Annuity Investors Life Insurance Company (REGISTERED TRADEMARK)
P.O. Box 5423
Cincinnati, Ohio 45201-5423
1-800-789-6771
ANNUITY INVESTORS (SERVICEMARK) VARIABLE ACCOUNT A
OF
ANNUITY INVESTORS (LOGO) (SERVICEMARK)
LIFE INSURANCE COMPANY
FOR
[LOGO]
THE COMMODORE (SERVICEMARK) Variable Annuities
THE COMMODORE THE COMMODORE
NAUTICUS (REGISTERED TRADEMARK) Americus (SERVICEMARK)
JUNE 30, 1998
SEMIANNUAL REPORT TO CONTRACT OWNERS
<PAGE>
SEMIANNUAL REPORT TO CONTRACT OWNERS
JUNE 30, 1998
TABLE OF CONTENTS PAGE
LETTER FROM THE PRESIDENT 7
DREYFUS CORPORATION
DREYFUS VARIABLE INVESTMENT FUND, CAPITAL APPRECIATION PORTFOLIO
SEMI-ANNUAL LETTER TO SHAREHOLDERS 12
STATEMENT OF INVESTMENTS 15
STATEMENT OF ASSETS AND LIABILITIES 18
STATEMENT OF OPERATIONS 19
STATEMENT OF CHANGES IN NET ASSETS 20
FINANCIAL HIGHLIGHTS 21
NOTES TO FINANCIAL STATEMENTS 22
DREYFUS VARIABLE INVESTMENT FUND, GROWTH AND INCOME PORTFOLIO
LETTER TO SHAREHOLDERS 26
STATEMENT OF INVESTMENTS 28
STATEMENT OF ASSETS AND LIABILITIES 31
STATEMENT OF OPERATIONS 32
STATEMENT OF CHANGES IN NET ASSETS 33
FINANCIAL HIGHLIGHTS 34
NOTES TO FINANCIAL STATEMENTS 35
DREYFUS VARIABLE INVESTMENT FUND, SMALL CAP PORTFOLIO
LETTER TO SHAREHOLDERS 38
STATEMENT OF INVESTMENTS 41
STATEMENT OF ASSETS AND LIABILITIES 45
STATEMENT OF OPERATIONS 46
STATEMENT OF CHANGES IN NET ASSETS 47
FINANCIAL HIGHLIGHTS 48
NOTES TO FINANCIAL STATEMENTS 49
DREYFUS VARIABLE INVESTMENT FUND, SOCIALLY RESPONSIBLE FUND, INC.
LETTER TO SHAREHOLDERS 54
STATEMENT OF INVESTMENTS 58
STATEMENT OF ASSETS AND LIABILITIES 61
STATEMENT OF OPERATIONS 62
STATEMENT OF CHANGES IN NET ASSETS 63
FINANCIAL HIGHLIGHTS 64
NOTES TO FINANCIAL STATEMENTS 65
DREYFUS STOCK INDEX FUND
LETTER TO SHAREHOLDERS 68
STATEMENT OF INVESTMENTS 70
STATEMENT OF FINANCIAL FUTURES 76
STATEMENT OF ASSETS AND LIABILITIES 77
STATEMENT OF OPERATIONS 78
STATEMENT OF CHANGES IN NET ASSETS 79
FINANCIAL HIGHLIGHTS 80
NOTES TO FINANCIAL STATEMENTS 81
<PAGE>
TABLE OF CONTENTS PAGE
JANUS CAPITAL CORPORATION
JANUS ASPEN GROWTH PORTFOLIO
PORTFOLIO STRATEGY 83
PERFORMANCE 84
SCHEDULE OF INVESTMENTS 84
SUMMARY OF INVESTMENT BY COUNTRY 85
FORWARD CURRENCY CONTRACTS 85
JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO
PORTFOLIO STRATEGY 86
PERFORMANCE 87
SCHEDULE OF INVESTMENTS 87
SUMMARY OF INVESTMENT BY COUNTRY 88
FORWARD CURRENCY CONTRACTS 88
JANUS ASPEN INTERNATIONAL PORTFOLIO
PORTFOLIO STRATEGY 89
PERFORMANCE 90
SCHEDULE OF INVESTMENTS 90
SUMMARY OF INVESTMENT BY COUNTRY 94
FORWARD CURRENCY CONTRACTS 94
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO
PORTFOLIO STRATEGY 95
PERFORMANCE 96
SCHEDULE OF INVESTMENTS 96
SUMMARY OF INVESTMENT BY COUNTRY 100
FORWARD CURRENCY CONTRACTS 100
JANUS ASPEN BALANCED PORTFOLIO
CURRENT OUTLOOK 101
PERFORMANCE 102
SCHEDULE OF INVESTMENTS 102
SUMMARY OF INVESTMENT BY COUNTRY 104
STATEMENTS OF ASSETS AND LIABILITIES 106
JANUS ASPEN GROWTH PORTFOLIO
JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO
JANUS ASPEN INTERNATIONAL PORTFOLIO
