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, 1998
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.................................................3-8
Statements of Assets & Liabilities............................................9
Statements of Operations.....................................................10
Statements of Changes in Net Assets.......................................11-12
Financial Highlights......................................................13-16
Schedules of Investments..................................................17-41
Notes to Financial Statements.............................................42-49
Report of Independent Accountants........................................... 50
MESSAGE FROM THE PRESIDENT
Dear Contract Owner:
We are pleased to provide you with the Annual Report for the LPT Variable
Insurance Series Trust for the year ending December 31, 1998.
The performance of the majority of portfolios was encouraging with exceptional
results in some cases. The Asian financial problems spilled over into most
worldwide markets at the end of the summer, but the U.S. stock markets rebounded
strongly in the last quarter.
Strong Growth Portfolio was up 30.43% as compared to the Russell 2000 Small
Company Index, which was down 2.55% and the S&P 500 Index which was up 28.58%.
The Robertson Stephens Diversified Growth Portfolio was up 17.42% compared to
the Russell 2000 Small Company Index, which fell 2.55%. Lexington Corporate
Leaders Portfolio was up 12.04% compared to the Lipper Growth & Income Index,
which was up 13.58%. Berkeley U.S. Quality Bond Portfolio was up 7.87% compared
to the Lipper Government Intermediate Bond Index which rose 8.17%. Harris
Associates Value Portfolio was up 4.31% compared to the Lipper Growth & Income
Index which was up 13.58%. MFS Total Return Portfolio was up 11.98% as compared
to the Lehman Brothers Aggregate Bond Index, which increased by 8.69% and the
Lipper Balanced Fund Index which rose by 15.37%.
We will continue to monitor the performance of each of the investment options
carefully. Our ongoing objective is to provide you with the highest quality
investment choices.
Thank you for choosing the Regency Variable Annuity. We look forward to serving
your investment needs in the future.
Ian K. Whitehead
President
LPT Variable Insurance Series Trust
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, 1998:
Harris Value Portfolio 4.31%*
S&P 500 Index 28.58%
Lipper Growth &
Income Index 13.58%
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 4.31% for the
year ended December 31, 1998. Comparatively, the returns for the S&P 500 and the
Lipper Growth and Income Indices were 28.58% and 13.58%, respectively.
During the first six months of the year, the market cap-weighted indices,
dominated by a handful of large cap growth stocks, outpaced the broad market. As
the market went through its corrective period during the third quarter and the
beginning of the fourth quarter, the broad market and reasonably-priced stocks
took the brunt of the correction. This left many of the large cap growth stocks,
which continued their dominance of certain indices, such as the market
cap-weighted S&P 500, unscathed.
In short, the absence of many large cap stocks and growth stocks adversely
impacted the Portfolio's performance. We entered 1998 believing these stocks to
be overpriced. We enter 1999 believing these stocks to be irrationally
overpriced. While the trailing P/E ratio of the S&P 500 is a lofty 30.3 times,
the P/E ratio of the ten largest stocks is 40.3.
While 1998 has been frustrating, we are excited about the present composition of
the Portfolio. The year's volatility has provided us with an opportunity to
create a portfolio of stocks whose valuation is very compelling.
In fact, our list of holdings now trades at about 8 times operating cash flow
(the measure we prefer), or about 40% below the market multiple. While it is
impossible to predict exactly when the stocks we own today, at deep discounts,
will converge with their intrinsic values, our experience tells us that price
and value always come together. Historically, this dynamic has allowed our
philosophy and process to add value and to outperform.
An example of an attractive stock recently added to the portfolio would be Eaton
(ETN). The company, based in Cleveland, Ohio, is a diversified manufacturer of
proprietary industrial products. The strengths of this company included strong
market positions (80% of their products are #1 or #2), above industry-average
returns among their business lines, and strong free cash flow. Valuation for
this above-average business with above-average management is very compelling.
Based on our earnings estimates for 1999, ETN is trading at 10 times earnings
(and one times sales, much less than half the multiple on the S&P 500). Its $5
billion market capitalization puts it squarely in the ignored, unloved, and
underfollowed mid cap category. It is the sort of holding that, once discovered,
should generate excellent performance.
$10,000 Hypothetical Investment since inception February 9, 1996
- --------------------------------------------------------------------------------
Harris Associates Value Portfolio - X
S&P 500 Index - Y
Lipper Growth & Income Index - Z
$20,000 ---------------------------------------------------------------Y $19,736
$18,000 ---------------------------------------------------------------
$16,000 ---------------------------------------------------------------Z $16,543
$14,000 ---------------------------------------------------------------X $15,815
$12,000 ---------------------------------------------------------------
$10,000 ---------------------------------------------------------------
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 include reinvestment of dividends
Average Annual Total Returns as of 12/31/98
1 Year Since Inception
February 9, 1996
Harris Associates Value Portfolio 4.31%* 17.17%*
S&P 500 Index 28.58% 26.49%
Lipper Growth & Income Index 13.58% 19.00%
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 capital growth and income, consistent
with the prudent employment of capital.
PERFORMANCE
Net total return for the year ended December 31, 1998:
MFS Total Return
Portfolio 11.98%*
Lehman Brothers
Aggregate Bond Index 8.69%
Lipper Balanced
Fund Index 15.37%
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 Fund
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 MFS Total Return Portfolio earned a total return of 11.98% for the year
ended December 31, 1998. Comparatively, the returns for the Lehman Brothers
Aggregate Bond Index and the Lipper Balanced Fund Index were 8.69% and 15.37%,
respectively.
The Portfolio benefited from the strong equity market in 1998 and from a rise in
the bond market. However, it was a volatile year in both markets. Equity returns
varied widely based on "style." As "value" managers, we focus more on financial
services, basic industry, energy, and utilities companies, while "growth"
managers are more focused on technology and health care companies. Although we
had many stocks appreciate dramatically in 1998, it was the technology and
health care sectors, groups that we have historically underweighted, that led
the market to new heights.
On the fixed-income side, U.S. Treasuries performed much better than corporate
debt. As economic and political turmoil spread throughout the Far East and Latin
America during 1998, there was a "flight to safety" that pushed up prices on
U.S. Treasuries. At the same time, bonds issued by U.S. corporations did not
keep pace because investors feared that corporate earnings would be hampered by
these global problems. Because the Portfolio tends to hold more corporate bonds
than Treasuries, our return on the fixed-income side, although strong, did not
match the return of an "all-Treasuries" portfolio.
Our goal for the coming year is to follow through with our value-oriented style.
We believe that our conservative stance offers the potential for good returns
should the equity and bond markets rise, while our balanced approach can offer
support should these markets undergo corrections.
$10,000 Hypothetical Investment since inception February 9, 1996
- --------------------------------------------------------------------------------
MFS Total Return Portfolio - X
Lehman Brothers Aggregate Bond Index - Y
Lipper Balanced Fund Index - Z
$16,000 ---------------------------------------------------------------Z $15,153
$15,000 ---------------------------------------------------------------X $14,895
$14,000 ---------------------------------------------------------------
$13,000 ---------------------------------------------------------------
$12,000 ---------------------------------------------------------------Y $12,278
$11,000 ---------------------------------------------------------------
$10,000 ---------------------------------------------------------------
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 Bond Index, and the Lipper Balanced Fund Index on February 9,
1996, the inception date of the Portfolio. The figures for the Portfolio,
the Lehman Brothers Aggregate Bond Index and the Lipper Balanced Fund Index
include reinvestment of dividends
Average Annual Total Returns as of 12/31/98
1 Year Since Inception
February 9, 1996
MFS Total Return Portfolio 11.98%* 14.76%*
Lehman Brothers Aggregate Bond Index 8.69% 7.35%
Lipper Balanced Fund Index 15.37% 15.45%
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, 1998.
Berkeley U.S. Quality
Bond Portfolio 7.87%*
Lipper Government
Intermediate Bond Index 8.17%
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 have been lower.
The Berkeley U.S. Quality Bond Portfolio earned a total return of
7.87% for the year ended December 31, 1998, compared to 8.17% for the
Lipper Government Intermediate Bond Index.
After a huge rally in the third quarter, the U.S. bond market was
softer in the fourth quarter. Interest rates rose and the yield curve
flattened as investors became convinced that the Federal Reserve would
take a more passive stance in early 1999 following the aggressive
easing which lowered the Fed Funds rate by 0.75% Economic growth,
meanwhile, has continued at an impressive rate. Third quarter GNP was
reported as a 3.7% increase, and expectations are that the fourth
quarter was equally strong. A healthy consumer sector, buoyed by
strong job and income creation and robust housing and equity markets,
has offset a slumping manufacturing sector.
Our outlook for 1999 is for the U.S. economy to slow from the
pace of 1998. Weaknesses in emerging markets will continue to
negatively impact the manufacturing sector through the mechanism
of a widening trade gap. It is also possible that further
turbulence in Latin America and a difficult environment for
corporate earnings may create problems for the stock market. Any
correction in equities will affect consumer confidence and the
real economy.
We do not, however, expect the U.S. economy to slip into
recession in 1999. Low interest rates and subdued inflation
should keep the economy growing modestly, while the Federal
Reserve has demonstrated its willingness to lower interest rates
further if conditions warrant.
$10,000 Hypothetical Investment since inception February 9, 1996
- --------------------------------------------------------------------------------
Berkeley U.S. Quality Bond Portfolio - X
Lipper Government Intermediate Bond Index - Y
$12,500 ---------------------------------------------------------------X $12,075
$12,000 ---------------------------------------------------------------Y $11,991
$11,500 ---------------------------------------------------------------
$11,000 ---------------------------------------------------------------
$10,500 ---------------------------------------------------------------
$10,000 ---------------------------------------------------------------
The chart above illustrates the growth in value of a
hypothetical $10,000 investment made in the Berkeley U.S.
Quality Bond Portfolio, and the Lipper Government
Intermediate Bond Index on February 9, 1996, the inception
date of the Portfolio. The figures for the Portfolio, and
the Lipper Government Intermediate Bond Index include
reinvestment of dividends
Average Annual Total Returns as of 12/31/98
1 Year Since Inception
February 9, 1996
Berkeley U.S. Quality Bond Portfolio 7.87%* 6.73%*
Lipper Government Intermediate Bond Index 8.17% 6.48%
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, 1998
Strong Growth Portfolio 30.43%*
Russell 2000 Small
Company Index -2.55%
S&P 500 Index 28.58%
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 expense reimbursement, total return would have been lower.
The Strong Growth Portfolio earned a total return of 30.43% for the year ended
December 31, 1998, compared to -2.55% for the Russell 2000 Small Company Index
and 28.58% for the S&P 500 Index.
Significant investments in retail stocks contributed most to our relative
outperformance. Strong retail sales, especially in department stores and
specialty retailers benefited the sector, as shoppers felt wealthier from low
inflation and a strong job market. Technology stocks performed well in the
fourth quarter benefiting from significant investments in information technology
during the year by U.S. corporations striving to enhance productivity. Our
investments in commercial services and media stocks were also beneficial.
Underperformance by healthcare and financial stocks detracted from relative
returns.
During the year, we pared our holdings in slower growing sectors such as
capital equipment, and shifted to higher growth sectors such as technology.
The Portfolio emphasized more technology issues during the period due to
the sector's high earnings visibility for the coming quarters.
Healthcare holdings were also decreased, especially in drug stocks and
patient care stocks. In summary, areas of emphasis included technology,
healthcare, and retail. The Portfolio had little or no exposure to basic
materials, energy, or utilities.
Looking ahead to 1999, we foresee an economy characterized by stable,
moderate growth and very low inflation. Prospects for stable or rising
earnings growth should help technology and consumer sectors to lead the
market. Volatility will continue to be an issue in 1999 as valuations are
back to peak levels and any uncertainty can bring sudden and sharp
corrections. Provided the economy avoids a recession, corporate earnings
remain positive, and the federal reserve maintains its bias towards easing
interest rates, high quality growth stocks should outperform. We also
expect to see broader stock leadership, which includes the best growing mid
and small cap stocks.
$10,000 Hypothetical Investment since inception February 9, 1996
- --------------------------------------------------------------------------------
Strong Growth Portfolio - X
Russell 2000 Small Company Index - Y
S&P 500 Index - Z
$22,000 ---------------------------------------------------------------Z $19,736
$20,000 ---------------------------------------------------------------X $19,725
$18,000 ---------------------------------------------------------------
$16,000 ---------------------------------------------------------------
$14,000 ---------------------------------------------------------------Y $13,184
$12,000 ---------------------------------------------------------------
$10,000 ---------------------------------------------------------------
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 Russell 2000 Small
Company Index and the S&P 500 Index include reinvestment of dividends
Average Annual Total Returns as of 12/31/98
1 Year Since Inception
February 9, 1996
Strong Growth Portfolio 30.43%* 26.47%*
Russell 2000 Small Company Index -2.55% 10.03%
S&P 500 Index 28.58% 26.49%
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, 1998:
Robertson Stephens
Diversified Growth
Portfolio 17.42%*
Russell 2000 Small
Company Index -2.55%
S&P 500 Index 28.58%
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 expense reimbursement, total return would have been lower.
The Robertson Stephens Diversified Growth Portfolio earned a total
return of 17.42% for the year ended December 31, 1998 compared to
- -2.55% for the Russell 2000 Small Company Index and 28.58% for the S&P
500 Index for the same period.
After a miserable summer in which small stocks of nearly all
types declined significantly, the broad markets snapped back
strongly in the fourth quarter. Unlike many rallies in the past,
small stocks participated in the late year surge.
Our investment process involves building client portfolios from
the bottom-up, stock by stock. In this process we seek to achieve
broad diversification across S&P sectors and individual stocks.
This fundamental emphasis has not changed.
A general overweight to technology, and strong stock selection in
the sector, helped propel our returns against the Russell 2000
Small Company Index. We leveraged the strength of the Internet
through a company called Macromedia, Inc., a leading provider of
multimedia and web based tools. The stock produced strong
returns, particularly in the fourth quarter.
