<PAGE> 1
Dear STI Classic Variable Trust Shareholder:
The STI Classic Variable Trust was launched on October 2, 1995. We are pleased
to report that, within only a three month period, total Trust assets grew to
approximately $14.3 million as of December 31, 1995. We look forward to
continued robust asset growth in the year ahead.
The past year was marked by slower economic growth, low inflation, and the
emergence of increased investor confidence in longer term financial assets.
Both equity and fixed income securities' total return performance was
outstanding.
Currently, investors are extremely concerned about slowing corporate profits
and a weakening overall U.S. economy. However, the Federal Reserve has
considerable flexibility to loosen monetary conditions and lower short-term
interest rates. Given that 1996 is a presidential election year, it is also
expected that more stimulative economic policy will be forthcoming once the
budget debate is settled.
The STI Classic Variable Trust investment philosophy, which focuses on quality,
should serve shareholders well in this kind of environment.
Sincerely,
/s/ ANTHONY R. GRAY
Anthony R. Gray
Chairman of the Board
Chief Investment Officer
STI Capital Management, N.A.
<PAGE> 2
VALUE INCOME STOCK FUND
The Value Income Stock Fund (the "Fund") seeks to provide a high level of total
return through investment in equity assets of high yielding, undervalued
companies.
The Fund's investment philosophy is a very structured, methodical approach to
purchasing stocks. The bottom-up approach has three key factors to consider in
all investment decisions -- minimum dividend yield criteria, low historical
relative valuation, and a fundamental catalyst which could upwardly value the
individual security.
Most securities in the Fund's portfolio have a dividend yield of at least the
average stock held in the S&P 500 market index. By screening for only high
yielding securities, the Fund is ensured a high dividend component for the
total return. Stocks are then screened on a relative historical valuation
basis. Quantitative review is conducted on the Price to Book, Price to
Earnings, Price to Cash Flow and Yield data for the past several years. Only
stocks trading in the bottom third of their historical range (based on certain
acceptable criteria) have the potential to be added to the portfolio. Finally,
traditional fundamental analysis is applied to determine a catalyst which
could, when recognized by other investors, revalue the stock positively. Only
securities which appear to have a reason for attracting investor attention are
then selected to be held in the Fund's portfolio.
This year we anticipate encountering several opportunities to invest in good
companies whose valuations do not reflect their true potential. The current
portfolio is the result of the rigid application of our investment
discipline.If the economic cycle continues to lengthen, with a slowing U.S.
economy, many of the stocks in the Fund should do very well, especially the
larger holdings such as Tenneco, Corning, and Occidental Petroleum.
2
<PAGE> 3
AGGRESSIVE GROWTH FUND
The Aggressive Growth Fund (the "Fund") seeks to provide capital appreciation
by investing in a diversified portfolio of equity assets of mid-cap companies
with above-average growth of earnings.
Mid-cap securities, between $300 million to $6 billion market capitalization,
with a strong growth history are the primary consideration for this investment
philosophy. These companies are evaluated relative to their industry sector and
the market in general. Each industry sector is considered in relation to the
business cycle, and the portfolio maintains large positions in the sectors
which appear to perform best in the given cycle. Stocks that fall within
favored sectors are analyzed based on fundamentals -- the quality of earnings,
dependability of growth rates, and relative attractiveness of price/earnings
ratios.
The Fund begins with securities presenting strong earnings growth relative to
historical numbers. Then, business cycle analysis, sector rotation, and stock
selection are applied in trading the portfolio. By evaluating the relative
value of the various industry sectors at different points in the business
cycle, sectors are identified that will perform well in a given environment.
Stocks that fall within favored sectors are analyzed based on fundamentals --
the quality of earnings, dependability of growth rates, relative attractiveness
of price/earnings ratios and the yield of the security.
Large positions are held in the technology, healthcare and financial
securities, particularly banking stocks. The Fund is positioned to avoid
cyclical weakness in the slowing economy. The more traditional growth companies
look to continue their consistent earnings growth over the next several
quarters and investors should shift into these types of securities as the stock
market begins to plateau. The investment philosophy of the Fund is geared
towards mid-cap sized growth companies, and these types of stocks should
perform well in the current market environment.
3
<PAGE> 4
CAPITAL GROWTH FUND
The investment objective of the Capital Growth Fund (the "Fund") is to provide
capital appreciation by investing in a diversified portfolio of equity assets
which have a consistent record of earnings growth and are relatively
undervalued in the marketplace.
Large capitalization stocks with a strong growth history are the primary
consideration for this investment philosophy. Out of this universe of
companies, a security is selected for the portfolio when it appears undervalued
based on the relative earnings ratios. In order to make this relative value
comparison, each stock is compared to its own historical price earnings ratio
range, to other stocks in the sector, and to the stock market as measured by
indices such as the Standard & Poor's 500 Index.
The Fund focuses on business cycle analysis, sector rotation and stock
selection when trading the portfolio. By evaluating the relative value of the
various industry sectors at different points in the business cycle, sectors are
identified that will perform well in a given environment. Stocks that fall
within favored sectors are analyzed based on fundamentals -- the quality of
earnings, dependability of growth rates, relative attractiveness of
price/earnings ratios and the yield of the security.
The Fund held true to form in the volatile market environment, focusing on the
larger growth companies in each of the best performing industry sectors. A
large weighting in the technology and healthcare industries, as well as energy,
financial and leisure all led to adequate exposure to the growth of the equity
markets. Underexposure to automotive, aerospace and the cyclicals limited the
downside exposure of the slowing U.S. economy.
The Fund continues to be underexposed to cyclical sectors such as building,
machinery, mining and textiles which should continue to have a difficult time
in the current economic climate. However, a slowing economy typically leads to
higher returns in the more traditional growth sectors. The strong earnings
history of the larger food, beverage and tobacco companies should fair well in
a slowing stock market. Also, larger healthcare and selected financial
companies look to continue their consistent growth records over the next
several quarters. As performance returns from smaller, cyclical companies begin
to decline, investors will turn to larger companies with more reliable earnings
growth. This is the optimal environment for the Fund, and it stands positioned
to take advantage of this market.
4
<PAGE> 5
INVESTMENT GRADE BOND FUND
The Investment Grade Bond Fund (the "Fund") seeks to provide as high a level of
total return through income and capital appreciation through investment in high
quality fixed income securities.
The Fund utilizes an investment philosophy which minimizes risk, while
outperforming selected market indices. The core portfolio is structured around
the composition of the Lehman Government/Corporate Index. The composition of
the index is reviewed and quantitative historical data is analyzed to determine
the optimal spread ranges of the different market sectors.
