealized appreciation
(depreciation) of securities
and foreign currency transactions 323,262 409,023 29,349 0 (82,041)
------- ------- ------ - -------
NET ASSETS $3,522,652 $5,973,008 $1,081,899 $1,373,157 $1,492,290
========== ========== ========== ========== ==========
SHARES OUTSTANDING (UNLIMITED
AUTHORIZATION,
$.01 PAR VALUE) 261,935 466,463 109,188 1,373,157 167,642
------- ------- ------- --------- -------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION
PRICE, PER SHARE (NET ASSETS/SHARES
OUTSTANDING) $13.45 $12.80 $9.91 $1.00 $8.90
====== ====== ===== ===== =====
<FN>
(1) Formerly MAS Value Portfolio
(2) Formerly Salomon U.S. Quality Bond Portfolio
(3) Formerly Salomon Money Market Portfolio
(4) Formerly Berkeley Smaller Companies Portfolio
</FN>
</TABLE>
<TABLE>
<CAPTION>
LPT VARIABLE INSURANCE SERIES TRUST
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
LEXINGTON
ROBERTSON STEPHENS CORPORATE
STRONG GROWTH DIVERSIFIED GROWTH LEADERS
ASSETS PORTFOLIO PORTFOLIO(4) PORTFOLIO
---------------- --------------------- --------------
<S> <C> <C> <C>
Investments at value, see accompanying $2,795,883 $3,130,940 $3,407,601
schedules
Repurchase agreements at cost and value 417,000 393,000 111,000
Cash 803 76 14
Foreign currency at value 0 0 0
Unrealized appreciation on forward
foreign
currency contracts (Note 2) 0 0 0
Dividends and/or interest receivable 1,796 506 6,211
Receivable for investments securities 17,900 0 0
sold
Receivable for Trust shares sold 2,004 1,002 1,002
Expense reimbursements receivable
11,416 10,629 9,186
Other assets
2,010 2,010 2,010
----- ----- -----
TOTAL ASSETS $3,248,812 $3,538,163 $3,537,024
Investments at cost $2,339,514 $2,766,662 $3,085,219
Foreign currency at cost $0 $0 $0
LIABILITIES
Payable for investments securities $148,453 $51,719 $0
purchased
Payable for Trust shares redeemed 156,747 3,843 54,169
Unrealized depreciation on forward
foreign
currency contracts (Note 2) 0 0 0
Custodian fees payable 7,798 6,533 6,146
Advisory fees payable 1,937 2,398 1,897
Accrued legal and audit fees 15,930 15,930 15,930
Accrued expenses and other liabilities 5,593 5,593 5,577
----- ----- -----
TOTAL LIABILITIES 336,458 86,016 83,719
Net Assets $2,912,354 $3,452,147 $3,453,305
========== ========== ==========
COMPONENTS OF NET ASSETS:
Paid-in capital $2,513,204 $3,248,650 $3,116,813
Undistributed net investment 0 0 0
income (loss)
Accumulated net realized gain (loss)
on securities
and foreign currency transactions (57,219) (160,781) 14,110
Net unrealized appreciation
(depreciation) of securities
and foreign currency transactions 456,369 364,278 322,382
------- ------- -------
NET ASSETS $2,912,354 $3,452,147 $3,453,305
========== ========== ==========
SHARES OUTSTANDING (UNLIMITED
AUTHORIZATION,
$.01 PAR VALUE) 216,183 337,840 257,809
------- ------- -------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION
PRICE, PER SHARE (NET ASSETS/SHARES
OUTSTANDING) $13.97 $10.22 $13.39
====== ====== ======
<FN>
(1) Formerly MAS Value Portfolio
(2) Formerly Salomon U.S. Quality Bond Portfolio
(3) Formerly Salomon Money Market Portfolio
(4) Formerly Berkeley Smaller Companies Portfolio
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
LPT VARIABLE INSURANCE SERIES TRUST
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED
DECEMBER 31, 1997
HARRIS
ASSOCIATES MFS TOTAL BERKELEY U.S BERKELEY MONEY STRONG
VALUE RETURN QUALITY BOND MARKET INTERNATIONAL
PORTFOLIO(1) PORTFOLIO PORTFOLIO(2) PORTFOLIO(3) STOCK PORTFOLIO
---------------- --------------- -------------- ------------------- -----------------
INVESTMENT INCOME
Income:
<S> <C> <C> <C> <C> <C>
Dividends $31,021 $40,147 $0 $0 $24,313
Foreign withholding tax on
dividend income (102) (478) 0 0 (2,962)
Interest 8,253 84,918 98,014 91,915 9,705
----- ------ ------ ------ -----
TOTAL INVESTMENT INCOME 39,172 124,587 98,014 91,915 31,056
------ ------- ------ ------ ------
EXPENSES:
Investment advisory fees 20,567 22,830 7,955 7,560 10,737
Custodian fees 33,544 60,161 30,494 29,447 51,591
Printing expenses 1,394 1,394 1,394 1,394 1,394
Legal and audit fees 25,780 25,780 25,780 25,780 25,780
Insurance expense 1,939 1,939 1,939 1,939 1,939
Trustees' fees and expenses 3,676 3,676 3,676 3,676 3,676
Other expense 2,421 2,421 2,421 2,421 2,421
----- ----- ----- ----- -----
Expenses before expense
reimbursement 89,321 118,201 73,659 72,217 97,538
Expense reimbursement (62,010) (78,936) (59,341) (57,225) (76,210)
(Note 3) ------- ------- ------- ------- -------
TOTAL EXPENSES 27,311 39,265 14,318 14,992 21,328
------ ------ ------ ------ ------
NET INVESTMENT INCOME 11,861 85,322 83,696 76,923 9,728
------ ------ ------ ------ -----
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) on
securities and foreign currency
transactions 309,569 133,356 18,375 0 (70,392)
Net change in unrealized
appreciation (depreciation) of
securities and foreign currency
transactions 148,504 311,415 23,041 0 (130,748)
------- ------- ------ - --------
NET GAIN (LOSS) ON INVESTMENTS 458,073 444,771 41,416 0 (201,140)
------- ------- ------ - --------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $469,934 $530,093 $125,112 $76,923 ($191,412)
======== ======== ======== ======= =========
<FN>
(1) Formerly MAS Value Portfolio
(2) Formerly Salomon U.S. Quality Bond Portfolio
(3) Formerly Salomon Money Market Portfolio
(4) Formerly Berkeley Smaller Companies Portfolio
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
LPT VARIABLE INSURANCE SERIES TRUST
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED
DECEMBER 31, 1997
LEXINGTON
ROBERTSON STEPHENS CORPORATE
STRONG GROWTH DIVERSIFIED GROWTH LEADERS
PORTFOLIO PORTFOLIO(4) PORTFOLIO
----------------- -------------------- ---------------
INVESTMENT INCOME
Income:
<S> <C> <C> <C>
Dividends $12,397 $5,413 $42,824
Foreign withholding tax on
dividend income (34) (26) (464)
Interest 11,061 8,401 3,777
------ -----
TOTAL INVESTMENT INCOME 23,424 13,788 46,137
------ ------ ------
EXPENSES:
Investment advisory fees 17,116 19,812 13,153
Custodian fees 48,993 38,539 34,170
Printing expenses 1,394 1,394 1,394
Legal and audit fees 25,780 25,780 25,780
Insurance expense 1,939 1,939 1,939
Trustees' fees and expenses 3,676 3,676 3,676
Other expense 2,421 2,421 2,421
----- ----- -----
Expenses before expense
reimbursement 101,319 93,561 82,533
Expense reimbursement (71,882) (64,876) (56,431)
(Note 3) ------- ------- -------
TOTAL EXPENSES 29,437 28,685 26,102
------ ------ ------
NET INVESTMENT INCOME (6,013) (14,897) 20,035
------- ------- ------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) on
securities and foreign currency
transactions 214,565 104,555 209,511
Net change in unrealized
appreciation (depreciation) of
securities and foreign currency
transactions 316,734 396,298 173,395
------- ------- -------
NET GAIN (LOSS) ON INVESTMENTS 531,299 500,853 382,906
------- ------- -------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $525,286 $485,956 $402,941
======== ======== ========
<FN>
(1) Formerly MAS Value Portfolio
(2) Formerly Salomon U.S. Quality Bond Portfolio
(3) Formerly Salomon Money Market Portfolio
(4) Formerly Berkeley Smaller Companies Portfolio
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
LPT VARIABLE INSURANCE SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
HARRIS ASSOCIATES MFS TOTAL RETURN
VALUE PORTFOLIO (1) PORTFOLIO
-------------------------------------- ------------------------------------
Year Ended Period Ended Year Ended Period Ended
December 31,1997 December 31,1996* December 31, 1997 December 31, 1996*
---------------- ----------------- ----------------- ------------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
<S> <C> <C> <C> <C>
Net investment income $11,861 $10,502 $85,322 $27,104
Net realized gain (loss) on
securities and foreign currency
transactions 309,569 49,011 133,356 (2,959)
Net change in unrealized
appreciation (depreciation)of
securities and foreign
currency transactions during 148,504 174,758 311,415 97,608
the period ------- ------- ------- ------
Net increase (decrease) in net
assets resulting from operations 469,934 234,271 530,093 121,753
------- ------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (11,864) (10,502) (84,797) (26,938)
------- ------- ------- -------
Net realized gain on investments (326,649) (31,932) (94,786) 0
-------- ------- ------- -
Total distributions (338,513) (42,434) (179,583) (26,938)
SHARE TRANSACTIONS
Net proceeds from sale of shares 2,687,516 1,387,694 4,879,026 1,661,251
Issued to shareholders in
reinvestment of dividends 338,513 42,434 179,583 26,938
Cost of shares repurchased (1,055,861) (200,902) (964,786) (254,329)
---------- -------- -------- --------
Net increase (decrease) from
share transactions(Note 5) 1,970,168 1,229,226 4,093,823 1,433,860
--------- --------- --------- ---------
TOTAL INCREASE IN NET ASSETS 2,101,589 1,421,063 4,444,333 1,528,675
--------- --------- --------- ---------
NET ASSETS AT BEGINNING OF PERIOD 1,421,063 0 1,528,675 0
--------- - --------- -
NET ASSETS AT END OF PERIOD $3,522,652 $1,421,063 $5,973,008 $1,528,675
========== ========== ========== ==========
Accumulated undistributed net
investment income (loss) included
in net assets at end of period $ 0 $ 0 $ 996 $ 166
========= ========== ========== ==========
<FN>
(1) Formerly MAS Value Portfolio
(2) Formerly Salomon U.S. Quality Bond Portfolio
(3) Formerly Salomon Money Market Portfolio
*For the period January 31, 1996 (Commencement of Operations) to December 31, 1996
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
LPT VARIABLE INSURANCE SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
BERKELEY U. S. QUALITY BOND BERKELEY MONEY MARKET
PORTFOLIO(2) PORTFOLIO(3)
---------------------------------- ----------------------------------
Year Ended Period Ended Year Ended Period Ended
December 31, 1997 December 31, 1996* December 31, 1997 December 31, 1996*
----------------- ------------------ ----------------- ------------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
<S> <C> <C> <C> <C>
Net investment income $83,696 $64,084 $76,923 $42,722
Net realized gain (loss) on
securities and foreign currency
transactions 18,375 (22,025) 0 0
Net change in unrealized
appreciation (depreciation)of
securities and foreign
currency transactions during 23,041 6,308 0 0
the period ------ ----- - -
Net increase (decrease) in net
assets resulting from operations 125,112 48,367 76,923 42,722
------- ------ ------ ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (83,993) (64,078) (76,923) (42,722)
------- ------- ------- -------
Net realized gain on investments 0 0 0 0
- - - -
Total distributions (83,993) (64,078) (76,923) (42,722)
SHARE TRANSACTIONS
Net proceeds from sale of shares 222,203 1,674,647 14,018,379 3,995,273
Issued to shareholders in
reinvestment of dividends 83,993 64,078 76,923 42,722
Cost of shares repurchased (817,964) (170,466) (13,900,532) (2,859,608)
-------- -------- ----------- ----------
Net increase (decrease) from
share transactions(Note 5) (511,768) 1,568,259 194,770 1,178,387
-------- --------- ------- ---------
TOTAL INCREASE IN NET ASSETS (470,649) 1,552,548 194,770 1,178,387
-------- --------- ------- ---------
NET ASSETS AT BEGINNING OF PERIOD 1,522,548 0 1,178,387 0
--------- - --------- -
NET ASSETS AT END OF PERIOD $1,081,899 $1,552,548 $1,373,157 $1,178,387
========== ========== ========== ==========
Accumulated undistributed net
investment income (loss) included
in net assets at end of period $ 0 $ 6 $ 0 $ 0
========= ========== ========== ==========
<FN>
(1) Formerly MAS Value Portfolio
(2) Formerly Salomon U.S. Quality Bond Portfolio
(3) Formerly Salomon Money Market Portfolio
*For the period January 31, 1996 (Commencement of Operations) to December 31, 1996
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
LPT VARIABLE INSURANCE SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
STRONG INTERNATIONAL STRONG GROWTH
STOCK PORTFOLIO PORTFOLIO
------------------------------------ ------------------------------------
Year Ended Period Ended Year Ended Period Ended
December 31, 1997 December 31, 1996* December 31, 1997 December 31, 1996*
----------------- ------------------ ------------------------------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
<S> <C> <C> <C> <C>
Net investment income $9,728 $2,799 ($6,013) $26,176
Net realized gain/(loss) on
securities and foreign currency
transactions (70,392) 10,921 214,565 106,629
Net unrealized appreciation
(depreciation) of securities and
foreign currency transactions
during the period (130,748) 48,707 316,734 139,635
-------- ------ ------- -------
Net increase (decrease) in net
assets resulting from operations (191,412) 62,427 525,286 272,440
-------- ------ ------- -------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (9,932) (576) (93) (26,083)
Net realized gain on investments (62,644) (6,253) (301,894) (70,506)