We were also attracted to a broad number of healthcare issues, a
sector somewhat neglected by many individual investors in past
quarters. Strong positions in this sector included Balanced Care
Corporation. Balanced Care operates senior living and care
centers. The company is well positioned to take advantage of an
aging population and their needs for a cost effective care
solution. Revenues and earnings were up strongly over the last
several quarters as the company expanded its number of sites.
We have maintained a modest weighting in energy services
throughout the year. While this sector provided outstanding
returns in 1997, the stocks did not meet expectations in 1998 and
detracted from performance in the fourth quarter.
$10,000 Hypothetical Investment since inception February 9, 1996
- --------------------------------------------------------------------------------
Robertson Stephens Diversified Growth Portfolio - X
Russell 2000 Small Company Index - Y
S&P 500 Index - Z
$22,000 ---------------------------------------------------------------
$20,000 ---------------------------------------------------------------Z $19,736
$18,000 ---------------------------------------------------------------
$16,000 ---------------------------------------------------------------
$14,000 ---------------------------------------------------------------X $14,325
$12,000 ---------------------------------------------------------------Y $13,184
$10,000 ---------------------------------------------------------------
The chart above illustrates the growth in value of a hypothetical
$10,000 investment made in the Robertson Stephens Diversified
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 Russell 2000 Small
Company Index and the S&P 500 Index include reinvestment of
dividends
Average Annual Total Returns as of 12/31/98
1 Year Since Inception
February 9, 1996
Robertson Stephens Diversified
Growth Portfolio 17.42%* 13.23%*
Russell 2000 Small Company Index -2.55% 10.03%
S&P 500 Index 28.58% 26.49%
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, 1998:
Lexington Corporate
Leaders Portfolio 12.04%*
S&P 500 Index 28.58%
Lipper Growth &
Income Index 13.58%
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 12.04% for
the year ended December 31, 1998, compared to 28.58% for the S&P 500 Index and
13.58% for the Lipper Growth & Income Index.
The Portfolio underperformed primarily due to weaknesses throughout the year in
energy, retail and railroads. The energy sector continues to suffer from decade
low oil prices. As many hard hit economies begin to recover, there will be
stronger demand for energy and retail products. The portfolio will greatly
benefit from a turnaround in energy.
Stocks turned in another record performance in 1998, with the Dow Jones
Industrial Average rising 18.1% after three consecutive years of 20%+ returns.
The gains were not achieved in a straight line as the market dropped 12% in the
third quarter, its worst quarterly performance since 1990. Behind the drop was
the growing concern that the U.S. would finally begin to feel the effects of the
spreading currency and economic crisis that began in Asia in 1997.
Liquidity problems at several large hedge funds together with the
deterioration of the financial systems in Russia raised the specter of
global financial crisis. Central Banks around the world, including the
U.S. Federal Reserve, responded aggressively, lowering interest rates
and helping to restore confidence. Stocks responded in kind with a
strong year-end rally.
The U.S. economy continues to defy gravity. Despite widespread
predictions that the economic problems in many emerging economies
would drive the U.S. into a sharp slowdown, if not full-blown
recession, growth has remained strong.
The larger issue for investors will be the corporate earnings
environment. Reduced demand overseas, a lack of pricing power and
pressure from rising wage costs has resulted in virtually no
earnings growth in 1998. The outlook is more of the same, at
least through the first half of this year with the prospect of a
return to moderate growth in the second half. Analyst estimates
appear too optimistic and stock prices will be fighting a steady
stream of estimate reductions in early 1999. The key to
investments in this environment will be avoiding companies with
significant earnings disappointments.
$10,000 Hypothetical Investment since inception February 9, 1996
- --------------------------------------------------------------------------------
Lexington Corporate Leaders Portfolio - X
S&P 500 Index - Y
Lipper Growth & Income Index - Z
$22,000 ---------------------------------------------------------------
$20,000 ---------------------------------------------------------------Y $19,736
$18,000 ---------------------------------------------------------------
$16,000 ---------------------------------------------------------------Z $16,543
$14,000 ---------------------------------------------------------------X $15,778
$12,000 ---------------------------------------------------------------
$10,000 ---------------------------------------------------------------
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 include reinvestment of dividends
Average Annual Total Returns as of 12/31/98
1 Year Since Inception
February 9, 1996
Lexington Corporate Leaders Portfolio 12.04%* 17.07%*
S&P 500 Index 28.58% 26.49%
Lipper Growth & Income Index 13.58% 19.00%
<TABLE>
<CAPTION>
LPT Variable Insurance Series Trust
Statements of Assets and Liabilities
December 31, 1998
Harris
Associates Berkeley U.S. Berkeley Money
Value MFS Total Return Quality Bond Market Strong Growth
Assets Portfolio Portfolio Portfolio Portfolio Portfolio
---------------- ----------------- --------------- ----------------- --------------
<S> <C> <C> <C> <C> <C>
Investments at value, see accompanying schedules $7,098,791 $10,970,179 $1,859,208 $1,159,296 $6,714,225
Repurchase agreements at cost and value 156,000 805,000 190,000 159,000 419,000
Cash 643 5,347 588 352 850
Foreign currency at value 0 16 0 0 0
Dividends and/or interest receivable 12,972 72,071 21,412 18 1,656
Receivable for investments securities sold 0 0 0 0 256,100
Expense reimbursements receivable 2,856 1,007 9,365 9,425 6,086
Other assets 102 102 102 102 102
--- --- --- --- ---
Total Assets $7,271,364 $11,853,722 $2,080,675 $1,328,193 $7,398,019
Investments at cost $6,881,573 $10,348,073 $1,790,470 $1,159,296 $5,224,934
Foreign currency at cost $0 $11 $0 $0 $0
Liabilities
Payable for investments securities purchased $0 $35,940 $77,418 $0 $492,719
Payable for Trust shares redeemed 12,870 7,657 1,299 876 13,889
Unrealized depreciation on forward foreign
currency contracts 0 7 0 0 0
Payable to London Pacific 0 0 0 0 0
Payable to Custodian 0 0 0 0 0
Custodian fees payable 2,349 7,289 4,987 5,448 4,320
Advisory fees payable 17,482 20,970 2,696 1,866 10,679
Accrued legal and audit fees 15,053 15,053 15,053 15,053 15,803
Accrued expenses and other liabilities 775 1,217 775 775 775
--- ----- --- --- ---
Total Liabilities 48,529 88,133 102,228 24,018 538,185
Net Assets $7,222,835 $11,765,589 $1,978,447 $1,304,175 $6,859,834
========== =========== ========== ========== ==========
Components of Net Assets:
Paid-in capital $6,747,035 $10,391,710 $1,835,861 $1,304,175 $5,230,727
Undistributed net investment income(loss) 42,474 249,860 77,788 0 0
Accumulated net realized gain (loss)on
securities, written options, and
foreign currency transactions 216,108 501,908 (3,940) 0 139,816
Net unrealized appreciation of securities
and foreign currency transactions 217,218 622,111 68,738 0 1,489,291
------- ------- ------ - ---------
Net assets $7,222,835 $11,765,589 $1,978,447 $1,304,175 $6,859,834
========== =========== ========== ========== ==========
Shares outstanding (unlimited authorization,
$.01 par value) 514,791 823,663 185,153 1,304,175 402,026
======= ======= ======= ========= =======
Net asset value, offering price and
redemption price, per share
(Net assets/shares outstanding) $14.03 $14.28 $10.69 $1.00 $17.06
====== ====== ====== ===== ======
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
LPT Variable Insurance Series Trust
Statements of Assets and Liabilities
December 31, 1998
Lexington
Robertson Stephens Corporate
Diversified Growth Leaders
Assets Portfolio Portfolio
---------------- --------------
<S> <C> <C>
Investments at value, see accompanying schedules $6,040,378 $8,212,820
Repurchase agreements at cost and value 0 0
Cash 0 620
Foreign currency at value 0 0
Dividends and/or interest receivable 2,321 13,353
Receivable for investments securities sold 734,601 0
Expense reimbursements receivable 5,685 0
Other assets 102 102
--- ---
Total Assets $6,783,087 $8,226,895
Investments at cost $5,252,218 $7,398,277
Foreign currency at cost $0 $0
Liabilities
Payable for investments securities purchased $168,831 $0
Payable for Trust shares redeemed 13,591 13,638
Unrealized depreciation on forward foreign
currency contracts 0 0
Payable to London Pacific 0 13,579
Payable to Custodian 309,032 0
Custodian fees payable 4,526 2,518
Advisory fees payable 13,662 12,591
Accrued legal and audit fees 15,803 15,053
Accrued expenses and other liabilities 775 775
--- ---
Total Liabilities 526,220 58,154
Net Assets $6,256,867 $8,168,741
========== ==========
Components of Net Assets:
Paid-in capital $5,085,847 $7,213,611
Undistributed net investment income(loss) 0 52,006
Accumulated net realized gain (loss)on
securities, written options, and
foreign currency transactions 382,860 88,581
Net unrealized appreciation of securities
and foreign currency transactions 788,160 814,543
------- -------
Net assets $6,256,867 $8,168,741
========== ==========
Shares outstanding (unlimited authorization,
$.01 par value) 521,423 545,704
======= =======
Net asset value, offering price and
redemption price, per share
(Net assets/shares outstanding) $12.00 $14.97
====== ======
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
LPT Variable Insurance Series Trust
Statements of Operations
For the Year Ended
December 31, 1998
Harris
Associates MFS Total Berkeley U.S.
Value Return Quality Bond Berkeley Money Strong Growth
Portfolio Portfolio Portfolio Market Portfolio Portfolio
--------------- ---------------- -------------- ------------------- ----------------
<S> <C> <C> <C> <C> <C>
Investment Income
Income:
Dividends $87,247 $110,044 $0 $0 $16,614
Foreign withholding tax on
dividend income (228) (1,939) 0 0 0
Interest 28,820 259,551 93,269 96,209 18,322
------ ------- ------ ------ ------
Total Investment Income 115,839 367,656 93,269 96,209 34,936
Expenses:
Investment advisory fees 56,876 68,715 8,601 8,030 34,631
Custodian fees 25,764 80,116 25,099 25,276 52,410
Legal and audit fees 16,322 16,322 16,322 16,322 17,072
Insurance expense 1,767 1,767 1,767 1,767 1,767
Trustees'fees and expenses 4,578 4,578 4,578 4,578 4,578
----- ----- ----- ----- -----
Expenses before expense reimbursement 105,307 171,498 56,367 55,973 110,458
Expense reimbursement (Note 3) (31,942) (53,310) (40,886) (40,092) (50,894)
------- ------- ------- ------- -------
Net Expenses 73,365 118,188 15,481 15,881 59,564
------ ------- ------ ------ ------
Net Investment Income/Loss 42,474 249,468 77,788 80,328 (24,628)
------ ------- ------ ------ -------
Realized and Unrealized Gain
(Loss) on Investments
Net realized gain on securities, written
options, and foreign currency transactions 216,108 502,439 0 0 416,484
Net change in unrealized appreciation
(depreciation) of securities and foreign
currency transactions (106,044) 213,088 39,389 0 1,032,922
-------- ------- ------ - ---------
Net Gain on Investments 110,064 715,527 39,389 0 1,449,406
------- ------- ------ - ---------
Net Increase in Net Assets
Resulting from Operations $152,538 $964,995 $117,177 $80,328 $1,424,778
======== ======== ======== ======= ==========
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
LPT Variable Insurance Series Trust
Statements of Operations
For the Year Ended
December 31, 1998
Lexington
Robertson Stephens Corporate
Diversified Growth Leaders
Portfolio Portfolio
--------------------- --------------
<S> <C> <C>
Investment Income
Income:
Dividends $6,783 $120,875
Foreign withholding tax on
dividend income (69) (993)
Interest 25,033 9,437
------ -----
Total Investment Income 31,747 129,319
Expenses:
Investment advisory fees 45,590 38,958
Custodian fees 44,923 34,285
Legal and audit fees 17,072 16,322
Insurance expense 1,767 1,767
Trustees'fees and expenses 4,578 4,578
----- -----
Expenses before expense reimbursement 113,930 95,910
Expense reimbursement (Note 3) (47,226) (18,597)
------- -------
Net Expenses 66,704 77,313
------ ------
Net Investment Income/Loss (34,957) 52,006
------- ------
Realized and Unrealized Gain
(Loss) on Investments
Net realized gain on securities, written
options, and foreign currency transactions 578,598 88,581
Net change in unrealized appreciation
(depreciation) of securities and foreign
currency transactions 423,882 492,161
------- -------
Net Gain on Investments 1,002,480 580,742
--------- -------
Net Increase in Net Assets
Resulting from Operations $967,523 $632,748
======== ========
</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 Year Ended Year Ended Year Ended
December 31,1998 December 31, 1997 December 31, 1998 December 31, 1997
---------------- ----------------------------------- -----------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
from Operations
Net investment income $42,474 $11,861 $249,468 $85,322
Net realized gain on securities and
foreign currency transactions 216,108 309,569 502,439 133,356
Net change in unrealized
appreciation (depreciation)of
securities and foreign currency transactions (106,044) 148,504 213,088 311,415
-------- ------- ------- -------
Net increase in net assets
resulting from operations 152,538 469,934 964,995 530,093
------- ------- ------- -------
Distributions to shareholders from:
Net investment income 0 (11,864) (995) (84,797)
Net realized gain on investments 0 (326,649) (37,096) (94,786)
- -------- ------- -------
Total distributions 0 (338,513) (38,091) (179,583)
Share Transactions
Net proceeds from sale of shares 4,529,342 2,687,516 5,544,537 4,879,026
Issued to shareholders in
reinvestment of dividends 0 338,513 38,091 179,583
Cost of shares repurchased (981,697) (1,055,861) (716,951) (964,786)
-------- ---------- -------- --------
Net increase (decrease) from