Once the optimum market sectors are selected, an over- or under-weighting is
developed in different sectors by investing in well-valued issues. All
securities purchased are carefully reviewed for value. Yield curve analysis and
credit ratings are an important part of this process.
A level of technical analysis is then applied to assist in duration structure
keeping the portfolio within 15% of the duration of the Lehman Government
Corporate Index. By aggressively applying this investment philosophy to the
fixed income markets, the Fund provides at or above market returns while
keeping portfolio risk well below the market indicators and most fixed income
managers.
The past year's economy was in a slow growth mode which was positive for the
fixed income markets. Growth rates in corporate earnings and industrial
production remained in check throughout 1995, keeping inflationary pressures
down and allowing fixed income securities to appreciate. The result was a less
volatile trading environment centered around a moderately flat yield curve.
The impact of the proposed Federal budget and Federal Reserve interest rate
policy will significantly influence the fixed income market over the course of
the next six months. The Fund will maintain roughly the same duration as the
Lehman Government/Corporate Bond Index. The 1996 fixed income market will be
volatile as interest rates fluctuate and economic indicators vary. Still, the
Fund is fairly positioned for this environment.
5
<PAGE> 6
STATEMENT OF NET ASSETS
STI CLASSIC VARIABLE TRUST FUNDS December 31, 1995
VALUE INCOME STOCK FUND
<TABLE>
<CAPTION>
MARKET
SHARES VALUE (000)
------ -----------
<S> <C> <C>
COMMON STOCK -- 90.2%
AIRCRAFT -- 0.2%
United Technologies 100 $ 9
------
AUTOMOTIVE -- 0.8%
Eaton 600 32
------
BANKS -- 6.7%
BankAmerica 500 32
Central Fidelity Banks 800 26
Compass Bancshares 800 26
First Virginia Banks 400 17
Fleet Financial Group 800 33
Great Western Financial 700 18
Magna Group 800 19
Nationsbank 500 35
PNC Bank 1,100 35
Summit Bancorporation 900 28
------
Total Banks 269
------
CHEMICALS -- 4.3%
Crompton & Knowles 800 11
DuPont (E.I.) de Nemours 800 56
Ethyl 4,000 50
Lawter International 1,100 13
Lubrizol 400 11
Nalco Chemical 600 18
Witco Chemical 500 15
------
Total Chemicals 174
------
COMPUTERS & SERVICES -- 0.8%
Pitney Bowes 700 33
------
DRUGS -- 6.1%
American Home Products 600 58
Bristol-Myers Squibb 900 77
Rhone-Poulenc Rorer 400 21
Schering Plough 200 11
Warner Lambert 800 78
------
Total Drugs 245
------
ELECTRICAL & ELECTRONIC
PRODUCTS -- 0.9%
General Electric 500 36
------
ELECTRICAL UTILITIES -- 3.1%
Cinergy 1,700 52
General Public Utilities 1,100 37
Northeast Utilities 600 15
Pacificorp 900 19
------
Total Electrical Utilities 123
------
ENVIRONMENTAL SERVICES -- 0.9%
Browning-Ferris Industries 1,300 38
------
FOOD, BEVERAGE & TOBACCO -- 9.5%
General Mills 700 40
Grand Metropolitan PLC 2,700 78
Hanson PLC ADR 4,200 64
Heinz (H.J.) 2,050 68
Lance 800 13
RJR Nabisco 2,000 62
Schweitzer-Mauduit International* 20 1
UST 1,700 56
------
Total Food, Beverage & Tobacco 382
------
GAS -- 1.1%
El Paso Natural Gas 800 23
Sonat 600 21
------
Total Gas/Natural Gas 44
------
GLASS PRODUCTS -- 1.5%
Corning 1,900 61
------
HOUSEHOLD FURNITURE &
FIXTURES -- 0.6%
Masco 700 22
------
</TABLE>
6
<PAGE> 7
<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE (000)
------ -----------
<S> <C> <C>
HOUSEHOLD PRODUCTS -- 3.2%
Dial 1,900 $ 56
Maytag 1,700 35
Snap-on Tools 800 36
------
Total Household Products 127
------
INSURANCE -- 4.4%
Aetna Life & Casualty 600 41
Lincoln National 1,000 54
Marsh and McLennan 900 80
------
Total Insurance 175
------
MACHINERY -- 6.8%
Cooper Industries 1,500 55
Dresser Industries 2,300 56
General Signal 1,600 52
Goulds Pumps 800 20
Tenneco 1,800 89
------
Total Machinery 272
------
MEDICAL PRODUCTS & SERVICES -- 1.1%
Bausch & Lomb 1,100 44
------
METALS AND MINING -- 0.8%
Minnesota Mining &
Manufacturing 500 33
------
MISCELLANEOUS CONSUMER
SERVICES -- 1.1%
H & R Block 1,100 45
------
PAPER & PAPER PRODUCTS -- 2.7%
International Paper 800 30
James River 1,800 43
Kimberly-Clark 200 17
Tambrands 400 19
------
Total Paper & Paper Products 109
------
PETROLEUM & FUEL PRODUCTS -- 3.5%
Occidental Petroleum 3,200 $ 68
Questar 1,100 37
YPF Sociedad Anonima ADR 1,700 37
------
Total Petroleum & Fuel Products 142
------
PETROLEUM REFINING -- 7.3%
Ashland 1,100 39
Atlantic Richfield 600 66
Pennzoil 900 38
Phillips Petroleum 1,100 38
Repsol 1,100 36
Texaco 500 39
USX-Marathon Group 1,900 37
------
Total Petroleum Refining 293
------
PHOTOGRAPHIC EQUIPMENT &
SUPPLIES -- 1.4%
Xerox 400 55
------
PRINTING & PUBLISHING -- 4.2%
Deluxe 1,700 49
Gannett 800 49
McGraw-Hill 600 52
Time Warner 600 19
------
Total Printing & Publishing 169
------
PROFESSIONAL SERVICES -- 2.2%
Dun & Bradstreet 800 52
Ogden 1,800 38
------
Total Professional Services 90
------
RAILROADS -- 0.9%
Conrail 500 35
------
RETAIL -- 4.2%
Giant Food, Class A 700 22
Intimate Brands* 1,800 27
Melville 1,000 31
</TABLE>
7
<PAGE> 8
STATEMENT OF NET ASSETS
STI CLASSIC VARIABLE TRUST FUNDS December 31, 1995
VALUE INCOME STOCK FUND -- CONCLUDED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE (000)
------ -----------
<S> <C> <C>
RETAIL -- CONTINUED
J.C. Penney 1,000 $ 48
Sears Roebuck 1,000 39
------
Total Retail 167
------
SEMI-CONDUCTORS/INSTRUMENTS -- 1.2%
AMP 1,200 46
------
STEEL & STEEL WORKS -- 0.8%
USX-U.S. Steel Group 1,000 31
------
TELECOMMUNICATIONS -- 7.9%
Alltel 2,200 65
Bellsouth 600 26
GTE 1,200 53
SBC Telecommunications 300 17
Southern New England Telecom 1,400 56
Sprint 1,900 76
US West 700 25
------
Total Telecommunications 318
------
Total Common Stock
(Cost $3,421,729) 3,619
------
<CAPTION>
FACE MARKET
AMOUNT (000) VALUE (000)
------------ -----------
<S> <C> <C>
REPURCHASE AGREEMENTS -- 9.6%
Lehman Brothers Incorporated,
5.54%, dated 12/29/95, matures
01/02/96, repurchase price
$386,086 (collateralized by U.S.