------- ------ -------- -------
Total distributions (72,576) (6,829) (301,987) (96,589)
SHARE TRANSACTIONS
Net proceeds from sale of shares 945,574 1,327,854 2,330,737 1,481,628
Issued to shareholders in
reinvestment of
dividends 72,576 6,829 301,987 96,589
Cost of shares repurchased (483,041) (169,112) (1,456,632) (241,105)
-------- -------- ---------- --------
Net increase from share
transactions (Note 5) 535,109 1,165,571 1,176,092 1,337,112
------- --------- --------- ---------
TOTAL INCREASE IN NET ASSETS 271,121 1,221,169 1,399,391 1,512,963
------- --------- --------- ---------
NET ASSETS AT BEGINNING OF PERIOD 1,221,169 0 1,512,963 0
--------- - --------- -
NET ASSETS AT END OF PERIOD $1,492,290 $1,221,169 $2,912,354 $1,512,963
========== ========== ========== ==========
Accumulated undistributed net
investment income (loss) included in
net assets at end of period $ (345) $ 0 $ 93 $ 0
========= ========== ========== ==========
<FN>
(4) Formerly Berkeley Smaller Companies Portfolio
* For the period January 31, 1996 (Commencement of Operations) to December
31, 1996
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
LPT VARIABLE INSURANCE SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
ROBERTSON STEPHENS DIVERSIFIED LEXINGTON CORPORATE
GROWTH PORTFOLIO(4) LEADERS PORTFOLIO
--------------------------------- -------------------------------------
Year Ended Period Ended Year Ended Period Ended
December 31, 1997 December 31, 1996* December 31,1997 December 31, 1996*
----------------- ------------------ ---------------- ------------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
<S> <C> <C> <C> <C>
Net investment income ($14,897) $253,443 $20,035 $14,001
Net realized gain/(loss) on
securities and foreign currency
transactions 104,555 (265,336) 209,511 (2)
Net unrealized appreciation
(depreciation) of securities and
foreign currency transactions
during the period 396,298 (32,020) 173,395 148,987
------- ------- ------- -------
Net increase (decrease) in net
assets resulting from operations 485,956 (43,913) 402,941 162,986
------- ------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (20) (253,423) (20,558) (13,899)
Net realized gain on investments 0 0 (195,399) 0
- - -------- -
Total distributions (20) (253,423) (215,957) (13,899)
SHARE TRANSACTIONS
Net proceeds from sale of shares 2,410,896 2,060,025 3,057,461 1,250,539
Issued to shareholders in
reinvestment of
dividends 20 253,423 215,957 13,929
Cost of shares repurchased (885,949) (574,868) (1,330,518) (90,134)
-------- -------- ---------- -------
Net increase from share
transactions (Note 5) 1,524,967 1,738,580 1,942,900 1,174,334
--------- --------- --------- ---------
TOTAL INCREASE IN NET ASSETS 2,010,903 1,441,244 2,942,900 1,323,421
--------- --------- --------- ---------
NET ASSETS AT BEGINNING OF PERIOD 1,441,244 0 1,323,421 0
--------- - --------- -
NET ASSETS AT END OF PERIOD $3,452,147 $1,441,244 $3,453,305 $1,323,421
========== ========== ========== ==========
Accumulated undistributed net
investment income (loss) included in
net assets at end of period $ 0 $ 0 $ 0 $ 102
========== =========== ========== ============
<FN>
(4) Formerly Berkeley Smaller Companies Portfolio
* For the period January 31, 1996 (Commencement of Operations) to December
31, 1996
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
LPT VARIABLE INSURANCE SERIES TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
HARRIS ASSOCIATES MFS TOTAL RETURN
VALUE PORTFOLIO (1) PORTFOLIO
-------------------------------------- -------------------------------------
Year Ended Period Ended Year Ended Period Ended
December 31, 1997 December 31, 1996* December 31, 1997 December 31, 1996*
----------------- ------------------ ----------------- ------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $11.86 $10.00 $10.90 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a) 0.08 0.10 0.35 0.25
Net realized and unrealized gain
(loss) on
investments 2.94 2.13 1.95 0.85
---- ---- ---- ----
Total from investment operations 3.02 2.23 2.30 1.10
---- ---- ---- ----
LESS DISTRIBUTIONS:
Dividends from net investment income (0.05) (0.10) (0.19) (0.20)
Distributions from net realized (1.38) (0.27) (0.21) (0.00)
----- ----- ----- -----
capital gains
Total distributions (1.43) (0.37) (0.40) (0.20)
----- ----- ----- -----
Net asset value, end of period $13.45 $11.86 $12.80 $10.90
====== ====== ====== ======
TOTAL RETURN ++ 25.56% 20.39% 21.18% 9.81%
===== ===== ===== ====
RATIOS TO AVERAGE NET
ASSETS/SUPPLEMENTAL
DATA
Net assets, end of period (in 000's)
$3,523 $1,421 $5,973 $1,529
Ratio of operating expenses to
average net
assets 1.29% 1.26%+ 1.29% 1.26%+
Ratio of net investment income to
average net
assets 0.56% 1.01%+ 2.80% 2.59%+
Portfolio turnover rate 84.94% 41.08% 103.75% 53.91%
Average commission rate per share
+++ $0.0595 $0.0542 $0.0532 $0.0571
Ratio of operating expenses to
average net
assets before expense 4.22% 7.55%+ 3.88% 7.84%+
reimbursements
Net investment income (loss) per
share before
expense reimbursements (a)
($0.32) ($0.52) $0.03 ($0.38)
<FN>
+ Annualized
++ Total returns represents aggregate total return for the year ended December
31, 1997 and for the period February 9, 1996 (effective date) to December
31, 1996, respectively. The total return would have been lower if certain
expenses had not been reimbursed by London Pacific.
+++ Average commission rate paid per share on equity securities purchased and
sold by the Portfolio. Amount excludes mark-ups, mark-downs or spreads paid
on shares traded.
(a) Based on the average of the daily shares outstanding throughout the year.
(1) Formerly MAS Value Portfolio
(2) Formerly Salomon U.S. Quality Bond Portfolio
(3) Formerly Salomon Money Market Portfolio
* For the period January 31, 1996 (Commencement of Operations) to December
31, 1996
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
LPT VARIABLE INSURANCE SERIES TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
BERKELEY U. S. QUALITY BOND BERKELEY MONEY MARKET
PORTFOLIO(2) PORTFOLIO(3)
------------------------------------ ----------------------------------
Year Ended Period Ended Year Ended Period Ended
December 31, 1997 December 31, 1996* December 31, 1997 December 31, 1996*
----------------- ------------------ ----------------- ------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $9.81 $10.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a) 0.58 0.49 0.05 0.04
Net realized and unrealized gain
(loss) on
investments 0.34 (0.25) 0.00 0.00
---- ----- ---- ----
Total from investment operations 0.92 0.24 0.05 0.04
---- ---- ---- ----
LESS DISTRIBUTIONS:
Dividends from net investment income (0.82) (0.43) (0.05) (0.04)
Distributions from net realized ( 0.00) (0.00) (0.00) (0.00)
- ---- ----- ----- -----
capital gains
Total distributions (0.82) (0.43) (0.05) (0.04)
----- ----- ----- -----
Net asset value, end of period $9.91 $9.81 $1.00 $1.00
===== ===== ===== =====
TOTAL RETURN ++ 9.45% 2.27% 4.58% 3.93%
==== ==== ==== ====
RATIOS TO AVERAGE NET
ASSETS/SUPPLEMENTAL
DATA
Net assets, end of period (in 000's) $1,082 $1,553 $1,373 $1,178
Ratio of operating expenses to
average net
assets 0.99% 0.97%+ 0.89% 0.87%+
Ratio of net investment income to
average net
assets 5.79% 5.41%+ 4.58% 4.43%+
Portfolio turnover rate 431.63% 231.03% 4.58% N/A
Average commission rate per share
+++ N/A N/A N/A N/A
Ratio of operating expenses to
average net
assets before expense 5.09% 5.79%+ 4.30% 6.67%+
reimbursements
Net investment income (loss) per
share before
expense reimbursements (a)
$0.17 $0.05 $0.01 ($0.01)
<FN>
+ Annualized
++ Total returns represents aggregate total return for the year ended December
31, 1997 and for the period February 9, 1996 (effective date) to December
31, 1996, respectively. The total return would have been lower if certain
expenses had not been reimbursed by London Pacific.
+++ Average commission rate paid per share on equity securities purchased and
sold by the Portfolio. Amount excludes mark-ups, mark-downs or spreads paid
on shares traded.
(a) Based on the average of the daily shares outstanding throughout the year.
(1) Formerly MAS Value Portfolio
(2) Formerly Salomon U.S. Quality Bond Portfolio
(3) Formerly Salomon Money Market Portfolio
* For the period January 31, 1996 (Commencement of Operations) to December
31, 1996
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
LPT VARIABLE INSURANCE SERIES TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
STRONG INTERNATIONAL STRONG GROWTH
STOCK PORTFOLIO PORTFOLIO
-------------------------------------- -------------------------------------
Year Ended Period Ended Year Ended Period Ended
December 31, 1997 December 31, 1996* December 31, 1997 December 31, 1996*
----------------- ------------------ ----------------- ------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.58 $10.00 $11.92 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a) 0.07 0.03 (0.04) 0.25
Net realized and unrealized gain
(loss) on
investments (1.30) 0.61 3.07 2.49
----- ---- ---- ----
Total from investment operations (1.23) 0.64 3.03 2.74
----- ---- ---- ----
LESS DISTRIBUTIONS:
Dividends from net investment income (0.06) (0.01) 0.00 (0.22)
Distributions from net realized (0.39) (0.05) (1.48) (0.60)
----- ----- ----- -----
capital gains
Total distributions (0.45) (0.06) (1.48) (0.82)
----- ----- ----- -----
Net asset value, end of period $8.90 $10.58 $13.47 $11.92
----- ------ ------ ------
TOTAL RETURN ++ (11.62%) 5.85% 25.56% 20.27%
------ ---- ----- -----
RATIOS TO AVERAGE NET
ASSETS/SUPPLEMENTAL
DATA
Net assets, end of period (in 000's) $1,492 $1,221 $2,912 $1,513
Ratio of operating expenses to
average net
assets 1.49% 1.45%+ 1.29% 1.26%+
Ratio of net investment income to
average net
assets 0.68% 0.27%+ (0.26%) 2.25%+
Portfolio turnover rate 165.59% 49.32% 270.11% 422.67%
Average commission rate per share $0.0108 $0.0096 $0.0662 $0.0575
Ratio of operating expenses to
average net
assets before expense 6.81% 7.74%+ 4.44% 7.09%+
reimbursements
Net investment income (loss) per
share before
expense reimbursements (a) ($0.49) ($0.58) ($0.46) ($0.39)
<FN>
+ Annualized
++ Total returns represents aggregate total return for the year ended December
31, 1997 and for the period February 9, 1996 (effective date) to December
31, 1996, respectively. The total return would have been lower if certain
expenses had not been reimbursed by London Pacific.
+++ Average commission rate paid per share on equity securities purchased and
sold by the Portfolio. Amount excludes mark-ups, mark-downs or spreads paid
on shares traded.
(a) Based on the average of the daily shares outstanding throughout the year.
(4) Formerly Berkeley Smaller Companies Portfolio
* For the period January 31, 1996 (Commencement of Operations) to December
31, 1996
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
LPT VARIABLE INSURANCE SERIES TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
ROBERTSON STEPHENS DIVERSIFIED LEXINGTON CORPORATE
GROWTH PORTFOLIO(4) LEADERS PORTFOLIO
----------------------------------- ---------------------------------
Year Ended Period Ended Year Ended Period Ended
December 31, 1997 December 31, 1996* December 31, 1997 December 31, 1996*
----------------- ------------------ ----------------- ------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $8.58 $10.00 $11.44 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (a) (0.07) 2.10 0.13 0.14
Net realized and unrealized gain
(loss) on
investments 1.71 (1.69) 2.70 1.42
---- ----- ---- ----
Total from investment operations 1.64 0.41 2.83 1.56
---- ---- ---- ----
LESS DISTRIBUTIONS:
Dividends from net investment income 0.00 (1.83) (0.08) (0.12)
Distributions from net realized 0.00 (0.00) (0.80) (0.00)
---- ----- ----- -----
capital gains
Total distributions 0.00 (1.83) (0.88) (0.12)
---- ----- ----- -----
Net asset value, end of period $10.22 $8.58 $13.39 $11.44
------ ----- ------ ------
TOTAL RETURN ++ 19.12% 2.42% 24.71% 12.84%
----- ---- ----- -----
RATIOS TO AVERAGE NET
ASSETS/SUPPLEMENTAL
DATA
Net assets, end of period (in 000's) $3,452 $1,441 $3,453 $1,323
Ratio of operating expenses to
average net
assets 1.39% 1.36%+ 1.29% 1.26%+
Ratio of net investment income to
average net
assets (0.72%) 20.30%+ 0.99% 1.40%+
Portfolio turnover rate 234.54% 2242.85% 35.69% 0.00%
Average commission rate per share $0.0540 $0.0478 $0.0622 $0.0500
Ratio of operating expenses to
average net
assets before expense 4.53% 7.02%+ 4.08% 6.86%+
reimbursements
Net investment income (loss) per
share before
expense reimbursements (a) ($0.35) $1.51 ($0.24) ($0.41)
<FN>
+ Annualized
++ Total returns represents aggregate total return for the year ended December
31, 1997 and for the period February 9, 1996 (effective date) to December
31, 1996, respectively. The total return would have been lower if certain
expenses had not been reimbursed by London Pacific.
