UNITED STATES

SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number

811-01944

     Principal Variable Contracts Funds, Inc. (Exact name of registrant as specified in charter)

711 High Street, Des Moines, IA 50392-2080
(Address of principal executive offices)	(Zip code)

     Princor Financial Services Corporation, Des Moines, IA 50392-2080 (Name and address of agent for service)

Registrant’s telephone number, including area code:		515-247-6783
Date of fiscal year end:	December 31, 2009
Date of reporting period:	June 30, 2009

ITEM 1 – REPORT TO STOCKHOLDERS

Principal Variable Contracts Funds, Inc.

Semiannual Report
June 30, 2009

Table of Contents

Shareholder Expense Example	1
Financial Statements	5
Notes to Financial Statements	51
Schedules of Investments	83
Financial Highlights	306
Supplemental Information	338

SHAREHOLDER EXPENSE EXAMPLE
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)

As a shareholder of Principal Variable Contracts Funds, Inc. you incur ongoing costs, including management fees; distribution fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in Principal Variable Contracts Funds, Inc. and to compare these costs with the ongoing costs of investing in other mutual funds. As a shareholder of Principal LifeTime 2010 Account, Principal LifeTime 2020 Account, Principal LifeTime 2030 Account, Principal LifeTime 2040 Account, Principal LifeTime 2050 Account, Principal LifeTime Strategic Income Account, SAM Balanced Portfolio, SAM Conservative Balanced Portfolio, SAM Conservative Growth Portfolio, SAM Flexible Income Portfolio, or SAM Strategic Growth Portfolio, your fund will indirectly bear its pro rata share of the expenses incurred by the investment companies in which the fund invests. These expenses are not included in the fu nd’s annualized expense ratio used to calculate the expenses paid in this example. If they were, the expenses paid would be higher. Expenses shown below and on the following pages do not account for fees, expenses and charges of any variable insurance contract or retirement plan. If these fees had been reflected, expenses would have been higher.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2009 to June 30, 2009).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on each accounts’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the account’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in Principal Variable Contracts Funds, Inc. and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.

			Expenses Paid
	Beginning	Ending	During Period
	Account Value	Account Value	January 1, 2009	Annualized
	January 1, 2009	June 30, 2009	to June 30, 2009(a)	Expense Ratio
Asset Allocation Account Class 1
Actual	$1,000.00	$1,031.11	$4.43	0.88%
Hypothetical	1,000.00	1,020.43	4.41	0.88
Balanced Account Class 1
Actual	1,000.00	1,033.73	3.48	0.69
Hypothetical	1,000.00	1,021.37	3.46	0.69
Bond & Mortgage Securities Account Class 1
Actual	1,000.00	1,082.35	2.38	0.46
Hypothetical	1,000.00	1,022.51	2.31	0.46
Diversified International Account Class 1
Actual	1,000.00	1,039.84	4.86	0.96
Hypothetical	1,000.00	1,020.03	4.81	0.96
Diversified International Account Class 2
Actual	1,000.00	1,037.51	6.11	1.21
Hypothetical	1,000.00	1,018.79	6.06	1.21
Equity Income Account Class 1
Actual	1,000.00	990.16	2.71	0.55
Hypothetical	1,000.00	1,022.07	2.76	0.55
Equity Income Account Class 2
Actual	1,000.00	989.03	3.95	0.80
Hypothetical	1,000.00	1,020.83	4.01	0.80

1

	SHAREHOLDER EXPENSE EXAMPLE
	PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
	June 30, 2009 (unaudited)
			Expenses Paid
	Beginning	Ending	During Period
	Account Value	Account Value	January 1, 2009	Annualized
	January 1, 2009	June 30, 2009	to June 30, 2009(a)	Expense Ratio
Government & High Quality Bond Account Class 1
Actual	$1,000.00	$1,010.81	$2.34	0.47%
Hypothetical	1,000.00	1,022.46	2.36	0.47
Income Account Class 1
Actual	1,000.00	1,090.17	2.64	0.51
Hypothetical	1,000.00	1,022.27	2.56	0.51
Income Account Class 2
Actual	1,000.00	1,089.75	3.94	0.76
Hypothetical	1,000.00	1,021.03	3.81	0.76
International Emerging Markets Account Class 1
Actual	1,000.00	1,279.93	8.14	1.44
Hypothetical	1,000.00	1,017.65	7.20	1.44
International SmallCap Account Class 1
Actual	1,000.00	1,094.22	7.32	1.41
Hypothetical	1,000.00	1,017.80	7.05	1.41
LargeCap Blend Account II Class 1
Actual	1,000.00	1,062.87	3.99	0.78
Hypothetical	1,000.00	1,020.93	3.91	0.78
LargeCap Blend Account II Class 2
Actual	1,000.00	1,058.71	5.26	1.03
Hypothetical	1,000.00	1,019.69	5.16	1.03
LargeCap Growth Account Class 1
Actual	1,000.00	1,038.58	3.54	0.70
Hypothetical	1,000.00	1,021.32	3.51	0.70
LargeCap Growth Account Class 2
Actual	1,000.00	1,038.18	4.80	0.95
Hypothetical	1,000.00	1,020.08	4.76	0.95
LargeCap Growth Account I Class 1
Actual	1,000.00	1,213.31	4.34	0.79
Hypothetical	1,000.00	1,020.88	3.96	0.79
LargeCap S&P 500 Index Account Class 1
Actual	1,000.00	1,030.95	1.41	0.28
Hypothetical	1,000.00	1,023.41	1.40	0.28
LargeCap Value Account Class 1
Actual	1,000.00	968.08	3.03	0.62
Hypothetical	1,000.00	1,021.72	3.11	0.62
LargeCap Value Account III Class 1
Actual	1,000.00	987.31	3.74	0.76
Hypothetical	1,000.00	1,021.03	3.81	0.76
MidCap Blend Account Class 1
Actual	1,000.00	1,088.94	3.21	0.62
Hypothetical	1,000.00	1,021.72	3.11	0.62
MidCap Growth Account I Class 1
Actual	1,000.00	1,104.89	4.85	0.93
Hypothetical	1,000.00	1,020.18	4.66	0.93
MidCap Stock Account Class 1
Actual	1,000.00	1,019.53	3.96	0.79
Hypothetical	1,000.00	1,020.88	3.96	0.79
MidCap Stock Account Class 2
Actual	1,000.00	1,017.70	5.20	1.04
Hypothetical	1,000.00	1,019.64	5.21	1.04

2

	SHAREHOLDER EXPENSE EXAMPLE
	PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
	June 30, 2009 (unaudited)
			Expenses Paid
	Beginning	Ending	During Period
	Account Value	Account Value	January 1, 2009	Annualized
	January 1, 2009	June 30, 2009	to June 30, 2009(a)	Expense Ratio
MidCap Value Account II Class 1
Actual	$1,000.00	$1,015.37	$5.05	1.01%
Hypothetical	1,000.00	1,019.79	5.06	1.01
Money Market Account Class 1
Actual	1,000.00	1,002.21	2.23	0.45
Hypothetical	1,000.00	1,022.56	2.26	0.45
Money Market Account Class 2
Actual	1,000.00	1,001.80	2.68	0.54
Hypothetical	1,000.00	1,022.12	2.71	0.54
Mortgage Securities Account Class 1
Actual	1,000.00	1,031.04	2.57	0.51
Hypothetical	1,000.00	1,022.27	2.56	0.51
Mortgage Securities Account Class 2
Actual	1,000.00	1,030.66	3.83	0.76
Hypothetical	1,000.00	1,021.03	3.81	0.76
Principal Capital Appreciation Account Class 1
Actual	1,000.00	1,054.35	3.31	0.65
Hypothetical	1,000.00	1,021.57	3.26	0.65
Principal Capital Appreciation Account Class 2
Actual	1,000.00	1,053.67	4.58	0.90
Hypothetical	1,000.00	1,020.33	4.51	0.90
Principal LifeTime 2010 Account Class 1
Actual	1,000.00	1,061.12	0.77	0.15
Hypothetical	1,000.00	1,024.05	0.75	0.15
Principal LifeTime 2020 Account Class 1
Actual	1,000.00	1,062.65	0.66	0.13
Hypothetical	1,000.00	1,024.15	0.65	0.13
Principal LifeTime 2030 Account Class 1
Actual	1,000.00	1,058.28	0.77	0.15
Hypothetical	1,000.00	1,024.05	0.75	0.15
Principal LifeTime 2040 Account Class 1
Actual	1,000.00	1,059.72	0.71	0.14
Hypothetical	1,000.00	1,024.10	0.70	0.14
Principal LifeTime 2050 Account Class 1
Actual	1,000.00	1,059.81	0.72	0.14
Hypothetical	1,000.00	1,024.10	0.70	0.14
Principal LifeTime Strategic Income Account Class 1
Actual	1,000.00	1,054.05	0.71	0.14
Hypothetical	1,000.00	1,024.10	0.70	0.14
Real Estate Securities Account Class 1
Actual	1,000.00	883.78	4.30	0.92
Hypothetical	1,000.00	1,020.23	4.61	0.92
Real Estate Securities Account Class 2
Actual	1,000.00	883.34	5.46	1.17
Hypothetical	1,000.00	1,018.99	5.86	1.17
SAM Balanced Portfolio Class 1
Actual	1,000.00	1,053.46	1.32	0.26
Hypothetical	1,000.00	1,023.51	1.30	0.26
SAM Balanced Portfolio Class 2
Actual	1,000.00	1,053.20	2.60	0.51
Hypothetical	1,000.00	1,022.27	2.56	0.51

3

	SHAREHOLDER EXPENSE EXAMPLE
	PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
	June 30, 2009 (unaudited)
			Expenses Paid
	Beginning	Ending	During Period
	Account Value	Account Value	January 1, 2009	Annualized
	January 1, 2009	June 30, 2009	to June 30, 2009(a)	Expense Ratio
SAM Conservative Balanced Portfolio Class 1
Actual	$1,000.00	$1,062.00	$1.33	0.26%
Hypothetical	1,000.00	1,023.51	1.30	0.26
SAM Conservative Balanced Portfolio Class 2
Actual	1,000.00	1,060.32	2.61	0.51
Hypothetical	1,000.00	1,022.27	2.56	0.51
SAM Conservative Growth Portfolio Class 1
Actual	1,000.00	1,042.04	1.32	0.26
Hypothetical	1,000.00	1,023.51	1.30	0.26
SAM Conservative Growth Portfolio Class 2
Actual	1,000.00	1,041.11	2.58	0.51
Hypothetical	1,000.00	1,022.27	2.56	0.51
SAM Flexible Income Portfolio Class 1
Actual	1,000.00	1,072.05	1.34	0.26
Hypothetical	1,000.00	1,023.51	1.30	0.26
SAM Flexible Income Portfolio Class 2
Actual	1,000.00	1,070.36	2.62	0.51
Hypothetical	1,000.00	1,022.27	2.56	0.51
SAM Strategic Growth Portfolio Class 1
Actual	1,000.00	1,039.92	1.32	0.26
Hypothetical	1,000.00	1,023.51	1.30	0.26
SAM Strategic Growth Portfolio Class 2
Actual	1,000.00	1,038.41	2.58	0.51
Hypothetical	1,000.00	1,022.27	2.56	0.51
Short-Term Bond Account Class 1
Actual	1,000.00	1,051.19	2.59	0.51
Hypothetical	1,000.00	1,022.27	2.56	0.51
Short-Term Income Account Class 1
Actual	1,000.00	1,057.95	2.65	0.52
Hypothetical	1,000.00	1,022.22	2.61	0.52
Short-Term Income Account Class 2
Actual	1,000.00	1,059.20	3.93	0.77
Hypothetical	1,000.00	1,020.98	3.86	0.77
SmallCap Blend Account Class 1
Actual	1,000.00	998.18	4.41	0.89
Hypothetical	1,000.00	1,020.38	4.46	0.89
SmallCap Growth Account II Class 1
Actual	1,000.00	1,080.84	5.47	1.06
Hypothetical	1,000.00	1,019.54	5.31	1.06
SmallCap Growth Account II Class 2
Actual	1,000.00	1,079.70	6.76	1.31
Hypothetical	1,000.00	1,018.30	6.56	1.31
SmallCap Value Account I Class 1
Actual	1,000.00	931.21	4.84	1.01
Hypothetical	1,000.00	1,019.79	5.06	1.01
SmallCap Value Account I Class 2
Actual	1,000.00	930.04	6.03	1.26
Hypothetical	1,000.00	1,018.55	6.31	1.26

^(a) Expenses are equal to a fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

4

STATEMENTS OF ASSETS AND LIABILITIES
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
				Bond &
				Mortgage
	Asset Allocation		Balanced	Securities
Amounts in thousands, except per share amounts		Account	Account	Account
Investment in securities--at cost	$ 66,488		$ 61,494	$ 453,784
Assets
Investment in securities--at value	$ 61,394		$ 56,414	$ 395,755
Cash		864	106	1,827
Receivables:
Dividends and interest		225	234	2,952
Foreign currency contracts		118	–	–
Fund shares sold		50	2	1,669
Investment securities sold		2,100	1,697	6,507
Swap premiums paid		–	–	3,703
Unrealized gain on swap agreements		–	–	46
Variation margin on futures contracts		457	–	–
Total Assets		65,208	58,453	412,459
Liabilities
Accrued management and investment advisory fees		39	26	116
Accrued directors expenses		1	1	3
Accrued other expenses		12	17	10
Payables:
Foreign currency contracts		141	–	–
Fund shares redeemed		23	1	200
Investment securities purchased		5,114	5,896	87,214
Swap premiums received		–	–	381
Unrealized loss on swap agreements		–	–	1,824
Variation margin on futures contracts		–	2	–
Total Liabilities		5,330	5,943	89,748
Net Assets Applicable to Outstanding Shares	$ 59,878		$ 52,510	$ 322,711
Net Assets Consist of:
Capital Shares and additional paid-in-capital	$ 66,206		$ 75,457	$ 416,128
Accumulated undistributed (overdistributed) net investment income (operating loss)		549	717	7,924
Accumulated undistributed (overdistributed) net realized gain (loss)		(1,744)	(18,577)	(41,534)
Net unrealized appreciation (depreciation) of investments		(5,113)	(5,087)	(59,807)
Net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currency		(20)	–	–
Total Net Assets	$ 59,878		$ 52,510	$ 322,711
Capital Stock (par value: $.01 a share):
Shares authorized		100,000	100,000	200,000
Net Asset Value Per Share:
Class 1: Net Assets	$ 59,878		$ 52,510	$ 322,711
Shares issued and outstanding		5,961	4,992	34,602
Net Asset Value per share	$ 10.05		$ 10.52	$ 9.33

See accompanying notes.

5

STATEMENTS OF ASSETS AND LIABILITIES
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
		Diversified		Government &
		International	Equity Income	High Quality
Amounts in thousands, except per share amounts		Account	Account	Bond Account
Investment in securities--at cost	$ 309,673		$ 386,166	$ 271,771
Foreign currency--at cost	$ 579		$ –	$ –
Assets
Investment in securities--at value	$ 296,259		$ 352,045	$ 259,716
Foreign currency--at value		576	–	–
Cash		84	1,311	897
Receivables:
Dividends and interest		1,056	1,040	1,102
Foreign tax refund		20	–	–
Fund shares sold		6	97	1,804
Investment securities sold		1,630	390	167
Total Assets		299,631	354,883	263,686
Liabilities
Accrued management and investment advisory fees		208	153	93
Accrued distribution fees		–	6	–
Accrued directors expenses		3	3	3
Accrued other expenses		164	7	4
Payables:
Fund shares redeemed		591	844	113
Investment securities purchased		2,110	7,806	14,582
Total Liabilities		3,076	8,819	14,795
Net Assets Applicable to Outstanding Shares	$ 296,555		$ 346,064	$ 248,891
Net Assets Consist of:
Capital Shares and additional paid-in-capital	$ 470,570		$ 486,855	$ 276,174
Accumulated undistributed (overdistributed) net investment income (operating loss)		3,393	6,009	5,035
Accumulated undistributed (overdistributed) net realized gain (loss)		(164,014)	(112,679)	(20,263)
Net unrealized appreciation (depreciation) of investments		(13,414)	(34,121)	(12,055)
Net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currency		20	–	–
Total Net Assets	$ 296,555		$ 346,064	$ 248,891
Capital Stock (par value: $.01 a share):
Shares authorized		300,000	200,000	100,000
Net Asset Value Per Share:
Class 1: Net Assets	$ 294,568		$ 316,984	$ 248,891
Shares issued and outstanding		31,647	28,655	24,694
Net Asset Value per share	$ 9.31		$ 11.06	$ 10.08
Class 2: Net Assets	$ 1,987		$ 29,080	N/A
Shares issued and outstanding		212	2,643
Net Asset Value per share	$ 9.37		$ 11.00

See accompanying notes.

6

STATEMENTS OF ASSETS AND LIABILITIES
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
			International	International
			Emerging	SmallCap
Amounts in thousands, except per share amounts	Income Account		Markets Account	Account
Investment in securities--at cost	$ 169,245		$ 121,633	$ 82,390
Foreign currency--at cost	$ –		$ 750	$ 151
Assets
Investment in securities--at value	$ 166,002		$ 127,611	$ 86,975
Foreign currency--at value		–	752	151
Cash		399	–	87
Receivables:
Dividends and interest		2,230	463	256
Foreign tax refund		–	90	–
Fund shares sold		116	8	6
Investment securities sold		–	1,877	369
Total Assets		168,747	130,801	87,844
Liabilities
Accrued management and investment advisory fees		66	133	85
Accrued distribution fees		1	–	–
Accrued directors expenses		1	1	2
Accrued other expenses		4	129	74
Cash overdraft		–	17	–
Payables:
Fund shares redeemed		33	22	54
Investment securities purchased		1,645	2,200	720
Total Liabilities		1,750	2,502	935
Net Assets Applicable to Outstanding Shares	$ 166,997		$ 128,299	$ 86,909
Net Assets Consist of:
Capital Shares and additional paid-in-capital	$ 168,871		$ 187,316	$ 154,760
Accumulated undistributed (overdistributed) net investment income (operating loss)		2,918	537	320
Accumulated undistributed (overdistributed) net realized gain (loss)		(1,549)	(65,520)	(72,755)
Net unrealized appreciation (depreciation) of investments		(3,243)	5,978	4,585
Net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currency		–	(12)	(1)
Total Net Assets	$ 166,997		$ 128,299	$ 86,909
Capital Stock (par value: $.01 a share):
Shares authorized		200,000	100,000	100,000
Net Asset Value Per Share:
Class 1: Net Assets	$ 159,943		$ 128,299	$ 86,909
Shares issued and outstanding		16,724	11,319	8,937
Net Asset Value per share	$ 9.56		$ 11.33	$ 9.72
Class 2: Net Assets	$ 7,054		N/A	N/A
Shares issued and outstanding		740
Net Asset Value per share	$ 9.53

See accompanying notes.

7

STATEMENTS OF ASSETS AND LIABILITIES
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
				LargeCap
	LargeCap Blend		LargeCap	Growth
Amounts in thousands, except per share amounts		Account II	Growth Account	Account I
Investment in securities--at cost	$ 188,176		$ 192,461	$ 185,900
Assets
Investment in securities--at value	$ 159,777		$ 187,870	$ 179,255
Cash		766	647	973
Receivables:
Dividends and interest		218	55	87
Fund shares sold		13	49	9
Investment securities sold		–	–	403
Total Assets		160,774	188,621	180,727
Liabilities
Accrued management and investment advisory fees		100	107	116
Accrued directors expenses		2	1	2
Accrued other expenses		14	13	5
Payables:
Fund shares redeemed		2,162	62	144
Variation margin on futures contracts		19	–	20
Total Liabilities		2,297	183	287
Net Assets Applicable to Outstanding Shares	$ 158,477		$ 188,438	$ 180,440
Net Assets Consist of:
Capital Shares and additional paid-in-capital	$ 243,185		$ 297,571	$ 247,283
Accumulated undistributed (overdistributed) net investment income (operating loss)		1,247	210	(5)
Accumulated undistributed (overdistributed) net realized gain (loss)		(57,482)	(104,752)	(60,126)
Net unrealized appreciation (depreciation) of investments		(28,473)	(4,591)	(6,712)
Total Net Assets	$ 158,477		$ 188,438	$ 180,440
Capital Stock (par value: $.01 a share):
Shares authorized		300,000	300,000	100,000
Net Asset Value Per Share:
Class 1: Net Assets	$ 157,703		$ 187,858	$ 180,440
Shares issued and outstanding		31,009	17,969	12,689
Net Asset Value per share	$ 5.09		$ 10.45	$ 14.22
Class 2: Net Assets	$ 774		$ 580	N/A
Shares issued and outstanding		151	55
Net Asset Value per share	$ 5.11		$ 10.48

See accompanying notes.

8

STATEMENTS OF ASSETS AND LIABILITIES
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
	LargeCap S&P
		500 Index	LargeCap Value	LargeCap Value
Amounts in thousands, except per share amounts		Account	Account	Account III
Investment in securities--at cost	$ 118,988		$ 145,215	$ 203,127
Assets
Investment in securities--at value	$ 97,417		$ 133,455	$ 183,949
Cash		183	101	1,730
Receivables:
Dividends and interest		131	189	291
Fund shares sold		11	137	22
Investment securities sold		74	20,702	121
Total Assets		97,816	154,584	186,113
Liabilities
Accrued management and investment advisory fees		20	67	116
Accrued directors expenses		2	2	2
Accrued other expenses		10	5	9
Payables:
Fund shares redeemed		377	31	1,723
Investment securities purchased		107	20,475	131
Variation margin on futures contracts		15	5	48
Total Liabilities		531	20,585	2,029
Net Assets Applicable to Outstanding Shares	$ 97,285		$ 133,999	$ 184,084
Net Assets Consist of:
Capital Shares and additional paid-in-capital	$ 125,974		$ 211,112	$ 279,837
Accumulated undistributed (overdistributed) net investment income (operating loss)		971	1,577	1,889
Accumulated undistributed (overdistributed) net realized gain (loss)		(8,013)	(66,911)	(78,519)
Net unrealized appreciation (depreciation) of investments		(21,647)	(11,779)	(19,123)
Total Net Assets	$ 97,285		$ 133,999	$ 184,084
Capital Stock (par value: $.01 a share):
Shares authorized		100,000	100,000	100,000
Net Asset Value Per Share:
Class 1: Net Assets	$ 97,285		$ 133,999	$ 184,084
Shares issued and outstanding		14,935	7,436	25,511
Net Asset Value per share	$ 6.51		$ 18.02	$ 7.22

See accompanying notes.

9

STATEMENTS OF ASSETS AND LIABILITIES
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
	MidCap Blend		MidCap Growth	MidCap Stock
Amounts in thousands, except per share amounts		Account	Account I	Account
Investment in securities--at cost	$ 324,583		$ 49,807	$ 53,101
Foreign currency--at cost	$ 20		$ –	$ –
Assets
Investment in securities--at value	$ 271,779		$ 41,449	$ 55,198
Foreign currency--at value		20	–	–
Cash		1,071	359	176
Receivables:
Dividends and interest		156	45	89
Fund shares sold		23	31	14
Investment securities sold		1,217	–	–
Total Assets		274,266	41,884	55,477
Liabilities
Accrued management and investment advisory fees		136	30	34
Accrued distribution fees		–	–	2
Accrued directors expenses		3	1	1
Accrued other expenses		7	5	8
Payables:
Fund shares redeemed		1,538	1	23
Investment securities purchased		3,237	–	128
Total Liabilities		4,921	37	196
Net Assets Applicable to Outstanding Shares	$ 269,345		$ 41,847	$ 55,281
Net Assets Consist of:
Capital Shares and additional paid-in-capital	$ 334,724		$ 62,379	$ 58,790
Accumulated undistributed (overdistributed) net investment income (operating loss)		295	92	286
Accumulated undistributed (overdistributed) net realized gain (loss)		(12,870)	(12,266)	(5,892)
Net unrealized appreciation (depreciation) of investments		(52,804)	(8,358)	2,097
Total Net Assets	$ 269,345		$ 41,847	$ 55,281
Capital Stock (par value: $.01 a share):
Shares authorized		100,000	100,000	200,000
Net Asset Value Per Share:
Class 1: Net Assets	$ 269,345		$ 41,847	$ 47,030
Shares issued and outstanding		10,589	6,315	5,795
Net Asset Value per share	$ 25.44		$ 6.63	$ 8.12
Class 2: Net Assets		N/A	N/A	$ 8,251
Shares issued and outstanding				1,025
Net Asset Value per share				$ 8.05

See accompanying notes.

10

STATEMENTS OF ASSETS AND LIABILITIES
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
				Mortgage
	MidCap Value		Money Market	Securities
Amounts in thousands, except per share amounts		Account II	Account	Account
Investment in securities--at cost	$ 90,756		$ 445,116	$ 182,981
Assets
Investment in securities--at value	$ 81,173		$ 445,116	$ 183,958
Cash		74	12	1,310
Receivables:
Dividends and interest		182	94	925
Expense reimbursement from Manager		4	–	–
Expense reimbursement from Underwriter		–	2	–
Fund shares sold		3	185	369
Investment securities sold		2,552	52	29
Prepaid expenses		–	44	–
Total Assets		83,988	445,505	186,591
Liabilities
Accrued management and investment advisory fees		71	152	72
Accrued distribution fees		–	2	–
Accrued directors expenses		1	4	1
Accrued other expenses		6	–	5
Payables:
Dividends payable		–	13	–
Fund shares redeemed		2,922	1,179	44
Investment securities purchased		2,049	–	2,353
Total Liabilities		5,049	1,350	2,475
Net Assets Applicable to Outstanding Shares	$ 78,939		$ 444,155	$ 184,116
Net Assets Consist of:
Capital Shares and additional paid-in-capital	$ 142,938		$ 444,457	$ 186,426
Accumulated undistributed (overdistributed) net investment income (operating loss)		744	–	2,825
Accumulated undistributed (overdistributed) net realized gain (loss)		(55,160)	(302)	(6,112)
Net unrealized appreciation (depreciation) of investments		(9,583)	–	977
Total Net Assets	$ 78,939		$ 444,155	$ 184,116
Capital Stock (par value: $.01 a share):
Shares authorized		100,000	1,500,000	200,000
Net Asset Value Per Share:
Class 1: Net Assets	$ 78,939		$ 435,852	$ 182,103
Shares issued and outstanding		10,056	436,143	18,166
Net Asset Value per share	$ 7.85		$ 1.00	$ 10.02
Class 2: Net Assets		N/A	$ 8,303	$ 2,013
Shares issued and outstanding			8,314	201
Net Asset Value per share			$ 1.00	$ 10.03

See accompanying notes.

11

STATEMENTS OF ASSETS AND LIABILITIES
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
	Principal Capital		Principal	Principal
		Appreciation	LifeTime 2010	LifeTime 2020
Amounts in thousands, except per share amounts		Account(a)	Account	Account
Investment in securities--at cost	$ 66,684		$ –	$ –
Investment in affiliated securities--at cost	$ –		$ 50,156	$ 210,282
Assets
Investment in securities--at value	$ 79,236		$ –	$ –
Investment in affiliated securities--at value		–	35,011	142,058
Cash		118	–	–
Receivables:
Dividends and interest		76	31	87
Fund shares sold		7	11	36
Investment securities sold		167	–	–
Total Assets		79,604	35,053	142,181
Liabilities
Accrued management and investment advisory fees		41	4	15
Accrued distribution fees		2	–	–
Accrued directors expenses		1	1	2
Accrued other expenses		6	2	2
Payables:
Fund shares redeemed		51	63	307
Investment securities purchased		80	–	–
Total Liabilities		181	70	326
Net Assets Applicable to Outstanding Shares	$ 79,423		$ 34,983	$ 141,855
Net Assets Consist of:
Capital Shares and additional paid-in-capital	$ 68,792		$ 51,285	$ 211,896
Accumulated undistributed (overdistributed) net investment income (operating loss)		338	912	3,170
Accumulated undistributed (overdistributed) net realized gain (loss)		(2,259)	(2,069)	(4,987)
Net unrealized appreciation (depreciation) of investments		12,552	(15,145)	(68,224)
Total Net Assets	$ 79,423		$ 34,983	$ 141,855
Capital Stock (par value: $.01 a share):
Shares authorized		200,000	100,000	100,000
Net Asset Value Per Share:
Class 1: Net Assets	$ 72,870		$ 34,983	$ 141,855
Shares issued and outstanding		4,642	4,283	17,064
Net Asset Value per share	$ 15.70		$ 8.17	$ 8.31
Class 2: Net Assets	$ 6,553		N/A	N/A
Shares issued and outstanding		419
Net Asset Value per share	$ 15.64
(a) Effective June 30, 2009, West Coast Equity Account changed its name to Principal Capital Appreciation Account.

See accompanying notes.

12

STATEMENTS OF ASSETS AND LIABILITIES
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
		Principal	Principal	Principal
	LifeTime 2030		LifeTime 2040	LifeTime 2050
Amounts in thousands, except per share amounts		Account	Account	Account
Investment in affiliated securities--at cost	$ 49,759		$ 18,970	$ 12,214
Assets
Investment in affiliated securities--at value	$ 37,408		$ 12,365	$ 7,944
Receivables:
Dividends and interest		27	4	2
Fund shares sold		34	5	3
Total Assets		37,469	12,374	7,949
Liabilities
Accrued management and investment advisory fees		4	1	1
Accrued directors expenses		1	1	1
Accrued other expenses		2	2	2
Payables:
Fund shares redeemed		25	5	–
Total Liabilities		32	9	4
Net Assets Applicable to Outstanding Shares	$ 37,437		$ 12,365	$ 7,945
Net Assets Consist of:
Capital Shares and additional paid-in-capital	$ 49,645		$ 19,470	$ 12,497
Accumulated undistributed (overdistributed) net investment income (operating loss)		437	116	51
Accumulated undistributed (overdistributed) net realized gain (loss)		(294)	(616)	(333)
Net unrealized appreciation (depreciation) of investments		(12,351)	(6,605)	(4,270)
Total Net Assets	$ 37,437		$ 12,365	$ 7,945
Capital Stock (par value: $.01 a share):
Shares authorized		100,000	100,000	100,000
Net Asset Value Per Share:
Class 1: Net Assets	$ 37,437		$ 12,365	$ 7,945
Shares issued and outstanding		4,605	1,511	986
Net Asset Value per share	$ 8.13		$ 8.18	$ 8.06

See accompanying notes.

13

STATEMENTS OF ASSETS AND LIABILITIES
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
		Principal
		LifeTime	Real Estate
	Strategic Income		Securities	SAM Balanced
Amounts in thousands, except per share amounts		Account	Account	Portfolio
Investment in securities--at cost	$ –		$ 143,818	$ –
Investment in affiliated securities--at cost	$ 26,272		$ –	$ 683,004
Assets
Investment in securities--at value	$ –		$ 110,873	$ –
Investment in affiliated securities--at value		20,207	–	606,876
Cash		–	48	–
Receivables:
Dividends and interest		26	407	464
Fund shares sold		1	9	147
Total Assets		20,234	111,337	607,487
Liabilities
Accrued management and investment advisory fees		2	84	120
Accrued distribution fees		–	–	22
Accrued directors expenses		1	2	5
Accrued other expenses		2	5	3
Payables:
Fund shares redeemed		286	95	249
Total Liabilities		291	186	399
Net Assets Applicable to Outstanding Shares	$ 19,943		$ 111,151	$ 607,088
Net Assets Consist of:
Capital Shares and additional paid-in-capital	$ 26,236		$ 206,354	$ 690,108
Accumulated undistributed (overdistributed) net investment income (operating loss)		626	1,738	16,403
Accumulated undistributed (overdistributed) net realized gain (loss)		(854)	(63,996)	(23,295)
Net unrealized appreciation (depreciation) of investments		(6,065)	(32,945)	(76,128)
Total Net Assets	$ 19,943		$ 111,151	$ 607,088
Capital Stock (par value: $.01 a share):
Shares authorized		100,000	300,000	200,000
Net Asset Value Per Share:
Class 1: Net Assets	$ 19,943		$ 110,702	$ 501,823
Shares issued and outstanding		2,330	14,715	42,952
Net Asset Value per share	$ 8.56		$ 7.52	$ 11.68
Class 2: Net Assets		N/A	$ 449	$ 105,265
Shares issued and outstanding			59	9,059
Net Asset Value per share			$ 7.57	$ 11.62

See accompanying notes.

14

STATEMENTS OF ASSETS AND LIABILITIES
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
		SAM
		Conservative	SAM
		Balanced	Conservative	SAM Flexible
Amounts in thousands, except per share amounts		Portfolio	Growth Portfolio	Income Portfolio
Investment in affiliated securities--at cost	$ 132,918		$ 217,255	$ 143,783
Assets
Investment in affiliated securities--at value	$ 125,394		$ 178,035	$ 141,534
Receivables:
Dividends and interest		115	79	176
Fund shares sold		195	11	494
Total Assets		125,704	178,125	142,204
Liabilities
Accrued management and investment advisory fees		25	36	28
Accrued distribution fees		3	14	4
Accrued directors expenses		1	3	2
Accrued other expenses		3	3	3
Payables:
Fund shares redeemed		255	161	99
Total Liabilities		287	217	136
Net Assets Applicable to Outstanding Shares	$ 125,417		$ 177,908	$ 142,068
Net Assets Consist of:
Capital Shares and additional paid-in-capital	$ 135,966		$ 227,040	$ 148,013
Accumulated undistributed (overdistributed) net investment income (operating loss)		4,324	3,560	5,714
Accumulated undistributed (overdistributed) net realized gain (loss)		(7,349)	(13,472)	(9,410)
Net unrealized appreciation (depreciation) of investments		(7,524)	(39,220)	(2,249)
Total Net Assets	$ 125,417		$ 177,908	$ 142,068
Capital Stock (par value: $.01 a share):
Shares authorized		200,000	200,000	200,000
Net Asset Value Per Share:
Class 1: Net Assets	$ 110,686		$ 107,841	$ 120,327
Shares issued and outstanding		11,538	9,424	11,271
Net Asset Value per share	$ 9.59		$ 11.44	$ 10.68
Class 2: Net Assets	$ 14,731		$ 70,067	$ 21,741
Shares issued and outstanding		1,545	6,162	2,047
Net Asset Value per share	$ 9.53		$ 11.37	$ 10.62

See accompanying notes.

15

STATEMENTS OF ASSETS AND LIABILITIES
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
	SAM Strategic		Short-Term	Short-Term
Amounts in thousands, except per share amounts	Growth Portfolio		Bond Account	Income Account
Investment in securities--at cost	$ –		$ 128,073	$ 50,726
Investment in affiliated securities--at cost	$ 127,325		$ –	$ –
Assets
Investment in securities--at value	$ –		$ 110,630	$ 50,485
Investment in affiliated securities--at value		102,001	–	–
Cash		–	379	163
Receivables:
Dividends and interest		48	1,180	477
Fund shares sold		85	4,314	122
Investment securities sold		–	537	–
Variation margin on futures contracts		–	–	5
Total Assets		102,134	117,040	51,252
Liabilities
Accrued management and investment advisory fees		20	45	20
Accrued distribution fees		10	–	1
Accrued directors expenses		2	2	1
Accrued other expenses		3	7	4
Payables:
Fund shares redeemed		8	3	19
Total Liabilities		43	57	45
Net Assets Applicable to Outstanding Shares	$ 102,091		$ 116,983	$ 51,207
Net Assets Consist of:
Capital Shares and additional paid-in-capital	$ 134,486		$ 141,414	$ 51,879
Accumulated undistributed (overdistributed) net investment income (operating loss)		1,617	2,368	773
Accumulated undistributed (overdistributed) net realized gain (loss)		(8,688)	(9,356)	(1,221)
Net unrealized appreciation (depreciation) of investments		(25,324)	(17,443)	(224)
Total Net Assets	$ 102,091		$ 116,983	$ 51,207
Capital Stock (par value: $.01 a share):
Shares authorized		200,000	100,000	200,000
Net Asset Value Per Share:
Class 1: Net Assets	$ 51,744		$ 116,983	$ 49,572
Shares issued and outstanding		4,275	13,846	20,575
Net Asset Value per share	$ 12.10		$ 8.45	$ 2.41
Class 2: Net Assets	$ 50,347		N/A	$ 1,635
Shares issued and outstanding		4,180		681
Net Asset Value per share	$ 12.04			$ 2.40

See accompanying notes.