Treasury Note, par value
$391,379, 5.625%, maturity date
10/31/97, market value
$397,679) $386 $ 386
------
Total Repurchase Agreements
(Cost $386,096) 386
------
Total Investments -- 99.8%
(Cost $3,807,825) 4,005
------
OTHER ASSETS AND LIABILITIES -- 0.2%
Total Other Assets and Liabilities 10
------
NET ASSETS:
Portfolio Shares (unlimited
authorization - no par value)
based on 376,157 outstanding
shares of beneficial interest 3,813
Undistributed net realized gain
on investments 5
Unrealized appreciation on investments 197
------
Total Net Assets: -- 100% $4,015
======
Net Asset Value, Offering Price and
Redemption Price Per Share $10.67
======
</TABLE>
ADR -- American Depository Receipt
PLC -- Public Limited Company
* Non-income producing security
The accompanying notes are an integral part of the financial statements.
8
<PAGE> 9
Aggressive Growth Fund
<TABLE>
<CAPTION>
MARKET
SHARES VALUE (000)
------ -----------
<S> <C> <C>
COMMON STOCK -- 84.9%
AEROSPACE & DEFENSE -- 1.3%
Litton Industries* 1,000 $ 45
------
AIR TRANSPORTATION -- 0.4%
Atlantic Southeast Airlines 600 13
------
AIRCRAFT -- 0.8%
Sundstrand 400 28
------
APPAREL/TEXTILES -- 0.6%
Nine West Group* 400 15
Shaw Industries 500 7
------
Total Apparel/Textiles 22
------
AUTOMOTIVE -- 2.6%
Allen Group 600 13
Federal Signal 600 16
General Motors, Class E 700 36
Magna International, Class A 500 22
------
Total Automotive 87
------
BANKS -- 12.4%
Bancorp Hawaii 700 25
California Federal Bank, Class A* 1,000 16
Comerica 900 36
Crestar Financial 700 41
First Security 900 35
Great Western Financial 1,700 43
Marshall & Ilsley 600 16
Merchantile Bancorp 1,000 46
Regions Financial Corporation 600 26
Republic New York 700 43
Signet Banking 800 19
Southtrust 900 23
United Jersey Bank Financial 1,500 54
------
Total Banks 423
------
BROADCASTING, NEWSPAPERS &
ADVERTISING -- 0.5%
Interpublic Group 400 17
------
CHEMICALS -- 2.2%
Cabot 1,000 54
Praxair 400 13
Witco Chemical 300 9
------
Total Chemicals 76
------
COMMUNICATIONS EQUIPMENT -- 1.5%
ADC Telecommunications* 800 29
Vishay Intertechnology* 700 22
------
Total Communications Equipment 51
------
COMPUTERS & SERVICES -- 3.5%
Bay Networks* 950 39
Dell Computer* 600 21
EMC Corporation/Mass* 700 11
Seagate Technology* 400 19
Silicon Graphics* 300 8
Symbol Technologies* 500 20
------
Total Computers & Services 118
------
DRUGS -- 6.7%
Biogen* 700 43
Chiron* 500 55
Genzyme* 800 50
Ivax 1,000 29
Mylan Laboratories 700 17
Scherer RP* 700 34
------
Total Drugs 228
------
ELECTRICAL UTILITIES -- 1.2%
Wisconsin Energy 1,400 43
------
ENTERTAINMENT -- 1.4%
Mirage Resorts* 1,400 48
</TABLE>
9
<PAGE> 10
STATEMENT OF NET ASSETS
STI CLASSIC VARIABLE TRUST FUNDS December 31, 1995
AGGRESSIVE GROWTH FUND
<TABLE>
<CAPTION>
MARKET
SHARES VALUE (000)
------ ----------
<S> <C> <C>
FINANCIAL SERVICES -- 3.1%
Bear Stearns 500 $ 10
Franklin Resources 1,000 50
Green Tree Financial 1,000 26
Charles Schwab 1,000 20
------
Total Financial Services 106
------
FOOD, BEVERAGE & TOBACCO -- 3.2%
Dole Food 700 25
IBP 500 25
McCormick 1,400 34
Tyson Foods 1,000 26
------
Total Food, Beverage & Tobacco 110
------
HOUSEHOLD PRODUCTS -- 1.9%
American Standard* 1,800 51
Hubbell, Class B 200 13
------
64
------
INSURANCE -- 2.7%
AFLAC 700 30
Equifax 1,400 30
Mid Atlantic Medical Services* 500 12
Progressive of Ohio 400 20
------
Total Insurance 92
------
LUMBER & WOOD PRODUCTS -- 0.6%
Clayton Homes 950 20
------
MACHINERY -- 0.3%
Goulds Pumps 400 10
------
MEDICAL PRODUCTS & SERVICES -- 3.9%
Fisher Scientific International 400 13
Healthsouth Rehabilitation* 1,300 38
Nellcor* 400 23
Pacificare Health Systems, Class B* 300 26
Varian Associates 400 19
Tenet Healthcare * 700 15
------
Total Medical Products & Services 134
------
METALS & MINING -- 2.3%
Alumax* 500 15
Molten Metal Technology* 800 26
Potash of Saskatchewan, ADR 500 36
------
Total Metals & Mining 77
------
MISCELLANEOUS BUSINESS
SERVICES -- 4.5%
Adobe Systems 200 13
Cadence Design Systems* 600 25
Cuc International* 1,000 34
Informix* 900 27
Mentor Graphics* 700 13
Parametric Technology* 500 33
Symantec* 400 9
------
Total Miscellaneous Business
Services 154
------
MISCELLANEOUS MANUFACTURING -- 1.1%
Stryker 700 37
------