+++ Average commission rate paid per share on equity securities purchased and
sold by the Portfolio. Amount excludes mark-ups, mark-downs or spreads paid
on shares traded.
(a) Based on the average of the daily shares outstanding throughout the year.
(4) Formerly Berkeley Smaller Companies Portfolio
* For the period January 31, 1996 (Commencement of Operations) to December
31, 1996
</FN>
</TABLE>
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
HARRIS ASSOCIATES VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS - 89.84%
BROADCASTING & PUBLISHING - 11.98%
3,500 Dun & Bradstreet Corporation............................ $108,281
3,800 Lee Enterprises, Inc. .................................. 112,337
3,950 Tele-Communications, Inc. (New)+........................ 110,353
3,150 U.S. West, Inc. +....................................... 90,956
------
421,927
-------
BASIC INDUSTRIES - 10.72%
4,800 DeBeers Consolidated Mines, Ltd., ADR................... 98,100
1,900 First Brands Corporation................................ 51,181
3,050 Fort James Corporation.................................. 116,663
3,850 Premark International, Inc.............................. 111,650
-------
377,594
-------
FINANCIAL SERVICES - 9.93%
1,200 AON Corporation......................................... 70,350
1,323 Federal National Mortgage Association................... 75,494
888 Mellon Bank Corporation................................. 53,835
1,920 Old Republic International Corporation.................. 71,400
1,700 PartnerRe, Ltd.......................................... 78,838
------
349,917
-------
CONSUMER BASICS - 8.92%
5,400 American Stores Company................................. 111,037
2,950 Black & Decker Corporation.............................. 115,234
1,943 Philip Morris Companies, Inc............................ 88,042
------
314,313
-------
CAPITAL GOODS - 6.89%
3,100 General Signal Corporation.............................. 130,781
2,800 UCAR International, Inc. +.............................. 111,825
-------
242,606
-------
CONSUMER NON-DURABLES - 5.78%
2,200 Mattel, Inc. ........................................... 81,950
2,500 Polaroid Corporation.................................... 121,719
-------
203,669
-------
CONSUMER SERVICES - 5.41%
3,400 Brunswick Corporation................................... 103,063
1,850 GC Companies, Inc. +.................................... 87,644
------
190,707
-------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
HARRIS ASSOCIATES VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS - (Continued)
CONSTRUCTION MATERIALS - 5.37%
1,350 Armstrong World Industries, Inc. ....................... $100,913
1,800 USG Corporation +....................................... 88,200
------
189,113
-------
CONGLOMERATES - 5.16%
3,200 ITT Industries, Inc. ................................... 100,400
2,700 U.S. Industries, Inc. .................................. 81,338
------
181,738
-------
ENERGY - 3.43%
5,800 Union Texas Petroleum Holdings, Inc. ................... 120,713
-------
TECHNOLOGY - 3.07%
1,100 Lockheed Martin Corporation............................. 108,350
-------
DRUGS & HEALTH CARE - 2.78%
3,300 Columbia/HCA Healthcare Corporation..................... 97,762
------
REAL ESTATE - 2.73%
4,800 Catellus Development Corporation +...................... 96,000
------
CHEMICALS - 2.69%
3,900 Ferro Corporation....................................... 94,819
------
CONSUMER DURABLES - 2.67%
2,600 Echlin, Inc. ........................................... 94,087
------
AUTOS & TRANSPORTATION - 2.31%
1,700 Bandag, Inc., Class A................................... 81,387
------
TOTAL COMMON STOCKS (COST $2,841,440)................... 3,164,702
---------
PRINCIPAL
AMOUNT
- ------
SHORT-TERM OBLIGATIONS - 12.23%
$431,000 Repurchase Agreement with State Street
Bank and Trust Company, dated 12/31/97 at
5.0%, due 01/02/98, maturity value $431,120
(collateralized by U.S. Treasury Note,
5.625%, due 10/31/99, par value $440,000;
market value $443,277) (Cost $431,000)........... 431,000
-------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
HARRIS ASSOCIATES VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
VALUE
(NOTE 2)
--------
TOTAL INVESTMENTS (COST $3,272,440*)................. 102.07% $3,595,702
OTHER ASSETS AND LIABILITIES (NET)................... (2.07) (73,050)
NET ASSETS........................................... 100.00% $3,522,652
------ ----------
* Aggregate cost for Federal tax purposes (Note 4)
+ Non-income producing security
---------------------------------------------------------------
GLOSSARY OF TERMS
ADR American Depository Receipt
---------------------------------------------------------------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
MFS TOTAL RETURN PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS - 52.62%
FINANCIAL SERVICES - 13.76%
130 Allstate Corporation.................................... $11,814
620 American Express Company................................ 55,335
480 Arden Reality, Inc. .................................... 14,760
240 BB&T Corporation........................................ 15,375
70 BankBoston Corporation.................................. 6,576
790 Bank of New York Company, Inc........................... 45,672
100 Beneficial Corporation.................................. 8,298
175 Chase Manhattan Corporation (New)....................... 19,163
590 Chubb Corporation....................................... 44,619
310 CIGNA Corporation....................................... 53,649
200 CIT Group, Inc., Class A +............................. 6,450
270 Corestates Financial Corporation........................ 21,617
585 A.G. Edwards, Inc. ..................................... 23,254
400 Federal Home Loan Mortgage Corporation.................. 16,775
740 Federal National Mortgage Association................... 42,226
200 Fleet Financial Group, Inc.............................. 14,987
520 Lincoln National Corporation............................ 40,625
150 Merrill Lynch & Company, Inc. .......................... 10,941
350 Morgan Stanley, Dean Witter, Discover & Company......... 20,694
950 National City Corporation............................... 62,463
540 Nationsbank Corporation................................. 32,839
600 Northern Trust Corporation.............................. 41,850
900 Norwest Corporation..................................... 34,762
870 PNC Bank Corporation.................................... 49,644
600 Provident Companies, Inc. .............................. 23,175
390 St. Paul Companies, Inc................................. 32,004
1,000 Torchmark, Inc. ........................................ 42,063
555 Travelers Group, Inc. .................................. 29,901
------
821,531
-------
ENERGY - 6.69%
240 Amoco Corporation....................................... 20,430
380 Atlantic Richfield Company.............................. 30,447
430 Baker Hughes, Inc. ..................................... 18,759
1,007 British Petroleum PLC, ADR ............................. 80,245
150 Chevron Corporation..................................... 11,550
600 Exxon Corporation....................................... 36,713
390 Mobil Corporation....................................... 28,153
630 Occidental Petroleum Company............................ 18,467
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
MFS TOTAL RETURN PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCK - (Continued)
ENERGY - (CONTINUED)
280 Repsol SA, ADR.......................................... $11,917
760 Royal Dutch Petroleum Company, NY Shares................ 41,183
890 Texaco, Inc............................................. 48,394
200 Union Pacific Resource Group, Inc. ..................... 4,850
400 Unocal Corporation...................................... 15,525
980 USX-Marathon Group...................................... 33,075
------
399,708
-------
UTILITIES - 5.11%
400 CMS Energy Corporation.................................. 17,625
510 Carolina Power & Light Company.......................... 21,643
500 Cinergy Corporation..................................... 19,156
710 Coastal Corporation..................................... 43,976
491 Duke Energy Corporation................................. 27,189
90 Eastern Enterprises..................................... 4,050
450 FPL Group, Inc.......................................... 26,634
210 GPU, Inc. .............................................. 8,846
100 Keyspan Energy Corporation.............................. 3,681
500 New Century Energies, Inc. ............................. 23,969
830 Pacificorp.............................................. 22,669
710 Pinnacle West Capital Corporation....................... 30,086
300 Sierra Pacific Resources................................ 11,250
180 Texas Utilities Company................................. 7,481
500 UGI Corporation......................................... 14,656
790 Williams Companies, Inc................................. 22,416
------
305,327
-------
TECHNOLOGY - 4.18%
600 Alcatel Alsthom, ADR.................................... 15,188
1,330 Allied Signal, Inc...................................... 51,787
490 Digital Equipment Corporation +......................... 18,130
440 General Dynamics Corporation............................ 38,032
480 International Business Machines Corporation............. 50,190
250 Lockheed Martin Corporation............................. 24,625
106 Raytheon Company, Class A............................... 5,246
680 Raytheon Company, Class B............................... 34,340
170 United Technologies Corporation......................... 12,378
------
249,916
-------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
MFS TOTAL RETURN PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS - (CONTINUED)
DRUGS & HEALTH CARE - 4.02%
550 American Home Products Corporation...................... $42,075
200 Baxter International, Inc............................... 10,087
840 Bristol Myers Squibb Company............................ 79,485
322 Meditrust............................................... 11,793
19 Novartis AG (Switzerland)............................... 30,817
1,060 SmithKline Beecham, PLC, ADR............................ 54,524
230 United Healthcare Corporation........................... 11,428
------
240,209
-------
CAPITAL GOODS - 3.71%
1,100 Browning Ferris Industries, Inc......................... 40,700
680 Cooper Industries, Inc. ................................ 33,320
420 Deere & Company......................................... 24,491
800 General Electric Company................................ 58,700
300 Hubbell, Inc. .......................................... 14,794
420 Tyco International, Ltd. ............................... 18,926
960 Waste Management, Inc. ................................. 26,400
110 York International Corporation.......................... 4,352
-----
221,683
-------
MATERIALS AND PROCESSING - 3.38%
285 Akzo Nobel NV (Netherlands)............................. 49,139
370 Air Products and Chemicals, Inc. ....................... 30,433
330 Aluminum Company of America............................. 23,224
150 Dexter Corporation...................................... 6,478
100 Dow Chemical Company.................................... 10,150
870 B.F. Goodrich Company................................... 36,051
100 Nalco Chemical Company.................................. 3,956
20 Phelps Dodge Corporation................................ 1,245
230 Sherwin Williams Company................................ 6,382
710 Weyerhaeuser Company.................................... 34,834
------
201,892
-------
COMMUNICATIONS - 3.16%
680 AT&T Corporation........................................ 41,650
500 BellSouth Corporation................................... 28,156
1,030 GTE Corporation......................................... 53,817
255 SBC Communications, Inc. ............................... 18,679
600 Sprint Corporation...................................... 35,175
240 Telephone & Data Systems, Inc........................... 11,175
------
188,652
-------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
MFS TOTAL RETURN PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS - (CONTINUED)
CONSUMER DISCRETIONARY - 2.80%
100 CVS Corporation......................................... $6,406
1,500 Diageo PLC (Great Britain).............................. 13,723
340 Eastman Kodak Company................................... 20,676
80 May Department Stores Company........................... 4,215
400 Meyer Fred, Inc., New................................... 14,550
530 J.C. Penney, Inc. ...................................... 31,966
870 Rite Aid Corporation.................................... 51,058
250 Safeway, Inc. +......................................... 15,813
200 Sears Roebuck & Company................................. 9,050
-----
167,457
-------
AUTOS & TRANSPORTATION - 2.39%
190 Burlington Northern Santa Fe Corporation................ 17,658
420 Canadian National Railway Company....................... 19,845
800 Ford Motor Company...................................... 38,950
100 General Motors Corporation.............................. 6,063
700 Illinois Central Corporation............................ 23,844
480 Lear Corporation +...................................... 22,800
430 Norfolk Southern Corporation............................ 13,249
------
142,409
-------
CONSUMER STAPLES - 1.85%
80 Colgate Palmolive Company............................... 5,880
80 General Mills, Inc...................................... 5,730
200 McCormick & Company, Inc. .............................. 5,600
390 Pepsico, Inc............................................ 14,211
1,390 Phillip Morris Companies, Inc........................... 62,984
580 Rubbermaid, Inc......................................... 14,500
40 Stanley Works........................................... 1,888
-----
110,793
-------
REAL ESTATE - 0.76%
300 Boston Properties, Inc. ................................ 9,919
200 Hospitality Properties Trust............................ 6,575
300 Prime Group Realty Trust................................ 6,075
300 Tower Realty Trust, Inc. ............................... 7,388
400 TriNet Corporate Realty Trust, Inc. .................... 15,475
------
45,432
------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
MFS TOTAL RETURN PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS (CONTINUED)
BASIC INDUSTRY - 0.24%
310 Champion International Corporation...................... $14,047
-------
BROADCASTING - 0.21%
300 Viacom, Inc. +.......................................... 12,431
------
CHEMICALS - 0.19%
320 Hoechst AG (Germany).................................... 11,207
------
GENERAL BUSINESS - 0.15%
250 Service Corporation International....................... 9,234
-----
RESTAURANTS - 0.02%
42 Tricon Global Restaurants, Inc. +...................... 1,221
-----
Total Common Stocks (Cost $2,777,095)................... 3,143,149
---------
PREFERRED STOCKS - 1.97%
50 Case Corporation, Series A, Non-Voting.................. 7,269
70 Finova Financial Trust ................................ 4,900
710 Henkel KGAA (Germany)................................... 44,795
160 Host Marriott Financial Trust, 144A..................... 9,700
80 Loral Space & Communications, 144A...................... 4,920
170 McKesson Financing Trust, 144A.......................... 12,856
400 Newell Financial Trust, 144A............................ 20,900
50 Timet Capital Trust, 144A............................... 2,487
300 WBK Strypes Trust....................................... 10,050
------
TOTAL PREFERRED STOCKS (COST $104,651).................. 117,877
-------
PRINCIPAL
AMOUNT
- ------
TREASURY OBLIGATIONS - 20.75%
U.S. TREASURY NOTES - 17.86%
$135,000
57,000 6.25%, due 08/31/2002............................ 58,167
60,000 5.75%, due 10/31/2002............................ 60,056
250,000 5.625%, due 12/31/2002........................... 249,063
20,000 7.25%, due 05/15/2004............................ 21,584
1,000 6.50%, due 10/15,2006............................. 1,047
500,000 6.625%, due 05/15/2007........................... 529,220
12,000 6.125%, due 08/15/2007........................... 12,332
------
1,066,890
---------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
MFS TOTAL RETURN PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- ------ --------
TREASURY OBLIGATIONS (Continued)
U.S. TREASURY BOND - 2.89%
$21,000 6.625%, due 02/15/2027........................... $22,798
137,000 6.375%, due 08/15/2027........................... 144,493
5,000 6.125%, due 11/15/2027........................... 5,138
172,429
-------
TOTAL TREASURY OBLIGATIONS (COST $1,223,703)..... 1,239,319
---------
CORPORATE BONDS AND NOTES - 7.14%
5,000 Bear Stearns Companies, Inc.,
6.75%, due 12/15/2007............................ 5,038
5,000 Burlington Industries, Inc, Debenture
7.25%, due 08/01/2027............................ 5,256
2,000 Chesapeake Energy Corporation,
7.875, due 03/15/2004............................ 1,965
5,000 Circus Circus Enterprises, Inc, Debenture
7.00%, due 11/15/2036............................ 5,112
10,000 Cleveland Electric Illuminating Company, Secured.
