Front cover:
I am an investor. My money's as good as anybody's. I am no longer on the outside
looking in.
I have crossed over.
Blind faith has turned to calculated optimism.
I am an investor.
1997 Annual Report
Transamerica Premier Funds
1
Dear Fellow Shareholders
I last reported to you in the Semi Annual Report how proud I was that Lipper
Analytical Services, Inc. rated four Transamerica Premier Funds in the top ten
for their respective categories for the 12-month period ending June 30, 1997.
Now, I am pleased to be able to tell you that these four funds continued their
excellent performance, achieving phenomenal rankings for the 12-month period
ending December 31, 1997:
* The Premier Balanced Fund ranked first out of 350 balanced funds, * The
Premier Index Fund ranked fifth out of 66 S&P 500 Index funds, * The Premier
Cash Reserve Fund ranked sixth out of 304 money market funds, and * The Premier
Equity Fund ranked ninth out of 820 growth equity funds.
Lipper Analytical Services, Inc. also ranked the Premier Balanced Fund #1 for
12-month performance for three
consecutive quarters in 1997.
Our money management expertise and superior rankings have resulted in very
positive publicity for the Transamerica Fund family. Over the course of the
year, complimentary articles about the Premier Equity Fund have appeared in
Forbes, Kiplingeris, the Wall Street Journal, the New York Post and the Los
Angeles Times.
Although past performance is no guarantee of future results, we know that most
investors will be considerably more confident about choosing an investment
company that achieves and maintains the kind of performance reported by the
Transamerica Premier Funds.
I am also very pleased to report that, despite a fourth quarter down-turn in the
stock market, our two new funds, the Transamerica Premier Aggressive Growth Fund
and the Transamerica Premier Small Company Fund did extremely well, returning
21.8% and 24.9% respectively, for the six-month period from their launch to
December 31, 1997. Their performance compares quite favorably to the total
return of 10.58% for the S&P 500 Index for the same period.
I hope that by now you have taken advantage of the opportunity to use the
automated voice response system on our toll-free telephone line (1-800-89-ASK-US
or 1-800-892-7587). Choosing option two gives you round-the-clock automated
information including daily fund prices (net asset value) and the yield for the
Premier Cash Reserve Fund, as well as information regarding your own account
balance.
Phase two of our improved customer service program, which will be implemented
before my next report, will allow you to give us transaction instructions
including purchases, exchanges and redemptions, 24-hours a day. Information
including total returns for all the funds will also be available, and youill
have access to detailed information about your own account, including dividend
and transaction history, plus many more conveniences.
The Investment Outlook (on page 1) was prepared by the Fundsi Investment
Adviser, Transamerica Investment Services, and should prove informative and
useful. As you review it, and the rest of this Annual Report, please consider
all of the investment opportunities offered by the Transamerica Premier Funds.
We will continue to bring you new funds and new services in the coming year.
Please call us at 1-800-89-ASK-US (1-800-892-7587) for more information, or with
any questions you may have.
Thank you for your continued interest in the Transamerica Premier Funds.
Sincerely,
Nicki Bair
President
An investment in the Transamerica Premier Cash Reserve Fund is neither insured
nor guaranteed by the U.S. Government, and there can be no assurance that the
Fund will be able to maintain a stable net asset value of $1.00 per share.
For the other Premier Funds, the investment return and principal value of an
investment will fluctuate so that an investoris shares, when redeemed, may be
worth more or less than their original cost.
1
Contents
1
Presidentis Report
Investment Advisor Outlook 1
Investment Management Reports
and Schedules of Investments
Transamerica Premier
Aggressive Growth Fund 2
Transamerica Premier
Small Company Fund 4
Transamerica Premier
Equity Fund 6
Transamerica Premier
Index Fund 8
Transamerica Premier
Bond Fund 16
Transamerica Premier
Balanced Fund 18
Transamerica Premier
Cash Reserve Fund 20
Financial Statements
Statements of Assets
and Liabilities 22
Statements of Operations 24
Statements of Changes
in Net Assets 26
Financial Highlights 30
Notes to Financial Statements 34
Independent Auditorsi Report 40
1
Investment Adviser Outlook
The U.S. economy has continued its strong growth, with the Asian economic crisis
having had little impact as of yet. This strength will begin to dissipate as the
effects of the financial collapse in Asia ripple through our domestic markets.
For now, though, strong gains in employment and wage increases have continued to
boost U.S.
consumers' incomes while pushing confidence to new high levels.
Shock waves from the Asian economic crisis will affect emerging market
economies, effectively slowing growth in the United States. Specifically, the
collapse in Asian export markets, coupled with dis-inflationary forces, will
moderate corporate profits for non-financial corporations with Asian exposure.
At the same time, an increase in risk aversion and lowered global capital market
liquidity will likely have a cooling effect on business expectations and lead to
increased private sector retrenchment in the coming quarters.
The most widespread impact from the Asian financial crisis has been
pressure on prices. Worldwide commodity prices have fallen dramatically for most
goods, from sugar, to lumber, to copper, to oil. Manufactured goods prices are
also lower for items which Asian countries are pushing hard to gain export
market share, including electronics, steel, and paper.
Inflation was at low levels before Asian problems reached the crisis
stage, and has all but disappeared since fall 1997. Producer price indexes have
begun to reflect deflation after prices at the producer level fell 1.3% last
year. Consumer prices rose only 1.7% (the ex-food and energy core rate rose just
2.2%), the lowest level since 1965. For 1998, price increases are likely to be
negative at the producer level, and rise only nominally at the consumer level.
Service sector price increases remain the most resistant to deflation, and
continue to rise for most services including air fares, legal and medical fees,
and even cable television.
Bond Market
Monetary policy is expected to be significantly easier in 1998 than it
was in 1997. Federal Reserve Chairman Greenspanis concern over the economic
implications of rapid deflation suggest that the Fed has dropped its bias toward
tightening. Since money growth has been above target levels, liquidity in U.S.
markets is not an issue. Even so, the Fed may actually prefer to ease
restrictions now that low inflation levels and short-term interest rates have
produced a de-facto tightening in monetary policy. And while strong first
quarter growth reduces the chances for an early cut in short-term interest
rates, a rate cut becomes more likely with any signs of slower economic growth.
Long-term interest rates will probably head lower during 1998. The bond
market has rallied strongly since April 1997, and interest rates have fallen
over 150 basis points. With the Fed holding up short-term rates, the yield curve
has flattened dramatically, but real long-term interest rates are still about 4%
(nearly three times inflation) creating very attractive values in long-term
bonds. If the Fed resists cutting short-term rates until the second quarter, a
bond market rally could spark a slight yield curve inversion. During the year,
long-term rates are expected to fall 75 to 100 basis points.
Stock Market
1997 was an extraordinary year for the stock market, with the Standard
& Poor's 33% total rate of return as of December 31, 1997 summarizing what looks
to be the best three-year period for equities in more than 70 years. Although
bullish long-term fundamentals remain intact, slower profit growth should cause
stock prices to struggle to stay in an up-trend. Certain industries will be more
affected than others, and we have already seen the prices of technology,
commodity, and aerospace stocks (which are down 30% or so from their highs),
begin to discount the impact of both lower sales and profits.
For the short term, the effects of lower interest rates should serve to
offset the earnings growth slowdown, while the decline in bond yields should
allow price/earnings multiples (the discount rate on earnings) to expand. For
the longer term, the outlook for productivity gains led by expanding technology
applications, communications, and re-engineered business practices is still
good. We continue to favor the best-managed companies in the technology,
leisure, financial products, and health care industries.
1
#
2
Transamerica Premier Aggressive Growth Fund
Portfolio Manager, Philip Treick
2
Fund Performance
The first six months of operation for the Transamerica Premier Aggressive Growth
Fund, launched July 1, 1997, were highly successful. For the six-month period
ended December 31, 1997, the Fund posted a total return of 21.80%. In
comparison, the total return for the S&P 500 over the same time period was only
10.58%.
Portfolio Manager Comments
Declining interest rates combined with rising corporate profits in 1997 produced
a robust domestic equity market with fantastic returns. In fact, the S&P 500
Index performed exceptionally well, beating more than 80% of the active managers
tracked by Indata.
The Premier Aggressive Growth Fund concentrates its holdings in
companies which enjoy a competitive advantage in their markets due to the
benefits of scale. This can be described as a powerful circle: The bigger you
get, the more profitable you become...the more profitable you become the faster
you grow...the faster you grow, the bigger you get...and the cycle repeats
itself, eventually generating companies which are the low cost manufacturer, low
cost marketer, and low cost distributor in their particular market.
The Premier Aggressive Growth Fundis market beating performance was
driven by investments in companies that are known as "scale players." Few
companies enjoy the luxury of this positioning, and we try to maximize our
ownership positions in ones that do, like Dell Computer, Pixar, Amazon.com,
Inc., Intel, Microsoft and Applied Materials.
Portfolio Asset Mix
As of December 31, 1997, the Fund consisted of:
Common Stocks 90.3%
Cash and
Cash Equivalents 9.6%
Other 0.1%
Total 100.0%
Going Forward
The weakness in Asian markets that occurred during the last quarter of 1997 will
almost certainly have a negative effect on overall corporate profitability,
making investment selection particularly crucial to equity performance. I
believe that such an environment will foster a "stock pickers" market. Since our
investment style is well suited to perform in this type of market, we will
continue to search for and strengthen our holdings in world class companies that
meet our criteria.
Thank you for your continued investment in the Transamerica Premier
Aggressive Growth Fund.
2
Comparison Of Change In Value Of A $10,000 Investment In
Transamerica Premier Aggressive Growth Fund With The S&P 500 Index**
2
<TABLE>
<CAPTION>
Total Returns One Year
as of December 31, 1997 Since Inception* Total Return
<S> <C> <C>
Premier Aggressive Growth Fund 21.80% N/A
S&P 500 Index 10.58% N/A
</TABLE>
2
Premier Aggressive Growth Fund ($12,180 at 12/31/97)
S&P 500 Index ($11,058 at 12/31/97)
2
The Standard & Pooris 500 Composite Stock Price Index ("S&P 500") consists of
500 widely held, publicly traded common stocks. The S&P 500 Index does not
reflect any commissions or fees which would be incurred by an investor
purchasing the securities it represents.
* July 1, 1997.
** Hypothetical illustration of $10,000 invested at inception (July 1, 1997),
assuming reinvestment of dividends and capital gains at net asset value through
December 31, 1997. Note: All performance information represents past performance
and is not indicative of future results. If the Investment Adviser had not
waived fees and the Administrator had not reimbursed expenses, the aggregate
total returns of the Funds would have been lower.
3
Transamerica Premier Aggressive Growth Fund
Schedule of Investments - December 31, 1997
3
<TABLE>
<CAPTION>
Market
Shares Value
Shares or
Principal Market
Amount Value
3
COMMON STOCKS - 90.3%
APPAREL - 3.1%
<S> <C> <C>
Nike, Inc. 10,000 $ 392,500
BUSINESS SERVICES - 5.7%
Envoy Corporation (a) 25,000 728,125
CHEMICALS - 5.7%
Monsanto Company 17,500 735,000
COMMERCIAL SERVICES - 3.0%
Quintiles Transnational Corp. (a) 10,000 382,500
COMPUTERS & BUSINESS EQUIPMENT - 16.4%
Cisco Systems, Inc. (a) 7,500 418,125
Dell Computer Corporation (a) 20,000 1,680,000
2,098,125
DRUGS & HEALTH CARE - 3.5%
Alternative Living Services, Inc. (a) 15,000 443,438
ELECTRONICS - 10.9%
Applied Materials, Inc. (a) 23,000 692,875
Intel Corporation 10,000 702,500
1,395,375
FINANCIAL SERVICES - 5.7%
Charles Schwab Corporation 9,000 377,438
Franklin Resources, Inc. 4,000 347,750
725,188
HOTELS & RESTAURANTS - 2.1%
Mirage Resorts, Inc. (a) 12,000 273,000
INSURANCE - 3.0%
20th Century Industries 15,000 390,000
LEISURE TIME - 10.1%
Pixar, Inc. (a) 36,500 789,312
Speedway Motorsports, Inc. (a) 20,000 496,250
1,285,562
REAL ESTATE OPERATIONS - 5.2%
CCA Prison Realty Trust 15,000 $ 669,375
RETAIL - 10.8%
Amazon.com, Inc. (a) 15,000 903,750
Fred Meyer, Inc. (a) 13,020 473,602
1,377,352
SOFTWARE - 5.1%
Microsoft Corporation (a) 5,000 646,250
TOTAL COMMON STOCKS
(cost $10,259,327) 11,541,790
U.S. GOVERNMENT AGENCY SECURITY - 4.9%
Federal Home Loan Mortgage Discount Notes
(cost $624,271) 5.250% 01/09/98 $ 625,000 624,271
REPURCHASE AGREEMENT - 4.7%
State Street Bank and Trust Company, 4.75%, due 01/02/98, (collateralized by
$465,000 par value U.S. Treasury Bond, 8.5%, due 02/15/20, with a
value of $616,561, cost $600,000) 600,000 600,000
TOTAL INVESTMENTS - 99.9%
(cost $11,483,598)* 12,766,061
OTHER ASSETS LESS LIABILITIES - 0.1% 14,292
NET ASSETS - 100.0% $12,780,353
</TABLE>
(a) non-income producing security
* Aggregate cost for Federal tax purposes. Aggregate gross unrealized
appreciation for all securities in which there is an excess of value
over tax cost and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over value were
$1,857,509 and $575,046, respectively. Net unrealized appreciation for
tax purposes is $1,282,463.
3
#
3
See notes to financial statements
4
Transamerica Premier Small Company Fund
Portfolio Manager, Philip Treick
4
Fund Performance
The Transamerica Premier Small Company Fund, launched on July 1, 1997, provided
excellent returns in the first six months of operation. The Fund posted a total
return of 24.90%, while the total return for the S&P 500 was only 10.58% for the
six-month period ended December 31, 1997. The Russell 2000 Index, often used as
a benchmark for small-company funds, had a total return of 11.03% for the same
time period. Portfolio Manager Comments The Premier Small Company Fund invests
in companies that are on the verge of achieving competitive advantage. Similar
to the Premier Aggressive Growth Fund, this advantage over the competition
occurs when a company becomes the low cost manufacturer, the low cost marketer
and the low cost distributor in a specific market.
The Premier Small Company Fundis outstanding performance was a result
of investing in companies with this competitive advantage. Examples of such
companies in the Premier Small Company portfolio are: Envoy Corporation,
Amazon.com, Inc., Pixar, CCA Prison Realty Trust, and Alternative Living
Services.
Portfolio Asset Mix
As of December 31, 1997, the Fund consisted of:
Common Stocks 88.8%
Cash and
Cash Equivalents 10.3%
Other .9%
Total 100.0%
Going Forward
Small company valuations are particularly sensitive to movements in interest
rates, making them generally more volatile than larger companies. However, some
small companies are poised to grow even in periods of lower inflation and slow
economic growth like we expect during 1998, which can produce higher valuation
multiples.
The Premier Small Company Fund is positioned well for this type of
environment and we are actively searching for more companies that fit our
profile. Thank you for your continued investment in the Transamerica Premier
Small Company Fund.