share transactions (Note 6) 3,547,645 1,970,168 4,865,677 4,093,823
--------- --------- --------- ---------
Total increase/(decrease) in net assets 3,700,183 2,101,589 5,792,581 4,444,333
--------- --------- --------- ---------
Net Assets at beginning of period 3,522,652 1,421,063 5,973,008 1,528,675
--------- --------- --------- ---------
Net Assets at end of period $7,222,835 $3,522,652 $11,765,589 $5,973,008
========== ========== =========== ==========
Accumulated undistributed net
investment income included in net
assets at end of period $ 42,474 $ 0 $249,860 $ 996
======== ======= ======== ========
<FN>
(1) Formerly MAS Value Portfolio (Note 1)
</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 Year Ended Year Ended Year Ended
December 31,1998 December 31, 1997 December 31, 1998 December 31, 1997
---------------- ----------------------------------- -----------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
from Operations
Net investment income $77,788 $83,696 $80,328 $76,923
Net realized gain on securities and
foreign currency transactions 0 18,375 0 0
Net change in unrealized
appreciation (depreciation)of
securities and foreign currency transactions 39,389 23,041 0 0
------ ------ - -
Net increase in net assets
resulting from operations 117,177 125,112 80,328 76,923
------- ------- ------ ------
Distributions to shareholders from:
Net investment income 0 (83,993) (80,328) (76,923)
Net realized gain on investments 0 0 0 0
- - - -
Total distributions 0 (83,993) (80,328) (76,923)
Share Transactions
Net proceeds from sale of shares 1,168,980 222,203 15,337,252 14,018,379
Issued to shareholders in
reinvestment of dividends 0 83,993 80,328 76,923
Cost of shares repurchased (389,609) (817,964) (15,486,562) (13,900,532)
-------- -------- ----------- -----------
Net increase (decrease) from
share transactions (Note 6) 779,371 (511,768) (68,982) 194,770
------- -------- ------- -------
Total increase/(decrease) in net assets 896,548 (470,649) (68,982) 194,770
------- -------- ------- -------
Net Assets at beginning of period 1,081,899 1,552,548 1,373,157 1,178,387
--------- --------- --------- ---------
Net Assets at end of period $1,978,447 $1,081,899 $1,304,175 $1,373,157
========== ========== ========== ==========
Accumulated undistributed net
investment income included in net
assets at end of period $ 77,788 $ 0 $ 0 $ 0
======== ======= ====== ======
<FN>
(2) Formerly Salomon U.S. Quality Bond Portfolio (Note 1)
(3) Formerly Salomon Money Market Portfolio (Note 1)
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
LPT Variable Insurance Series Trust
Statements of Changes in Net Assets
Strong Growth Robertson Stephens Diversified
Portfolio Growth Portfolio(4)
----------------------------------- ----------------------------------
Year Ended Year Ended Year Ended Year Ended
December 31,1998 December 31, 1997 December 31, 1998 December 31, 1997
---------------- ----------------- -----------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
from Operations
Net investment income/loss ($24,628) ($6,013) ($34,957) ($14,897)
Net realized gain on securities,
written options, and foreign currency
transactions 416,484 214,565 578,598 104,555
Net unrealized appreciation
of securities and foreign
currency transactions 1,032,922 316,734 423,882 396,298
--------- ------- ------- -------
Net increase in net assets
resulting from operations 1,424,778 525,286 967,523 485,956
--------- ------- ------- -------
Distributions to shareholders from:
Net investment income 0 (93) 0 (20)
Net realized gain on investments (194,821) (301,894) 0 0
-------- -------- - -
Total distributions (194,821) (301,987) 0 (20)
Share Transactions
Net proceeds from sale of shares 3,036,477 2,330,737 2,763,953 2,410,896
Issued to shareholders in
reinvestment of dividends 194,821 301,987 0 20
Cost of shares repurchased (513,775) (1,456,632) (926,756) (885,949)
-------- ---------- -------- --------
Net increase from share
transactions (Note 6) 2,717,523 1,176,092 1,837,197 1,524,967
--------- --------- --------- ---------
Total increase/(decrease) in net assets 3,947,480 1,399,391 2,804,720 2,010,903
--------- --------- --------- ---------
Net Assets at beginning of period 2,912,354 1,512,963 3,452,147 1,441,244
--------- --------- --------- ---------
Net Assets at end of period $6,859,834 $2,912,354 $6,256,867 $3,452,147
========== ========== ========== ==========
Accumulated undistributed net
investment income (loss) included in net
assets at end of period $ 0 $ 0 $ 0 $ 0
=== === ==== =====
<FN>
(4) Formerly Berkeley Smaller Companies Portfolio (Note 1)
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
LPT Variable Insurance Series Trust
Statements of Changes in Net Assets
Lexington Corporate
Leaders Portfolio
--------------------------------------
Year Ended Year Ended
December 31,1998 December 31, 1997
---------------- ------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
from Operations
Net investment income/loss $52,006 $20,035
Net realized gain on securities,
written options, and foreign currency
transactions 88,581 209,511
Net unrealized appreciation
of securities and foreign
currency transactions 492,161 173,395
------- -------
Net increase in net assets
resulting from operations 632,748 402,941
------- -------
Distributions to shareholders from:
Net investment income 0 (20,558)
Net realized gain on investments (14,110) (195,399)
------- --------
Total distributions (14,110) (215,957)
Share Transactions
Net proceeds from sale of shares 4,506,043 3,057,461
Issued to shareholders in
reinvestment of dividends 14,110 215,957
Cost of shares repurchased (423,355) (1,330,518)
-------- ----------
Net increase from share
transactions (Note 6) 4,096,798 1,942,900
--------- ---------
Total increase/(decrease) in net assets 4,715,436 2,129,884
--------- ---------
Net Assets at beginning of period 3,453,305 1,323,421
--------- ---------
Net Assets at end of period $8,168,741 $3,453,305
========== ==========
Accumulated undistributed net
investment income (loss) included in net
assets at end of period $ 52,006 $ 0
========= =====
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
LPT Variable Insurance Series Trust
Financial Highlights
For a Share Outstanding Throughout the Period
Harris Associates Value Portfolio (1)
--------------------------------------------------------
Year Ended Year Ended Period Ended
December 31, 1998 December 31,1997 December 31, 1996*
----------------- ---------------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of period $13.45 $11.86 $10.00
Income from investment operations:
Net investment income (a) 0.10 0.08 0.10
Net realized and unrealized gain on
investments 0.48 2.94 2.13
---- ---- ----
Total from investment operations 0.58 3.02 2.23
---- ---- ----
Less distributions:
Dividends from net investment income 0.00 (0.05) (0.10)
Distributions from net realized capital gains 0.00 (1.38) (0.27)
---- ----- -----
Total distributions 0.00 (1.43) (0.37)
---- ----- -----
Net asset value, end of period $14.03 $13.45 $11.86
====== ====== ======
Total return ++ 4.31% 25.56% 20.39%
==== ===== =====
Ratios to average net assets/supplemental
data
Net assets, end of period (in 000's) $7,223 $3,523 $1,421
Ratio of operating expenses to average nets assets 1.29% 1.29% 1.26%+
Ratio of net investment income to average net assets 0.75% 0.56% 1.01%+
Portfolio turnover rate 49.83% 84.94% 41.08%
Ratio of operating expenses to average net
assets before expense reimbursements 1.85% 4.22% 7.55%+
Net investment income (loss) per share
before expense reimbursements (a) $0.03 ($0.32) ($0.52)
<FN>
+ Annualized
++ Total returns represent aggregate total return for the years
ended December 1998 and 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.
(a) Based on the average of the daily shares outstanding throughout the year.
(1) Formerly MAS Value Portfolio (Note 1)
*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
MFS Total Return Portfolio
--------------------------------------------------------
Year Ended Year Ended Period Ended
December 31, 1998 December 31,1997 December 31, 1996*
----------------- ---------------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of period $12.80 $10.90 $10.00
Income from investment operations:
Net investment income (a) 0.37 0.35 0.25
Net realized and unrealized gain on
investments 1.16 1.95 0.85
---- ---- ----
Total from investment operations 1.53 2.30 1.10
---- ---- ----
Less distributions:
Dividends from net investment income 0.00 (0.19) (0.20)
Distributions from net realized capital gains (0.05) (0.21) (0.00)
----- ----- -----
Total distributions (0.05) (0.40) (0.20)
----- ----- -----
Net asset value, end of period $14.28 $12.80 $10.90
====== ====== ======
Total return ++ 11.98% 21.18% 9.81%
===== ===== ====
Ratios to average net assets/supplemental
data
Net assets, end of period (in 000's) $11,766 $5,973 $1,529
Ratio of operating expenses to average nets assets 1.29% 1.29% 1.26%+
Ratio of net investment income to average net assets 2.72% 2.80% 2.59%+
Portfolio turnover rate 126.29% 103.75% 53.91%
Ratio of operating expenses to average net
assets before expense reimbursements 1.87% 3.88% 7.84%+
Net investment income (loss) per share
before expense reimbursements (a) $0.29 $0.03 ($0.38)
<FN>
+ Annualized
++ Total returns represent aggregate total return for the years
ended December 1998 and 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.
(a) Based on the average of the daily shares outstanding throughout the year.
*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 Portfolio (2)
-----------------------------------------------------------
Year Ended Year Ended Period Ended
December 31,1998 December 31,1997 December 31, 1996*
---------------- ---------------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of period $9.91 $9.81 $10.00
Income from investment operations:
Net investment income (a) 0.52 0.58 0.49
Net realized and unrealized gain (loss)
on investments 0.26 0.34 (0.25)
---- ---- -----
Total from investment operations 0.78 0.92 0.24
---- ---- ----
Less distributions:
Dividends from net investment income 0.00 (0.82) (0.43)
Distributions from net realized capital gains 0.00 (0.00) (0.00)
---- ----- -----
Total distributions 0.00 (0.82) (0.43)
Net asset value, end of period $10.69 $9.91 $9.81
====== ===== =====
Total return ++ 7.87% 9.45% 2.27%
==== ==== ====
Ratios to average net assets/supplemental
data
Net assets, end of period (in 000's) $1,978 $1,082 $1,553
Ratio of operating expenses to average net assets 0.99% 0.99% 0.97%+
Ratio of net investment income to average
net assets 4.97% 5.79% 5.41%+
Portfolio turnover rate 5.21% 431.63% 231.03%
Ratio of operating expenses to average net
assets before expense reimbursements 3.60% 5.09% 5.79%+
Net investment income (loss) per share
before expense reimbursements (a) $0.24 $0.17 $0.05
<FN>
+ Annualized
++ Total returns represent aggregate total return for the years
ended December 1998 and 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.
(a) Based on the average of the daily shares outstanding throughout the year.
(2) Formerly Salomon U.S. Quality Bond Portfolio (Note 1)
*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 Money Market Portfolio (3)
-----------------------------------------------------------
Year Ended Year Ended Period Ended
December 31,1998 December 31,1997 December 31, 1996*
---------------- ---------------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00
Income from investment operations:
Net investment income (a) 0.04 0.05 0.04
Net realized and unrealized gain (loss)
on investments 0.00 0.00 0.00
---- ---- ----
Total from investment operations 0.04 0.05 0.04
---- ---- ----
Less distributions:
Dividends from net investment income (0.04) (0.05) (0.04)
Distributions from net realized capital gains (0.00) (0.00) (0.00)
----- ----- -----
Total distributions (0.04) (0.05) (0.04)
Net asset value, end of period $1.00 $1.00 $1.00
===== ===== =====
Total return ++ 4.55% 4.58% 3.93%
==== ==== ====
Ratios to average net assets/supplemental
data
Net assets, end of period (in 000's) $1,304 $1,373 $1,178
Ratio of operating expenses to average net assets 0.89% 0.89% 0.87%+
Ratio of net investment income to average
net assets 4.50% 4.58% 4.43%+
Portfolio turnover rate N/A N/A N/A
Ratio of operating expenses to average net
assets before expense reimbursements 3.14% 4.30% 6.67%+
Net investment income (loss) per share
before expense reimbursements (a) $0.02 $0.01 ($0.01)
<FN>
+ Annualized
++ Total returns represent aggregate total return for the years
ended December 1998 and 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.
(a) Based on the average of the daily shares outstanding throughout the year.
(3) Formerly Salomon Money Market Portfolio (Note 1)
*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 Growth Portfolio
-----------------------------------------------------------
Year Ended Year Ended Period Ended
December 31, 1998 December 31, 1997 December 31, 1996*
----------------- ----------------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of period $13.47 $11.92 $10.00
Income from investment operations:
Net investment income (a) (0.08) (0.04) 0.25
Net realized and unrealized gain
(loss) on investments 4.17 3.07 2.49
---- ---- ----
Total from investment operations 4.09 3.03 2.74
---- ---- ----
Less distributions:
Dividends from net investment income 0.00 0.00 (0.22)
Distributions from net realized capital gains (0.50) (1.48) (0.60)
----- ----- -----
Total distributions (0.50) (1.48) (0.82)
----- ----- -----
Net asset value, end of period $17.06 $13.47 $11.92
====== ====== ======
Total return ++ 30.43% 25.56% 20.27%
===== ===== =====
Ratios to average net assets/supplemental
data
Net assets, end of period (in 000's) $6,860 $2,912 $1,513
Ratio of operating expenses to average
net assets 1.29% 1.29% 1.26%+
Ratio of net investment income/loss to
average net assets (0.53%) (0.26%) 2.25%+
Portfolio turnover rate 275.16% 270.11% 422.67%
Ratio of operating expenses to average net
assets before expense reimbursements 2.39% 4.44% 7.09%+
Net investment income (loss) per share before
expense reimbursements (a) ($0.24) ($0.46) ($0.39)
<FN>
+ Annualized
++ Total returns represent aggregate total return for the years
ended December 1998 and 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.
(a) Based on the average of the daily shares outstanding throughout the year.