Note, 144A 7.88%, due 11/01/2017................. 10,557
5,000 Commonwealth Edison Company,
6.40%, due 10/15/2005............................ 4,897
5,000 Commonwealth Edison Company,
7.625, due 01/15/2007............................ 5,277
5,000 Conseco Finance Trust III,
8.796%, due 04/01/2027........................... 5,648
12,000 Contifinancial Corporation,
7.50%, due 03/15/2002............................ 11,745
5,000 Continental Cablevision, Inc.,
8.30%, due 05/15/2006............................ 5,457
25,000 Continental Cablevision, Inc,
11.00%, due 06/01/2007........................... 27,759
10,000 Delta Airlines, Inc.,
8.50%, due 03/15/2002............................ 10,671
1,000 Diamond Offshore Drilling, Inc., Subordinated Convertible Note,
3.75%, due 02/15/2007............................ 1,290
5,000 Dynex Capital Corporation,
7.875%, due 07/15/2002........................... 5,062
10,000 Federal Express Corporation, Pass-thru Certificate,
7.65%, due 01/15/2014............................ 10,686
5,000 First Empire Capital Trust, Capital Securities,
8.234%, due 02/01/2027........................... 5,384
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
MFS TOTAL RETURN PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- ------ --------
CORPORATE BONDS AND NOTES (Continued)
$5,000 Ford Motor Company,
7.70%, due 05/15/2097............................ $5,494
10,000 Georgia Pacific Corporation,
9.50%, due 05/15/2022............................ 11,260
5,000 Gulf Canada Resources Ltd.,
9.25%, due 01/15/2004............................ 5,273
8,000 Hearst Argyle Television, Inc., Debenture,
7.50%, due 11/15/2027............................ 8,118
3,000 Hilton Hotels Corporation,
7.95%, due 04/15/2007............................ 3,182
6,000 Lasmo USA, Inc., Guaranteed Debenture,
7.30%, due 11/15/2027............................ 6,127
5,000 Loewen Group International, Inc., Pass-Thru, 144A,
6.70% , due 10/01/1999........................... 5,010
10,000 Long Island Lighting Company,
7.50%, due 03/01/2007............................ 10,358
10,000 Long Island Lighting Company,
9.00%, due 11/01/2022............................ 11,166
15,000 MBNA Capital 1, Capital Securities, Series A,
8.278%, due 12/01/2026........................... 15,691
10,000 MBNA Corporation, Senior MTN,
6.963%, due 09/12/2002........................... 10,163
3,139 Midland Funding Corporation, Senior Secured Lease Bond,
Series C, 10.33%, due 07/23/2002................. 3,375
5,000 Mirage Resorts, Inc.,
6.75%, due 08/01/2007............................ 4,985
5,000 News America Holdings, Inc., Debenture,
8.00%, due 10/17/2016............................ 5,367
5,000 News America Holdings, Inc.,
7.75%, due 12/01/2045............................ 5,177
5,000 Niagara Mohawk Power Corporation,
6.875%, due 04/01/2003........................... 4,986
5,000 Niagara Mohawk Power Corporation,
8.50%, due 07/01/2023............................ 5,348
10,000 Oryx Energy Company,
10.00%, due 04/01/2001........................... 10,986
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
MFS TOTAL RETURN PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- ------ --------
CORPORATE BONDS AND NOTES (CONTINUED)
$5,000 Philip Morris Companies, Inc., Debenture
7.75%, due 01/15/2027............................ $5,400
10,000 Solutia, Inc., Debenture
7.375%, due 10/15/2027........................... 10,267
2,000 Southern Company Capital Trust, Capital Securities, 144A
8.19%, due 02/01/2037............................ 2,114
5,000 TCI Communications Financing III, Capital Securities,
9.65%, due 03/31/2027............................ 5,853
20,000 Tele Communications, Inc., MTN,
7.385%, due 08/27/2001........................... 20,475
5,000 Tele Communications, Inc.,
8.25%, due 01/15/2003............................ 5,339
20,000 Tennessee Gas Pipeline Company, Debenture,
7.625%, due 04/01/2037........................... 21,588
5,000 Texas Gas Transmission Corporation,
7.25%, due 07/15/2027............................ 5,202
10,000 Texas Utilities Electric Company, Debenture,
7.17%, due 08/01/2007............................ 10,404
25,000 Time Warner, Inc., Pass-thru Asset Trust, 144A,
6.10%, due 12/30/2001............................ 24,496
10,000 Time Warner, Inc.,
9.125%, due 01/15/2013........................... 11,908
5,000 Time Warner, Inc.,
9.15%, due 02/01/2023............................ 6,160
5,000 Transocean Offshore, Inc., Debenture,
8.00%, due 04/15/2027............................ 5,655
5,000 United States Cellular Corporation,
7.25%, due 08/15/2007............................ 5,106
5,000 Waterford 3 Funding Corporation, Secured Lease Collateral Bond
8.09%, due 01/02/2017............................ 5,227
10,000 Washington Mutual Capital I, Subordinated Capital Income
Securities, 8.375%, due 06/01/2027............... 11,024
5,000 WorldCom, Inc.,
8.875%, due 01/15/2006........................... 5,380
7,000 WorldCom, Inc.,
7.75%, due 04/01/2007............................ 7,517
3,000 WorldCom, Inc.,
7.75%, due 04/01/2027............................ 3,302
-----
Total Corporate Bonds and Notes (Cost $410,722).. 426,287
-------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
MFS TOTAL RETURN PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- ------ --------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 2.78%
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA) - 1.51%
$88,840 Pool #401151, 7.00%, due 11/01/2012
(Cost $89,895)................................... $90,144
-------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(GNMA) - 1.27%
10,000 REMIC, 8.00%, due 06/20/2025..................... 10,437
34,625 Pool #453937, 7.50%, due 08/15/2027.............. 35,468
29,581 Pool #455301, 7.50%, due 09/15/2027.............. 30,302
------
Total GNMA (Cost $75,382)........................ 76,207
------- ------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $165,277).................................. 166,351
-------
EUROBONDS - 0.80%
10,000 Banco Commercial SA, (Spain)
8.25%, due 02/05/2007............................ 9,687
18,000 Deutsche Fianance NV, (Netherlands), 144A
0.00%, due 02/17/2017............................ 8,055
5,000 Empresa Nacional De Electric, (Chile),
7.325%, due 02/01/2037........................... 5,049
10,000 Hidroelectrica Arcura, (Argentina), 144A,
8.375%, due 03/15/1999........................... 9,900
11,000 PT Polysindo Eka Perkasa, (Indonesia),
13.00%, due 06/15/2001........................... 10,010
5,000 UPM Kymmene Corporation, (Finland),
7.45%, due 11/26/2027............................ 5,040
-----
TOTAL EUROBONDS (COST $50,224)................... 47,741
------
SHORT-TERM OBLIGATIONS - 19.22%
REPURCHASE AGREEMENT - 19.20%
1,147,000 Repurchase Agreement with State Street Bank & Trust
Company, dated 12/31/97 at 5.00%, due 01/02/98,
maturity value $1,147,319 (collateralized by U.S. Treasury
Note, 5.625%, due 10/31/99, par value $1,165,000:
market value $1,173,676) (Cost $1,147,000)....... 1,147,000
SHARES INVESTMENT COMPANY - 0.02%
- ------
856 Seven Seas Money Market Fund (Cost $856)......... 856
Total Short-Term Obligations (Cost $1,147,856)... 1,147,856
---------- ---------
TOTAL INVESTMENTS (COST $5,879,528*)................. 105.28% 6,288,580
OTHER ASSETS AND LIABILITIES......................... (5.28) (315,572)
----- --------
NET ASSETS........................................... 100.00% $5,973,008
------ ----------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
MFS TOTAL RETURN PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
* Aggregate cost for Federal tax purposes is $5,879,667 (Note 4)
+ Non-income producing security 144A after the name of a security represents
those securities exempt under registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers. The
value of these securities amounted to $110,995 or 1.86% of net assets.
---------------------------------------------------------------
GLOSSARY OF TERMS
ADR American Depository Receipt
MTN Medium Term Note
REMIC Real Estate Mortgage Investment Conduit
---------------------------------------------------------------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
BERKELEY U.S. QUALITY BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- ------ --------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 76.40%
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA) - 48.93%
$100,000 6.74%, due 08/25/2007............................ $103,219
3,289 Pool #100090, 14.50%, due 11/01/2014............. 4,049
6,316 Pool #303791, 12.50%, due 08/01/2015............. 7,439
9,665 Pool #100089, 13.00%, due 11/01/2015............. 11,583
7,312 Pool #303792, 11.50%, due 09/01/2019............. 8,361
197,805 Pool #250845, 6.50%, due 11/01/2026.............. 195,702
99,631 Pool #396818, 6.50%, due 08/01/2027.............. 98,386
99,703 Pool #331325, 7.00%, due 11/01/2027.............. 100,637
-------
TOTAL FNMA (COST $523,873)....................... 529,376
-------
STUDENT LOAN MARKETING ASSOCIATION
(SLMA) - 11.97%
125,000 7.20%, due 11/09/2000 (Cost $127,777)............ 129,473
-------
FEDERAL HOME LOAN BANK (FHLB) - 11.57%
125,000 5.89%, due 07/24/2000 (Cost $124,282)............ 125,215
-------
FEDERAL HOME LOAN MORTGAGE CORPORATION
(FHLMCB) - 3.93%
37,190 Pool #251137, 11.75%, due 08/01/2014
(Cost $41,289)................................... 42,476
------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $817,221).................................. 826,540
-------
U.S. TREASURY BOND - 15.05%
150,000 6.625%, due 02/15/2027 (Cost $144,862)........... 162,843
-------
CORPORATE BONDS AND NOTES - 2.89%
25,000 Occidental Petroleum, 9.25%
Due 08/01/2001 (Cost $29,175).................... 31,224
------
INVESTMENT COMPANY - 4.62%
SHARES
- ------
50,000 Seven Seas Money Market Fund (Cost $50,000)...... 50,000
TOTAL INVESTMENTS (COST $1,041,258*)................. 98.96% 1,070,607
OTHER ASSETS AND LIABILITIES (NET)................... 1.04 11,292
---- ------
NET ASSETS........................................... 100.00% $1,081,899
------ ----------
* Aggregate cost for Federal tax purposes (Note 4)
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
BERKELEY MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- ------ --------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 71.48%
FEDERAL HOME LOAN MORTGAGE CORPORATION
(FHLMC) - 21.83%
$300,000 5.52%, due 01/06/1998+ (Cost $299,770)........... $299,770
--------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA) - 21.73%
300,000 5.47%, due 02/05/1998+ (Cost $298,405)........... 298,405
-------
FEDERAL FARM CREDIT BANK (FFCB) - 13.40%
15,000 5.95%, due 01/07/1998+ .......................... 14,985
20,000 5.95%, due 01/13/1998+ .......................... 19,960
150,000 5.67%, due 02/10/1998+ .......................... 149,055
-------
TOTAL FFCB (COST $184,000)....................... 184,000
-------
FEDERAL HOME LOAN BANK (FHLB) - 7.26%
100,000 5.73%, due 01/21/1998+ (Cost $99,682)............ 99,682
------
INTERNATIONAL BANK FOR RECONSTRUCTION &
DEVELOPMENT - 7.26%
100,000 5.76%, due 01/26/1998 + (Cost $99,600)........... 99,600
------
Total U.S. Government Agency Obligations
(Cost $981,457) ................................. 981,457
-------
U.S. TREASURY BILLS - 43.17%
300,000 5.00%, due 01/22/1998+ .......................... 299,247
295,000 5.00%, due 02/05/1998+ .......................... 293,566
-------
Total U.S. Treasury Bills (Cost $592,813)........ 592,813
-------
TOTAL INVESTMENTS (COST $1,574,270*)................. 114.65% 1,574,270
OTHER ASSETS AND LIABILITIES (NET)................... (14.65) (201,113)
------ --------
NET ASSETS........................................... 100.00% $1,373,157
------ ----------
* Aggregate cost for Federal tax purposes
+ Rate represents annualized yield at date of purchase
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
STRONG INTERNATIONAL STOCK PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS - 94.13%
UNITED KINGDOM - 17.54%
500 Barclays Bank, PLC. .................................... $13,311
17,500 Bluebird Toys, PLC. .................................... 25,726
17,000 Burton Group, PLC. ..................................... 37,975
4,200 Diageo, PLC. +.......................................... 38,425
2,200 Eidos, PLC. +........................................... 24,391
24,000 Fyffes, PLC. ........................................... 35,478
5,000 General Electric Company, PLC. ......................... 32,398
5,000 Hamleys, PLC. .......................................... 21,517
9,200 Lucasvarity, PLC........................................ 32,489
------
261,710
-------
JAPAN - 11.05%
6,000 Mitsubishi Motor Corporation............................ 20,219
2,000 Miyota Company.......................................... 18,840
2,000 Mizuno Corporation...................................... 6,050
9,000 Nippon Shinpan Company.................................. 10,133
4 Nippon Telegraph & Telephone Corporation................ 34,311
2,000 Nomura Securities Company, Ltd.......................... 26,652
1,000 Softbank Corporation.................................... 26,040
2,000 Tokio Marine & Fire Insurance........................... 22,670
------
164,915
-------
UNITED STATES - 10.31%
700 Compania De Minas Buenaventura, ADR (Peru).............. 11,200
1,500 Distribucion y Servicio D&S S.A., ADR (Chile) +......... 27,844
1,440 India Public Sector Fund, Ltd. (India).................. 13,680
3,850 The Indian Smaller Companies (India) +................. 26,334
1,650 Industrie Natuzzi SPA, ADR (Italy)...................... 34,031
800 Matav Rt., ADR (Hungary) +............................ 20,800
1,000 Virgin Express Holdings, ADR (United Kingdom) +........ 20,000
------
153,889
-------
FRANCE - 8.07%
100 Accor................................................... 18,593
100 Axa Uap+................................................ 7,738
300 Castorama Dubois........................................ 36,388
200 Groupe Danone........................................... 35,723
50 Pernod Ricard........................................... 2,941
200 Sylea................................................... 19,108
------
120,491
-------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
STRONG INTERNATIONAL STOCK PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS - (CONTINUED)
NEW ZEALAND - 6.87%
10,000 Air New Zealand, Ltd. .................................. $20,032
108,111 Guinness Peat Group, PLC................................ 55,242
54,000 Shortland Property, Ltd. ............................... 27,279
------
102,553
-------
ITALY - 6.26%
1,500 Assicurazioni Generali.................................. 36,843