4
Comparison Of Change In Value Of A $10,000 Investment In
Transamerica Premier Small Company Fund With The Russell 2000 Index**
4
<TABLE>
<CAPTION>
Total Returns One Year
as of December 31, 1997 Since Inception* Total Return
<S> <C> <C>
Premier Small Company Fund 24.90% N/A
Russell 2000 Index 11.03% N/A
</TABLE>
4
Premier Small Company Fund ($12,490 at 12/31/97)
Russell 2000 Index ($11,103 at 12/31/97)
4
The Russell 2000 Index measures the performance of the 2,000 smallest companies
(approximately 7%) in the Russell 3000 Index (an index composed of the 3000
largest U.S. companies by market capitalization, representing approximately 98%
of the U.S. equity market). * July 1, 1997 ** Hypothetical illustration of
$10,000 invested at inception (July 1, 1997), assuming reinvestment of dividends
and capital gains at net asset value through December 31, 1997.
Note: All performance information represents past performance
and is not indicative of future results. If the Investment Adviser had not
waived fees and the Administrator had not reimbursed expenses, the aggregate
total returns of the Funds would have been lower.
5
Transamerica Premier Small Company Fund
Schedule of Investments - December 31, 1997
5
<TABLE>
<CAPTION>
Market
Shares Value
Shares or
Principal Market
Amount Value
5
COMMON STOCKS - 88.8%
BUSINESS SERVICES - 5.1%
<S> <C> <C>
Envoy Corporation (a) 19,500 $ 567,938
CHEMICALS - 8.3%
Eco Soil Systems, Inc. (a) 75,000 382,031
Minerals Technologies, Inc. 12,000 545,250
927,281
COMPUTERS & BUSINESS EQUIPMENT - 2.3%
Dell Computer Corporation (a) 3,000 252,000
DRUGS & HEALTH CARE - 4.7%
Alternative Living Services, Inc. (a) 17,500 517,344
ELECTRONICS - 6.3%
Applied Materials, Inc. (a) 6,000 180,750
Intel Corporation 4,800 337,200
Level One Communications, Inc. (a) 6,500 183,625
701,575
FINANCIAL SERVICES - 1.7%
MoneyGram Payment Systems, Inc. (a) 17,800 191,350
HOTELS & RESTAURANTS - 5.4%
Famous Daveis of America, Inc. (a) 25,000 223,438
Host Marriott Corp. (a) 19,500 382,687
606,125
INSURANCE - 4.7%
20th Century Industries 20,000 520,000
LEISURE TIME - 11.9%
Pixar, Inc. (a) 38,100 823,912
Speedway Motorsports, Inc. (a) 20,000 496,250
1,320,162
OIL - 3.1%
Newpark Resources, Inc. (a) 20,000 350,000
REAL ESTATE OPERATIONS - 5.9%
CCA Prison Realty Trust 14,800 660,450
RETAIL - 14.2%
Amazon.com, Inc. (a) 19,000 $ 1,144,750
Fred Meyer, Inc. (a) 12,000 436,500
1,581,250
RETAIL GROCERY - 4.3%
Dominickis Supermarkets, Inc. (a) 13,000 474,500
SOFTWARE - 8.2%
Broderbund Software, Inc. (a) 12,500 320,312
Microsoft Corporation (a) 1,600 206,800
Transaction Systems Architects, Inc. (a) 10,000 380,000
907,112
TECHNOLOGY - 2.7%
Cymer, Inc. (a) 20,000 300,000
TOTAL COMMON STOCKS
(cost $9,525,696) 9,877,087
REPURCHASE AGREEMENT - 10.3%
State Street Bank and Trust Company
4.75%, due 01/02/98, (collateralized by
$1,155,000 par value U.S. Treasury
Note, 5.875%, due 10/31/98, with a
value of $1,168,058, cost $1,142,000) $1,142,000
1,142,000
TOTAL INVESTMENTS - 99.1%
(cost $10,667,696)* 11,019,087
OTHER ASSETS LESS LIABILITIES - 0.9% 103,034
NET ASSETS - 100.0% $11,122,121
</TABLE>
(a) non-income producing security
* Aggregate cost for Federal tax purposes. Aggregate gross unrealized
appreciation for all securities in which there is an excess of value
over tax cost and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over value were
$1,007,853 and $656,462, respectively. Net unrealized appreciation for
tax purposes is $351,391.
5
#
5
See notes to financial statements
6
Transamerica Premier Equity Fund
Portfolio Manager, Glen E. Bickerstaff
6
Fund Performance
The Transamerica Premier Equity Fundis performance for 1997 was extraordinary.
The Fund generated a total return of 47.51% for the year ended December 31,
1997, ranking ninth among 820 growth funds monitored by Lipper Analytical
Services, Inc. Since its inception in October 1995, the Fund has earned an
annualized total return of 32.03%, while the S&P 500 has returned 27.84%.
Portfolio Manager Comments
Strong corporate profits and almost non-existent inflation in the United States
provided a very positive environment for the equity markets in 1997. During the
third consecutive year of extraordinary stock market returns, several strong
economic and demographic trends led to substantial gains in the technology,
financial services, and leisure sectors of the stock market.
Capital investments in technology equipment grew rapidly, as companies
focused on strong productivity gains and lower cost structures to remain
competitive. Unfortunately, higher pricing was not an option for most companies,
since inflation remained subdued in virtually all sectors of the economy. At the
same time, the aging of the baby-boom generation resulted in strong demand for
financial and investment services. Faced with growing uncertainty about
government retirement programs, these older, more-affluent boomers have become
increasingly more aggressive about building wealth through their own savings and
investments.
Portfolio Asset Mix
As of December 31, 1997, the Fund consisted of:
Common Stocks 96.7%
Cash and
Cash Equivalents 3.3%
Total 100.0%
Going Forward
At the end of 1997, as several Asian economies faced potentially severe
recessions, investors focused on the financial situation in the Far East. While
there is some debate about the potential impact of Asiais economic slowdown on
economic growth in the United States, domestic growth will most likely slow over
the next year as corporate profits rise at a slower rate. However, as inflation
recedes further from the investment landscape, lower interest rates should
bolster stock market valuations.
Individual stock selection will remain a critical component of the
performance of the Premier Equity Fund in 1998. The Fund is invested in
companies that have superior growth prospects, strong management, and leading
market share positions. The companies that comprise our portfolio have unique
and enduring advantages over their competitors that should lead to increased
returns for shareholders over the long term. The Premier Equity Fund has
significant assets committed to leading companies in the technology, specialty
growth, leisure, and financial services sectors. These should remain strong
growth areas throughout 1998.
Thank you for your continued investment in the Transamerica Premier
Equity Fund.
6
Comparison Of Change In Value Of A $10,000 Investment In
Transamerica Premier Equity Fund With The S&P 500 Index**
6
Total Returns Annualized One Year
as of December 31, 1997 Since Inception* Total Return
Premier Equity Fund 32.03% 47.51%
S&P 500 Index 27.84% 33.36%
6
Premier Equity Fund ($18,696 at 12/31/97)
S&P 500 Index ($17,385 a 12/31/97)
6
The Standard & Pooris 500 Composite Stock Price Index ("S&P 500") consists of
500 widely held, publicly traded common stocks. The S&P 500 Index does not
reflect any commissions or fees which would be incurred by an investor
purchasing the securities it represents.
* October 2, 1995.
** Hypothetical illustration of $10,000 invested at inception (October 2, 1995),
assuming reinvestment of dividends and capital gains at net asset value through
December 31, 1997. Note: All performance information represents past performance
and is not indicative of future results. If the Investment Adviser had not
waived fees and the Administrator had not reimbursed expenses, the aggregate
total returns of the Funds would have been lower.
7
Transamerica Premier Equity Fund
Schedule of Investments - December 31, 1997
7
<TABLE>
<CAPTION>
Market
Shares Value
Shares or
Principal Market
Amount Value
7
COMMON STOCKS - 96.7%
BUSINESS SERVICES - 14.0%
<S> <C> <C>
Cendant Corporation (a) 150,000 $ 5,156,250
Envoy Corporation (a) 145,000 4,223,125
First Data Corporation 110,000 3,217,500
Paychex, Inc. 60,000 3,037,500
15,634,375
CHEMICALS - 7.8%
BetzDearborn, Inc. 45,000 2,747,813
Minerals Technologies Inc. 85,000 3,862,187
Monsanto Company 50,000 2,100,000
8,710,000
COMPUTERS & BUSINESS EQUIPMENT - 8.3%
Cisco Systems, Inc. (a) 60,000 3,345,000
Dell Computer Corporation (a) 70,000 5,880,000
9,225,000
CONTAINERS & PACKAGING - 2.8%
Sealed Air Corporation (a) 50,000 3,087,500
DRUGS & HEALTH CARE - 6.6%
Alternative Living Services, Inc. (a) 160,000 4,730,000
Centocor, Inc. (a) 80,000 2,660,000
7,390,000
ELECTRONICS - 7.4%
Applied Materials, Inc. (a) 110,000 3,313,750
Intel Corporation 70,000 4,917,500
8,231,250
FINANCIAL SERVICES - 14.7%
Charles Schwab Corporation 112,500 4,717,969
Franklin Resources, Inc. 40,000 3,477,500
Merrill Lynch & Company, Inc. 40,000 2,917,500
MoneyGram Payment Systems, Inc. (a) 175,000 1,881,250
T. Rowe Price Associates, Inc. 55,000 3,458,125
16,452,344
HOTELS & RESTAURANTS - 9.9%
Host Marriott Corp. (a) 150,000 2,943,750
Marriott International, Inc. 40,000 2,770,000
Mirage Resorts, Incorporated (a) 235,000 5,346,250
11,060,000
INDUSTRIAL MACHINERY - 2.7%
Illinois Tool Works, Inc. 50,000 $ 3,006,250
INSURANCE - 3.5%
20th Century Industries 150,000 3,900,000
LEISURE TIME - 2.8%
Speedway Motorsports, Inc. (a) 125,000 3,101,563
REAL ESTATE OPERATIONS - 3.0%
CCA Prison Realty Trust 75,000 3,346,875
RETAIL - 5.8%
Fred Meyer, Inc. (a) 178,500 6,492,937
SOFTWARE - 7.4%
Broderbund Software, Inc. (a) 25,000 640,625
Microsoft Corporation (a) 25,000 3,231,250
Pixar, Inc. (a) 165,000 3,568,125
Transaction Systems Architects, Inc. (a) 20,000 760,000
8,200,000
TOTAL COMMON STOCKS
(cost $83,772,995) 107,838,094
REPURCHASE AGREEMENT - 2.7%
State Street Bank and Trust Company
4.75% due 01/02/98, (collateralized by
$3,070,000 par value U.S. Treasury
Note, 5.875%, due 10/31/98, with a
value of $3,104,709, cost $3,042,000) $3,042,000
3,042,000
TOTAL INVESTMENTS - 99.4%
(cost $86,814,995)* 110,880,094
OTHER ASSETS LESS LIABILITIES - 0.6% 686,960
NET ASSETS - 100.0% $111,567,054
</TABLE>
(a) non-income producing security
* Aggregate cost for Federal tax purposes. Aggregate gross unrealized
appreciation for all securities in which there is an excess of value
over tax cost and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over value were
$26,522,084 and $2,456,985, respectively. Net unrealized appreciation
for tax purposes is $24,065,099.
7
#
7
See notes to financial statements
8
Transamerica Premier Index Fund
Portfolio Manager, Christopher J. Bonavico
8
Fund Performance
The Transamerica Premier Index Fund earned a total return of 33.14% for the year
ended December 31, 1997, in comparison to a total return of 33.36% for the S&P
500 Index. Since its inception in October 1995, the Fund has earned an
annualized total return of 27.38%, relative to a 27.84% total return for the S&P
500. The Fund was ranked fifth among the 66 S&P 500 Index funds tracked by
Lipper Analytical Services, Inc. for 1997. This performance is consistent with
the Fundis long-term goal of tracking overall stock market returns, as measured
by the S&P 500 Index.
To achieve its goal, the Fund invests in a basket of stocks that mirror
the S&P 500 Index, as well as in fixed-income investments and stock index
futures. While the Fund may not match the S&P 500 precisely, in general it will
change in value in proportion to this stock market index.
Portfolio Manager Comments
Equity market returns were strong in 1997 as corporate profits continued their
rise of the past seven years, albeit at a slower pace. The competitive
environment for many sectors of the the economy is increasing. As a result, many
business managers are reporting difficulty in raising prices and have been able
to grow profits only by reducing costs. Increasingly, only those companies which
offer a unique product or service or that have a unique cost advantage have been
able to deliver growth in profits.
The companies in the S&P 500 Index are the leaders in American
business. The competitive advantages they possess should allow them to earn
returns in excess of their rivals here and overseas. While the economic turmoil
in Asia will likely have a moderate impact on overall business activity, we
expect leading American companies to continue to represent attractive investment
opportunities.
Portfolio Asset Mix
As of December 31, 1997, the Fund consisted of:
Common Stocks 80.6%
Cash and
Cash Equivalents 19.4%
Total 100.0%
Going Forward
We expect continued positive returns for equity investors in 1998. While the
earnings performance of individual companies is important to stock valuations,
the long-term trend of lower global inflation and interest rates supports higher
overall equity market values. In this lower inflation environment, bond yields
should decline and equity returns should continue to be attractive for the
long-term investor.
Thank you for your continued investment in the Transamerica Premier
Index Fund.
8
Comparison Of Change In Value Of A $10,000 Investment In
Transamerica Premier Index Fund With The S&P 500 Index**
8
Total Returns Annualized One Year
as of December 31, 1997 Since Inception* Total Return
Premier Index Fund 27.38% 33.14%
S&P 500 Index 27.84% 33.36%
8
Premier Index Fund ($17,247 at 12/31/97)
S&P 500 Index ($17,385 at 12/31/97)
8
The Standard & Pooris 500 Composite Stock Price Index ("S&P 500") consists of
500 widely held, publicly traded common stocks. The S&P 500 Index does not
reflect any commissions or fees which would be incurred by an investor
purchasing the securities it represents.
* October 2, 1995.
** Hypothetical illustration of $10,000 invested at inception (October 2, 1995),
assuming reinvestment of dividends and capital gains at net asset value through
December 31, 1997. Note: All performance information represents past performance
and is not indicative of future results. If the Investment Adviser had not
waived fees and the Administrator had not reimbursed expenses, the aggregate
total returns of the Funds would have been lower.