16

STATEMENTS OF ASSETS AND LIABILITIES
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
			SmallCap
	SmallCap Blend		Growth	SmallCap Value
Amounts in thousands, except per share amounts		Account	Account II	Account I
Investment in securities--at cost	$ 46,538		$ 64,178	$ 140,976
Assets
Investment in securities--at value	$ 44,896		$ 62,703	$ 109,143
Cash		162	2,084	1,593
Receivables:
Dividends and interest		47	10	178
Expense reimbursement from Manager		–	–	10
Fund shares sold		2	7	6
Investment securities sold		51	443	4,354
Total Assets		45,158	65,247	115,284
Liabilities
Accrued management and investment advisory fees		33	53	101
Accrued directors expenses		1	1	2
Accrued other expenses		5	15	13
Payables:
Fund shares redeemed		35	26	770
Investment securities purchased		115	228	4,454
Variation margin on futures contracts		1	6	8
Total Liabilities		190	329	5,348
Net Assets Applicable to Outstanding Shares	$ 44,968		$ 64,918	$ 109,936
Net Assets Consist of:
Capital Shares and additional paid-in-capital	$ 72,838		$ 126,030	$ 177,320
Accumulated undistributed (overdistributed) net investment income (operating loss)		118	(198)	651
Accumulated undistributed (overdistributed) net realized gain (loss)		(26,356)	(59,355)	(36,084)
Net unrealized appreciation (depreciation) of investments		(1,632)	(1,559)	(31,951)
Total Net Assets	$ 44,968		$ 64,918	$ 109,936
Capital Stock (par value: $.01 a share):
Shares authorized		100,000	300,000	300,000
Net Asset Value Per Share:
Class 1: Net Assets	$ 44,968		$ 62,726	$ 109,844
Shares issued and outstanding		8,191	8,686	12,587
Net Asset Value per share	$ 5.49		$ 7.22	$ 8.73
Class 2: Net Assets		N/A	$ 2,192	$ 92
Shares issued and outstanding			306	11
Net Asset Value per share			$ 7.18	$ 8.74

See accompanying notes.

17

STATEMENTS OF OPERATIONS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
Six Months Ended June 30, 2009 (unaudited)
	Asset Allocation			Bond & Mortgage
Amounts in thousands	Account		Balanced Account	Securities Account
Net Investment Income (Operating Loss)
Income:
Dividends	$ 460		$ 437	$ 443
Withholding tax		(26)	–	–
Interest		478	579	9,224
Securities lending - net		–	2	–
Total Income		912	1,018	9,667
Expenses:
Management and investment advisory fees		230	153	693
Custodian fees		18	18	9
Directors' expenses		2	2	6
Professional fees		3	3	2
Other expenses		1	–	1
Total Expenses		254	176	711
Net Investment Income (Loss)		658	842	8,956
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and
Swaptions, Swap agreements and Foreign Currencies
Net realized gain (loss) from:
Investment transactions		122	(8,765)	(20,279)
Foreign currency transactions		39	–	–
Futures contracts		561	(81)	–
Swap agreements		–	–	404
Change in unrealized appreciation/depreciation of:
Investments		516	9,330	36,333
Futures contracts		(284)	(16)	–
Swap agreements		–	–	(1,502)
Translation of assets and liabilities in foreign currencies		(127)	–	–
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and Swaptions,
Swap agreements and Foreign Currencies		827	468	14,956
Net Increase (Decrease) in Net Assets Resulting from Operations	$ 1,485		$ 1,310	$ 23,912

See accompanying notes.

18

STATEMENTS OF OPERATIONS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
Six Months Ended June 30, 2009 (unaudited)
		Diversified		Government &
		International	Equity Income	High Quality Bond
Amounts in thousands		Account	Account	Account
Net Investment Income (Operating Loss)
Income:
Dividends	$ 6,332		$ 6,151	$ –
Withholding tax		(737)	–	–
Interest		2	179	6,009
Total Income		5,597	6,330	6,009
Expenses:
Management and investment advisory fees		1,124	853	586
Distribution Fees - Class 2		2	36	N/A
Custodian fees		139	2	2
Directors' expenses		5	5	6
Professional fees		8	5	3
Other expenses		1	1	1
Total Expenses		1,279	902	598
Net Investment Income (Loss)		4,318	5,428	5,411
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and
Swaptions, Swap agreements and Foreign Currencies
Net realized gain (loss) from:
Investment transactions		(65,297)	(44,803)	(16,288)
Foreign currency transactions		(58)	–	–
Futures contracts		–	–	21
Swap agreements		–	–	(774)
Change in unrealized appreciation/depreciation of:
Investments		71,537	36,947	13,839
Futures contracts		–	–	(188)
Swap agreements		–	–	731
Translation of assets and liabilities in foreign currencies		40	–	–
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and Swaptions,
Swap agreements and Foreign Currencies		6,222	(7,856)	(2,659)
Net Increase (Decrease) in Net Assets Resulting from Operations	$ 10,540		$ (2,428)	$ 2,752

See accompanying notes.

19

STATEMENTS OF OPERATIONS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
Six Months Ended June 30, 2009 (unaudited)
			International
			Emerging Markets	International
Amounts in thousands	Income Account		Account	SmallCap Account
Net Investment Income (Operating Loss)
Income:
Dividends	$ –		$ 1,863	$ 1,648
Withholding tax		–	(179)	(196)
Interest		4,816	1	1
Total Income		4,816	1,685	1,453
Expenses:
Management and investment advisory fees		348	645	463
Distribution Fees - Class 2		9	N/A	N/A
Custodian fees		1	90	72
Directors' expenses		1	2	2
Professional fees		3	4	5
Other expenses		–	1	–
Total Expenses		362	742	542
Net Investment Income (Loss)		4,454	943	911
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and
Swaptions, Swap agreements and Foreign Currencies
Net realized gain (loss) from:
Investment transactions		(1,564)	(25,352)	(21,009)
Foreign currency transactions		–	(181)	5
Change in unrealized appreciation/depreciation of:
Investments		9,903	51,442	27,110
Translation of assets and liabilities in foreign currencies		–	12	–
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and Swaptions,
Swap agreements and Foreign Currencies		8,339	25,921	6,106
Net Increase (Decrease) in Net Assets Resulting from Operations	$ 12,793		$ 26,864	$ 7,017

See accompanying notes.

20

STATEMENTS OF OPERATIONS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
Six Months Ended June 30, 2009 (unaudited)
	LargeCap Blend		LargeCap Growth	LargeCap Growth
Amounts in thousands		Account II	Account	Account I
Net Investment Income (Operating Loss)
Income:
Dividends	$ 1,929		$ 844	$ 630
Interest		1	7	2
Total Income		1,930	851	632
Expenses:
Management and investment advisory fees		557	583	627
Distribution Fees - Class 2		1	1	N/A
Custodian fees		5	2	3
Directors' expenses		4	2	3
Professional fees		9	11	3
Other expenses		1	–	1
Total Expenses		577	599	637
Net Investment Income (Loss)		1,353	252	(5)
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and
Swaptions, Swap agreements and Foreign Currencies
Net realized gain (loss) from:
Investment transactions		(20,089)	(35,510)	(17,470)
Futures contracts		294	–	301
Change in unrealized appreciation/depreciation of:
Investments		27,091	41,833	48,876
Futures contracts		(93)	–	(67)
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and Swaptions,
Swap agreements and Foreign Currencies		7,203	6,323	31,640
Net Increase (Decrease) in Net Assets Resulting from Operations	$ 8,556		$ 6,575	$ 31,635

See accompanying notes.

21

STATEMENTS OF OPERATIONS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
Six Months Ended June 30, 2009 (unaudited)
	LargeCap S&P 500		LargeCap Value	LargeCap Value
Amounts in thousands		Index Account	Account	Account III
Net Investment Income (Operating Loss)
Income:
Dividends	$ 1,182		$ 2,129	$ 2,652
Interest		2	2	4
Total Income		1,184	2,131	2,656
Expenses:
Management and investment advisory fees		112	382	633
Custodian fees		7	3	2
Directors' expenses		2	3	3
Professional fees		3	3	2
Other expenses		2	1	1
Total Expenses		126	392	641
Net Investment Income (Loss)		1,058	1,739	2,015
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and
Swaptions, Swap agreements and Foreign Currencies
Net realized gain (loss) from:
Investment transactions		(3,405)	(19,903)	(48,443)
Futures contracts		405	(17)	300
Change in unrealized appreciation/depreciation of:
Investments		4,613	12,865	43,167
Futures contracts		(156)	(88)	55
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and Swaptions,
Swap agreements and Foreign Currencies		1,457	(7,143)	(4,921)
Net Increase (Decrease) in Net Assets Resulting from Operations	$ 2,515		$ (5,404)	$ (2,906)

See accompanying notes.

22

STATEMENTS OF OPERATIONS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
Six Months Ended June 30, 2009 (unaudited)
		MidCap Blend	MidCap Growth	MidCap Stock
Amounts in thousands		Account	Account I	Account
Net Investment Income (Operating Loss)
Income:
Dividends	$ 1,607		$ 280	$ 511
Withholding tax		(12)	–	–
Interest		17	–	1
Total Income		1,612	280	512
Expenses:
Management and investment advisory fees		770	173	183
Distribution Fees - Class 2		N/A	N/A	10
Custodian fees		4	2	1
Directors' expenses		6	1	1
Professional fees		2	3	3
Shareholder meeting expense		–	–	4
Other expenses		1	–	–
Total Expenses		783	179	202
Net Investment Income (Loss)		829	101	310
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and
Swaptions, Swap agreements and Foreign Currencies
Net realized gain (loss) from:
Investment transactions		(8,682)	(6,833)	(3,198)
Foreign currency transactions		(1)	–	–
Change in unrealized appreciation/depreciation of:
Investments		28,810	10,504	4,024
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and Swaptions,
Swap agreements and Foreign Currencies		20,127	3,671	826
Net Increase (Decrease) in Net Assets Resulting from Operations	$ 20,956		$ 3,772	$ 1,136

See accompanying notes.

23

STATEMENTS OF OPERATIONS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
Six Months Ended June 30, 2009 (unaudited)
		MidCap Value	Money Market	Mortgage
Amounts in thousands		Account II	Account	Securities Account
Net Investment Income (Operating Loss)
Income:
Dividends	$ 1,162		$ –	$ –
Interest		1	2,097	3,913
Total Income		1,163	2,097	3,913
Expenses:
Management and investment advisory fees		380	955	399
Distribution Fees - Class 2		N/A	15	3
Custodian fees		4	4	2
Directors' expenses		2	10	1
Professional fees		3	6	3
Treasury Temporary Guarantee Program expense		–	73	–
Other expenses		–	3	–
Total Gross Expenses		389	1,066	408
Less: Reimbursement from Manager - Class 1		23	–	–
Less: Reimbursement from Underwriter - Class 2		–	9	–
Total Net Expenses		366	1,057	408
Net Investment Income (Loss)		797	1,040	3,505
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and
Swaptions, Swap agreements and Foreign Currencies
Net realized gain (loss) from:
Investment transactions		(18,720)	(4)	(64)
Other investment companies		72	–	–
Change in unrealized appreciation/depreciation of:
Investments		19,210	–	1,451
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and Swaptions,
Swap agreements and Foreign Currencies		562	(4)	1,387
Net Increase (Decrease) in Net Assets Resulting from Operations	$ 1,359		$ 1,036	$ 4,892

See accompanying notes.

24

STATEMENTS OF OPERATIONS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
Six Months Ended June 30, 2009 (unaudited)
	Principal Capital
		Appreciation	Principal LifeTime	Principal LifeTime
Amounts in thousands		Account(a)	2010 Account	2020 Account
Net Investment Income (Operating Loss)
Income:
Dividends from affiliates	$ –		$ 978	$ 3,400
Dividends		601	–	–
Interest		2	–	–
Total Income		603	978	3,400
Expenses:
Management and investment advisory fees		220	19	77
Distribution Fees - Class 2		8	N/A	N/A
Custodian fees		4	–	–
Directors' expenses		1	1	3
Professional fees		3	3	2
Other expenses		–	–	1
Total Expenses		236	23	83
Net Investment Income (Loss)		367	955	3,317
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and
Swaptions, Swap agreements and Foreign Currencies
Net realized gain (loss) from:
Investment transactions		(1,059)	–	–
Investment transactions in affiliates		–	(1,311)	(4,177)
Change in unrealized appreciation/depreciation of:
Investments		4,954	–	–
Investments in affiliates		–	2,370	9,397
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and Swaptions,
Swap agreements and Foreign Currencies		3,895	1,059	5,220
Net Increase (Decrease) in Net Assets Resulting from Operations	$ 4,262		$ 2,014	$ 8,537
(a) Effective June 30, 2009, West Coast Equity Account changed its name to Principal Capital Appreciation Account.

See accompanying notes.

25

STATEMENTS OF OPERATIONS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
Six Months Ended June 30, 2009 (unaudited)
	Principal LifeTime		Principal LifeTime	Principal LifeTime
Amounts in thousands	2030 Account		2040 Account	2050 Account
Net Investment Income (Operating Loss)
Income:
Dividends from affiliates	$ 480		$ 134	$ 62
Total Income		480	134	62
Expenses:
Management and investment advisory fees		18	7	4
Directors' expenses		1	1	1
Professional fees		2	2	2
Total Gross Expenses		21	10	7
Less: Reimbursement from Manager - Class 1		–	2	2
Total Net Expenses		21	8	5
Net Investment Income (Loss)		459	126	57
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and
Swaptions, Swap agreements and Foreign Currencies
Net realized gain (loss) from:
Investment transactions in affiliates		(98)	(465)	(247)
Change in unrealized appreciation/depreciation of:
Investments in affiliates		2,037	1,033	658
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and Swaptions,
Swap agreements and Foreign Currencies		1,939	568	411
Net Increase (Decrease) in Net Assets Resulting from Operations	$ 2,398		$ 694	$ 468

See accompanying notes.

26

STATEMENTS OF OPERATIONS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
Six Months Ended June 30, 2009 (unaudited)
	Principal LifeTime
	Strategic Income		Real Estate	SAM Balanced
Amounts in thousands	Account		Securities Account	Portfolio
Net Investment Income (Operating Loss)
Income:
Dividends from affiliates	$ 667		$ –	$ 17,887
Dividends		–	2,538	–
Interest		–	102	–
Total Income		667	2,640	17,887
Expenses:
Management and investment advisory fees		11	469	638
Distribution Fees - Class 2		N/A	1	128
Custodian fees		–	2	–
Directors' expenses		1	2	11
Professional fees		2	4	3
Other expenses		–	–	2
Total Gross Expenses		14	478	782
Less: Reimbursement from Manager - Class 1		1	–	–
Total Net Expenses		13	478	782
Net Investment Income (Loss)		654	2,162	17,105
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and
Swaptions, Swap agreements and Foreign Currencies
Net realized gain (loss) from:
Investment transactions		–	(31,647)	–
Investment transactions in affiliates		(643)	–	(7,475)
Other investment companies		–	–	66
Change in unrealized appreciation/depreciation of:
Investments		–	14,044	–
Investments in affiliates		1,052	–	22,114
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and Swaptions,
Swap agreements and Foreign Currencies		409	(17,603)	14,705
Net Increase (Decrease) in Net Assets Resulting from Operations	$ 1,063		$ (15,441)	$ 31,810

See accompanying notes.

27

STATEMENTS OF OPERATIONS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
Six Months Ended June 30, 2009 (unaudited)
	SAM Conservative		SAM Conservative	SAM Flexible
Amounts in thousands	Balanced Portfolio		Growth Portfolio	Income Portfolio
Net Investment Income (Operating Loss)
Income:
Dividends from affiliates	$ 4,589		$ 4,119	$ 6,098
Total Income		4,589	4,119	6,098
Expenses:
Management and investment advisory fees		126	202	155
Distribution Fees - Class 2		19	82	29
Directors' expenses		2	4	3
Professional fees		3	3	3
Other expenses		–	1	–
Total Expenses		150	292	190
Net Investment Income (Loss)		4,439	3,827	5,908
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and
Swaptions, Swap agreements and Foreign Currencies
Net realized gain (loss) from:
Investment transactions in affiliates		(2,907)	(6,143)	(5,987)
Other investment companies		21	8	31
Change in unrealized appreciation/depreciation of:
Investments in affiliates		5,870	8,688	9,205
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and Swaptions,
Swap agreements and Foreign Currencies		2,984	2,553	3,249
Net Increase (Decrease) in Net Assets Resulting from Operations	$ 7,423		$ 6,380	$ 9,157

See accompanying notes.

28

STATEMENTS OF OPERATIONS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
Six Months Ended June 30, 2009 (unaudited)
		SAM Strategic	Short-Term Bond	Short-Term
Amounts in thousands	Growth Portfolio		Account	Income Account
Net Investment Income (Operating Loss)
Income:
Dividends from affiliates	$ 1,903		$ –	$ –
Interest		–	2,881	943
Securities lending - net		–	12	–
Total Income		1,903	2,893	943
Expenses:
Management and investment advisory fees		113	278	110
Distribution Fees - Class 2		57	N/A	2
Custodian fees		–	4	2
Directors' expenses		2	3	–
Professional fees		3	2	3
Other expenses		–	1	–
Total Expenses		175	288	117
Net Investment Income (Loss)		1,728	2,605	826
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and
Swaptions, Swap agreements and Foreign Currencies
Net realized gain (loss) from:
Investment transactions		–	(5,205)	(11)
Investment transactions in affiliates		(3,028)	–	–
Futures contracts		–	50	(38)
Change in unrealized appreciation/depreciation of:
Investments		–	8,167	1,680
Investments in affiliates		5,305	–	–
Futures contracts		–	(76)	103
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and Swaptions,
Swap agreements and Foreign Currencies		2,277	2,936	1,734
Net Increase (Decrease) in Net Assets Resulting from Operations	$ 4,005		$ 5,541	$ 2,560

See accompanying notes.

29

STATEMENTS OF OPERATIONS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
Six Months Ended June 30, 2009 (unaudited)
	SmallCap Blend		SmallCap Growth	SmallCap Value
Amounts in thousands		Account	Account II	Account I
Net Investment Income (Operating Loss)
Income:
Dividends	$ 317		$ 109	$ 1,202
Interest		1	–	4
Total Income		318	109	1,206
Expenses:
Management and investment advisory fees		179	286	559
Distribution Fees - Class 2		N/A	3	–
Custodian fees		5	7	12
Directors' expenses		1	1	2
Professional fees		3	10	4
Other expenses		–	–	1
Total Gross Expenses		188	307	578
Less: Reimbursement from Manager - Class 1		–	–	63
Total Net Expenses		188	307	515
Net Investment Income (Loss)		130	(198)	691
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and
Swaptions, Swap agreements and Foreign Currencies
Net realized gain (loss) from:
Investment transactions		(15,867)	(15,233)	(15,943)
Futures contracts		62	88	390
Change in unrealized appreciation/depreciation of:
Investments		15,225	19,968	7,314
Futures contracts		(56)	(84)	(283)
Net Realized and Unrealized Gain (Loss) on Investments, Futures, Options and Swaptions,
Swap agreements and Foreign Currencies		(636)	4,739	(8,522)
Net Increase (Decrease) in Net Assets Resulting from Operations	$ (506)		$ 4,541	$ (7,831)

See accompanying notes.

30

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
Amounts in thousands	Asset Allocation Account		Balanced Account
	Period	Year Ended	Period	Year Ended
	Ended June	December 31,	Ended June	December 31,
	30, 2009	2008	30, 2009	2008
Operations
Net investment income (operating loss)	$ 658	$ 1,534	$ 842	$ 2,510
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	722	(2,144)	(8,846)	(9,466)
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	105	(23,135)	9,314	(21,503)
Net Increase (Decrease) in Net Assets Resulting from Operations	1,485	(23,745)	1,310	(28,459)
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(1,822)	(2,565)	(2,647)	(2,956)
From net realized gain on investments:
Class 1	–	(6,987)	–	(3,470)
Total Dividends and Distributions	(1,822)	(9,552)	(2,647)	(6,426)
Capital Share Transactions
Shares sold:
Class 1	2,212	7,671	921	1,959
Shares issued in reinvestment of dividends and distributions:
Class 1	1,822	9,552	2,647	6,426
Shares redeemed:
Class 1	(6,887)	(24,139)	(6,520)	(21,984)
Net Increase (Decrease) in Net Assets from Capital Share Transactions	(2,853)	(6,916)	(2,952)	(13,599)
Total Increase (Decrease)	(3,190)	(40,213)	(4,289)	(48,484)
Net Assets
Beginning of period	63,068	103,281	56,799	105,283
End of period (including undistributed net investment income as set forth below)	$ 59,878	$ 63,068	$ 52,510	$ 56,799
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 549	$ 1,669	$ 717	$ 2,519
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	229	594	90	141
Shares issued in reinvestment of dividends and distributions:
Class 1	181	736	250	433
Shares redeemed:
Class 1	(725)	(1,998)	(649)	(1,585)
Net Increase (Decrease)	(315)	(668)	(309)	(1,011)

See accompanying notes.

31

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
	Bond & Mortgage Securities			Diversified International
Amounts in thousands	Account			Account
	Period	Year Ended		Period	Year Ended
	Ended June	December 31,		Ended June	December 31,
	30, 2009		2008	30, 2009		2008
Operations
Net investment income (operating loss)	$ 8,956	$ 24,070		$ 4,318	$ 9,110
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(19,875)		(16,833)	(65,355)		(95,476)
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	34,831		(83,390)	71,577		(165,823)
Net Increase (Decrease) in Net Assets Resulting from Operations	23,912		(76,153)	10,540		(252,189)
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(24,743)		(25,851)	(9,693)		(7,552)
Class 2	N/A		N/A	(54)		(85)
From net realized gain on investments:
Class 1	–		–	–		(99,649)
Class 2	N/A		N/A	–		(1,354)
Total Dividends and Distributions	(24,743)		(25,851)	(9,747)		(108,640)
Capital Share Transactions
Shares sold:
Class 1	9,499		41,449	17,383		57,888
Class 2	N/A		N/A	101		977
Shares issued in reinvestment of dividends and distributions:
Class 1	24,743		25,851	9,693		107,201
Class 2	N/A		N/A	54		1,439
Shares redeemed:
Class 1	(41,030)		(108,763)	(19,734)		(98,361)
Class 2	N/A		N/A	(494)		(3,973)
Net Increase (Decrease) in Net Assets from Capital Share Transactions	(6,788)		(41,463)	7,003		65,171
Total Increase (Decrease)	(7,619)		(143,467)	7,796		(295,658)
Net Assets
Beginning of period	330,330		473,797	288,759		584,417
End of period (including undistributed net investment income as set forth below)	$ 322,711	$ 330,330		$ 296,555	$ 288,759
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 7,924	$ 23,725		$ 3,393	$ 8,881
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	1,017		3,735	2,053		4,221
Class 2	N/A		N/A	12		88
Shares issued in reinvestment of dividends and distributions:
Class 1	2,689		2,361	1,018		6,493
Class 2	N/A		N/A	6		87
Shares redeemed:
Class 1	(4,418)		(10,396)	(2,378)		(6,354)
Class 2	N/A		N/A	(58)		(295)
Net Increase (Decrease)	(712)		(4,300)	653		4,240

See accompanying notes.

32

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
			Government & High Quality
Amounts in thousands	Equity Income Account		Bond Account
	Period	Year Ended	Period	Year Ended
	Ended June	December 31,	Ended June	December 31,
	30, 2009	2008	30, 2009	2008
Operations
Net investment income (operating loss)	$ 5,428	$ 13,002	$ 5,411	$ 14,855
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(44,803)	(65,658)	(17,041)	4,409
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	36,947	(133,172)	14,382	(24,700)
Net Increase (Decrease) in Net Assets Resulting from Operations	(2,428)	(185,828)	2,752	(5,436)
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(11,835)	(10,050)	(15,687)	(15,001)
Class 2	(997)	(1,288)	N/A	N/A
From net realized gain on investments:
Class 1	–	(30,043)	–	–
Class 2	–	(4,327)	N/A	N/A
Total Dividends and Distributions	(12,832)	(45,708)	(15,687)	(15,001)
Capital Share Transactions
Shares sold:
Class 1	31,549	79,058	12,787	47,093
Class 2	910	2,539	N/A	N/A
Shares issued in reinvestment of dividends and distributions:
Class 1	11,835	40,093	15,687	15,001
Class 2	997	5,615	N/A	N/A
Shares redeemed:
Class 1	(17,306)	(125,129)	(38,077)	(84,743)
Class 2	(5,720)	(22,161)	N/A	N/A
Net Increase (Decrease) in Net Assets from Capital Share Transactions	22,265	(19,985)	(9,603)	(22,649)
Total Increase (Decrease)	7,005	(251,521)	(22,538)	(43,086)
Net Assets
Beginning of period	339,059	590,580	271,429	314,515
End of period (including undistributed net investment income as set forth below)	$ 346,064	$ 339,059	$ 248,891	$ 271,429
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 6,009	$ 13,413	$ 5,035	$ 15,229
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	3,026	5,221	1,217	4,211
Class 2	89	163	N/A	N/A
Shares issued in reinvestment of dividends and distributions:
Class 1	1,057	2,463	1,561	1,383
Class 2	89	348	N/A	N/A
Shares redeemed:
Class 1	(1,660)	(8,049)	(3,600)	(7,769)
Class 2	(555)	(1,490)	N/A	N/A
Net Increase (Decrease)	2,046	(1,344)	(822)	(2,175)

See accompanying notes.

33

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
			International Emerging
Amounts in thousands	Income Account		Markets Account
	Period	Year Ended	Period	Year Ended
	Ended June	December 31,	Ended June	December 31,
	30, 2009	2008	30, 2009	2008
Operations
Net investment income (operating loss)	$ 4,454	$ 9,257	$ 943	$ 2,026
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(1,564)	802	(25,533)	(40,042)
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	9,903	(15,476)	51,454	(79,451)
Net Increase (Decrease) in Net Assets Resulting from Operations	12,793	(5,417)	26,864	(117,467)
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(9,313)	(10,514)	(1,424)	(1,805)
Class 2	(410)	(821)	N/A	N/A
From net realized gain on investments:
Class 1	(198)	(192)	–	(55,894)
Class 2	(10)	(16)	N/A	N/A
Total Dividends and Distributions	(9,931)	(11,543)	(1,424)	(57,699)
Capital Share Transactions
Shares sold:
Class 1	35,107	27,925	13,285	33,145
Class 2	311	618	N/A	N/A
Shares issued in reinvestment of dividends and distributions:
Class 1	9,511	10,706	1,424	57,699
Class 2	420	837	N/A	N/A
Shares redeemed:
Class 1	(8,221)	(72,530)	(8,221)	(45,871)
Class 2	(1,759)	(5,698)	N/A	N/A
Net Increase (Decrease) in Net Assets from Capital Share Transactions	35,369	(38,142)	6,488	44,973
Total Increase (Decrease)	38,231	(55,102)	31,928	(130,193)
Net Assets
Beginning of period	128,766	183,868	96,371	226,564
End of period (including undistributed net investment income as set forth below)	$ 166,997	$ 128,766	$ 128,299	$ 96,371
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 2,918	$ 8,208	$ 537	$ 1,199
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	3,675	2,750	1,367	2,206
Class 2	33	62	N/A	N/A
Shares issued in reinvestment of dividends and distributions:
Class 1	1,010	1,097	122	3,076
Class 2	45	86	N/A	N/A
Shares redeemed:
Class 1	(867)	(7,234)	(936)	(2,723)
Class 2	(188)	(585)	N/A	N/A
Net Increase (Decrease)	3,708	(3,824)	553	2,559

See accompanying notes.

34

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
	International SmallCap
Amounts in thousands	Account			LargeCap Blend Account II
	Period	Year Ended		Period	Year Ended
	Ended June	December 31,		Ended June	December 31,
	30, 2009		2008	30, 2009	2008
Operations
Net investment income (operating loss)	$ 911	$ 2,180		$ 1,353	$ 2,905
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(21,004)		(51,635)	(19,795)	(36,152)
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	27,110		(43,129)	26,998	(62,162)
Net Increase (Decrease) in Net Assets Resulting from Operations	7,017		(92,584)	8,556	(95,409)
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(2,378)		(2,978)	(3,013)	(3,105)
Class 2	N/A		N/A	(10)	(21)
From net realized gain on investments:
Class 1	–		(29,450)	–	(96,559)
Class 2	N/A		N/A	–	(848)
Total Dividends and Distributions	(2,378)		(32,428)	(3,023)	(100,533)
Capital Share Transactions
Shares sold:
Class 1	3,168		15,675	3,985	23,838
Class 2	N/A		N/A	27	218
Shares issued in reinvestment of dividends and distributions:
Class 1	2,378		32,428	3,013	99,664
Class 2	N/A		N/A	10	869
Shares redeemed:
Class 1	(8,339)		(36,915)	(14,639)	(40,733)
Class 2	N/A		N/A	(164)	(1,355)
Net Increase (Decrease) in Net Assets from Capital Share Transactions	(2,793)		11,188	(7,768)	82,501
Total Increase (Decrease)	1,846		(113,824)	(2,235)	(113,441)
Net Assets
Beginning of period	85,063		198,887	160,712	274,153
End of period (including undistributed net investment income as set forth below)	$ 86,909	$ 85,063		$ 158,477	$ 160,712
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 320	$ 1,782		$ 1,247	$ 2,917
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	379		1,073	867	3,242
Class 2	N/A		N/A	6	32
Shares issued in reinvestment of dividends and distributions:
Class 1	243		1,840	588	13,486
Class 2	N/A		N/A	2	117
Shares redeemed:
Class 1	(997)		(2,472)	(3,196)	(5,535)
Class 2	N/A		N/A	(36)	(187)
Net Increase (Decrease)	(375)		441	(1,769)	11,155

See accompanying notes.

35

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
Amounts in thousands	LargeCap Growth Account		LargeCap Growth Account I
	Period	Year Ended	Period	Year Ended
	Ended June	December 31,	Ended June	December 31,
	30, 2009	2008	30, 2009	2008
Operations
Net investment income (operating loss)	$ 252	$ 1,429	$ (5)	$ (21)
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(35,510)	(22,472)	(17,169)	(22,231)
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	41,833	(125,107)	48,809	(91,296)
Net Increase (Decrease) in Net Assets Resulting from Operations	6,575	(146,150)	31,635	(113,548)
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(1,469)	(1,454)	–	(401)
Class 2	(2)	(2)	N/A	N/A
Total Dividends and Distributions	(1,471)	(1,456)	–	(401)
Capital Share Transactions
Shares sold:
Class 1	20,717	45,707	5,283	11,949
Class 2	40	237	N/A	N/A
Shares issued in reinvestment of dividends and distributions:
Class 1	1,469	1,454	–	401
Class 2	2	2	N/A	N/A
Shares redeemed:
Class 1	(13,055)	(122,133)	(13,616)	(42,486)
Class 2	(19)	(579)	N/A	N/A
Net Increase (Decrease) in Net Assets from Capital Share Transactions	9,154	(75,312)	(8,333)	(30,136)
Total Increase (Decrease)	14,258	(222,918)	23,302	(144,085)
Net Assets
Beginning of period	174,180	397,098	157,138	301,223
End of period (including undistributed net investment income as set forth below)	$ 188,438	$ 174,180	$ 180,440	$ 157,138
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 210	$ 1,429	$ (5)	$ –
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	2,071	3,323	415	761
Class 2	4	20	N/A	N/A
Shares issued in reinvestment of dividends and distributions:
Class 1	137	88	–	21
Shares redeemed:
Class 1	(1,366)	(8,373)	(1,133)	(2,620)
Class 2	(2)	(44)	N/A	N/A
Net Increase (Decrease)	844	(4,986)	(718)	(1,838)

See accompanying notes.

36

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
	LargeCap S&P 500 Index
Amounts in thousands	Account			LargeCap Value Account
	Period	Year Ended		Period	Year Ended
	Ended June	December 31,		Ended June	December 31,
	30, 2009		2008	30, 2009	2008
Operations
Net investment income (operating loss)	$ 1,058	$ 3,028		$ 1,739	$ 4,615
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(3,000)		(4,007)	(19,920)	(45,707)
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	4,457		(63,217)	12,777	(45,291)
Net Increase (Decrease) in Net Assets Resulting from Operations	2,515		(64,196)	(5,404)	(86,383)
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(3,117)		(3,668)	(4,794)	(4,911)
From net realized gain on investments:
Class 1	–		(3,811)	–	(29,007)
Total Dividends and Distributions	(3,117)		(7,479)	(4,794)	(33,918)
Capital Share Transactions
Shares sold:
Class 1	6,248		12,532	5,066	10,466
Shares issued in reinvestment of dividends and distributions:
Class 1	3,117		7,479	4,794	33,918
Shares redeemed:
Class 1	(9,155)		(46,148)	(11,474)	(48,623)
Net Increase (Decrease) in Net Assets from Capital Share Transactions	210		(26,137)	(1,614)	(4,239)
Total Increase (Decrease)	(392)		(97,812)	(11,812)	(124,540)
Net Assets
Beginning of period	97,677		195,489	145,811	270,351
End of period (including undistributed net investment income as set forth below)	$ 97,285	$ 97,677		$ 133,999	$ 145,811
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 971	$ 3,030		$ 1,577	$ 4,632
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	1,027		1,451	294	405
Shares issued in reinvestment of dividends and distributions:
Class 1	473		762	261	1,208
Shares redeemed:
Class 1	(1,537)		(5,286)	(677)	(1,847)
Net Increase (Decrease)	(37)		(3,073)	(122)	(234)

See accompanying notes.

37

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
Amounts in thousands	LargeCap Value Account III		MidCap Blend Account
	Period	Year Ended	Period	Year Ended
	Ended June	December 31,	Ended June	December 31,
	30, 2009	2008	30, 2009	2008
Operations
Net investment income (operating loss)	$ 2,015	$ 4,347	$ 829	$ 1,945
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(48,143)	(28,979)	(8,683)	10,673
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	43,222	(75,446)	28,810	(158,556)
Net Increase (Decrease) in Net Assets Resulting from Operations	(2,906)	(100,078)	20,956	(145,938)
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(4,472)	(4,163)	(2,392)	(2,431)
From net realized gain on investments:
Class 1	–	(8,023)	(14,827)	(44,758)
Total Dividends and Distributions	(4,472)	(12,186)	(17,219)	(47,189)
Capital Share Transactions
Shares sold:
Class 1	12,648	94,895	5,904	25,349
Shares issued in acquisition:
Class 1	3,770	N/A	N/A	N/A
Shares issued in reinvestment of dividends and distributions:
Class 1	4,472	12,186	17,219	47,189
Shares redeemed:
Class 1	(15,235)	(30,694)	(26,700)	(82,813)
Net Increase (Decrease) in Net Assets from Capital Share Transactions	5,655	76,387	(3,577)	(10,275)
Total Increase (Decrease)	(1,723)	(35,877)	160	(203,402)
Net Assets
Beginning of period	185,807	221,684	269,185	472,587
End of period (including undistributed net investment income as set forth below)	$ 184,084	$ 185,807	$ 269,345	$ 269,185
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 1,889	$ 4,346	$ 295	$ 1,859
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	1,874	10,342	240	794
Shares issued in acquisition:
Class 1	548	N/A	N/A	N/A
Shares issued in reinvestment of dividends and distributions:
Class 1	609	1,062	673	1,206
Shares redeemed:
Class 1	(2,343)	(3,039)	(1,122)	(2,440)
Net Increase (Decrease)	688	8,365	(209)	(440)

See accompanying notes.

38

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
Amounts in thousands	MidCap Growth Account I		MidCap Stock Account
	Period	Year Ended	Period	Year Ended
	Ended June	December 31,	Ended June	December 31,
	30, 2009	2008	30, 2009	2008
Operations
Net investment income (operating loss)	$ 101	$ 48	$ 310	$ 761
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(6,833)	(5,404)	(3,198)	(2,772)
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	10,504	(25,119)	4,024	(18,377)
Net Increase (Decrease) in Net Assets Resulting from Operations	3,772	(30,475)	1,136	(20,388)
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(67)	(53)	(679)	(804)
Class 2	N/A	N/A	(95)	(154)
From net realized gain on investments:
Class 1	–	(9,049)	–	(12,628)
Class 2	N/A	N/A	–	(2,887)
Total Dividends and Distributions	(67)	(9,102)	(774)	(16,473)
Capital Share Transactions
Shares sold:
Class 1	2,226	6,404	6,148	13,572
Class 2	N/A	N/A	449	1,591
Shares issued in reinvestment of dividends and distributions:
Class 1	67	9,102	679	13,432
Class 2	N/A	N/A	95	3,041
Shares redeemed:
Class 1	(4,573)	(15,389)	(2,587)	(21,442)
Class 2	N/A	N/A	(511)	(2,281)
Net Increase (Decrease) in Net Assets from Capital Share Transactions	(2,280)	117	4,273	7,913
Total Increase (Decrease)	1,425	(39,460)	4,635	(28,948)
Net Assets
Beginning of period	40,422	79,882	50,646	79,594
End of period (including undistributed net investment income as set forth below)	$ 41,847	$ 40,422	$ 55,281	$ 50,646
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 92	$ 58	$ 286	$ 750
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	364	755	795	1,338
Class 2	N/A	N/A	59	144
Shares issued in reinvestment of dividends and distributions:
Class 1	10	892	81	1,166
Class 2	N/A	N/A	12	266
Shares redeemed:
Class 1	(787)	(1,797)	(338)	(1,662)
Class 2	N/A	N/A	(68)	(211)
Net Increase (Decrease)	(413)	(150)	541	1,041

See accompanying notes.