2,625 Brembo SPA.............................................. 24,640
3,000 ENI SPA................................................. 17,009
------
5,000 Ittierre Holding+....................................... 14,952
------
93,444
------
SINGAPORE - 5.77%
1,000 Cycle & Carriage, Ltd. ................................. 4,124
4,000 Jurong Shipyard, Ltd. .................................. 18,985
17,000 Osprey Maritime, Ltd. .................................. 13,616
4,000 Overseas Union Bank, Ltd. .............................. 15,307
8,000 Tat Lee Bank, Ltd. ..................................... 11,866
4,000 United Overseas Bank, Ltd. ............................. 22,189
------
86,087
------
SPAIN - 3.37%
1,600 Baron De Ley+........................................... 30,246
500 Sol Melia SA............................................ 20,020
------
50,266
------
SWITZERLAND - 3.32%
25 Liechtenstein Global Trust AG........................... 15,484
50 Movenpick Holdings AG................................... 20,223
25 SMH AG Neuenburg........................................ 13,790
------
49,497
------
AUSTRALIA - 3.11%
28,252 Normandy Mining, Ltd.................................... 27,436
7,000 Simeon Wines, Ltd. ..................................... 18,933
------
46,369
------
GERMANY - 2.72%
200 Holsten-Brau AG......................................... 40,579
------
PHILIPPINES - 2.16%
364,000 Cosmos Bottling Corporation+............................ 29,659
176,000 Empire East Land Holdings, Inc.+........................ 2,564
-----
32,223
------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
STRONG INTERNATIONAL STOCK PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS - (CONTINUED)
NORWAY - 2.12%
700 Fred Olsen Energy ASA+.................................. $14,501
800 Tandberg ASA............................................ 17,114
------
31,615
------
PERU - 2.10%
34,141 Union de Cervecerias Peruanas Backus Y Johnston S.A..... 31,322
------
NETHERLANDS - 1.93%
400 Hunter Douglas, NV...................................... 14,006
350 ING Groep, NV........................................... 14,741
------
28,747
------
FINLAND - 1.85%
2,000 Valmet Corporation...................................... 27,591
------
CANADA - 1.58%
3,000 CAE, Inc. .............................................. 23,617
------
SOUTH AFRICA - 1.36%
1,000 De Beers Centenary AG................................... 20,343
------
SWEDEN - 1.14%
3,000 Nordbanken Holding AB+.................................. 16,965
------
HONG KONG - 0.89%
31,499 CDL Hotels International, Ltd .......................... 9,553
1,000 Shanghai Industrial Holdings, Ltd. ..................... 3,717
-----
13,270
------
THAILAND - 0.32%
7,200 Dusit Thani Publishing Company.......................... 4,785
-----
MALAYSIA - 0.29%
3,000 Malaysia International Shipping......................... 4,396
-----
TOTAL COMMON STOCKS (COST $1,487,414)................... 1,404,674
---------
PREFERRED STOCK - 0.97%
60 Grohe AG (Germany), (Cost $17,586)...................... 14,542
------
WARRANTS - 0.00%
2,600 Peregrine Investment Holdings, Ltd. (Hong Kong),
expires 05/15/1998 +(Cost $0)........................... 3
-
SHARES
- ------
INVESTMENT COMPANY - 5.03%
75,000 Seven Seas Money Market Fund (Cost $75,000)............. 75,000
------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
STRONG INTERNATIONAL STOCK PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
VALUE
(NOTE 2)
--------
TOTAL INVESTMENTS (COST $1,580,000*)................. 100.13% $1,494,219
OTHER ASSETS AND LIABILITIES (NET)................... (0.13) (1,929)
----- ------
NET ASSETS........................................... 100.00% $1,492,290
------ ----------
FORWARD FOREIGN CURRENCY CONTRACTS SOLD
UNREALIZED
SETTLEMENT CONTRACTS IN EXCHANGE APPRECIATION
CURRENCY DATE AT VALUE FOR U.S $ (DEPRECIATION)
-------- ---- -------- --------- --------------
British Pound 05/12/98 $118,635 $122,000 $3,365
Japanese Yen 06/12/98 73,970 75,000 1,030
Singapore Dollar 06/17/98 30,339 30,000 (339)
$222,944 $227,000 $4,056
* Aggregate cost for Federal tax purposes is $1,580,177 (Note 4)
+ Non-income producing security
---------------------------------------------------------------
GLOSSARY OF TERMS
ADR American Depository Receipt
---------------------------------------------------------------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
STRONG INTERNATIONAL STOCK PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED) (UNAUDITED)
DECEMBER 31, 1997
As of December 31, 1997, sector diversification of the Portfolio was as follows:
% OF VALUE
SECTOR DIVERSIFICATION NET ASSETS (NOTE 2)
---------------------- ---------- --------
COMMON STOCKS:
Financial Services................................... 20.02% $298,708
Consumer Staple...................................... 17.90 267,023
Consumer Cyclical.................................... 16.99 253,567
Consumer Discretionary............................... 8.29 123,724
Transportation....................................... 6.75 100,646
Producer Durables.................................... 5.76 86,029
Basic Industries..................................... 4.88 72,769
Technology........................................... 4.04 60,345
Conglomerates........................................ 3.70 55,242
Communications....................................... 3.69 55,111
Energy............................................... 2.11 31,510
---- ------
TOTAL COMMON STOCKS.................................. 94.13 1,404,674
PREFERRED STOCKS..................................... 0.97 14,542
WARRANTS............................................. 0.00 3
SHORT TERM OBLIGATIONS............................... 5.03 75,000
---- ------
TOTAL INVESTMENTS.................................... 100.13 1,494,219
------ ---------
OTHER ASSETS AND LIABILITIES (Net)................... (0.13) (1,929)
----- ------
NET ASSETS........................................... 100.00% $1,492,290
====== ==========
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
STRONG GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS - 96.00%
CONSUMER DISCRETIONARY -20.91%
900 Capstar Hotel Company+.................................. $30,881
300 Carnival Corporation.................................... 16,613
400 Coca Cola Company....................................... 26,650
300 Consolidated Stores Corporation+........................ 13,181
300 CVS Corporation......................................... 19,219
400 Dean Foods Company...................................... 23,800
200 Disney Walt Company..................................... 19,813
950 Dollar Tree Stores, Inc.+............................... 39,306
300 Gillette Company........................................ 30,131
1,000 Kohl's Corporation+..................................... 68,125
300 Landry's Seafood Restaurant, Inc.+...................... 7,200
1,000 Lowes Companies, Inc. .................................. 47,687
700 Midwest Express Holdings, Inc.+......................... 27,169
300 Nabisco Holdings Corporation............................ 14,531
900 Office Depot, Inc.+..................................... 21,544
900 Outback Steakhouse, Inc.+............................... 25,875
1,000 Peoplesoft, Inc.+....................................... 39,000
400 Pepsico, Inc. .......................................... 14,575
600 Safeway, Inc.+.......................................... 37,950
400 Sara Lee Corporation.................................... 22,525
200 Stage Stores, Inc.+..................................... 7,475
700 Staples, Inc. +......................................... 19,425
900 Wyndham Hotel Corporation +............................. 36,337
------
609,012
-------
DRUGS & HEALTH CARE - 15.12%
400 Amerisource Health Corporation, Class A +............... 23,300
600 Cardinal Health, Inc. .................................. 45,075
500 Guidant Corporation..................................... 31,125
1,100 HEALTHSOUTH Corporation +............................... 30,525
400 Health Management Associates, Inc. +.................... 10,100
300 Johnson & Johnson....................................... 19,762
900 Eli Lilly & Company..................................... 62,663
300 McKesson Corporation (New).............................. 32,456
800 Medtronic, Inc. ........................................ 41,850
500 Parexel International Corporation +..................... 18,500
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
STRONG GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS - (CONTINUED)
DRUGS & HEALTHCARE - (CONTINUED)
600 Pfizer, Inc. ........................................... $44,738
300 Schering-Plough Corporation............................. 18,638
200 Shared Medical System Corporation....................... 13,200
500 Sybron International Corporation+....................... 23,469
200 Warner Lambert Company.................................. 24,800
------
440,201
-------
FINANCIAL SERVICES - 14.55%
300 Capital One Financial Corporation....................... 16,256
300 Conseco, Inc. .......................................... 13,631
700 Federal Home Loan Mortgage Corporation.................. 29,356
400 Federal National Mortgage Association................... 22,825
200 Franklin Resources, Inc. ............................... 17,388
400 Hartford Life, Inc. .................................... 18,125
700 MGIC Investment Corporation............................. 46,550
500 Northern Trust Corporation.............................. 34,875
800 Norwest Corporation..................................... 30,900
300 Charles Schwab Corporation.............................. 12,581
400 Security Capital Group, Inc. +.......................... 13,000
1,200 TCF Financial Corporation............................... 40,725
950 Travelers Group, Inc. .................................. 51,181
200 UNUM Corporation........................................ 10,875
300 U.S. Bancorp............................................ 33,581
500 Washington Mutual, Inc. ................................ 31,906
------
423,755
-------
TECHNOLOGY - 11.95%
600 Acxiom Corporation +.................................. 11,550
500 CBT Group Publishing, Ltd., ADR +....................... 41,063
750 Cisco Systems, Inc. +................................... 41,812
300 Computer Associates International, Inc. ................ 15,863
800 Compuware Corporation +................................ 25,600
1,000 HBO & Company........................................... 48,000
500 Keane, Inc. +........................................... 20,312
250 Microsoft Corporation +................................ 32,312
400 Saville Systems, PLC, ADR +............................ 16,600
300 Tellabs, Inc. +......................................... 15,862
800 Uniphase Corporation +................................. 33,100
300 Veritas Software Company +.............................. 15,300
800 Visio Corporation +.................................. 30,700
------
348,074
-------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
STRONG GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS - (CONTINUED)
BUSINESS SERVICES - 10.83%
700 Billing Info Concepts Corporation +.................... $33,600
2,100 Cendant Corporation + ................................ 72,196
600 Mail-Well, Inc. +....................................... 24,300
800 Outdoor Systems, Inc. +................................. 30,700
300 Paychex, Inc............................................ 15,188
1,000 Robert Half International, Inc. +....................... 40,000
1,400 Romac International, Inc. +............................. 34,212
1,000 Snyder Communications, Inc. +........................... 36,500
300 Universal Outdoor Holdings, Inc. +...................... 15,600
600 Viking Office Products, Inc. +.......................... 13,088
------
315,384
-------
COMMUNICATIONS - 4.60%
300 AT&T Corporation........................................ 18,375
200 Bell Atlantic Corporation............................... 18,200
200 BellSouth Corporation................................... 11,263
500 Clear Channel Communications, Inc. +.................... 39,719
200 LCI International, Inc. +............................... 6,150
400 Teleport Communications Group, Inc. +................... 21,950
600 WorldCom, Inc. +........................................ 18,150
------
133,807
-------
BROADCASTING & PUBLISHING - 3.71%
700 Chancellor Media Corporation +......................... 52,237
300 Heftel Broadcasting Corporation +...................... 14,025
300 Jacor Communications, Inc. +............................ 15,938
200 Tele-Communications, Inc. +............................. 7,250
300 Time Warner, Inc. ...................................... 18,600
------
108,050
-------
CAPITAL GOODS - 3.50%
800 General Electric Company................................ 58,700
600 Sunbeam Corporation (New)............................... 25,275
400 Tyco International, Ltd. ............................... 18,025
------
102,000
-------
ELECTRONICS - 2.76%
900 ADC Telecommunications, Inc. +.......................... 37,575
700 Ciena Corporation +................................... 42,787
------
80,362
------
REAL ESTATE - 2.48%
900 Patriot American Hospitality, Inc. ..................... 25,931
800 Starwood Lodging Trust.................................. 46,300
------
72,231
------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
STRONG GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCK - (CONTINUED)
ENERGY - 2.23%
400 Falcon Drilling Company, Inc. +.......................... $14,025
500 Key Energy Group, Inc. +................................. 10,844
500 Schlumberger, Ltd........................................ 40,250
------
65,119
------
UTILITIES - 1.05%
500 Cooper Cameron Corporation +............................. 30,500
------
MATERIALS AND EQUIPMENT - 1.25%
500 EVI, Inc. +.............................................. 25,875
600 Newpark Resources, Inc. +................................ 10,500
------
36,375
------
EDUCATIONAL SERVICES - 0.81%
500 Apollo Group, Inc. +..................................... 23,625
------
TRANSPORTATION - 0.25%
300 Southwest Airlines Company............................... 7,388
-----
TOTAL COMMON STOCKS (COST $2,339,514).................... 2,795,883
---------
PRINCIPAL
AMOUNT
- ------
REPURCHASE AGREEMENT - 14.32%
$417,000 Repurchase Agreement with State Street
Bank and Trust Company, dated 12/31/97 at
5.00%, due 01/02/97, maturity value $417,116
(collateralized by U.S. Treasury Note, 5.625%, due 10/31/99,
par value $425,000; market value $428,165)
(Cost $417,000)........................................ 417,000
-------