9
Transamerica Premier Index Fund
Schedule of Investments - December 31, 1997
9
<TABLE>
<CAPTION>
Market
Shares Value
Market
Shares Value
9
COMMON STOCKS - 80.6%
ADVERTISING - 0.1%
<S> <C> <C>
Omnicom Group Inc. 380 $ 16,103
AEROSPACE & DEFENSE - 1.3%
Boeing Company 2,418 118,331
Computer Sciences Corporation (a) 157 13,110
General Dynamics Corporation 153 13,225
Lockheed Martin Corporation 477 46,984
Northrop Grumman Corporation 129 14,835
Raytheon Company, Class A 115 5,660
Raytheon Company, Class B 581 29,341
TRW, Inc. 313 16,706
United Technologies Corporation 585 42,595
300,787
AGRICULTURAL MACHINERY - 0.1%
Deere & Company 631 36,795
AIR TRAVEL - 0.3%
AMR Corporation (a) 200 25,700
Delta Air Lines, Inc. 146 17,374
Southwest Airlines Company 526 12,953
US Airways Group Inc. (a) 168 10,500
66,527
ALUMINUM - 0.2%
Alcan Aluminum Ltd. 548 15,139
Aluminum Company of America 427 30,050
Reynolds Metals Company 164 9,840
55,029
APPAREL & TEXTILES - 0.3%
Brown Group, Inc. 26 346
Fruit of the Loom, Inc. (a) 185 4,741
Liz Claiborne, Inc. 176 7,359
Nike, Inc. 697 27,357
Reebok International Ltd. 128 3,688
Russell Corporation 92 2,444
Springs Industries, Inc. 49 2,548
VF Corporation 310 14,240
62,723
AUTO PARTS - 0.2%
Dana Corporation 248 11,780
Eaton Corporation 188 16,779
Echlin, Inc. 150 5,428
Genuine Parts Company 444 15,068
49,055
AUTOMOBILES - 1.3%
Chrysler Corporation 1,768 62,211
Ford Motor Company 2,718 132,333
General Motors Corporation 1,800 109,125
PACCAR Inc. 189 9,923
313,592
BANKING - 6.1%
Banc One Corporation 1,223 $ 66,424
Bank of New York Company, Inc. 959 55,442
BankAmerica Corporation 1,766 128,918
BankBoston Corporation 357 33,536
Bankers Trust New York Corporation 190 21,363
Barnett Banks, Inc. 470 33,781
BB&T Corporation 290 18,578
Citicorp 1,158 146,415
Comerica, Inc. 275 24,819
CoreStates Financial Corporation 505 40,432
Fifth Third Bancorp 373 30,493
First Chicago NBD Corporation 771 64,378
First Union Corporation 1,386 71,032
Fleet Financial Group, Inc. 640 47,960
Huntington Bancshares Incorporated 330 11,880
J.P. Morgan & Company Incorporated 452 51,019
KeyCorp 561 39,726
MBNA Corporation 1,216 33,212
Mellon Bank Corporation 639 38,739
National City Corporation 428 28,141
NationsBank Corporation 1,867 113,537
Norwest Corporation 1,756 67,825
PNC Bank Corporation 810 46,221
Providian Financial Corporation 229 10,348
Republic New York Corporation 136 15,530
SunTrust Banks, Inc. 544 38,828
Synovus Financial Corp. 340 11,135
US Bancorp 616 68,953
Wachovia Corporation 485 39,346
Wells Fargo & Company 228 77,392
1,475,403
BROADCASTING - 0.3%
Clear Channel Communications, Inc. (a) 200 15,887
Comcast Corporation 693 21,873
Viacom, Inc. (a) 879 36,424
74,184
BUILDING CONSTRUCTION - 0.1%
Centex Corporation 70 4,406
Fluor Corporation 204 7,624
Kaufman & Broad Home Corporation 85 1,907
Pulte Corporation 60 2,509
16,446
BUSINESS SERVICES - 0.9%
Automatic Data Processing, Inc. 708 43,454
ChoicePoint Inc. (a) 35 1,671
Cognizant Corporation 509 22,682
Deluxe Corporation 200 6,900
Ecolab, Inc. 158 8,759
First Data Corporation 1,085 31,736
H & R Block, Inc. 253 11,338
9
#
9
See notes to financial statements
10
Transamerica Premier Index Fund
Schedule of Investments - December 31, 1997
(Continued)
10
Market
Shares Value
Market
Shares Value
10
HBO & Company 480 $ 23,040
Humana, Inc. (a) 395 8,196
Interpublic Group Companies, Inc. 291 14,495
Laidlaw, Inc. 734 10,001
R.R. Donnelley & Sons Company 366 13,634
Safety-Kleen Corporation 141 3,869
Service Corporation International 574 21,202
220,977
CHEMICALS - 2.0%
Air Products and Chemicals, Inc. 269 22,125
B.F. Goodrich Company 129 5,345
Dow Chemical Company 607 61,610
E.I. du Pont de Nemours and Company 2,717 163,190
Eastman Chemical Company 193 11,496
FMC Corporation (a) 90 6,058
Great Lakes Chemical Corporation 153 6,866
Hercules, Inc. 258 12,916
Mallinckrodt, Inc. 179 6,802
Monsanto Company 1,424 59,808
Morton International, Inc. 351 12,066
Nalco Chemical Company 162 6,409
PPG Industries, Inc. 455 25,992
Praxair, Inc. 357 16,065
Rohm & Haas Company 158 15,128
Sigma-Aldrich Corporation 242 9,620
Solutia Inc. 284 7,579
Union Carbide Corporation 322 13,826
W.R. Grace & Company 212 17,053
479,954
COMMUNICATION SERVICES - 1.6%
Lucent Technologies, Inc. 1,580 126,202
Northern Telecom Limited 623 55,447
SBC Communications, Inc. 2,226 163,054
Tele-Communications TCI Ventures Group 581 16,450
Tele-Communications, Inc. (a) 1,015 28,357
389,510
COMPUTERS & BUSINESS EQUIPMENT - 4.1%
3Com Corporation (a) 567 19,810
Apple Computer, Inc. (a) 302 3,964
Bay Networks, Inc. (a) 460 11,759
Cabletron Systems, Inc. (a) 361 5,415
Ceridian Corporation (a) 175 8,017
Cisco Systems, Inc. (a) 2,330 129,870
Compaq Computer Corporation 1,635 92,275
Data General Corporation (a) 95 1,657
Dell Computer Corporation (a) 934 78,456
Digital Equipment Corporation (a) 371 13,727
EMC Corporation (a) 1,090 29,907
Hewlett-Packard Company 2,474 154,625
International Business Machines Corporation 2,619 273,849
NextLevel Systems Incorporated (a) 286 5,112
Pitney Bowes, Inc. 362 $ 32,557
Seagate Technology, Inc. (a) 544 10,472
Sun Microsystems, Inc. (a) 893 35,608
Tandy Corporation 290 11,183
Unisys Corporation (a) 420 5,828
Xerox Corporation 787 58,090
982,181
CONGLOMERATES - 1.8%
Aeroquip-Vickers Inc. 69 3,385
AlliedSignal, Inc. 1,374 53,500
CBS Corporation 1,488 43,803
Cendant Corporation (a) 1,806 62,078
Gillette Company 1,311 131,674
Harcourt General, Inc. 175 9,581
Minnesota Mining & Manufacturing Company 1,016 83,375
Tenneco, Inc. 420 16,590
Textron, Inc. 409 25,563
429,549
CONSTRUCTION & MINING EQUIPMENT - 0.3%
Case Corporation 176 10,637
Caterpillar, Inc. 942 45,746
Dover Corporation 550 19,869
Foster Wheeler Corporation 98 2,652
Harnischfeger Industries, Inc. 116 4,096
83,000
CONSTRUCTION MATERIALS - 0.2%
Armstrong World Industries, Inc. 94 7,027
Masco Corporation 391 19,892
Owens Corning 127 4,334
Sherwin-Williams Company 416 11,544
42,797
CONSUMER PRODUCTS - 0.0%
American Greetings Corporation 182 7,121
CONTAINERS & GLASS - 0.2%
Ball Corporation 73 2,578
Bemis Company, Inc. 129 5,684
Crown Cork & Seal Company, Inc. 307 15,389
Owens-Illinois, Inc. (a) 350 13,278
Temple-Inland, Inc. 135 7,062
43,991
COSMETICS & TOILETRIES - 0.2%
Alberto-Culver Company 136 4,361
Avon Products, Inc. 325 19,947
International Flavors & Fragances, Inc. 267 13,750
38,058
DRUGS & HEALTH CARE - 8.3%
Abbott Laboratories 1,897 124,372
Allergan, Inc. 157 5,269
Alza Corporation 203 6,458
American Home Products Corporation 1,537 117,580
Amgen, Inc. 645 34,911
10
See notes to financial statements
11
Transamerica Premier Index Fund
Schedule of Investments - December 31, 1997
(Continued)
11
Market
Shares Value
Market
Shares Value
11
Bausch & Lomb, Inc. 138 $ 5,468
Baxter International Inc. 666 33,591
Becton, Dickinson & Company 305 15,250
Biomet, Inc. 276 7,073
Bristol-Myers Squibb Company 2,442 231,074
C.R. Bard, Inc. 139 4,352
Cardinal Health, Inc. 258 19,382
Columbia / HCA Healthcare Corporation 1,622 48,052
Crescenco Pharmaceuticals Corporation (a) 10 116
Eli Lilly & Company 2,686 187,013
Guidant Corporation 348 21,663
HEALTHSOUTH Corporation (a) 792 21,978
Johnson & Johnson 3,236 213,171
Manor Care, Inc. 153 5,355
Medtronic, Inc. 1,140 59,636
Merck & Company, Inc. 2,963 314,819
Pfizer Inc. 3,112 232,038
Pharmacia & Upjohn, Inc. 1,228 44,976
Schering-Plough Corporation 1,773 110,148
St. Jude Medical, Inc. (a) 191 5,826
Tenet Healthcare Corporation (a) 700 23,188
United Healthcare Corporation 436 21,664
US Surgical Corporation 155 4,543
Warner-Lambert Company 658 81,592
2,000,558
ELECTRIC UTILITIES - 2.1%
American Electric Power Company 455 23,489
Baltimore Gas & Electric Company 358 12,194
Carolina Power & Light Company 371 15,744
Central & South West Corporation 508 13,748
CINergy Corporation 383 14,674
Consolidated Edison Company
of New York, Inc. 572 23,452
Dominion Resources, Inc. 436 18,557
DTE Energy Company 352 12,210
Duke Energy Corporation 875 48,453
Edison International 1,052 28,601
Entergy Corporation 563 16,855
FirstEnergy Corp. (a) 371 10,759
FPL Group, Inc. 447 26,457
GPU, Inc. 291 12,258
Houston Industries, Incorporated 844 22,524
Niagara Mohawk Power Corporation (a) 351 3,686
Northern States Power Company 167 9,728
P P & L Resources, Inc. 392 9,383
PacifiCorp 714 19,501
PECO Energy Company 539 13,071
PG & E Corporation 1,007 30,651
Public Service Enterprise Group, Inc. 582 18,442
Southern Company 1,634 42,280
Texas Utilities Company 585 24,314
Unicom Corporation 523 $ 16,082
Union Electric Company 247 10,683
497,796
ELECTRICAL EQUIPMENT - 3.0%
Boston Scientific Corporation (a) 442 20,277
Cooper Industries, Inc. 273 13,377
Emerson Electric Company 1,085 61,235
General Electric Company 8,052 590,816
General Signal Corporation 118 4,978
Johnson Controls, Inc. 201 9,598
Millipore Corporation 108 3,665
National Service Industries, Inc. 114 5,650
Raychem Corporation 214 9,215
W.W. Grainger, Inc. 124 12,051
730,862
ELECTRONICS - 2.6%
Advanced Micro Devices, Inc. (a) 327 5,866
AMP, Inc. 531 22,302
Andrew Corporation (a) 216 5,184
Applied Materials, Inc. (a) 874 26,329
DSC Communications Corporation (a) 282 6,768
EG & G, Inc. 114 2,373
Harris Corporation 192 8,808
Honeywell, Inc. 309 21,166
Intel Corporation 3,986 280,016
KLA Tencor Corporation (a) 200 7,725
LSI Logic Corporation (a) 327 6,458
Micron Technology, Inc. (a) 507 13,182
Motorola, Inc. 1,437 81,999
National Semiconductor Corporation (a) 334 8,663
Perkin-Elmer Corporation 106 7,533
Rockwell International Corporation 524 27,379
Scientific-Atlanta, Inc. 188 3,149
Silicon Graphics, Inc. (a) 428 5,323
Tektronix, Inc. 121 4,802
Tellabs, Inc. (a) 434 22,948
Texas Instruments, Inc. 920 41,400
Thomas & Betts Corporation 112 5,292
614,665
FINANCIAL SERVICES - 3.3%
American Express Company 1,165 103,976
Beneficial Corporation 129 10,723
Charles Schwab Corporation 711 29,818
Chase Manhattan Corporation 1,054 115,413
Countrywide Credit Industries, Inc. 254 10,890
Equifax, Inc. 351 12,439
Federal Home Loan Mortgage Corporation 1,728 72,468
Federal National Mortgage Association 2,621 149,561
Green Tree Financial Corporation 332 8,694
Household International, Inc. 247 31,508
Merrill Lynch & Company, Inc. 834 60,830
11
#
11
See notes to financial statements
12
Transamerica Premier Index Fund
Schedule of Investments - December 31, 1997
(Continued)
12
Market
Shares Value
Market
Shares Value
12
Morgan Stanley, Dean Witter,
Discover and Co. 1,971 $ 116,535
State Street Corporation 422 24,555
SunAmerica, Inc. 450 19,238
Washington Mutual, Inc. 425 27,120
793,768
FOOD & BEVERAGES - 4.8%
Archer-Daniels-Midland Company 1,384 30,015
Campbell Soup Company 1,177 68,413
Coca-Cola Company 6,063 403,947
ConAgra, Inc. 1,180 38,719
CPC International, Inc. 351 37,820
General Mills, Inc. 389 27,862
H.J. Heinz Company 896 45,528
Hershey Foods Corporation 375 23,227
Kellogg Company 1,038 51,511
PepsiCo, Inc. 3,784 137,879
Pioneer Hi-Bred International, Inc. 202 21,665
Quaker Oats Company 328 17,302
Ralston-Ralston Purina Group 258 23,978
Sara Lee Corporation 1,172 65,998
Sysco Corporation 437 19,911
Unilever NV and PLC 1,552 96,903
Whitman Corporation 253 6,594
Wm. Wrigley Jr. Company 282 22,437
1,139,709
GAS & PIPELINE UTILITIES - 0.5%
Coastal Corporation 255 15,794
Columbia Gas System, Inc. 133 10,449
Consolidated Natural Gas Company 228 13,794
Eastern Enterprises 49 2,205
Enron Corporation 666 27,681
NICOR, Inc. 121 5,105
ONEOK, Inc. 67 2,705
Pacific Enterprises 204 7,675
Peopleis Energy Corporation 84 3,307
Sonat, Inc. 209 9,562
The Williams Companies, Inc. 754 21,395
119,672
GAS EXPLORATION - 0.1%
Anadarko Petroleum Corporation 140 8,496
Apache Corporation 220 7,714
16,210
GAS EXPLORATION & DISTRIBUTION - 0.3%
Burlington Resources, Inc. 430 19,269
Occidental Petroleum Corporation 785 23,010
Oryx Energy Company (a) 255 6,503
Union Pacific Resources Group Inc. 561 13,604
62,386
GOLD & MINING - 0.3%
Barrick Gold Corporation 877 16,334
Battle Mountain Gold Company 529 $ 3,108
Cyprus Amax Minerals Company 225 3,459
Echo Bay Mines Ltd. 319 778
Freeport-McMoRan Copper & Gold, Inc. 489 7,702
Homestake Mining Company 345 3,062
Newmont Mining Corporation 370 10,869
Phelps Dodge Corporation 161 10,022
Placer Dome, Inc. 581 7,371
62,705
HOUSEHOLD APPLIANCES & PRODUCTS - 1.8%
Black & Decker Corporation 217 8,477
Clorox Company 250 19,766
Colgate-Palmolive Company 712 52,332
Corning Inc. 556 20,641
Maytag Corporation 252 9,403
Newell Company 386 16,405
Procter & Gamble Company 3,316 264,658
Rubbermaid, Inc. 376 9,400
Snap-On, Inc. 148 6,456
The Stanley Works 217 10,240
Tupperware Corporation 149 4,153
Whirlpool Corporation 180 9,900
431,831
HOTELS & RESTAURANTS - 0.6%
Darden Restaurants, Inc. 379 4,737
Hilton Hotels Corporation 591 17,582
Marriott International, Inc. 305 21,121
McDonaldis Corporation 1,681 80,268
Mirage Resorts, Incorporated (a) 400 9,100
Tricon Global Restaurants, Inc. (a) 378 10,986
Wendyis International, Inc. 301 7,243
151,037
INDUSTRIAL MACHINERY - 0.7%
Briggs & Stratton Corporation 66 3,205
Cincinnati Milacron, Inc. 88 2,282
Crane Company 109 4,728
Cummins Engine Company, Inc. 95 5,611
Illinois Tool Works, Inc. 584 35,113