PAPER & PAPER PRODUCTS -- 0.6%
Tambrands 400 19
------
PETROLEUM & FUEL PRODUCTS -- 2.1%
Apache 1,000 30
Questar 400 13
Weatherford Enterra* 922 27
------
Total Petroleum & Fuel Products 70
------
PETROLEUM REFINING -- 2.5%
Kerr-McGee 800 51
Valero Energy 1,400 34
------
Total Petroleum Refining 85
------
PRINTING & PUBLISHING -- 2.2%
American Greetings, Class A 1,100 30
Belo, Class A 700 24
Houghton Mifflin 500 22
------
Total Printing & Publishing 76
------
</TABLE>
10
<PAGE> 11
<TABLE>
<CAPTION>
MARKET
SHARES VALUE (000)
------ -----------
<S> <C> <C>
RAILROADS -- 1.1%
Illinois Central 1,000 $ 38
------
REAL ESTATE -- 0.1%
Castle & Cooke* 233 4
------
RETAIL -- 6.5%
Circuit City Stores 300 8
Federated Department Stores* 900 25
Hannaford Brothers 500 12
Kohls* 700 37
Micro Warehouse* 400 17
Outback Steakhouse* 800 29
Price/Costco* 2,000 31
Talbots 800 23
Wendys International 1,900 40
------
Total Retail 222
------
RUBBER & PLASTIC -- 1.3%
First Brands 900 43
------
SEMI-CONDUCTORS/INSTRUMENTS -- 3.0%
Analog Devices* 800 28
Atmel* 500 11
Linear Technology 600 24
LSI Logic* 1,200 39
------
Total Semi-Conductors/
Instruments 102
------
STEEL & STEEL WORKS -- 1.3%
Olin 600 45
------
TELEPHONES &
TELECOMMUNICATION -- 2.5%
Frontier* 1,000 30
Worldcom* 1,600 56
------
Total Telephones &
Telecommunication 86
------
WHOLESALE -- 3.0%
Arrow Electronics* 300 13
Avnet 400 18
Cardinal Health 600 33
Office Depot 1,000 20
Staples 700 17
------
Total Wholesale 101
------
Total Common Stock
(Cost $2,827,849) 2,894
------
<CAPTION>
FACE MARKET
AMOUNT (000) VALUE (000)
------------ -----------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS -- 8.8%
U.S. Treasury Bill
5.450%, 01/04/96 300 300
------
Total U.S. Treasury Obligations
(Cost $299,894) 300
------
REPURCHASE AGREEMENTS -- 5.6%
Lehman Brothers Incorporated,
5.54%, dated 12/29/95,
matures 01/02/96, repurchase
price $192,307 (collateralized
by U.S. Treasury Note, par
value $194,938, 5.625%, maturity
date 10/31/97, market
value $198,076) 192 192
------
Total Repurchase Agreements
(Cost $192,307) 192
------
Total Investments -- 99.3%
(Cost $3,320,050) 3,386
------
OTHER ASSETS AND LIABILITIES -- 0.7%
Total Other Assets and Liabilities 23
------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE> 12
STATEMENT OF NET ASSETS
STI CLASSIC VARIABLE TRUST FUNDS December 31, 1995
AGGRESSIVE GROWTH
FUND -- CONCLUDED
<TABLE>
<CAPTION>
MARKET
VALUE (000)
-----------
<S> <C>
NET ASSETS:
Portfolio shares (unlimited
authorization - no par value)
based on 331,877 outstanding
shares of beneficial interest $3,334
Accumulated net realized gain
on investments 9
Unrealized appreciation on investments 66
------
Total Net Asset: -- 100.0% $3,409
======
Net Asset Value, Offering Price and
Redemption Price Per Share $10.27
======
ADR -- American Depository Receipt
* Non-income producing security
<CAPTION>
MARKET
SHARES VALUE (000)
------ -----------
<S> <C> <C>
CAPITAL GROWTH FUND
COMMON STOCK -- 86.9%
AIRCRAFT -- 3.9%
Allied Signal 1,000 $ 48
Boeing 400 31
Textron 300 20
United Technologies 500 47
------
Total Aircraft 146
------
AUTOMOTIVE -- 0.8%
General Motors 600 32
------
BANKS -- 4.2%
H.F. Ahmanson 600 16
Bank of Boston 600 28
Bank South 400 12
Chase Manhattan 500 30
First Interstate 100 14
Integra Financial 400 25
Signet Banking 700 16
Summit Bancorporation 500 16
------
Total Banks 157
------
BROADCASTING, NEWSPAPERS &
ADVERTISING -- 3.2%
Capital Citites/ABC 400 49
Tele-Communications, Class A* 1,300 26
Viacom, Class B* 1,000 47
------
Total Broadcasting, Newspapers &
Advertising 122
------
BUILDING & CONSTRUCTION -- 0.8%
Foster Wheeler 300 13
Halliburton 300 15
------
Total Building & Construction 28
------
CHEMICALS -- 3.0%
Air Products & Chemicals 500 26
Dow Chemical 200 14
DuPont (E.I.) de Nemours 800 56
Praxair 500 17
------
Total Chemicals 113
</TABLE>
12
<PAGE> 13
<TABLE>
<CAPTION>
MARKET
SHARES VALUE (000)
------ -----------
<S> <C> <C>
COMMUNICATIONS EQUIPMENT -- 2.4%
ITT* 500 $ 26
ITT Industries* 500 12
Motorola 800 46
Scientific-Atlanta 500 8
------
Total Communications Equipment 92
------
COMPUTERS & SERVICES -- 5.2%
Cisco Systems 200 15
Computer Sciences * 200 14
Digital Equipment * 300 20