39

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
Amounts in thousands	MidCap Value Account II		Money Market Account
	Period	Year Ended	Period	Year Ended
	Ended June	December 31,	Ended June	December 31,
	30, 2009	2008	30, 2009	2008
Operations
Net investment income (operating loss)	$ 797	$ 1,452	$ 1,040	$ 8,668
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(18,648)	(33,394)	(4)	(298)
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	19,210	(30,784)	–	–
Net Increase (Decrease) in Net Assets Resulting from Operations	1,359	(62,726)	1,036	8,370
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(1,573)	(1,054)	(1,016)	(8,441)
Class 2	N/A	N/A	(24)	(227)
From net realized gain on investments:
Class 1	–	(10,116)	–	–
Total Dividends and Distributions	(1,573)	(11,170)	(1,040)	(8,668)
Capital Share Transactions
Shares sold:
Class 1	5,701	18,596	107,381	364,568
Class 2	N/A	N/A	3,416	25,195
Shares issued in reinvestment of dividends and distributions:
Class 1	1,573	11,170	1,003	8,441
Class 2	N/A	N/A	23	227
Shares redeemed:
Class 1	(8,708)	(26,201)	(128,123)	(189,474)
Class 2	N/A	N/A	(10,148)	(15,045)
Net Increase (Decrease) in Net Assets from Capital Share Transactions	(1,434)	3,565	(26,448)	193,912
Total Increase (Decrease)	(1,648)	(70,331)	(26,452)	193,614
Net Assets
Beginning of period	80,587	150,918	470,607	276,993
End of period (including undistributed net investment income as set forth below)	$ 78,939	$ 80,587	$ 444,155	$ 470,607
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 744	$ 1,520	$ –	$ –
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	856	1,756	107,381	364,568
Class 2	N/A	N/A	3,416	25,195
Shares issued in reinvestment of dividends and distributions:
Class 1	198	799	1,003	8,441
Class 2	N/A	N/A	23	227
Shares redeemed:
Class 1	(1,223)	(2,241)	(128,123)	(189,474)
Class 2	N/A	N/A	(10,148)	(15,045)
Net Increase (Decrease)	(169)	314	(26,448)	193,912

See accompanying notes.

40

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
				Principal Capital Appreciation
Amounts in thousands	Mortgage Securities Account			Account(a)
	Period	Year Ended		Period	Year Ended
	Ended June	December 31,		Ended June	December 31,
	30, 2009		2008	30, 2009		2008
Operations
Net investment income (operating loss)	$ 3,505	$ 8,941		$ 367	$ 768
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(64)		51	(1,059)		673
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	1,451		(126)	4,954		(41,559)
Net Increase (Decrease) in Net Assets Resulting from Operations	4,892		8,866	4,262		(40,118)
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(9,401)		(12,150)	(782)		(1,044)
Class 2	(104)		(164)	(44)		(99)
From net realized gain on investments:
Class 1	–		–	–		(9,541)
Class 2	–		–	–		(1,202)
Total Dividends and Distributions	(9,505)		(12,314)	(826)		(11,886)
Capital Share Transactions
Shares sold:
Class 1	37,789		29,483	8,339		14,438
Class 2	684		379	282		813
Shares issued in reinvestment of dividends and distributions:
Class 1	9,401		12,150	782		10,585
Class 2	104		164	44		1,301
Shares redeemed:
Class 1	(13,220)		(112,140)	(4,634)		(41,923)
Class 2	(825)		(1,729)	(983)		(5,201)
Net Increase (Decrease) in Net Assets from Capital Share Transactions	33,933		(71,693)	3,830		(19,987)
Total Increase (Decrease)	29,320		(75,141)	7,266		(71,991)
Net Assets
Beginning of period	154,796		229,937	72,157		144,148
End of period (including undistributed net investment income as set forth below)	$ 184,116	$ 154,796		$ 79,423	$ 72,157
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 2,825	$ 8,724		$ 338	$ 797
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	3,650		2,825	586		748
Class 2	66		38	20		40
Shares issued in reinvestment of dividends and distributions:
Class 1	939		1,217	49		489
Class 2	10		16	3		60
Shares redeemed:
Class 1	(1,275)		(10,795)	(326)		(2,017)
Class 2	(78)		(168)	(70)		(261)
Net Increase (Decrease)	3,312		(6,867)	262		(941)
(a) Effective June 30, 2009, West Coast Equity Account changed its name to Principal Capital Appreciation Account.

See accompanying notes.

41

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
	Principal LifeTime 2010			Principal LifeTime 2020
Amounts in thousands	Account			Account
	Period	Year Ended		Period	Year Ended
	Ended June	December 31,		Ended June	December 31,
	30, 2009		2008	30, 2009		2008
Operations
Net investment income (operating loss)	$ 955	$ 1,533		$ 3,317	$ 4,926
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(1,311)		(674)	(4,177)		(792)
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	2,370		(15,781)	9,397		(70,198)
Net Increase (Decrease) in Net Assets Resulting from Operations	2,014		(14,922)	8,537		(66,064)
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(1,551)		(1,833)	(5,072)		(7,083)
From net realized gain on investments:
Class 1	(67)		(2,967)	–		(13,813)
Total Dividends and Distributions	(1,618)		(4,800)	(5,072)		(20,896)
Capital Share Transactions
Shares sold:
Class 1	5,565		13,255	17,102		36,098
Shares issued in reinvestment of dividends and distributions:
Class 1	1,618		4,800	5,072		20,896
Shares redeemed:
Class 1	(4,709)		(11,111)	(10,339)		(22,723)
Net Increase (Decrease) in Net Assets from Capital Share Transactions	2,474		6,944	11,835		34,271
Total Increase (Decrease)	2,870		(12,778)	15,300		(52,689)
Net Assets
Beginning of period	32,113		44,891	126,555		179,244
End of period (including undistributed net investment income as set forth below)	$ 34,983	$ 32,113		$ 141,855	$ 126,555
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 912	$ 1,532		$ 3,170	$ 4,925
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	716		1,170	2,208		3,099
Shares issued in reinvestment of dividends and distributions:
Class 1	197		422	606		1,750
Shares redeemed:
Class 1	(609)		(1,082)	(1,348)		(2,182)
Net Increase (Decrease)	304		510	1,466		2,667

See accompanying notes.

42

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
	Principal LifeTime 2030			Principal LifeTime 2040
Amounts in thousands	Account			Account
	Period	Year Ended		Period	Year Ended
	Ended June	December 31,		Ended June	December 31,
	30, 2009		2008	30, 2009		2008
Operations
Net investment income (operating loss)	$ 459	$ 754		$ 126	$ 335
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(98)		(141)	(465)		(146)
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	2,037		(13,136)	1,033		(6,936)
Net Increase (Decrease) in Net Assets Resulting from Operations	2,398		(12,523)	694		(6,747)
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(776)		(1,175)	(345)		(579)
From net realized gain on investments:
Class 1	(51)		(2,513)	–		(1,301)
Total Dividends and Distributions	(827)		(3,688)	(345)		(1,880)
Capital Share Transactions
Shares sold:
Class 1	12,932		12,809	1,559		5,459
Shares issued in reinvestment of dividends and distributions:
Class 1	827		3,688	345		1,880
Shares redeemed:
Class 1	(3,397)		(6,086)	(1,256)		(3,588)
Net Increase (Decrease) in Net Assets from Capital Share Transactions	10,362		10,411	648		3,751
Total Increase (Decrease)	11,933		(5,800)	997		(4,876)
Net Assets
Beginning of period	25,504		31,304	11,368		16,244
End of period (including undistributed net investment income as set forth below)	$ 37,437	$ 25,504		$ 12,365	$ 11,368
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 437	$ 754		$ 116	$ 335
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	1,712		1,263	207		468
Shares issued in reinvestment of dividends and distributions:
Class 1	101		309	42		152
Shares redeemed:
Class 1	(455)		(563)	(170)		(318)
Net Increase (Decrease)	1,358		1,009	79		302

See accompanying notes.

43

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
	Principal LifeTime 2050			Principal LifeTime Strategic
Amounts in thousands	Account			Income Account
	Period	Year Ended		Period	Year Ended
	Ended June	December 31,		Ended June	December 31,
	30, 2009		2008	30, 2009	2008
Operations
Net investment income (operating loss)	$ 57	$ 195		$ 654	$ 1,047
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(247)		(80)	(643)	(29)
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	658		(4,506)	1,052	(6,646)
Net Increase (Decrease) in Net Assets Resulting from Operations	468		(4,391)	1,063	(5,628)
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(201)		(372)	(1,034)	(831)
From net realized gain on investments:
Class 1	–		(877)	(174)	(663)
Total Dividends and Distributions	(201)		(1,249)	(1,208)	(1,494)
Capital Share Transactions
Shares sold:
Class 1	1,252		3,768	4,681	7,116
Shares issued in reinvestment of dividends and distributions:
Class 1	201		1,249	1,208	1,494
Shares redeemed:
Class 1	(1,006)		(1,646)	(2,865)	(5,634)
Net Increase (Decrease) in Net Assets from Capital Share Transactions	447		3,371	3,024	2,976
Total Increase (Decrease)	714		(2,269)	2,879	(4,146)
Net Assets
Beginning of period	7,231		9,500	17,064	21,210
End of period (including undistributed net investment income as set forth below)	$ 7,945	$ 7,231		$ 19,943	$ 17,064
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 51	$ 195		$ 626	$ 1,047
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	171		327	554	649
Shares issued in reinvestment of dividends and distributions:
Class 1	25		102	142	135
Shares redeemed:
Class 1	(137)		(158)	(341)	(559)
Net Increase (Decrease)	59		271	355	225

See accompanying notes.

44

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
Amounts in thousands	Real Estate Securities Account		SAM Balanced Portfolio
	Period	Year Ended	Period	Year Ended
	Ended June	December 31,	Ended June	December 31,
	30, 2009	2008	30, 2009	2008
Operations
Net investment income (operating loss)	$ 2,162	$ 3,122	$ 17,105	$ 23,443
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(31,647)	(26,770)	(7,409)	12,560
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	14,044	(38,078)	22,114	(209,282)
Net Increase (Decrease) in Net Assets Resulting from Operations	(15,441)	(61,726)	31,810	(173,279)
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(3,230)	(4,078)	(20,080)	(15,830)
Class 2	(10)	(24)	(4,062)	(6,681)
From net realized gain on investments:
Class 1	–	(59,405)	(15,098)	(49,181)
Class 2	–	(394)	(3,368)	(22,251)
Total Dividends and Distributions	(3,240)	(63,901)	(42,608)	(93,943)
Capital Share Transactions
Shares sold:
Class 1	9,021	35,107	122,541	259,925
Class 2	24	102	2,383	10,091
Shares issued in reinvestment of dividends and distributions:
Class 1	3,230	63,483	35,178	65,011
Class 2	10	418	7,430	28,932
Shares redeemed:
Class 1	(10,785)	(50,601)	(35,198)	(228,229)
Class 2	(72)	(671)	(15,426)	(61,240)
Net Increase (Decrease) in Net Assets from Capital Share Transactions	1,428	47,838	116,908	74,490
Total Increase (Decrease)	(17,253)	(77,789)	106,110	(192,732)
Net Assets
Beginning of period	128,404	206,193	500,978	693,710
End of period (including undistributed net investment income as set forth below)	$ 111,151	$ 128,404	$ 607,088	$ 500,978
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 1,738	$ 2,816	$ 16,403	$ 23,440
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	1,256	2,889	10,667	17,161
Class 2	3	6	208	662
Shares issued in reinvestment of dividends and distributions:
Class 1	407	4,551	2,986	4,117
Class 2	1	30	634	1,844
Shares redeemed:
Class 1	(1,559)	(3,574)	(3,127)	(13,955)
Class 2	(10)	(47)	(1,371)	(4,078)
Net Increase (Decrease)	98	3,855	9,997	5,751

See accompanying notes.

45

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
	SAM Conservative Balanced			SAM Conservative Growth
Amounts in thousands	Portfolio			Portfolio
	Period	Year Ended		Period	Year Ended
	Ended June	December 31,		Ended June	December 31,
	30, 2009		2008	30, 2009		2008
Operations
Net investment income (operating loss)	$ 4,439	$ 3,871		$ 3,827	$ 8,877
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(2,886)		(1,312)	(6,135)		12,159
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	5,870		(21,124)	8,688		(121,996)
Net Increase (Decrease) in Net Assets Resulting from Operations	7,423		(18,565)	6,380		(100,960)
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(3,540)		(1,966)	(5,635)		(5,962)
Class 2	(447)		(942)	(3,509)		(3,823)
From net realized gain on investments:
Class 1	(1,600)		(3,514)	(6,274)		(15,851)
Class 2	(231)		(1,806)	(4,190)		(10,940)
Total Dividends and Distributions	(5,818)		(8,228)	(19,608)		(36,576)
Capital Share Transactions
Shares sold:
Class 1	39,905		74,332	15,927		36,948
Class 2	664		4,186	2,846		12,556
Shares issued in reinvestment of dividends and distributions:
Class 1	5,140		5,480	11,909		21,813
Class 2	678		2,748	7,699		14,763
Shares redeemed:
Class 1	(10,134)		(37,094)	(15,440)		(123,153)
Class 2	(3,964)		(11,061)	(5,777)		(32,447)
Net Increase (Decrease) in Net Assets from Capital Share Transactions	32,289		38,591	17,164		(69,520)
Total Increase (Decrease)	33,894		11,798	3,936		(207,056)
Net Assets
Beginning of period	91,523		79,725	173,972		381,028
End of period (including undistributed net investment income as set forth below)	$ 125,417	$ 91,523		$ 177,908	$ 173,972
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 4,324	$ 3,872		$ 3,560	$ 8,877
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	4,294		6,691	1,364		2,176
Class 2	72		363	248		768
Shares issued in reinvestment of dividends and distributions:
Class 1	534		471	1,026		1,230
Class 2	71		238	668		837
Shares redeemed:
Class 1	(1,114)		(3,203)	(1,361)		(6,893)
Class 2	(435)		(1,015)	(508)		(2,002)
Net Increase (Decrease)	3,422		3,545	1,437		(3,884)

See accompanying notes.

46

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
			SAM Strategic Growth
Amounts in thousands	SAM Flexible Income Portfolio		Portfolio
	Period	Year Ended	Period	Year Ended
	Ended June	December 31,	Ended June	December 31,
	30, 2009	2008	30, 2009		2008
Operations
Net investment income (operating loss)	$ 5,908	$ 6,492	$ 1,728	$ 3,689
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(5,956)	(895)	(3,028)		685
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	9,205	(24,636)	5,305		(68,603)
Net Increase (Decrease) in Net Assets Resulting from Operations	9,157	(19,039)	4,005		(64,229)
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(5,703)	(5,083)	(1,995)		(2,252)
Class 2	(982)	(2,897)	(1,803)		(2,364)
From net realized gain on investments:
Class 1	(1,118)	(6,769)	(747)		(9,795)
Class 2	(214)	(4,017)	(736)		(11,094)
Total Dividends and Distributions	(8,017)	(18,766)	(5,281)		(25,505)
Capital Share Transactions
Shares sold:
Class 1	34,265	85,968	10,917		28,314
Class 2	646	5,367	3,322		8,092
Shares issued in reinvestment of dividends and distributions:
Class 1	6,821	11,852	2,742		12,047
Class 2	1,196	6,914	2,539		13,458
Shares redeemed:
Class 1	(19,716)	(88,904)	(6,254)		(99,810)
Class 2	(7,035)	(25,636)	(3,068)		(10,888)
Net Increase (Decrease) in Net Assets from Capital Share Transactions	16,177	(4,439)	10,198		(48,787)
Total Increase (Decrease)	17,317	(42,244)	8,922		(138,521)
Net Assets
Beginning of period	124,751	166,995	93,169		231,690
End of period (including undistributed net investment income as set forth below)	$ 142,068	$ 124,751	$ 102,091	$ 93,169
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 5,714	$ 6,491	$ 1,617	$ 3,687
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	3,280	7,072	943		1,568
Class 2	63	409	291		462
Shares issued in reinvestment of dividends and distributions:
Class 1	640	968	223		644
Class 2	113	569	207		724
Shares redeemed:
Class 1	(1,914)	(6,710)	(550)		(4,869)
Class 2	(680)	(2,146)	(270)		(630)
Net Increase (Decrease)	1,502	162	844		(2,101)

See accompanying notes.

47

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
Amounts in thousands	Short-Term Bond Account		Short-Term Income Account
	Period	Year Ended	Period	Year Ended
	Ended June	December 31,	Ended June	December 31,
	30, 2009	2008	30, 2009	2008
Operations
Net investment income (operating loss)	$ 2,605	$ 7,333	$ 826	$ 2,572
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(5,155)	(2,649)	(49)	(517)
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	8,091	(22,448)	1,783	(1,805)
Net Increase (Decrease) in Net Assets Resulting from Operations	5,541	(17,764)	2,560	250
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(7,521)	(7,051)	(2,563)	(1,997)
Class 2	N/A	N/A	(83)	(56)
Total Dividends and Distributions	(7,521)	(7,051)	(2,646)	(2,053)
Capital Share Transactions
Shares sold:
Class 1	9,946	22,798	16,358	12,280
Class 2	N/A	N/A	416	1,056
Shares issued in reinvestment of dividends and distributions:
Class 1	7,521	7,051	2,563	1,997
Class 2	N/A	N/A	83	56
Shares redeemed:
Class 1	(16,464)	(43,904)	(7,229)	(50,741)
Class 2	N/A	N/A	(535)	(1,759)
Net Increase (Decrease) in Net Assets from Capital Share Transactions	1,003	(14,055)	11,656	(37,111)
Total Increase (Decrease)	(977)	(38,870)	11,570	(38,914)
Net Assets
Beginning of period	117,960	156,830	39,637	78,551
End of period (including undistributed net investment income as set forth below)	$ 116,983	$ 117,960	$ 51,207	$ 39,637
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 2,368	$ 7,302	$ 773	$ 2,568
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	1,159	2,351	6,668	4,898
Class 2	N/A	N/A	172	426
Shares issued in reinvestment of dividends and distributions:
Class 1	901	745	1,072	808
Class 2	N/A	N/A	35	23
Shares redeemed:
Class 1	(1,900)	(4,735)	(2,948)	(20,339)
Class 2	N/A	N/A	(220)	(712)
Net Increase (Decrease)	160	(1,639)	4,779	(14,896)

See accompanying notes.

48

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
Amounts in thousands	SmallCap Blend Account		SmallCap Growth Account II
	Period	Year Ended	Period	Year Ended
	Ended June	December 31,	Ended June	December 31,
	30, 2009	2008	30, 2009	2008
Operations
Net investment income (operating loss)	$ 130	$ 294	$ (198)	$ (551)
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(15,805)	(10,481)	(15,145)	(15,510)
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	15,169	(20,746)	19,884	(26,133)
Net Increase (Decrease) in Net Assets Resulting from Operations	(506)	(30,933)	4,541	(42,194)
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(335)	(317)	–	–
From net realized gain on investments:
Class 1	–	(8,654)	–	–
Total Dividends and Distributions	(335)	(8,971)	–	–
Capital Share Transactions
Shares sold:
Class 1	1,038	2,481	4,440	15,817
Class 2	N/A	N/A	88	533
Shares issued in reinvestment of dividends and distributions:
Class 1	335	8,971	–	–
Shares redeemed:
Class 1	(4,184)	(15,384)	(5,237)	(19,686)
Class 2	N/A	N/A	(153)	(825)
Net Increase (Decrease) in Net Assets from Capital Share Transactions	(2,811)	(3,932)	(862)	(4,161)
Total Increase (Decrease)	(3,652)	(43,836)	3,679	(46,355)
Net Assets
Beginning of period	48,620	92,456	61,239	107,594
End of period (including undistributed net investment income as set forth below)	$ 44,968	$ 48,620	$ 64,918	$ 61,239
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 118	$ 323	$ (198)	$ –
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	213	328	676	1,848
Class 2	N/A	N/A	15	64
Shares issued in reinvestment of dividends and distributions:
Class 1	60	1,059	–	–
Shares redeemed:
Class 1	(853)	(2,029)	(843)	(2,122)
Class 2	N/A	N/A	(25)	(98)
Net Increase (Decrease)	(580)	(642)	(177)	(308)

See accompanying notes.

49

STATEMENTS OF CHANGES IN NET ASSETS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
(unaudited)
Amounts in thousands	SmallCap Value Account I
	Period	Year Ended
	Ended June	December 31,
	30, 2009	2008
Operations
Net investment income (operating loss)	$ 691	$ 1,589
Net realized gain (loss) on investments, futures, options and swaptions, swap agreements
and foreign currency transactions	(15,553)	(17,616)
Change in unrealized appreciation/depreciation of investments, futures, options and
swaptions, swap agreements and translation of assets and liabilities in foreign currencies	7,031	(38,186)
Net Increase (Decrease) in Net Assets Resulting from Operations	(7,831)	(54,213)
Dividends and Distributions to Shareholders
From net investment income:
Class 1	(1,625)	(1,414)
Class 2	(1)	(1)
From net realized gain on investments:
Class 1	–	(17,058)
Class 2	–	(19)
Total Dividends and Distributions	(1,626)	(18,492)
Capital Share Transactions
Shares sold:
Class 1	9,638	30,010
Class 2	5	36
Shares issued in reinvestment of dividends and distributions:
Class 1	1,625	18,472
Class 2	1	20
Shares redeemed:
Class 1	(8,438)	(38,084)
Class 2	(6)	(116)
Net Increase (Decrease) in Net Assets from Capital Share Transactions	2,825	10,338
Total Increase (Decrease)	(6,632)	(62,367)
Net Assets
Beginning of period	116,568	178,935
End of period (including undistributed net investment income as set forth below)	$ 109,936	$ 116,568
Undistributed (Overdistributed) Net Investment Income (Operating Loss)	$ 651	$ 1,586
Increase (Decrease) in Capital Shares
Shares sold:
Class 1	1,199	2,519
Class 2	1	4
Shares issued in reinvestment of dividends and distributions:
Class 1	180	1,340
Class 2	–	1
Shares redeemed:
Class 1	(1,034)	(3,009)
Class 2	(1)	(9)
Net Increase (Decrease)	345	846

See accompanying notes.

50

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)

1. Organization

Principal Variable Contracts Funds, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company and operates as a series fund in the mutual fund industry. At June 30, 2009, the Fund consists of 39 accounts. The financial statements for Asset Allocation Account, Balanced Account, Bond & Mortgage Securities Account, Diversified International Account, Equity Income Account, Government & High Quality Bond Account, Income Account, International Emerging Markets Account, International SmallCap Account, LargeCap Blend Account II, LargeCap Growth Account, LargeCap Growth Account I, LargeCap S&P 500 Index Account, LargeCap Value Account, LargeCap Value Account III, MidCap Blend Account, MidCap Growth Account I, MidCap Stock Account, MidCap Value Account II, Money Market Account, Mortgage Securities Account, Principal Capital Appreciation Account, Principal LifeTime 2010 Account, Principal LifeTime 2020 Account, Principal LifeTime 2030 Account, Principal LifeTime 2040 Account, Principal LifeTime 2050 Account, Principal LifeTime Strategic Income Account, Real Estate Securities Account, SAM Balanced Portfolio, SAM Conservative Balanced Portfolio, SAM Conservative Growth Portfolio, SAM Flexible Income Portfolio, SAM Strategic Growth Portfolio, Short-Term Bond Account, Short-Term Income Account, SmallCap Blend Account, SmallCap Growth Account II, and SmallCap Value Account I, known as the “Accounts”, are presented herein.

On June 13, 2008 Principal Variable Contracts Fund, Inc. changed its name to Principal Variable Contracts Funds, Inc. In addition, the Accounts had name changes:

Former Account Name Bond Account Capital Value Account Equity Growth Account Equity Income Account I Growth Account LargeCap Blend Account LargeCap Stock Index Account LargeCap Value Account MidCap Account MidCap Growth Account MidCap Value Account SmallCap Account SmallCap Growth Account SmallCap Value Account New Account Name Bond & Mortgage Securities Account LargeCap Value Account LargeCap Growth Account I Equity Income Account LargeCap Growth Account LargeCap Blend Account II LargeCap S&P 500 Index Account LargeCap Value Account III MidCap Blend Account MidCap Growth Account I MidCap Value Account II SmallCap Blend Account SmallCap Growth Account II SmallCap Value Account I

Effective April 24, 2009, LargeCap Value Account III acquired all the assets and assumed all the liabilities of LargeCap Value Account II pursuant to a plan of acquisition. The acquisition was accomplished by a tax-free exchange of shares from LargeCap Value Account II for shares of LargeCap Value Account III at an approximate exchange rate of .88 for Class 1 and Class 2 shares. The aggregate net assets of LargeCap Value Account II and LargeCap Value Account III immediately prior to the acquisition were approximately $3,770,000 (including approximately $1,076,000 of accumulated realized losses and $1,388,000 of unrealized depreciation) and $168,567,000, respectively. The aggregate net assets of LargeCap Value Account III immediately following the acquisition were $172,337,000.

On June 30, 2009, West Coast Equity Account changed its name to Principal Capital Appreciation Account.

All classes of shares for each of the Accounts represent interests in the same portfolio of investments, and will vote together as a single class except where otherwise required by law or as determined by the Fund’s Board of Directors. In addition, the Board of Directors declares separate dividends on each class of shares.

Temporary Guarantee Program for Money Market Funds. Following approval by the Board of Directors of Principal Variable Contracts Funds, Inc., Money Market Account submitted to the United States Department of Treasury an agreement to participate in the Temporary Guarantee Program for Money Market Funds (the “Program”).

51

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)

1. Organization (Continued)

The Program will guarantee Money Market Account shareholders that they will receive $1.00 per share they owned as of the close of business on September 19, 2008, or the number of shares held on the date the Account’s market based net asset value falls below $0.995 per share and Money Market Account liquidates, whichever is less. The program is subject to an overall limit of $50 billion for all money market funds participating in the Program. The Program does not cover investors who were not shareholders of Money Market Account on September 19, 2008.

The Program remains in effect until September 18, 2009. The cost for participating in the initial three-month Program was 0.01% of the net assets of the Account as of September 19, 2008 and was borne by Money Market Account. An additional cost of .015% of the net assets of the Account as of September 19, 2008 was borne by Money Market Account to participate in the program through June 30, 2009. The cost for participating in the Program incurred during the period ended June 30, 2009 is included on the statement of operations.

On March 31, 2009, the United States Treasury Department announced an extension of the Program to September 18, 2009. Money Market Account has applied to participate in the extension.

2. Significant Accounting Policies

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security Valuation. Principal LifeTime 2010 Account, Principal LifeTime 2020 Account, Principal LifeTime 2030 Account, Principal LifeTime 2040 Account, Principal LifeTime 2050 Account, and Principal LifeTime Strategic Income Account (collectively, the “Principal LifeTime Accounts”) along with SAM Balanced Portfolio, SAM Conservative Balanced Portfolio, SAM Conservative Growth Portfolio, SAM Flexible Income Portfolio, SAM Strategic Growth Portfolio (collectively, the “SAM Portfolios”) invest in combinations of other series of Principal Variable Contracts Funds, Inc. and Principal Funds, Inc. (the “Underlying Funds”). Investments in the Underlying Funds are valued at the closing net asset value per share of each Underlying Fund on the day of valuation.

The Accounts (with the exception of Money Market Account, Principal LifeTime Accounts, and SAM Portfolios) value securities for which market quotations are readily available at market value, which is determined using the last reported sale price. If no sales are reported, as is regularly the case for some securities traded over-the-counter, securities are valued using the last reported bid price or an evaluated bid price provided by a pricing service. Pricing services use electronic modeling techniques that incorporate security characteristics, market conditions and dealer-supplied valuations to determine an evaluated bid price. When reliable market quotations are not considered to be readily available, which may be the case, for example, with respect to restricted securities, certain debt securities, preferred stocks and foreign securities, the investments are valued at their fair value as determined in good faith by Principal Management Corporation (the “Manager”) under procedures established and periodically reviewed by the Fund’s Board of Directors.

The value of foreign securities used in computing the net asset value per share is generally determined as of the close of the foreign exchange where the security is principally traded. Events that occur after the close of the applicable foreign market or exchange but prior to the calculation of the account’s net asset value are ordinarily not reflected in the account’s net asset value. If the Manager reasonably believes events that occur after the close of the applicable foreign market or exchange but prior to the calculation of the account’s net asset value will materially affect the value of a foreign security, then the security is valued at its fair value as determined in good faith by the Manager under procedures established and periodically reviewed by the Fund’s Board of Directors. Many factors are reviewed in the course of making a good faith determination of a security’s fair value, including, but not limited to, price movements in ADRs, futures contracts, industry indices, general indices and foreign currencies.

To the extent each account invests in foreign securities listed on foreign exchanges which trade on days on which the account does not determine its net asset value, for example weekends and other customary national U.S. holidays, each account’s net asset value could be significantly affected on days when shareholders cannot purchase or redeem shares.

52

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)

2. Significant Accounting Policies (continued)

Certain securities issued by companies in emerging market countries may have more than one quoted valuation at any given point in time, sometimes referred to as a "local" price and a "premium" price. The premium price is often a negotiated price, which may not consistently represent a price at which a specific transaction can be effected. It is the policy of the Accounts to value such securities at prices at which it is expected those shares may be sold, and the Manager or any sub-advisor is authorized to make such determinations subject to such oversight by the Fund’s Board of Directors as may occasionally be necessary.

Short-term securities purchased with less than 60 days until maturity are valued at amortized cost, which approximates market. Money Market Account values its securities at amortized cost as permitted under Rule 2a-7 of the Investment Company Act of 1940. Under the amortized cost method, a security is valued by applying a constant yield to maturity of the difference between the principal amount due at maturity and the cost of the security to the account.

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). This standard clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. Effective January 1, 2008, the Accounts adopted the provisions of FAS 157.

In accordance with FAS 157, fair value is defined as the price that the Accounts would receive upon selling a security in a timely transaction to an independent buyer in the principal or most advantageous market of the security at the measurement date. In determining fair value, the Accounts use various valuation approaches, including market, income and/or cost approaches. FAS 157 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.

Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Accounts. Unobservable inputs are inputs that reflect the Accounts own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

”Level 1 – Quoted prices are available in active markets for identical securities as of the reporting date. The type of securities included in Level 1 includes listed equities and listed derivatives.

”Level 2 – Other significant observable inputs (including quoted prices for similar investments, interest rates, prepayments speeds, credit risk, etc.). Investments which are generally included in this category include corporate bonds, senior floating rate interests, and municipal bonds.

”Level 3 – Significant unobservable inputs (including the Accounts’ assumptions in determining the fair value of investments). Investments which are generally included in this category include certain corporate bonds and certain mortgage backed securities. The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the market place, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Accounts in determining fair value is greatest for instruments categorized in Level 3.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Fair value is a market based measure considered from the perspective of a market participant who holds the asset rather than an entity specific measure. Therefore, even when market assumptions are not readily available, the Account’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Accounts use prices and inputs that are current as of the measurement date.

53

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)

2. Significant Accounting Policies (Continued)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those instruments. For example, short-term securities held in Money Market Account are valued using amortized cost, as permitted under 2a-7 of the Investment Company Act of 1940. Generally, amortized cost approximates the current fair value of these securities, but because the value is not obtained from a quoted price in an active market, such securities are reflected as Level 2.

The following is a summary of the inputs used as of June 30, 2009 in valuing the Accounts’ securities carried at value (amounts shown in thousands):

		Level 2 - Other	Level 3 - Significant
	Level 1 - Quoted	Significant	Unobservable
Account	Prices	Observable Inputs	Inputs	Totals (Level 1,2,3)
Asset Allocation Account
Equities
Basic Materials	$ 745	$ 145	$ —	$ 890
Communications	2,789	635	—	3,424
Consumer, Cyclical	1,966	303	—	2,269
Consumer, Non-cyclical	5,569	1,691	—	7,260
Diversified	15	62	—	77
Energy	2,274	192	—	2,466
Exchange Traded Funds	1,529	—	—	1,529
Financial	2,732	1,308	—	4,040
Industrial	2,139	493	—	2,632
Technology	3,064	244	—	3,308
Utilities	879	405	—	1,284
Debt securities issued by the U.S.	—	17,561	—	17,561
Treasury and other U.S. government
corporations and agencies
Debt securities issued by foreign	—	30	—	30
governments
Corporate debt securities	—	6,928	35	6,963
Commercial mortgage-backed	—	268	—	268
securities
Other debt obligations	—	7,393	—	7,393
Total investments in securities	$ 23,701	$ 37,658	$ 35	$ 61,394
Foreign currency Contracts	$ —	$ (23)	$ —	$ (23)
Futures	$ (19)	$ —	$ —	$ (19)

54

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
2. Significant Accounting Policies (Continued)
		Level 2 - Other	Level 3 - Significant
	Level 1 - Quoted	Significant	Unobservable
Account	Prices	Observable Inputs	Inputs	Totals (Level 1,2,3)
Balanced Account
Equities
Basic Materials	$ 1,040	$ —	$ —	$ 1,040
Communications	3,392	—	—	3,392
Consumer, Cyclical	2,987	—	—	2,987
Consumer, Non-cyclical	6,816	—	—	6,816
Diversified	4	—	—	4
Energy	3,712	—	—	3,712
Exchange Traded Funds	80	—	—	80
Financial	4,599	20	—	4,619
Industrial	3,495	—	—	3,495
Technology	3,550	—	—	3,550
Utilities	1,255	—	—	1,255
Debt securities issued by the U.S.	—-	10,501	67	10,568
Treasury and other U.S. government
corporations and agencies
Debt securities issued by foreign	—	130	—	130
governments
Corporate debt securities	—	9,900	251	10,151
Residential mortgage-backed securities	—	503	18	521
Commercial mortgage-backed securities	—	2,473	329	2,802
Other debt obligations	—	1,141	151	1,292
Total investments in securities	$ 30,930	$ 24,668	$ 816	$ 56,414
Futures	$ (7)	$ —	$ —	$ (7)
Bond & Mortgage Securities Account
Equities
Communications	$ —	$ 807	$ —	$ 807
Financial	632	7,508	42	8,182
Utilities	—	1,413	—	1,413
Debt securities issued by the U.S.	—	151,181	1,036	152,217
Treasury and other U.S. government
corporations and agencies
Debt securities issued by foreign	—	1,230	—	1,230
governments
Corporate debt securities	—	149,685	3,385	153,070
Residential mortgage-backed securities	—	4,750	466	5,216
Commercial mortgage-backed securities	—	37,384	3,703	41,087
Other debt obligations	—	30,158	2,375	32,533
Total investments in securities	$ 632	$ 384,116	$ 11,007	$ 395,755
Credit Default Swaps	$ —	$ (1,778)	$ —	$ (1,778)

55

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
2. Significant Accounting Policies (Continued)
		Level 2 - Other	Level 3 - Significant
	Level 1 - Quoted	Significant	Unobservable
Account	Prices	Observable Inputs	Inputs	Totals (Level 1,2,3)
Diversified International Account
Equities
Basic Materials	$ 1,072	$ 28,583	$ 467	$ 30,122
Communications	1,337	24,072	—	25,409
Consumer, Cyclical	—	29,036	—	29,036
Consumer, Non-cyclical	784	43,227	58	44,069
Diversified	—	4,735	—	4,735
Energy	4,971	28,984	—	33,955
Financial	1,383	77,801	—	79,184
Industrial	—	22,508	209	22,717
Technology	363	13,802	—	14,165
Utilities	—	11,351	—	11,351
Debt securities issued by the U.S.	—	451	—	451
Treasury and other U.S. government
corporations and agencies
Other debt obligations	—	1,065	—	1,065
Total investments in securities	$ 9,910	$ 285,615	$ 734	$ 296,259
Equity Income Account
Equities
Basic Materials	$ 12,133	$ —	$ —	$ 12,133
Communications	32,523	—	—	32,523
Consumer, Cyclical	40,133	—	—	40,133
Consumer, Non-cyclical	66,466	—	—	66,466
Energy	25,420	—	—	25,420
Financial	60,871	312	—	61,183
Industrial	37,121	—	—	37,121
Technology	28,010	—	—	28,010
Utilities	27,892	—	—	27,892
Debt securities issued by the U.S.	—	5,890	—	5,890
Treasury and other U.S. government
corporations and agencies
Corporate debt securities	—	1,473	—	1,473
Other debt obligations	—	13,801	—	13,801
Total investments in securities	$ 330,569	$ 21,476	$ —	$ 352,045
Government & High Quality Bond Account
Debt securities issued by the U.S.	$ —	$ 212,683	$ 1,024	$ 213,707
Treasury and other U.S. government
corporations and agencies
Corporate debt securities	—	10,127	1,975	12,102
Residential mortgage-backed securities	—	4,918	893	5,811
Commercial mortgage-backed securities	—	7,544	-	7,544
Other debt obligations	—	19,759	793	20,552
Total investments in securities	$ —	$ 255,031	$ 4,685	$ 259,716