Ingersoll-Rand Company 396 16,038
ITT Industries, Inc. 289 9,067
NACCO Industries Inc. 21 2,251
Pall Corporation 289 5,979
Parker Hannifin Corporation 270 12,386
Thermo Electron Corporation (a) 350 15,575
Timken Company 152 5,225
Tyco International Ltd. 924 41,638
UNOVA, Inc. (a) 130 2,137
161,235
INSURANCE - 3.7%
Aegon N.V. 59 5,288
Aetna Life & Casualty Company 364 25,685
12
See notes to financial statements
13
Transamerica Premier Index Fund
Schedule of Investments - December 31, 1997
(Continued)
13
Market
Shares Value
Market
Shares Value
13
Allstate Corporation 1,080 $ 98,145
American General Corporation 588 31,789
American International Group, Inc. 1,719 186,941
Aon Corporation 391 22,922
Chubb Corporation 425 32,141
CIGNA Corporation 183 31,670
Cincinnati Financial Corporation 130 18,297
Conseco, Inc. 183 8,315
General Re Corporation 199 42,188
Hartford Financial Services Group Inc. 288 26,946
Jefferson-Pilot Corporation 172 13,395
Lincoln National Corporation 251 19,609
Loews Corporation 283 30,033
Marsh & McLennan Companies, Inc. 376 28,035
MBIA, Inc. 216 14,432
MGIC Investment Corporation 318 21,147
Progressive Corporation Ohio 175 20,978
Safeco Corporation 306 14,918
St. Paul Companies, Inc. 205 16,823
Torchmark Corporation 346 14,554
Travelers Group, Inc. 2,756 148,479
UNUM Corporation 347 18,868
USF&G Corporation 271 5,979
897,577
INVESTMENT COMPANIES - 4.3%
Standard and Pooris Depositary Receipts 10,599 1,028,766
LEISURE TIME - 0.8%
Brunswick Corporation 236 7,154
Harrahis Entertainment, Inc. (a) 249 4,700
ITT Corporation 287 23,785
King World Productions, Inc. 90 5,197
The Walt Disney Company 1,643 162,760
203,596
LIQUOR - 0.4%
Adolph Coors Company 92 3,059
Anheuser-Busch Companies, Inc. 1,222 53,768
Brown-Forman Corporation 168 9,282
The Seagram Company Ltd. 906 29,275
95,384
MOBILE HOMES - 0.0%
Fleetwood Enterprises, Inc. 35 1,485
NEWSPAPERS - 0.5%
Dow Jones & Company, Inc. 234 12,563
Gannett Company, Inc. 684 42,280
Knight-Ridder, Inc. 231 12,012
New York Times Company 234 15,473
Times Mirror Company 251 15,437
Tribune Company 305 18,986
116,751
NON-FERROUS METALS - 0.1%
Asarco, Inc. 104 2,334
Engelhard Corporation 350 $ 6,081
Inco, Limited 435 7,395
15,810
OIL - 5.3%
Amerada Hess Corporation 226 12,402
Amoco Corporation 1,205 102,575
Ashland, Inc. 164 8,805
Atlantic Richfield Company 781 62,578
Chevron Corporation 1,586 122,122
EEX Corporation (a) 251 2,275
Exxon Corporation 6,031 369,022
Kerr-McGee Corporation 121 7,661
Mobil Corporation 1,914 138,167
Pennzoil Company 113 7,550
Phillips Petroleum Company 638 31,023
Royal Dutch Petroleum Company 5,207 282,154
Sun Company, Inc. 181 7,613
Texaco, Inc. 1,316 71,557
Unocal Corporation 602 23,365
USX-Marathon Group 698 23,557
1,272,426
OFFICE FURNISHINGS & SUPPLIES - 0.1%
Avery Dennison Corporation 256 11,456
Ikon Office Solutions, Inc. 315 8,859
Moore Corporation Ltd. 231 3,494
23,809
PAPER & FOREST PRODUCTS - 0.8%
Boise Cascade Corporation 118 3,570
Champion International Corporation 233 10,558
Fort James Corporation 208 7,956
Georgia-Pacific Corporation 223 13,547
International Paper Company 722 31,136
Kimberly-Clark Corporation 1,355 66,818
Louisiana-Pacific Corporation 264 5,016
Mead Corporation 258 7,224
Potlatch Corporation 71 3,053
Stone Container Corporation 242 2,526
Union Camp Corporation 170 9,127
Westvaco Corporation 246 7,734
Weyerhaeuser Company 487 23,893
Willamette Industries, Inc. 268 8,626
200,784
PETROLEUM SERVICES - 0.8%
Baker Hughes, Inc. 368 16,054
Dresser Industries, Inc. 434 18,201
Halliburton Company 578 30,020
Helmerich & Payne, Inc. 60 4,072
McDermott International, Inc. 133 4,871
Rowan Companies, Inc. (a) 206 6,283
Schlumberger Ltd. 1,186 95,473
13
#
13
See notes to financial statements
14
Transamerica Premier Index Fund
Schedule of Investments - December 31, 1997
(Continued)
14
Market
Shares Value
Market
Shares Value
14
Western Atlas, Inc. 130 $ 9,620
184,594
PHOTOGRAPHY - 0.2%
Eastman Kodak Company 818 49,745
Polaroid Corporation 109 5,307
55,052
POLLUTION CONTROL - 0.2%
Browning-Ferris Industries, Inc. 517 19,129
Waste Management, Incorporated 1,148 31,570
50,699
PUBLISHING - 0.4%
Dun & Bradstreet Corporation 414 12,808
John H. Harland Company 74 1,554
Jostens, Inc. 93 2,145
McGraw-Hill Companies Inc. 244 18,056
Meredith Corporation 133 4,746
Time Warner, Inc. 1,111 68,882
108,191
RAILROADS & EQUIPMENT - 0.5%
Burlington Northern Santa Fe 356 33,086
CSX Corporation 519 28,026
Norfolk Southern Corporation 933 28,748
Union Pacific Corporation 541 33,779
123,639
RETAIL - 3.2%
AutoZone, Inc. (a) 351 10,179
Charming Shoppes, Inc. (a) 254 1,191
Circuit City Stores-Circuit City Group 237 8,428
Costco Companies, Inc. (a) 490 21,866
CVS Corporation 317 20,308
Dayton Hudson Corporation 525 35,438
Dillardis Inc. 275 9,694
Federated Department Stores, Inc. (a) 497 21,402
Gap, Inc. 1,028 36,412
Home Depot, Inc. 1,749 102,972
J.C. Penney Company, Inc. 566 34,137
Kmart Corporation (a) 1,133 13,100
Limited, Inc. 661 16,856
Longs Drug Stores Corporation 97 3,116
Loweis Companies, Inc. 402 19,170
May Department Stores Company 593 31,244
Mercantile Stores Company, Inc. 90 5,479
Nordstrom, Inc. 195 11,773
Pep Boys-Manny, Moe & Jack 149 3,557
Rite-Aid Corporation 242 14,202
Sears, Roebuck & Co. 949 42,942
SUPERVALU, Inc. 157 6,574
TJX Companies, Inc. 360 12,375
Toys "R" Us, Inc. (a) 678 21,315
Wal-Mart Stores, Inc. 5,562 219,351
Walgreen Company 1,196 37,525
Woolworth Corporation (a) 325 $ 6,622
767,228
RETAIL GROCERY - 0.4%
Albertsonis, Inc. 612 28,993
American Stores Company 712 14,641
Giant Food, Inc. 145 4,885
Great Atlantic & Pacific Tea Company, Inc. 93 2,761
Kroger Company (a) 607 22,421
Winn-Dixie Stores, Inc. 367 16,033
89,734
SAVINGS & LOAN - 0.1%
Golden West Financial Corporation 142 13,890
H.F. Ahmanson & Company 268 17,939
31,829
SOFTWARE - 2.2%
Adobe Systems, Inc. 171 7,054
Autodesk, Inc. 114 4,218
Computer Associates International, Inc. 1,323 69,953
Microsoft Corporation (a) 2,895 374,179
Novell, Inc. (a) 872 6,540
Oracle Corporation (a) 2,379 53,081
Parametric Technology Corporation (a) 327 15,492
Shared Medical Systems Corporation 58 3,828
534,345
STEEL - 0.2%
Allegheny Teldyne Inc. 429 11,100
Armco, Inc. (a) 259 1,279
Bethlehem Steel Corporation (a) 273 2,355
Inland Steel Industries, Inc. 118 2,021
Nucor Corporation 213 10,290
USX-US Steel Group 205 6,406
Worthington Industries, Inc. 226 3,729
37,180
TELECOMMUNICATIONS - 4.8%
AirTouch Communications, Inc. (a) 1,211 50,332
Alltel Corporation 456 18,725
Ameritech Corporation 1,340 107,870
AT & T Corporation 3,909 239,426
Bell Atlantic Corporation 1,909 173,719
BellSouth Corporation 2,412 135,826
Frontier Corporation 363 8,735
GTE Corporation 2,338 122,160
MCI Communications Corporation 1,660 71,069
Sprint Corporation 1,077 63,139
U.S. West Communications Group (a) 1,149 51,849
U.S. West Media Group 1,279 36,931
WorldCom, Inc. (a) 2,089 63,192
1,142,973
TIRES & RUBBER - 0.1%
Cooper Tire & Rubber Company 198 4,826
14
See notes to financial statements
15
Transamerica Premier Index Fund
Schedule of Investments - December 31, 1997
(Continued)
15
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
Shares or
Principal Market
Amount Value
15
<S> <C> <C>
Goodyear Tire & Rubber Company 374 $ 23,796
28,622
TOBACCO - 1.3%
Fortune Brands, Inc. 431 15,974
Philip Morris Companies, Inc. 6,007 272,192
UST, Inc. 460 16,991
305,157
TOYS & AMUSEMENTS - 0.1%
Hasbro, Inc. 317 9,986
Mattel, Inc. 686 25,553
35,539
TRUCKING & FREIGHT FORWARDING - 0.1%
Caliber System, Inc. 94 4,577
Federal Express Corporation (a) 276 16,853
Navistar International Corporation (a) 178 4,417
Ryder System, Inc. 190 6,223
32,070
TOTAL COMMON STOCKS
(cost $15,193,838) 19,349,456
PREFERRED STOCK - 0.0%
INSURANCE - 0.0%
Aetna Life & Casualty Company 16 1,144
MEDICAL PRODUCTS - 0.0%
Fresenius National Medical Care Inc. (a) 140 8
TOTAL PREFERRED STOCKS
(cost $1,063) 1,152
U.S. GOVERNMENT SECURITIES - 0.9%
United States Treasury Bills*
5.075% 03/19/98 170,000 168,155
5.100% 03/19/98 50,000 49,457
TOTAL U.S. GOVERNMENT SECURITIES
(cost $217,609) 217,612
COMMERCIAL PAPER - 15.5%
Associates Corporation of North America
5.730% 03/20/98 750,000 740,820
General Electric Capital Corporation
5.700% 03/20/98 1,500,000 1,481,640
Merrill Lynch & Company, Inc.
5.700% 03/20/98 1,500,000 1,481,640
TOTAL COMMERCIAL PAPER
(cost $3,703,639) 3,704,100
REPURCHASE AGREEMENT - 3.3%
State Street Bank & Trust Company,
4.75%, due 01/02/98 (collateralized
by $790,000 par value U.S. Treasury Notes,
5.875%, due 10/31/98, with a value of
$798,932, cost $780,000) $780,000 $
780,000
TOTAL INVESTMENTS - 100.3%
(cost $19,896,149)** 24,052,320
LIABILITIES IN EXCESS OF
OTHER ASSETS - (0.3)% (60,198)
NET ASSETS - 100.0% $23,992,122
(a) non-income producing security
</TABLE>
* $217,612 market value of securities has been pledged as collateral for
initial margin for futures contracts.
** Aggregate cost for Federal tax purposes. Aggregate gross unrealized
appreciation for all securities in which there is an excess of value
over tax cost and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over value were
$4,413,805 and $257,634, respectively. Net unrealized appreciation for
tax purposes is $4,156,171.
SCHEDULE OF FUTURES CONTRACTS
Number Contract Total Unrealized
of Contracts Description Contract Value Loss
19 S&P 500 $4,650,725 $(27,788)
March 1998 (Long)
See notes to financial statements 1
15
#
15
See notes to financial statements
16
Transamerica Premier Bond Fund
Portfolio Manager, Sharon K. Kilmer
16
Fund Performance
The Transamerica Premier Bond Fund earned a total return of 9.99% for the year
ended December 31, 1997. In comparison, the Lehman Brothers Government/Corporate
Index returned 9.76% for the same period. Since its inception in October, 1995,
the Fund has realized an annualized return of 7.07%, while the Index returned
7.71%.
Portfolio Manager Comments
Economic growth remained strong during the course of 1997, and inflation levels
continued to decline. The Federal Reserve increased short-term interest rates in
the first quarter due to concern that stronger-than-expected economic growth
would lead to higher prices for goods and services. The bond market reflected
those fears by selling off, which increased long-term interest rates from 6.64%
at the beginning of the year, to a high of 7.17% in April.
By early summer, it was apparent that inflation would not re-ignite,
and that the economy was growing at a manageable rate. Market and Federal
Reserve attention turned to Southeast Asia, as unsustainable growth and leverage
took their toll on the Thai, Indonesian, Malaysian and Korean economies. The
U.S. dollar and domestic interest rates rallied for the remainder of the year,
due to this countryis solid growth prospects relative to the rest of the world.
While 1997 was a good year for bond funds in general, the Premier Bond
Fundis outperformance was due to itis maturity and security selection. A number
of the Fundis larger positions had positive developments during the year. For
example, the approval of the state takeover of Long Island Lighting caused these
bonds to rally. And the culmination of the merger between Ohio Edison and
Cleveland Electric had a positive impact on the prices of the Cleveland Electric
securities in our portfolio. Overall, the Fundis superior total return can be
attributed to itis credit barbell strategy, which consisted of AAA-rated
government bond positions combined with weaker rated corporate securities with
credit upgrade potential.
Portfolio Asset Mix
As of December 31, 1997, the Fund consisted of:
Corporate Bonds 77.1%
U.S. Treasury Securities 19.8%
Cash or
Cash Equivalents 1.9%
Other Assets 1.2%
Total 100.0%
Going Forward
Although the severity and duration of the Asian economic crisis remains to be
seen, U.S. economic growth should slow and profit margins for domestic companies
should decline. We expect domestic growth to drop to the 2.0% to 2.5% range,
down from the 4.0% level in 1997. Long-term interest rates, which ended the year
at 5.92%, will probably stay in a 5.25% to 6.25% range, with a bias to the lower
end of that range early in 1998. The Fund will continue to be invested in the
securities of high quality companies with improving credit fundamentals that
should perform well despite a slowdown in economic growth.
Thank you for your continued investment in the Transamerica Premier
Bond Fund.
16
Comparison Of Change In Value Of A $10,000 Investment In Transamerica Premier
Bond Fund With The Lehman Brothers
Government/Corporate Bond Index**
16
Total Returns Annualized One Year
as of December 31, 1997 Since Inception* Total Return
Premier Bond Fund 7.07% 9.99%
Lehman Brothers Government/
Corporate Bond Index 7.71% 9.76%
16
Premier Bond Fund ($11,662 at 12/31/97)
Lehman Brothers Government/
Corporate Bond Index ($11,821 at 12/31/97)
16
The Lehman Brothers Government/Corporate Bond Index is a broad-based unmanaged
index of all government and corporate bonds that are investment grade with at
least one year to maturity. The Index does not reflect any commissions or fees
which would be incurred by an investor purchasing the securities it represents.