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO
JANUS ASPEN BALANCED PORTFOLIO
STATEMENTS OF OPERATIONS 106
JANUS ASPEN GROWTH PORTFOLIO
JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO
JANUS ASPEN INTERNATIONAL PORTFOLIO
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO
JANUS ASPEN BALANCED PORTFOLIO
<PAGE>
TABLE OF CONTENTS PAGE
STATEMENTS OF CHANGES IN NET ASSETS 108
JANUS ASPEN GROWTH PORTFOLIO
JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO
JANUS ASPEN INTERNATIONAL PORTFOLIO
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO
JANUS ASPEN BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS - INSTITUTIONAL SHARES 110
JANUS ASPEN GROWTH PORTFOLIO
JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO
JANUS ASPEN INTERNATIONAL PORTFOLIO
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO
JANUS ASPEN BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS - RETIREMENT SHARES 113
JANUS ASPEN GROWTH PORTFOLIO
JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO
JANUS ASPEN INTERNATIONAL PORTFOLIO
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO
JANUS ASPEN BALANCED PORTFOLIO
NOTES TO FINANCIAL STATEMENTS 114
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
MERRILL LYNCH VARIABLE SERIES FUNDS, INC. - BASIC VALUE FOCUS FUND
LETTER TO SHAREHOLDERS 120
RECENT PERFORMANCE RESULTS 122
SCHEDULE OF INVESTMENTS 123
STATEMENT OF ASSETS AND LIABILITIES 125
STATEMENT OF OPERATIONS 126
STATEMENT OF CHANGES IN NET ASSETS 127
FINANCIAL HIGHLIGHTS 128
NOTES TO FINANCIAL STATEMENTS 130
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
- DOMESTIC MONEY MARKET FUND
LETTER TO SHAREHOLDERS 133
SCHEDULE OF INVESTMENTS 134
STATEMENT OF ASSETS AND LIABILITIES 137
STATEMENT OF OPERATIONS 138
STATEMENT OF CHANGES IN NET ASSETS 139
FINANCIAL HIGHLIGHTS 140
NOTES TO FINANCIAL STATEMENTS 141
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
- GLOBAL STRATEGY FOCUS FUND
LETTER TO SHAREHOLDERS 142
RECENT PERFORMANCE RESULTS 144
SCHEDULE OF INVESTMENTS 145
STATEMENT OF ASSETS AND LIABILITIES 151
STATEMENT OF OPERATIONS 152
STATEMENT OF CHANGES IN NET ASSETS 153
FINANCIAL HIGHLIGHTS 154
NOTES TO FINANCIAL STATEMENTS 155
<PAGE>
TABLE OF CONTENTS PAGE
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
- High Current Income Fund
LETTER TO SHAREHOLDERS 158
RECENT PERFORMANCE RESULTS 160
SCHEDULE OF INVESTMENTS 161
STATEMENT OF ASSETS AND LIABILITIES 170
STATEMENT OF OPERATIONS 171
STATEMENT OF CHANGES IN NET ASSETS 172
FINANCIAL HIGHLIGHTS 173
NOTES TO FINANCIAL STATEMENTS 174
MORGAN STANLEY UNIVERSAL FUNDS INC.
FIXED INCOME PORTFOLIO
INVESTMENT OVERVIEW 178
STATEMENT OF NET ASSETS 180
STATEMENT OF OPERATIONS 184
FINANCIAL HIGHLIGHTS 185
NOTES TO FINANCIAL STATEMENTS 186
DIRECTORS AND OFFICERS 191
U.S. REAL ESTATE PORTFOLIO
INVESTMENT OVERVIEW 194
STATEMENT OF NET ASSETS 196
STATEMENT OF OPERATIONS 198
FINANCIAL HIGHLIGHTS 199
NOTES TO FINANCIAL STATEMENTS 200
DIRECTORS AND OFFICERS 205
PBHG INSURANCE SERIES FUND, INC.