56

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
2. Significant Accounting Policies (Continued)
		Level 2 - Other	Level 3 - Significant
	Level 1 - Quoted	Significant	Unobservable
Account	Prices	Observable Inputs	Inputs	Totals (Level 1,2,3)
Income Account
Equities
Financial	$ —	$ 1	$ —	$ 1
Government	—	49	—	49
Debt securities issued by the U.S.	—	47,254	—	47,254
Treasury and other U.S. government
corporations and agencies
Corporate debt securities	—	108,805	4,053	112,858
Other debt obligations	—	5,840	—	5,840
Total investments in securities	$ —	$ 161,949	$ 4,053	$ 166,002
International Emerging Markets Account
Equities
Basic Materials	$ 3,082	$ 13,095	$ —	$ 16,177
Communications	3,862	10,103	—	13,965
Consumer, Cyclical	—	7,580	263	7,843
Consumer, Non-cyclical	2,443	3,739	—	6,182
Diversified	—	1,830	—	1,830
Energy	10,063	9,575	—	19,638
Financial	1,823	32,983	—	34,806
Industrial	—	9,434	621	10,055
Technology	1,179	10,389	—	11,568
Utilities	510	3,341	—	3,851
Debt securities issued by the U.S.	—	505	—	505
Treasury and other U.S. government
corporations and agencies
Other debt obligations	—	1,191	—	1,191
Total investments in securities	$ 22,962	$ 103,765	$ 884	$ 127,611
International SmallCap Account
Equities
Basic Materials	$ —	$ 6,180	$ —	$ 6,180
Communications	11	3,972	—	3,983
Consumer, Cyclical	—	13,930	—	13,930
Consumer, Non-cyclical	—	13,480	—	13,480
Diversified	—	1,018	—	1,018
Energy	—	5,929	—	5,929
Financial	—	16,185	16	16,201
Industrial	73	18,269	—	18,342
Technology	—	4,603	28	4,631
Utilities	—	2,217	—	2,217
Debt securities issued by the U.S.	—	317	—	317
Treasury and other U.S. government
corporations and agencies
Other debt obligations	—	747	—	747
Total investments in securities	$ 84	$ 86,847	$ 44	$ 86,975

57

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
2. Significant Accounting Policies (Continued)
		Level 2 - Other	Level 3 - Significant
	Level 1 - Quoted	Significant	Unobservable
Account	Prices	Observable Inputs	Inputs	Totals (Level 1,2,3)
LargeCap Blend Account II
Equities
Basic Materials	$ 4,994	$ —	$ —	$ 4,994
Communications	18,082	—	—	18,082
Consumer, Cyclical	13,366	—	—	13,366
Consumer, Non-cyclical	38,580	—	—	38,580
Energy	19,850	—	—	19,850
Financial	20,409	—	—	20,409
Industrial	15,594	—	—	15,594
Technology	19,813	—	—	19,813
Utilities	6,255	—	—	6,255
Debt securities issued by the U.S.	—	844	—	844
Treasury and other U.S. government
corporations and agencies
Other debt obligations	—	1,990	—	1,990
Total investments in securities	$ 156,943	$ 2,834	$ —	$ 159,777
Futures	$ (74)	$ —	$ —	$ (74)
LargeCap Growth Account			—
Equities
Basic Materials	$ 9,085	$ —	$ —	$ 9,085
Communications	33,598	—	—	33,598
Consumer, Cyclical	23,207	—	—	23,207
Consumer, Non-cyclical	41,405	—	—	41,405
Energy	9,050	—	—	9,050
Financial	23,565	—	—	23,565
Industrial	9,002	—	—	9,002
Technology	29,340	—	—	29,340
Debt securities issued by the U.S.	—	2,865	—	2,865
Treasury and other U.S. government
corporations and agencies
Other debt obligations	—	6,753	—	6,753
Total investments in securities	$ 178,252	$ 9,618	$ —	$ 187,870
LargeCap Growth Account I
Equities
Basic Materials	$ 4,539	$ —	$ —	$ 4,539
Communications	38,761	—	—	38,761
Consumer, Cyclical	20,586	—	—	20,586
Consumer, Non-cyclical	32,977	—	—	32,977
Energy	12,498	—	—	12,498
Financial	17,446	—	—	17,446
Industrial	12,528	—	—	12,528
Technology	34,592	—	—	34,592
Utilities	2,679	—	—	2,679
Debt securities issued by the U.S.	—	789	—	789
Treasury and other U.S. government
corporations and agencies
Other debt obligations	—	1,860	—	1,860
Total investments in securities	$ 176,606	$ 2,649	$ —	$ 179,255
Futures	$ (67)	$ —	$ —	$ (67)

58

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
2. Significant Accounting Policies (Continued)
		Level 2 - Other	Level 3 - Significant
	Level 1 - Quoted	Significant	Unobservable
Account	Prices	Observable Inputs	Inputs	Totals (Level 1,2,3)
LargeCap S&P 500 Index Account
Equities
Basic Materials	$ 2,975	$ —	$ —	$ 2,975
Communications	10,967	—	—	10,967
Consumer, Cyclical	8,040	—	—	8,040
Consumer, Non-cyclical	23,044	—	—	23,044
Diversified	45	—	—	45
Energy	11,896	—	—	11,896
Exchange Traded Funds	372	—	—	372
Financial	12,659	—	—	12,659
Industrial	9,499	—	—	9,499
Technology	11,814	—	—	11,814
Utilities	3,762	—	—	3,762
Debt securities issued by the U.S.	—	698	—	698
Treasury and other U.S. government
corporations and agencies
Other debt obligations	—	1,646	—	1,646
Total investments in securities	$ 95,073	$ 2,344	$ —	$ 97,417
Futures	$ (76)	$ —	$ —	$ (76)
LargeCap Value Account
Equities
Basic Materials	$ 3,692	$ —	$ —	$ 3,692
Communications	15,062	—	—	15,062
Consumer, Cyclical	6,765	—	—	6,765
Consumer, Non-cyclical	19,521	—	—	19,521
Energy	26,244	—	—	26,244
Financial	30,942	—	—	30,942
Industrial	14,596	—	—	14,596
Technology	5,422	—	—	5,422
Utilities	9,930	—	—	9,930
Debt securities issued by the U.S.	—	382	—	382
Treasury and other U.S. government
corporations and agencies
Other debt obligations	—	899	—	899
Total investments in securities	$ 132,174	$ 1,281	$ —	$ 133,455
Futures	$ (19)	$ —	$ —	$ (19)

59

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
2. Significant Accounting Policies (Continued)
		Level 2 - Other		Level 3 - Significant
	Level 1 - Quoted	Significant		Unobservable
Account	Prices	Observable Inputs		Inputs	Totals (Level 1,2,3)
LargeCap Value Account III
Equities
Basic Materials	$ 3,172	$ —		$ —	$ 3,172
Communications	29,504		—	—	29,504
Consumer, Cyclical	11,222		—	—	11,222
Consumer, Non-cyclical	42,489		—	—	42,489
Energy	31,744		—	—	31,744
Financial	35,677		—	—	35,677
Industrial	11,719		—	—	11,719
Technology	4,162		—	—	4,162
Utilities	7,078		—	—	7,078
Debt securities issued by the U.S.	—	2,138		—	2,138
Treasury and other U.S. government
corporations and agencies
Other debt obligations	—	5,042		—	5,042
Total investments in securities	$ 176,767	$ 7,180		$ —	$ 183,947
Futures	$ 55	$ —		$ —	$ 55
MidCap Blend Account
Equities
Basic Materials	$ 8,380	$ 4,616		$ —	$ 12,996
Communications	38,024		—	—	38,024
Consumer, Cyclical	21,569		—	—	21,569
Consumer, Non-cyclical	68,183		—	—	68,183
Diversified	3,562		—	—	3,562
Energy	40,644		—	—	40,644
Financial	33,535		—	—	33,535
Industrial	8,510		—	—	8,510
Technology	10,250		—	—	10,250
Utilities	18,477		—	—	18,477
Debt securities issued by the U.S.	—	4,775		—	4,775
Treasury and other U.S. government
corporations and agencies
Other debt obligations	—	11,254		—	11,254
Total investments in securities	$ 251,134	$ 20,645		$ —	$ 271,779
MidCap Growth Account I
Equities
Basic Materials	$ 2,180	$ —		$ —	$ 2,180
Communications	2,062		—	—	2,062
Consumer, Cyclical	7,268		—	—	7,268
Consumer, Non-cyclical	10,438		—	—	10,438
Energy	2,535		—	—	2,535
Financial	3,048		—	—	3,048
Industrial	5,741		—	—	5,741
Technology	6,367		—	—	6,367
Utilities	1,810		—	—	1,810
Total investments in securities	$ 41,449	$ —		$ —	$ 41,449

60

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
2. Significant Accounting Policies (Continued)
		Level 2 - Other	Level 3 - Significant
	Level 1 - Quoted	Significant	Unobservable
Account	Prices	Observable Inputs	Inputs	Totals (Level 1,2,3)
MidCap Stock Account
Equities
Basic Materials	$ 2,900	$ —	$ —	$ 2,900
Communications	198	—	—	198
Consumer, Cyclical	8,098	—	—	8,098
Consumer, Non-cyclical	9,792	—	—	9,792
Energy	3,235	—	—	3,235
Financial	8,209	—	—	8,209
Industrial	8,945	—	—	8,945
Technology	6,886	—	—	6,886
Utilities	4,427	—	—	4,427
Debt securities issued by the U.S.	—	747	—	747
Treasury and other U.S. government
corporations and agencies
Other debt obligations	—	1,761	—	1,761
Total investments in securities	$ 52,690	$ 2,508	$ —	$ 55,198
MidCap Value Account II
Equities
Basic Materials	$ 3,021	$ —	$ —	$ 3,021
Communications	4,698	—	—	4,698
Consumer, Cyclical	8,006	—	—	8,006
Consumer, Non-cyclical	10,057	—	—	10,057
Energy	7,026	—	—	7,026
Exchange Traded Funds	2,459	—	—	2,459
Financial	21,871	—	—	21,871
Industrial	9,489	—	—	9,489
Technology	3,525	—	—	3,525
Utilities	10,054	—	—	10,054
Debt securities issued by the U.S.	—	288	—	288
Treasury and other U.S. government
corporations and agencies
Other debt obligations	—	679	—	679
Total investments in securities	$ 80,206	$ 967	$ —	$ 81,173
Money Market Account
Debt securities issued by the U.S.	$ —	$ 1,006	$ —	$ 1,006
Treasury and other U.S. government
corporations and agencies
Debt securities issued by states of the	—	7,375	—	7,375
U.S. and political subdivisions of the
states
Corporate debt securities	—	9,531	—	9,531
Other debt obligations	—	427,204	—	427,204
Total investments in securities	$ —	$ 445,116	$ —	$ 445,116

61

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
2. Significant Accounting Policies (Continued)
		Level 2 - Other		Level 3 - Significant
	Level 1 - Quoted	Significant		Unobservable
Account	Prices	Observable Inputs		Inputs	Totals (Level 1,2,3)
Mortgage Securities Account
Debt securities issued by the U.S.	$ —	$ 146,299		$ —	$ 146,299
Treasury and other U.S. government
corporations and agencies
Other debt obligations	—	37,659		—	37,659
Total investments in securities	$ —	$ 183,958		$ —	$ 183,958
Principal Capital Appreciation Account
Equities
Basic Materials	$ 3,017	$ —		$ —	$ 3,017
Communications	7,232		—	—	7,232
Consumer, Cyclical	9,872		—	—	9,872
Consumer, Non-cyclical	16,091		—	—	16,091
Energy	8,500		—	—	8,500
Exchange Traded Funds	22		—	—	22
Financial	10,007		—	—	10,007
Industrial	9,726		—	—	9,726
Technology	10,445		—	—	10,445
Utilities	2,690		—	—	2,690
Debt securities issued by the U.S.	—		487	—	487
Treasury and other U.S. government
corporations and agencies
Other debt obligations	—	1,147		—	1,147
Total investments in securities	$ 77,602	$ 1,634		$ —	$ 79,236
Principal LifeTime 2010 Account
Equities
Funds	$ 35,011	$ —		$ —	$ 35,011
Total investments in securities	$ 35,011	$ —		$ —	$ 35,011
Principal LifeTime 2020 Account
Equities
Funds	$ 142,058	$ —		$ —	$ 142,058
Total investments in securities	$ 142,058	$ —		$ —	$ 142,058
Principal LifeTime 2030 Account
Equities
Funds	$ 37,408	$ —		$ —	$ 37,408
Total investments in securities	$ 37,408	$ —		$ —	$ 37,408
Principal LifeTime 2040 Account
Equities
Funds	$ 12,365	$ —		$ —	$ 12,365
Total investments in securities	$ 12,365	$ —		$ —	$ 12,365
Principal LifeTime 2050 Account
Equities
Funds	$ 7,944	$ —		$ —	$ 7,944
Total investments in securities	$ 7,944	$ —		$ —	$ 7,944
Principal LifeTime Strategic Income Account
Equities
Funds	$ 20,207	$ —		$ —	$ 20,207
Total investments in securities	$ 20,207	$ —		$ —	$ 20,207

62

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
2. Significant Accounting Policies (Continued)
		Level 2 - Other		Level 3 - Significant
	Level 1 - Quoted	Significant		Unobservable
Account	Prices	Observable Inputs		Inputs	Totals (Level 1,2,3)
Real Estate Securities Account
Equities
Financial	$ 109,545	$ —		$ —	$ 109,545
Debt securities issued by the U.S.	—		127	—	127
Treasury and other U.S. government
corporations and agencies
Corporate debt securities	—		902	—	902
Other debt obligations	—		299	—	299
Total investments in securities	$ 109,545	$ 1,328		$ —	$ 110,873
SAM Balanced Portfolio
Equities
Funds	$ 606,876	$ —		$ —	$ 606,876
Total investments in securities	$ 606,876	$ —		$ —	$ 606,876
SAM Conservative Balanced Portfolio
Equities
Funds	$ 125,394	$ —		$ —	$ 125,394
Total investments in securities	$ 125,394	$ —		$ —	$ 125,394
SAM Conservative Growth Portfolio
Equities
Funds	$ 178,035		$ —	$ —	$ 178,035
Total investments in securities	$ 178,035		$ —	$ —	$ 178,035
SAM Flexible Income Portfolio
Equities
Funds	$ 141,534		$ —	$ —	$ 141,534
Total investments in securities	$ 141,534		$ —	$ —	$ 141,534
SAM Strategic Growth Portfolio
Equities
Funds	$ 102,001	$ —		$ —	$ 102,001
Total investments in securities	$ 102,001	$ —		$ —	$ 102,001
Short-Term Bond Account
Debt securities issued by the U.S.	$ —	$ 50,844		$ —	$ 50,844
Treasury and other U.S. government
corporations and agencies
Corporate debt securities	—	34,554		175	34,729
Residential mortgage-backed securities	—	3,118		40	3,158
Commercial mortgage-backed securities	—	9,538		1,105	10,643
Other debt obligations	—	10,909		347	11,256
Total investments in securities	$ —	$ 108,963		$ 1,667	$ 110,630
Short-Term Income Account
Debt securities issued by the U.S.	$ —	$ 16,283		$ —	$ 16,283
Treasury and other U.S. government
corporations and agencies
Corporate debt securities	—	28,043		—	28,043
Other debt obligations	—	6,159		—	6,159
Total investments in securities	$ —	$ 50,485		$ —	$ 50,485
Futures	$ 17	$ —		$ —	$ 17

63

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
2. Significant Accounting Policies (Continued)
		Level 2 - Other		Level 3 - Significant
	Level 1 - Quoted	Significant		Unobservable
Account	Prices	Observable Inputs		Inputs	Totals (Level 1,2,3)
SmallCap Blend Account
Equities
Basic Materials	$ 567	$ —		$ —	$ 567
Communications	3,421		—	—	3,421
Consumer, Cyclical	5,468		—	—	5,468
Consumer, Non-cyclical	10,934		—	—	10,934
Diversified	73		—	—	73
Energy	1,779		—	—	1,779
Financial	7,598		—	—	7,598
Industrial	7,605		—	—	7,605
Technology	4,395		—	—	4,395
Utilities	1,816		—	—	1,816
Debt securities issued by the U.S.	—		369	—	369
Treasury and other U.S. government
corporations and agencies
Other debt obligations	—		871	—	871
Total investments in securities	$ 43,656	$ 1,240		$ —	$ 44,896
Futures	$ 10	$ —		$ —	$ 10
SmallCap Growth Account II
Equities
Basic Materials	$ 806	$ —		$ —	$ 806
Communications	7,938		67	—	8,005
Consumer, Cyclical	9,626		—	—	9,626
Consumer, Non-cyclical	15,038		—	—	15,038
Energy	2,652		—	—	2,652
Financial	3,153		—	—	3,153
Industrial	9,026		—	—	9,026
Technology	11,897		—	—	11,897
Utilities	144		—	—	144
Debt securities issued by the U.S.	—		702	—	702
Treasury and other U.S. government
corporations and agencies
Other debt obligations	—	1,654		—	1,654
Total investments in securities	$ 60,280	$ 2,423		$ —	$ 62,703
Futures	$ (84)	$ —		$ —	$ (84)

64

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
2. Significant Accounting Policies (Continued)
		Level 2 - Other	Level 3 - Significant
	Level 1 - Quoted	Significant	Unobservable
Account	Prices	Observable Inputs	Inputs	Totals (Level 1,2,3)
SmallCap Value Account I
Equities
Basic Materials	$ 4,121	$ —	$ —	$ 4,121
Communications	7,129	—	—	7,129
Consumer, Cyclical	13,048	—	—	13,048
Consumer, Non-cyclical	14,596	—	—	14,596
Diversified	62	—	—	62
Energy	3,111	—	—	3,111
Exchange Traded Funds	44	—	—	44
Financial	33,637	—	—	33,637
Industrial	16,056	—	—	16,056
Technology	5,973	—	—	5,973
Utilities	7,332	—	—	7,332
Debt securities issued by the U.S.	—	1,202	—	1,202
Treasury and other U.S. government
corporations and agencies
Other debt obligations	—	2,832	—	2,832
Total investments in securities	$ 105,109	$ 4,034	$ —	$ 109,143
Futures	$ (118)	$ —	$ —	$ (118)

*Derivative instruments such as futures, foreign currency contracts, and swap agreements are valued at the unrealized appreciation/depreciation on the instrument.

The changes in investments measured at fair value for which the Accounts’ have used level 3 inputs to determine fair value are as follows (amounts shown in thousands):

						Transfers
	Value			Change in		In and/or	Value
	December	Accrued	Realized	Unrealized	Net	Out of	June 30,
Portfolio	31, 2008	Discounts/Premiums	Gain/(Loss)	Gain/(Loss)	Purchases/Sales	Level 3	2009
Asset Allocation
Debt securities issued by the U.S.
Treasury and other U.S.
government corporations and
agencies	$ 300	$ —	$ 3	$ —	$ (303)	$ —	$ —
Corporate debt securities	—	—	—	(4)	(4)	43	35
Total	$ 300	$ —	$ 3	$ (4)	$ (307)	$ 43	$ 35
Balanced Account
Debt securities issued by the U.S.
Treasury and other U.S.
government corporations and
agencies	$ —	$ —	$ —	$ 1	$ 66	$ —	$ 67
Corporate debt securities	34	—	(9)	(119)	(25)	370	251
Residential mortgage-backed
securities	—	—	—	(34)	—	52	18
Commercial mortgage-backed
securities	—	(3)	—	10	187	135	329
Other debt obligations		—	—	(15)	(22)	188	151
Total
	$ 34	$ (3)	$ (9)	$ (157)	$ 206	$ 745	$ 816

65

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
2. Significant Accounting Policies (Continued)
						Transfers
	Value			Change in		In and/or	Value
	December	Accrued	Realized	Unrealized	Net	Out of	June 30,
Portfolio	31, 2008	Discounts/Premiums	Gain/(Loss)	Gain/(Loss)	Purchases/Sales	Level 3	2009
Bond & Mortgage Securities Account
Equities
Financial	$ —	$ —	$ —	$ 1	$ 41	$ —	$ 42
Debt securities issued by the U.S.
Treasury and other U.S.
government corporations and
agencies	—	—	—	11	1,025	—	1,036
Corporate debt securities	521	9	(97)	(689)	(191)	3,832	3,385
Residential mortgage-backed
securities	—	—	—	(374)	(77)	917	466
Commercial mortgage-backed
securities	—	(24)	(125)	189	2,362	1,301	3,703
Other debt obligations	—	—	(1)	(193)	(328)	2,897	2,375
Total	$ 521	$ (15)	$ (223)	$ (1,055)	$ 2,832	$ 8,947	$11,007
Diversified International Account
Equities
Basic Materials	$ —	$ —	$ —	$ 154	$ 313	$ —	$467
Communications	2,623	—	—	—	—	(2,623)	—
Consumer, Non-cyclical	—	—	—	16	42	—	58
Industrial	1,588	—	—	6	204	(1,589)	209
Utilities	2	—	(21)	29	(10)	—	—
Total	$ 4,213	$ —	$ (21)	$ 205	$ 549	$(4,212)	$ 734
Government & High Quality Bond Account
Debt securities issued by the U.S.
Treasury and other U.S.
government corporations and
agencies	$ —	$ —	$ —	$ (94)	$ (191)	$ 1,309	$1,024
Corporate debt securities	—	—	—	(1,776)	—	3,751	1,975
Residential mortgage-backed
securities	—	—	—	(149)	(216)	1,258	893
Other debt obligations	—	—	—	31	(144)	906	793
Total	$ —	$ —	$ —	$(1,988)	$ (551)	$ 7,224	$4,685
Income Account
Corporate debt securities	$ 774	$ —	$ —	$ (180)	$ 1,500	$ 1,959	$ 4,053
Total	$ 774	$ —	$ —	$ (180)	$ 1,500	$ 1,959	$4,053
International Emerging Markets Account
Equities
Consumer, Non-cyclical	$ —	$ —	$ 106	$ 122	$ (394)	$ 429	$ 263
Industrial
	—	—	—	16	605	—	621
Total	$ —	$ —	$ 106	$ 138	$ 211	$ 429	$ 884
International SmallCap Account
Equities
Financial
	$ —	$ —	$ —	$ (1)	$ 17	$ —	$16
Industrial	58	—	—	(58)	—	—	—
Technology	—	—	—	—	28	—	28
Total	$ 58	$ —	$ —	$ (59)	$ 45	$ —	$ 44

66

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
2. Significant Accounting Policies (Continued)
						Transfers
	Value			Change in		In and/or	Value
	December	Accrued	Realized	Unrealized	Net	Out of	June 30,
Portfolio	31, 2008	Discounts/Premiums	Gain/(Loss)	Gain/(Loss)	Purchases/Sales	Level 3	2009
Short-Term Bond Account
Corporate debt securities	$ —	$ —	$ —	$ 20	$ (35)	$ 190	$175
Residential mortgage-backed
securities	—	—	—	(30)	(4)	74	40
Commercial mortgage-backed
securities	53	(3)	—	38	(1)	1,018	1,105
Other debt obligations	—	—	—	(28)	(102)	477	347
Total	$ 53	$ (3)	$ —	$ —	$ (142)	$1,759	$1,667

Currency Translation. Foreign holdings are translated to U.S. dollars using the exchange rate at the daily close of the New York Stock Exchange. The identified cost of the account holdings is translated at approximate rates prevailing when acquired. Income and expense amounts are translated at approximate rates prevailing when received or paid, with daily accruals of such amounts reported at approximate rates prevailing at the date of valuation. Since the carrying amount of the foreign securities is determined based on the exchange rate and market values at the close of the period, it is not practicable to isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities during the period.

Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between trade and settlement dates on security transactions, and the difference between the amount of dividends and foreign withholding taxes recorded on the books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies arise from changes in the exchange rate relating to assets and liabilities, other than investments in securities, purchased and held in non-U.S. denominated currencies.

The following Accounts held securities denominated in currencies that exceeded 5% of net assets of the Account:

Diversified International Account		International Emerging Markets Account		International SmallCap Account
Euro	23.4%	United States Dollar	23.6%	Japanese Yen	28.4%
British Pound	19.0	Hong Kong Dollar	20.5	Euro	22.3
Japanese Yen	18.9	Korean Won	12.0	British Pound	18.6
Canadian Dollar	7.0	Taiwan Dollar	11.4	Canadian Dollar	10.0
Swiss Franc	6.3	Brazilian Real	9.3
		South African Rand	5.7

Income and Investment Transactions. The Accounts record investment transactions on a trade date basis. Trade date for senior floating rate interests purchased in the primary market is considered the date on which the loan allocations are determined. Trade date for senior floating rate interests purchased in the secondary market is the date on which the transaction is entered into. The identified cost basis has been used in determining the net realized gain or loss from investment transactions and unrealized appreciation or depreciation of investments. The Accounts record dividend income on the ex-dividend date, except dividend income from foreign securities whereby the ex-dividend date has passed; such dividends are recorded as soon as the Accounts are informed of the ex-dividend date. Interest income is recognized on an accrual basis. Discounts and premiums on securities are accreted/amortized over the lives of the respective securities. The Accounts allocate daily all income and realized and unrealized gains or losses to each class of shares based upon the relative proportion of the value of shares outstanding (number of settled shares outstanding for Money Market Account) of each class.

67

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)

2. Significant Accounting Policies (Continued)

Expenses. Expenses directly attributed to an Account are charged to that Account. Other Account expenses not directly attributed to an Account are apportioned among the registered investment companies managed by the Manager.

Management fees are allocated daily to each class of shares based upon the relative proportion of the value of shares outstanding (number of settled shares outstanding for Money Market Account) of each class. Expenses specifically attributable to a particular class are charged directly to such class and are included separately in the statements of operations.

Expenses included in the statements of operations of the Principal LifeTime Accounts and SAM Portfolios reflect the expenses of each Principal LifeTime Account and SAM Portfolio and do not include any expenses associated with the Underlying Funds.

Dividends and Distributions to Shareholders. With respect to Money Market Account, all net investment income and any realized gains from investment transactions are declared as dividends daily to shareholders of record as of that day. Dividends and distributions to shareholders of the other accounts are recorded on the ex-dividend date. Dividends and distributions to shareholders from net investment income and net realized gain from investments and foreign currency transactions are determined in accordance with federal tax regulations, which may differ from U.S. generally accepted accounting principles. These differences are primarily due to differing treatments for net operating losses, mortgage-backed securities, certain defaulted securities, expiring capital loss carry forwards, certain preferred securities, returns of capital, amortization of premiums and discounts, futures contracts, consent distributions, sales of Passive Foreign Investment Companies, losses deferred due to wash sales, swap agreements, and foreign currency transactions. Permanent book and tax basis differences are reclassified within the capital accounts based on federal tax-basis treatment; temporary differences do not require reclassification. Distributions which exceed current and accumulated earnings and profits for federal income tax purposes are reported as return of capital distributions.

Real Estate Securities Account receives substantial distributions from holdings in Real Estate Investment Trusts (“REITs”). Distributions from REITs may be characterized as ordinary income, net capital gain, or a return of capital to the Account. The proper characterization of REIT distributions is generally not known until after the end of each calendar year. As such, estimates must be used in reporting the character of income and distributions for financial statement purposes.

Federal Income Taxes. No provision for federal income taxes is considered necessary because each account is qualified as a “regulated investment company” under the Internal Revenue Code and intends to distribute each year substantially all of its net investment income and realized capital gains to shareholders.

The Accounts recognize uncertain tax positions consistent with FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes.” As of June 30, 2009, there were no such uncertainties recognized in the accompanying financial statements.

Foreign Taxes. Certain of the Accounts are subject to foreign income taxes imposed by certain countries in which they invest. Foreign income taxes are accrued by the Accounts as a reduction of income. These amounts are shown as withholding tax on foreign dividends on the statements of operations.

Gains realized upon disposition of certain foreign securities held by the Accounts are subject to capital gains tax, payable prior to repatriation of sale proceeds. The tax is computed on certain net realized gains. Realized losses in excess of gains may be carried forward eight years to offset future gains. In addition, the Accounts accrue an estimated deferred tax liability for future gains on certain foreign securities. At June 30, 2009, Diversified International Account had a foreign tax refund receivable of $20,000, no deferred tax liability, and an approximate capital loss carryforward of $675,000 that expires in 2017, and International Emerging Markets Account had a foreign tax refund receivable of $90,000, no deferred tax liability, and an approximate capital loss carryforward of $2,747,000 that expires in 2017, relating to Indian securities.

Recent Accounting Pronouncements. In March 2008, the FASB issued the Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“FAS 161”). FAS 161 requires enhanced disclosures about the Accounts’ derivative and hedging activities, including how such activities are accounted for and their effect on the Accounts’ financial position, performance and cash flows. FAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008. All changes to financial statement disclosure have been made in accordance with FAS 161 and are incorporated for the current period as part of the notes to financial statements.

68

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)

2. Significant Accounting Policies (Continued)

In April 2009, the FASB issued Staff Position No. 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FSP 157-4”). FSP 157-4 provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity for the asset or liability have significantly decreased. FSP 157-4 also requires additional disaggregation of the current FAS 157 required disclosures. FSP 157-4 is effective for interim and annual reporting periods ending after June 15, 2009, and shall be applied prospectively. All changes to financial statement disclosure have been made in accordance with FSP 157-4 and are incorporated for the current period as part of the notes to financial statements.

3. Operating Policies

Foreign Currency Contracts. Certain of the Accounts may be subject to foreign currency exchange rate risk in the normal course of pursuing such Account’s investment objectives. The Accounts may use foreign currency contracts to gain exposure to, or hedge against changes in the value of foreign currencies. Certain of the Accounts enter into forward contracts to purchase and sell foreign currencies at a specified future date at a fixed exchange rate. Forward foreign currency contracts are valued at the forward rate, and are marked-to-market daily. The change in market value is recorded by the Accounts as an unrealized gain or loss. When the contract is closed, the Accounts record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

The use of forward foreign currency contracts does not eliminate the fluctuations in underlying prices of the Accounts’ portfolio securities, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency contracts limit the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain that might result should the value of the currency increase. In addition, the Accounts could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts or if the value of the currency changes unfavorably to the U.S. dollar. The foreign currency contracts outstanding as of June 30, 2009 are included in the schedules of investments.

Futures Contracts. The Accounts are subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing their investment objectives. The Accounts (with the exception of Money Market Account) may enter into futures contracts to hedge against changes in or to gain exposure to, change in the value of equities, interest rates and foreign currencies. Initial margin deposits are made by cash deposits or segregation of specific securities as may be required by the exchange on which the transaction was conducted. Pursuant to the contracts, an account agrees to receive from or pay to the broker, an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as “variation margin” and are recorded by the account as a variation margin receivable or payable on futures contracts. During the period the futures contracts are open, daily changes in the value of the contracts are recognized as unrealized gains or losses. These unrealized gains or losses are included as a component of net unrealized appreciation (depreciation) of investments on the statements of assets and liabilities. When the contracts are closed, the Account recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the account’s cost basis in the contract. There is minimal counterparty credit risk to the Accounts because futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default.

Illiquid Securities. Illiquid securities generally cannot be sold or disposed of in the ordinary course of business (within seven calendar days) at approximately the value at which each of the Accounts has valued the investments. This may have an adverse effect on each of the Accounts’ ability to dispose of particular illiquid securities at fair market value and may limit each of the Accounts’ ability to obtain accurate market quotations for purposes of valuing the securities. Information regarding illiquid securities is included with footnote designations in the schedules of investments.

Indemnification. Under the Fund’s by-laws, present and past officers, directors and employees are indemnified against certain liabilities arising out of the performance of their duties. In addition, in the normal course of business, the Fund may enter into a variety of contracts that may contain representations and warranties which provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

69

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)

3. Operating Policies (Continued)

Joint Trading Account. Certain of the Accounts may, pursuant to an exemptive order issued by the Securities and Exchange Commission, transfer uninvested funds into a joint trading account. The order permits the participating accounts’ cash balances to be deposited into a single joint account along with the cash of other registered investment companies managed by the Manager. These balances may be invested in one or more short-term instruments or repurchase agreements that are collateralized by U.S. government securities.

Line of Credit. Certain of the Accounts participate with other funds managed by the Manager in an unsecured joint line of credit with two banks which allow the participants to borrow up to $150 million, collectively. Borrowings are made solely to facilitate the handling of unusual and/or unanticipated short-term cash requirements. Interest is charged to each participant, based on its borrowings, at a rate equal to the Fed Funds Rate plus .4%. During the period ended June 30, 20099, Asset Allocation Account, Bond & Mortgage Securities Account, Diversified International Account, Income Account, International Emerging Markets Account, LargeCap Blend Account II, LargeCap Growth Account, LargeCap Growth Account I, LargeCap Value Account, MidCap Growth Account I, Real Estate Securities Account, SmallCap Blend Account, SmallCap Growth Account II, and SmallCap Value Account I each borrowed against the line of credit. The interest expense associated with these borrowings is included in other expenses on the statements of operations.

Effective July 2, 2009, the unsecured joint line of credit is with three banks which allow the participants to borrow up to $150 million, collectively. Interest charged to each participant, based on its borrowings, will be at a rate equal to the higher of the Fed Funds Rate or the One Month LIBOR Rate plus 1.25% .

Rebates. Subject to best execution, the Accounts may direct certain portfolio transactions to brokerage firms that, in turn, have agreed to rebate a portion of the related brokerage commission to the account in cash. Commission rebates are included as a component of realized gain from investment transactions in the statements of operations.

Repurchase Agreements. The Accounts may invest in repurchase agreements that are fully collateralized, typically by U.S. government or U.S. government agency securities. It is the Accounts’ policy that its custodian takes possession of the underlying collateral securities. The fair value of the collateral is at all times at least equal to the total amount of the repurchase obligation. In the event of default on the obligation to repurchase, the Accounts have the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event the seller of a repurchase agreement defaults, the Accounts could experience delays in the realization of the collateral.

Restricted Securities. Certain of the Accounts may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included with footnote designations in the schedules of investments.

Securities Lending. To earn additional income, certain of the Accounts may lend portfolio securities to approved brokerage firms. The Accounts receive collateral, generally in the form of cash, against the loaned securities. During the period of the loan, the borrower must maintain collateral in an amount not less than 100% of the market value of the loaned securities. The market value of loaned securities is determined at the close of business of the Accounts and any additional required collateral is delivered to the Accounts on the next business day. The cash collateral is usually invested in short-term securities and the Accounts could realize a loss on such investments. Further, the Accounts could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. As of June 30, 2009, the Accounts had no securities on loan.

Senior Floating Rate Interests. The Accounts may invest in senior floating rate interests (bank loans). Senior floating rate interests hold the most senior position in the capital structure of a business entity (the “Borrower”), are typically secured by specific collateral and have a claim on the assets and/or stock of the Borrower that is senior to that held by subordinated debtholders and stockholders of the Borrower. Senior floating rate interests are typically structured and administered by a financial institution that acts as the agent of the lenders participating in the senior floating rate interest. Senior floating rate interests are rated below-investment-grade, which means they are more likely to default than investment-grade loans. A default could lead to non-payment of income which would result in a reduction of income to the fund and there can be no assurance that the liquidation of any collateral would satisfy the Borrower’s obligation in the event of non-payment of scheduled interest or principal payments, or that such collateral could be readily liquidated.

70

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)

3. Operating Policies (Continued)

Senior floating rate interests pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. These base lending rates are generally the prime rate offered by a designated U.S. bank or the London InterBank Offered Rate (LIBOR) or the prime rate offered by one or more major United States banks.

Senior floating rate interests generally are subject to mandatory and/or optional prepayment. Because of these mandatory prepayment conditions and because there may be significant economic incentives for the Borrower to repay, prepayments of senior floating rate interests may occur. As a result, the actual remaining maturity of senior floating rate interests may be substantially less than stated maturities shown in the schedules of investments.

Swap Agreements. Certain of the Accounts may invest in swap agreements. Swap agreements are privately negotiated agreements between an Account and a counterparty to exchange a series of cash flows at specified intervals based upon, or calculated by reference to, changes in specified prices or rates for a specified amount of an underlying asset. An Account may enter into credit default, interest rate, or total return swap agreements to manage its exposure to credit, interest rate, or market risk. The Accounts are subject to interest rate and credit risk in the normal course of pursuing their investment objectives. In connection with these agreements, securities may be identified as collateral in accordance with the terms of the respective swap agreements to provide assets of value and recourse in the event of default or bankruptcy/insolvency.

Swaps agreements are valued through a pricing service or using procedures established and periodically reviewed by the Fund’s Board of Directors; changes in value are recorded as unrealized gain or loss. These unrealized gains or losses are included as a component of net unrealized appreciation (depreciation) of investments on the statements of assets and liabilities

Upon termination of swap agreements, the Accounts recognize a realized gain or loss. Net periodic payments to be received or paid are accrued daily and are recorded in the statements of operations as realized gains or losses.