* October 2, 1995.
** Hypothetical illustration of $10,000 invested at inception (October 2, 1995),
assuming reinvestment of dividends and capital gains at net asset value through
December 31, 1997. Note: All performance information represents past performance
and is not indicative of future results. If the Investment Adviser had not
waived fees and the Administrator had not reimbursed expenses, the aggregate
total returns of the Funds would have been lower.
17
Transamerica Premier Bond Fund
Schedule of Investments - December 31, 1997
<TABLE>
<CAPTION>
17
Principal Market
Amount Value
Principal Market
Amount Value
17
CORPORATE BONDS - 77.1%
AEROSPACE & DEFENSE - 7.2%
Boeing Company
<S> <C> <C> <C> <C> <C> <C>
8.625% 11/15/31 $400,000 $503,428
Northrop Grumman Corporation
7.000% 03/01/06 500,000 515,775
1,019,203
AIR TRAVEL - 2.8%
AMR Corporation
9.750% 08/15/21 300,000 393,906
AUTOMOBILES - 3.0%
General Motors Corporation
9.625% 12/01/00 400,000 435,344
BROADCASTING - 1.9% CF Cable TV Inc.
11.625% 02/15/05 240,000 272,182
ELECTRIC UTILITIES - 24.0%
Cleveland Electric Illuminating Company
9.500% 05/15/05 500,000 554,510
Commonwealth Edison Company
7.000% 07/01/05 300,000 309,786
Connecticut Light & Power Company
7.875% 06/01/01 500,000 506,825
Hydro-Quebec
7.375% 02/01/03 400,000 418,420
Long Island Lighting Company
8.200% 03/15/23 500,000 534,760
Pennsylvania Power & Light Co.
8.500% 05/01/22 500,000 558,450
Philadelphia Electric Company
8.750% 04/01/22 500,000 531,075
3,413,826
FINANCIAL SERVICES - 7.7% Morgan Stanley, Dean Witter, Discover and Co.
8.875% 10/15/01 500,000 542,035
Westinghouse Credit Corporation
8.875% 06/14/14 500,000 555,410
1,097,445
GAS EXPLORATION AND DISTRIBUTION - 9.8% Burlington Resources Inc.
9.125% 10/01/21 300,000 376,266
Gulf Canada Resources Ltd.
8.250% 03/15/17 500,000 556,255
NorAm Energy Corp.
8.900% 12/15/06 400,000 460,096
1,392,617
LIQUOR - 2.9% Anheuser-Busch Companies, Inc.
7.250% 09/15/15 400,000 415,116
MULTI MEDIA - 2.2%
News America Holdings, In
7.750% 12/01/45 $300,000 $ 310,632
RETAIL GROCERY - 4.0%
Ralphs Grocery Company
11.000% 06/15/05 500,000 568,750
TELECOMMUNICATIONS - 7.3%
Bellsouth Capital Funding Corporation
7.120% 07/15/27 100,000 105,066
British Telecommunications Plc
9.625% 02/15/19 300,000 323,652
U.S. West Capital Funding Inc.
6.950% 01/15/37 400,000 412,028
6.750% 10/01/05 200,000 200,646
1,041,392
TRANSPORTATION - 4.3%
Norfolk Southern Corporation
9.000% 03/01/21 500,000 616,670
TOTAL CORPORATE BONDS
(cost $10,597,856) 10,977,083
U.S. GOVERNMENT SECURITIES - 19.8%
U.S. Treasury Bonds
7.500% 11/15/16 1,000,000 1,167,190
6.500% 11/15/26 440,000 469,700
6.125% 11/15/27 250,000 256,915
U.S. Treasury Notes
6.250% 06/30/02 900,000 917,856
TOTAL U.S. GOVERNMENT SECURITIES
(cost $2,695,963) 2,811,661
REPURCHASE AGREEMENT - 1.9%
State Street Bank and Trust Company,
4.75%, due 01/02/98, (collateralized by
$280,000 par value U.S. Treasury Notes,
5.875%, due 10/31/98, with a value of
$283,166, cost $274,000) 274,000 274,000
TOTAL INVESTMENTS - 98.8%
(cost $13,567,819)* 14,062,744
OTHER ASSETS LESS LIABILITIES - 1.2% 173,409
NET ASSETS - 100.0% $14,236,153
</TABLE>
* Aggregate cost for Federal tax purposes. Aggregate gross unrealized
appreciation for all securities in which there is an excess of value over tax
cost and aggregate
gross unrealized depreciation for all securities in which there is an
excess of tax cost over value
were $529,571 and $34,646, respectively. Net unrealized
appreciation for tax purposes is $494,925.
17
#
17
See notes to financial statements
18
Transamerica Premier Balanced Fund
Portfolio Managers, Sharon K. Kilmer and Jeffrey S. Van Harte
18
Fund Performance
1997 was an excellent year for the Transamerica Premier Balanced Fund. The Fund
generated a total return of 35.38%, in comparison to the benchmark index (50% S
& P 500 Index/50% Lehman Brothers Government/Corporate Bond Index) return of
21.29% for the year ended December 31, 1997. For the same period, the Fund was
ranked first among the 350 balanced funds tracked by Lipper Analytical Services,
Inc. Since the Fundis inception in October 1995, it has achieved an annualized
return of 23.09% relative to the benchmark index return of 17.58%.
Our portfolio holdings in the technology and financial services
industries did especially well in 1997. The Fundis outstanding performance
ranking was attributable to high quality investments in industry-leading
companies, as well as its emphasis on common stocks.
Portfolio Manageris Comments
The performance of the Premier Balanced Fund continues to be driven by its stock
holdings, which represent nearly two-thirds of the Fundis asset mix. The total
return for the S&P 500 was 33.36% for 1997, which also marked the third year in
a row that common stocks achieved returns in excess of 20%. Stocks continue to
benefit from low rates of interest and inflation as well as respectable
corporate earnings growth.
Bond returns improved in the second half of the year, as investors
perceived that declining Asian economies would slow both the American and global
economies. For the year, the Lehman Brothers Government/Corporate Bond Index
posted a total return of 9.76%.
Portfolio Asset Mix
As of December 31, 1997, the Fund consisted of:
Common Stocks 65.4%
Bonds & U.S. Government 30.2%
Cash and
Cash Equivalents 3.9%
Other 0.5%
Total 100.0%
Going Forward
Although the U.S. economy and stock market have performed extraordinarily well
over the past three years, such strong economic growth and similar stock market
returns cannot be expected to continue forever. Worldwide economic growth should
be slowed by the economic crisis in Asia, and downward pressure on prices should
intensify due to excess supplies of consumer, industrial, and commodity goods.
Slower unit volume growth and declining prices will negatively impact the
profitability of many companies and industries, especially those in which price
is the most important factor in determining demand.
Accordingly, our equity strategy will continue to focus on companies
that sell products that provide value-added solutions and whose brand stands for
more than just price. While industry-leading companies in the technology and
financial services industries are not completely immune to declining prices,
their products offer value-added solutions for customers, and thus are still
excellent candidates for investment. Additional equity investments will focus on
"under-followed" and "out-of-favor" companies where fundamental change is
emerging and valuations are attractive.
The bond market should do well in 1998 given slower economic growth and
non-existent inflation. Since we are bullish on bonds, we moved the Fundis
portfolio towards a heavier weighting in bonds in the fourth quarter of 1997.
Our bond selection strategy will focus on an opposing spectrum of high-quality
credits as well as candidates for credit upgrades.
Thank you for your continued investment in the Transamerica Premier
Balanced Fund.
18
Comparison Of Change In Value Of A $10,000 Investment In Transamerica Premier
Balanced Fund With 50% Lehman Brothers Government/Corporate Bond Index And 50%
S&P 500 Index**
18
Total Returns Annualized One Year
as of December 31, 1997 Since Inception* Total Return
Premier Balanced Fund 23.09% 35.38%
50% Lehman Brothers Government/
Corporate Bond Index
50% S&P 500 Index 17.58% 21.29%
18
Premier Balanced Fund ($15,965 at 12/31/97) 50% Lehman Brothers
Government/Corporate Bond Index 50% S&P 500 Index ($14,392 at 12/31/97)
18
The Standard & Pooris 500 Composite Stock Price Index ("S&P 500") consists of
500 widely held, publicly traded common stocks. The Lehman Brothers
Government/Corporate Bond Index is a broad-based unmanaged index of all
government and corporate bonds that are investment grade with at least one year
to maturity. These indexes do not reflect any commissions or fees which would be
incurred by an investor purchasing the securities represented by each index.
* October 2, 1995.
** Hypothetical illustration of $10,000 invested at inception (October 2, 1995),
assuming reinvestment of dividends and capital gains at net asset value through
December 31, 1997. Note: All performance information represents past performance
and is not indicative of future results. If the Investment Adviser had not
waived fees and the Administrator had not reimbursed expenses, the aggregate
total returns of the Funds would have been lower.
19
Transamerica Premier Balanced Fund
Schedule of Investments - December 31, 1997
<TABLE>
<CAPTION>
19
Shares or
Principal Market
Amount Value
Principal Market
Amount Value
19
COMMON STOCKS - 65.4%
BUSINESS SERVICES - 2.7%
<S> <C> <C>
First Data Corporation 25,000 $731,250
CHEMICALS - 5.3%
BetzDearborn, Inc. 10,000 610,625
W.R. Grace & Company 10,000 804,375
1,415,000
COMPUTERS & BUSINESS EQUIPMENT - 9.1%
Cisco Systems, Inc. (a) 10,500 585,375
Dell Computer Corporation (a) 22,000 1,848,000
2,433,375
CONGLOMERATES - 1.9%
Gillette Company 5,000 502,188
CONTAINERS & PACKAGING - 1.6%
Sealed Air Corporation (a) 7,000 432,250
ELECTRICAL EQUIPMENT - 1.3%
Millipore Corporation 10,000 339,375
ELECTRONICS - 6.3%
Applied Materials, Inc. (a) 26,000 783,250
Intel Corporation 13,000 913,250
1,696,500
FINANCIAL SERVICES - 10.8%
Charles Schwab Corporation 22,500 943,594
Franklin Resources, Inc. 15,000 1,304,062
MoneyGram Payment Systems, Inc. (a) 60,000 645,000
2,892,656
HOTELS & RESTAURANTS - 3.2%
Host Marriott Corp. (a) 20,000 392,500
Mirage Resorts, Incorporated (a) 20,000 455,000
847,500
LEISURE TIME - 3.8%
Pixar, Inc. (a) 15,000 324,375
The Walt Disney Company 7,000 693,438
1,017,813
REAL ESTATE OPERATIONS - 4.2%
CCA Prison Realty Trust 25,000 1,115,625
RETAIL - 7.1%
Fred Meyer, Inc. (a) 52,500
1,909,687
RETAIL GROCERY - 2.3%
Safeway Inc. (a) 10,000 632,500
SOFTWARE - 5.8%
Microsoft Corporation (a) 8,000 1,034,000
Transaction Systems Architects, Inc. (a) 14,000 532,000
1,566,000
TOTAL COMMON STOCKS
(cost $9,828,162) 17,531,719
CORPORATE BONDS - 18.8%
ADVERTISING - 2.1% Valassis Communications, Inc.
9.550% 12/01/03 500,000 561,800
BROADCASTING - 2.6% Time Warner Inc.
9.125% 01/15/13 500,000 595,385
Viacom, Inc.
7.750% 06/01/05 100,000 101,709
697,094
ELECTRIC UTILITIES - 5.2%
Cleveland Electric Illuminating Company
7.880% 11/01/17 500,000 527,350
Commonwealth Edison Company
7.000% 07/01/05 $300,000 $ 309,786
Pennsylvania Power & Light Co.
8.500% 05/01/22 500,000 558,450
1,395,586
FINANCE & BANKING - 3.5%
General Motors Acceptance Corporation
7.375% 05/28/99 300,000 305,346
Mellon Bank Corporation
7.000% 03/15/06 300,000 309,495
U.S. West Capital Funding Inc.
6.950% 01/15/37 300,000 309,022
923,863
GAS & PIPELINE UTILITIES - 1.1% The Williams Companies, Inc.
7.500% 09/15/99 300,000 306,096
GAS EXPLORATION AND DISTRIBUTION - 0.9% NorAm Energy Corp.
8.900% 12/15/06 200,000 230,048
RETAIL - 1.1%
Dayton Hudson Corporation
6.400% 02/15/03 300,000 300,126
TRANSPORTATION - 2.3%
Norfolk Southern Corporation
9.000% 03/01/21 500,000 616,670
TOTAL CORPORATE BONDS
(cost $4,904,194) 5,031,283
U.S. GOVERNMENT SECURITIES - 11.4%
U.S. Treasury Bonds
6.375% 08/15/27 1,200,000 1,265,628
U.S. Treasury Notes
6.375% 08/15/02 400,000 410,312
5.875% 11/15/05 1,370,000 1,377,274
TOTAL U.S. GOVERNMENT SECURITIES
(cost $3,041,483) 3,053,214
REPURCHASE AGREEMENT - 3.9%
State Street Bank and Trust Company,
4.75% due 01/02/98 (collateralized
by $1,070,000 par value U.S. Treasury Notes,
5.875%, due 10/31/98, with a value of
$1,082,097, cost $1,058,000) 1,058,000
1,058,000
TOTAL INVESTMENTS - 99.5%
(cost $18,831,839)* 26,674,216
OTHER ASSETS LESS LIABILITIES - 0.5% 124,755
NET ASSETS - 100.0% $ 26,798,971
</TABLE>
(a) non-income producing security
* Aggregate cost for Federal tax purposes. Aggregate gross unrealized
appreciation for all securities in which there is an excess of value over tax
cost and aggregate gross unrealized depreciation for all securities in which
there is an excess of tax cost over value were $8,110,650 and $268,273,
respectively. Net unrealized appreciation for tax purposes is $7,842,377.
See notes to financial statements
. 1
19
#
19
See notes to financial statements
20
Transamerica Premier Cash Reserve Fund
Portfolio Manager, Kevin H. Hickam
20
Fund Performance
The Transamerica Premier Cash Reserve Fund delivered excellent results in 1997,
posting a 5.48% annualized yield (12-month return) as of December 31, 1997. In
comparison, the total return for the average IBC/Donoghue First Tier money
market fund was 5.03%. The Fund ranked sixth among 304 money funds, as tracked
by Lipper Analytical Services, Inc. As of December 31, 1997, the seven-day
current and effective yields were 5.49% and 5.64%, respectively. The Fundis
annualized return since inception in October 1995 is 5.44%.
Portfolio Manager Comments
1997 was a great year for the United Statesi economy. Strong economic growth
created 3.2 million new jobs, while unemployment stayed under 5%, leading to a
4% increase in average hourly earnings. As high labor productivity and falling
commodity prices worked together to offset the increase in earnings, the
Consumer Price Index (CPI) rose just 1.7%. Thus, the Federal Reserve enjoyed the
enviable position of presiding over an economy that was creating jobs but not
inflation.
Portfolio Asset Mix
As of December 31, 1997, the Fund consisted of:
Commercial Paper 77.1%
(Domestic) 62.9
Commercial Paper
(Canadian) 16.7
Short Term
Corporate Notes 17.9
Cash and
Cash Equivalents 1.0
Other 1.5
Total 100.0%
Going Forward
For the first three quarters of 1997, the outlook for 1998 appeared to call for
the continuation of solid economic growth. However, turmoil in Asian financial
markets during the fourth quarter of 1997 makes projections for 1998 very hard,
indeed. The dilemma is due in large part to the difficulty of estimating the
severity of the impact of the Asian crisis.