PBHG TECHNOLOGY & COMMUNICATIONS PORTFOLIO
LETTER TO SHAREHOLDERS 208
PORTFOLIO RETURNS 210
STATEMENT OF NET ASSETS 211
STATEMENT OF OPERATIONS 213
STATEMENT OF CHANGES IN NET ASSETS 214
FINANCIAL HIGHLIGHTS 215
NOTES TO FINANCIAL STATEMENTS 216
PBHG GROWTH II PORTFOLIO
LETTER TO SHAREHOLDERS 220
PORTFOLIO RETURNS 221
STATEMENT OF NET ASSETS 222
STATEMENT OF OPERATIONS 225
STATEMENT OF CHANGES IN NET ASSETS 226
FINANCIAL HIGHLIGHTS 227
NOTES TO FINANCIAL STATEMENTS 228
<PAGE>
TABLE OF CONTENTS PAGE
THE STRONG GROWTH FUND II INC.
STRONG GROWTH FUND II, INC.
INVESTMENT REVIEW 232
FINANCIAL INFORMATION
SCHEDULE OF INVESTMENTS IN SECURITIES 234
STATEMENT OF ASSETS AND LIABILITIES 235
STATEMENT OF OPERATIONS 236
STATEMENTS OF CHANGES IN NET ASSETS 236
NOTES TO FINANCIAL STATEMENTS 237
FINANCIAL HIGHLIGHTS 238
<PAGE>
REPORT FROM THE PRESIDENT
Dear Contract Owner:
During the first six months of 1998, Annuity Investors Variable Account A
maintained its investment options at seventeen sub-accounts representing a broad
spectrum of investment objectives. Annuity Investors continually monitors and
reviews existing options to insure portfolio objectives are being met. We will
continue to follow new market trends and sectors to be certain there is adequate
diversification options available to our contract holders.
The semi-annual reports for each of the seventeen portfolios are reprinted in
the following pages. Below are performance results for each sub-account of
Annuity Investors Variable Account A for the 1997 fiscal year and the six month
period ending June 30, 1998. All performance results are measured by the
percentage change in unit values for the applicable period, net of all mortality
and expense charges.
Six Months Year
Ending Ending
6/30/98 12/31/97
GLOBAL PORTFOLIO:
Janus Aspen Series Worldwide Growth
Portfolio 26.24% 20.65%
AGGRESSIVE GROWTH PORTFOLIOS:
Janus Aspen Series Aggressive Growth
Portfolio
PBHG Insurance Series Fund, Inc. -
Technology and Communication Fund 11.61% 3.25%
GROWTH PORTFOLIOS:
Dreyfus VIF Small Cap Portfolio 5.30% 15.32%
PBHG Insurance Series Fund, Inc. -
PBHG Growth II Portfolio 9.46% 6.62%
Strong Special Opportunity Fund II, Inc. 12.72% 23.91%
Dreyfus VIF Capital Appreciation
Portfolio 19.99% 26.48%
The Dreyfus Socially Responsible
Growth Fund, Inc. 17.66% 26.86%
Merrill Lynch VSF Basic Value Focu Fund 13.00% 19.14%
Dreyfus Stock Index Fund 16.78% 31.32%
GROWTH AND INCOME PORTFOLIO:
Dreyfus VIF Growth and Income Portfolio 5.83% 14.78%
REAL ESTATE PORTFOLIO:
Morgan Stanley Universal Funds Inc. -
U.S. Real Estate Portfolio (5.32%) 16.78%
BALANCED PORTFOLIOS:
Merrill Lynch VSF Global Strategy
Focus Fund 9.90% 10.57%
Janus Aspen Series Balanced Portfolio 16.73% 20.60%
INCOME PORTFOLIOS:
Merrill Lynch VSF High Current Income
Fund 2.55% 9.63%
Morgan Stanley Universal Funds Inc. -
Fixed Income Portfolio 2.92% 8.58%
MONEY MARKET PORTFOLIO:
Merrill Lynch VSF Domestic Money
Market Fund 1.56% 3.30%
<PAGE>
In the first half of 1998, the equity market as measured by the Standard &
Poor's 500 index, showed a 16.84% increase and the NASDAQ Composite Index
increased by 20.66%. The bond market, as measured by the Lehman Brothers
Aggregate Index, increased by 4.20% over the same period.