General Motors, Class E 600 31
Hewlett Packard 300 25
International Business Machines 600 55
Microsoft* 400 35
------
Total Computers & Services 195
------
CONTAINERS & PACKAGING -- 0.4%
Newell 600 16
------
DRUGS -- 9.8%
Abbott Labs 700 29
Allergan 500 16
American Home Products 200 19
Amgen* 600 36
Bristol-Myers Squibb 400 34
Bush Boake Allen* 500 14
Johnson & Johnson 400 34
Merck 500 33
Pfizer 400 25
Schering Plough 300 16
SmithKline Beecham 1,200 67
Upjohn 500 19
Warner Lambert 300 29
------
Total Drugs 371
------
ELECTRICAL & ELECTRONIC PRODUCTS -- 2.6%
Emerson Electric 500 41
General Electric 800 57
------
Total Electrical & Electronic Products 98
------
ENVIRONMENTAL SERVICES -- 1.0%
Wheelabrator Technologies 700 12
WMX Technologies 800 24
------
Total Environmental Services 36
------
ENTERTAINMENT -- 1.2%
Carnival 1,900 46
------
FINANCIAL SERVICES -- 1.9%
Federal Home Loan Mortgage
Corporation 600 50
ITT Hartford Group* 500 24
------
Total Financial Services 74
------
FOOD, BEVERAGE & TOBACCO -- 7.7%
Campbell Soup 300 18
CPC International 300 21
Coca Cola 400 30
ConAgra 400 17
General Mills 300 17
Hershey Foods 200 13
Kellogg 200 15
PepsiCo 500 28
Philip Morris 900 81
RJR Nabisco 500 15
Sara Lee 1,100 35
------
Total Food, Beverage & Tobacco 290
------
HOUSEHOLD PRODUCTS -- 4.0%
American Standard* 900 25
Gillette 800 42
Procter & Gamble 1,000 83
------
Total Household Products 150
</TABLE>
13
<PAGE> 14
STATEMENT OF NET ASSETS
STI CLASSIC VARIABLE TRUST FUNDS December 31, 1995
CAPITAL GROWTH FUND -- CONCLUDED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE (000)
-------- ----------
<S> <C> <C>
INSURANCE -- 4.6%
American International Group 200 $ 18
Chubb 300 29
General Re Corporation 400 62
MGIC Investment 400 22
Travelers 700 44
----
Total Insurance 175
----
LEISURE PRODUCTS -- 0.8%
Mattel 1,000 31
----
MACHINERY -- 3.0%
Deere 400 14
General Signal 1,400 45
Tyco Labs 1,500 54
----
Total Machinery 113
----
MEDICAL PRODUCTS & SERVICES -- 3.6%
Columbia/HCA Healthcare 1,000 51
Cordis * 200 20
Healthsouth Rehabilitation * 600 17
Medtronic 300 17
Tenet Healthcare* 800 17
Varian Associates 300 14
----
Total Medical Products & Services 136
----
METALS AND MINING -- 0.8%
Aluminum Company of America 200 10
Molten Metal Technology* 600 20
----
Total Metals & Mining 30
----
MISCELLANEOUS BUSINESS
SERVICES -- 0.6%
First Data 200 13
Oracle Systems* 200 9
----
Total Miscellaneous Business
Services 22
----
PETROLEUM & FUEL PRODUCTS -- 1.9%
Exxon 200 16
Occidental Petroleum 1,000 21
Schlumberger 300 21
Union Texas Petroleum Holdings 600 12
----
Total Petroleum & Fuel Products 70
----
PETROLEUM REFINING -- 4.6%
Amoco 300 22
Atlantic Richfield 300 33
Chevron 700 37
Kerr-McGee 300 19
Phillips Petroleum 500 17
Texaco 300 24
Unocal 800 23
----
Total Petroleum Refining 175
----
PHOTOGRAPHIC EQUIPMENT &
SUPPLIES -- 2.1%
Eastman Kodak 600 40
Xerox 300 41
----
Total Photographic Equipment &
Supplies 81
----
PRINTING & PUBLISHING -- 0.2%
American Greetings, Class A 300 8
----
RAILROADS -- 1.9%
Burlington Northern Santa Fe 200 16
Conrail 300 21
Union Pacific 500 33
----
Total Railroads 70
----
RETAIL -- 4.6%
Barnes & Noble* 400 12
Federated Department Stores* 500 14
Home Depot 900 43
Kroger* 500 19
Marriott International 800 30
Office Depot* 700 14
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
MARKET
SHARES VALUE (000)
------------ -----------
<S> <C> <C>
RETAIL (CONTINUED)
Wal-Mart Stores 1,200 $ 27
Wendy's International 700 15
------
Total Retail 174
------
RUBBER & PLASTIC -- 0.7%
Goodyear Tire & Rubber 600 27
------
SEMI-CONDUCTORS/INSTRUMENTS -- 1.6%
AMP 800 31
Intel 500 28
------
Total Semi-Conductors/
Instruments 59
------
STEEL & STEEL WORKS -- 0.5%
Worthington Industries 900 19
------
TELEPHONES &
TELECOMMUNICATION -- 2.0%
Alltel 600 18
AT&T 900 58
------
Total Telephones &
Telecommunication 76
------
WHOLESALE -- 1.3%
Arrow Electronics* 600 26
Sysco 800 26
------
Total Wholesale 52
------
Total Common Stock
(Cost $3,088,684) 3,284
------
<CAPTION>
MARKET
SHARES VALUE (000)
------------ -----------
<S> <C> <C>
REPURCHASE AGREEMENT -- 17.7%
Lehman Brothers Incorporated,
5.54%, dated 12/29/95, matures
01/02/96, repurchase price
$666,534 (collateralized by U.S.