*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 Growth
Portfolio (4)
--------------------------------------
Year Ended Year Ended
December 31, 1998 December 31, 1997 December 31, 1996*
----------------- ----------------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of period $10.22 $8.58 $10.00
Income from investment operations:
Net investment income (a) (0.08) (0.07) 2.10
Net realized and unrealized gain
(loss) on investments 1.86 1.71 (1.69)
---- ---- -----
Total from investment operations 1.78 1.64 0.41
---- ---- ----
Less distributions:
Dividends from net investment income 0.00 0.00 (1.83)
Distributions from net realized capital gains 0.00 0.00 (0.00)
---- ---- -----
Total distributions 0.00 0.00 (1.83)
---- ---- -----
Net asset value, end of period $12.00 $10.22 $8.58
====== ====== =====
Total return ++ 17.42% 19.12% 2.42%
===== ===== ====
Ratios to average net assets/supplemental
data
Net assets, end of period (in 000's) $6,257 $3,452 $1,441
Ratio of operating expenses to average
net assets 1.39% 1.39% 1.36%+
Ratio of net investment income/loss to
average net assets (0.73%) (0.72%) 20.30%+
Portfolio turnover rate 381.64% 234.54% 2,242.85%
Ratio of operating expenses to average net
assets before expense reimbursements 2.37% 4.53% 7.02%+
Net investment income (loss) per share before
expense reimbursements (a) ($0.18) ($0.35) $1.51
<FN>
+ Annualized
++ Total returns represent aggregate total return for the years
ended December 1998 and 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.
(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
Lexington Corporate Leaders Portfolio
-----------------------------------------------------------
Year Ended Year Ended Period Ended
December 31, 1998 December 31, 1997 December 31,1996*
----------------- ----------------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of period $13.39 $11.44 $10.00
Income from investment operations:
Net investment income (a) 0.12 0.13 0.14
Net realized and unrealized gain
(loss) on investments 1.49 2.70 1.42
---- ---- ----
Total from investment operations 1.61 2.83 1.56
---- ---- ----
Less distributions:
Dividends from net investment income 0.00 (0.08) (0.12)
Distributions from net realized capital gains (0.03) (0.80) (0.00)
----- ----- -----
Total distributions (0.03) (0.88) (0.12)
----- ----- -----
Net asset value, end of period $14.97 $13.39 $11.44
====== ====== ======
Total return ++ 12.04% 24.71% 12.84%
===== ===== =====
Ratios to average net assets/supplemental
data
Net assets, end of period (in 000's) $8,169 $3,453 $1,323
Ratio of operating expenses to average net
assets 1.29% 1.29% 1.26%+
Ratio of net investment income to average
net assets 0.87% 0.99% 1.40%+
Portfolio turnover rate 7.08% 35.69% 0.00%
Ratio of operating expenses to average net
assets before expense reimbursements 1.60% 4.08% 6.86%+
Net investment income (loss) per share
before expense reimbursements (a) $0.08 ($0.24) ($0.41)
<FN>
+ Annualized
++ Total returns represent aggregate total return for the years
ended December 1998 and 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.
(a) Based on the average of the daily shares outstanding throughout the year.
*For the period January 31, 1996 (Commencement of Operations) to December 31, 1996
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
Harris Associates Value Portfolio
Schedule of Investments
December 31, 1998
Value
Shares (Note 2)
- ------ --------
COMMON STOCKS - 98.28%
Consumer Basics - 11.71%
<S> <C>
4,950 Black & Decker Corporation................................................$277,509
9,600 Dial Corporation...........................................................277,200
5,443 Philip Morris Companies, Inc...............................................291,201
-------
845,910
-------
Consumer Non-Durables - 10.51%
7,000 Gucci Group NV, ADR........................................................340,375
7,700 Mattel, Inc................................................................175,656
6,000 Nike, Inc..................................................................243,375
-------
759,406
-------
Conglomerates - 8.79%
8,800 ITT Industries, Inc. ......................................................349,800
15,300 U.S. Industries, Inc. .....................................................284,963
--------
634,763
-------
Broadcasting & Publishing - 8.61%
4,600 Central Newspapers, Inc....................................................328,612
9,300 Dun & Bradstreet Corporation...............................................293,531
--------
622,143
-------
Construction Materials - 7.89%
4,050 Armstrong World Industries, Inc. ......................................... 244,266
6,400 USG Corporation........................................................... 326,000
-------
570,266
-------
Financial Services - 7.89%
2,880 Old Republic International Corporation......................................64,800
3,900 PartnerRe, Ltd.............................................................178,425
8,550 Washington Mutual, Inc.....................................................326,503
--------
569,728
-------
Autos & Transportation - 6.43%
4,600 Bandag, Inc., Class A......................................................160,425
4,300 Eaton Corporation..........................................................303,956
--------
464,381
-------
Basic Industries - 6.33%
6,450 Fort James Corporation.....................................................258,000
5,750 Premark International, Inc.................................................199,094
--------
457,094
-------
General Business - 6.06%
8,000 ACNielsen Corporation +...................................................226,000
4,700 H & R Block, Inc...........................................................211,500
--------
437,500
-------
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
Harris Associates Value Portfolio
Schedule of Investments (Continued)
December 31, 1998
Value
Shares (Note 2)
- ------ --------
COMMON STOCKS - (Continued)
Electronics - 4.94%
<S> <C>
7,100 Electronic Data Systems Corporation........................................$356,775
--------
Drugs & Health Care - 4.66%
13,600 Columbia/HCA Healthcare Corporation.........................................336,600
--------
Chemicals - 3.71%
10,300 Ferro Corporation...........................................................267,800
--------
Real Estate - 3.65%
18,400 Catellus Development Corporation +..........................................263,350
- ------ --------
Consumer Discretionary - 3.59%
8,200 Fortune Brands, Inc.........................................................259,325
--------
Energy - 3.51%
28,000 Union Pacific Resource Group, Inc. .........................................253,750
--------
Total Common Stocks (Cost $6,881,573).....................................7,098,791
----------
Principal
Amount
- ------
SHORT-TERM OBLIGATIONS - 2.16%
$156,000 Repurchase Agreement with State Street
Bank and Trust Company, dated 12/31/98 at
4.00%, due 01/04/99, maturity value $156,069
(collateralized by U.S. Treasury Bond, 10.625%, due 08/15/15,
par value $100,000; market value $161,865) (Cost $156,000)..........156,000
--------
TOTAL INVESTMENTS (COST $7,037,573*)............................100.44% $7,254,791
OTHER ASSETS AND LIABILITIES (NET)...............................(0.44) (31,956)
----- -------
NET ASSETS......................................................100.00% $7,222,835
======= ==========
<FN>
* Aggregate cost for Federal tax purposes (Note 5)
+ Non-income producing security
</FN>
</TABLE>
----------------------------------------------------------
GLOSSARY OF TERMS
ADR American Depository Receipt
------------------ ---------------------------------------
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
MFS Total Return Portfolio
Schedule of Investments
December 31, 1998
Value
Shares (Note 2)
- ------ --------
COMMON STOCKS - 54.23%
Financial Services - 11.30%
<S> <C>
400 Allstate Corporation........................................................$15,450
1,010 American Express Company....................................................103,272
380 Arden Reality, Inc........................................................... 8,811
2,158 Associates First Capital Corporation, Class A................................91,445
290 Bank of New York Company, Inc................................................11,672
1,350 Chubb Corporation............................................................87,581
150 CIGNA Corporation............................................................11,597
1,545 A.G. Edwards, Inc. ..........................................................57,551
2,450 Equitable Companies, Inc....................................................141,794
1,440 Federal Home Loan Mortgage Corporation.......................................92,790
100 Federated Investments, Inc. .................................................1,812
1,843 ING Groep NV................................................................112,324
755 Jefferson Pilot Corporation..................................................56,625
1,400 Lincoln National Corporation................................................114,537
730 Mellon Bank Corporation......................................................50,187
1,490 National City Corporation...................................................108,025
400 PNC Bank Corporation.........................................................21,650
20 Progressive Corporation Ohio..................................................3,387
100 Provident Companies, Inc. ....................................................4,150
900 Torchmark, Inc. .............................................................31,781
830 Transamerica Corporation.....................................................95,865
700 US Bancorporation Delaware...................................................24,850
400 Washington Mutual, Inc. .....................................................15,275
1,690 Wells Fargo & Company........................................................67,494
-------
1,329,925
---------
Utilities - 6.74%
700 CMS Energy Corporation.......................................................33,906
1,810 Carolina Power & Light Company...............................................85,183
3,280 Coastal Corporation........................................................ 114,595
1,270 Columbia Energy Group........................................................73,343
1,800 DPL, Inc.....................................................................38,925
1,090 Eastern Enterprises..........................................................47,688
1,260 GPU, Inc. ...................................................................55,676
420 National Fuel Gas Company....................................................18,979
460 New Century Energies, Inc. ..................................................22,425
1,230 Pacificorp...................................................................25,907
1,520 Pinnacle West Capital Corporation............................................64,410
1,300 Public Service Company of North Carolina, Inc................................33,800
900 Sierra Pacific Resources.....................................................34,200
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
MFS Total Return Portfolio
Schedule of Investments (Continued)
December 31, 1998
Value
Shares (Note 2)
- ------ --------
COMMON STOCK - (Continued)
Utilities- (Continued
<S> <C>
1,800 Southern Company...........................................................$52,313
770 Texas Utilities Company.....................................................35,949
1,100 UGI Corporation.............................................................26,125
900 Washington Gas & Light Company..............................................24,413
170 Williams Companies, Inc......................................................5,302
------
793,139
-------
Consumer Discretionary - 4.62%
400 Albertsons, Inc.............................................................25,475
1,270 American Stores Company.....................................................46,911
1,490 Dayton Hudson Corporation...................................................80,833
396 Diageo PLC (Great Britain)...................................................4,392
1,040 Eastman Kodak Company.......................................................74,880
1,400 MGM Grand, Inc. +.........................................................37,975
1,180 McDonalds Corporation.......................................................90,418
1,240 Meyer Fred, Inc. +..........................................................74,710
60 J.C. Penney, Inc.............................................................2,813
1,120 Rite Aid Corporation........................................................55,510
300 Safeway, Inc................................................................18,281
110 Sears Roebuck & Company......................................................4,675
900 Walt Disney Company.........................................................27,000
-------
543,873
-------
Energy - 4.37%
1,000 Amoco Corporation...........................................................60,375
1,243 BP Amoco PLC, ADR..........................................................111,404
1,500 Conoco, Inc.................................................................31,312
491 Exxon Corporation...........................................................35,904
780 Mobil Corporation...........................................................67,957
360 Royal Dutch Petroleum Company...............................................17,235
810 Schlumberger, Ltd...........................................................37,361
1,500 Sempra Energy...............................................................38,063
1,350 Texaco, Inc. ...............................................................71,381
1,470 Unocal Corporation .........................................................42,906
-------
513,898
-------
Communications - 4.31%
1,100 AT&T Corporation............................................................82,775
720 Alcatel Alsthom CGE, ADR....................................................17,595
640 Bell Atlantic Corporation...................................................33,920
2,300 GTE Corporation............................................................149,500
2,010 SBC Communications, Inc....................................................107,786
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
MFS Total Return Portfolio
Schedule of Investments (Continued)
December 31, 1998
Value
Shares (Note 2)
- ------ --------
COMMON STOCKS - (Continued)
Communications - (Continued)
<S> <C>
1,090 Sprint Corporation ......................................................$91,696
520 Telephone & Data Systems, Inc...............................................23,368
-------
506,640
-------
Consumer Staples - 4.25%
4,787 Archer Daniels Midland Company................................................82,277
720 General Mills, Inc............................................................55,980
400 Gillette Company..............................................................19,325
840 Hershey Foods Corporation.....................................................52,237
900 Hormel Foods Corporation......................................................29,475
700 McCormick & Company, Inc. ....................................................23,669
44 Nestle SA (Switzerland).......................................................95,771
2,150 Philip Morris Companies, Inc.................................................115,025
820 Rubbermaid, Inc...............................................................25,779
-------
499,538
-------
Drugs & Health Care - 4.09%
1,300 American Home Products Corporation............................................73,206
300 Baxter International, Inc.....................................................19,294
660 Bristol Myers Squibb Company..................................................88,316
3,770 Columbia/HCA Healthcare Corporation...........................................93,308
1,430 Glaxo Wellcome, PLC, ADR......................................................99,385
1,140 SmithKline Beecham, PLC, ADR................................................. 79,230
660 United Healthcare Corporation.................................................28,421
-------
481,160
-------
Broadcasting & Publishing - 2.47%
890 Gannett, Inc..................................................................57,405
1,250 New York Times Company, Class A...............................................43,359
1,720 Time Warner, Inc.............................................................106,747
1,120 Viacom, Inc...................................................................82,880
-------
290,391
-------
Aerospace - 2.25%
3,040 Allied Signal, Inc..........................................................134,710
900 General Dynamics Corporation.................................................52,763
1,170 TRW, Inc.....................................................................65,739
110 United Technologies Corporation..............................................11,963
-------
265,175
-------
Materials and Processing - 1.91%
1,710 Akzo Nobel NV (Netherlands)................................................. 77,822
650 ALCOA, Inc...................................................................48,466
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
MFS Total Return Portfolio
Schedule of Investments (Continued)
December 31, 1998
Value
Shares (Note 2)
COMMON STOCKS - (Continued)
Materials and Processing - (Continued)
<S> <C>
480 DuPont (E.I) DeNemours & Company............................................$25,470
1,430 Weyerhaeuser Company.........................................................72,662
-------
224,420
-------
Basic Industry - 1.59%
750 Bowater, Inc.................................................................31,078
1,150 Champion International Corporation...........................................46,575
500 Illinois Tool Works, Inc.....................................................29,000
1,470 Kimberly Clark Corporation...................................................80,115
-------
186,768
-------
Capital Goods - 1.58%
1,700 Browning Ferris Industries, Inc..............................................48,344
1,120 Emerson Electric Company.....................................................67,760
250 General Electric Company.....................................................25,516