TOTAL INVESTMENTS (COST $2,756,514*)................. 110.32% 3,212,883
OTHER ASSETS AND LIABILITIES (NET)................... (10.32) (300,529)
------ --------
NET ASSETS........................................... 100.00% $2,912,354
------ ----------
* Aggregate cost for Federal tax purposes is $2,765,754 (Note 4)
+ Non-income producing security
---------------------------------------------------------------
GLOSSARY OF TERMS
ADR American Depository Receipt
---------------------------------------------------------------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
ROBERTSON STEPHENS DIVERSIFIED GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS - 90.11%
TECHNOLOGY - 16.91%
600 Alliant Techsystems, Inc. +.............................. $33,450
2,250 Aware, Inc. +............................................ 23,063
3,000 Concentric Network Corporation +....................... 26,625
1,000 Data General Corporation +.............................. 17,437
2,500 Digi International, Inc. +............................... 42,500
7,000 Egghead, Inc. +.......................................... 45,500
2,000 Inspire Insurance Solutions, Inc. +...................... 41,750
2,500 Intersolv, Inc.+......................................... 50,625
1,000 Pegasus System, Inc. +................................... 14,875
2,000 Platinum Technology, Inc. +.............................. 56,500
5,800 Secure Computing Corporation +......................... 68,512
3,000 STRATESEC, Inc. +........................................ 29,250
4,000 System Software Associates, Inc. +....................... 35,000
3,000 THQ, Inc.+............................................... 69,000
7,500 Tidel Technologies, Inc. +............................... 29,531
------
583,618
-------
CONSUMER DISCRETIONARY - 10.50%
5,000 Alliance Gaming Corporation +.......................... 24,375
2,000 American Italian Pasta Company +...................... 50,000
4,000 Authentic Specialty Foods, Inc. +........................ 54,500
2,000 The Dress Barn, Inc. +................................... 56,750
1,500 Gadzooks, Inc. +......................................... 31,500
2,000 Grand Casinos, Inc. +.................................... 27,250
4,250 N2K, Inc. +.............................................. 62,156
3,700 Vans, Inc. +............................................ 55,963
------
362,494
-------
ENERGY - 8.57%
1,000 Artisan Corporation (Canada)............................. 7,697
8,000 Bonus Resource Services Corporation (Canada) +......... 33,029
750 Burlington Resources, Inc. .............................. 33,609
500 Camco International, Inc. ............................... 31,844
1,000 Nabors Industries, Inc. +................................ 31,438
1,250 Noble Drilling Corporation +............................ 38,281
1,000 Oryx Energy Company +.................................. 25,500
1,500 UTI Energy Corporation +............................... 38,813
750 Western Atlas, Inc. +.................................... 55,500
------
295,711
-------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
ROBERTSON STEPHENS DIVERSIFIED GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS - (CONTINUED)
FINANCIAL SERVICES - 7.78%
750 Cape Cod Bank & Trust Company............................ $29,625
1,200 Commercial Federal Corporation........................... 42,675
750 Hartford Life, Inc. ..................................... 33,984
750 Long Island Bancorp., Inc. .............................. 37,219
1,750 ML Bancorp, Inc. ........................................ 52,500
1,200 TCF Financial Corporation................................ 40,725
500 Washington Mutual, Inc. ................................. 31,906
------
268,634
-------
DRUGS & HEALTH CARE - 7.23%
2,000 Beverly Enterprises, Inc. +.............................. 26,000
1,200 Crompton & Knowles Corporation........................... 31,800
2,000 Dusa Pharmaceuticals, Inc. +............................. 23,000
900 Intercardia, Inc. +...................................... 16,088
2,000 Millennium Pharmaceuticals, Inc.+ ....................... 38,000
1,750 Neurex Corporation +................................... 24,281
2,700 Perclose, Inc. +......................................... 51,975
750 Spine Tech, Inc. +...................................... 38,578
------
249,722
-------
COMMUNICATIONS - 7.19%
2,500 Antec Corporation +.................................... 39,063
4,300 IWL Communications, Inc. +............................... 55,900
1,000 Nextel Communications, Inc. +............................ 26,000
2,000 Nextlevel Systems, Inc. +................................ 35,750
2,400 Startec Global Communications Corporation +........... 53,700
1,250 WorldCom, Inc. +......................................... 37,812
------
248,225
-------
HOUSING - 6.61%
2,400 Crossmann Communities, Inc. +............................ 66,300
1,000 Oakwood Homes Corporation................................ 33,188
2,500 Toll Brothers, Inc. +.................................... 66,875
3,000 Walter Industries, Inc. +................................ 61,875
------
228,238
-------
COMMERCIAL SERVICES - 4.35%
1,500 Children's Comprehensive Services, Inc. +................ 27,750
2,000 Correctional Services Corporation +................... 20,875
2,500 Mac-Gray Corporation +................................. 39,063
2,000 Rock of Ages Corporation +............................. 31,000
2,000 Youth Services, Inc. +................................... 31,375
------
150,063
-------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
ROBERTSON STEPHENS DIVERSIFIED GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS - (Continued)
BROADCASTING & PUBLISHING - 4.07%
2,000 Tele-Communications, Inc. (New) +....................... $55,875
1,455 Tele-Communications TCI Ventures Group +............... 41,195
1,500 U.S. West, Inc. +........................................ 43,312
------
140,382
-------
UTILITIES - 3.58%
1,500 Cooper Cameron Corporation +........................... 91,500
1,200 Houston Industries, Inc. ................................ 32,025
------
123,525
-------
MATERIALS AND EQUIPMENT - 3.00%
2,000 EVI, Inc.+............................................... 103,500
-------
PRODUCT DURABLE - 2.50%
1,000 Miller (Herman), Inc. ................................... 54,562
750 Sunbeam Corporation (New)................................ 31,594
------
86,156
------
CONSTRUCTION MATERIALS - 1.97%
1,500 Giant Cement Holding, Inc. +............................. 34,688
800 Medusa Corporation....................................... 33,450
------
68,138
------
REAL ESTATE - 1.52%
1,800 CRIIMI MAE, Inc. ........................................ 27,000
1,000 Walden Residential Properties, Inc. ..................... 25,500
------
52,500
------
BIOTECHNOLOGY - 1.48%
3,000 AgriBioTech, Inc., (New) +............................. 51,187
------
TRANSPORTATION - 1.41%
1,000 Consolidated Freightways Corporation +.................. 13,625
1,500 Genesee & Wyoming, Inc. +................................ 35,062
------
48,687
------
ELECTRICAL EQUIPMENT - 0.82%
1,500 Advanced Lighting Technologies, Inc. +................... 28,500
------
BUSINESS SERVICES - 0.62%
1,000 CorporateFamily Solutions, Inc. +........................ 21,500
------
TOTAL COMMON STOCKS (COST $2,747,372).................... 3,110,780
---------
WARRANTS - 0.58%
3,000 CNDN Hotel Expires 06/25/1998 (Cost $19,290).............20,160
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
ROBERTSON STEPHENS DIVERSIFIED GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
PRINCIPAL VALUE
AMOUNT (NOTE 2)
- ------ --------
REPURCHASE AGREEMENT - 11.39%
$393,000 Repurchase Agreement with State Street
Bank and Trust Company, dated 12/31/97 at
5.00%, due 01/02/98, maturity value $393,104
(collateralized by U.S. Treasury Note,
5.625%, due 10/31/99, par value $400,000;
market value $402,979) (Cost $393,000).......... $393,000
--------
TOTAL INVESTMENTS (COST $3,159,662*)................. 102.08% 3,523,940
OTHER ASSETS AND LIABILITIES (NET)................... (2.08) (71,793)
----- -------
NET ASSETS ..................................... 100.00% $3,452,147
------ ----------
* Aggregate cost for Federal tax purposes is $3,160,059 (Note 4)
+ Non-income producing security
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
LEXINGTON CORPORATE LEADERS PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS - 98.68%
CONSUMER DISCRETIONARY - 18.60%
1,350 Coca Cola Company........................................ $89,944
1,350 Eastman Kodak Company.................................... 82,097
1,350 Fortune Brands, Inc. .................................... 50,034
1,350 McDonalds Corporation.................................... 64,462
1,350 Philip Morris Companies, Inc............................. 61,172
1,350 Procter & Gamble Company................................. 107,747
1,350 Wal-Mart Stores, Inc..................................... 53,241
1,350 Walt Disney Company...................................... 133,734
-------
642,431
-------
ENERGY - 16.56%
1,350 Chevron Corporation...................................... 103,950
1,350 Exxon Corporation........................................ 82,603
1,350 Mobil Corporation........................................ 97,453
1,350 Royal Dutch Petroleum Company, NY Shares................. 73,153
1,350 Schlumberger, Ltd........................................ 108,675
1,350 Texaco, Inc. ............................................ 73,406
1,350 Union Pacific Resource Group, Inc. ...................... 32,738
------
571,978
-------
TECHNOLOGY - 11.35%
1,350 Allied Signal, Inc....................................... 52,566
1,350 Boeing Company........................................... 66,066
1,350 Hewlett Packard Company.................................. 84,375
1,350 Lucent Technologies, Inc. ............................... 107,831
1,350 Motorola, Inc............................................ 77,034
84 Raytheon Company, Class A................................ 4,167
-----
392,039
-------
AUTOS & TRANSPORTATION - 10.93%
1,350 Burlington Northern Santa Fe Corporation................. 125,466
1,350 General Motors Corporation............................... 81,844
1,350 Goodyear Tire and Rubber Company......................... 85,894
1,350 Union Pacific Corporation................................ 84,291
------
377,495
-------
FINANCIAL SERVICES - 10.01%
1,350 American Express Company................................. 120,488
1,350 J.P. Morgan & Company, Inc............................... 152,381
1,350 Travelers Group, Inc..................................... 72,731
------
345,600
-------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
LEXINGTON CORPORATE LEADERS PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
VALUE
SHARES (NOTE 2)
- ------ --------
COMMON STOCKS - (CONTINUED)
MATERIALS & PROCESSING - 8.80%
1,350 Aluminum Company of America.............................. $95,006
1,350 Bethlehem Steel Corporation +............................ 11,644
1,350 DuPont (E.I.) DeNemours & Company........................ 81,084
1,350 International Paper Company.............................. 58,219
1,350 Union Carbide Corporation................................ 57,966
------
303,919
-------
UTILITIES - 7.69%
1,350 Consolidated Edison Company of New York.................. 55,350
1,350 Duke Power Company....................................... 74,756
1,350 Houston Industries, Inc.................................. 36,028
1,350 PG&E Corporation......................................... 41,091
1,350 Union Electric Company................................... 58,387
------
265,612
-------
DRUGS & HEALTH CARE - 6.73%
1,350 Johnson & Johnson........................................ 88,931
1,350 Merck & Company, Inc..................................... 143,437
-------
232,368
-------
PRODUCER DURABLES - 4.77%
1,350 Caterpillar, Inc......................................... 65,559
1,350 General Electric Company................................. 99,056
------
164,615
-------
COMMUNICATIONS - 2.40%
1,350 AT&T Corporation......................................... 82,688
------
CONSUMER STAPLES - 0.84%
1,350 Gallaher Group PLC, ADR ................................ 28,856
------
TOTAL COMMON STOCKS (COST $3,085,219).................... 3,407,601
---------
PRINCIPAL
AMOUNT
- ------
REPURCHASE AGREEMENT - 3.21%
$111,000 Repurchase Agreement with State Street
Bank and Trust Company, dated 12/31/97 at
5.00%, due 01/02/98, maturity value $111,031
(collateralized by U.S. Treasury Note,
5.625%, due 10/31/99, par value $115,000;
market value $115,856) (Cost $111,000).......... 111,000
-------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
LEXINGTON CORPORATE LEADERS PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
VALUE
(NOTE 2)
--------
TOTAL INVESTMENTS (COST $3,196,219*)................. 101.89% $3,518,601
OTHER ASSETS AND LIABILITIES......................... (1.89) (65,296)
----- -------
NET ASSETS........................................... 100.00% $3,453,305
------ ----------
* Aggregate cost for Federal tax purposes (Note 4)
+ Non-income producing security
---------------------------------------------------------------
GLOSSARY OF TERMS
ADR American Depository Receipt
---------------------------------------------------------------
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. ORGANIZATION AND BUSINESS
The LPT Variable Insurance Series Trust (the "Trust") was organized under
the laws of the Commonwealth of Massachusetts on January 23, 1995, and is a
business entity commonly known as a "Massachusetts Business Trust". The Trust is
registered under the Investment Company Act of 1940, as amended, (the "1940
Act"), as an open-end series management investment company. The trust offers
eight managed investment portfolios (the "Portfolios") to the public only
through certain variable annuity contracts offered by London Pacific Life and
Annuity Company ("London Pacific"): the Berkeley Money Market Portfolio (the
"Money Portfolio"); the Berkeley U.S. Quality Bond Portfolio (the "Bond
Portfolio"); and the Harris Associates Value, MFS Total Return, Strong
International Stock, Strong Growth, Robertson Stephens Diversified Growth, and
Lexington Corporate Leaders Portfolios (the "Equity Portfolios"). Prior to May
1, 1997, the Harris Associates Value Portfolio was known as the MAS Value
Portfolio and the Robertson Stephens Diversified Growth Portfolio was known as
the Berkeley Smaller Companies Portfolio. Prior to November 3, 1997, the
Berkeley Money Market Portfolio was known as the Salomon Money Market Portfolio
and the Berkeley U.S. Quality Bond Portfolio was known as the Salomon U.S.