Treasury Note, par value
$675,655, 5.625%, maturity date
10/31/97, market value
$686,530) $667 $ 667
------
Total Repurchase Agreements
(Cost $666,534) 667
------
Total Investments -- 104.6%
(Cost $3,755,218) 3,951
------
OTHER ASSETS AND LIABILITIES -- (4.6%)
Total Other Assets and Liabilities (173)
------
NET ASSETS:
Portfolio shares (unlimited
authorization - no par value)
based on 354,566 outstanding
shares of beneficial interest 3,595
Accumulated realized loss
on investments (13)
Unrealized appreciation on investments 196
------
Total Net Asset: -- 100% $3,778
======
Net Asset Value, Offering Price and
Redemption Price Per Share $10.66
======
</TABLE>
* Non-income producing security
The accompanying notes are an integral part of the financial statements
15
<PAGE> 16
STATEMENT OF NET ASSETS
STI CLASSIC VARIABLE TRUST FUNDS December 31, 1995
INVESTMENT GRADE BOND FUND
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT (000) VALUE (000)
------------ -----------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS -- 91.6%
U.S. Treasury Note
8.880%, 02/15/99 $1,000 $1,102
5.750%, 08/15/03 400 405
7.880%, 11/15/04 1,000 1,157
U.S. Treasury Bond
8.130%, 08/15/19 150 189
------
Total U.S. Treasury Obligations
(Cost $2,783,310) 2,853
------
REPURCHASE AGREEMENTS -- 3.9%
Lehman Brothers Incorporated,
5.54%, dated 12/29/95, matures
01/02/96, repurchase price
$121,934 (collateralized by
U.S. Treasury Note, par value
$123,601, 5.625%, maturity
date 10/31/97, market
value $125,592) 123 123
------
Total Repurchase Agreements
(Cost $121,934) 123
------
CASH EQUIVALENT -- 2.6%
SEI Liquid Asset Trust Prime
Money Market 80 80
------
Total Cash Equivalent
(Cost $80,368) 80
------
Total Investments -- 98.1%
(Cost $2,985,612) 3,056
------
OTHER ASSETS AND LIABILITIES -- 1.9%
Total Other Assets and Liabilities 59
------
NET ASSETS:
Portfolio shares (unlimited
authorization - no par value)
based on 304,027 outstanding
shares of beneficial interest 3,045
Unrealized appreciation on investments 70
------
Total Net Assets: -- 100% $3,115
======
Net Asset Value, Offering Price and
Redemption Price Per Share $10.25
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE> 17
STATEMENT OF OPERATIONS
STI CLASSIC VARIABLE TRUST FUNDS For the Period from Inception through
December 31, 1995
<TABLE>
<CAPTION>
VALUE
INCOME AGGRESSIVE CAPITAL INVESTMENT
STOCK GROWTH GROWTH GRADE
FUND FUND FUND BOND FUND
------------- ----------- ---------- -------------
10/02/95-* 10/02/95-* 10/02/95-* 10/02/95-*
12/31/95 12/31/95 12/31/95 12/31/95
(000) (000) (000) (000)
------------- ----------- ---------- -------------
<S> <C> <C> <C> <C>
Investment Income:
Interest Income . . . . . . . . . . . . . . . . . . . . . $ 6 $ 20 $ 10 $ 40
Dividend Income . . . . . . . . . . . . . . . . . . . . . 24 4 11 --
---- ---- ---- ----
Total Investment Income . . . . . . . . . . . . . . . 30 24 21 40
---- ---- ---- ----
Expenses:
Investment Advisory Fees . . . . . . . . . . . . . . . . 6 8 8 5
Investment Advisory Fees Waived . . . . . . . . . . . . . (6) (8) (8) (5)
Reimbursement from Advisor. . . . . . . . . . . . . . . . (30) (29) (29) (32)
Administrator Fees . . . . . . . . . . . . . . . . . . . 16 16 16 16
Custody Fees . . . . . . . . . . . . . . . . . . . . . . 1 1 1 1
Transfer Agent Fees . . . . . . . . . . . . . . . . . . . 3 3 3 3
Professional Fees . . . . . . . . . . . . . . . . . . . . 10 10 10 10
Trustee Fees . . . . . . . . . . . . . . . . . . . . . . -- -- -- --
Registration Fees . . . . . . . . . . . . . . . . . . . . 1 1 1 1
Printing Expenses . . . . . . . . . . . . . . . . . . . . 3 3 3 3
Insurance and Other Fees . . . . . . . . . . . . . . . . 1 1 1 1
Amortization of Deferred Organization Costs . . . . . . . 2 2 2 2
---- ---- ---- ----
Total Expenses 7 8 8 5
---- ---- ---- ----
Net Investment Income (Loss) 23 16 13 35
---- ---- ---- ----
Net Realized Gain (Loss) on Securities Sold . . . . . . . 5 9 (13) --
Net Unrealized Appreciation on Investments: . . . . . . . 197 66 196 70
---- ---- ---- ----
Net Realized and Unrealized Gain on Investments 202 75 183 70
---- ---- ---- ----
Increase in Net Assets from Operations . . . . . . . . . . $225 $ 91 $196 $105
==== ==== ==== ====
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
* Commencement of operations.
The accompanying notes are an integral part of the financial statements.
17
<PAGE> 18
STATEMENT OF CHANGES IN NET ASSETS
STI CLASSIC VARIABLE TRUST FUNDS For the Period from Inception through
December 31, 1995
<TABLE>
<CAPTION>
VALUE
INCOME AGGRESSIVE CAPITAL INVESTMENT
STOCK GROWTH GROWTH GRADE
FUND FUND FUND BOND FUND
---------- ---------- ---------- ----------
10/02/95-* 10/02/95-* 10/02/95-* 10/02/95-*
12/31/95 12/31/95 12/31/95 12/31/95
(000) (000) (000) (000)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Operations:
Net Investment Income . . . . . . . . . . . . . . . . . . . $ 23 $ 16 $ 13 $ 35
Net Realized Gain (Loss) on Investments . . . . . . . . . . 5 9 (13) --
Net Change in Unrealized Appreciation on Investments . . . . 197 66 196 70
------ ------ ------ ------
Increase in Net Assets from Operations . . . . . . . . . . 225 91 196 105
------ ------ ------ ------
Distributions to Shareholders:
Net Investment Income: . . . . . . . . . . . . . . . . . . . (23) (16) (13) (35)
Capital Gains: . . . . . . . . . . . . . . . . . . . . . . . -- -- -- --
------ ------ ------ ------
Total Distributions . . . . . . . . . . . . . . . . . . . (23) (16) (13) (35)
------ ------ ------ ------
Capital Transactions:
Proceeds from Shares Issued . . . . . . . . . . . . . . . . 3,790 3,318 3,582 3,010
Reinvestment of Cash Distributions . . . . . . . . . . . . 23 16 13 35
Cost of Shares Repurchased . . . . . . . . . . . . . . . . . -- -- -- --
------ ------ ------ ------
Increase in Net Assets from Share Transactions . . . . . . 3,813 3,334 3,595 3,045
------ ------ ------ ------
Total Increase in Net Assets . . . . . . . . . . . . . . 4,015 3,409 3,778 3,115
------ ------ ------ ------
Net Assets:
Beginning of Period . . . . . . . . . . . . . . . . . . . . -- -- -- --
------ ------ ------ ------
End of Period . . . . . . . . . . . . . . . . . . . . . . . $4,015 $3,409 $3,778 $3,115
====== ====== ====== ======
Shares Issued and Redeemed:
Shares Issued . . . . . . . . . . . . . . . . . . . . . . . 374 330 354 301
Shares Issued in Lieu of Cash Distributions . . . . . . . . 2 2 1 3
Shares Redeemed . . . . . . . . . . . . . . . . . . . . . . -- -- -- --
------ ------ ------ ------
Net Share Transactions . . . . . . . . . . . . . . . . . 376 332 355 304
====== ====== ====== ======
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
* Commencement of operations.
The accompanying notes are an integral part of the financial statements.
18
<PAGE> 19
This page intentionally left blank.