Slower economic growth in the Asian region will almost certainly lead
to slower economic growth and lower prices in the U.S., as depreciating
currencies allow Asian producers to displace domestic production by
substantially cutting export prices. Inflation statistics will benefit as slower
growth and declining import costs keep price increases in check. This outlook
for slower growth will translate into stable to lower Federal Fund rates as the
Federal Reserve attempts to manage the ultimate effect of the Asian crisis.
Thank you for your continued investment in the Transamerica Premier
Cash Reserve Fund.
20
Comparison Of Change In Value Of $10,000 Investment In Transamerica Premier
Cash Reserve Fund With The IBCis Money
Fund Reporttm**
20
Total Returns Annualized One Year
as of December 31, 1997 Since Inception* Total Return
Premier Cash Reserve Fund 5.44% 5.48%
The IBCis Money Fund ReportTM 4.98% 5.03%
20
Premier Cash Reserve Fund ($11,266 at 12/31/97)
The IBCis Money Fund Reporttm ($11,156 at 12/31/97)
20
The IBCis Money Fund ReportTM -All Taxable, First Tier is a composite of taxable
money market funds that meet the SECis definition of first tier securities
contained in Rule 2a-7 under the Investment Company Act of 1940. It does not
reflect any commissions or fees which would be incurred by an investor
purchasing the securities it represents. The Fund is neither insured nor
guaranteed by the U.S. government, and there can be no assurance that the Fund
will be able to maintain a stable net asset value of $1.00 per share.
The Investment Adviser agreed to waive their Adviser Fee and the
Administrator agreed to assume any other operating expenses for the Fund.
Otherwise, the current and effective yields would have been 2.55% and 2.68%,
respectively.
* October 2, 1995.
** Hypothetical illustration of $10,000 invested at inception (October 2, 1995),
assuming reinvestment of dividends and capital gains at net asset value through
December 31, 1997. Note: All performance information represents past performance
and is not indicative of future results. If the Investment Adviser had not
waived fees and the Administrator had not reimbursed expenses, the aggregate
total returns of the Funds would have been lower.
21
Transamerica Premier Cash Reserve Fund
Schedule of Investments - December 31, 1997
21
Principal Amortized
Amount Cost
Principal Amortized
Amount Cost
21
COMMERCIAL PAPER - DOMESTIC - 62.9%
BANKING - 1.6%
J.P. Morgan & Company, Incorporated
5.700% 03/16/98 $800,000 $790,627
BROKERAGE - 4.8% Merrill Lynch & Company, Inc.
5.540% 01/06/98 800,000 799,385
5.570% 01/12/98 1,450,000 1,447,532
5.620% 01/12/98 100,000 99,828
5.820% 01/16/98 130,000 129,685
2,476,430
COMMERCIAL FINANCIAL SERVICES - 9.6%
Associates Corporation of North America
5.490% 02/02/98 160,000 159,219
5.510% 02/10/98 2,150,000 2,136,837
5.620% 02/10/98 170,000 168,938
General Electric Capital Corporation
5.720% 01/21/98 100,000 99,682
5.550% 02/23/98 2,185,000 2,167,147
5.610% 03/23/98 195,000 192,539
4,924,362
COMPUTERS & BUSINESS EQUIPMENT - 0.2%
IBM Corporation
5.680% 03/09/98 120,000 118,732
CONGLOMERATES - 2.9%
Minnesota Mining & Manufacturing Company
5.900% 01/09/98 1,500,000 1,498,033
CONSUMER FINANCIAL SERVICES - 14.4%
Ford Motor Credit Company
5.510% 01/09/98 120,000 119,853
5.510% 01/20/98 2,150,000 2,143,748
5.650% 01/20/98 200,000 199,403
Toyota Motor Credit Company
5.920% 01/30/98 1,200,000 1,194,277
5.640% 02/27/98 1,300,000 1,288,391
USAA Capital Corporation
5.680% 01/26/98 850,000 846,647
5.570% 02/27/98 1,600,000 1,585,890
7,378,209
FINANCIAL SERVICES - 4.7%
Caterpillar Financial Services
5.650% 02/23/98 1,200,000 1,190,019
5.720% 02/23/98 1,225,000 1,214,684
2,404,703
FOOD & BEVERAGES - 6.8%
Coca-Cola Company
5.630% 03/20/98 1,800,000 1,778,043
McDonaldis Corporation
5.730% 01/20/98 1,700,000 1,694,859
3,472,902
FOOD PROCESSING - 4.7%
Cargill, Incorporated
5.630% 04/03/98 2,450,000 2,414,750
LEISURE TIME - 4.7%
The Walt Disney Company
5.580% 01/29/98 2,000,000 1,991,320
5.700% 02/05/98 400,000 397,783
2,389,103
TELECOMMUNICATIONS - 8.5%
Ameritech Capital Funding Corp.
5.550% 01/23/98 $2,400,000 $ 2,391,860
AT&T Corporation
5.680% 02/25/98 2,000,000 1,982,644
4,374,504
TOTAL COMMERCIAL PAPER - DOMESTIC
(amortized cost $32,242,355) 32,242,355
COMMERCIAL PAPER - FOREIGN - 16.7%
BANKING - 8.1%
Canadian Imperial Holdings, Inc.
5.690% 03/02/98 2,450,000 2,426,766
Toronto Dominion Holdings
5.500% 01/02/98 150,000 149,977
5.470% 01/20/98 1,600,000 1,595,381
4,172,124
FOOD PROCESSING - 2.8%
Canadian Wheat Board
5.600% 01/16/98 1,425,000 1,421,675
GOVERNMENT - 1.9%
Province of British Columbia
5.560% 04/15/98 1,000,000 983,937
UTILITIES - 3.9%
Ontario Hydro
5.670% 03/16/98 2,000,000 1,976,690
TOTAL COMMERCIAL PAPER - FOREIGN
(amortized cost $8,554,426) 8,554,426
COLLATERALIZED LOAN OBLIGATIONS - 4.3%
FINANCE - 4.3%
Triangle Funding Limited
(amortized cost $2,200,000)
5.750% 11/15/98 2,200,000 2,200,000
SHORT-TERM CORPORATE NOTES - 13.6%
COMMERCIAL FINANCIAL SERVICES - 4.2%
Asset Securitization Cooperative Corporation
5.680% 02/26/98 2,150,000 2,131,004
FINANCE & BANKING - 4.8%
John Deere Capital Corporation
5.730% 01/22/98 110,000 109,632
5.550% 01/28/98 1,425,000 1,419,068
5.520% 02/10/98 775,000 770,247
5.480% 03/05/98 175,000 173,322
2,472,269
TECHNOLOGY - 4.6%
IBM Credit Corporation
5.530% 01/14/98 430,000 429,141
5.560% 02/19/98 950,000 942,811
5.480% 04/01/98 1,000,000 986,300
2,358,252
TOTAL SHORT-TERM CORPORATE NOTES
(amortized cost $6,961,525) 6,961,525
U.S. GOVERNMENT AGENCY SECURITY - 1.0%
Federal National Mortgage Association Discount Notes
(amortized cost $493,192)
5.570% 03/30/98 500,000 493,192
TOTAL INVESTMENTS - 98.5%
(amortized cost $50,451,498) 50,451,498
OTHER ASSETS LESS LIABILITIES - 1.5% 794,670
NET ASSETS - 100.0% $ 51,246,168
See notes to financial statements 1
21
#
21
See notes to financial statements
22
Statements of Assets and Liabilities
December 31, 1997
22
<TABLE>
<CAPTION>
Transamerica Transamerica Transamerica Transamerica
Premier Premier Premier Premier
Aggressive Growth Fund Small Company Fund Equity Fund Index Fund
ASSETS
<S> <C> <C> <C> <C>
Investments, at cost$ 11,483,598 $ 10,667,696 $ 86,814,995 $ 19,896,149
Investments, at value $ 12,766,061 $ 11,019,087 $ 110,880,094 $ 24,052,320
Cash 30,372 5 360 391
Receivables:
Dividends and interest 8,054 6,441 57,426 28,295
Securities sold - 72,348 - 1,239
Fund shares sold 11,309 56,565 1,085,526 4,096
Due from Administrator 4,809 3,916 - 21,711
Prepaid expenses and other assets 7,505 7,504 3,453 1,786
12,828,110 11,165,866 112,026,859 24,109,838
LIABILITIES
Payables:
Dividends payable - - 31,941 332
Securities purchased - - 15,106 44,472
Fund shares redeemed 9,186 7,175 233,959 6,804
Advisory fees payable 9,046 8,091 78,460 6,034
Directors fees payable 610 529 642 1,219
Distribution fees payable 2,660 2,380 23,077 2,011
Variation margin payable - - - 950
Other accrued expenses 26,255 25,570 76,620 55,894
47,757 43,745 459,805 117,716
TOTAL NET ASSETS $12,780,353 $11,122,121 $111,567,054 $23,992,122
NET ASSETS CONSIST OF:
Paid in capital $11,520,418 $10,127,644 $87,239,867 $18,901,120
Undistributed net investment income - - - 1,398
Accumulated net realized gain (loss) on
investments and futures transactions(22,528) 643,086 262,088 961,221
Net unrealized appreciation
of investments and futures contracts1,282,463 351,391 24,065,099 4,128,383
TOTAL NET ASSETS $12,780,353 $11,122,121 $111,567,054 $23,992,122
Shares outstanding 1,049,240 890,372 6,020,961 1,548,731
NET ASSET VALUE PER SHARE$ 12.18 $ 12.49 $ 18.53 $ 15.49
</TABLE>
22
See notes to financial statements
23
Statements of Assets and Liabilities
December 31, 1997 (Continued)
23
<TABLE>
<CAPTION>
Transamerica Transamerica Transamerica Transamerica
Premier Premier Premier Premier
Bond Fund Balanced Fund Cash Reserve Fund Index Fund
ASSETS
<S> <C> <C> <C>
Investments, at cost $ 13,567,819 $ 18,831,839 $ 50,451,498
Investments, at value $ 14,062,744 $ 26,674,216 $ 50,451,498
Cash 808 730 -
Receivables:
Dividends and interest 209,081 164,319 20,029
Securities sold - - -
Fund shares sold 534 20,622 1,113,295
Due from Administrator 1,139 1,356 24,980
Prepaid expenses and other assets 1,774 2,371 4,216
14,276,080 26,863,614 51,614,018
LIABILITIES
Payables:
Dividends payable 680 629 -
Due to Custodian - - 172,342
Fund shares redeemed - 1,891 112,350
Advisory fees payable 7,164 16,737 14,872
Directors fees payable 722 1,387 2,803
Distribution fees payable 2,985 5,579 -
Other accrued expenses 28,376 38,420 65,483
39,927 64,643 367,850
TOTAL NET ASSETS $14,236,153 $26,798,971 $51,246,168
NET ASSETS CONSIST OF:
Paid in capital $13,959,903 $19,096,776 $51,246,168
Undistributed net investment income 770 774 -
Accumulated net realized loss on
investments and futures transactions(219,445) (140,956) -
Net unrealized appreciation
of investments and futures contracts494,925 7,842,377 -
TOTAL NET ASSETS $ 14,236,153 $26,798,971 $51,246,168
Shares outstanding 1,396,814 1,724,861 51,246,168
NET ASSET VALUE PER SHARE $ 10.19 $ 15.54 $ 1.00
</TABLE>
23
#
23
See notes to financial statements
24
Statements of Operations
Year ended December 31, 1997
24
<TABLE>
<CAPTION>
Transamerica Transamerica Transamerica Transamerica
Premier Premier Premier Premier
Aggressive Growth Fund** Small Company Fund** Equity Fund Index Fund
INVESTMENT INCOME
<S> <C> <C> <C> <C>
Interest income $ 20,399 $ 30,687 $ 217,530 $ 207,624
Dividend income* 20,615 13,425 279,260 236,521
TOTAL INCOME 41,014 44,112 496,790 444,145
EXPENSES
Investment adviser fee 42,912 38,671 540,485 52,012
Transfer agent fees 14,526 9,856 120,755 79,109
Distribution fees:
Investor class 12,621 11,374 158,557 17,309
Adviser class - - 1,636 292
Custodian fees 11,241 11,941 80,040 106,377
Registration fees 12,696 14,382 40,131 13,210
Audit fees 6,431 6,431 13,043 6,828
Legal fees 2,057 2,057 5,037 5,000
Printing 759 419 2,228 1,270
Directorsi fees and expenses 1,219 1,058 13,471 4,561
Other expenses 495 486 3,072 1,862
Total operating expenses
before waiver and reimbursement 104,957 96,675 978,455 287,830
Fees waived and expenses reimbursed (34,278) (32,982) (28,198) (244,224)
70,679 63,693 950,257 43,606
NET INVESTMENT INCOME (LOSS) (29,665) (19,581) (453,467) 400,539
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on
investments and futures
transactions (5,049) 651,499 1,028,129 1,010,570
Change in net unrealized appreciation
of investments and futures contracts 1,282,463 351,391 18,094,426
2,901,178
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS 1,277,414 1,002,890 19,122,555
3,911,748
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 1,247,749 $ 983,309 $ 18,669,088 $
4,312,287
</TABLE>
*Net of foreign withholding taxes $ 1,313
**Funds commenced operations on
July 1, 1997.
24
See notes to financial statements
25
Statements of Operations
Year ended December 31, 1997
(Continued)
25
Transamerica Transamerica Transamerica Transamerica
Premier Premier Premier Premier
Bond Fund Balanced Fund Cash Reserve Fund Index Fund
INVESTMENT INCOME
Interest income $ 1,000,311 $ 416,787 $ 2,366,069
Dividend income - 67,862 -
TOTAL INCOME 1,000,311 484,649 2,366,069
EXPENSES
Investment adviser fee 79,524 159,452 147,809
Transfer agent fees 56,313 67,899 99,359
Distribution fees:
Investor class 33,061 53,112 37,947
Adviser class 296 153 84
Custodian fees 33,518 41,583 65,693
Registration fees 9,737 11,880 19,424
Audit fees 8,126 9,582 19,258
Legal fees 5,000 5,000 5,000
Printing 159 688 2,086
Directorsi fees and expenses 3,341 5,730 11,323
Other expenses 2,571 2,973 6,464
Total operating expenses
before waiver and reimbursement 231,646 358,052 414,447
Fees waived and expenses reimbursed (59,121) (49,663)(308,778)
172,525 308,389 105,669
NET INVESTMENT INCOME 827,786 176,260 2,260,400
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on
investments and futures
transactions (204,704) 16,730 -
Change in net unrealized appreciation
of investments and future contracts 670,280 5,682,201 -
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS 465,576 5,698,931 -
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $1,293,362 $5,875,191 $2,260,400
25
#
25
See notes to financial statements
26
Statements of Changes in Net Assets
26
Transamerica Premier Aggressive Growth Fund*
Transamerica Premier Small Company Fund*
Period Ended Period Ended
December 31, 1997 December 31, 1997
INCREASE IN NET ASSETS
From operations:
Net investment income (loss) $ (29,665) $ (19,581)
Net realized gain (loss) on
investments and futures
transactions (5,049) 651,499
Net change in unrealized appreciation
of investments 1,282,463 351,391
Net increase in net assets
resulting from operations 1,247,749 983,309
Fund share transactions (Note 5) 11,531,604 10,137,812
Increase in net assets 12,779,353 11,121,121
NET ASSETS
Beginning of period 1,000 1,000
End of period $12,780,353 $ 11,122,121
* Funds commenced operations on
July 1, 1997.