Payments received or made at the beginning of the measurement period are reflected as such on the statements of assets and liabilities and represent payments made or received upon entering into the swap agreement to compensate for differences between the stated terms of the swap agreement and prevailing market conditions (credit spreads, interest rates, and other relevant factors). These upfront payments are amortized daily over the term of the swap agreement as realized gains or losses on the statements of operations.

Notional principal amounts are used to express the extent of involvement in these agreements. Risks may exceed amounts shown on the statements of assets and liabilities. These risks include changes in the returns of the underlying instruments, unfavorable interest rate fluctuation, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of contractual terms in the agreements, and the possible lack of liquidity with respect to the swap agreements.

Credit default swaps involve commitments to pay a fixed rate at a predetermined frequency in exchange for a lump sum payment if a “credit event”, as defined in the agreement, affecting a third party occurs. Credit events may include a failure to pay interest, bankruptcy, restructuring, or other event as defined in the agreement. A “buyer” of credit protection agrees to pay a counterparty to assume the credit risk of an issuer upon the occurrence of a credit event. The “seller” of the protection receives periodic payments and agrees to assume the credit risk of an issuer upon the occurrence of a credit event. As the seller of credit protection, an Account would add leverage to its portfolio because, in addition to its total net assets, an Account would be subject to investment exposure on the notional amount of the swap.

If an Account is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Account will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. If an Account is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, an Account will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and deliver the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

71

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)

3. Operating Policies (Continued)

Credit default swap agreements on credit indices involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising the credit index. A credit index is a list of a basket of credit instruments or exposures designed to be representative of some part of the credit market as a whole. These indices are made up of reference credits that are judged by a poll of dealers to be the most liquid entities in the credit default swap market based on the sector of the index. Components of the indices may include, but are not limited to, investment grade securities, high yield securities, asset backed securities, emerging markets, and/or various credit ratings within each sector. Credit indices are traded using credit default swaps with standardized terms including a fixed spread and standard maturity dates. An index credit default swap references all the names in the index, and if there is a default, the credit event is settled based on that name’s weight in the index. The composition of the indices changes periodically, usually every six months, and for most indices, each name has an equal weight in the index. An Account may use credit default swaps on credit indices to hedge a portfolio of credit default swaps or bonds with a credit default swap on indices which is less expensive than it would be to buy many credit default swap to achieve a similar effect. Credit-default swap on indices are benchmarks for protecting investors owning bonds against default, and traders use them to speculate on changes in credit quality.

For credit default swap agreements on asset-backed securities and credit indices, the quoted market prices and resulting values serve as the indicator of the current status of the payment/performance risk. Wider credit spreads and increasing market values, in absolute terms when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.

The maximum potential amount of future payments (undiscounted) that an Account as a seller of protection could be required to make under a credit default swap agreement would be an amount equal to the notional amount of the agreement. Notional amounts of all credit default swap agreements outstanding as of June 30, 2009 for which an Account is the seller of protection are disclosed in the footnotes to the Schedules of Investments. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into by an Account for the same referenced entity or entities.

Details of credit default swaps where Bond & Mortgage Securities Account sold protection as of June 30, 2009 are as follows (amounts shown in thousands):

Counterparty	Reference	(Pay)/Receive	Expiration	Notional	Market	Upfront Premiums	Unrealized
(Issuer)	Entity	Fixed Rate	Date	Amount(1)	Value(2)	Paid/(Received)	(Depreciation)
Deutsche Bank	CMBX.NA.AAA.4	0.35%	02/17/2051	$ 1,250	$ (335)	$ (381)	$ 46

⁽¹⁾ The maximum potential amount the Account could be required to make as a seller of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

⁽²⁾ The market price and resulting market value for credit default swap agreements on credit indices serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit default swap as of the period end. Increasing market values, in absolute terms, when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.

Interest rate swaps involve the commitment to pay or receive a floating rate of interest in exchange for a fixed rate of interest based on the same notional amount

Total return swaps involve commitments to pay interest in exchange for a market-linked return. To the extent the total return of the security or index underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the Accounts will receive a payment from or make a payment to the counterparty.

Details of swap agreements open at period end are included in the Accounts' schedules of investments.

72

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)

3. Operating Policies (Continued)

Derivatives. The following tables provide information about where in the statements of assets and liabilities and statements of operations information about derivatives can be found (amounts shown in thousands):

Derivatives not accounted for as	Asset Derivatives June 30, 2009		Liability Derivatives June 30, 2009
hedging instruments under Statement		Fair		Fair
133	Statement of Assets and Liabilities Location	Value	Statement of Assets and Liabilities Location	Value
Asset Allocation Account
Equity contracts	Receivables, Net Assets Consist of Net	$1*
	unrealized appreciation (depreciation) of
	investments
Foreign exchange contracts	Receivables	118	Payables	$141
Interest rate contracts			Receivables, Net Assets Consist of Net	20*
			unrealized appreciation (depreciation) of
			investments
	Total	$119		$161
Bond & Mortgage Securities Account
Credit contracts	Receivables, Net Assets Consist of Net	$46	Payables, Net Assets Consist of Net unrealized	$1,824
	unrealized appreciation (depreciation) of		appreciation (depreciation) of investments
	investments
Balanced Account
Equity contracts			Payables, Net Assets Consist of Net unrealized	$7*
			appreciation (depreciation) of investments
Government & High Quality Bond Account
Interest rate contracts			Payables, Net Assets Consist of Net unrealized	$7*
			appreciation (depreciation) of investments
LargeCap Blend Account II
Equity contracts			Payables, Net Assets Consist of Net unrealized	$74*
			appreciation (depreciation) of investments
LargeCap Growth Account I
Equity contracts			Payables, Net Assets Consist of Net unrealized	$67*
			appreciation (depreciation) of investments
LargeCap S&P 500 Index Account
Equity contracts			Payables, Net Assets Consist of Net unrealized	$76*
			appreciation (depreciation) of investments
LargeCap Value Account
Equity contracts			Payables, Net Assets Consist of Net unrealized	$19*
			appreciation (depreciation) of investments
LargeCap Value Account III
Equity contracts	Payables, Net Assets Consist of Net unrealized	$55*
	appreciation (depreciation) of investments
Short-Term Income Account
Interest rate contracts	Receivables, Net Assets Consist of Net	$17*
	unrealized appreciation (depreciation) of
	investments
SmallCap Blend Account
Equity contracts	Payables, Net Assets Consist of Net unrealized	$10*
	appreciation (depreciation) of investments
SmallCap Growth Account II
Equity contracts			Payables, Net Assets Consist of Net unrealized	$84*
			appreciation (depreciation) of investments
SmallCap Value Account I
Equity contracts			Payables, Net Assets Consist of Net unrealized	$118*
			appreciation (depreciation) of investments

*Includes cumulative unrealized appreciation/depreciation of futures contracts as shown in the schedules of investments. Only the portion of the unrealized appreciation/depreciation not yet cash settled is shown in the statements of assets and liabilities as variation margin.

73

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)
3. Operating Policies (Continued)
		Realized Gain or (Loss)	Change in Unrealized
Derivatives Not Accounted		on Derivatives	Appreciation or (depreciation) of
for as Hedging Instruments	Location of Gain or (Loss) On Derivatives Recognized in	Recognized in	Derivatives Recognized in
Under Statement 133	Operations	Operations	Operations
Asset Allocation Account
Equity contracts	Net realized gain (loss) from Futures contracts/Change in	$580	$(347)
	unrealized appreciation/depreciation of Futures contracts
Foreign exchange rate	Net realized gain (loss) for Foreign currency	102	(129)
contracts	transactions/Change in unrealized appreciation/depreciation
	of Translation of assets and liabilities in foreign currencies
Interest rate contracts	Net realized gain (loss) from Futures contracts/Change in	(17)	63
	unrealized appreciation/depreciation of Futures contracts
	Total	$665	$(413)
Bond & Mortgage Securities Account
Credit contracts	Net realized gain (loss) from Swap agreements/Change in	$404	$(1,502)
	unrealized appreciation/depreciation of Swap agreements
Balanced Account
Equity contracts	Net realized gain (loss) from Futures contracts/Change in	$(32)	$(15)
	unrealized appreciation/depreciation of Futures contracts
Interest rate contracts	Net realized gain (loss) from Futures contracts/Change in	(49)	(1)
	unrealized appreciation/depreciation of Futures contracts
	Total	$(81)	$(16)
Government & High Quality Bond Account
Interest rate contracts	Net realized gain (loss) from Futures contracts and Swap	$(753)	$543
	agreements/Change in unrealized appreciation/depreciation of
	Futures contracts and swap agreements
LargeCap Blend Account II
Equity contracts	Net realized gain (loss) from Futures contracts/Change in	$294	$(93)
	unrealized appreciation/depreciation of Futures contracts
LargeCap Growth Account I
Equity contracts	Net realized gain (loss) from Futures contracts/Change in	$301	$(67)
	unrealized appreciation/depreciation of Futures contracts
LargeCap S&P 500 Index Account
Equity contracts	Net realized gain (loss) from Futures contracts/Change in	$405	$(156)
	unrealized appreciation/depreciation of Futures contracts
LargeCap Value Account
Equity contracts	Net realized gain (loss) from Futures contracts/Change in	$(17)	$(88)
	unrealized appreciation/depreciation of Futures contracts
LargeCap Value Account III
Equity contracts	Net realized gain (loss) from Futures contracts/Change in	$300	$55
	unrealized appreciation/depreciation of Futures contracts
Short-Term Income Account
Interest rate contracts	Net realized gain (loss) from Futures contracts/Change in	$(38)	$103
	unrealized appreciation/depreciation of Futures contracts
Short-Term Bond Account
Interest rate contracts	Net realized gain (loss) from Futures contracts/Change in	$50	$(76)
	unrealized appreciation/depreciation of Futures contracts
SmallCap Blend Account
Equity contracts	Net realized gain (loss) from Futures contracts/Change in	$62	$(56)
	unrealized appreciation/depreciation of Futures contracts
SmallCap Growth Account II
Equity contracts	Net realized gain (loss) from Futures contracts/Change in	$88	$(84)
	unrealized appreciation/depreciation of Futures contracts
SmallCap Value Account I
Equity contracts	Net realized gain (loss) from Futures contracts/Change in	$390	$(283)
	unrealized appreciation/depreciation of Futures contracts

The level of derivative activity disclosed in the schedules of investments is representative of the level of derivative activity used in the Accounts throughout the period ended June 30, 2009.

74

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)

4. Management Agreement and Transactions with Affiliates

Management Services. The Fund has agreed to pay investment advisory and management fees to the Manager (wholly owned by Principal Financial Services, Inc.) computed at an annual percentage rate of each account’s average daily net assets. The annual rate paid by Principal LifeTime Accounts is 0.1225% of each of the Principal LifeTime Accounts’ average daily net assets up to $3 billion and 0.1125% of each of the Principal LifeTime Accounts’ average daily net assets over $3 billion. Effective July 1, 2009, the annual rate paid by Principal LifeTime Accounts was reduced to 0.03% of each of the Principal LifeTime Accounts’ average net assets. The annual rate paid by the SAM Portfolios is based upon the aggregate average daily net assets (“aggregate net assets”) of the SAM Portfolios. The investment advisory and management fee schedule for the SAM Portfolios is 0.25% of aggregate net assets up to the first $1 billion and 0.20% of aggregate net assets over $1 billion. The annual rates used in this calculation for each of the other Accounts are as follows:

		Net Assets of Accounts (in millions)
					Over
	First $100	Next $100	Next $100	Next $100	$400
Asset Allocation Account	0.80 %	0.75 %	0.70 %	0.65 %	0.60 %
Balanced Account	0.60	0.55	0.50	0.45	0.40
Bond & Mortgage Securities Account	0.50	0.45	0.40	0.35	0.30
Equity Income Account	0.60	0.55	0.50	0.45	0.40
Government & High Quality Bond Account	0.50	0.45	0.40	0.35	0.30
International SmallCap Account	1.20	1.15	1.10	1.05	1.00
LargeCap Growth Account I	0.80	0.75	0.70	0.65	0.60
MidCap Blend Account	0.65	0.60	0.55	0.50	0.45
MidCap Growth Account I	0.90	0.85	0.80	0.75	0.70
Money Market Account	0.50	0.45	0.40	0.35	0.30
Real Estate Securities Account	0.90	0.85	0.80	0.75	0.70
Short-Term Bond Account	0.50	0.45	0.40	0.35	0.30
SmallCap Blend Account	0.85	0.80	0.75	0.70	0.65
SmallCap Growth Account II	1.00	0.95	0.90	0.85	0.80
SmallCap Value Account I	1.10	1.05	1.00	0.95	0.90
		Net Assets of Accounts (in millions)
					Over
	First $250	Next $250	Next $250	Next $250	$1,000
Diversified International Account	0.85%	0.80%	0.75%	0.70%	0.65%
International Emerging Markets Account	1.25	1.20	1.15	1.10	1.05
LargeCap Blend Account II	0.75	0.70	0.65	0.60	0.55
LargeCap Value Account	0.60	0.55	0.50	0.45	0.40
LargeCap Value Account III	0.75	0.70	0.65	0.60	0.55
MidCap Value Account II	1.05	1.00	0.95	0.90	0.85

						Net Assets of Account
		Net Assets of Account					(in millions)
	First	Next	Next	Over $3		First	Next	Over
	$1 billion	$1 billion	$1 billion	Billion		$200	$300	$500
MidCap Stock Account	0.75%	0.70%	0.65%	0.60%	Short-Term Income Account	0.50%	0.45%	0.40%

75

			NOTES TO FINANCIAL STATEMENTS
		PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
			June 30, 2009 (unaudited)
4. Management Agreement and Transactions with Affiliates (Continued)
	Net Assets of Account					Net Assets of Account
	(in millions)					(in millions)
				First	Next	Next $1	Next $1	Over $3
	First $500	Over $500		$500	$500	billion	billion	billion
Principal Capital			LargeCap Growth
Appreciation Account	.625%	.50%	Account	0.68%	0.63%	0.61%	0.56%	0.51%
	Net Assets of Accounts
	First $2	Over $2
	billion	billion
Income Account	.50%	.45%
Mortgage Securities Account	.50	.45
	Overall Fee
LargeCap S&P 500 Index Account	.25 %

Effective July 1, 2009, the Manager has contractually agreed to limit the Account’s management and investment advisory fees for certain of the Accounts through the period ended April 30, 2011. The expense limit will reduce the Account’s management and investment advisory fees by the following amounts:

LargeCap Blend Account II	0.018 %
LargeCap Growth Account I	0.016
LargeCap Value Account III	0.012
SmallCap Growth Account II	0.020
SmallCap Value Account I	0.020

The Manager has contractually agreed to limit the expenses (excluding interest the Accounts incur in connection with investments they make) for certain classes of shares of certain of the Accounts. The reductions and reimbursements are in amounts that maintain total operating expenses at or below certain limits. The limits are expressed as a percentage of average daily net assets attributable to each class of shares on an annualized basis during the reporting period. The operating expense limits are as follows:

	From January 1, 2009 through June 30, 2009
	Class 1	Class 2	Expiration
MidCap Value Account II	1.01%	N/A	April 30, 2010
Principal LifeTime 2040 Account	0.13	N/A	April 30, 2009
Principal LifeTime 2050 Account	0.12	N/A	April 30, 2009
Principal LifeTime Strategic Income Account	0.14	N/A	April 30, 2009
SmallCap Value Account I	1.01	1.26%	April 30, 2010

Effective July 1, 2009, the operating expense limit for SmallCap Value Account I will be 0.99% for Class 1 and 1.24% for Class 2.

76

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)

4. Management Agreement and Transactions with Affiliates (Continued)

Distribution and Shareholder Servicing Fees. Class 2 shares of the Accounts bear distribution fees. The fee is computed at an annual rate of the average daily net assets attributable to Class 2 shares of each of the Accounts. Distribution fees are paid to Principal Funds Distributor, Inc., the principal underwriter, a portion may be paid to other selling dealers for providing certain services. The annual rate for Class 2 shares is .25%.

Effective March 1, 2009, Principal Funds Distributor, Inc. has voluntarily agreed to limit the Money Market Account’s distribution fees attributable to Class 2 shares of the Money Market Account. The limit will maintain the level of distribution fees not to exceed 0% for Class 2 shares. The limit may be terminated at any time.

Affiliated Ownership. At June 30, 2009, Principal Life Insurance Company (an affiliate of the Manager) and/or one or more separate accounts sponsored by Principal Life Insurance Company owned shares of the Accounts as follows (amounts in thousands):

	Class 1		Class 1
Asset Allocation Account	5,961	Principal Capital Appreciation Account	164
Balanced Account	4,992	Principal LifeTime 2010 Account	4,283
Bond & Mortgage Securities Account	28,803	Principal LifeTime 2020 Account	17,064
Diversified International Account	23,202	Principal LifeTime 2030 Account	4,605
Equity Income Account	13,222	Principal LifeTime 2040 Account	1,511
Government & High Quality Bond Account	24,694	Principal LifeTime 2050 Account	986
International Emerging Markets Account	8,653	Principal LifeTime Strategic Income Account	2,330
International SmallCap Account	8,937	Real Estate Securities Account	10,081
LargeCap Blend Account II	28,753	SAM Balanced Portfolio	31,694
LargeCap Growth Account	6,546	SAM Conservative Balanced Portfolio	10,400
LargeCap Growth Account I	11,715	SAM Conservative Growth Portfolio	3,834
LargeCap S&P 500 Index Account	14,935	SAM Flexible Income Portfolio	8,840
LargeCap Value Account	7,037	SAM Strategic Growth Portfolio	2,494
LargeCap Value Account III	17,079	Short-Term Bond Account	13,846
MidCap Blend Account	10,589	Short-Term Income Account	4,828
MidCap Growth Account I	6,315	SmallCap Blend Account	8,191
MidCap Value Account II	10,056	SmallCap Growth Account II	5,373
Money Market Account	415,093	SmallCap Value Account I	10,193
Mortgage Securities Account	972

Affiliated Brokerage Commissions. With respect to Bond & Mortgage Securities Account, $3,000 of brokerage commissions were paid to Spectrum Asset Management, Inc., a member of the Principal Financial Group. The other Accounts did not pay brokerage commissions to any member of the Principal Financial Group during the period ended June 30, 2009. Brokerage commissions were paid to affiliates of sub-advisors as follows (in thousands):

	Period Ended
	June 30, 2009
SmallCap Growth Account II	$ 1

77

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)

5. Investment Transactions

For the period ended June 30, 2009, the cost of investment securities purchased and proceeds from investment securities sold (not including short-term investments) by the Accounts were as follows (amounts shown in thousands):

	Purchases	Sales		Purchases	Sales
Asset Allocation Account	$46,281	$54,542	Mortgage Securities Account	$34,287	$18,490
Balanced Account	62,108	68,991	Principal Capital Appreciation Account	13,197	8,738
Bond & Mortgage Securities Account	844,344	878,482	Principal LifeTime 2010 Account	7,113	5,281
Diversified International Account	153,027	148,017	Principal LifeTime 2020 Account	22,225	11,669
Equity Income Account	108,196	85,786	Principal LifeTime 2030 Account	12,432	2,325
Government & High Quality Bond Account	132,418	190,652	Principal LifeTime 2040 Account	1,834	1,378
Income Account	36,034	15,512	Principal LifeTime 2050 Account	1,288	970
International Emerging Markets Account	92,722	85,858	Principal LifeTime Strategic Income Account	5,793	3,084
International SmallCap Account	50,097	54,340	Real Estate Securities Account	47,371	41,776
LargeCap Blend Account II	37,996	43,183	SAM Balanced Portfolio	106,757	15,504
LargeCap Growth Account	107,321	95,033	SAM Conservative Balanced Portfolio	38,884	7,965
LargeCap Growth Account I	41,915	52,549	SAM Conservative Growth Portfolio	12,522	10,972
LargeCap S&P 500 Index Account	7,781	9,529	SAM Flexible Income Portfolio	31,647	18,348
LargeCap Value Account	117,750	121,300	SAM Strategic Growth Portfolio	11,498	4,610
LargeCap Value Account III	64,946	63,709	Short-Term Bond Account	5,132	26,112
MidCap Blend Account	17,838	26,692	Short-Term Income Account	13,757	4,946
MidCap Growth Account I	10,217	12,402	SmallCap Blend Account	21,425	23,975
MidCap Stock Account	11,620	8,234	SmallCap Growth Account II	26,282	30,452
MidCap Value Account II	63,756	59,417	SmallCap Value Account I	27,147	25,190

For the year ended June 30, 2009, the cost of U.S. government securities purchased and proceeds from U.S. government securities sold (not including short-term investments) by the Accounts were as follows (amounts shown in thousands):

	Purchases	Sales		Purchases	Sales
Asset Allocation Account	$18,344	$17,902	Mortgage Securities Account	$3,375	$1,458
Balanced Account	3,793	3,040	Short Term Bond Account	16,032	6,790
Bond & Mortgage Securities Account	59,757	59,621	Short Term Income Account	2,985	6
Government & High Quality Bond Account	16,980	18,713	SmallCap Value Account I	—	116
Income Account	11,127	2,246

The Accounts may trade portfolio securities on a “to-be-announced” (“TBA”) or when-issued basis. In a TBA or when-issued transaction, the account commits to purchase or sell securities for which all specific information is not known at the time of the trade. Securities purchased on a TBA or when-issued basis are not settled until they are delivered to the account, normally 15 to 30 days later. These transactions are subject to market fluctuations and their current value is determined in the same manner as for other portfolio securities. The value of the securities purchased on a TBA or when-issued basis are identified as such in each account’s schedule of investments.

Certain of the Accounts have entered into mortgage-dollar-roll transactions, in which the Account sells mortgage-backed securities and simultaneously agrees to purchase similar securities in the future at a predetermined price. The proceeds of the securities sold in mortgage-dollar-roll transactions are invested in additional securities. The Account forgoes principal and interest paid on the securities, and is compensated by interest earned on the proceeds of the initial sale and by a lower price on the securities to be repurchased. The Accounts treat mortgage-dollar-roll transactions as purchases and sales; as such, these transactions may increase the Accounts' portfolio turnover ratio. Amounts to be received or paid in connection with open mortgage-dollar-rolls are included in Investment securities sold and Investment securities purchased on the statements of assets and liabilities.

78

NOTES TO FINANCIAL STATEMENTS

PRINCIPAL VARIABLE CONTRACTS FUNDS, INC. June 30, 2009 (unaudited)

6. Federal Tax Information

Distributions to Shareholders. The federal income tax character of distributions paid for the periods ended June 30, 2009 and December 31, 2008 were as follows (amounts in thousands):

	Ordinary Income		Long-Term Capital Gain		Section 1250 Gains
	2009	2008	2009	2008*	2009		2008
Asset Allocation Account	$1,822	$ 4,724	$ —	$ 4,828	$ —	$ —
Balanced Account	2,647	2,956	—	3,470	—		—
Bond & Mortgage Securities Account	24,743	25,851	—	—	—		—
Diversified International Account	9,747	32,412	—	76,228	—		—
Equity Income Account	12,832	20,200	—	25,508	—		—
Government & High Quality Bond Account	15,687	15,001	—	—	—		—
Income Account	9,779	11,335	152	208	—		—
International Emerging Markets Account	1,424	31,597	—	26,102	—		—
International SmallCap Account	2,378	12,395	—	20,033	—		—
LargeCap Blend Account II	3,023	15,975	—	84,558	—		—
LargeCap Growth Account	1,471	1,456	—	—	—		—
LargeCap Growth Account I	—	401	—	—	—		—
LargeCap S&P 500 Index Account	3,117	3,668	—	3,811	—		—
LargeCap Value Account	4,794	8,985	—	24,933	—		—
LargeCap Value Account III	4,472	6,207	—	5,979	—		—
MidCap Blend Account	2,392	7,072	14,827	40,117	—		—
MidCap Growth Account I	67	5,034	—	4,068	—		—
MidCap Stock Account	774	1,477	—	14,996	—		—
MidCap Value Account II	1,573	7,114	—	4,056	—		—
Money Market Account	1,040	8,668	—	—	—		—
Mortgage Securities Account	9,505	12,314	—	—	—		—
Principal Capital Appreciation Account	826	1,572	—	10,314	—		—
Principal LifeTime 2010 Account	1,551	2,161	67	2,639	—		—
Principal LifeTime 2020 Account	5,072	8,649	—	12,247	—		—
Principal LifeTime 2030 Account	776	1,505	51	2,183	—		—
Principal LifeTime 2040 Account	345	695	—	1,185	—		—
Principal LifeTime 2050 Account	201	485	—	764	—		—
Principal LifeTime Strategic Income Account	1,034	861	174	633	—		—
Real Estate Securities Account	3,240	5,194	—	58,377	—		330
SAM Balanced Portfolio	24,142	22,940	18,466	71,003	—		—
SAM Conservative Balanced Portfolio	3,987	3,089	1,831	5,139	—		—
SAM Conservative Growth Portfolio	9,144	9,785	10,464	26,791	—		—
SAM Flexible Income Portfolio	6,685	8,007	1,332	10,759	—		—
SAM Strategic Growth Portfolio	3,798	4,616	1,483	20,889	—		—
Short-Term Bond Account	7,521	7,051	—	—	—		—
Short-Term Income Account	2,646	2,053	—	—	—		—
SmallCap Blend Account	335	3,084	—	5,887	—		—
SmallCap Value Account I	1,626	5,981	—	12,511	—		—
*The Accounts designate these distributions as long-term capital gain dividends per IRC code Sec. 852(b)(3)(C).
For U.S. federal income tax purposes, short-term capital gain distributions are considered ordinary income distributions.

79

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)

6. Federal Tax Information (Continued)

Distributable Earnings. As of December 31, 2008, the components of distributable earnings on a federal income tax basis were as follows (amounts in thousands):

	Undistributed	Undistributed
	Ordinary Income	Long-Term Capital Gains
Asset Allocation Account	$1,769	$ —
Balanced Account	2,568	—
Bond & Mortgage Securities Account	24,028	—
Diversified International Account	9,461	—
Equity Income Account	12,432	—
Government & High Quality Bond Account	15,229	—
Income Account	9,496	152
International Emerging Markets Account	1,383	—
International SmallCap Account	2,309	—
LargeCap Blend Account II	2,917	—
LargeCap Growth Account	1,429	—
LargeCap S&P 500 Index Account	3,030	—
LargeCap Value Account	4,633	—
LargeCap Value Account II	98	—
LargeCap Value Account III	4,347	—
MidCap Blend Account	2,294	14,827
MidCap Growth Account I	57	—
MidCap Stock Account	750	382
MidCap Value Account II	1,520	—
Mortgage Securities Account	9,227	—
Principal Capital Appreciation Account	797	—
Principal LifeTime 2010 Account	1,531	66
Principal LifeTime 2020 Account	4,925	—
Principal LifeTime 2030 Account	754	51
Principal LifeTime 2040 Account	335	—
Principal LifeTime 2050 Account	195	—
Principal LifeTime Strategic Income Account	1,047	173
Real Estate Securities Account	2,816	—
SAM Balanced Portfolio	23,440	18,466
SAM Conservative Balanced Portfolio	3,872	1,462
SAM Conservative Growth Portfolio	8,877	10,464
SAM Flexible Income Portfolio	6,491	1,124
SAM Strategic Growth Portfolio	3,687	1,483
Short-Term Bond Account	7,302	—
Short-Term Income Account	2,568	—
SmallCap Blend Account	323	—
SmallCap Value Account I	1,587	—

As of December 31, 2008, LargeCap Growth Account I, Money Market Account and SmallCap Growth Account II had no distributable earnings on a federal income tax basis.

80

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)

6. Federal Tax Information (Continued)

Capital Loss Carryforwards. For federal income tax purposes, capital loss carryforwards are losses that can be used to offset future capital gains of an account. At December 31, 2008, the following Accounts had approximate net capital loss carryforwards as follows (amounts in thousands):

			Net Capital Loss Carryforward Expiring In:
										Annual
	2009	2010	2011	2012	2013	2014	2015	2016	Total	Limitations*
Asset Allocation Account	$ —	$ —	$ —	$ —	$ —	$ —	$ —	$ 680	$ 680	$ —
Balanced Account	—	—	—	—	—	—	—	4,781	4,781	—
Bond & Mortgage Securities Account	302	1,073	—	—	574	1,318	171	13,681	17,119	—
Diversified International Account	—	—	—	—	—	—	—	57,701	57,701	—
Equity Income Account	—	—	—	—	—	—	—	44,839	44,839	—
Government & High Quality
Bond Account	—	—	—	—	—	2,001	—	—	2,001	—
International Emerging Markets
Account	—	—	—	—	—	—	—	24,460	24,460	—
International SmallCap Account	—	—	—	—	—	—	—	34,076	34,076	—
LargeCap Blend Account II	—	—	—	—	—	—	—	18,629	18,629	—
LargeCap Growth Account	9,548	18,104	12,160	—	1,468	—	—	14,946	56,226	12,160
LargeCap Growth Account I	—	9,225	11,287	—	—	—	—	10,427	30,939	—
LargeCap S&P 500 Index Account	—	—	—	—	—	—	—	2,495	2,495	—
LargeCap Value Account	—	—	—	—	—	—	—	26,940	26,940	—
LargeCap Value Account II	—	—	—	—	—	—	—	431	431	—
LargeCap Value Account III	—	—	—	—	—	—	—	14,882	14,882	—
MidCap Growth Account I	—	—	—	—	—	—	—	2,952	2,952	—
MidCap Value Account II	—	—	—	—	—	—	—	13,216	13,216	—
Money Market Account	—	—	—	—	—	—	—	298	298	—
Mortgage Securities Account	—	—	1,673	1,119	782	1,308	436	608	5,926	—
Principal Capital Appreciation Account	—	—	—	—	—	—	—	47	47	—
Principal LifeTime 2020 Account	—	—	—	—	—	—	—	94	94	—
Principal LifeTime 2040 Account	—	—	—	—	—	—	—	66	66	—
Principal LifeTime 2050 Account	—	—	—	—	—	—	—	12	12	—
Real Estate Securities Account	—	—	—	—	—	—	—	15,912	15,912	—
Short-Term Bond Account	—	—	1	166	573	445	348	1,956	3,489	—
Short-Term Income Account	35	—	112	85	—	42	43	617	934	—
SmallCap Blend Account	—	—	—	—	—	—	—	7,114	7,114	—
SmallCap Growth Account II	—	20,647	—	7,505	—	—	—	9,404	37,556	1,977
SmallCap Value Account I	—	—	—	—	—	—	—	11,782	11,782	—

* In accordance with Sections 381-384 of the Internal Revenue Code, a portion of certain Account’s losses have been subjected to an annual limitation.

81

NOTES TO FINANCIAL STATEMENTS
PRINCIPAL VARIABLE CONTRACTS FUNDS, INC.
June 30, 2009 (unaudited)

6. Federal Tax Information (Continued)

Post-October Losses. Post-October losses are certain capital and foreign currency losses which occur during the portion of a regulated investment company’s taxable year subsequent to October 31. These losses must be deferred until the next taxable year. At December 31, 2008, the Accounts had approximate post-October losses as follows (amounts in thousands):

Asset Allocation Account	$ 1,512
Balanced Account	3,126
Bond & Mortgage Securities Account	3,465
Diversified International Account	34,499
Equity Income Account	16,980
Government & High Quality Bond Account	354
International Emerging Markets Account	12,708
International SmallCap Account	16,352
LargeCap Blend Account II	8,303
LargeCap Growth Account	11,306
LargeCap Growth Account I	10,681
LargeCap S&P 500 Index Account	703
LargeCap Value Account	16,839
LargeCap Value Account II	133
LargeCap Value Account III	12,362
MidCap Blend Account	4,114
MidCap Growth Account I	2,444
MidCap Stock Account	1,687
MidCap Value Account II	22,015
Mortgage Securities Account	20
Principal Capital Appreciation Account	687
Principal LifeTime 2010 Account	516
Principal LifeTime 2020 Account	206
Principal LifeTime 2030 Account	51
Principal LifeTime 2040 Account	22
Principal LifeTime 2050 Account	26
Principal LifeTime Strategic Income Account	145
Real Estate Securities Account	12,451
SAM Balanced Portfolio	201
SAM Conservative Balanced Portfolio	3
SAM Conservative Growth Portfolio	30
SAM Flexible Income Portfolio	29
SAM Strategic Growth Portfolio	367
Short-Term Bond Account	506
Short-Term Income Account	180
SmallCap Blend Account	3,215
SmallCap Growth Account II	5,544
SmallCap Value Account I	6,845

82

Schedule of Investments
Asset Allocation Account
June 30, 2009 (unaudited)

	Shares	Value			Shares	Value
	Held	(000's)			Held	(000's)
COMMON STOCKS (48.73%)				COMMON STOCKS (continued)
Advertising Agencies (0.09%)				Applications Software (continued)
Interpublic Group of Cos Inc (a)	1,714 $		9	Microsoft Corp	26,300 $		625
Omnicom Group Inc	1,350		42	Sage Group PLC	5,697		17
			51				718
Advertising Services (0.01%)				Athletic Footwear (0.09%)
JC Decaux SA	72		1	NIKE Inc	1,100		57
Publicis Groupe	166		5
			6	Auto - Car & Light Trucks (0.28%)
				Daimler AG	514		19
Aerospace & Defense (0.57%)				Ford Motor Co (a)	8,200		50
BAE Systems PLC	3,609		20	General Motors Corp	900		1
Boeing Co/The	2,300		98	Peugeot SA	118		3
Finmeccanica SpA	345		5	Renault SA	53		2
General Dynamics Corp	1,000		55	Tata Motors Ltd ADR	800		7
Lockheed Martin Corp	800		65	Volkswagen AG	225		76
Northrop Grumman Corp	800		37	Volvo AB	1,200		7
Raytheon Co	1,000		44				165
Rolls-Royce Group PLC (a)	1,986		12
Thales SA	120		5	Auto - Medium & Heavy Duty Trucks (0.09%)
			341	Paccar Inc	1,500		49
				Scania AB	400		4
Aerospace & Defense Equipment (0.31%)							53
Cobham PLC	992		3
European Aeronautic Defence and Space Co				Auto/Truck Parts & Equipment - Original (0.08%)
NV	388		6	Johnson Controls Inc	2,200		48
United Technologies Corp	3,400		177
			186	Beverages - Non-Alcoholic (0.80%)
				Coca-Cola Co/The	5,000		240
Agricultural Chemicals (0.23%)				Coca-Cola Enterprises Inc	1,400		23
Monsanto Co	1,700		126	PepsiCo Inc	3,900		215
Syngenta AG	30		7				478
Yara International ASA	100		3
			136	Beverages - Wine & Spirits (0.10%)
				Diageo PLC	3,202		46
Agricultural Operations (0.07%)				Pernod-Ricard SA	247		16
Archer-Daniels-Midland Co	1,600		43				62
Airlines (0.05%)				Brewery (0.10%)
Air France-KLM	366		5	Anheuser-Busch InBev NV	261		10
Deutsche Lufthansa AG	467		6	Heineken NV	493		18
Southwest Airlines Co	3,200		21	SABMiller PLC	1,460		30
			32				58
Apparel Manufacturers (0.08%)				Building - Heavy Construction (0.07%)
Coach Inc	1,000		27	Acciona SA	36		4
VF Corp	400		22	ACS Actividades de Construccion y
			49	Servicios SA	252		13
				Grupo Ferrovial SA	93		3
Appliances (0.02%)				Skanska AB	400		5
Whirlpool Corp	300		13	Vinci SA	448		20
Applications Software (1.20%)							45
Citrix Systems Inc (a)	800		25	Building - Residential & Commercial (0.03%)
Intuit Inc (a)	1,800		51	Centex Corp	500		4

See accompanying notes

83

Schedule of Investments Asset Allocation Account June 30, 2009 (unaudited)