700 Hubbell, Inc.................................................................26,600
240 Tyco International, Ltd......................................................18,105
-------
186,325
-------
Autos & Transportation - 1.49%
780 Canadian National Railway Company............................................40,462
200 Ford Motor Company...........................................................11,738
320 Lear Corporation +.........................................................12,320
1,360 Norfolk Southern Corporation.................................................43,095
2,880 Volvo Aktiebolaget AB........................................................67,140
-------
174,755
-------
Computer & Business Equipment - 1.41%
850 International Business Machines Corporation.................................157,037
80 Xerox Corporation.............................................................9,440
------
166,477
-------
Electronics - 0.97%
567 AMP, Inc.....................................................................29,519
300 Analog Devices, Inc. +.....................................................9,413
756 Raytheon Company, Class A....................................................39,076
680 Raytheon Company, Class B....................................................36,210
-------
114,218
-------
Real Estate - 0.45%
330 Boston Properties, Inc.......................................................10,065
190 Hospitality Properties Trust..................................................4,584
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
MFS Total Return Portfolio
Schedule of Investments (Continued)
December 31, 1998
Value
Shares (Note 2)
- ------ --------
COMMON STOCKS (Continued)
Real Estate - (Continued)
<S> <C>
600 Prime Group Realty Trust.....................................................$9,075
1,100 TriNet Corporate Realty Trust, Inc. .........................................29,425
-------
53,149
------
Miscellaneous - 0.43%
500 CVS Automatic Com Exchange Securities Trust..................................50,094
Total Common Stocks (Cost $5,794,641).....................................6,379,945
PREFERRED STOCKS - 1.71%
1,900 Lincoln National Corporation ................................................44,769
200 McKesson Financing Trust, 144A...............................................21,425
730 MediaOne Group, Inc..........................................................48,545
680 Newell Financial Trust, Gtd Conv., 144A......................................35,870
370 Newell Financial Trust.......................................................19,518
550 Texas Utilities Company......................................................31,006
-------
Total Preferred Stocks (Cost $196,311)......................................201,133
--------
Principal
Amount
- ------
CORPORATE BONDS AND NOTES - 20.73%
$19,000 Atlantic Mutual Insurance Company, 144A, 8.15%, due 02/15/2028..............19,120
25,000 B E Aerospace Company, 8.00%, due 03/01/2008 ..............................24,500
10,000 Bausch & Lomb, Inc., 6.50%, due 08/01/2005...................................9,726
10,000 Bausch & Lomb, Inc., Debenture, 7.125%, due 08/01/2028.......................9,341
25,000 Beaver Valley II Funding Corporation, 9.00%, due 06/01/2017.................28,845
25,000 Bell Atlantic Financial Services, Inc., 144A,4.25%, due 09/15/2005......... 25,625
15,000 Building Materials Corporation of America, 144A 8.00%, due 12/01/2008...... 15,056
175,000 Calenergy, Inc., 6.96%, due 09/15/2003.....................................176,904
10,000 Calenergy, Inc., 7.23%, due 09/15/2005......................................10,186
15,000 Calenergy, Inc., 7.52%, due 09/15/2008......................................15,702
5,000 Capital One Bank, MTM, 6.70%, due 05/15/2008.................................4,835
200,000 Century Communications Corporation,.0.00%, due 01/15/2008..................102,500
10,000 Chancellor Media Corporation, 8.75%, due 06/15/2007.........................10,250
10,000 Cleveland Electric Illuminating Company, Secured Note, 144A,
7.88%, due 11/01/2017.......................................................10,335
5,000 Coastal Corporation, 6.50%, due 06/02/2008...................................5,125
25,000 Coastal Corporation, Senior Debenture, 7.75%, due 10/15/2035................27,515
43,000 Coastal Corporation, Senior Debenture, 7.42%, due 02/15/2037................45,423
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
MFS Total Return Portfolio
Schedule of Investments (Continued)
December 31, 1998
Principal Value
Amount (Note 2)
- ------ --------
CORPORATE BONDS AND NOTES (Continued)
<S> <C>
$3,000 Columbia/HCA Healthcare Corporation, 6.875%, due 07/15/2001................$2,977
18,000 Columbia/HCA Healthcare Corporation, 7.69%, due 06/15/2025.................16,313
10,000 Commonwealth Edison Company, 6.95, due 07/15/2018..........................10,360
5,000 Connecticut Light & Power Company, First Mortgage,
7.875%, due 10/01/2024......................................................5,187
12,000 Conseco Inc., MTN, 6.40%, due 06/15/2001..................................11,561
12,000 Contifinancial Corporation, 7.50%, due 03/15/2002...........................8,629
5,000 Continental Airlines, 6.648%, due 03/15/2019................................4,921
30,000 Continental Cablevision, Inc, 11.00%, due 06/01/2007...................... 32,223
100,000 Crimi Mae Commercial Mortgage Trust, 144A, 7.00%, due 03/02/2011...........93,859
10,000 Dillards, Inc., Debenture, 7.13%, due 08/01/2018...........................10,228
20,000 Disney, Walt Company, MTN, 5.125%, due 12/15/2003..........................19,889
7,000 Fairfax Financial Holdings, Ltd., 7.375%, due 04/15/2018....................6,778
9,854 Federal Express Corporation, Pass-thru Certificate,
7.65%, due 01/15/2014......................................................10,254
10,000 Federal Mogul Corporation, 7.50%, due 07/01/2004...........................10,096
5,000 Federal Mogul Corporation, 7.75%, due 07/01/2006............................5,077
5,000 First Empire Capital Trust, Captial Securities, 8.234%, due 02/01/2027......5,527
20,000 FrontierVision Operation Partnership, LP, 11.00%, due 10/15/2006...........22,125
32,996 GGIB Funding Corporation, Secured Lease Obligation Bond,
7.43%, due 01/15/2011......................................................34,295
50,000 GS Escrow Corporation, 144A, 6.75%, due 08/01/2001.........................49,281
35,000 GS Escrow Corporation, 144A, 7.125%, due 08/01/2005........................34,486
10,000 Georgia Pacific Corporation, 9.50%, due 05/15/2022.........................11,270
6,000 Georgia Pacific Corporation, Debenture, 7.25%, due 06/01/2028...............6,045
100,000 Goldman Sachs Group, LP, 144A, 5.90%, due 01/15/2003......................101,126
30,000 Gulf Canada Resources Ltd., Debenture, 9.25%, due 01/15/2004...............30,740
20,000 Healthsouth Corporation, Subordinated Convertible Debenture,
3.25%, due 04/01/2003......................................................16,975
58,000 Hearst Argyle Television, Inc., Debenture, 7.50%, due 11/15/2027...........60,515
8,000 Tommy Hilfiger USA, Inc., 6.50%, due 06/01/2003.............................7,885
6,000 Tommy Hilfiger USA, Inc., 6.85%, due 06/01/2008.............................5,779
20,000 Husky Oil, Ltd., 144A, 8.90%, due 08/15/2028...............................20,648
9,000 Illinois Power Supply, 5.26%, due 06/25/2003................................9,000
45,000 Jones Apparel Group, Inc.,144A, 6.25%, due 10/01/2001......................44,783
5,000 KCS Energy, 8.875%, due 01/15/2008.........................................3,500
5,000 Lasmo USA, Inc., 6.75%, due 12/15/2007......................................5,033
15,000 MBNA Capital 1, Capital Securities, Series A, 8.278%, due 12/01/2026.......15,389
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
MFS Total Return Portfolio
Schedule of Investments (Continued)
December 31, 1998
Principal Value
Amount (Note 2)
- ------ --------
CORPORATE BONDS AND NOTES (Continued)
<S> <C>
$10,000 Marsh Supermarkets, Inc., 8.875%, due 08/01/2007..........................$10,450
20,000 McDermott, Inc., 9.375%, due 03/15/2002...................................20,810
2,537 Midland Funding Corporation, Senior Secured Lease Bond,
Series C, 10.33%, due 07/23/2002 ...........................................2,707
10,000 NGC Corporation, 8.316%, due 06/01/2027....................................10,134
5,000 Nabisco, Inc., 6.375%, due 02/01/2035.......................................4,841
15,000 Natexis Ambs Company, 144A, 8.44%, due 12/29/2049..........................13,800
10,000 News America Holdings, Inc., Debenture, 8.00%, due 10/17/2016..............11,015
10,000 News America Holdings, Inc., 8.875%, due 04/26/2023........................12,122
10,000 News America Holdings, Inc., 9.50%, due 07/15/2024.........................12,877
5,000 Niagara Mohawk Power Corporation, 7.75%, due 05/15/2006.....................5,490
10,000 Niagara Mohawk Power Corporation, 8.75%, due 04/01/2022....................10,905
5,000 Niagara Mohawk Power Corporation, 8.50%, due 07/01/2023.....................5,327
20,000 Nortek, Inc., 9.25%, due 03/15/2007.......................................20,700
3,915 Northeast Utilities, 8.58%, due 12/01/2006..................................4,181
10,000 Northwest Airlines, Inc., 7.625%, due 03/15/2005............................9,480
5,000 Northwest Airlines, Inc., 8.70%, due 03/15/2007.............................4,928
75,000 Oryx Energy Company, 8.375%, due 07/15/2004................................80,182
10,000 Outdoor Systems, Inc., 8.875%, due 06/15/2007..............................10,675
100,000 Owens Illinois, Inc., Senior Debenture, 7.80%, due 05/15/2018..............99,764
50,000 Petroleum Geo Services, 144A, 6.25%, due 11/19/2003........................49,175
15,000 Petroleum Geo Services, 7.125%, due 03/30/2028.............................14,016
20,000 Protection One Alarm Monitor, Inc., 144A, 7.375%, due 08/15/2005...........20,117
15,000 Qwest Communciations International,Inc.,144A, 7.50%,due 11/01/2008.........15,581
10,000 Raytheon Company, Debenture, 144A, 6.40%, due 12/15/2008....................9,925
5,000 Riggs Capital II, 8.875%, due 03/15/2027....................................5,259
40,000 Saks, Inc., 8.25%, due 11/15/2008..........................................42,823
50,000 Saks, Inc., 7.50%, due 12/01/2010..........................................49,997
60,000 Salton Sea Funding Group Corporation, Senior Secured Bond,
7.84%, due 05/30/2010......................................................68,969
45,794 Seabrook 1, Secured Lease Obligation Bond, 7.83%, due 01/01/2019...........51,877
35,000 Joseph E. Seagram & Sons, Inc., 6.40%, due 12/15/2003......................34,587
6,000 Seagull Energy Corporation, 7.50%, due 09/15/2027...........................5,374
10,000 Solutia, Inc., Debenture, 7.375%, due 10/15/2027............................9,803
99,000 Sun, Inc., Debenture, 9.00%, due 11/01/2024...............................110,402
15,000 TCI Communications Financing III
9.65%, due 03/31/2027......................................................18,523
5,000 TCI Communications, Inc., 8.00%, due 08/01/2005.............................5,629
10,000 TCI Communications,Inc., 7.125%, due 02/15/2028............................10,898
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
MFS Total Return Portfolio
Schedule of Investments (Continued)
December 31, 1998
Principal Value
Amount (Note 2)
- ------ --------
CORPORATE BONDS AND NOTES (Continued)
<S> <C>
$45,000 Tele-Communications, Inc., 7.875%, due 08/01/2013.........................$52,721
5,000 Tennessee Gas Pipeline Company, Debenture, 7.00%, due 10/15/2028............5,102
20,000 Tennessee Gas Pipeline Company, Debenture, 7.625%, due 04/01/2037..........21,994
5,000 Texas Gas Transmission Corporation, 7.25%, due 07/15/2027...................5,127
15,000 Texas Utilities Electric Company, 6.375%, due 01/01/2008..................14,740
30,000 Time Warner, Inc., Pass-thru Asset Trust, 144A, 6.10%, due 12/30/2001......30,483
10,000 Time Warner, Inc., 7.57%, due 02/01/2024...................................11,318
15,000 Union Pacific Corporation, MTN, 6.34%, due 11/25/2003......................15,216
10,000 US Timberlands Company, 9.625%, due 11/15/2007.............................10,125
50,000 Viacom, Inc., 6.75%, due 01/15/2003........................................51,443
13,000 Waterford 3 Funding Corporation, Secured Lease Collateral Bond
8.09%, due 01/02/2017......................................................14,094
10,000 Washington Mutual Capital I,
8.375%, due 06/01/2027.....................................................10,968
5,000 WorldCom, Inc., 7.55%, due 04/01/2004.......................................5,452
5,000 WorldCom, Inc., 8.875%, due 01/15/2006......................................5,465
35,000 Xerox Corporation, 144A, 0.57%, due 04/21/2018.............................21,656
26,000 Xerox Corporation, 0.57%, due 04/21/2018...................................16,088
-------
Total Corporate Bonds and Notes (Cost $2,432,670).............. 2,439,077
---------
TREASURY OBLIGATIONS - 9.42%
U.S. Treasury Bonds - 4.72%
100,000 6.375%, due 08/15/2027....................................................114,937
71,000 6.125%, due 11/15/2027.....................................................79,475
353,000 5.25%, due 11/15/2028.....................................................361,384
--------
555,796
-------
U.S. Treasury Notes - 4.70%
150,000 5.75%, due 11/15/2000.....................................................152,906
60,000 6.625%, due 03/31/2002.....................................................63,422
232,000 6.25%, due 08/31/2002.....................................................243,853
25,000 7.875%, due 11/15/2004.....................................................28,965
35,000 5.875%, due 11/15/2005.....................................................37,335
15,000 6.50%, due 10/15/2006......................................................16,638
10,000 4.75%, due 11/15/2008......................................................10,078
-------
553,197
-------
Total Treasury Obligations (Cost $1,091,960)....................1,108,993
----------
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
MFS Total Return Portfolio
Schedule of Investments (Continued)
December 31, 1998
Principal Value
Amount (Note 2)
- ------ --------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 6.35%
Government National Mortgage Association (GNMA) - 4.28%
<S> <C>
$7,301 REMIC, 8.00%, due 06/20/2025...............................................$7,492
71,231 Pool #377615, 7.50%, due 09/15/2025........................................73,434
49,628 Pool #410122, 7.50%, due 10/15/2025........................................51,163
59,883 Pool #432725, 8.00%, due 07/15/2026........................................62,241
31,718 Pool #247754, 7.50%, due 11/15/2026........................................32,699
34,059 Pool #780546, 7.50%, due 04/15/2027........................................35,112
27,502 Pool #453937, 7.50%, due 08/15/2027........................................28,353
24,831 Pool #455301, 7.50%, due 09/15/2027........................................25,599
26,064 Pool #469399, 7.00%, due 03/15/2028........................................26,667
40,002 Pool #467737, 7.00%, due 04/15/2028........................................40,926
37,168 Pool #480352, 7.00%, due 07/15/2028........................................38,027
80,800 Pool #495777, 6.50%, due 12/15/2028........................................81,608
-------
Total GNMA (Cost $494,437)................................................503,321
--------
Federal National Mortgage Association (FNMA) - 2.07%
15,000 4.75%, due 11/14/2003......................................................14,808
148,501 Pool #448669, 6.00%, due 12/01/2013.......................................148,872
39,854 Pool #326868, 6.50%, due 10/01/2025........................................40,128
39,601 Pool #446373, 6.50%, due 11/01/2028........................................39,860
-------
Total FNMA (Cost $243,223)................................................243,668
--------
Total U.S. Government Agency Obligations (Cost $737,660)................. 746,989
-------
EUROBONDS - 0.80%
17,000 Bayerische Landesbank, (Germany), 5.875%, due 12/01/2008...................17,381
15,000 Columbia, Republic, (Columbia), 12.243%, due 08/13/2005....................13,725
4,000 Corporacion Andina De Fomento, (Venezuela), 7.10%, due 02/01/2003.......... 3,881
8,000 Deutsche Fianance NV, (Netherlands), 144A,0.00%, due 02/12/2017.............4,730
5,000 Empresa Nacional De Electric, (Chile), 7.325%, due 02/01/2037...............4,407
10,000 Hidroelectrica Arcura, (Argentina), 144A, 8.375%, due 03/15/1999............9,750
40,000 UPM Kymmene Corporation, (Finland), 7.45%, due 11/26/2027..................40,033
-------
Total Eurobonds (Cost $94,696).............................................93,907
-------
SHORT-TERM OBLIGATIONS - 6.84%
Repurchase Agreement - 6.84%
805,000 Repurchase Agreement with State Street Bank & Trust
Company, dated 12/31/98 at 4.00%, due 01/04/99,
maturity value $805,358 (collateralized by U.S. Treasury
Bond, 10.625%, due 08/15/15, par value $505,000;
market value $817,416) (Cost $805,000)....................................805,000
--------
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
MFS Total Return Portfolio
Schedule of Investments (Continued)
December 31, 1998
Value
Shares (Note 2)
- ------ --------
Investment Company - 0.00%
<S> <C>
135 Seven Seas Money Market Fund (Cost $135).....................................$135
----
Total Short-Term Obligations (Cost $805,135)..............................805,135
--------
TOTAL INVESTMENTS (COST $11,153,073*) 100.08% $11,775,179
OTHER ASSETS AND LIABILITIES.............. (0.08) (9,590)
----- ------
NET ASSETS................................. 100.00% $11,765,589
====== ===========
<FN>
FORWARD FOREIGN CURRENCY CONTRACTS
Unrealized
Buy/ Settlement Contracts In Exchange Appreciation
Sell Currency Date at Value for U.S. $ (Depreciation)
- ---- -------- ---- -------- ---------- --------------
Buy DEM 03/15/99 $649 $642 (7)
Sell DEM 03/15/99 $641 $641 0
* Aggregate cost for Federal tax purposes is $11,160,051 (Note 5)
+ 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 $646,831 or 5.50% of net assets.