<PAGE> 20
FINANCIAL HIGHLIGHTS
STI CLASSIC VARIABLE TRUST FUNDS For the Period from Inception through
December 31, 1995
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET NET REALIZED AND
NET ASSET VALUE INVESTMENT UNREALIZED GAINS DISTRIBUTIONS FROM DISTRIBUTIONS FROM
BEGINNING OF PERIOD INCOME ON INVESTMENTS NET INVESTMENT INCOME REALIZED CAPITAL GAINS
------------------- ---------- ---------------- --------------------- ----------------------
<S> <C> <C> <C> <C> <C>
VALUE INCOME STOCK FUND
1995 (1) $10.00 $0.06 $0.67 $(0.06) $ --
AGGRESSIVE GROWTH FUND
1995 (1) $10.00 $0.05 $0.27 $(0.05) $ --
CAPITAL GROWTH FUND
1995 (1) $10.00 $0.04 $0.66 $(0.04) $ --
INVESTMENT GRADE BOND FUND
1995 (1) $10.00 $0.13 $0.25 $(0.13) $ --
</TABLE>
(1) Commenced operations on October 2, 1995.
* Annualized
+ Cumulative since inception.
Amounts designated as "--" are either zero or rounded to zero.
20
<PAGE> 21
<TABLE>
<CAPTION> Rate of Net
Ratio to Investment
Ratio Expenses to Income
of Net Average (loss) to
Ratio of Investment Net Assets Net Assets
Net Asset Net Assets Expenses to Income to (Excluding (Excluding Portfolio
Value End Total End of Average Net Average Net Waivers and Waivers and Turnover
of Period Return Period (000) Assets Assets Reimbursements) Reimbrusements) Rate
- --------- ------ ------------ ----------- ----------- --------------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$10.67 7.31%+ 4,015 0.95%* 2.98%* 5.72%* (1.79)%* 7.17%
$10.27 3.19%+ 3,409 1.15%* 2.22%* 6.34%* (2.97)%* 13.29%
$10.66 6.96%+ 3,778 1.15%* 1.69%* 6.18%* (3.34)%* 8.05%
$10.25 3.68%+ 3,115 0.75%* 5.04%* 6.05%* (0.26)%* 108.55%
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS
STI CLASSIC VARIABLE TRUST FUNDS December 31, 1995
1. Organization:
The STI Classic Variable Trust (the "Trust") was organized as a Massachusetts
business trust under a Declaration of Trust dated April 18, 1995. The Trust is
registered under the Investment Trust Act of 1940, as amended, as an open-end
management investment Trust with four funds: the Capital Growth Fund, the
Value Income Stock Fund, the Aggressive Growth Fund (collectively "the Equity
Funds") and the Investment Grade Bond Fund. The assets of each Fund are
segregated, and a shareholder's interest is limited to the Fund in which shares
are held. The Fund's prospectus provides a description of each Fund's
investment objective policies and strategies.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the
Trust. These policies are in conformity with generally accepted accounting
principles.
Security Valuation -- Investments in equity securities which are
traded on a national securities exchange (or reported on the NASDAQ
national market system) are stated at the last quoted sales price if
readily available for such equity securities on each business day. If
there is no such reported sale, these securities, and unlisted
securities for which market quotations are readily available, are
valued at the most recently quoted bid price.
Debt obligations exceeding sixty days to maturity for which market
quotations are readily available are valued at the most recently
quoted bid price. Debt obligations with sixty days or less until
maturity may be valued either at the most recently quoted bid price or
at their amortized cost.
Federal Income Taxes -- It is each Fund's intention to qualify as a
regulated investment company by complying with the appropriate
provisions of the Internal Revenue Code of 1986, as amended.
Accordingly, no provisions for Federal income taxes are required.
Security Transactions and Investment Income -- Security transactions
are accounted for on the trade date of the security purchase or sale.
Dividend income is recognized on ex-dividend date, and interest income
is recognized on an accrual basis and includes, where applicable, the
pro rata amortization of premium or accretion of discount. The cost
used in determining net realized capital gains and losses on the sale
of securities are those of the specific securities sold, adjusted for
the accretion and amortization of purchase discounts and premiums
during the applicable holding period. Purchase discounts and premiums
on securities held by the Investment Grade Bond and the Equity Funds
are accreted and amortized to maturity using the scientific interest
method, which approximates the effective interest method.
Repurchase Agreements -- Securities pledged as collateral for
repurchase agreements are held by the custodian bank until the
repurchase agreements mature. Provisions of the repurchase agreements
ensure that the market value of the collateral, including accrued
interest thereon, is sufficient in the event of default of the
counterparty. If the counterparty defaults and the value of the
collateral declines or if the counterparty enters an insolvency
proceeding, realization of the collateral by the Funds may be delayed
or limited.
Net Asset Value Per Share -- The net asset value per share of each
Fund is calculated on each business day. In general, it is computed by
dividing the assets of each Fund, less its liabilities, by the number
of outstanding shares of the respective class of the Fund. The
offering price per share for the shares of the Investment Grade Bond
and Equity Funds is the net asset value per share.
22
<PAGE> 23
Other -- Distributions from net investment income for the Investment
Grade Bond Fund are declared daily and paid monthly to shareholders.
Distributions from net investment income for the Equity Funds are
declared and paid quarterly to shareholders. Any net realized capital
gains are distributed to shareholders at least annually. Expenses
related to a specific Fund are charged to that Fund. Other operating
expenses of the Trust are pro-rated to the Funds on the basis of
relative net assets.
Use of Estimates -- The preparation of the financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that effect the reported
amount of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and reported
amounts of revenues and expenses during the reporting period. Actual
amounts could differ from these estimates.
3. Administration and Distribution Agreements
The Trust and SEI Financial Management Corporation (the "Administrator") are
parties to an administration agreement (the "Administration Agreement") dated
May 29, 1995. Under the terms of the Administration Agreement the
Administrator is entitled to a fee, subject to a minimum, (expressed as a
percentage of the combined average daily net assets of the Trust and the STI
Classic Trust) of: .10% up to $1 billion, .07% on the next $4 billion, .05% on
the next $3 billion, .045% on the next $2 billion, and .04% for over $10
billion.
The Trust and Federated Services Company are parties to a Transfer Agency
servicing agreement dated May 29, 1995 under which Federated Services Company
provides transfer agency services to the Trust.
The Trust and SEI Financial Services Company ("the Distributor") are parties to
a Distribution Agreement dated May 29, 1995. The Distributor receives no fees
for its services under this agreement.
4. Investment Advisory Agreement
Investment advisory services are provided to the Trust by STI Capital
Management, N.A. ("STI Capital"). Under the terms of the investment advisory
agreements, STI Capital is entitled to receive a fee from the Fund, computed
daily and paid monthly, at an annual rate of .74%, 1.15%, .80% and 1.15% of the
average daily net assets of the Investment Grade Bond Fund, Capital Growth
Fund, Value Income Stock Fund and Aggressive Growth Fund, respectively.