Based on the level of professional investment expertise present in each
management company and their dedication to in-depth research, Annuity Investors
is proud to offer Dreyfus, Janus, Merrill Lynch, Morgan Stanley, Pilgrim Baxter
and Strong for inclusion in its Variable Account A. This broad range of
investment options allows you the flexibility to implement your own personal
investment strategy and to change your mix of investments as your objectives
change over time.
It gives me great pleasure to present this performance and we look forward to
continuing to serve you in the future.
Sincerely,
Robert A. Adams
President
<PAGE>
The Financial Statements of the following investment companies ("Registrant")
are made a part hereof and incorporated herein:
REGISTRANT 1940 Act Number
- ---------- ---------------
Dreyfus Variable Investment Fund 811-05125
- --Capital Appreciation Portfolio
- --Growth & Income Portfolio
- --Small Cap Portfolio
The Dreyfus Socially Responsible Growth Fund, Inc. 811-07044
Dreyfus Stock Index Fund 811-05719
Janus Aspen Series 811-07736
- --Janus Aspen Aggressive Growth Portfolio
- --Janus Aspen Worldwide Growth Portfolio
- --Janus Aspen Balanced Portfolio
Merrill Lynch Variable Series Fund, Inc. 811-03290
- --Basic Value Focus Fund
- --Domestic Money Market Fund
- --Global Strategy Focus Fund
- --High Current Income Fund
Morgan Stanley Universal Fund Inc. 811-07607
- --Fixed Income Portfolio
- --U.S. Real Estate Portfolio
PBHG Insurance Series Fund, Inc. 811-08009
- --PGHB Growth II Portfolio
- --PBHG Technology & Communications Portfolio
Strong Opportunity Fund II, Inc. 811-6552
<PAGE>
ANNUITY INVESTORS (SERVICEMARK) VARIABLE ACCOUNT A
[DREYFUS LOGO]
Dreyfus Variable Investment Fund - Capital Appreciation Portfolio
Dreyfus Variable Investment Fund - Growth & Income Portfolio
Dreyfus Variable Investment Fund - Small Cap Portfolio
The Dreyfus Socially Responsible Growth Fund, Inc.
Dreyfus Stock Index Fund
[JANUS LOGO]
Janus Aspen Growth Portfolio
Janus Aspen Aggressive Growth Portfolio
Janus Aspen International Portfolio
Janus Aspen Worldwide Growth Portfolio
Janus Aspen Balanced Portfolio
[MERRILL LYNCH LOGO]
Merrill Lynch Variable Series Fund, Inc. - Basic Value Focus Fund
Merrill Lynch Variable Series Fund, Inc. - Domestic Money Market Fund
Merrill Lynch Variable Series Funds, Inc. - Global Strategy Focus Fund
Merrill Lynch Variable Series Fund, Inc. - High Current Income Fund
[MORGAN STANLEY LOGO]
Morgan Stanley Universal Funds Inc. - Fixed Income Portfolio
Morgan Stanley Universal Funds Inc. - U.S. Real Estate Portfolio
[PBHG LOGO]
PBHG Insurance Series Fund, Inc. - PBHG Growth II Portfolio
PBHB Insurance Series Fund, Inc. - PBHG Technology & Communications Portfolio
[STRONG FUNDS LOGO]
Strong Growth Fund II, Inc.
<PAGE>
Annuity Investors Life Insurance Company (REGISTERED TRADEMARK)
P.O. Box 5423
Cincinnati, Ohio 45201-5423
1-800-789-6771
ANNUITY INVESTORS
(SERVICEMARK)
VARIABLE ACCOUNT A
OF
Annuity Investors (SERVICEMARK)
Life Insurance Company
FOR
THE COMMODORE(SERVICEMARK)
Variable Annuities
JUNE 30, 1998
SEMIANNUAL REPORT TO CONTRACT OWNERS
This report is for the information of the contract owners and participants of
the Annuity Investors Life Insurance Company and the Annuity Investors Variable
Account A. It is authorized for distribution to other persons only when preceded
or accompanied by a current prospectus which contains complete information,
including charges and expenses.