-----------------------------------------------------------------
GLOSSARY OF TERMS
ADR American Depository Receipt
DEM German Deutsche Mark
MTN Medium Term Note
REMIC Real Estate Mortgage Investment Conduit
------------------ ----------------------------------------------
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
Berkeley U.S. Quality Bond Portfolio
Schedule of Investments
December 31, 1998
Principal Value
Amount (Note 2)
- ------ --------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 64.32%
Federal National Mortgage Association (FNMA) - 34.81%
<S> <C>
$100,000 MTN, 6.70%, due 05/06/2002 .............................................$104,656
100,000 REMIC, 6.74%, due 08/25/2007.............................................105,641
2,176 Pool #100090, 14.50%, due 11/01/2014.......................................2,632
5,470 Pool #303791, 12.50%, due 08/01/2015...................................... 6,273
7,461 Pool #100089, 13.00%, due 11/01/2015.......................................8,897
4,843 Pool #303792, 11.50%, due 09/01/2019.......................................5,415
25,000 REMIC, 5.00%, due 12/25/2021..............................................23,992
53,000 REMIC, 5.00%, due 04/25/2022..............................................50,979
15,000 REMIC, 7.00%, due 11/25/2022..............................................15,614
15,000 REMIC, 5.00%, due 04/25/2024..............................................14,119
184,293 Pool #250845, 6.50%, due 11/01/2026......................................185,559
84,431 Pool #396818, 6.50%, due 08/01/2027.......................................84,985
78,272 Pool #331325, 7.00%, due 11/01/2027.......................................79,862
-------
Total FNMA (Cost $669,390) ..............................................688,624
--------
Federal Home Loan Mortgage Corporation (FHLMC) - 11.34%
50,000 Debenture, 6.745%, due 08/01/2001.........................................52,138
20,940 Pool #251137, 11.75%, due 08/01/2014......................................23,595
20,000 Series G020, 5.50%, due 05/25/2022........................................19,312
75,000 Series 1737, Class H, 11.75%, due 01/15/2023..............................76,172
53,000 Series 2068, Class A, 6.50%, due 03/15/2026...............................53,066
-------
Total FHLMC (Cost $221,834)..............................................224,283
-------- --------
Student Loan Marketing Association (SLMA) - 6.56%
125,000 7.20%, due 11/09/2000 (Cost $126,859)....................................129,765
--------
Federal Home Loan Bank (FHLB) - 6.40%
125,000 5.89%, due 07/24/2000 (Cost $124,549)....................................126,680
--------
Federal Farm Credit Bank (FFCB) - 5.21%
100,000 5.85%, due 06/10/2005 (Cost $100,151)....................................103,125
--------
Total U.S. Government Agency Obligations
(Cost $1,242,783)......................................................1,272,477
----------
CORPORATE BONDS AND NOTES - 20.69%
35,000 Ford Capital Corporation, 9.875%, due 05/15/2002..........................39,537
50,000 Gap, Inc., 6.90%, due 09/15/2007..........................................54,962
50,000 Merrill Lynch & Company, Inc., 7.375%, due 05/15/2006.....................54,628
75,000 Nationsbank Corporation, 6.125%, due 07/15/2004...........................76,730
25,000 Occidental Petroleum Corporation, 9.25%, due 08/01/2001...................28,704
25,000 Salomon, Inc., 6.875%, due 06/15/2005.....................................26,050
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
Berkeley U.S. Quality Bond Portfolio
Schedule of Investments (Continued)
December 31, 1998
Principal Value
Amount (Note 2)
- ------ --------
CORPORATE BONDS AND NOTES - (Continued)
<S> <C>
$75,000 Sprint Capital Corporation, 6.125%, due 11/15/2008.......................$76,733
50,000 Worldcom, Inc., 6.40%, due 08/15/2005.....................................51,966
-------
Total Corporate Bonds and Notes (Cost $402,766)..........................409,310
--------
U.S. TREASURY BOND - 8.97%
150,000 6.625%, due 02/15/2027 (Cost $144,921)...................................177,421
--------
SHORT-TERM OBLIGATIONS - 9.60%
190,000 Repurchase Agreement with State Street
Bank and Trust Company, dated 12/31/98 at
4.00%, due 01/04/99, maturity value $190,084
(collateralized by U.S. Treasury Bond,
10.625%, due 08/15/15, par value $120,000;
market value $194,238) (Cost $190,000)...................................190,000
--------
TOTAL INVESTMENTS (COST $1,980,470*)................. 103.58% 2,049,208
OTHER ASSETS AND LIABILITIES (NET)................... (3.58) (70,761)
----- -------
NET ASSETS........................................... 100.00% $1,978,447
====== ==========
<FN>
* Aggregate cost for Federal tax purposes (Note 5)
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
Berkeley Money Market Portfolio
Schedule of Investments
December 31, 1998
Principal Value
Amount (Note 2)
- ------ --------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 88.89%
Federal Farm Credit Bank (FFCB) - 26.81%
<S> <C>
$150,000 5.08%, due 01/05/1999+.................................................$149,915
200,000 5.03%, due 01/12/1999+..................................................199,693
--------
Total FFCB (Cost $349,608) .............................................349,608
--------
Federal Home Loan Bank (FHLB) - 16.25%
100,000 5.08%, due 01/04/1999+...................................................99,958
112,000 5.10%, due 01/06/1999+..................................................111,921
--------
Total FFLB (Cost $211,879)..............................................211,879
--------
Federal Home Loan Mortgage Corporation (FHLMC) - 15.31%
100,000 5.10%, due 01/04/1999+...................................................99,957
50,000 5.10%, due 01/08/1999+...................................................49,950
50,000 5.08%, due 01/29/1999+...................................................49,802
-------
Total FHLMC (Cost $199,709).................................... 199,709
-------
Tennessee Valley Authority (TVA) - 15.30%
100,000 5.08%, due 01/04/1999+...................................................99,958
100,000 5.05%, due 01/27/1999+...................................................99,635
-------
Total TVA (Cost $199,593)...............................................199,593
--------
Federal National Mortgage Association (FNMA) - 15.22%
50,000 5.08%, due 01/08/1999+...................................................49,951
70,000 4.72%, due 01/19/1999+...................................................69,835
79,000 5.08%, due 01/26/1999+...................................................78,721
-------
Total FNMA (Cost $198,507)..............................................198,507
--------
Total U.S. Government Agency Obligations
(Cost $1,159,296) ............................................1,159,296
----------
REPURCHASE AGREEMENT 12.19%
159,000 Repurchase Agreement with State Street Bank & Trust
Company, dated 12/31/98 at 4.00%, due 01/04/99,
maturity value $159,071 (collateralized by U.S. Treasury
Bond, 10.625%, due 08/15/15, par value $100,000;
market value $161,864) (Cost $159,000)..................................159,000
--------
TOTAL INVESTMENTS (COST $1,318,296*)................. 101.08% 1,318,296
OTHER ASSETS AND LIABILITIES (NET)................... (1.08) (14,121)
----- -------
NET ASSETS .......................................... 100.00% $1,304,175
<FN>
* Aggregate cost for Federal tax purposes
+ Rate represents annualized yield at date of purchase
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
Strong Growth Portfolio
Schedule of Investments
December 31, 1998
Value
Shares (Note 2)
- ------ --------
COMMON STOCKS - 97.88%
Consumer Discretionary - 23.87%
<S> <C>
600 Abercrombie & Fitch Company +............................................$42,450
1,700 Bed Bath & Beyond, Inc. +...............................................58,012
800 Best Buy Company, Inc. +.................................................49,100
1,000 Carnival Corporation.......................................................48,000
2,200 CVS Corporation...........................................................121,000
2,400 Dollar Tree Stores, Inc. +................................................104,850
600 Gap, Inc...................................................................33,750
1,000 Hain Food Group, Inc. +.................................................25,000
2,000 Home Depot, Inc...........................................................122,375
3,500 Kohl's Corporation +......................................................215,031
300 Kroger Company +.........................................................18,150
3,300 Lowes Companies, Inc......................................................168,919
800 Meyer, Fred, Inc. +....................................................... 48,200
1,400 99 Cents Only Stores +.....................................................68,775
1,000 Office Depot, Inc. +.......................................................36,937
2,200 Safeway, Inc. +...........................................................134,062
2,200 Staples, Inc. +............................................................96,112
700 Starbucks Corporation +..................................................39,287
1,400 Wal-Mart Stores, Inc. ....................................................114,013
1,600 Walgreen Company...........................................................93,700
-------
1,637,723
---------
Drugs & Health Care - 12.24%
1,100 Allergan, Inc.............................................................. 71,225
700 Alza Corporation +.....................................................36,575
500 Biogen, Inc. +..........................................................41,500
1,900 Forest Laboratories, Inc. + ........................................101,056
500 Genzyme Corporation +....................................................24,875
1,000 Idexx Laboratories, Inc. +..............................................26,906
400 International Network Services +........................................26,600
1,000 McKesson Corporation........................................................79,062
1,100 Medtronic, Inc..............................................................81,675
700 Pfizer, Inc.................................................................87,806
1,200 PSS World Medical, Inc. +...................................................27,600
900 Schering-Plough Corporation.................................................49,725
500 Sepracor, Inc. +.........................................................44,062
2,400 Sybron International Corporation +........................................65,250
1,200 Watson Pharmaceuticals, Inc. +..........................................75,450
- ----- -------
839,367
-------
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
Strong Growth Portfolio
Schedule of Investments (Continued)
December 31, 1998
Value
Shares (Note 2)
- ------ --------
COMMON STOCKS - (Continued)
Software - 10.48%
<S> <C>
400 Advantage Learning Systems, Inc. +........................................$26,300
1,200 Aware, Inc. +..............................................................32,625
700 Compuware Corporation +....................................................54,688
400 Inktomi Corporation +......................................................51,750
1,400 Legato Systems, Inc. +.....................................................92,312
1,600 Microsoft Corporation +...................................................221,900
800 Oracle Corporation +.......................................................34,500
600 Siebel Systems, Inc. +....................................................20,362
1,100 Solectron Corporation +.................................................102,231
700 Synopsys, Inc. +.........................................................37,975
1,200 Visio Corporation +......................................................43,875
-------
718,518
-------
Communications - 10.19%
900 American Online, Inc........................................................144,000
700 At Home Corporation +....................................................51,975
700 Broadcom Corporation +....................................................84,525
1,200 Clear Channel Communication, Inc. +.......................................65,400
400 Equant NV, NY Shares +...................................................27,125
600 Jacor Communications, Inc. +...............................................38,625
3,000 MCI WorldCom, Inc. .........................................................215,250
500 Qwest Communications International, Inc. +............................... 25,000
200 Yahoo, Inc. +............................................................47,388
-------
699,288
-------
Computers & Business Equipment - 9.17%
200 CDW Computer Centers, Inc. +................................................19,188
500 CSG Systems International, Inc. +...........................................39,500
2,100 Cisco Systems, Inc. +...................................................... 194,906
1,200 Dell Computer Corporation +................................................87,825
1,400 EMC Corporation ..........................................................119,000
1,400 Global Imaging Systems, Inc. +..............................................33,950
2,000 Network Appliance, Inc. +..................................................90,000
1,000 3Com Corporation +.........................................................44,813
-------
629,182
-------
Electronics - 9.04%
900 Altera Corporation +......................................................54,788
800 Comverse Technology, Inc. +...............................................56,800
400 Gemstar International Group, Ltd. +.......................................22,900
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
Strong Growth Portfolio
Schedule of Investments (Continued)
December 31, 1998
Value
Shares (Note 2)
- ------ --------
COMMON STOCKS - (Continued)
Electronics - (Continued)
<S> <C>
1,100 Intel Corporation..........................................................$130,419
300 Lucent Technologies, Inc.....................................................33,000
700 Perkin Elmer Corporation.....................................................68,294
400 Rambus, Inc. +...........................................................38,500
900 Tellabs, Inc. +..............................................................61,706
1,000 Teradyne, Inc. +............................................................42,375
600 Transwitch Corporation +....................................................23,363
700 Uniphase Corporation +......................................................48,563
600 Xilinx, Inc. +...............................................................39,075
-------
619,783
-------
Business Services - 6.83%
900 Fiserv, Inc. +............................................................46,294
300 Lamar Advertising Company, Class A +.......................................11,175
600 Lason Holdings, Inc. +....................................................34,913
600 The Metzler Group, Inc. +.................................................29,212
3,500 Outdoor Systems, Inc. +.....................................................105,000
800 Paychex, Inc. ...............................................................41,150
800 Profit Recovery Group International, Inc. +..............................29,950
1,700 Reynolds & Reynolds Company ................................................ 38,994
700 Robert Half International, Inc. +............................................31,281
1,900 Romac International, Inc. +..................................................42,275
1,900 Sykes Enterprises, Inc. +.................................................57,950
-------
468,194
-------
Financial Services - 6.36%
900 Concord EFS, Inc.............................................................38,138
1,400 Federal Home Loan Mortgage Corporation.......................................90,213
1,100 Fifth Third Bancorp..........................................................78,444
900 First Tennessee National Corporation.........................................34,256
1,000 Northern Trust Corporation...................................................87,312
1,200 Charles Schwab Corporation...................................................67,425
500 SunAmerica, Inc..............................................................40,563
-------
436,351
-------
Broadcasting & Publishing - 5.06%
900 Ascend Communications, Inc. +.............................................59,175
400 Chancellor Media Corporation +..............................................19,150
800 Comcast Corporation..........................................................46,950
2,000 Infinity Broadcasting Corporation ...........................................54,750
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
Strong Growth Portfolio
Schedule of Investments (Continued)
December 31, 1998
Value
Shares (Note 2)
- ------ --------
COMMON STOCK - (Continued)
Broadcasting & Publishing - (Continued)
<S> <C>