26
See notes to financial statements
27
Statements of Changes in Net Assets
27
<TABLE>
<CAPTION>
Transamerica Premier Equity Fund Transamerica Premier Index Fund
Year Ended December 31, Year Ended December 31,
1997 1996 1997 1996
INCREASE IN NET ASSETS
From operations:
<S> <C> <C> <C>
Net investment income (loss) $ (453,467) $ (152,385) $
400,539 $ 212,430
Net realized gain on
investments and futures
transactions 1,028,129 19,987 1,010,570
597,132
Net change in unrealized appreciation
of investments 18,094,426 6,207,735 2,901,178
950,341
Net increase in net assets
resulting from operations 18,669,088 6,075,337 4,312,287
1,759,903
Dividends and distributions to
shareholders from:
Net investment income:
Investor class - (21,868) (398,741)
(250,208)
Adviser class - (6) (400)
(667)
Net realized gains:
Investor class (762,199) -
(109,162) (532,417)
Adviser class - -
- (4,551)
Fund share transactions (Note 5) 62,593,208 13,886,118 9,280,981
3,000,914
Increase in net assets 80,500,097 19,939,581 13,084,965
3,972,974
NET ASSETS
Beginning of period 31,066,957 11,127,376 10,907,157
6,934,183
End of period (1) $ 111,567,054 $ 31,066,957 $ 23,992,122 $ 10,907,157
(1) Includes undistributed net
investment income (loss) of: $ - $ (152,433) $
1,398 $ (476)
</TABLE>
27
#
27
See notes to financial statements
28
Statements of Changes in Net Assets
28
<TABLE>
<CAPTION>
Transamerica Premier Bond Fund Transamerica Premier Balanced Fund
Year Ended December 31, Year Ended December 31,
1997 1996 1997 1996
INCREASE IN NET ASSETS
From operations:
<S> <C> <C> <C> <C>
Net investment income $ 827,786 $ 679,307 $ 176,260 $ 189,475
Net realized gain (loss) on
investments and futures
transactions (204,704) 20,100 16,730 (131,140)
Net change in unrealized appreciation
(depreciation) of investments 670,280 (541,487) 5,682,201
2,023,894
Net increase in net assets
resulting from operations 1,293,362 157,920 5,875,191
2,082,229
Dividends and distributions to
shareholders from:
Net investment income:
Investor class (825,680) (738,858) (175,465)
(261,146)
Adviser class (1,373) (3,840) (21) (751)
Fund share transactions (Note 5) 1,108,065 1,410,447 4,999,432
2,177,366
Increase in net assets 1,574,374 825,669 10,699,137 3,997,698
NET ASSETS
Beginning of period 12,661,779 11,836,110 16,099,834
12,102,136
End of period (1) $ 14,236,153 $ 12,661,779 $ 26,798,971 $ 16,099,834
(1) Includes undistributed net
investment income (loss) of: $ 770 $ 37 $ 774 $ (367)
</TABLE>
28
See notes to financial statements
29
Statements of Changes in Net Assets
29
Transamerica Premier Cash Reserve Fund Year Ended December 31,
1997 1996
INCREASE IN NET ASSETS
From operations:
Net investment income $ 2,260,400 $ 1,525,057
Net realized gain (loss) on
investments and futures
transactions - -
Net change in unrealized appreciation
(depreciation) of investments - -
Net increase in net assets
resulting from operations 2,260,400 1,525,057
Dividends and distributions to
shareholders from:
Net investment income:
Investor class (2,258,470) (1,518,377)
Adviser class (1,930) (6,680)
Fund share transactions (Note 5) 19,002,190 4,226,226
Increase in net assets 19,002,190 4,226,226
NET ASSETS
Beginning of period 32,243,978 28,017,752
End of period $ 51,246,168 $ 32,243,978
29
#
29
See notes to financial statements
30
Financial Highlights
30
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
Transamerica Transamerica
Premier Aggressive Premier Small
Growth Fund Company Fund
Period ended Period ended
December 31, 1997* December 31, 1997*
NET ASSET VALUE
Beginning of period $ 10.00 $ 10.00
Investment Operations
Net investment income (loss)1 (0.03) (0.02)
Net realized and
unrealized gain (loss) 2.21 2.51
Total from investment operations 2.18 2.49
Distributions To
Shareholders From
Net investment income - -
Net realized gains - -
Total distributions - -
Net Asset Value
End of period $ 12.18 $ 12.49
Total Return2 21.80% 24.90%
Ratios And Supplemental Data
Expenses to average net assets:
After reimbursement/fee waiver= 1.40% 1.40%
Before reimbursement/fee waiver= 2.08% 2.12%
Net investment income (loss), after
reimbursement/fee waiver= (0.59)% (0.43)%
Portfolio turnover rate 17% 74%
Average commission rate3 $0.0650 $0.0562
Net assets, end of period
(in thousands) $12,780 $11,122
= Annualized
* Funds commenced operations on July 1, 1997.
1 Net investment income (loss) is after waiver of fees by the Adviser
and reimbursement of certain expenses
by the
Administrator (Note 2). If the Adviser had not waived fees and the
Administrator had not reimbursed
expenses,
net investment income (loss) per share would have been $(0.06) and
$(0.06) for the Aggressive Growth Fund
and
the Small Company Fund, respectively, for the period ended December
31, 1997.
2 Total return represents aggregate total return for the period indicated and is
not annualized, for periods less than
one year.
3 Represents the average commission rate paid on equity security transactions on
which commissions are charged.
30
See notes to financial statements
31
Financial Highlights
31
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
Transamerica Premier Equity Fund Transamerica Premier Index Fund
Year ended Year ended Period ended Year ended Year ended Period
ended
December 31, 1997 December 31, 1996December 31, 1995* December 31, 1997December 31, 1996
December 31, 1995*
Net Asset Value
<S> <C> <C> <C> <C> <C> <C>
Beginning of period $ 12.65 $ 9.82 $ 10.00 $ 11.96 $ 10.59 $
10.00
Investment Operations
Net investment income (loss)1 (0.04) (0.06) 0.02 0.32
0.27 0.06
Net realized and
unrealized gain (loss) 6.05 2.91 (0.20) 3.60
2.06 0.53
Total from investment operations 6.01 2.85 (0.18) 3.92
2.33 0.59
Distributions To
Shareholders From:
Net investment income - (0.02) - (0.32) (0.33)
- -
Net realized gains (0.13) - - (0.07) (0.63)
- -
Total distributions (0.13) (0.02) - (0.39) (0.96)
- -
Net Asset Value
End of period $ 18.53 $ 12.65 $ 9.82 $ 15.49 $ 11.96 $
10.59
Total Return2 47.51% 29.07% (1.80)% 33.14% 22.33%
5.90%
Ratios And Supplemental Data
Expenses to average net assets:
After reimbursement/fee waiver= 1.49% 1.50% 0.25% 0.25%
0.35% 0.25%
Before reimbursement/fee waiver= 1.51% 1.95% 2.39% 1.57%
2.29% 4.12%
Net investment income (loss),
after reimbursement/fee waiver= (0.71)% (0.66)% 1.51% 2.31%
2.48% 2.70%
Portfolio turnover rate 13% 60% - 11% 94%
4%
Average commission rate3 $ 0.0619 $ 0.0660 $ 0.0678 $ 0.0407 $ 0.0363 $
0.0418
Net assets, end of period
(in thousands) $ 111,567 $ 30,454 $ 11,070 $ 23,992 $ 10,814 $
6,934
</TABLE>
= Annualized
* Funds commenced operations on October 2, 1995.
1 Net investment income (loss) is after waiver of fees by the Adviser and
reimbursement of certain expenses by the Administrator (Note 2). If the Adviser
had not waived fees and
the Administrator had not reimbursed expenses, net investment income
(loss) per share would have been $(0.04), $(0.10) and $(0.01) for the Equity
Fund and $0.14, $0.06 and $(0.03) for the Index Fund for the periods ended
December 31, 1997, 1996 and 1995, respectively.
2 Total return represents aggregate total return for the period indicated and is
not annualized, for periods less than one year.
3 Represents the average commission rate paid on equity security transactions on
which commissions are charged.
31
#
31
See notes to financial statements
32
Financial Highlights
32
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
Transamerica Premier Bond Fund Transamerica Premier Balanced Fund
Year ended Year ended Period ended Year ended Year ended Period
ended
December 31, 1997 December 31, 1996December 31, 1995* December 31, 1997December 31, 1996
December 31, 1995*
Net Asset Value
<S> <C> <C> <C> <C> <C> <C>
Beginning of period $ 9.86 $ 10.37 $ 10.00 $ 11.57 $ 10.23 $
10.00
Investment Operations
Net investment income1 0.62 0.56 0.16 0.11 0.14
0.06
Net realized and
unrealized gain (loss) 0.33 (0.46) 0.32 3.97
1.40 0.17
Total from investment operations 0.95 0.10 0.48 4.08
1.54 0.23
Distributions To
Shareholders From:
Net investment income (0.62) (0.61) (0.11) (0.11) (0.20)
- -
Net realized gains - - - - -
- -
Total distributions (0.62) (0.61) (0.11) (0.11) (0.20)
- -
Net Asset Value
End of period $ 10.19 $ 9.86 $ 10.37 $ 15.54 $ 11.57 $
10.23
Total Return2 9.99% 1.16% 4.82% 35.38% 15.28%
2.30%
Ratios And Supplemental Data
Expenses to average net assets:
After reimbursement/fee waiver= 1.30% 1.30% 0.25% 1.45%
1.45% 0.25%
Before reimbursement/fee waiver= 1.64% 1.81% 1.93% 1.62%
1.94% 2.12% Net investment income (loss),
after reimbursement/fee waiver= 6.25% 5.66% 6.55% 0.83%
1.34% 3.12%
Portfolio turnover rate 99% 7% 19% 23% 19%
16%
Average commission rate3 - - - $ 0.0638 $ 0.0656 $
0.0662
Net assets, end of period
(in thousands) $ 14,236 $ 12,553 $ 11,827 $ 26,799 $ 16,041 $
12,084
</TABLE>
= Annualized
* Funds commenced operations on October 2, 1995.
1 Net investment income is after waiver of fees by the Adviser and reimbursement
of certain expenses by the Administrator (Note 2). If the Adviser had not waived
fees and the
Administrator had not reimbursed expenses, net investment income per
share would have been $0.58, $0.50 and $0.12 for the Bond Fund and $0.09, $0.09
and $0.02 for the ` Balanced Fund for the periods ended December 31, 1997, 1996
and 1995, respectively.
2 Total return represents aggregate total return for the period indicated and is
not annualized, for periods less than one year.
3 Represents the average commission rate paid on equity security transactions on
which commissions are charged.
32
See notes to financial statements
33
Financial Highlights
33
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
Transamerica Premier Cash Reserve Fund
Year ended Year ended Period ended
December 31, 1997 December 31, 1996December 31, 1995*
Net Asset Value
Beginning of period $ 1.00 $ 1.00 $ 1.00
Investment Operations
Net investment income1 0.05 0.05 0.01
Net realized and
unrealized gain (loss) - - -
Total from investment operations 0.05 0.05 0.01
Distributions To
Shareholders From:
Net investment income (0.05) (0.05) (0.01)
Net realized gains - - -
Total distributions (0.05) (0.05) (0.01)
Net Asset Value
End of period $ 1.00 $ 1.00 $ 1.00
Total Return2 5.48% 5.34% 1.39%
<TABLE>
<CAPTION>
Ratios And Supplemental Data
Expenses to average net assets:
<S> <C> <C> <C>
After reimbursement/fee waiver= 0.25% 0.25% 0.25%
Before reimbursement/fee waiver= 0.95% 1.09% 1.37%
Net investment income (loss),
after reimbursement/fee waiver= 5.35% 5.21% 5.55%
Net assets, end of period
(in thousands) $51,246 $32,041 $27,996
</TABLE>
= Annualized
* The Fund commenced operations on October 2, 1995.
1 Net investment income is after waiver of fees by the Adviser and
reimbursement of certain expenses by the
Administrator
(Note 2). If the Adviser had not waived fees and the Administrator
had not reimbursed expenses, net
investment income
per share would have been $0.05, $0.04 and $0.01 for the Cash Reserve
Fund for the periods ended December 31, 1997,
1996 and 1995, respectively.
2 Total return represents aggregate total return for the period indicated and is
not annualized, for periods less than one year.
33
#
33
See notes to financial statements
34
Notes to Financial Statements
December 31, 1997
34
1. Significant Accounting Policies
Transamerica Investors, Inc. (the "Company") is registered under the Investment
Company Act of 1940 (the "1940 Act") as an open-end, management investment
company. The Company is composed of seven Funds: Transamerica Premier Small
Company Fund (the "Small Company Fund"), Transamerica Premier Equity Fund (the
"Equity Fund"), Transamerica Premier Index Fund (the "Index Fund"), Transamerica
Premier Bond Fund (the "Bond Fund"), Transamerica Premier Balanced Fund (the
"Balanced Fund"), Transamerica Premier Cash Reserve Fund (the "Cash Reserve
Fund") and Transamerica Premier Aggressive Growth Fund (the "Aggressive Growth
Fund") which is non-diversified (collectively referred to as the "Funds"). For
information of investment objectives and strategies, please refer to the Fundsi
prospectus.
Prior to April 30, 1997, each Fund had two classes of shares, Investor
Class and Adviser Class. Each share of each class represented an identical legal
interest in the same investments of a Fund, except that Adviser Class shares had
higher distribution fees. Each class had certain other expenses related solely
to that class. On April 30, 1997, the Adviser Class of each series was
terminated by the Board of Directors.
The following is a summary of significant accounting policies followed
by each Fund in the preparation of its financial statements in accordance with
generally accepted accounting principles.
(A) VALUATION OF SECURITIES - Equity securities listed on a principal exchange
(U.S. or foreign), NASDAQ and over-the-counter securities are valued at the last
sale price, or, if no sale occurs, at the mean between the closing bid and the
closing asked prices. Debt securities with a maturity of 61 days or more are
valued on the basis of valuations obtained from a commercial pricing service or
dealer-supplied quotations. Debt securities with a maturity of 60 days or less,
and all investments in the Cash Reserve Fund, are valued at amortized cost,
which approximates market value. Futures contracts are valued at the last sale
price on the market where the contract is principally traded. Securities for
which market quotations are not readily available are valued at the fair value
as determined in good faith pursuant to procedures established by the Companyis
Board of Directors.
(B) REPURCHASE AGREEMENTS - Each Fund may enter into repurchase agreements with
Federal Reserve System member banks or U.S. securities dealers. A repurchase
agreement occurs when, at the time the Fund purchases an interest-bearing debt
obligation, the seller agrees to repurchase the debt obligation on a specified
date in the future at an agreed-upon price. If the seller is unable to make
timely repurchase, the Fundis expected proceeds could be delayed, or the Fund
could suffer a loss in principal or current interest, or incur costs in
liquidating the collateral.
(C) FUTURES CONTRACTS - The Index Fund uses S&P 500 index futures as part of its
strategy to track the return of the S&P 500 Index. Upon entering into a futures
contract, the Fund is required to deposit with the broker an amount of cash or
cash equivalents equal to a certain percentage of the contract amount. This is
known as the initial margin. Subsequent payments ("variation margin") are made
or received by the Fund each day, depending on the daily fluctuations of the
value of the contract. The daily changes in the contract are recorded as
unrealized gains or losses. The Fund recognizes a realized gain or loss when the
contract is closed.
The use of futures contracts involves several risks. The change in
value of futures contracts corresponds primarily with the value of their
underlying instruments, which may not correlate with the change in value of the
hedged investments. In addition, the Fund may not be able to enter into a
closing transaction because of an illiquid secondary market.