Quality Bond Portfolio. Prior to May 1, 1997, Miller, Anderson & Sherrerd, LLP
served as sub-advisor to the Harris Associates Value Portfolio and Berkeley
Capital Management served as sub-advisor to the Robertson Stephens Diversified
Growth Portfolio. Prior to November 3, 1997, Salomon Brothers Asset Management
Inc. served as sub-advisor to the Berkeley Money Market Portfolio and Berkeley
U.S. Quality Bond Portfolio.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies which are in
conformity with generally accepted accounting principles consistently followed
by the Trust in the preparation of its financial statements. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reported period. Actual
results could differ from those estimates.
SECURITY VALUATION: Securities which are traded on a recognized exchange
(including securities traded through the National Market System) are valued at
the last sale price on the securities exchange on which such securities are
primarily traded, or, if there were no sales during the day, at the closing bid
price. Portfolio securities that are primarily traded on foreign exchanges are
generally valued at the most recent closing values of such securities on their
respective exchanges, except when an occurrence subsequent to the time a value
was so established is likely to have changed the value, then the fair value of
those securities will be determined by the Board of Trustees or its delegates.
Over-the-counter securities that are not traded through the National Market
System are valued on the basis of the bid price at the close of business on each
day. Short-term investments that mature in 60 days or less are valued at
amortized cost. Long-term debt securities are valued using information furnished
by an independent pricing service approved by the Board of Trustees which
utilizes market quotations and transactions, quotations from dealers and various
relationships among securities in determining value. If not valued by a pricing
service, such securities are valued at prices obtained from independent brokers.
Investments with prices that cannot be readily obtained, if any, are stated at
fair value as determined in good faith under consistently applied procedures
established by and under the supervision of the Board of Trustees. The
investments of the Money Portfolio are valued utilizing the amortized cost
valuation method permitted in accordance with Rule 2a-7 under the Investment
Company Act of 1940. This method involves valuing a portfolio security initially
at its cost, and, thereafter, assuming a constant amortization to maturity of
any discount or premium.
THE LPT VARIABLE INSURANCE SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
REPURCHASE AGREEMENTS: Each Portfolio may engage in Repurchase Agreement
transactions. Under the terms of a typical Repurchase Agreement, the Portfolio
through its custodian takes possession of an underlying debt obligation, subject
to an obligation of the seller to repurchase and the Portfolio to resell, the
obligation at an agreed-upon price and time, thereby determining the yield
during the Portfolio's holding period. This arrangement results in a fixed rate
of return that is not subject to market fluctuations during the Portfolio's
holding period. The value of the collateral is at least equal at all times to
the total amount of the repurchase obligations, including interest. In the event
of counterparty default, the Portfolio has the right to use the collateral to
offset losses incurred. There is potential loss to the Portfolio in the event
the Portfolio is delayed or prevented from exercising its rights to dispose of
the collateral securities, including the risk of a possible decline in the value
of the underlying securities during the period while the Portfolio seeks to
assert its rights. Each Portfolio may enter into Repurchase Agreements only with
banks or dealers which, in the opinion of each Portfolio's Sub-advisor, based on
guidelines established by the Trust's Board of Trustees, are deemed
creditworthy.
DOLLAR ROLL TRANSACTIONS: The Berkeley U.S. Quality Bond Portfolio in order
to seek a high level of current income, may enter into dollar roll transactions
with financial institutions to take advantage of opportunities in the mortgage
market. The values of the dollar roll transactions are reflected in the
Portfolio's Statements of Assets and Liabilities. A dollar roll transaction
involves the sale by the Portfolio of securities that it holds with an agreement
by the Portfolio to repurchase similar securities at a agreed upon price and
date. The securities repurchased will bear the same interest as those sold, but
generally will be collateralized at time of delivery by different pools of
mortgages with different prepayment histories than those securities sold. The
Portfolio is paid a fee for entering into a dollar roll transaction, that is
accrued as income over the life of the dollar roll contract. During the period
between the sale and repurchase, the Portfolio will not be entitled to receive
interest and principal payments on the securities sold. Management anticipates
that the proceeds of the sale will be invested in additional instruments for the
Portfolio, and the income from these investments, together with any additional
income received on the sale will generate income for the Portfolio exceeding the
interest that would have been earned on the securities sold. Dollar roll
transactions involve the risk that the market value of the securities sold by
the Portfolio may decline below the repurchase price of those similar securities
which the Portfolio is obligated to purchase or that the return earned by the
Portfolio with the proceeds of a dollar roll may not exceed transaction costs.
There were no open dollar roll transactions at December 31, 1997.
SHORT SALES: The Robertson Stephens Diversified Growth Portfolio may seek
to hedge investments or realize additional gains through short sales. When the
sub-advisor anticipates that the price of a security will decline, it may sell
the security short and borrow the same security from a broker or other
institution to complete the sale. The Portfolio may make a profit or incur a
loss depending upon whether the market price of the security decreases or
increases between the date of the short sale and the date on which the Portfolio
must replace the borrowed security. An increase in the value of a security sold
short by the Portfolio over the price at which it was sold short will result in
a loss to the Portfolio, and there can be no assurance that the Portfolio will
be able to close out the position at any particular time or at an acceptable
price. All short sales must be fully collateralized and marked to market daily.
There were no open positions in short sales at December 31, 1997.
FOREIGN CURRENCY TRANSLATION: The books and records of the Portfolios are
maintained in U.S. Dollars. Investment valuations, other assets and liabilities
initially expressed as foreign currencies are converted each business day into
U.S. dollars based upon current exchange rates. Purchases and sales of foreign
investments and income and expenses are converted into U.S. dollars based upon
exchange rates prevailing on the respective dates of such transactions. That
portion of unrealized gains or losses on investments due to fluctuations in
foreign currency exchange rates is not separately disclosed.
FORWARD FOREIGN CURRENCY CONTRACTS: All Portfolios, except the Money Market
Portfolio, may enter into forward foreign currency contracts, whereby the
Portfolios agree to sell a specific currency at a specific price at a future
date in an attempt to attempt to hedge against fluctuations in the value of the
underlying currency of certain investment instruments. Forward foreign currency
contracts are valued at the daily exchange rate of the underlying currency.
Gains or losses on the purchase or sale of forward foreign currency contracts
having the same settlement date and broker are recognized on the date of offset,
otherwise gains or losses are recognized on the settlement date.
THE LPT VARIABLE INSURANCE SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
SECURITY TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
recorded on the trade date. Net realized gains and losses from security
transactions are recorded on the basis of identified cost. Interest income is
recorded on the accrual basis and consists of interest accrued, and, if
applicable, discount earned less premiums amortized. Dividend income is recorded
on the ex-dividend date, except that certain dividends from foreign securities
are recorded as soon as a Portfolio is informed of the ex-dividend date.
Withholding taxes on foreign dividend income and gains have been paid or
provided for in accordance with the applicable country's tax rules and rates.
DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income are
declared daily and reinvested monthly for the Money Portfolio and are declared
and distributed at least annually for all other Portfolios. All Portfolios, with
the exception of the Money Portfolio, declare and distribute, if any, all net
realized capital gains at least annually. The amount and character of income and
gains to be distributed are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
differences include treatment of losses on wash sale transactions and realized
and unrealized gains and losses on foreign currency contracts. Reclassifications
are made to a portfolio's capital accounts to reflect income and gains available
for distribution (or available capital loss carryovers) under income tax
regulations. The calculation of net investment income per share in the financial
highlights table excludes these adjustments.
FEDERAL INCOME TAXES: The Trust treats each Portfolio as a separate entity
for Federal income tax purposes. Each Portfolio of the Trust intends to qualify
each year as a "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended. By so qualifying, each Portfolio will not be
subject to Federal income taxes to the extent it distributes all of its taxable
income and net realized gains for the tax year ending December 31. In addition,
by distributing during each calendar year substantially all of its net
investment income, capital gains, and certain other amounts, if any, each
Portfolio will not be subject to Federal excise tax. Therefore, no Federal
income tax provision is required.
EXPENSES: The Trust accounts separately for assets, liabilities, and
operations of each Portfolio. Expenses directly attributed to a Portfolio are
charged to the Portfolio, while expenses which are attributable to more than one
Portfolio of the Trust are allocated among the respective Portfolios.
3. INVESTMENT ADVISORY, SUB-ADVISORY, AND OTHER RELATED PARTY TRANSACTIONS
LPIMC Insurance Marketing Services ("LPIMC"), a wholly owned subsidiary of
London Pacific, serves as investment advisor to the Trust. Berkeley Capital
Management, a wholly owned subsidiary of the London Pacific Group, Ltd., and an
affiliate of London Pacific, serves as sub-advisor to the Berkeley U.S. Quality
Bond and Berkeley Money Market Portfolios. Harris Associates L.P., an indirect,
wholly owned subsidiary of New England Investment Companies, L.P., serves as
sub-advisor to the Harris Associates Value Portfolio, Massachusetts Financial
Services Company, an indirect wholly owned subsidiary of Sun Life Assurance
Company of Canada, serves as sub-advisor to the MFS Total Return Portfolio,
Strong Capital Management, Inc., a privately held corporation, serves as
sub-advisor to the Strong International Stock and Strong Growth Portfolios,
Robertson Stephens & Company Investment Management, L.P., an indirect wholly-
owned subsidiary of BancAmerica Robertson Stephens, serves as sub-advisor of the
Robertson Stephens Diversified Growth Portfolio and Lexington Management
Corporation, a wholly owned subsidiary of Lexington Global Asset Managers, Inc.,
serves as sub-advisor to the Lexington Corporate Leaders Portfolio.
THE LPT VARIABLE INSURANCE SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
3. INVESTMENT ADVISORY, SUB-ADVISORY, AND OTHER RELATED PARTY TRANSACTIONS
(CONTINUED)
The Trust pays LPIMC a monthly fee in arrears based on a percentage of the
average daily net assets of each Portfolio during the month, out of which LPIMC
pays the sub-advisor of each Portfolio a monthly fee in arrears at annual rates
as follows:
FEES ON
AVERAGE NET FEES ON
FEES ON ASSETS BETWEEN AVERAGE NET
AVERAGE NET $25 MILLION AND ASSETS
NAME OF PORTFOLIO ASSETS UP TO $100 MILLION EXCEEDING
----------------- $25 MILLION --------------- $100 MILLION
------------ ------------
HARRIS ASSOCIATES VALUE
PORTFOLIO (A)
LPIMC .25% .25% .25%
Sub-advisor .75% .60% .50%
Total Fees Paid to
LPIMC * 1.00% .85% .75%
==== === ===
FEES ON
AVERAGE FEES ON
FEES ON NET ASSETS AVERAGE NET
AVERAGE NET BETWEEN $200 ASSETS
NAME OF PORTFOLIO ASSETS UP TO MILLION AND EXCEEDING $1.3
----------------- $200 MILLION $1.3 BILLION BILLION
------------ ------------ -------------
MFS TOTAL RETURN PORTFOLIO
LPIMC .25% .25% .25%
Sub-advisor .50% .45% .40%
Total Fees Paid to .75% .70% .65%
LPIMC *
<TABLE>
<CAPTION>
FEES ON
FEES ON AVERAGE FEES ON AVERAGE NET
NET ASSETS AVERAGE NET ASSETS
FEES ON BETWEEN $50 ASSETS BETWEEN BETWEEN
AVERAGE NET MILLION AND $150 MILLION $300 MILLION
NAME OF ASSETS UP TO $150 MILLION AND $300 AND $500
PORTFOLIO $50 MILLION MILLION MILLION
--------- ------------ --------------- -------------- -------------
BERKELEY U.S. QUALITY BOND
PORTFOLIO (B)
<S> <C> <C> <C> <C>
LPIMC .25% .25% .25% .25%
Sub-advisor .30% .275% .25% .20%
Total Fees Paid to
LPIMC * .55% .525% .50% .45%
=== ==== === ===
</TABLE>
<TABLE>
<CAPTION>
FEES ON
FEES ON AVERAGE FEES ON AVERAGE NET
NET ASSETS AVERAGE NET ASSETS
FEES ON BETWEEN $50 ASSETS BETWEEN BETWEEN
NAME OF PORTFOLIO AVERAGE NET MILLION AND $150 MILLION $300 MILLION
- ----------------- ASSETS UP TO $150 MILLION AND $300 AND $500
$50 MILLION ---------------- MILLION MILLION
------------ -------------- -------------
BERKELEY MONEY MARKET
PORTFOLIO (B)
<S> <C> <C> <C> <C>
LPIMC .25% .25% .25% .25%
Sub-advisor .20% .175% .15% .10%
Total Fees Paid to
LPIMC * .45% .425% .40% .35%
=== ==== === ===
</TABLE>
THE LPT VARIABLE INSURANCE SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
3. INVESTMENT ADVISORY, SUB-ADVISORY, AND OTHER RELATED PARTY TRANSACTIONS
(CONTINUED)
FEES ON
AVERAGE NET FEES ON
FEES ON ASSETS BETWEEN AVERAGE NET
AVERAGE NET $150 MILLION ASSETS
NAME OF PORTFOLIO ASSETS UP TO AND $500 EXCEEDING $500
$150 MILLION MILLION MILLION
- ---------------------------- ------------ -------------- -------------
STRONG INTERNATIONAL STOCK
PORTFOLIO AND STRONG GROWTH
PORTFOLIO
LPIMC .25% .25% .25%
Sub-advisor .50% .45% .40%
Total Fees Paid to
LPIMC * .75% .70% .65%
=== === ===
<TABLE>
<CAPTION>
FEES ON FEES ON AVERAGE
AVERAGE NET NET ASSETS FEES ON
FEES ON ASSETS BETWEEN BETWEEN AVERAGE NET
AVERAGE NET $10 MILLION $35 MILLION AND ASSETS
NAME OF PORTFOLIO ASSETS UP TO AND $200 MILLION EXCEEDING
$10 MILLION $35 MILLION $200 MILLION
- ------------------------------- ------------ -------------- --------------- -------------
ROBERTSON STEPHENS DIVERSIFIED
GROWTH PORTFOLIO (C)
<S> <C> <C> <C> <C>
LPIMC .25% .25% .25% .25%
Sub-advisor .70% .65% .60% .55%
Total Fees Paid to
LPIMC * .95% .90% .85% .80%
=== === === ===
</TABLE>
FEES ON
AVERAGE NET FEES ON
FEES ON ASSETS BETWEEN AVERAGE NET
AVERAGE NET $10 MILLION ASSETS
NAME OF PORTFOLIO ASSETS UP TO AND $100 EXCEEDING $100
$10 MILLION MILLION MILLION
LEXINGTON CORPORATE LEADERS
PORTFOLIO
LPIMC .25% .25% .25%
Sub-advisor .40% .35% .30%
Total Fees Paid to
LPIMC * .65% .60% .55%
* Fees paid to LPIMC include fees paid for services rendered by LPIMC to the
Portfolio and those fees that LPIMC will in turn pay to the sub-advisor.