1,200 Tele-Communications, Inc. +.................................................$55,275
1,800 Time Warner, Inc............................................................111,713
--------
347,013
-------
Capital Goods - 1.58%
1,000 American Power Conversion Corporation +......................................48,438
300 Jabil Circuit, Inc. +.......................................................22,387
500 Tyco International, Ltd......................................................37,719
-------
108,544
-------
Consumer Non-Durables - 1.28%
1,000 American Eagle Outfitters, Inc. +............................................66,625
300 Cintas Corporation...........................................................21,131
-------
87,756
------
Basic Industry - 0.89%
700 Waters Corporation +.........................................................61,075
-------
Utilities - 0.74%
900 Montana Power Company........................................................50,906
-------
Transportation - 0.15%
400 Midwest Express Holdings, Inc. +.............................................10,525
-------
Total Common Stocks (Cost $5,224,934).....................................6,714,225
----------
Principal
Amount
- ------
REPURCHASE AGREEMENT - 6.11%
$419,000 Repurchase Agreement with State Street
Bank and Trust Company, dated 12/31/98 at
4.00%, due 01/04/99, maturity value $419,186
(collateralized by U.S. Treasury Bond, 10.625%, due
08/15/15, par value $265,000; market value $428,942)
(Cost $419,000) .........................................................419,000
-------- --------
TOTAL INVESTMENTS (COST $5,643,934*)................. 103.99% 7,133,225
OTHER ASSETS AND LIABILITIES (NET)................... (3.99) (273,391)
----- --------
NET ASSETS........................................... 100.00% $6,859,834
====== ==========
<FN>
* Aggregate cost for Federal tax purposes is $5,723,771 (Note 5)
+ Non-income producing security
-----------------------------------------------------------------
GLOSSARY OF TERMS
ADR American Depository Receipt
------------------ ----------------------------------------------
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
Robertson Stephens Diversified Growth Portfolio
Schedule of Investments
December 31, 1998
Value
Shares (Note 2)
- ------ --------
COMMON STOCKS - 95.17%
Software - 17.54%
<S> <C>
4,500 Acclaim Entertainment, Inc. +............................................$55,125
1,500 Check Point Software Technologies, Ltd. +.................................68,719
1,000 Complete Business Solutions, Inc. +.......................................33,875
5,000 Digital Courier Technologies, Inc. +......................................35,625
12,500 DSET Corporation ........................................................129,687
2,500 Hyperion Solutions Corporation +..........................................45,000
3,000 IMRglobal Corporation +....................................................88,312
25,000 Information Advantage, Inc. +............................................189,062
6,000 Inso Corporation +.......................................................150,000
7,500 JDA Software Group, Inc. +................................................72,656
7,000 Novell, Inc. +...........................................................126,875
8,000 System Software Associates, Inc. +...........................................56,250
6,600 Viasoft, Inc. +..............................................................46,200
-------
1,097,386
---------
Computers & Business Equipment - 11.73%
950 CSG Systems International, Inc. +..........................................75,050
5,500 Condor Technology Solutions, Inc. +.......................................55,000
5,500 Digi International, Inc. +................................................61,187
2,000 Egghead.Com, Inc. +..........................................................41,625
6,500 Fore Systems, Inc. +.....................................................119,031
3,000 Micron Electronics, Inc. +.................................................51,937
2,000 Seagate Technology, Inc. +................................................60,500
4,000 Secure Computing Corporation +............................................76,250
750 Sun Microsystems, Inc. +..................................................64,219
2,000 3Com Corporation +...........................................................89,625
1,500 USWeb Corporation +.......................................................39,562
-------
733,986
-------
Communications - 9.67%
6,000 CapRock Communications Corporation +.......................................40,125
10,000 CellNet Data Systems, Inc. +..............................................50,000
8,000 Commscope, Inc. +........................................................134,500
5,000 FaxSav, Inc. +............................................................30,938
22,500 Metrocall, Inc. +.........................................................98,438
12,500 Pagemart Wireless, Inc. +.................................................69,531
3,000 SkyTel Communications, Inc. +.............................................66,375
12,000 Startec Global Communications Corporation +..............................115,500
- ------ --------
605,407
-------
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
Robertson Stephens Diversified Growth Portfolio
Schedule of Investments (Continued)
December 31, 1998
Value
Shares (Note 2)
- ------ --------
COMMON STOCK (Continued)
Consumer Discretionary - 9.41%
<S> <C>
3,500 Chicos Fashions, Inc. +..................................................$81,813
5,000 Global Vacation Group, Inc. +.............................................43,125
4,000 Hollywood Entertainment Corporation +.....................................109,000
12,500 Kushner-Locke Company +....................................................92,969
15,000 Paul Harris Stores, Inc. +...............................................121,875
6,000 Petsmart, Inc. +..........................................................66,000
7,000 Prime Hospitality Corporation +............................................73,937
-------
588,719
-------
Broadcasting & Publishing - 8.32%
2,500 Adelphia Communications Corporation +.....................................114,375
2,000 Comcast Corporation ......................................................117,375
3,500 MediaOne Group, Inc. +...................................................164,500
1,500 Tele-Communications, Inc., Series A +......................................69,094
3,500 Ziff-Davis, Inc. +.........................................................55,344
-------
520,688
-------
Electronics - 7.92%
6,000 Adaptec, Inc. +.............................................................105,375
1,000 Alliant Techsystems, Inc. +..................................................82,438
1,200 Conexant Systems, Inc. +...................................................21,363
3,000 Electronics for Imaging, Inc. +..........................................120,562
3,000 Newbridge Networks Corporation +...........................................91,125
4,000 Powerwave Technologies, Inc. +.............................................74,500
-------
495,363
-------
Drugs & Health Care - 7.44%
2,500 Alkermes, Inc. +...........................................................55,469
3,000 Alternative Living Services, Inc. +.......................................102,750
11,000 Balanced Care Corporation +................................................88,000
9,000 Endocardial Solutions, Inc. +.............................................90,000
5,000 Millennium Pharmaceuticals, Inc.+...........................................129,375
22 Pharmerica, Inc. +...........................................................132
----
465,726
-------
Business Services - 6.85%
5,000 Cendant Corporation +......................................................95,312
3,000 National Data Corporation...................................................146,063
17,500 National Media Corporation +.............................................187,031
--------
428,406
-------
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
Robertson Stephens Diversified Growth Portfolio
Schedule of Investments (Continued)
December 31, 1998
Value
Shares (Note 2)
- ------ --------
COMMON STOCK (Continued)
Financial Services - 5.81%
<S> <C>
7,500 American Bank Note Holographic, Inc. +..................................$131,250
12,000 Amresco, Inc. +...........................................................105,000
8,000 Franchise Mortgage Acceptance Company +...................................62,000
10,000 Friedman, Billings, Ramsey Group, Inc. +...................................65,000
-------
363,250
-------
Transportation - 2.74%
15,000 Simon Transportation Services, Inc. +......................................87,187
45,000 U Ship, Inc. +.............................................................84,375
-------
171,562
-------
Investment Companies - 2.04%
6,500 Webs Hong Kong Index Fund, Inc...............................................60,938
6,500 Webs Japan Index Fund, Inc...................................................66,625
-------
127,563
-------
Consumer Non-Durables - 1.36%
4,500 Discreet Logic, Inc. +.....................................................84,938
-------
Real Estate - 1.25%
4,000 Brookdale Living Communities, Inc. +.......................................78,000
-------
Energy - 1.18%
75,000 Bonus Resource Services Corporation (Canada) +.............................73,602
-------
Consumer Staples - 0.97%
6,000 Omega Protein Corporation +................................................60,750
-------
Consumer Durable - 0.94%
35,000 Krauses Furniture, Inc. +.................................................59,063
-------
Total Common Stocks (Cost $5,170,302).....................................5,954,409
----------
Principal
Amount
- ------
CORPORATE NOTES - 1.37%
$50,000 Sabratek Corporation, Convertible Note,
6.00%, due 04/15/2005........................................................33,000
75,000 System Software Associates, Inc., Subordinate Convertible Note,
7.00%, due 09/15/2002........................................................52,969
-------
Total Corporate Notes (Cost $81,916).........................................85,969
-------
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
Robertson Stephens Diversified Growth Portfolio
Schedule of Investments (Continued)
December 31, 1998
Value
(Note 2)
--------
<S> <C>
TOTAL INVESTMENTS (COST $5,252,218*)................. 96.54% 6,040,378
OTHER ASSETS AND LIABILITIES (NET)................... 3.46 216,489
---- -------
NET ASSETS ..................................... 100.00% $6,256,867
====== ==========
<FN>
* Aggregate cost for Federal tax purposes is $5,307,324 (Note 5)
+ Non-income producing security
</FN>
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
Lexington Corporate Leaders Portfolio
Schedule of Investments
December 31, 1998
Value
Shares (Note 2)
- ------ --------
COMMON STOCKS - 99.66%
Consumer Discretionary - 19.26%
<S> <C>
3,125 Coca Cola Company..........................................................$208,984
3,125 Eastman Kodak Company.......................................................225,000
3,125 Fortune Brands, Inc..........................................................98,828
3,125 McDonalds Corporation.......................................................239,453
3,125 Philip Morris Companies, Inc................................................167,188
3,125 Procter & Gamble Company....................................................285,352
3,125 Wal-Mart Stores, Inc........................................................254,492
3,125 Walt Disney Company..........................................................93,750
-------
1,573,047
---------
Energy - 15.27%
3,125 Chevron Corporation.........................................................259,180
3,125 Exxon Corporation...........................................................228,516
3,125 Mobil Corporation...........................................................272,266
3,125 Royal Dutch Petroleum Company, NY Shares....................................149,609
3,125 Schlumberger, Ltd...........................................................144,141
3,125 Texaco, Inc.................................................................165,234
3,125 Union Pacific Resource Group, Inc............................................28,320
-------
1,247,266
---------
Financial Services - 9.83%
3,125 American Express Company....................................................319,531
3,125 Citigroup, Inc..............................................................154,688
3,125 J.P. Morgan & Company, Inc..................................................328,320
--------
802,539
-------
Drugs & Health Care - 8.86%
3,125 Johnson & Johnson...........................................................262,109
3,125 Merck & Company, Inc........................................................461,523
--------
723,632
-------
Materials & Processing - 8.54%
3,125 Alcoa, Inc..................................................................233,008
3,125 Bethlehem Steel Corporation +................................................26,172
3,125 DuPont (E.I.) DeNemours & Company...........................................165,820
3,125 International Paper Company.................................................140,039
3,125 Union Carbide Corporation...................................................132,813
--------
697,852
-------
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
Lexington Corporate Leaders Portfolio
Schedule of Investments (Continued)
December 31, 1998
Value
Shares (Note 2)
- ------ --------
COMMON STOCKS - (Continued)
Utilities - 8.54%
<S> <C>
3,125 Ameren Corporation.........................................................$133,398
3,125 Consolidated Edison Company of New York.....................................165,234
3,125 Duke Energy Company.........................................................200,195
3,125 Houston Industries, Inc.....................................................100,391
3,125 PG&E Corporation.............................................................98,438
-------
697,656
-------
Autos & Transportation - 7.68%
3,125 Burlington Northern Santa Fe Corporation....................................105,469
3,125 General Motors Corporation..................................................223,633
3,125 Goodyear Tire and Rubber Company............................................157,617
3,125 Union Pacific Corporation...................................................140,820
--------
627,539
-------
Electronics - 6.55%
3,125 Lucent Technologies, Inc. .................................................343,750
3,125 Motorola, Inc...............................................................190,820
--------
534,570
-------
Producer Durables - 5.66%
3,125 Caterpillar, Inc............................................................143,750
3,125 General Electric Company....................................................318,945
--------
462,695
-------
Aerospace - 2.94%
3,125 Allied Signal, Inc..........................................................138,477
3,125 Boeing Company..............................................................101,953
--------
240,430
-------
Communications - 2.88%
3,125 AT&T Corporation............................................................235,156
--------
Computers & Business Equipment - 2.61%
3,125 Hewlett Packard Company.....................................................213,477
--------
Consumer Staples - 1.04%
3,125 Gallaher Group PLC, ADR......................................................84,961
-------
Total Common Stocks (Cost $7,326,277).................................... 8,140,820
---------
INVESTMENT COMPANY - 0.88 %
72,000 Seven Seas Money Market Fund (Cost $72,000)..................................72,000
-------
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
The LPT Variable Insurance Series Trust
Lexington Corporate Leaders Portfolio
Schedule of Investments
December 31, 1998
Value
(Note 2)
--------
<S> <C>
TOTAL INVESTMENTS (COST $7,398,277*)................. 100.54% $8,212,820
OTHER ASSETS AND LIABILITIES......................... (0.54) (44,079)
----- -------
NET ASSETS........................................... 100.00% $8,168,741
====== ==========
<FN>
* Aggregate cost for Federal tax purposes is $7,399,191 (Note 5)
+ Non-income producing security
-----------------------------------------------------------------
GLOSSARY OF TERMS
ADR American Depository Receipt
-----------------------------------------------------------------
</FN>
</TABLE>
See Notes to Financial Statements
THE LPT VARIABLE INSURANCE SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
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
seven 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 Growth,
Robertson Stephens Diversified Growth, and Lexington Corporate Leaders
Portfolios (the "Equity Portfolios"). 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, 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, Salomon Brothers Asset Management Inc. served as sub-advisor
to the Berkeley Money Market Portfolio and Berkeley 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.