	Shares	Value			Shares	Value
	Held	(000's)			Held	(000's)
COMMON STOCKS (continued)				COMMON STOCKS (continued)
Building - Residential & Commercial				Chemicals - Specialty (continued)
(continued)				Sigma-Aldrich Corp	300 $		15
KB Home	400 $		6	Umicore	35		1
Pulte Homes Inc	900		8				48
			18
				Coal (0.06%)
Building & Construction - Miscellaneous (0.03%)				Peabody Energy Corp	1,100		33
Balfour Beatty PLC	729		4
Bouygues SA	282		10	Coatings & Paint (0.04%)
Koninklijke Boskalis Westminster NV	77		2	Sherwin-Williams Co/The	400		22
			16
Building & Construction Products -				Commercial Banks (0.81%)
Miscellaneous (0.03%)				Alpha Bank AE	20		-
Cie de Saint-Gobain	315		11	Axis Bank Ltd	237		4
Geberit AG	45		5	Banco Bilbao Vizcaya Argentaria SA	5,810		73
			16	Banco de Sabadell SA	76		1
Building Products - Cement & Aggregate (0.03%)				Banco Popolare SC	1,010		8
Ambuja Cements Ltd	4,240		8	Banco Popular Espanol SA	1,389		12
CRH PLC	187		4	Banco Santander SA	9,194		111
Holcim Ltd (a)	77		4	BB&T Corp	2,100		46
Lafarge SA	53		4	Commerzbank AG	910		6
			20	Dexia SA	39		-
				DnB NOR ASA	1,655		13
Cable/Satellite TV (0.30%)				EFG Eurobank Ergasias SA	20		-
British Sky Broadcasting Group PLC	1,199		9	Erste Group Bank AG	297		8
Comcast Corp - Class A	9,378		136	HDFC Bank Ltd ADR	300		31
Time Warner Cable Inc	947		30	ICICI Bank Ltd ADR	200		6
Zon Multimedia Servicos de				Intesa Sanpaolo SpA	10,565		34
Telecomunicacoes e Multimedia SGPS SA	680		4
				Julius Baer Holding AG	260		10
			179
				KBC Groep NV	216		4
Casino Services (0.02%)				Lloyds Banking Group PLC (b)	11,489		13
International Game Technology	806		13	M&T Bank Corp	200		10
				Marshall & Ilsley Corp	400		2
Cellular Telecommunications (0.04%)				Nordea Bank AB	3,310		26
Vodafone Group PLC	13,532		26	Piraeus Bank SA	25		-
Chemicals - Diversified (0.34%)				Regions Financial Corp	2,000		8
Akzo Nobel NV	85		4	Standard Chartered PLC	2,163		41
BASF SE	317		13	State Bank of India Ltd	207		15
Bayer AG	509		27				482
Dow Chemical Co/The	3,100		50	Commercial Services (0.04%)
EI Du Pont de Nemours & Co	3,000		77	Iron Mountain Inc (a)	600		17
Johnson Matthey PLC	73		2	SGS SA	7		9
K+S AG	43		3				26
Koninklijke DSM NV	42		1	Commercial Services - Finance (0.31%)
PPG Industries Inc	600		26	Automatic Data Processing Inc	1,800		64
Solvay SA	16		1	Equifax Inc	400		10
			204	Experian PLC	1,257		9
Chemicals - Specialty (0.08%)				H&R Block Inc	800		14
Eastman Chemical Co	300		11	Moody's Corp	700		18
Ecolab Inc	500		20	Paychex Inc	1,300		33
Givaudan SA	2		1	Total System Services Inc	145		2
See accompanying notes			84

Schedule of Investments Asset Allocation Account June 30, 2009 (unaudited)

	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Commercial Services - Finance (continued)			Cruise Lines (0.05%)
Western Union Co/The	2,247 $	37	Carnival Corp	1,183 $	30
		187
			Data Processing & Management (0.09%)
Computer Aided Design (0.05%)			Dun & Bradstreet Corp	200	16
Autodesk Inc (a)	1,000	19	Fiserv Inc (a)	800	37
Dassault Systemes SA	304	13			53
		32
			Disposable Medical Products (0.05%)
Computer Services (0.24%)			CR Bard Inc	400	30
Affiliated Computer Services Inc (a)	500	22
Atos Origin SA	320	11	Distribution & Wholesale (0.05%)
Cap Gemini SA	515	19	Genuine Parts Co	800	27
Computer Sciences Corp (a)	900	40	Wolseley PLC	78	1
Indra Sistemas SA	401	9			28
Infosys Technologies Ltd ADR	1,100	40
			Diversified Banking Institutions (2.28%)
		141
			Bank of America Corp	17,588	232
Computers (1.89%)			Barclays PLC	11,575	54
Apple Inc (a)	1,800	256	BNP Paribas	1,212	79
Dell Inc (a)	6,500	89	Citigroup Inc	15,516	46
Hewlett-Packard Co	7,700	298	Credit Agricole SA	976	12
IBM Corp	4,400	460	Credit Suisse Group AG	1,132	52
Sun Microsystems Inc (a)	3,300	30	Deutsche Bank AG	589	36
		1,133	Goldman Sachs Group Inc/The	1,275	188
Computers - Memory Devices (0.19%)			HSBC Holdings PLC	17,097	142
EMC Corp/Massachusetts (a)	6,700	88	JP Morgan Chase & Co	11,028	376
NetApp Inc (a)	1,200	23	Royal Bank of Scotland Group PLC	20,605	13
		111	Societe Generale	796	44
			UBS AG	3,149	39
Computers - Peripheral Equipment (0.02%)
			UniCredit SpA	20,873	53
Lexmark International Inc (a)	500	8
					1,366
Logitech International SA (a)	231	3
		11	Diversified Financial Services (0.01%)
			Criteria Caixacorp SA	846	4
Consulting Services (0.01%)
			Investec PLC	625	3
Serco Group PLC	633	4
					7
Consumer Products - Miscellaneous (0.17%)			Diversified Manufacturing Operations (1.39%)
Clorox Co	500	28	3M Co	2,100	126
Fortune Brands Inc	400	14	Danaher Corp	800	49
Kimberly-Clark Corp	1,100	57	Eaton Corp	800	36
		99	General Electric Co	27,700	325
Containers - Metal & Glass (0.00%)			Honeywell International Inc	2,300	72
Rexam PLC	230	1	Illinois Tool Works Inc	1,500	56
			Invensys PLC	1,337	5
Cosmetics & Toiletries (0.77%)			ITT Corp	800	36
Avon Products Inc	1,000	26	Leggett & Platt Inc	700	11
Colgate-Palmolive Co	1,150	81	Parker Hannifin Corp	800	34
L'Oreal SA	314	24	Siemens AG	919	64
Procter & Gamble Co	6,415	328	Smiths Group PLC	357	4
		459	Sulzer AG	33	2
			Textron Inc	800	8

See accompanying notes

85

Schedule of Investments
Asset Allocation Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Diversified Manufacturing Operations			Electric - Integrated (continued)
(continued)			PPL Corp	1,100 $	36
Wartsila Oyj	102 $	3	Progress Energy Inc	900	34
		831	Public Service Enterprise Group Inc	1,600	52
Diversified Minerals (0.06%)			RWE AG	571	45
Anglo American PLC	474	14	Scottish & Southern Energy PLC	1,079	20
BHP Billiton PLC	789	18	Southern Co/The	2,300	72
Xstrata PLC	187	2	Union Fenosa SA	494	5
		34	Xcel Energy Inc	1,800	33
Diversified Operations (0.13%)					1,123
GEA Group AG	214	3	Electric - Transmission (0.06%)
Groupe Bruxelles Lambert SA	90	7	National Grid PLC	3,056	28
Leucadia National Corp	700	15	Red Electrica Corporacion SA	140	6
LVMH Moet Hennessy Louis Vuitton SA	648	50			34
Nationale A Portefeuille	52	2	Electric Products - Miscellaneous (0.14%)
		77	Emerson Electric Co	2,300	74
Diversified Operations & Commercial Services (0.01%)			Molex Inc	700	11
Bunzl PLC	394	3			85
E-Commerce - Products (0.11%)			Electronic Components - Miscellaneous (0.10%)
Amazon.com Inc (a)	800	67	Jabil Circuit Inc	800	6
			Koninklijke Philips Electronics NV	1,096	20
E-Commerce - Services (0.09%)			Tyco Electronics Ltd	1,675	31
eBay Inc (a)	3,256	56			57
			Electronic Components - Semiconductors (0.72%)
Electric - Generation (0.04%)			Advanced Micro Devices Inc (a)	1,500	6
AES Corp/The	2,100	24
			Altera Corp	1,600	26
Electric - Integrated (1.88%)			Broadcom Corp (a)	1,200	30
Allegheny Energy Inc	600	15	Intel Corp	12,400	205
Ameren Corp	800	20	Micron Technology Inc (a)	2,800	14
American Electric Power Co Inc	1,300	38	National Semiconductor Corp	1,500	19
Consolidated Edison Inc	900	34	Nvidia Corp (a)	2,050	23
Constellation Energy Group Inc	500	13	Q-Cells SE	65	1
Dominion Resources Inc/VA	1,700	57	QLogic Corp (a)	400	5
DTE Energy Co	700	22	Solarworld AG	84	2
Duke Energy Corp	3,600	53	STMicroelectronics NV	662	5
E.ON AG	2,435	87	Texas Instruments Inc	3,200	68
EDF SA	252	12	Xilinx Inc	1,200	25
Edison International	1,000	32			429
EDP - Energias de Portugal SA	2,465	10	Electronic Forms (0.09%)
Enel SpA	5,538	27	Adobe Systems Inc (a)	1,900	54
Entergy Corp	700	54
Exelon Corp	1,800	92	Electronic Measurement Instruments (0.04%)
FirstEnergy Corp	1,000	39	Agilent Technologies Inc (a)	1,300	26
Fortum Oyj	552	13
FPL Group Inc	1,200	68	Electronics - Military (0.05%)
			L-3 Communications Holdings Inc	400	28
GDF Suez	1,347	50
			Safran SA	302	4
Iberdrola SA	4,404	36
					32
International Power PLC	1,998	8
PG&E Corp	1,200	46
See accompanying notes		86

Schedule of Investments
Asset Allocation Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Energy - Alternate Sources (0.01%)			Food - Miscellaneous/Diversified (continued)
Renewable Energy Corp AS - Rights (a)	68 $	-	HJ Heinz Co	1,000 $		36
Renewable Energy Corp AS (a)	200	1	Kellogg Co	1,100		51
Verbund - Oesterreichische			Kraft Foods Inc	4,000		101
Elektrizitaetswirtschafts AG	110	6	Nestle SA	4,000		151
		7	Orkla ASA	780		6
Engineering - Research & Development Services (0.11%)			Sara Lee Corp	3,200		31
ABB Ltd (a)	2,378	38	Unilever NV	1,712		41
Larsen & Toubro Ltd (c)	904	29	Unilever PLC	1,343		32
		67				602
Enterprise Software & Services (0.71%)			Food - Retail (0.36%)
Autonomy Corp PLC (a)	845	20	Carrefour SA	762		33
CA Inc	2,300	40	Delhaize Group	165		11
Oracle Corp	11,071	237	Koninklijke Ahold NV	1,721		20
SAP AG	3,235	130	Kroger Co/The	1,900		42
		427	Safeway Inc	1,200		24
Entertainment Software (0.04%)			SUPERVALU Inc	600		8
Electronic Arts Inc (a)	1,200	26	Tesco PLC	10,159		59
			WM Morrison Supermarkets PLC	4,015		16
Fiduciary Banks (0.35%)						213
Bank of New York Mellon Corp/The	3,624	106	Food - Wholesale & Distribution (0.06%)
Northern Trust Corp	800	43	Sysco Corp	1,700		38
State Street Corp	1,300	62
		211	Forestry (0.05%)
Filtration & Separation Products (0.01%)			Plum Creek Timber Co Inc	478		14
Alfa Laval AB	500	5	Weyerhaeuser Co	500		15
						29
Finance - Credit Card (0.16%)			Gambling (Non-Hotel) (0.01%)
American Express Co	3,400	79	Ladbrokes PLC	1,051		3
Discover Financial Services	1,700	17
		96	Gas - Distribution (0.11%)
Finance - Investment Banker & Broker (0.11%)			Centrica PLC	5,115		19
Charles Schwab Corp/The	3,000	53	Sempra Energy	900		44
ICAP PLC	701	5				63
Mediobanca SpA	515	6	Gas - Transportation (0.01%)
		64	Snam Rete Gas SpA	1,089		5
Finance - Other Services (0.22%)			Gold Mining (0.10%)
CME Group Inc	200	62	Newmont Mining Corp	1,500		61
Deutsche Boerse AG	215	17
IntercontinentalExchange Inc (a)	200	23	Hazardous Waste Disposal (0.03%)
Man Group PLC	2,060	9	Stericycle Inc (a)	300		15
NYSE Euronext	800	22
		133	Home Decoration Products (0.02%)
			Newell Rubbermaid Inc	900		9
Food - Miscellaneous/Diversified (1.01%)
Cadbury PLC	1,954	17	Hotels & Motels (0.15%)
Campbell Soup Co	1,000	30	Accor SA	1,067		42
ConAgra Foods Inc	1,700	32	Intercontinental Hotels Group PLC	857		9
Danone	485	24	Marriott International Inc/DE	767		17
General Mills Inc	900	50
See accompanying notes		87

Schedule of Investments
Asset Allocation Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Hotels & Motels (continued)			Linen Supply & Related Items (0.02%)
Starwood Hotels & Resorts Worldwide Inc	478 $	11	Cintas Corp	400 $		9
Wyndham Worldwide Corp	1,120	13
		92	Machinery - Construction & Mining (0.14%)
			Atlas Copco AB - A Shares	800		8
Human Resources (0.05%)			Atlas Copco AB - B Shares	600		6
Adecco SA	169	7	Caterpillar Inc	2,100		69
Capita Group PLC/The	585	7				83
Randstad Holding NV	151	4
Robert Half International Inc	500	12	Machinery - Electrical (0.01%)
		30	Schindler Holding AG	80		5
Industrial Gases (0.21%)			Machinery - Farm (0.09%)
Air Liquide SA	89	8	Deere & Co	1,300		52
Air Products & Chemicals Inc	700	46
Linde AG	39	3	Machinery - General Industry (0.06%)
Praxair Inc	1,000	71	Alstom SA	242		14
		128	FLSmidth & Co A/S	100		4
			Kone OYJ	165		5
Instruments - Scientific (0.07%)
Thermo Fisher Scientific Inc (a)	600	25	MAN SE	135		8
Waters Corp (a)	300	15	Metso Oyj (a)	194		4
		40	Zardoya Otis SA	165		3
						38
Insurance Brokers (0.10%)
Aon Corp	900	34	Machinery Tools & Related Products (0.01%)
Marsh & McLennan Cos Inc	1,300	26	Sandvik AB	1,200		9
		60	Medical - Biomedical/Gene (0.78%)
Internet Security (0.14%)			Amgen Inc (a)	4,600		244
Symantec Corp (a)	3,948	62	Biogen Idec Inc (a)	1,505		68
VeriSign Inc (a)	1,100	20	Genzyme Corp (a)	700		39
		82	Gilead Sciences Inc (a)	2,100		98
Investment Companies (0.02%)			Life Technologies Corp (a)	309		13
Investor AB	600	9	Millipore Corp (a)	100		7
Marfin Investment Group SA (a)	600	3				469
Pargesa Holding SA	43	3	Medical - Drugs (3.65%)
		15	Abbott Laboratories	5,300		249
Investment Management & Advisory Services (0.21%)			Allergan Inc/United States	1,000		48
Ameriprise Financial Inc	880	21	AstraZeneca PLC	2,520		111
Franklin Resources Inc	600	43	Bristol-Myers Squibb Co	7,200		146
Invesco Ltd	1,601	29	Dr Reddys Laboratories Ltd ADR	700		12
T Rowe Price Group Inc	800	33	Eli Lilly & Co	3,800		132
		126	Forest Laboratories Inc (a)	1,300		33
			GlaxoSmithKline PLC	8,491		150
Life & Health Insurance (0.32%)			Merck & Co Inc/NJ	6,200		174
Aflac Inc	1,200	37	Novartis AG	3,864		157
Aviva PLC	4,580	26	Novo Nordisk A/S	1,070		58
Lincoln National Corp	800	14	Pfizer Inc	21,600		324
Prudential Financial Inc	1,200	45	Roche Holding AG	1,086		148
Prudential PLC	5,445	37	Sanofi-Aventis SA	1,714		101
Unum Group	1,900	30	Schering-Plough Corp	5,900		148
		189

See accompanying notes

88

Schedule of Investments Asset Allocation Account June 30, 2009 (unaudited)

	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Medical - Drugs (continued)			Metal Processors & Fabrication (continued)
Wyeth	4,300 $	195	SKF AB	600 $		7
		2,186				50
Medical - HMO (0.43%)			Motorcycle/Motor Scooter (0.02%)
Aetna Inc	1,700	43	Harley-Davidson Inc	900		15
CIGNA Corp	1,100	26
UnitedHealth Group Inc	4,000	100	Multi-Line Insurance (0.70%)
WellPoint Inc (a)	1,800	92	Allianz SE	541		50
		261	Allstate Corp/The	1,600		39
			Assicurazioni Generali SpA	3,215		67
Medical - Wholesale Drug Distribution (0.13%)			Assurant Inc	1,300		31
Cardinal Health Inc	1,300	40	AXA SA	3,025		57
McKesson Corp	900	39	Hartford Financial Services Group Inc	900		11
		79	ING Groep NV	2,094		21
Medical Instruments (0.37%)			Loews Corp	1,000		28
Boston Scientific Corp (a)	4,291	44	MetLife Inc	1,900		57
Intuitive Surgical Inc (a)	100	16	XL Capital Ltd	200		2
Medtronic Inc	3,317	116	Zurich Financial Services	319		56
St Jude Medical Inc (a)	1,150	47				419
		223
			Multimedia (0.68%)
Medical Products (1.53%)			Lagardere SCA	145		5
Baxter International Inc	2,100	111	McGraw-Hill Cos Inc/The	1,282		39
Becton Dickinson and Co	1,000	71	Pearson PLC	845		8
Covidien PLC	1,675	63	Sanoma Oyj	102		2
Johnson & Johnson	9,300	528	Thomson Reuters PLC	219		6
Nobel Biocare Holding AG	1,335	29	Time Warner Inc	4,374		110
Smith & Nephew PLC	6,219	46	Viacom Inc (a)	2,382		54
Stryker Corp	900	36	Vivendi	1,214		29
Zimmer Holdings Inc (a)	700	30	Walt Disney Co/The	6,338		148
		914	WPP PLC	1,226		8
Metal - Aluminum (0.05%)						409
Alcoa Inc	2,800	29	Networking Products (0.52%)
Norsk Hydro ASA	250	1	Cisco Systems Inc (a)	16,700		311
		30
			Non-Hazardous Waste Disposal (0.12%)
Metal - Copper (0.12%)
			Republic Services Inc	1,100		27
Antofagasta PLC	164	2
			Waste Management Inc	1,700		48
Freeport-McMoRan Copper & Gold Inc	1,200	60
						75
Sterlite Industries India Ltd ADR	1,000	12
		74	Office Automation & Equipment (0.07%)
			Neopost SA	48		4
Metal - Diversified (0.02%)
			Pitney Bowes Inc	700		15
Eurasian Natural Resources Corp	108	1
			Xerox Corp	3,000		20
Rio Tinto PLC	348	12
						39
Vedanta Resources PLC	55	1
		14	Office Supplies & Forms (0.01%)
			Avery Dennison Corp	300		8
Metal Processors & Fabrication (0.08%)
Assa Abloy AB	400	6	Oil - Field Services (0.39%)
Precision Castparts Corp	500	37	Baker Hughes Inc	900		33
			Halliburton Co	2,700		56

See accompanying notes

89

Schedule of Investments Asset Allocation Account June 30, 2009 (unaudited)

	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Oil - Field Services (continued)			Platinum (0.00%)
Schlumberger Ltd	2,700 $	146	Lonmin PLC	42 $	1
		235
			Power Converter & Supply Equipment (0.06%)
Oil Company - Exploration & Production (0.83%)			Gamesa Corp Tecnologica SA	229	5
Anadarko Petroleum Corp	1,400	64	Schneider Electric SA	247	19
Apache Corp	1,100	79	Vestas Wind Systems A/S (a)	200	14
Chesapeake Energy Corp	1,900	38			38
Devon Energy Corp	1,100	60
EOG Resources Inc	700	47	Property & Casualty Insurance (0.23%)
Occidental Petroleum Corp	1,800	118	Chubb Corp	1,100	44
Questar Corp	600	19	Progressive Corp/The	1,800	27
XTO Energy Inc	1,825	70	Travelers Cos Inc/The	1,600	66
		495			137
Oil Company - Integrated (2.69%)			Public Thoroughfares (0.03%)
BP PLC	3,784	30	Abertis Infraestructuras SA	385	7
Chevron Corp	4,730	313	Atlantia SpA	277	6
ConocoPhillips	3,598	151	Brisa Auto-Estradas de Portugal SA	393	3
Exxon Mobil Corp	12,000	839			16
Hess Corp	1,000	54	Publicly Traded Investment Fund (2.55%)
Marathon Oil Corp	2,200	66	iShares iBoxx Investment Grade Corporate
Royal Dutch Shell PLC - A Shares	2,619	66	Bond Fund	3,565	358
Royal Dutch Shell PLC - B Shares	1,621	41	iShares MSCI Emerging Markets Index Fund	5,470	176
Total SA	892	48	Midcap SPDR Trust Series 1	37	4
		1,608	Morgan Stanley Institutional International
			Growth Equity Fund (a)	130,378	991
Oil Field Machinery & Equipment (0.07%)					1,529
National Oilwell Varco Inc (a)	1,200	39
			Publishing - Books (0.03%)
Optical Supplies (0.20%)			Reed Elsevier NV	707	8
Cie Generale d'Optique Essilor International			Reed Elsevier PLC	1,179	9
SA	2,487	119			17
Paper & Related Products (0.05%)			Publishing - Newspapers (0.02%)
International Paper Co	1,100	17	Daily Mail & General Trust	311	2
MeadWestvaco Corp	500	8	Gannett Co Inc	960	3
Stora Enso Oyj (a)	164	1	New York Times Co/The	802	4
Svenska Cellulosa AB	200	2			9
UPM-Kymmene Oyj	164	1	Publishing - Periodicals (0.02%)
		29	PagesJaunes Groupe SA	119	1
Pharmacy Services (0.21%)			United Business Media Ltd	322	2
Express Scripts Inc (a)	800	55	Wolters Kluwer NV	342	6
Medco Health Solutions Inc (a)	1,500	68			9
		123	Quarrying (0.02%)
Photo Equipment & Supplies (0.00%)			Vulcan Materials Co	300	13
Eastman Kodak Co	1,000	3	Regional Banks (0.87%)
Pipelines (0.08%)			Capital One Financial Corp	1,100	24
Williams Cos Inc	3,100	48	Comerica Inc	200	4
			Fifth Third Bancorp	1,700	12
			Keycorp	1,300	7
			PNC Financial Services Group Inc	1,300	50

See accompanying notes

90

Schedule of Investments
Asset Allocation Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Regional Banks (continued)			Retail - Building Products (0.28%)
SunTrust Banks Inc	1,200 $	20	Home Depot Inc	4,093 $		96
US Bancorp	6,500	117	Lowe's Cos Inc	3,698		72
Wells Fargo & Co	11,900	289				168
		523	Retail - Computer Equipment (0.02%)
Reinsurance (0.02%)			GameStop Corp (a)	500		11
Muenchener Rueckversicherungs AG	101	14
			Retail - Consumer Electronics (0.05%)
REITS - Apartments (0.05%)			Best Buy Co Inc	853		29
AvalonBay Communities Inc	238	13
Equity Residential	790	18	Retail - Discount (0.77%)
		31	Costco Wholesale Corp	1,200		55
			Target Corp	2,049		81
REITS - Diversified (0.06%)			Wal-Mart Stores Inc	6,700		324
Land Securities Group PLC	2,108	16				460
Vornado Realty Trust	396	18
		34	Retail - Drug Store (0.36%)
			CVS Caremark Corp	4,200		134
REITS - Healthcare (0.02%)			Walgreen Co	2,800		82
HCP Inc	638	14				216
REITS - Hotels (0.02%)			Retail - Jewelry (0.06%)
Host Hotels & Resorts Inc	1,519	13	Compagnie Financiere Richemont SA	1,197		25
			Tiffany & Co	446		11
REITS - Office Property (0.03%)						36
Boston Properties Inc	335	16
			Retail - Major Department Store (0.18%)
REITS - Regional Malls (0.06%)			JC Penney Co Inc	841		24
Simon Property Group Inc	652	34	Marks & Spencer Group PLC	4,985		25
			Sears Holdings Corp (a)	300		20
REITS - Shopping Centers (0.01%)			TJX Cos Inc	1,296		41
Developers Diversified Realty Corp	25	-				110
Kimco Realty Corp	735	8
			Retail - Office Supplies (0.07%)
		8	Staples Inc	1,945		39
REITS - Storage (0.04%)
Public Storage	345	23	Retail - Regional Department Store (0.08%)
			Kohl's Corp (a)	797		34
REITS - Warehouse & Industrial (0.01%)			Macy's Inc	1,316		16
ProLogis	724	6				50
Retail - Apparel & Shoe (0.20%)			Retail - Restaurants (0.49%)
Abercrombie & Fitch Co	300	8	Darden Restaurants Inc	900		30
Gap Inc/The	1,544	25	McDonald's Corp	3,269		188
Hennes & Mauritz AB	1,250	62	Starbucks Corp (a)	1,974		27
Ltd Brands Inc	1,228	15	Yum! Brands Inc	1,396		47
Nordstrom Inc	600	12				292
		122	Rubber - Tires (0.02%)
Retail - Auto Parts (0.05%)			Compagnie Generale des Etablissements
			Michelin	227		13
AutoZone Inc (a)	205	31
			Savings & Loans - Thrifts (0.03%)
Retail - Bedding (0.05%)			Hudson City Bancorp Inc	1,500		20
Bed Bath & Beyond Inc (a)	898	28

See accompanying notes

91

Schedule of Investments
Asset Allocation Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Schools (0.05%)			Telephone - Integrated (2.29%)
Apollo Group Inc (a)	400 $	28	AT&T Inc	22,336 $	555
			BT Group PLC	9,010	15
Security Services (0.01%)			Deutsche Telekom AG	4,053	48
G4S PLC	1,547	5	Koninklijke (Royal) KPN NV	3,971	55
Securitas AB	400	4	Portugal Telecom SGPS SA	2,626	26
		9	Qwest Communications International Inc	7,000	29
Semiconductor Component - Integrated Circuits (0.07%)			Sprint Nextel Corp (a)	11,738	56
Analog Devices Inc	900	22	Swisscom AG	154	47
Linear Technology Corp	900	21	Telecom Italia SpA - RNC	10,709	10
		43	Telecom Italia SpA	17,007	24
Semiconductor Equipment (0.15%)			Telefonica SA	7,702	175
Applied Materials Inc	3,700	41	Verizon Communications Inc	10,700	329
ASML Holding NV	423	9			1,369
Kla-Tencor Corp	800	20	Television (0.04%)
Novellus Systems Inc (a)	800	13	CBS Corp	2,082	15
Teradyne Inc (a)	800	6	Gestevision Telecinco SA	150	1
		89	ITV PLC	4,482	3
Soap & Cleaning Products (0.06%)			Mediaset SpA	886	5
Reckitt Benckiser Group PLC	805	37	Modern Times Group AB	50	1
			Societe Television Francaise 1	165	2
Steel - Producers (0.10%)					27
ArcelorMittal	316	11	Tobacco (0.77%)
Nucor Corp	700	31	Altria Group Inc	5,600	92
Salzgitter AG	14	1	British American Tobacco PLC	2,293	63
ThyssenKrupp AG	112	3	Imperial Tobacco Group PLC	1,170	30
United States Steel Corp	300	11	ITC Ltd (c)	4,989	20
Voestalpine AG	47	1	Philip Morris International Inc	5,400	236
		58	Reynolds American Inc	600	23
Steel - Specialty (0.02%)					464
Allegheny Technologies Inc	300	10	Tools - Hand Held (0.01%)
			Black & Decker Corp	300	9
Steel Pipe & Tube (0.01%)
Vallourec SA	59	7	Toys (0.04%)
			Mattel Inc	1,400	22
Telecommunication Equipment (0.02%)
Alcatel-Lucent	1,532	4	Transport - Marine (0.02%)
Nortel Networks Corp (a)	38	-	A P Moller - Maersk A/S - A Shares	1	6
Tellabs Inc (a)	1,600	9	A P Moller - Maersk A/S - B Shares	1	6
		13			12
Telecommunication Equipment - Fiber Optics (0.11%)			Transport - Rail (0.39%)
Corning Inc	3,800	61	Burlington Northern Santa Fe Corp	900	66
JDS Uniphase Corp (a)	712	4	CSX Corp	1,500	52
		65	Norfolk Southern Corp	900	34
Telecommunication Services (0.07%)			Union Pacific Corp	1,600	83
Embarq Corp	806	34			235
Tata Communications Ltd ADR	500	10	Transport - Services (0.38%)
		44	Deutsche Post AG	889	12
			FedEx Corp	800	44

See accompanying notes

92

Schedule of Investments
Asset Allocation Account
June 30, 2009 (unaudited)
					Principal
	Shares	Value			Amount	Value
	Held	(000's)			(000's)	(000's)
COMMON STOCKS (continued)			BONDS (continued)
Transport - Services (continued)			Agricultural Operations (continued)
Firstgroup PLC	603 $	4	Bunge Ltd Finance Corp
Kuehne + Nagel International AG	62	5	8.50%, 6/15/2019	$ 10 $			10
Stagecoach Group PLC	595	1					42
TNT NV	478	9	Applications Software (0.02%)
United Parcel Service Inc	3,100	155	Microsoft Corp
		230	4.20%, 6/ 1/2019		15		15
Transport - Truck (0.00%)			Asset Backed Securities (0.47%)
DSV A/S	225	3	PSE&G Transition Funding LLC
			6.75%, 6/15/2016		250		278
Venture Capital (0.00%)
			Residential Asset Mortgage Products Inc
3i Group PLC	487	2	0.38%, 8/25/2036 (e)		5		5
Water (0.06%)							283
Severn Trent PLC	349	6	Auto - Car & Light Trucks (0.04%)
Suez Environnement SA	297	5	Daimler Finance North America LLC
United Utilities Group PLC	911	8	7.30%, 1/15/2012		20		21
Veolia Environnement	506	15	8.50%, 1/18/2031		5		5
		34					26
Web Portals (0.53%)			Beverages - Non-Alcoholic (0.14%)
Google Inc (a)	600	253	Coca-Cola Co/The
Yahoo! Inc (a)	4,300	67	4.88%, 3/15/2019		45		46
		320	Dr Pepper Snapple Group Inc
			6.82%, 5/ 1/2018		35		37
Wireless Equipment (0.61%)							83
American Tower Corp (a)	1,700	53
			Beverages - Wine & Spirits (0.09%)
Motorola Inc	6,200	41	Constellation Brands Inc
Nokia OYJ	4,140	61	7.25%, 9/ 1/2016		15		14
Qualcomm Inc	4,000	181	Diageo Capital PLC
Telefonaktiebolaget LM Ericsson	2,817	28	5.75%, 10/23/2017		40		42
		364					56
TOTAL COMMON STOCKS	$ 29,179		Brewery (0.14%)
	Principal		Anheuser-Busch InBev Worldwide Inc
	Amount	Value	7.20%, 1/15/2014 (d)		40		43
	(000's)	(000's)	FBG Finance Ltd
			5.13%, 6/15/2015 (d)		45		42
BONDS (14.43%)
							85
Aerospace & Defense (0.11%)
Boeing Co/The			Building Products - Cement & Aggregate (0.08%)
6.00%, 3/15/2019	$ 30	33	CRH America Inc
Systems 2001 AT LLC			6.00%, 9/30/2016		55		49
6.66%, 9/15/2013 (c)(d)	38	35
		68	Cable/Satellite TV (0.46%)
			Comcast Corp
Agricultural Chemicals (0.04%)			6.50%, 1/15/2017		45		48
Potash Corp of Saskatchewan Inc			5.70%, 5/15/2018		60		60
6.50%, 5/15/2019	20	22	COX Communications Inc
			8.38%, 3/ 1/2039 (d)		30		33
Agricultural Operations (0.07%)
			CSC Holdings Inc/United States
Archer-Daniels-Midland Co			7.63%, 7/15/2018		30		28
5.45%, 3/15/2018	15	16
			Time Warner Cable Inc
6.45%, 1/15/2038	15	16	6.75%, 7/ 1/2018		40		42

See accompanying notes

93

Schedule of Investments Asset Allocation Account June 30, 2009 (unaudited)

	Principal					Principal
	Amount	Value				Amount	Value
	(000's)	(000's)				(000's)	(000's)
BONDS (continued)				BONDS (continued)
Cable/Satellite TV (continued)				Diversified Financial Services (0.20%)
Time Warner Cable Inc (continued)				General Electric Capital Corp
8.75%, 2/14/2019	$ 40 $		47	5.63%, 5/ 1/2018	$ 125 $			118
6.75%, 6/15/2039	20		19
			277	Diversified Manufacturing Operations (0.21%)
				Cooper US Inc
Cellular Telecommunications (0.21%)				5.25%, 11/15/2012		35		37
Rogers Communications Inc				General Electric Co
6.80%, 8/15/2018	30		32	5.25%, 12/ 6/2017		45		44
Verizon Wireless Capital LLC				Honeywell International Inc
5.55%, 2/ 1/2014 (d)	65		69	5.30%, 3/ 1/2018		25		26
Vodafone Group PLC				Parker Hannifin Corp
5.63%, 2/27/2017	25		26	5.50%, 5/15/2018		20		21
			127					128
Chemicals - Diversified (0.05%)				Diversified Minerals (0.06%)
EI Du Pont de Nemours & Co				Rio Tinto Finance USA Ltd
6.00%, 7/15/2018	25		27	6.50%, 7/15/2018		35		35
Commercial Banks (0.13%)				Electric - Distribution (0.04%)
Barclays Bank PLC				Detroit Edison Co/The
6.75%, 5/22/2019	45		45	6.13%, 10/ 1/2010		25		26
BB&T Corp
6.85%, 4/30/2019	30		31	Electric - Generation (0.08%)
			76	AES Corp/The
Computers (0.07%)				8.75%, 5/15/2013 (d)		45		46
Hewlett-Packard Co
4.75%, 6/ 2/2014	25		26	Electric - Integrated (0.81%)
				Alabama Power Co
5.50%, 3/ 1/2018	15		16	5.80%, 11/15/2013		20		22
			42	Consumers Energy Co
Cosmetics & Toiletries (0.03%)				4.00%, 5/15/2010		15		15
Procter & Gamble Co				E.ON International Finance BV
4.70%, 2/15/2019	20		20	5.80%, 4/30/2018 (d)		65		68
				EDF SA
Data Processing & Management (0.05%)				6.50%, 1/26/2019 (d)		50		55
Fiserv Inc				FPL Group Capital Inc
6.80%, 11/20/2017	30		30	6.00%, 3/ 1/2019		35		38
				Georgia Power Co
Diversified Banking Institutions (0.89%)				6.00%, 11/ 1/2013		10		11
Bank of America Corp				Nisource Finance Corp
5.65%, 5/ 1/2018	100		88	6.80%, 1/15/2019		20		19
7.63%, 6/ 1/2019	15		15	Ohio Edison Co
Citigroup Inc				6.40%, 7/15/2016		30		31
6.13%, 11/21/2017	35		31	Ohio Power Co
6.13%, 5/15/2018	35		31	6.00%, 6/ 1/2016		15		15
8.50%, 5/22/2019	15		15	Pacificorp
Goldman Sachs Group Inc/The				5.50%, 1/15/2019		10		10
6.15%, 4/ 1/2018	185		180	Peco Energy Co
JP Morgan Chase & Co				5.35%, 3/ 1/2018		30		31
6.00%, 1/15/2018	175		174	PPL Energy Supply LLC
			534	6.30%, 7/15/2013		20		21
				Progress Energy Inc
				7.05%, 3/15/2019		30		33

See accompanying notes

94

Schedule of Investments
Asset Allocation Account
June 30, 2009 (unaudited)
		Principal				Principal
		Amount	Value			Amount	Value
		(000's)	(000's)			(000's)	(000's)
BONDS (continued)				BONDS (continued)
Electric - Integrated (continued)				Finance - Mortgage Loan/Banker (continued)
Public Service Co of Colorado				Fannie Mae (continued)
6.50%, 8/ 1/2038	$ 30 $		34	6.63%, 11/15/2030	$ 150 $			184
Union Electric Co				Nationwide Building Society
6.40%, 6/15/2017		20	20	4.25%, 2/ 1/2010 (d)		50		50
Virginia Electric and Power Co				SLM Student Loan Trust
8.88%, 11/15/2038		45	60	1.08%, 10/25/2014 (e)		38		37
			483					977
Electric Products - Miscellaneous (0.11%)				Food - Miscellaneous/Diversified (0.36%)
Emerson Electric Co				ConAgra Foods Inc
4.88%, 10/15/2019		40	40	7.00%, 10/ 1/2028		25		25
LG Electronics Inc				8.25%, 9/15/2030		20		22
5.00%, 6/17/2010 (d)		25	25	General Mills Inc
			65	5.65%, 2/15/2019		70		73
Electronic Components - Miscellaneous (0.07%)				Kraft Foods Inc
				6.13%, 2/ 1/2018		10		10
Koninklijke Philips Electronics NV
5.75%, 3/11/2018		40	40	7.00%, 8/11/2037		25		27
				6.88%, 1/26/2039		55		58
Enterprise Software & Services (0.01%)								215
Oracle Corp				Food - Retail (0.13%)
5.75%, 4/15/2018		5	5	Delhaize America Inc
				9.00%, 4/15/2031		36		44
Fiduciary Banks (0.13%)
				Delhaize Group
Bank of New York Mellon Corp/The				5.88%, 2/ 1/2014		5		5
4.50%, 4/ 1/2013		20	20
				Kroger Co/The
5.13%, 8/27/2013		45	48	6.40%, 8/15/2017		25		26
State Street Corp								75
4.30%, 5/30/2014		10	10
			78	Life & Health Insurance (0.04%)
				Prudential Financial Inc
Finance - Commercial (0.03%)				7.38%, 6/15/2019		10		10
Caterpillar Financial Services Corp				6.63%, 12/ 1/2037		15		13
4.90%, 8/15/2013		15	15
								23
Finance - Consumer Loans (0.22%)				Medical - Biomedical/Gene (0.19%)
HSBC Finance Corp				Amgen Inc
6.75%, 5/15/2011		105	108	5.85%, 6/ 1/2017		15		16
John Deere Capital Corp				5.70%, 2/ 1/2019		60		63
5.75%, 9/10/2018		25	25	Biogen Idec Inc
			133	6.88%, 3/ 1/2018		35		36
Finance - Credit Card (0.10%)								115
American Express Co				Medical - Drugs (0.58%)
8.13%, 5/20/2019		55	57	AstraZeneca PLC
				6.45%, 9/15/2037		25		28
Finance - Investment Banker & Broker (0.17%)				Bristol-Myers Squibb Co
Credit Suisse USA Inc				6.13%, 5/ 1/2038		40		43
5.13%, 8/15/2015		15	15	GlaxoSmithKline Capital Inc
Merrill Lynch & Co Inc				6.38%, 5/15/2038		30		33
6.88%, 4/25/2018		95	88	Merck & Co Inc/NJ
			103	5.00%, 6/30/2019		80		81
Finance - Mortgage Loan/Banker (1.63%)				Novartis Capital Corp
Fannie Mae				4.13%, 2/10/2014		55		57
2.88%, 12/11/2013		700	706