SunTrust Bank, Atlanta acts as Custodian for all the Funds. Fees of the
Custodian are paid on the basis of net assets. The Custodian plays no role in
determining the investment policies of the Trust or which securities are to be
purchased or sold in the Funds.
5. Organizational Costs and Transactions with Affiliates
Organizational costs have been capitalized by the Trust and are being
amortized on a straight line basis over a maximum of sixty months following
commencement of operations. In the event any of the initial shares of the Trust
are redeemed by any holder
23
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS (Concluded)
STI CLASSIC VARIABLE TRUST FUNDS December 31, 1995
thereof during the period that the Trust is amortizing its organizational
costs, the redemption proceeds payable to the holder thereof by the Trust will
be reduced by the unamortized organizational cost in the same ratio as the
number of initial shares being redeemed bears to the number of initial shares
outstanding at the time of redemption.
Certain officers of the Trust are also officers of the Administrator and/or SEI
Financial Services Company (the "Distributor"). Such officers are paid no
fees by the Trust for serving as officers of the Trust.
6. Investment Transactions
The cost of security purchases and the proceeds from security sales, excluding
short-term investments, for the period ended December 31, 1995 were as follows:
<TABLE>
<CAPTION>
U.S. Govt. U.S. Govt.
Purchases Sales Purchases Sales
(000) (000) (000) (000)
--------- ----- ---------- ----------
<S> <C> <C> <C> <C>
Investment Grade Bond Fund . . . . . $2,791 $ -- $2,791 $ --
Capital Growth Fund . . . . . . . . 3,323 222 -- --
Value Income Stock Fund . . . . . . 3,626 209 -- --
Aggressive Growth Fund . . . . . . . 3,085 267 -- --
</TABLE>
The aggregate gross unrealized appreciation and depreciation for securities
held by the Investment Grade Bond and Equity Funds at December 31, 1995 was as
follows:
<TABLE>
<CAPTION>
Net Unrealized
Appreciated Depreciated Appreciation --
Securities Securities (Depreciation)
(000) (000) (000)
----------- ----------- ---------------
<S> <C> <C> <C>
Investment Grade Bond Fund . . . $ 70 $ 0 $ 70
Capital Growth Fund . . . . . . 231 35 196
Value Income Stock Fund . . . . 230 33 197
Aggressive Growth Fund . . . . . 148 82 66
</TABLE>
At December 31, 1995 the Capital Growth Fund had $10,224 available realized
capital losses to offset future net capital gains.
7. Concentration of Credit Risk:
The Investment Grade Bond Fund invests primarily in investment grade
obligations rated at least BBB or better by S & P or Baa or better by Moody's.
Changes by recognized rating agencies in the ratings of any fixed income
security or in the ability of an issuer to make payments of interest and
principal may affect the value of these investments. The following is a summary
of credit quality ratings for securities held by the Fund at December 31, 1996:
<TABLE>
<CAPTION>
Moody's % of Portfolio Value
- ------- --------------------
<S> <C>
US Government Securities . . . . . . . 93.38%
Repurchase Agreements . . . . . . . . 6.62%
-----
100%
=====
</TABLE>
<TABLE>
<CAPTION>
S & P % of Portfolio Value
- ----- --------------------
<S> <C>
US Government Securities . . . . . . 93.38%
Repurchase Agreements . . . . . . . 6.62%
-----
100%
=====
</TABLE>
24
<PAGE> 25
Unaudited
NOTICE TO SHAREHOLDERS
OF
STI CLASSIC VARIABLETRUST FUNDS
For shareholders that do not have a December 31, 1995 tax year end, this notice
is for informational purposes only. For shareholders with a December 31, 1995
tax year end, please consult your tax advisor as to the pertinence of this
notice. For the fiscal year ended December 31, 1995, each portfolio is
designating the following items with regard to distributions paid during the
year:
<TABLE>
<CAPTION>
(A) (B) (C)
Long Term Ordinary
Capital Gains Income Total
Distributions Distributions Distributions
Portfolio (Tax Basis) (Tax Basis) (Tax Basis)
- --------- ------------- ------------- -------------
<S> <C> <C> <C>
Value Income Stock.................... 0% 100% 100%
Aggressive Growth..................... 0% 100% 100%
Capital Growth........................ 0% 100% 100%
Investment Grade Bond................. 0% 100% 100%
</TABLE>
<TABLE>
<CAPTION>
(D) (E)
Qualifying Tax-Exempt
Portfolio Dividends Interest
- --------- ---------- ----------
<S> <C> <C>
Value Income Stock.................... 35.56% 0%
Aggressive Growth..................... 5.49% 0%
Capital Growth........................ 19.44% 0%
Investment Grade Bond................. 0% 0%
</TABLE>
- --------
(1) Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction.
* Items (A) and (B) are based on a percentage of each portfolio's total
distributions.
** Items (D) and (E) are based on a percentage of gross income of each
portfolio.
25
<PAGE> 26
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Trustees of
STI Classic Variable Trust:
We have audited the accompanying statements of net assets of the Value Income
Stock, Aggressive Growth, Capital Growth, and Investment Grade Bond Funds of
the STI Classic Variable Trust (the "Trust") as of December 31, 1995, and the
related statements of operations, changes in net assets and financial
highlights for the period presented. These financial statements and financial
highlights are the responsibility of the Trust's 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, 1995, by correspondence with the custodian. 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 the
Value Income Stock, AggressiveGrowth, Capital Growth, and Investment Grade
Bond Funds of the STI Classic Variable Trust as of December 31, 1995, the
results of their operations, changes in their net assets, and financial
highlights for the period presented, in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
Philadelphia, Pa.
February 9, 1996
26
<PAGE> 27
Investment Advisor:
STI Capital Management, N.A.
STI Classic Variable Trust Funds are not ANNUAL
deposits, are not insured or guaranteed FINANCIAL REPORT
by the FDIC or any other government
agency, and are not endorsed by and do
not constitute obligations of SunTrust STI Classic Variable Trust
Banks, Inc. or any other of its
affiliates. Invesment in the Funds [LOGO]
involves risk, including the possible
loss of principal. There is no guarantee DECEMBER 31, 1995
that any STI Classic Variable Trust Fund
will achieve its investment objective. [LOGO]
The STI Classic Variable Trust Funds are
advised by an affiliate of SunTrust
Banks, Inc.
Distributor
SEI Financial Services Company
This information must be preceded or
accompanied by a current prospectus for each
Fund described.