(a) Prior to May 1, 1997, the advisor paid the previous sub-advisor (Miller,
Anderson & Sherrerd, LLP) a sub- advisory fee equivalent on an annual basis
to .625% of the Portfolio's average daily net assets.
(b) Prior to November 3, 1997, the advisor paid the previous sub-advisor
(Salomon Brothers Asset Management) an equivalent sub-advisory fee.
(c) Prior to May 1, 1997, the advisor paid the previous sub-advisor (Berkeley
Capital Management) a sub- advisory fee equivalent on an annual basis to
.75% of the Portfolio's average daily net assets.
THE LPT VARIABLE INSURANCE SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
3. INVESTMENT ADVISORY, SUB-ADVISORY, AND OTHER RELATED PARTY TRANSACTIONS
(CONTINUED)
In the event normal operating expenses of each Portfolio, excluding
brokerage commissions, but including the advisory fee, exceed certain voluntary
expense limitations based on average net assets (Harris Associates Value
Portfolio - 1.29%; MFS Total Return Portfolio - 1.29%; Berkeley U.S. Quality
Bond Portfolio - 0.99%; Berkeley Money Market Portfolio - 0.89%; Strong
International Stock Portfolio - 1.49%; Strong Growth - 1.29%; Robertson Stephens
Diversified Growth Portfolio - 1.39%; and Lexington Corporate Leaders Portfolio
- - 1.29%), London Pacific has agreed, through December 31, 1998, to reimburse
each Portfolio for expenses in excess of the stated expense limitations. The
expense limitations may be removed or revised after December 31, 1998, without
prior notice to existing shareholders.
For the year ended December 31, 1997, London Pacific voluntarily agreed to
reimburse the Portfolios as follows:
NAME OF PORTFOLIO REIMBURSEMENT
----------------- -------------
Harris Associates Value Portfolio $62,010
MFS Total Return Portfolio 78,936
Berkeley U.S. Quality Bond Portfolio 59,341
Berkeley Money Market Portfolio 57,225
Strong International Stock Portfolio 76,210
Strong Growth Portfolio 71,882
Robertson Stephens Diversified Growth Portfolio 64,876
Lexington Corporate Leaders Portfolio 56,431
The Trust pays no salaries or compensation to any of its officers. Trustees
who are not directors, officers, or employees of the Trust or any investment
advisor are reimbursed for their travel expenses in attending meetings of the
Trustees, and receive fees for each Trust meeting attended. Such amounts are
paid by the Trust.
4. PURCHASES AND SALES OF SECURITIES
The cost of purchases and proceeds from sales of investment securities,
excluding short-term investments, for the year ended December 31, 1997, were as
follows:
<TABLE>
<CAPTION>
PURCHASES SALES
--------- -----
PORTFOLIO OTHER GOVERNMENT OTHER GOVERNMENT
- --------- ----- ---------- ----- ----------
<S> <C> <C> <C> <C>
Harris Associates Value Portfolio $3,147,153 $0 $1,641,709 $0
MFS Total Return Portfolio 3,514,839 2,631,518 1,046,224 1,752,158
Berkeley U.S. Quality Bond Portfolio 29,233 3,653,230 54,942 4,053,728
Strong International Stock Portfolio 2,610,504 0 2,000,815 0
Strong Growth Portfolio 6,467,368 0 5,449,618 0
Robertson Stephens Diversified Growth Portfolio 5,865,044 0 4,186,633 0
Lexington Corporate Leaders Portfolio 2,422,326 0 703,167 0
</TABLE>
THE LPT VARIABLE INSURANCE SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
4. PURCHASES AND SALES OF SECURITIES (CONTINUED)
At December 31, 1997, aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost and aggregate
gross unrealized depreciation for all securities in which there was an excess of
tax cost over value were as follows:
<TABLE>
<CAPTION>
TAX BASIS
---------
NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
PORTFOLIO APPRECIATION DEPRECIATION (DEPRECIATION) COST
- --------- ------------ ------------ -------------- ----
<S> <C> <C> <C> <C>
Harris Associates Value Portfolio $386,470 $63,208 $323,262 $3,272,440
MFS Total Return Portfolio 448,941 40,028 408,913 5,879,667
Berkeley U.S. Quality Bond Portfolio 29,849 500 29,349 1,041,258
Strong International Stock Portfolio 73,543 159,501 (85,958) 1,580,177
Strong Growth Portfolio 451,852 4,723 447,129 2,765,754
Robertson Stephens Diversified Growth Portfolio 479,741 115,860 363,881 3,160,059
Lexington Corporate Leaders Portfolio 361,215 38,833 322,382 3,196,219
</TABLE>
5. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust authorizes the Trustees to issue an
unlimited number of shares of beneficial interest for the Portfolios, each with
a $.01 par value.
The Berkeley Money Market Portfolio has sold shares, issued reinvestment of
dividends and redeemed shares only at a constant net asset value of $1.00 per
share, the number of shares represented by such sales, reinvestments and
redemptions are the same as the dollar amounts shown for such transactions.
London Pacific directly and through its LPLA Separate Account One, owns of
record 100% of each Portfolio's outstanding shares. Changes in shares of
beneficial interest were as follows:
<TABLE>
<CAPTION>
BERKELEY MONEY MARKET PORTFOLIO
-------------------------------
YEAR ENDED DECEMBER 31, 1997 PERIOD ENDED DECEMBER 31, 1996*
SHARES AND AMOUNTS SHARES AND AMOUNTS
------------------ ------------------
<S> <C> <C>
Sold $14,018,379 $3,995,273
Issued as reinvestment
of dividends 76,923 42,722
Redeemed (13,900,532) (2,859,608)
----------- ----------
Net increase $ 194,770 $1,178,387
=========== ==========
</TABLE>
<TABLE>
<CAPTION>
HARRIS ASSOCIATES VALUE PORTFOLIO
---------------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 192,435 $ 2,687,516 134,159 $1,387,694
Issued as reinvestment
of dividends 25,257 338,513 3,597 42,434
Redeemed (75,619) (1,055,861) (17,894) (200,902)
------- ---------- ------- --------
Net increase 142,073 $ 1,970,168 119,862 $1,229,226
<FN>
* For the period January 31, 1996 to December 31, 1996
</FN>
</TABLE>
THE LPT VARIABLE INSURANCE SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
5. SHARES OF BENEFICIAL INTEREST (CONTINUED)
<TABLE>
<CAPTION>
MFS TOTAL RETURN PORTFOLIO
--------------------------
YEAR ENDED DECEMBER 31, 1997 PERIOD ENDED DECEMBER 31, 1996*
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 390,628 $ 4,879,026 161,535 $1,661,251
Issued as reinvestment
of dividends 14,058 179,583 2,481 26,938
Redeemed (78,498) (964,786) (23,741) (254,329)
------- -------- ------- --------
Net increase 326,188 $ 4,093,823 140,275 $1,433,860
======= =========== ======= ==========
</TABLE>
<TABLE>
<CAPTION>
BERKELEY U.S. QUALITY BOND PORTFOLIO
------------------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 22,204 $ 222,203 168,853 $1,674,647
Issued as reinvestment
of dividends 8,497 83,993 6,530 64,078
Redeemed (79,768) (817,964) (17,128) (170,466)
------- -------- ------- --------
Net increase/(decrease) (49,067) ($511,768) 158,255 $1,568,259
======= ========= ======= ==========
</TABLE>
<TABLE>
<CAPTION>
STRONG INTERNATIONAL STOCK PORTFOLIO
------------------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 91,988 $ 945,574 130,739 $1,327,854
Issued as reinvestment
of dividends 8,030 72,576 647 6,829
Redeemed (47,754) (483,041) (16,008) (169,112)
------- -------- ------- --------
Net increase 52,264 $ 535,109 115,378 $1,165,571
====== ========= ======= ==========
</TABLE>
<TABLE>
<CAPTION>
STRONG GROWTH PORTFOLIO
-----------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 169,760 $ 2,330,737 138,342 $1,481,628
Issued as reinvestment
of dividends 22,345 301,987 8,177 96,589
Redeemed (102,901) (1,456,632) (19,540) (241,105)
-------- ---------- ------- --------
Net increase 89,204 $ 1,176,092 126,979 $1,337,112
====== =========== ======= ==========
</TABLE>
* For the period January 31, 1996 to December 31, 1996
THE LPT VARIABLE INSURANCE SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
5. SHARES OF BENEFICIAL INTEREST (CONTINUED)
<TABLE>
<CAPTION>
ROBERTSON STEPHENS DIVERSIFIED GROWTH PORTFOLIO
-----------------------------------------------
YEAR ENDED DECEMBER 31, 1997 PERIOD ENDED DECEMBER 31, 1996*
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 265,027 $ 2,410,896 191,499 $2,060,025
Issued as reinvestment
of dividends 2 20 29,494 253,423
Redeemed (95,073) (885,949) (53,109) (574,868)
------- -------- ------- --------
Net increase 169,956 $ 1,524,967 167,884 $1,738,580
======= =========== ======= ==========
</TABLE>
<TABLE>
<CAPTION>
LEXINGTON CORPORATE LEADERS PORTFOLIO
-------------------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 222,339 $ 3,057,461 122,449 $1,250,539
Issued as reinvestment
of dividends 16,091 215,957 1,232 13,929
Redeemed (96,270) (1,330,518) (8,032) (90,134)
------- ---------- ------ -------
Net increase 142,160 $ 1,942,900 115,649 $1,174,334
======= =========== ======= ==========
</TABLE>
* For the period January 31, 1996 to December 31, 1996
6. FOREIGN SECURITIES
All Portfolios may invest in securities of foreign companies and foreign
governments. There are certain risks involved in investing in foreign securities
that are in addition to the usual risks inherent in domestic investments. These
risks include those resulting from future adverse political and economic
developments, reduced availability of public information concerning issues,
lower standards of accounting, auditing, and financial reporting, less market
liquidity, greater volatility of prices, and a possible imposition of currency
exchange blockages or restrictions on securities, transactions, or transfer of
assets.
7. CAPITAL LOSS CARRYFORWARD
At December 31, 1997, the following portfolios had a capital loss carryforward
which expires on December 31, 2004:
FUND AMOUNT
---- ------
Berkeley U.S. Quality Bond Portfolio $ 3,940
Berkeley Money Market Portfolio 27
Robertson Stephens Diversified Growth Portfolio 46,696
At December 31, 1997, Berkeley Money Market Portfolio and Robertson Stephens
Diversified Growth Portfolio had a capital loss carryforward of $53 and $86,234,
respectively, which expires on December 31, 2005.
THE LPT VARIABLE INSURANCE SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
7. CAPITAL LOSS CARRYFORWARD (CONTINUED)
At December 31, 1997, the following portfolios had Post-October loss which is
deferred until January 1, 1998:
FUND AMOUNT
---- ------
Berkeley Money Market Portfolio $ 14
Strong International Stock Portfolio 125,797
Strong Growth Portfolio 48,374
Robertson Stephens Diversified Growth Portfolio 27,454
Report of Independent Accountants
To the Trustees and Shareholders of
The London Pacific Trust
Variable Insurance Series Trust
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of each of the portfolios (Berkeley
Smaller Companies, Lexington Corporate Leaders, MAS Value, MFS Total Return,
Salomon Money Market, Salomon U.S. Quality Bond, Strong Growth, Strong
International Stock) constituting The London Pacific Trust Variable Insurance
Series Trust (the "Trust") at June 30, 1997, and the results of each of their
operations, the changes in each of their net assets and their financial
highlights for the period January 31, 1996 (commencement of operations) to June
30, 1997, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit, which included confirmation of securities at June 30,
1997 by correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provides a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
February 10, 1997