See accompanying notes

95

Schedule of Investments Asset Allocation Account June 30, 2009 (unaudited)

		Principal					Principal
		Amount	Value				Amount		Value
		(000's)	(000's)				(000's)		(000's)
BONDS (continued)					BONDS (continued)
Medical - Drugs (continued)					Multimedia (continued)
Pfizer Inc					Viacom Inc
6.20%, 3/15/2019	$ 90 $			98	6.88%, 4/30/2036	$ 40 $				37
Wyeth					Vivendi
5.50%, 2/15/2016		5		5	6.63%, 4/ 4/2018 (d)			30		30
5.45%, 4/ 1/2017		5		5						134
				350	Networking Products (0.08%)
Medical - HMO (0.07%)					Cisco Systems Inc
UnitedHealth Group Inc					4.95%, 2/15/2019			40		40
6.00%, 2/15/2018		35		34	5.90%, 2/15/2039			5		5
WellPoint Inc										45
7.00%, 2/15/2019		10		10
					Office Automation & Equipment (0.04%)
				44
					Xerox Corp
Medical - Hospitals (0.05%)					6.35%, 5/15/2018			25		22
HCA Inc/DE
8.50%, 4/15/2019 (d)		30		29	Oil - Field Services (0.03%)
					Weatherford International Ltd
Medical Laboratory & Testing Service (0.13%)					6.00%, 3/15/2018			20		20
Roche Holdings Inc
6.00%, 3/ 1/2019 (d)		75		80	Oil & Gas Drilling (0.05%)
					Transocean Inc
Medical Products (0.09%)					6.00%, 3/15/2018			30		31
Baxter International Inc
5.38%, 6/ 1/2018		10		10	Oil Company - Exploration & Production (0.34%)
Hospira Inc					Apache Corp
1.08%, 3/30/2010 (e)		35		35	6.90%, 9/15/2018			20		23
6.40%, 5/15/2015		10		11	Chesapeake Energy Corp
				56	6.88%, 1/15/2016			50		44
					Devon Financing Corp ULC
Mortgage Backed Securities (0.45%)					7.88%, 9/30/2031			30		35
Citigroup Commercial Mortgage Trust					EnCana Corp
5.89%, 12/10/2049 (e)		114		90	6.50%, 5/15/2019			30		32
Commercial Mortgage Pass Through Certificates					Questar Market Resources Inc
6.01%, 12/10/2049 (e)		75		60	6.80%, 4/ 1/2018			35		33
Greenwich Capital Commercial Funding Corp					XTO Energy Inc
5.44%, 3/10/2039 (e)		100		80	5.50%, 6/15/2018			25		25
JP Morgan Chase Commercial Mortgage					6.50%, 12/15/2018			10		11
Securities Corp
6.01%, 6/15/2049 (e)		50		38						203
				268	Oil Company - Integrated (0.21%)
Multi-Line Insurance (0.11%)					Chevron Corp
					4.95%, 3/ 3/2019			40		41
Allstate Corp/The
7.45%, 5/16/2019		20		22	ConocoPhillips
					5.75%, 2/ 1/2019			80		84
MetLife Inc
6.82%, 8/15/2018		25		25						125
7.72%, 2/15/2019		20		21	Paper & Related Products (0.02%)
				68	Georgia-Pacific LLC
					8.25%, 5/ 1/2016 (d)			15		15
Multimedia (0.22%)
News America Inc					Pharmacy Services (0.09%)
6.90%, 3/ 1/2019 (d)		45		47	Medco Health Solutions Inc
Time Warner Inc					7.13%, 3/15/2018			50		53
5.88%, 11/15/2016		20		20

See accompanying notes

96

Schedule of Investments Asset Allocation Account June 30, 2009 (unaudited)

		Principal				Principal
		Amount	Value			Amount	Value
		(000's)	(000's)			(000's)	(000's)
BONDS (continued)					BONDS (continued)
Pipelines (0.31%)					Retail - Building Products (0.07%)
CenterPoint Energy Resources Corp					Home Depot Inc
7.88%, 4/ 1/2013	$ 5 $			5	5.40%, 3/ 1/2016	$ 40 $		40
6.25%, 2/ 1/2037		15		11
Colorado Interstate Gas Co					Retail - Discount (0.18%)
6.80%, 11/15/2015		15		15	Wal-Mart Stores Inc
El Paso Corp					4.25%, 4/15/2013	40		42
8.25%, 2/15/2016		30		29	4.13%, 2/ 1/2019	70		68
Enterprise Products Operating LLC								110
6.50%, 1/31/2019		35		36
					Retail - Drug Store (0.17%)
Kinder Morgan Finance Co ULC					CVS Caremark Corp
5.70%, 1/ 5/2016		45		39	6.60%, 3/15/2019	10		11
Plains All American Pipeline LP/PAA Finance
Corp					CVS Lease Pass Through Certificates
6.70%, 5/15/2036		35		32	6.04%, 12/10/2028 (d)	42		36
Texas Eastern Transmission LP					CVS Pass-Through Trust
7.00%, 7/15/2032		20		21	8.35%, 7/10/2031 (d)	10		10
				188	Walgreen Co
					5.25%, 1/15/2019	40		42
Property & Casualty Insurance (0.15%)								99
ACE INA Holdings Inc
5.60%, 5/15/2015		15		15	Retail - Restaurants (0.19%)
5.90%, 6/15/2019		20		20	McDonald's Corp
					5.70%, 2/ 1/2039	75		74
Chubb Corp
5.75%, 5/15/2018		5		5	Yum! Brands Inc
					8.88%, 4/15/2011	15		17
Travelers Cos Inc/The
5.80%, 5/15/2018		15		16	6.25%, 3/15/2018	10		10
5.90%, 6/ 2/2019		30		31	6.88%, 11/15/2037	10		10
				87				111
Real Estate Operator & Developer (0.06%)					Semiconductor Equipment (0.05%)
Brookfield Asset Management Inc					Kla-Tencor Corp
7.13%, 6/15/2012		15		15	6.90%, 5/ 1/2018	30		27
5.80%, 4/25/2017		25		20	Sovereign (0.05%)
				35	Mexico Government International Bond
Regional Banks (0.35%)					5.63%, 1/15/2017	30		30
Capital One Financial Corp
7.38%, 5/23/2014		15		16	Sovereign Agency (0.82%)
PNC Funding Corp					Fannie Mae
6.70%, 6/10/2019		30		31	2.50%, 5/15/2014	300		295
US Bancorp					Freddie Mac
4.20%, 5/15/2014		30		30	3.75%, 3/27/2019	200		196
Wells Fargo & Co								491
5.63%, 12/11/2017		135		133	Special Purpose Banks (0.07%)
				210	Kreditanstalt fuer Wiederaufbau
Reinsurance (0.09%)					4.88%, 6/17/2019	40		41
Berkshire Hathaway Finance Corp
5.40%, 5/15/2018		50		52	Special Purpose Entity (0.11%)
					Harley-Davidson Funding Corp
REITS - Regional Malls (0.03%)					6.80%, 6/15/2018 (d)	15		13
Simon Property Group LP					Xlliac Global Funding
6.75%, 5/15/2014		20		20	4.80%, 8/10/2010 (d)	55		51
								64

See accompanying notes

97

Schedule of Investments
Asset Allocation Account
June 30, 2009 (unaudited)
	Principal					Principal
	Amount		Value			Amount	Value
	(000's)		(000's)			(000's)	(000's)
BONDS (continued)				BONDS (continued)
Steel - Producers (0.16%)				Transport - Services (0.05%)
ArcelorMittal				FedEx Corp
6.13%, 6/ 1/2018	$ 50 $		44	7.25%, 2/15/2011	$ 30 $		32
9.85%, 6/ 1/2019		50	54	TOTAL BONDS		$ 8,642
			98
				U.S. GOVERNMENT & GOVERNMENT AGENCY
Telecommunication Equipment - Fiber Optics (0.03%)				OBLIGATIONS (25.35%)
Corning Inc				Federal Home Loan Bank (2.50%)
6.63%, 5/15/2019		15	15	0.20%, 8/11/2009 (f)		1,000	1,000
				0.21%, 8/25/2009 (f)		500	500
Telecommunication Services (0.03%)							1,500
Qwest Corp
6.88%, 9/15/2033		25	18	Federal Home Loan Mortgage Corporation
				(FHLMC) (1.15%)
				6.00%, 4/ 1/2036		279	291
Telephone - Integrated (0.77%)				5.00%, 1/ 1/2037		110	112
AT&T Corp
8.00%, 11/15/2031 (e)		85	98	6.00%, 8/ 1/2037		235	246
AT&T Inc				12.00%, 7/ 1/2010		2	2
6.30%, 1/15/2038		35	34	12.00%, 7/ 1/2013		6	7
Deutsche Telekom International Finance BV				12.00%, 6/ 1/2015		11	13
8.75%, 6/15/2030 (e)		25	29	11.50%, 10/ 1/2015		10	10
France Telecom SA				10.00%, 9/ 1/2017		5	5
8.50%, 3/ 1/2031 (e)		10	13				686
Telecom Italia Capital SA
4.95%, 9/30/2014		15	14	Federal National Mortgage Association (FNMA) (12.52%)
7.00%, 6/ 4/2018		60	61	4.50%, 7/ 1/2039 (g)		225	224
7.18%, 6/18/2019		10	10	5.50%, 7/ 1/2039 (g)		525	542
Telefonica Europe BV				6.50%, 7/ 1/2039 (g)		425	453
8.25%, 9/15/2030		90	111	4.50%, 8/ 1/2039 (g)		250	249
Verizon Communications Inc				5.00%, 8/ 1/2039 (g)		450	456
5.50%, 2/15/2018		40	40	0.13%, 7/ 1/2009 (f)		500	500
8.95%, 3/ 1/2039		40	51	8.00%, 2/ 1/2012		5	5
			461	10.00%, 4/ 1/2016		6	6
Tobacco (0.24%)				4.50%, 9/ 1/2022		445	455
Altria Group Inc				7.00%, 4/ 1/2023		2	2
9.25%, 8/ 6/2019		30	34	7.50%, 4/ 1/2030		1	1
BAT International Finance PLC				7.50%, 11/ 1/2030		7	8
9.50%, 11/15/2018 (d)		40	47	7.50%, 2/ 1/2031		23	25
Philip Morris International Inc				8.00%, 12/ 1/2031		3	3
5.65%, 5/16/2018		35	37	7.50%, 6/ 1/2032		41	44
Reynolds American Inc				6.50%, 12/ 1/2032		182	196
6.50%, 7/15/2010		25	25	5.50%, 1/ 1/2036		868	900
			143	5.00%, 2/ 1/2036		608	621
Transport - Rail (0.21%)				6.00%, 7/ 1/2037		318	332
Canadian National Railway Co				5.50%, 2/ 1/2038		1,280	1,326
5.55%, 5/15/2018		15	16	6.00%, 5/ 1/2038		213	223
5.55%, 3/ 1/2019		15	15	5.50%, 8/ 1/2038		287	297
Norfolk Southern Corp				6.00%, 10/ 1/2038		86	90
5.75%, 1/15/2016 (d)		25	26	6.00%, 10/ 1/2038		419	439
Union Pacific Corp				5.00%, 4/ 1/2039		98	100
7.88%, 1/15/2019		35	40
							7,497
6.13%, 2/15/2020		30	31
			128

See accompanying notes

98

Schedule of Investments
Asset Allocation Account
June 30, 2009 (unaudited)
		Principal					Principal
		Amount	Value				Amount	Value
		(000's)	(000's)				(000's)	(000's)
U.S. GOVERNMENT & GOVERNMENT AGENCY				REPURCHASE AGREEMENTS (continued)
OBLIGATIONS (continued)				Diversified Banking Institutions (continued)
Government National Mortgage Association				Investment in Joint Trading Account;
(GNMA) (0.84%)				Morgan Stanley Repurchase Agreement;
4.50%, 7/ 1/2039 (g)	$ 225 $		225	0.03% dated 06/30/09 maturing 07/01/09
5.00%, 7/ 1/2039 (g)		250	255	(collateralized by Sovereign Agency
12.00%, 12/15/2012		12	13	Issues; $1,093,000; 2.38% - 5.00%; dated
10.50%, 4/15/2014		8	8	02/25/11-06/25/14)		$ 1,071 $		1,071
			501					5,892
U.S. Treasury (7.26%)				TOTAL REPURCHASE AGREEMENTS			$ 5,892
0.88%, 12/31/2010		190	190	Total Investments			$ 61,394
0.88%, 3/31/2011		1,200	1,198	Liabilities in Excess of Other Assets, Net - (2.53)%				(1,516)
0.88%, 4/30/2011		1,000	997	TOTAL NET ASSETS - 100.00%			$ 59,878
1.13%, 1/15/2012		1,000	994
2.75%, 2/15/2019		14	13
3.13%, 5/15/2019		680	658	(a)	Non-Income Producing Security
4.25%, 5/15/2039		300	297	(b)	Security is Illiquid
			4,347	(c)	Market value is determined in accordance with procedures established in
					good faith by the Board of Directors. At the end of the period, the value
U.S. Treasury Bill (1.08%)					of these securities totaled $84 or 0.14% of net assets.
0.12%, 7/ 2/2009 (f)		600	600	(d)	Security exempt from registration under Rule 144A of the Securities Act
0.27%, 11/12/2009 (f)		50	50		of 1933. These securities may be resold in transactions exempt from
					registration, normally to qualified institutional buyers. Unless otherwise
			650		indicated, these securities are not considered illiquid. At the end of the
					period, the value of these securities totaled $850 or 1.42% of net assets.
TOTAL U.S. GOVERNMENT & GOVERNMENT				(e)	Variable Rate. Rate shown is in effect at June 30, 2009.
AGENCY OBLIGATIONS		$ 15,181
				(f)	Rate shown is the discount rate.
SHORT TERM INVESTMENTS (4.18%)				(g)	Security was purchased in a "to-be-announced" ("TBA") transaction.
Commercial Paper (4.18%)					See Notes to Financial Statements.
Investment in Joint Trading Account; Federal
Home Loan Bank Discount Notes				Unrealized Appreciation (Depreciation)
0.01%, 7/ 1/2009 (f)	$ 2,500 $		2,500	The net federal income tax unrealized appreciation (depreciation) and federal tax cost
TOTAL SHORT TERM INVESTMENTS		$ 2,500		of investments held by the account as of the period end were as follows:
REPURCHASE AGREEMENTS (9.84%)				Unrealized Appreciation			$ 3,453
Diversified Banking Institutions (9.84%)				Unrealized Depreciation				(8,747)
Investment in Joint Trading Account; Bank				Net Unrealized Appreciation (Depreciation)				(5,294)
of America Repurchase Agreement; 0.05%
dated 06/30/09 maturing 07/01/09				Cost for federal income tax purposes				66,688
(collateralized by Sovereign Agency				All dollar amounts are shown in thousands (000's)
Issues; $2,732,000; 0.00% - 6.25%; dated
07/10/09 - 02/16/17)	$ 2,678 $		2,678
Investment in Joint Trading Account; Credit
Suisse Repurchase Agreement; 0.02%
dated 06/30/09 maturing 07/01/09
(collateralized by US Treasury Note;
$1,093,000; 0.88%; dated 03/31/11)		1,072	1,072
Investment in Joint Trading Account;
Deutsche Bank Repurchase Agreement;
0.08% dated 06/30/09 maturing 07/01/09
(collateralized by Sovereign Agency
Issues; $1,093,000; 3.12% - 4.63%; dated
12/06/10 - 10/10/12)		1,071	1,071

See accompanying notes

99

Schedule of Investments
Asset Allocation Account
June 30, 2009 (unaudited)

Portfolio Summary (unaudited)
Sector	Percent
Mortgage Securities	21.63%
Financial	19.53%
Consumer, Non-cyclical	14.54%
Government	10.70%
Communications	7.52%
Technology	5.76%
Industrial	5.25%
Energy	5.07%
Consumer, Cyclical	4.43%
Utilities	3.07%
Exchange Traded Funds	2.55%
Basic Materials	1.81%
Asset Backed Securities	0.54%
Diversified	0.13%
Liabilities in Excess of Other Assets, Net	(2.53%)
TOTAL NET ASSETS	100.00%
Other Assets Summary (unaudited)
Asset Type	Percent
Currency Contracts	64.05%
Futures	21.40%

See accompanying notes

100

		Schedule of Investments
		Asset Allocation Account
		June 30, 2009 (unaudited)
		Foreign Currency Contracts
						Net Unrealized
Foreign Currency	Delivery	Contracts				Appreciation
Purchase Contracts	Date	to Accept	In Exchange For		Value	(Depreciation)
Australian Dollar	7/16/2009	5,167,695		$4,130	$4,158	$28
British Pound	7/16/2009	2,282,599		3,756	3,755	(1)
Canadian Dollar	7/16/2009	983,425		870	846	(24)
Euro	7/16/2009	4,491,175		6,238	6,300	62
Hong Kong Dollar	7/16/2009	1,688,282		218	218	-
Japanese Yen	7/16/2009	525,296,373		5,439	5,454	15
Norwegian Krone	7/16/2009	3,982,489		620	619	(1)
Singapore Dollar	7/16/2009	246,244		169	170	1
Swedish Krona	7/16/2009	3,464,575		438	449	11
						Net Unrealized
Foreign Currency	Delivery	Contracts				Appreciation
Sale Contracts	Date	to Deliver	In Exchange For		Value	(Depreciation)
Australian Dollar	7/16/2009	4,432,223		$3,540	$3,566	$(26)
British Pound	7/16/2009	1,696,700		2,789	2,791	(2)
Euro	7/16/2009	4,397,763		6,108	6,169	(61)
Japanese Yen	7/16/2009	273,990,843		2,834	2,845	(11)
Swedish Krona	7/16/2009	7,784,216		995	1,009	(14)
All dollar amounts are shown in thousands (000's)
			Futures Contracts
						Current	Unrealized
					Original	Market	Appreciation/
Type			Buy/Sell	Contracts	Value	Value	(Depreciation)
HANG SENG Index; July 2009			Buy	2	$ 234	$ 238	$ 4
Long Gilt; September 2009			Buy	2	388	389	1
MSCI SING IX; July 2009			Buy	2	77	77	-
S&P 500 eMini; September 2009			Buy	94	4,284	4,303	19
SGX CNX NIFTY ETS; July 2009			Buy	5	42	43	1
SPI 200; September 2009			Buy	9	719	707	(12)
TOPIX Index; September 2009			Buy	18	1,720	1,727	7
US 10 Year Note; September 2009			Buy	7	815	814	(1)
US 2 Year Note; September 2009			Buy	8	1,722	1,730	8
DJ Euro Stoxx 50; September 2009			Sell	31	1,025	1,043	(18)
US 5 Year Note; September 2009			Sell	8	912	918	(6)
US Long Bond; September 2009			Sell	7	806	828	(22)
All dollar amounts are shown in thousands (000's)

See accompanying notes

101

Schedule of Investments Balanced Account June 30, 2009 (unaudited)

	Shares	Value			Shares	Value
	Held	(000's)			Held	(000's)
COMMON STOCKS (58.94%)				COMMON STOCKS (continued)
Advertising Agencies (0.16%)				Audio & Video Products (0.05%)
Interpublic Group of Cos Inc (a)	4,616 $		23	Sony Corp ADR	952 $		25
Omnicom Group Inc	1,906		60
			83	Auto - Car & Light Trucks (0.30%)
				Fiat SpA ADR (a)	1,282		13
Aerospace & Defense (0.98%)				Ford Motor Co (a)	10,005		61
BAE Systems PLC ADR	1,315		30	Honda Motor Co Ltd ADR	1,439		39
Boeing Co/The	486		21	Toyota Motor Corp ADR	569		43
Esterline Technologies Corp (a)	506		14				156
General Dynamics Corp	3,400		188
Lockheed Martin Corp	2,218		179	Batteries & Battery Systems (0.05%)
Raytheon Co	1,246		55	Energizer Holdings Inc (a)	297		15
Teledyne Technologies Inc (a)	319		10	EnerSys (a)	530		10
TransDigm Group Inc (a)	453		16				25
			513	Beverages - Non-Alcoholic (0.86%)
Aerospace & Defense Equipment (0.78%)				Coca-Cola Co/The	3,715		178
BE Aerospace Inc (a)	602		9	Coca-Cola Enterprises Inc	6,578		110
Goodrich Corp	2,231		111	PepsiCo Inc	3,017		166
Moog Inc (a)	254		6				454
Triumph Group Inc	340		14	Beverages - Wine & Spirits (0.02%)
United Technologies Corp	5,142		267	Central European Distribution Corp (a)	460		12
			407
				Brewery (0.04%)
Agricultural Chemicals (0.43%)				Kirin Holdings Co Ltd ADR	767		11
Monsanto Co	2,240		166
				SABMiller PLC ADR	590		12
Mosaic Co/The	273		12
							23
Syngenta AG ADR	752		35
Yara International ASA ADR	420		12	Broadcasting Services & Programming (0.02%)
			225	Liberty Media Corp - Capital Series A (a)	783		11
Airlines (0.02%)				Building - Heavy Construction (0.03%)
Alaska Air Group Inc (a)	240		4	Granite Construction Inc	200		7
JetBlue Airways Corp (a)	1,070		5	Orion Marine Group Inc (a)	240		4
			9	Sterling Construction Co Inc (a)	310		5
Alternative Waste Tech (0.01%)							16
Calgon Carbon Corp (a)	370		5	Building - Maintenance & Service (0.02%)
				ABM Industries Inc	550		10
Apparel Manufacturers (0.03%)
True Religion Apparel Inc (a)	650		14	Building & Construction - Miscellaneous (0.02%)
				Insituform Technologies Inc (a)	520		9
Applications Software (1.04%)
Actuate Corp (a)	800		4	Building Products - Cement & Aggregate (0.07%)
Compuware Corp (a)	3,287		23	CRH PLC ADR	1,064		25
Microsoft Corp	19,960		474	Lafarge SA ADR	704		11
Quest Software Inc (a)	1,140		16				36
Red Hat Inc (a)	1,501		30
			547	Cable/Satellite TV (0.53%)
				Comcast Corp - Class A	17,610		255
Athletic Footwear (0.07%)				DIRECTV Group Inc/The (a)	1,024		25
NIKE Inc	726		38				280

See accompanying notes

102

Schedule of Investments
Balanced Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Casino Services (0.04%)			Commercial Banks (continued)
Bally Technologies Inc (a)	660 $	20	Intesa Sanpaolo SpA ADR (a)	1,562 $	30
			National Bank of Greece SA ADR (a)	4,732	26
Cellular Telecommunications (0.09%)			NBT Bancorp Inc	430	9
Syniverse Holdings Inc (a)	420	7	Pinnacle Financial Partners Inc (a)	221	3
Vodafone Group PLC ADR	2,029	39	Prosperity Bancshares Inc	580	17
		46	Regions Financial Corp	18,549	75
Chemicals - Diversified (0.06%)			Renasant Corp	280	4
FMC Corp	545	26	Republic Bancorp Inc/KY	160	4
Innophos Holdings Inc	290	5	Royal Bank of Canada	850	35
		31	Smithtown Bancorp Inc	460	6
Chemicals - Specialty (0.30%)			Tompkins Financial Corp	110	5
Ashland Inc	1,579	44	Toronto-Dominion Bank	449	23
Eastman Chemical Co	952	36	Trustmark Corp	420	8
Ecolab Inc	510	20	United Overseas Bank Ltd ADR	1,646	33
International Flavors & Fragrances Inc	379	13			659
Lubrizol Corp	697	33	Commercial Services (0.06%)
Sensient Technologies Corp	320	7	Arbitron Inc	230	4
Stepan Co	110	5	PHH Corp (a)	1,040	19
		158	Steiner Leisure Ltd (a)	240	7
Circuit Boards (0.01%)					30
TTM Technologies Inc (a)	830	7	Commercial Services - Finance (0.79%)
			Automatic Data Processing Inc	1,278	45
Coal (0.21%)			CBIZ Inc (a)	1,070	8
Consol Energy Inc	973	33	Equifax Inc	2,746	72
Foundation Coal Holdings Inc	1,488	42	Lender Processing Services Inc	431	12
Peabody Energy Corp	1,136	34	Mastercard Inc	490	82
		109	Moody's Corp	1,945	51
Coatings & Paint (0.17%)			Morningstar Inc (a)	190	8
Sherwin-Williams Co/The	290	16	Western Union Co/The	7,515	123
Valspar Corp	3,331	75	Wright Express Corp (a)	639	16
		91			417
Commercial Banks (1.25%)			Computer Aided Design (0.02%)
Banco Latinoamericano de Exportaciones SA	840	10	Parametric Technology Corp (a)	880	10
Banco Santander SA ADR	4,763	58
Bancorpsouth Inc	1,103	23	Computer Services (0.26%)
Bank of Hawaii Corp	462	17	Accenture Ltd	1,335	45
Bank of Nova Scotia	852	32	Affiliated Computer Services Inc (a)	735	33
Bank of the Ozarks Inc	380	8	Ciber Inc (a)	1,350	4
BB&T Corp	5,815	128	Computer Sciences Corp (a)	979	43
City Holding Co	336	10	Insight Enterprises Inc (a)	600	6
Commerce Bancshares Inc	1	-	SYKES Enterprises Inc (a)	330	6
Community Bank System Inc	610	9			137
DBS Group Holdings Ltd ADR	775	25	Computers (2.72%)
First Financial Bancorp	380	3	Apple Inc (a)	3,243	462
FirstMerit Corp	827	14	Dell Inc (a)	4,431	61
Hang Seng Bank Ltd ADR	2,236	31	Hewlett-Packard Co	10,659	412
Iberiabank Corp	165	7	IBM Corp	4,726	493
Independent Bank Corp/Rockland MA	300	6			1,428

See accompanying notes

103

Schedule of Investments
Balanced Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Computers - Integrated Systems (0.07%)			Distribution & Wholesale (0.20%)
Jack Henry & Associates Inc	840 $	17	Beacon Roofing Supply Inc (a)	650 $	9
Super Micro Computer Inc (a)	490	4	FGX International Holdings Ltd (a)	330	4
Teradata Corp (a)	670	16	Genuine Parts Co	1,304	44
		37	Titan Machinery Inc (a)	390	5
Computers - Memory Devices (0.10%)			WW Grainger Inc	552	45
Western Digital Corp (a)	1,917	51			107
			Diversified Banking Institutions (2.83%)
Consulting Services (0.06%)			Bank of America Corp	33,069	436
FTI Consulting Inc (a)	112	6	Barclays PLC ADR	1,683	31
Huron Consulting Group Inc (a)	319	15	BNP Paribas ADR	1,117	36
ICF International Inc (a)	120	3	Citigroup Inc	3,214	10
Navigant Consulting Inc (a)	360	5	Credit Suisse Group AG ADR	652	30
Watson Wyatt Worldwide Inc	150	5	Goldman Sachs Group Inc/The	2,247	331
		34	HSBC Holdings PLC ADR	1,220	51
Consumer Products - Miscellaneous (0.38%)			JP Morgan Chase & Co	15,015	512
Central Garden and Pet Co - A Shares (a)	660	7	Mitsubishi UFJ Financial Group Inc ADR	5,321	33
Jarden Corp (a)	2,345	44	Morgan Stanley	202	6
Kimberly-Clark Corp	2,295	120	UBS AG	1,012	12
Scotts Miracle-Gro Co/The	718	25			1,488
Tupperware Brands Corp	210	5	Diversified Manufacturing Operations (1.60%)
		201	3M Co	2,459	148
Containers - Metal & Glass (0.28%)			Ameron International Corp	90	6
Crown Holdings Inc (a)	3,294	79	AZZ Inc (a)	470	16
Owens-Illinois Inc (a)	1,808	51	Brink's Co/The	1,115	32
Silgan Holdings Inc	310	15	Danaher Corp	688	43
		145	ESCO Technologies Inc (a)	150	7
Containers - Paper & Plastic (0.09%)			General Electric Co	37,409	438
Pactiv Corp (a)	1,141	25	ITT Corp	2,020	90
Rock-Tenn Co	650	25	Koppers Holdings Inc	827	22
		50	Siemens AG ADR	177	12
			Tomkins PLC ADR	2,493	24
Cosmetics & Toiletries (0.79%)					838
Chattem Inc (a)	144	10
Colgate-Palmolive Co	1,025	73	Diversified Minerals (0.16%)
Procter & Gamble Co	6,505	332	Anglo American PLC ADR	1,847	27
		415	BHP Billiton Ltd ADR	1,060	58
					85
Data Processing & Management (0.07%)
Broadridge Financial Solutions Inc	1,921	32	Diversified Operations (0.01%)
CSG Systems International Inc (a)	290	4	Compass Diversified Holdings	490	4
		36	E-Commerce - Products (0.07%)
Diagnostic Equipment (0.03%)			Amazon.com Inc (a)	466	39
Immucor Inc (a)	1,160	16
			E-Commerce - Services (0.15%)
Diagnostic Kits (0.02%)			eBay Inc (a)	3,874	66
Meridian Bioscience Inc	453	10	Priceline.com Inc (a)	105	12
					78
Disposable Medical Products (0.02%)
Merit Medical Systems Inc (a)	510	8	Electric - Integrated (1.83%)
			American Electric Power Co Inc	2,034	59

See accompanying notes

104

Schedule of Investments
Balanced Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Electric - Integrated (continued)			Electronic Components - Semiconductors
Avista Corp	990 $	18	(continued)
CMS Energy Corp	9,545	115	Xilinx Inc	1,277 $		26
Dominion Resources Inc/VA	1,120	37				891
DPL Inc	949	22	Electronic Connectors (0.05%)
Duke Energy Corp	257	4	Amphenol Corp	753		24
E.ON AG ADR	933	33
Enel SpA ADR	3,671	18	Electronic Parts Distribution (0.04%)
Exelon Corp	299	15	Arrow Electronics Inc (a)	882		19
FPL Group Inc	2,993	170
			Electronic Security Devices (0.02%)
IDACORP Inc	300	8	American Science & Engineering Inc	121		8
International Power PLC ADR	292	11
NorthWestern Corp	610	14	Electronics - Military (0.04%)
NSTAR	1,282	41	L-3 Communications Holdings Inc	338		23
PG&E Corp	3,562	137
Portland General Electric Co	577	11	E-Marketing & Information (0.03%)
Progress Energy Inc	1,027	39	Digital River Inc (a)	420		15
Public Service Enterprise Group Inc	3,760	123
RWE AG ADR	259	20	Engineering - Research & Development Services (0.50%)
Scottish & Southern Energy PLC ADR	662	13	EMCOR Group Inc (a)	826		17
Southern Co/The	185	6	Exponent Inc (a)	140		3
Westar Energy Inc	720	13	Fluor Corp	1,998		103
Xcel Energy Inc	1,728	32	Jacobs Engineering Group Inc (a)	1,078		45
		959	URS Corp (a)	1,864		92
						260
Electric Products - Miscellaneous (0.14%)
AMETEK Inc	1,795	62	Enterprise Software & Services (0.49%)
GrafTech International Ltd (a)	1,050	12	Informatica Corp (a)	670		12
		74	JDA Software Group Inc (a)	277		4
			Mantech International Corp (a)	210		9
Electronic Components - Miscellaneous (0.06%)			Oracle Corp	9,213		197
Benchmark Electronics Inc (a)	1,030	15	SAP AG ADR	306		12
CTS Corp	730	4	Sybase Inc (a)	280		9
OSI Systems Inc (a)	190	4	SYNNEX Corp (a)	550		14
Rogers Corp (a)	290	6				257
		29
			Entertainment Software (0.03%)
Electronic Components - Semiconductors (1.70%)			Take-Two Interactive Software Inc (a)	1,470		14
Altera Corp	1,966	32
Broadcom Corp (a)	4,322	107	Environmental Consulting & Engineering (0.02%)
Fairchild Semiconductor International Inc (a)	1,990	14	Tetra Tech Inc (a)	340		10
Intel Corp	25,660	425
IXYS Corp	730	7	E-Services - Consulting (0.01%)
Kopin Corp (a)	1,140	4	Websense Inc (a)	300		5
MEMC Electronic Materials Inc (a)	1,134	20
Microsemi Corp (a)	550	8	Fiduciary Banks (0.24%)
Nvidia Corp (a)	2,335	26	Bank of New York Mellon Corp/The	746		22
ON Semiconductor Corp (a)	3,878	27	State Street Corp	2,239		106
PMC - Sierra Inc (a)	1,150	9				128
Silicon Laboratories Inc (a)	290	11	Finance - Auto Loans (0.03%)
Skyworks Solutions Inc (a)	1,850	18	AmeriCredit Corp (a)	1,224		17
Texas Instruments Inc	7,346	157

See accompanying notes

105

Schedule of Investments
Balanced Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Finance - Investment Banker & Broker (0.13%)			Footwear & Related Apparel (0.04%)
ICAP PLC ADR	1,222 $	18	Iconix Brand Group Inc (a)	960 $		15
Knight Capital Group Inc (a)	580	10	Steven Madden Ltd (a)	306		8
Nomura Holdings Inc ADR	1,433	12				23
Stifel Financial Corp (a)	170	8	Gas - Distribution (0.56%)
SWS Group Inc	800	11	Northwest Natural Gas Co	410		18
TD Ameritrade Holding Corp (a)	645	12	Sempra Energy	3,069		152
		71	South Jersey Industries Inc	311		11
Finance - Leasing Company (0.01%)			UGI Corp	4,174		106
Financial Federal Corp	247	5	WGL Holdings Inc	240		8
						295
Finance - Other Services (0.15%)
IntercontinentalExchange Inc (a)	705	81	Gold Mining (0.14%)
			Lihir Gold Ltd ADR (a)	877		20
Food - Canned (0.22%)			Newcrest Mining Ltd ADR	979		24
Del Monte Foods Co	11,348	106	Newmont Mining Corp	718		29
TreeHouse Foods Inc (a)	300	9				73
		115	Home Decoration Products (0.05%)
Food - Catering (0.11%)			Newell Rubbermaid Inc	2,317		24
Compass Group PLC ADR	7,104	40
Sodexo ADR	364	19	Home Furnishings (0.02%)
		59	Tempur-Pedic International Inc	860		11
Food - Dairy Products (0.14%)			Hotels & Motels (0.28%)
Dean Foods Co (a)	3,727	72	Choice Hotels International Inc	1,337		35
			Wyndham Worldwide Corp	9,052		110
Food - Meat Products (0.12%)						145
Hormel Foods Corp	1,763	61
			Human Resources (0.05%)
Food - Miscellaneous/Diversified (0.57%)			Emergency Medical Services Corp (a)	370		14
American Italian Pasta Co (a)	410	12	Hewitt Associates Inc (a)	371		11
Campbell Soup Co	698	21				25
Diamond Foods Inc	140	4	Import & Export (0.23%)
HJ Heinz Co	755	27	ITOCHU Corp ADR	490		34
Kraft Foods Inc	1,660	42	Mitsubishi Corp ADR	1,021		38
Lancaster Colony Corp	120	5	Mitsui & Co Ltd ADR	69		16
Nestle SA ADR	1,895	71	Sumitomo Corp ADR	3,367		34
Ralcorp Holdings Inc (a)	140	9				122
Sara Lee Corp	9,480	92
			Instruments - Scientific (0.25%)
Unilever PLC ADR	806	19
			FEI Co (a)	740		17
		302
			Thermo Fisher Scientific Inc (a)	2,800		114
Food - Retail (0.38%)						131
Koninklijke Ahold NV ADR	2,431	28
			Insurance Brokers (0.01%)
Kroger Co/The	3,496	77
			eHealth Inc (a)	210		4
SUPERVALU Inc	7,501	97
			Life Partners Holdings Inc	150		2
		202
						6
Food - Wholesale & Distribution (0.01%)
			Internet Application Software (0.02%)
Fresh Del Monte Produce Inc (a)	280	5
			S1 Corp (a)	1,540		11
Sysco Corp	7	-
		5