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 which approximates market value. 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, 1998
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.
Option Contracts: All Portfolios, except the Money Portfolio, may
purchase and/or write put and call options on Portfolio securities or foreign
currencies. The Portfolios may use options contracts to manage their exposure to
the stock and bond markets and to fluctuations in interest rates and currency
values. Writing puts and buying calls tend to increase the Portfolio's exposure
to the underlying instrument. Buying puts and writing calls tends to either
decrease the Portfolio's exposure to the underlying instrument, or to hedge
other Portfolio investments.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a covered call option is that the Portfolio may forego
the opportunity of profit or incur a loss if the market price of the underlying
security increases and the option is exercised. The risk in writing a put option
is that the Portfolio may incur a loss if the market price of the underlying
security decreases and the option is exercised. In addition, there is a risk the
Portfolio may not be able to enter into a closing transaction because of an
illiquid secondary market, or, for over-the-counter options, because of a
counter party's inabilty to perform.
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, 1998.
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
Portfolio, may enter into forward foreign currency contracts, whereby the
Portfolios agree to buy and sell 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, 1998
2. Significant Accounting Policies (continued)
Security Transactions and Investment Income: Security transactions are recorded
on the trade date. 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 equally 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 Growth Portfolio; Robertson Stephens & Company
Investment Management, L.P., an indirect wholly- owned subsidiary of BancBoston
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, 1998
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:
<TABLE>
<CAPTION>
Fees on
Fees on Average Net Fees on
Average Assets Between Average Net
Name of Portfolio Net Assets $25 Million and Assets
---------------- up to $25 $100 Million Exceeding
Million ------------ $100 Million
------- ------------
Harris Associates Value
Portfolio
<S> <C> <C> <C>
LPIMC .25% .25% .25%
Sub-advisor .75% .60% .50%
--- --- ---
Total Fees Paid to LPIMC* 1.00% .85% .75%
==== === ===
Fees on
Fees on Average Fees on
Average NetAssets Average Net
Name of Portfolio Net Assets Between $200 Assets
----------------- up to $200 Million and Exceeding $1.3
Million $1.3 Billion Billion
------- ------------ -------
MFS Total Return Portfolio
<S> <C> <C> <C>
LPIMC .25% .25% .25%
Sub-advisor .50% .45% .40%
--- --- ---
Total Fees Paid to LPIMC* * .75% .70% .65%
=== === ===
Fees on
Fees on Average Fees on Average Net
Fees on Net Assets Average Net Assets
Average Net Between $50 Assets Between Between
Name of Assets up Million and $150 Million $300 Million
Portfolio to $50 $150 Million and $300 and $500
--------- Million ------------ Million Million
------- ------- -------
Berkeley U.S. Quality Bond
Portfolio
<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%
=== ==== === ===
Fees on
Fees on Average Fees on Average Net
Fees on Net Assets Average Net Assets
Name of Portfolio Average Net Between $50 Assets Between Between
- ----------------- Assets up Million and $150 Million $300 Million
to $50 $150 Million and $300 and $500
Million ------------- Million Million
------- ------- -------
Berkeley Money Market
Portfolio
<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, 1998
3. Investment Advisory, Sub-advisory, and Other Related Party Transactions
(continued)
<TABLE>
<CAPTION>
Fees on
Fees on Average Net Fees on
Average Net Assets Between Average Net
Name of Portfolio Assets up to $150 Million Assets
----------------- $150 Million and Exceeding
------------ $500 Million $500 Million
------------ ------------
Strong Growth Portfolio
<S> <C> <C> <C>
LPIMC .25% .25% .25%
Sub-advisor .50% .45% .40%
--- --- ---
Total Fees Paid to LPIMC* .75% .70% .65%
=== === ===
Fees on Fees on Average
Fees on Average Net Net Assets Fees on
Average Net Assets Between Between Average Net
Name of Portfolio Assets up to $10 Million $35 Million and Assets
----------------- $10 Million and $200 Million Exceeding
----------- $35 Million ------------ $200 Million
----------- ------------
Robertson Stephens Diversified
Growth Portfolio
<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%
=== === === ===
Fees on
Fees on Average Net Fees on
Average Net Assets Between Average Net
Name of Portfolio Assets up to $10 Million Assets
----------------- $10 Million and Exceeding
----------- $100 Million $100 Million
------------ ------------
Lexington Corporate Leaders
Portfolio
<S> <C> <C> <C>
LPIMC .25% .25% .25%
Sub-advisor .40% .35% .30%
--- --- ---
Total Fees Paid to LPIMC* .65% .60% .55%
=== === ===
<FN>
* 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.
</FN>
</TABLE>
THE LPT VARIABLE INSURANCE SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
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 Growth Portfolio - 1.29%; Robertson Stephens
Diversified Growth Portfolio - 1.39%; and Lexington Corporate Leaders
Portfolio - 1.29%), London Pacific has agreed, through December 31, 1999,
to reimburse each Portfolio for expenses in excess of the stated expense
limitations, except for Berkeley U.S. Quality Bond Portfolio and Berkeley
Money Market Portfolio. Expense reimbursements for these two Portfolios
will be suspended effective May 1, 1999. The remaining expense limitations
may be removed or revised after December 31, 1999, without prior notice
to existing shareholders.
For the year ended December 31, 1998 London Pacific voluntarily agreed to
reimburse the Portfolios as follows:
Name of Portfolio Reimbursement
----------------- -------------
Harris Associates Value Portfolio $31,942
MFS Total Return Portfolio 53,310
Berkeley U.S. Quality Bond Portfolio 40,886
Berkeley Money Market Portfolio 40,092
Strong Growth Portfolio 50,894
Robertson Stephens Diversified Growth Portfolio 47,226
Lexington Corporate Leaders Portfolio 18,597
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. Options
During the year ended December 31, 1998, the following option contracts
were written by Robertson Stephens Diversified Growth Portfolio:
Number
of Contracts Premium
------------ -------
Balance as of December 31, 1997 0 $0
Written 65 60,941
Closed and Expired (5) (1,859)
Exercised (60) (59,082)
--- -------
Balance as of December 31, 1998 0 $0
= ==
Net realized gains on written options for the year ended December 31, 1998 were
$6,691
THE LPT VARIABLE INSURANCE SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
5. 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, 1998,
were as follows:
<TABLE>
<CAPTION>
Purchases Sales
--------- -----
Portfolio Other Government Other Government
- --------- ----- ---------- ----- ----------
<S> <C> <C> <C> <C>
Harris Associates Value $6,384,300 $0 $2,560,275 $0
MFS Total Return 10,749,977 4,876,297 6,042,836 4,387,110
Berkeley U.S. Quality Bond 374,989 501,962 0 73,066
Strong Growth 14,387,605 0 11,918,670 0
Robertson Stephens Diversified Growth 18,865,200 0 16,960,281 0
Lexington Corporate Leaders 4,566,739 0 414,262 0
</TABLE>
At December 31, 1998, 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 $650,013 $432,795 $217,218 $7,037,573
MFS Total Return 840,138 225,010 615,128 11,160,051
Berkeley U.S. Quality Bond 70,998 2,260 68,738 1,980,470
Strong Growth 1,430,635 21,181 1,409,454 5,723,771
Robertson Stephens Diversified Growth 1,089,432 356,378 733,054 5,307,324
Lexington Corporate Leaders 1,136,776 323,147 813,629 7,399,191
</TABLE>
6. 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, 1998 Year ended December 31, 1997
Shares and Amounts Shares and Amounts
------------------ ------------------
<S> <C> <C>
Sold $15,337,252 $14,018,379
Issued as reinvestment of dividends 80,328 76,923
Redeemed (15,486,562) (13,900,532)
----------- -----------
Net increase/decrease ($68,982) $ 194,770
======== =========
</TABLE>
THE LPT VARIABLE INSURANCE SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Shares of Beneficial Interest (continued)
<TABLE>
<CAPTION>
Harris Associates Value Portfolio
---------------------------------
Year ended December 31, 1998 Year ended December 31, 1997
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 324,044 $ 4,529,342 192,435 $ 2,687,516
Issued as reinvestment of dividends 0 0 25,257 338,513
Redeemed (71,188) (981,697) (75,619) (1,055,861)
------- -------- ------- ----------
Net increase 252,856 $ 3,547,645 142,073 $ 1,970,168
======= =========== ======= ===========
MFS Total Return Portfolio
--------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 407,332 $ 5,544,537 390,628 $ 4,879,026
Issued as reinvestment of dividends 2,934 38,091 14,058 179,583
Redeemed (53,066) (716,951) (78,498) (964,786)
------- -------- ------- --------
Net increase 357,200 $ 4,865,677 326,188 $ 4,093,823
======= =========== ======= ===========
Berkeley U.S. Quality Bond Portfolio
------------------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 113,072 $ 1,168,980 22,204 $ 222,203
Issued as reinvestment of dividends 0 0 8,497 83,993
Redeemed (37,107) (389,609) (79,768) (817,964)
------- -------- ------- --------
Net increase/(decrease) 75,965 $ 779,371 (49,067) ($ 511,768)
====== ========= ======= ==========
Strong Growth Portfolio
-----------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 210,301 $ 3,036,477 169,760 $ 2,330,737
Issued as reinvestment of dividends 11,700 194,821 22,345 301,987
Redeemed (36,158) (513,775) (102,901) (1,456,632)
------- -------- -------- ----------
Net increase 185,843 $ 2,717,523 89,204 $ 1,176,092
======= =========== ====== ===========
</TABLE>
THE LPT VARIABLE INSURANCE SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
6. Shares of Beneficial Interest (continued)
<TABLE>
<CAPTION>
Robertson Stephens Diversified Growth Portfolio
-----------------------------------------------
Year ended December 31, 1998 Year ended December 31, 1997
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 267,239 $ 2,763,953 265,027 $ 2,410,896
Issued as reinvestment of dividends 0 0 2 20
Redeemed (83,656) (926,756) (95,073) (885,949)
------- -------- ------- --------
Net increase 183,583 $ 1,837,197 169,956 $ 1,524,967
======= =========== ======= ===========
Lexington Corporate Leaders Portfolio
-------------------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 316,043 $ 4,506,043 222,339 $ 3,057,461
Issued as reinvestment of dividends 1,096 14,110 16,091 215,957
Redeemed (29,244) (423,355) (96,270) (1,330,518)
------- -------- ------- ----------
Net increase 287,895 $ 4,096,798 142,160 $ 1,942,900
======= =========== ======= ===========
</TABLE>
7. 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.
8. Capital Loss Carryforward
At December 31, 1998, Berkeley U.S. Quality Bond Portfolio and Berkeley
Money Market Portfolio had loss carryforward amounts of $3,940 and $246,
respectively, which expire during the period 2004 - 2006.
At December 31, 1998, Harris Associates Value Portfolio and Berkeley Money
Market Portfolio had Post-October losses of $80,790 and $3, respectively,
which are deferred until January 1, 1999.
9. Risk Factors Applicable to Year 2000 Issue (Unaudited)
Like other mutual funds, as well as other financial and business organizations
around the world, the Trust could be adversely affected if the computer systems
used by the Advisor, the Sub-Advisors and other service providers in performing
their administrative functions do not properly process and calculate
date-related information and data as of and after January 1, 2000. This is
commonly known as the "Year 2000 Issue". The Advisor and the Sub-Advisors are
taking steps that they believe are reasonably designed to address the Year 2000
Issue with respect to computer systems that they use and to obtain reasonable
assurances that comparable steps are being taken by the Trust's other major
service providers. At this time, however, there can be no assurance that these
steps will be sufficient to avoid any adverse impact to the Trust.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of
The LPT 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 aspects, the financial position of each of the Portfolios (Harris
Associates Value, MFS Total Return, Berkeley U.S. Quality Bond, Berkeley Money
Market, Strong Growth, Robertson Stephens Diversified Growth, and Lexington
Corporate Leaders) constituting the LPT Variable Insurance Series Trust,
hereafter referred to as the "Trust" at December 31, 1998, and the results of
each of their operations, the changes in each of their net assets and the
financial highlights for the periods indicated, 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 audits. We conducted our
audits 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
audits, which include confirmation of securities owned at December 31, 1998 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 16, 1999