(D) SECURITIES TRANSACTIONS, INVESTMENT INCOME AND EXPENSES - Securities
transactions are recorded as of the trade date. Gains and losses on sales of
investments are determined on the identified cost basis for both financial
statement and Federal income tax purposes. Interest income and operating
expenses are recorded daily on an accrual basis. Dividend income is recorded on
the ex-dividend date. Expenses not directly chargeable to a specific Fund are
allocated primarily on the basis of relative average daily net assets.
(E) DIVIDENDS AND DISTRIBUTIONS - Dividends from net investment income on shares
of the Cash Reserve Fund are declared daily and paid monthly. Dividends from net
investment income on shares of the Bond Fund are declared and paid monthly.
Dividends from net investment income, if any, on shares of the Equity Fund, the
Index Fund, and the Balanced Fund are declared and paid quarterly. Dividends
from net investment income, if any, on shares of the AggressiveGrowth Fund and
the Small Company Fund are declared and paid annually. Each Fund distributes net
realized capital gains, if any, annually. Dividends and distributions paid by
each Fund are recorded on the ex-dividend date, except for the Cash Reserve
Fund, which records dividends daily. Income dividends and capital gain
distributions are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. These differences are
primarily due to differing treatments of income and gains on various investment
securities held by the Funds, timing differences and differing characterization
of distributions made by the Funds.
35
Notes to Financial Statements
December 31, 1997 (Continued)
35
(F) FEDERAL INCOME TAXES - Each Fund intends to qualify as a regulated
investment company by complying with the requirements of the Internal Revenue
Code applicable to regulated investment companies and by distributing to
shareholders substantially all of their taxable income. Therefore, no Federal
income or excise tax provision is required. For Federal income tax purposes, the
Bond Fund has capital loss carryforwards of $14,741 expiring in 2003 and
$204,704 expiring in 2005. For Federal income tax purposes, the Balanced Fund
has capital loss carryforwards of $26,024 expiring in 2003, $11,380 expiring in
2004, and $103,552 expiring in 2005.
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, net operating losses and
capital loss carryforwards. Permanent items identified in the period ended
December 31, 1997, have been reclassified among components of net assets as
follows:
Undistributed Net Undistributed Net Paid-In
Fund Investment Income Realized Gains and Losses Capital
Aggressive Growth Fund (29,665) 17,479 (12,186)
Small Company Fund (19,581) 8,413 (11,168)
Equity Fund (605,900) 22,565 (583,335)
Index Fund 476 (476) -
Bond Fund - - -
Balanced Fund (367) - (367)
Cash Reserve Fund - - -
(G) USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that reflect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
2. Investment Advisory Fees and other Transactions
The Company has entered into an Investment Advisory and Administrative Services
Agreement (the "Agreement") with Transamerica Investment Services, Inc. (the
"Investment Adviser"), a wholly owned subsidiary of Transamerica Corporation, on
behalf of each Fund. For its services to the Funds, the Investment Adviser
receives a monthly fee, based on an annual percentage of the average daily net
assets of each Fund. The annual fee for the Funds are as follows:
First Next In Excess of
Fund $1 Billion $1 Billion $2 Billion
Aggressive Growth Fund 0.85% 0.82% 0.80%
Small Company Fund 0.85% 0.82% 0.80%
Equity Fund 0.85% 0.82% 0.80%
Index Fund 0.30% 0.30% 0.30%
Bond Fund 0.60% 0.57% 0.55%
Balanced Fund 0.75% 0.72% 0.70%
Cash Reserve Fund 0.35% 0.35% 0.35%
The Companyis Administrator is Transamerica Occidental Life Insurance
Company (the "Administrator"), a wholly owned subsidiary of Transamerica
Insurance Corporation of California, which in turn is a wholly owned subsidiary
of Transamerica Corporation. The Administrator provides the Funds with
administrative and clerical services. The Administrator receives its fee
directly from the Investment Adviser, and receives no compensation from the
Funds.
The Adviser has agreed to waive its fee, and the Administrator has
agreed to assume any other operating expenses (other than certain extraordinary
or non-recurring expenses) which together exceed a specified percentage of the
average daily net assets of that Fund. These waivers and subsidies may be
terminated at any time without notice. The specified percentages are as follows:
Fund
Aggressive Growth Fund 1.40%
Small Company Fund 1.40%
Equity Fund 1.50%
Index Fund 0.25%
Bond Fund 1.30%
Balanced Fund 1.45%
Cash Reserve Fund 0.25%
35
#
36
Notes to Financial Statements
December 31, 1997 (Continued)
36
Transamerica Securities Sales Corporation ("TSSC") is the principal
underwriter and distributor of the shares of each of the Funds. TSSC is a
wholly-owned subsidiary of Transamerica Insurance Corporation of California,
which in turn is a wholly-owned subsidiary of Transamerica Corporation.
No officer, director, or employee of the Investment Adviser, the
Administrator or any of their respective affiliates receives any compensation
from the Funds for acting as a director or officer of the Company. Each director
of the Company who is not an "interested person" (as that term is defined in the
1940 Act) receives from the Funds a $10,000 annual fee, $1,000 for each meeting
of the Companyis Board attended, and $500 for each Board committee meeting
attended, and is reimbursed for expenses incurred in connection with such
attendance. For the year ended December 31, 1997, the Funds expensed aggregate
fees of $40,400 to all directors who are not affiliated persons of the
Investment Adviser.
Certain directors and officers of the fund are also directors and
officers of the Investment Adviser and other affiliated Transamerica entities.
As of December 31, 1997, Transamerica Corporation and its affiliates held the
following percentages of outstanding shares:
Fund
Aggressive Growth Fund 56.05%
Small Company Fund 64.68%
Equity Fund 38.55%
Index Fund 83.73%
Bond Fund 92.74%
Balanced Fund 76.87%
Cash Reserve Fund 68.39%
3. Distribution Plans
The 12b-1 plans of distribution and related distribution contracts require the
Funds to pay distribution fees to TSSC as compensation for its activities, not
as reimbursement for specific expenses. For the Investor Shares, there is an
annual 12b-1 distribution fee of 0.25% of the average daily net assets, except
for the Index Fund and the Cash Reserve Fund, which pay a distribution fee of
0.10% of the average daily net assets. On November 1, 1997, TSSC agreed to waive
the distribution fees for the Cash Reserve Fund. Prior to its termination, the
Adviser Class incurred annual 12b-1 distribution and service fees of 0.75% and
0.25%, respectively of the average daily net assets, except the Cash Reserve
Fund, which had no distribution fee for Adviser Shares.
4. Security Transactions
The aggregate cost of purchases and proceeds from sales of securities, excluding
short-term investments, for the year ended December 31, 1997 were as follows:
U.S.
Government Proceeds U.S. Government
Fund Purchases Purchases
from Sales Sales
Aggressive Growth Fund $11,706,203 $ - $1,441,865 $-
Small Company Fund 14,655,332 - 5,781,135 -
Equity Fund 66,672,984 - 8,017,508 -
Index Fund 9,690,016 67,467 1,861,391 -
Bond Fund 9,861,113 4,441,581 6,695,118 5,986,344
Balanced Fund 7,794,629 1,244,531 4,619,747 -
37
Notes to Financial Statements
December 31, 1997 (Continued)
37
5. Capital Stock Transactions
At December 31, 1997, there were two billion shares of $0.001 par value stock
authorized. The tables below summarize the transactions in Fund shares for the
periods indicated. As discussed in Note 1, the Adviser Class was terminated on
April 30, 1997.
Transamerica Premier Aggressive Growth Fund Authorized Shares - 7,142,857
Period ended December 31, 1997*
Shares Amount
Capital stock sold 1,182,281 $13,130,142
Capital stock issued upon reinvest-
ment of dividends and distributions- -
Capital stock redeemed (133,141) (1,598,538)
Net increase 1,049,140 $11,531,604
Transamerica Premier Small Company Fund Authorized Shares - 7,142,857
Period ended
December 31, 1997*
Shares Amount
Capital stock sold 1,477,867 $17,273,937
Capital stock issued upon reinvest-
ment of dividends and distributions- -
Capital stock redeemed (587,595) (7,136,125)
Net increase 890,272 $10,137,812 *Funds commenced operations on July 1, 1997.
Transamerica Premier Equity Fund Authorized Shares - 57,142,858
<TABLE>
<CAPTION>
Year ended
December 31, 1997 Year ended
December 31, 1996
Investor Class Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Capital stock sold 4,549,326 $80,027,236 1,396,408 $14,694,383
Capital stock issued upon reinvest-
ment of dividends and distributions39,406 729,460 2,199 21,734
Capital stock redeemed (975,133) (17,534,999) (118,611) (1,292,651)
Net increase 3,613,599 $63,221,697 1,279,996 $13,423,466
Adviser Class
Capital stock sold 6,522 $ 86,947 45,506 $ 489,805
Capital stock issued upon reinvest-
ment of dividends and distributions- - 1 6
Capital stock redeemed (55,259) (715,436) (2,598) (27,159)
Net increase (decrease) (48,737) $ (628,489) 42,909 $ 462,652
</TABLE>
37
#
38
Notes to Financial Statements
December 31, 1997 (Continued)
38
Transamerica Premier Index Fund Authorized Shares - 57,142,857
Year ended
December 31, 1997 Year ended
December 31, 1996
Investor Class Shares Amount Shares Amount
Capital stock sold 695,991 $10,118,205 206,344 $ 2,362,558
Capital stock issued upon reinvest-
ment of dividends and distributions35,103 506,892 63,545 781,615
Capital stock redeemed (86,530) (1,248,940) (20,564) (232,889)
Net increase 644,564 $ 9,376,157 249,325 $ 2,911,284
Adviser Class
Capital stock sold 2,720 $ 34,789 7,341 $ 84,268
Capital stock issued upon reinvest-
ment of dividends and distributions18 225 414 5,362
Capital stock redeemed (10,514) (130,190) - -
Net increase (decrease) (7,776) $ (95,176) 7,755 $ 89,630
Transamerica Premier Bond Fund Authorized Shares - 57,142,857
Year ended
December 31, 1997 Year ended
December 31, 1996
Investor Class Shares Amount Shares Amount
Capital stock sold 132,704 $ 1,318,618 85,943 $ 843,001
Capital stock issued upon reinvest-
ment of dividends and distributions83,092 820,341 74,981 736,816
Capital stock redeemed (92,679) (925,179) (27,700) (270,290)
Net increase 123,117 $ 1,213,780 133,224 $ 1,309,527
Adviser Class
Capital stock sold 4,562 $ 44,667 18,228 $ 179,841
Capital stock issued upon reinvest-
ment of dividends and distributions117 1,138 391 3,775
Capital stock redeemed (15,725) (151,520) (8,499) (82,696)
Net increase (decrease) (11,046) $ (105,715) 10,120 $ 100,920
Transamerica Premier Balanced Fund Authorized Shares - 57,142,857
Year ended
December 31, 1997 Year ended
December 31, 1996
Investor Class Shares Amount Shares Amount
Capital stock sold 455,997 $ 6,756,401 223,285 $ 2,348,093
Capital stock issued upon reinvest-
ment of dividends and distributions12,231 174,166 24,579 260,932
Capital stock redeemed (129,262) (1,870,703) (42,754) (465,759)
Net increase 338,966 $ 5,059,864 205,110 $ 2,143,266
Adviser Class
Capital stock sold 1,563 $ 19,115 22,698 $ 242,657
Capital stock issued upon reinvest-
ment of dividends and distributions1 17 72 750
Capital stock redeemed (6,682) (79,564)(19,469) (209,307)
Net increase (decrease) (5,118) $(60,432) 3,301 $34,100
39
Notes to Financial Statements
December 31, 1997 (Continued)
39
<TABLE>
<CAPTION>
Transamerica Premier Cash Reserve Fund Authorized Shares - 507,142,857
Year ended
December 31, 1997 Year ended
December 31, 1996
Investor Class Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Capital stock sold 43,510,804 $43,510,804 30,894,164 $30,894,164
Capital stock issued upon reinvest-
ment of dividends and distributions2,249,117 2,249,117 1,647,402 1,647,402
Capital stock redeemed (26,554,372) (26,554,372) (28,497,422) (28,497,422)
Net increase 19,205,549 $19,205,549 4,044,144 $ 4,044,144
Adviser Class
Capital stock sold 21,197 $ 21,197 417,209 $ 417,209
Capital stock issued upon reinvest-
ment of dividends and distributions1,638 1,638 6,461 6,461
Capital stock redeemed (226,194) (226,194) (241,588) (241,588)
Net increase (decrease) (203,359) $(203,359) 182,082 $182,082
</TABLE>
6. Transamerica Premier Short-Intermediate Government Fund
On April 30, 1997, the Board of Directors of the Company elected to terminate
the Transamerica Premier Short-Intermediate Government Fund.
39
#
40
Report of Ernest & Young llp, Independent Auditors
40
To the Shareholders and Board of Directors
of Transamerica Investors, Inc.
40
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of Transamerica Investors, Inc. (comprising
respectively, the Transamerica Premier Aggressive Growth Fund, Transamerica
Premier Small Company Fund, Transamerica Premier Equity Fund, Transamerica
Premier Index Fund, Transamerica Premier Bond Fund, Transamerica Premier
Balanced Fund, and Transamerica Premier Cash Reserve Fund) (the "Funds") as of
December 31, 1997, and the related statements of operations for the fiscal year
then ended, changes in net assets for each of the two fiscal years in the period
then ended, and financial highlights for each of the three fiscal years in the
period then ended. These financial statements and financial highlights are the
responsibility of the Fundsi management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion. In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of each of the respective funds constituting Transamerica Investors,
Inc., as of December 31, 1997, and the results of their operations for the
fiscal year then ended, the changes in their net assets for each of the two
fiscal years in the period then ended and their financial highlights for each of
the three fiscal years in the period then ended, in conformity with generally
accepted accounting principles.
Los Angeles, California
January 30, 1998
41
Transamerica Premier Funds
Board of Directors and Officers
41
Transamerica Premier
Funds Directors
Nooruddin S. Veerjee
Chairman of the Board
Sidney E. Harris
Charles C. Reed
Gary U. Rolle
Carl R. Terzian
Transamerica Premier
Funds Officers
Nooruddin S. Veerjee
Chief Executive Officer
Nicki A. Bair
President
E. Joy Heckendorf
Senior Vice President
Susan R. Hughes
Treasurer
Reid A. Evers
Secretary
H. Michael Kim
Vice President
Donald P. Radisich
Vice President
Christopher W. Shaw
Assistant Vice President
Investment Adviser
Transamerica Investment Services, Inc.
1150 South Olive Street
Los Angeles, CA 90015
Distributor
Transamerica Securities Sales Corporation
1150 South Olive Street
Los Angeles, CA 90015
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Transfer Agent
State Street Bank/Boston Financial
Data Services
Two Heritage Drive
North Quincy, Massachusetts 02171
41
This report is for the information of the shareholders of Transamerica Premier
Funds. Its use in connection with any offering of the Fundsi shares is
authorized only if accompanied or preceded by a current Transamerica Premier
Funds prospectus that contains more complete investment information, including
risks and expenses. Please read the prospectus thoroughly before you invest.
Call 1-800-892-7587 for more information.
These Funds are neither insured nor guaranteed by the U.S. government. There can
be no assurance that the Transamerica Premier Cash Reserve Fund will be
able to maintain a stable net asset value of $1.00 per share.
(C)1998 Transamerica Securities Sales Corporation, Distributor
1-800-89-ASK-US (1-800-892-7587)
http://funds.transamerica.com
e-mail: [email protected]
TPF 213
41
#
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