See accompanying notes

106

Schedule of Investments
Balanced Account
June 30, 2009 (unaudited)

	Shares	Value			Shares	Value
	Held	(000's)			Held	(000's)
COMMON STOCKS (continued)				COMMON STOCKS (continued)
Internet Infrastructure Equipment (0.02%)				Machinery - Construction & Mining (continued)
Avocent Corp (a)	850 $		12	Joy Global Inc	1,067 $		38
							53
Internet Infrastructure Software (0.17%)
AsiaInfo Holdings Inc (a)	540		10	Machinery - Farm (0.09%)
F5 Networks Inc (a)	2,003		69	AGCO Corp (a)	734		21
TIBCO Software Inc (a)	1,540		11	Kubota Corp ADR	611		25
			90				46
Internet Security (0.25%)				Machinery - General Industry (0.08%)
Blue Coat Systems Inc (a)	500		8	Gardner Denver Inc (a)	718		18
Symantec Corp (a)	8,033		125	Middleby Corp (a)	200		9
			133	Wabtec Corp	530		17
							44
Internet Telephony (0.02%)
j2 Global Communications Inc (a)	380		9	Machinery - Pumps (0.22%)
				Flowserve Corp	1,634		114
Intimate Apparel (0.03%)
Warnaco Group Inc/The (a)	534		17	Medical - Biomedical/Gene (0.81%)
				Acorda Therapeutics Inc (a)	140		4
Investment Companies (0.04%)				American Oriental Bioengineering Inc (a)	1,110		6
Ares Capital Corp	1,178		10	Amgen Inc (a)	1,304		69
Hercules Technology Growth Capital Inc	946		8	Arqule Inc (a)	630		4
PennantPark Investment Corp	329		2	Bio-Rad Laboratories Inc (a)	110		8
			20	Celera Corp (a)	1,580		12
				Cubist Pharmaceuticals Inc (a)	593		11
Investment Management & Advisory Services (0.38%)
				Exelixis Inc (a)	2,130		11
Affiliated Managers Group Inc (a)	227		13
				Gilead Sciences Inc (a)	4,788		224
Ameriprise Financial Inc	4,138		101
				Human Genome Sciences Inc (a)	2,560		7
Calamos Asset Management Inc	290		4
				Incyte Corp (a)	2,430		8
Invesco Ltd	4,735		84
				Life Technologies Corp (a)	1,018		43
			202
				Maxygen Inc (a)	561		4
Lasers - Systems & Components (0.03%)				United Therapeutics Corp (a)	100		8
Coherent Inc (a)	290		6	XOMA Ltd (a)	6,200		5
Rofin-Sinar Technologies Inc (a)	440		9				424
			15
				Medical - Drugs (2.87%)
Life & Health Insurance (0.55%)				Abbott Laboratories	6,943		327
Aflac Inc	1,507		47	Array Biopharma Inc (a)	810		3
Delphi Financial Group Inc	455		9	AstraZeneca PLC ADR	895		39
Presidential Life Corp	289		2	Bristol-Myers Squibb Co	8,746		178
Prudential PLC ADR	741		10	China Sky One Medical Inc (a)	190		3
StanCorp Financial Group Inc	190		5	Eli Lilly & Co	5,727		198
Torchmark Corp	2,361		88	Endo Pharmaceuticals Holdings Inc (a)	1,455		26
Unum Group	8,048		128	Forest Laboratories Inc (a)	1,593		40
			289	GlaxoSmithKline PLC ADR	664		23
Linen Supply & Related Items (0.01%)				Merck & Co Inc/NJ	2,466		69
G&K Services Inc	180		4	Myriad Pharmaceuticals Inc (a)	95		-
				Novartis AG ADR	862		35
Machinery - Construction & Mining (0.10%)				Novo Nordisk A/S ADR	434		24
Astec Industries Inc (a)	150		5	Orexigen Therapeutics Inc (a)	980		5
Bucyrus International Inc	350		10	Pfizer Inc	15,445		232
				PharMerica Corp (a)	450		9

See accompanying notes

107

Schedule of Investments
Balanced Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Medical - Drugs (continued)			Medical Products (1.39%)
Progenics Pharmaceuticals Inc (a)	570 $	3	American Medical Systems Holdings Inc (a)	1,040 $		16
Roche Holding AG ADR	1,360	46	Baxter International Inc	2,767		147
Schering-Plough Corp	5,401	136	Becton Dickinson and Co	2,135		152
Shire PLC ADR	395	16	Cantel Medical Corp (a)	530		9
Wyeth	1,981	90	Johnson & Johnson	6,939		394
XenoPort Inc (a)	270	6	Zoll Medical Corp (a)	728		14
		1,508				732
Medical - Generic Drugs (0.16%)			Metal - Aluminum (0.02%)
Par Pharmaceutical Cos Inc (a)	300	5	Century Aluminum Co (a)	1,987		12
Perrigo Co	330	9
Watson Pharmaceuticals Inc (a)	2,167	73	Metal - Copper (0.15%)
		87	Freeport-McMoRan Copper & Gold Inc	1,577		79
Medical - HMO (0.51%)			Metal - Diversified (0.07%)
Aetna Inc	568	14	Rio Tinto PLC ADR	211		35
CIGNA Corp	2,674	64
Health Net Inc (a)	669	10	Metal - Iron (0.04%)
Humana Inc (a)	3,025	98	Cliffs Natural Resources Inc	860		21
UnitedHealth Group Inc	2,082	52
WellPoint Inc (a)	579	30	Metal Processors & Fabrication (0.04%)
		268	LB Foster Co (a)	170		5
			Precision Castparts Corp	191		14
Medical - Hospitals (0.02%)						19
Universal Health Services Inc	200	10
			Metal Products - Distribution (0.01%)
Medical - Nursing Homes (0.02%)			AM Castle & Co	430		5
Ensign Group Inc/The	416	6
Skilled Healthcare Group Inc (a)	660	5	Miscellaneous Manufacturers (0.04%)
		11	Aptargroup Inc	595		20
Medical - Outpatient & Home Medical Care (0.05%)			Motion Pictures & Services (0.09%)
Amedisys Inc (a)	374	12	DreamWorks Animation SKG Inc (a)	1,688		47
Gentiva Health Services Inc (a)	270	5
LHC Group Inc (a)	420	9	Multi-Line Insurance (0.20%)
		26	Allianz SE ADR	1,755		16
			American Financial Group Inc/OH	1,041		23
Medical - Wholesale Drug Distribution (0.24%)			AXA SA ADR	888		17
AmerisourceBergen Corp	3,983	70
			MetLife Inc	771		23
McKesson Corp	1,289	57
			Zurich Financial Services AG ADR	1,423		25
		127
						104
Medical Instruments (0.23%)
			Multimedia (0.42%)
Genomic Health Inc (a)	380	7
			McGraw-Hill Cos Inc/The	3,318		100
Kensey Nash Corp (a)	400	10
			Time Warner Inc	896		23
Medtronic Inc	763	27
			Walt Disney Co/The	3,402		79
St Jude Medical Inc (a)	1,876	77
			WPP PLC ADR	506		17
		121
						219
Medical Laboratory & Testing Service (0.13%)
			Networking Products (0.81%)
ICON PLC ADR (a)	670	15
			3Com Corp (a)	4,590		22
Quest Diagnostics Inc	925	52
			Cisco Systems Inc (a)	20,936		390
		67

See accompanying notes

108

Schedule of Investments
Balanced Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Networking Products (continued)			Oil Company - Integrated (continued)
Polycom Inc (a)	580 $	12	Chevron Corp	6,326 $	419
		424	ConocoPhillips	2,360	99
Non-Ferrous Metals (0.16%)			ENI SpA ADR	915	43
Horsehead Holding Corp (a)	460	4	Exxon Mobil Corp	14,006	979
Titanium Metals Corp	8,938	82	Marathon Oil Corp	102	3
		86	Murphy Oil Corp	1,609	88
			Royal Dutch Shell PLC - B shares ADR	630	32
Non-Hazardous Waste Disposal (0.03%)			Royal Dutch Shell PLC ADR	536	27
Waste Connections Inc (a)	360	10	Total SA ADR	953	52
Waste Management Inc	256	7			1,835
		17
			Oil Field Machinery & Equipment (0.30%)
Office Automation & Equipment (0.07%)			Cameron International Corp (a)	1,669	47
Canon Inc ADR	336	11	Dresser-Rand Group Inc (a)	888	23
Pitney Bowes Inc	1,115	24	FMC Technologies Inc (a)	815	31
		35	National Oilwell Varco Inc (a)	1,725	56
Oil - Field Services (0.49%)					157
Hornbeck Offshore Services Inc (a)	470	10	Oil Refining & Marketing (0.04%)
Matrix Service Co (a)	729	8	CVR Energy Inc (a)	410	3
Oceaneering International Inc (a)	1,725	78	Tesoro Corp	1,472	19
Oil States International Inc (a)	470	12			22
Schlumberger Ltd	1,870	101
Tetra Technologies Inc (a)	3,910	31	Paper & Related Products (0.13%)
Willbros Group Inc (a)	1,300	16	International Paper Co	2,020	30
		256	MeadWestvaco Corp	1,132	19
			Svenska Cellulosa AB ADR	1,631	17
Oil & Gas Drilling (0.04%)					66
ENSCO International Inc	601	21
			Pastoral & Agricultural (0.02%)
Oil Company - Exploration & Production (2.24%)			AgFeed Industries Inc (a)	1,730	10
Anadarko Petroleum Corp	621	28
Apache Corp	2,265	163	Pharmacy Services (0.58%)
Arena Resources Inc (a)	210	7	Catalyst Health Solutions Inc (a)	630	16
Berry Petroleum Co	490	9	Express Scripts Inc (a)	2,449	168
Comstock Resources Inc (a)	270	9	Medco Health Solutions Inc (a)	1,345	61
Concho Resources Inc/Midland TX (a)	290	8	Omnicare Inc	2,290	59
Devon Energy Corp	2,795	152			304
EXCO Resources Inc (a)	1,050	14	Physical Therapy & Rehabilitation Centers (0.03%)
Forest Oil Corp (a)	4,437	66	Psychiatric Solutions Inc (a)	280	6
Mariner Energy Inc (a)	220	3	RehabCare Group Inc (a)	450	11
Newfield Exploration Co (a)	2,363	77			17
Occidental Petroleum Corp	4,469	294	Pipelines (0.26%)
SandRidge Energy Inc (a)	5,595	48	El Paso Corp	11,644	107
Southwestern Energy Co (a)	2,612	101	Spectra Energy Corp	1,642	28
Talisman Energy Inc	2,044	29			135
XTO Energy Inc	4,366	167
		1,175	Private Corrections (0.02%)
			Cornell Cos Inc (a)	584	9
Oil Company - Integrated (3.49%)
BG Group PLC ADR	571	48	Property & Casualty Insurance (0.63%)
BP PLC ADR	947	45	Amtrust Financial Services Inc	696	8

See accompanying notes

109

Schedule of Investments
Balanced Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Property & Casualty Insurance (continued)			REITS - Healthcare (continued)
Chubb Corp	2,374 $	95	Universal Health Realty Income Trust	120 $		4
Progressive Corp/The	4,895	74	Ventas Inc	2,028		60
Tokio Marine Holdings Inc ADR	1,128	31				73
Tower Group Inc	260	6	REITS - Mortgage (0.08%)
Travelers Cos Inc/The	2,885	118	Capstead Mortgage Corp	430		6
		332	Chimera Investment Corp	2,887		10
Publicly Traded Investment Fund (0.15%)			MFA Mortgage Investments Inc	3,220		22
iShares Russell 1000 Growth Index Fund	638	26	NorthStar Realty Finance Corp	1,140		3
iShares Russell 1000 Value Index Fund	1,138	54				41
		80	REITS - Office Property (0.22%)
Publishing - Books (0.03%)			Alexandria Real Estate Equities Inc	330		12
Reed Elsevier NV ADR	762	17	Boston Properties Inc	1,573		75
			Kilroy Realty Corp	170		3
Quarrying (0.02%)			SL Green Realty Corp	1,077		25
Compass Minerals International Inc	200	11				115
Real Estate Operator & Developer (0.08%)			REITS - Regional Malls (0.13%)
Brookfield Asset Management Inc	1,176	20	Macerich Co/The	584		10
Sun Hung Kai Properties Ltd ADR	1,789	22	Simon Property Group Inc	1,154		60
		42				70
Recreational Vehicles (0.01%)			REITS - Shopping Centers (0.04%)
Polaris Industries Inc	200	6	Inland Real Estate Corp	1,260		9
			Saul Centers Inc	270		8
Regional Banks (1.13%)			Urstadt Biddle Properties Inc	250		3
Fifth Third Bancorp	5,747	41				20
PNC Financial Services Group Inc	3,049	118
			REITS - Single Tenant (0.01%)
US Bancorp	723	13	Getty Realty Corp	180		3
Wells Fargo & Co	17,466	424
		596	REITS - Storage (0.04%)
Reinsurance (0.26%)			Public Storage	288		19
Allied World Assurance Co Holdings Ltd	542	22
Argo Group International Holdings Ltd (a)	350	10	Rental - Auto & Equipment (0.03%)
Aspen Insurance Holdings Ltd	990	22	Aaron's Inc	390		12
Everest Re Group Ltd	227	16	Rent-A-Center Inc/TX (a)	370		6
Hannover Rueckversicherung AG ADR (a)	1,080	20				18
Max Capital Group Ltd	150	3	Research & Development (0.03%)
PartnerRe Ltd	338	22	Parexel International Corp (a)	1,090		16
Platinum Underwriters Holdings Ltd	520	15
Validus Holdings Ltd	250	5	Retail - Apparel & Shoe (0.26%)
		135	Aeropostale Inc (a)	310		11
			Dress Barn Inc (a)	620		9
REITS - Apartments (0.02%)			Foot Locker Inc	1,790		19
Essex Property Trust Inc	130	8	Genesco Inc (a)	430		8
			JOS A Bank Clothiers Inc (a)	130		4
REITS - Diversified (0.11%)
Digital Realty Trust Inc	1,612	58	Ross Stores Inc	1,901		73
			Stage Stores Inc	580		6
REITS - Healthcare (0.14%)			Wet Seal Inc/The (a)	2,517		8
Nationwide Health Properties Inc	100	3				138
Omega Healthcare Investors Inc	410	6

See accompanying notes

110

Schedule of Investments
Balanced Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Retail - Appliances (0.01%)			Retail - Perfume & Cosmetics (0.01%)
hhgregg Inc (a)	240 $	4	Sally Beauty Holdings Inc (a)	1,120 $		7
Retail - Auto Parts (0.05%)			Retail - Petroleum Products (0.02%)
AutoZone Inc (a)	165	25	World Fuel Services Corp	240		10
Retail - Building Products (0.67%)			Retail - Regional Department Store (0.13%)
Home Depot Inc	9,557	226	Kohl's Corp (a)	1,014		43
Kingfisher PLC ADR	4,079	24	Macy's Inc	2,337		28
Lowe's Cos Inc	5,030	97				71
Lumber Liquidators Inc (a)	210	3	Retail - Restaurants (0.83%)
		350	Buffalo Wild Wings Inc (a)	130		4
Retail - Computer Equipment (0.09%)			CKE Restaurants Inc	811		7
GameStop Corp (a)	2,168	48	Darden Restaurants Inc	1,169		38
			Jack in the Box Inc (a)	630		14
Retail - Consumer Electronics (0.28%)			McDonald's Corp	4,275		246
Best Buy Co Inc	3,010	101	PF Chang's China Bistro Inc (a)	212		7
RadioShack Corp	3,272	45	Ruby Tuesday Inc (a)	540		4
		146	Yum! Brands Inc	3,502		117
Retail - Discount (1.16%)						437
99 Cents Only Stores (a)	920	13	Retail - Sporting Goods (0.02%)
Big Lots Inc (a)	4,434	93	Hibbett Sports Inc (a)	599		11
BJ's Wholesale Club Inc (a)	624	20
Citi Trends Inc (a)	160	4	Savings & Loans - Thrifts (0.07%)
Dollar Tree Inc (a)	529	22	ESSA Bancorp Inc	350		5
Target Corp	1,780	70	Flushing Financial Corp	400		4
Wal-Mart Stores Inc	7,997	388	Hudson City Bancorp Inc	990		13
		610	OceanFirst Financial Corp	340		4
Retail - Drug Store (0.06%)			Provident Financial Services Inc	430		4
CVS Caremark Corp	983	31	United Financial Bancorp Inc	320		4
			WSFS Financial Corp	136		4
Retail - Fabric Store (0.02%)						38
Jo-Ann Stores Inc (a)	610	13	Schools (0.07%)
			Apollo Group Inc (a)	325		23
Retail - Gardening Products (0.01%)
			Capella Education Co (a)	120		7
Tractor Supply Co (a)	180	7
			Grand Canyon Education Inc (a)	320		6
Retail - Hair Salons (0.01%)						36
Regis Corp	310	5	Semiconductor Component - Integrated Circuits (0.12%)
			Atmel Corp (a)	9,685		36
Retail - Jewelry (0.04%)			Hittite Microwave Corp (a)	340		12
Signet Jewelers Ltd	923	19	Integrated Device Technology Inc (a)	1,770		10
Retail - Major Department Store (0.12%)			Micrel Inc	510		4
JC Penney Co Inc	840	24	Pericom Semiconductor Corp (a)	360		3
Marks & Spencer Group PLC ADR	1,152	12				65
TJX Cos Inc	872	27	Semiconductor Equipment (0.06%)
		63	ASML Holding NV	945		20
Retail - Pawn Shops (0.02%)			Entegris Inc (a)	2,550		7
Cash America International Inc	380	9	Ultratech Inc (a)	380		5
						32

See accompanying notes

111

Schedule of Investments
Balanced Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Soap & Cleaning Products (0.11%)			Therapeutics (0.06%)
Church & Dwight Co Inc	1,070 $	58	Allos Therapeutics Inc (a)	880 $		7
			Isis Pharmaceuticals Inc (a)	560		9
Steel - Producers (0.10%)			Onyx Pharmaceuticals Inc (a)	260		8
ArcelorMittal	726	24	Vivus Inc (a)	1,350		8
Reliance Steel & Aluminum Co	390	15				32
Steel Dynamics Inc	985	14
		53	Tobacco (1.13%)
			Altria Group Inc	11,044		181
Steel - Specialty (0.03%)			British American Tobacco PLC ADR	792		44
Citic Pacific Ltd ADR	1,494	15	Imperial Tobacco Group PLC ADR	688		36
			Philip Morris International Inc	5,773		252
Telecommunication Equipment (0.17%)
			Reynolds American Inc	2,075		80
Anaren Inc (a)	240	4
						593
Arris Group Inc (a)	690	8
CommScope Inc (a)	482	13	Tools - Hand Held (0.06%)
Comtech Telecommunications Corp (a)	214	7	Snap-On Inc	320		9
Symmetricom Inc (a)	640	4	Stanley Works/The	679		23
Tellabs Inc (a)	9,294	53				32
		89	Toys (0.10%)
Telecommunication Equipment - Fiber Optics (0.13%)			Hasbro Inc	467		11
Corning Inc	3,758	60	Marvel Entertainment Inc (a)	240		9
Harmonic Inc (a)	1,150	7	Nintendo Co Ltd ADR	964		33
		67				53
Telecommunication Services (0.33%)			Transactional Software (0.02%)
Consolidated Communications Holdings Inc	710	8	Solera Holdings Inc (a)	390		10
Embarq Corp	3,371	142
Harris Stratex Networks Inc (a)	433	3	Transport - Air Freight (0.02%)
MasTec Inc (a)	430	5	Atlas Air Worldwide Holdings Inc (a)	480		11
NTELOS Holdings Corp	420	8	Transport - Marine (0.04%)
Premiere Global Services Inc (a)	920	10	Overseas Shipholding Group Inc	64		2
		176	Tidewater Inc	392		17
Telephone - Integrated (1.75%)						19
AT&T Inc	14,916	371	Transport - Rail (0.78%)
France Telecom SA ADR	486	11	Burlington Northern Santa Fe Corp	1,441		106
General Communication Inc (a)	490	3	CSX Corp	1,856		64
Koninklijke KPN NV ADR	2,055	28	MTR Corp ADR	829		25
Nippon Telegraph & Telephone Corp ADR	1,510	31	Norfolk Southern Corp	815		31
Qwest Communications International Inc	31,492	131	Union Pacific Corp	3,579		186
Sprint Nextel Corp (a)	22,483	108				412
Telecom Italia SpA ADR	1,215	17
Telefonica SA ADR	593	40	Transport - Services (0.09%)
Verizon Communications Inc	5,844	180	HUB Group Inc (a)	570		12
		920	United Parcel Service Inc	735		37
						49
Television (0.04%)
CBS Corp	3,036	21	Transport - Truck (0.02%)
			Heartland Express Inc	350		5
Theaters (0.01%)			Marten Transport Ltd (a)	180		4
National CineMedia Inc	380	5				9

See accompanying notes

112

Schedule of Investments Balanced Account June 30, 2009 (unaudited)

						Principal
		Shares	Value			Amount	Value
		Held	(000's)			(000's)	(000's)
COMMON STOCKS (continued)				BONDS (continued)
Vitamins & Nutrition Products (0.05%)				Asset Backed Securities (continued)
Herbalife Ltd		884 $	28	First Franklin Mortgage Loan Asset Backed
				Certificates
Web Portals (0.63%)				0.58%, 9/25/2035 (e)	$ 21 $		21
Google Inc (a)		784	331	0.55%, 11/25/2035 (e)		161	144
				First Horizon Asset Backed Trust
Wireless Equipment (0.61%)				0.44%, 10/25/2026 (e)		138	59
Nokia OYJ ADR		1,218	18	First-Citizens Home Equity Loan LLC
Qualcomm Inc		5,979	270	0.53%, 9/15/2022 (e)(f)		45	25
Telefonaktiebolaget LM Ericsson ADR		2,565	25	Great America Leasing Receivables
Viasat Inc (a)		190	5	5.39%, 9/15/2011 (f)		30	31
			318	JP Morgan Mortgage Acquisition Corp
				0.48%, 4/25/2036 (e)		197	126
TOTAL COMMON STOCKS		$ 30,950		5.45%, 11/25/2036		120	102
		Principal		0.46%, 3/25/2037 (e)		75	27
		Amount	Value	Long Beach Mortgage Loan Trust
		(000's)	(000's)	0.84%, 6/25/2034 (e)		30	15
BONDS (27.57%)				0.42%, 10/25/2036 (d)(e)		275	68
Aerospace & Defense Equipment (0.08%)				0.48%, 12/25/2036 (e)		175	39
GenCorp Inc				Marriott Vacation Club Owner Trust
9.50%, 8/15/2013	$ 60		44	5.52%, 5/20/2029 (e)(f)		27	21
				MSDWCC Heloc Trust
Airlines (0.26%)				0.50%, 7/25/2017 (e)		24	10
American Airlines Pass Through Trust 2001-02							1,263
7.86%, 10/ 1/2011 (b)		5	5	Auto/Truck Parts & Equipment - Original (0.04%)
American Airlines Pass Through Trust 2009-1A				Tenneco Inc
10.38%, 7/ 2/2019 (b)(c)		55	55	10.25%, 7/15/2013		21	20
Delta Air Lines Inc
7.11%, 9/18/2011 (b)(d)		50	47	Automobile Sequential (0.35%)
6.72%, 1/ 2/2023 (b)		24	19	Capital Auto Receivables Asset Trust
Southwest Airlines Co 2007-1 Pass Through				0.69%, 6/15/2010 (e)		4	4
Trust				5.52%, 3/15/2011 (e)		60	47
6.15%, 8/ 1/2022 (b)		14	13
				Ford Credit Auto Owner Trust
			139	5.30%, 6/15/2012		60	58
Apparel Manufacturers (0.00%)				5.60%, 10/15/2012		20	18
Rafaella Apparel Group Inc				WFS Financial Owner Trust
11.25%, 6/15/2011		15	3	4.50%, 5/17/2013		55	55
							182
Asset Backed Securities (2.40%)
Ameriquest Mortgage Securities Inc				Beverages - Non-Alcoholic (0.03%)
0.61%, 3/25/2035 (e)		13	10	Coca-Cola Enterprises Inc
Carrington Mortgage Loan Trust				4.25%, 3/ 1/2015		5	5
0.59%, 12/25/2035 (e)		275	211	Dr Pepper Snapple Group Inc
Citigroup Mortgage Loan Trust Inc				6.82%, 5/ 1/2018		10	11
0.46%, 3/25/2037 (e)		150	84				16
Countrywide Asset-Backed Certificates				Beverages - Wine & Spirits (0.08%)
1.38%, 1/25/2034 (e)		138	65	Constellation Brands Inc
0.60%, 2/25/2036 (e)		86	78	8.38%, 12/15/2014		40	40
0.56%, 3/25/2036 (d)(e)		166	87
0.48%, 6/25/2037 (e)		150	26	Brewery (0.61%)
Countrywide Home Equity Loan Trust				Anheuser-Busch InBev Worldwide Inc
0.52%, 5/15/2036 (e)		84	14	5.38%, 11/15/2014 (f)		185	187
				7.75%, 1/15/2019 (f)		35	38

See accompanying notes

113

Schedule of Investments
Balanced Account
June 30, 2009 (unaudited)
		Principal			Principal
		Amount	Value		Amount	Value
		(000's)	(000's)		(000's)	(000's)
BONDS (continued)				BONDS (continued)
Brewery (continued)				Casino Hotels (continued)
Anheuser-Busch InBev Worldwide Inc				Wynn Las Vegas LLC / Wynn Las Vegas
(continued)				Capital Corp
6.88%, 11/15/2019 (f)	$ 90 $		93	6.63%, 12/ 1/2014	$ 11 $		9
			318				37
Building - Residential & Commercial (0.01%)				Casino Services (0.06%)
M/I Homes Inc				International Game Technology
6.88%, 4/ 1/2012		10	8	7.50%, 6/15/2019	30		30
				Snoqualmie Entertainment Authority
Building Products - Cement & Aggregate (0.18%)				9.13%, 2/ 1/2015 (f)	5		3
CRH America Inc							33
6.40%, 10/15/2033		10	7
Martin Marietta Materials Inc				Cellular Telecommunications (0.67%)
1.19%, 4/30/2010 (e)		90	89	America Movil SA de CV
			96	5.50%, 3/ 1/2014	5		5
				Centennial Communications Corp
Building Products - Wood (0.49%)				6.96%, 1/ 1/2013 (e)	5		5
Masco Corp				Cricket Communications Inc
0.94%, 3/12/2010 (e)		265	256	9.38%, 11/ 1/2014	15		15
				iPCS Inc
Cable/Satellite TV (0.99%)				3.15%, 5/ 1/2013 (e)	5		4
Charter Communications Operating LLC /				MetroPCS Wireless Inc
Charter Communications Operating Capital				9.25%, 11/ 1/2014	5		5
10.38%, 4/30/2014 (e)(f)		15	14	9.25%, 11/ 1/2014 (f)	5		5
Comcast Corp
5.70%, 7/ 1/2019		115	114	Nextel Communications Inc
				7.38%, 8/ 1/2015	60		48
6.55%, 7/ 1/2039		150	150	Rogers Wireless Inc
COX Communications Inc				6.38%, 3/ 1/2014	45		48
6.75%, 3/15/2011		50	53	Vodafone Group PLC
5.50%, 10/ 1/2015		10	10	0.97%, 6/15/2011 (e)	45		44
8.38%, 3/ 1/2039 (f)		50	56	0.94%, 2/27/2012 (e)	75		72
CSC Holdings Inc/United States				5.45%, 6/10/2019	105		103
7.88%, 2/15/2018		5	5				354
8.63%, 2/15/2019 (f)		10	10
DirecTV Holdings LLC/DirecTV Financing Co				Chemicals - Diversified (0.08%)
8.38%, 3/15/2013		15	15	Dow Chemical Co/The
DISH DBS Corp				8.55%, 5/15/2019	45		45
6.63%, 10/ 1/2014		25	23
Kabel Deutschland GmbH				Commercial Banks (1.02%)
10.63%, 7/ 1/2014		15	15	American Express Bank FSB
Rainbow National Services LLC				5.50%, 4/16/2013	25		25
10.38%, 9/ 1/2014 (f)		5	5	CBA Capital Trust II
Time Warner Cable Inc				6.02%, 3/15/2036 (f)	40		27
6.75%, 6/15/2039		35	34	Credit Suisse/New York NY
UPC Holding BV				3.45%, 7/ 2/2012	150		150
9.88%, 4/15/2018 (f)		15	14	Nordea Bank Sweden AB
			518	8.95%, 11/29/2049 (f)	250		162
				Svenska Handelsbanken AB
Casino Hotels (0.07%)				4.88%, 6/10/2014 (f)	175		173
Harrah's Operating Co Inc							537
10.00%, 12/15/2018 (f)		2	1
10.00%, 12/15/2018 (f)		23	13	Commercial Services (0.01%)
MGM Mirage				Iron Mountain Inc
8.50%, 9/15/2010		15	14	8.00%, 6/15/2020	5		5

See accompanying notes

114

Schedule of Investments
Balanced Account
June 30, 2009 (unaudited)
	Principal			Principal
	Amount	Value		Amount		Value
	(000's)	(000's)		(000's)		(000's)
BONDS (continued)			BONDS (continued)
Computer Services (0.02%)			Diversified Financial Services (0.15%)
Sungard Data Systems Inc			Capmark Financial Group Inc
10.25%, 8/15/2015	$ 10 $	9	3.61%, 5/10/2010 (e)	$ 75 $			31
			General Electric Capital Corp
Computers (0.06%)			6.38%, 11/15/2067 (e)		75		50
Dell Inc							81
3.38%, 6/15/2012	25	25
Hewlett-Packard Co			Diversified Manufacturing Operations (0.04%)
2.95%, 8/15/2012	5	5	ITT Corp
		30	4.90%, 5/ 1/2014		20		20
Computers - Memory Devices (0.03%)			Diversified Minerals (0.43%)
Seagate Technology HDD Holdings			Anglo American Capital PLC
6.80%, 10/ 1/2016	10	9	9.38%, 4/ 8/2014 (f)		10		11
Seagate Technology International			Rio Tinto Finance USA Ltd
10.00%, 5/ 1/2014 (f)	5	5	8.95%, 5/ 1/2014		45		50
		14	6.50%, 7/15/2018		15		15
Containers - Paper & Plastic (0.01%)			9.00%, 5/ 1/2019		20		22
Norampac Industries Inc			Teck Resources Ltd
6.75%, 6/ 1/2013	5	4	9.75%, 5/15/2014 (f)		35		36
			10.25%, 5/15/2016 (f)		40		42
Cruise Lines (0.02%)			10.75%, 5/15/2019 (f)		45		49
Royal Caribbean Cruises Ltd							225
6.88%, 12/ 1/2013	10	8
			Diversified Operations (0.05%)
Data Processing & Management (0.03%)			Susser Holdings LLC / Susser Finance Corp
			10.63%, 12/15/2013		25		25
First Data Corp
9.88%, 9/24/2015	20	14
			Diversified Operations & Commercial Services (0.02%)
Diversified Banking Institutions (1.89%)			Aramark Corp
			8.50%, 2/ 1/2015		10		10
Bank of America Corp
5.38%, 9/11/2012	15	15
			Electric - Generation (0.22%)
7.38%, 5/15/2014	250	258	AES Corp/The
5.42%, 3/15/2017	10	8	9.75%, 4/15/2016 (f)		15		15
Citigroup Inc			Edison Mission Energy
6.50%, 8/19/2013	30	29	7.20%, 5/15/2019		10		8
5.00%, 9/15/2014	75	63	Elwood Energy LLC
8.50%, 5/22/2019	220	224	8.16%, 7/ 5/2026		27		23
GMAC LLC			Indiantown Cogeneration LP
7.75%, 1/19/2010 (f)	5	5	9.26%, 12/15/2010		23		23
6.00%, 12/15/2011 (f)	9	8	Korea East-West Power Co Ltd
6.63%, 5/15/2012 (f)	12	10	4.88%, 4/21/2011 (f)		20		20
Goldman Sachs Group Inc/The			Midwest Generation LLC
5.45%, 11/ 1/2012	100	103	8.56%, 1/ 2/2016		8		8
5.63%, 1/15/2017	35	33	Reliant Energy Mid-Atlantic Power Holdings
6.25%, 9/ 1/2017	13	13	LLC
			9.24%, 7/ 2/2017		21		20
6.75%, 10/ 1/2037	24	21
							117
Morgan Stanley
7.30%, 5/13/2019	150	156	Electric - Integrated (0.63%)
7.25%, 4/ 1/2032	25	25	Baltimore Gas & Electric Co
Royal Bank of Scotland Group PLC			5.90%, 10/ 1/2016		25		25
5.05%, 1/ 8/2015	25	20	CMS Energy Corp
		991	8.75%, 6/15/2019		5		5

See accompanying notes

115

Schedule of Investments
Balanced Account
June 30, 2009 (unaudited)
		Principal				Principal
		Amount	Value			Amount	Value
		(000's)	(000's)			(000's)	(000's)
BONDS (continued)				BONDS (continued)
Electric - Integrated (continued)				Finance - Investment Banker & Broker (0.04%)
Dominion Resources Inc/VA				Charles Schwab Corp/The
8.88%, 1/15/2019	$ 40 $		48	4.95%, 6/ 1/2014	$ 20 $			20
Jersey Central Power & Light Co				UBS Preferred Funding Trust V
7.35%, 2/ 1/2019		30	33	6.24%, 5/29/2049		5		3
6.15%, 6/ 1/2037		30	28					23
Midamerican Energy Holdings Co				Food - Miscellaneous/Diversified (0.09%)
6.13%, 4/ 1/2036		40	39
				Kellogg Co
Mirant Americas Generation LLC				4.45%, 5/30/2016		10		10
8.30%, 5/ 1/2011		10	10
				Kraft Foods Inc
Oncor Electric Delivery Co				6.25%, 6/ 1/2012		35		38
6.38%, 5/ 1/2012		65	68
								48
5.95%, 9/ 1/2013		15	16
Public Service Co of Colorado				Food - Retail (0.11%)
5.13%, 6/ 1/2019		30	31	Delhaize America Inc
Texas Competitive Electric Holdings Co LLC				9.00%, 4/15/2031		40		48
10.25%, 11/ 1/2015 (e)		45	28	Ingles Markets Inc
			331	8.88%, 5/15/2017 (f)		10		10
								58
Electronic Components - Miscellaneous (0.05%)
NXP BV/NXP Funding LLC				Gambling (Non-Hotel) (0.01%)
3.88%, 10/15/2013 (e)		65	26	Pinnacle Entertainment Inc
				7.50%, 6/15/2015		5		4
Finance - Auto Loans (0.09%)
Ford Motor Credit Co LLC				Gas - Distribution (0.03%)
7.38%, 10/28/2009		5	5	Sempra Energy
2.70%, 1/15/2010 (e)		20	19	6.15%, 6/15/2018		15		15
7.88%, 6/15/2010		25	24
			48	Home Equity - Other (0.90%)
				Bear Stearns Asset Backed Securities Trust
Finance - Commercial (0.33%)				0.47%, 8/25/2036 (e)		200		66
CIT Group Inc				Countrywide Asset-Backed Certificates
4.25%, 2/ 1/2010		5	4	6.09%, 6/25/2021 (e)		72		21
0.76%, 3/12/2010 (e)		10	9	GMAC Mortgage Corp Loan Trust
1.32%, 4/27/2011 (e)		100	71	5.75%, 10/25/2036		81		50
Textron Financial Corp				5.81%, 10/25/2036		35		12
0.79%, 2/25/2011 (e)		100	89	GSAA Trust
			173	0.45%, 4/25/2047 (d)(e)		132		18
				Option One Mortgage Loan Trust
Finance - Consumer Loans (0.42%)				1.36%, 5/25/2034 (e)		69		41
HSBC Finance Corp				0.41%, 7/25/2036 (e)		159		104
1.13%, 11/16/2009 (e)		75	74
				Specialty Underwriting & Residential Finance
4.13%, 11/16/2009		75	76	1.08%, 2/25/2035 (e)		43		21
SLM Corp				0.54%, 3/25/2036 (e)		5		5
1.25%, 7/26/2010 (e)		75	68
				WAMU Asset-Backed Certificates
4.50%, 7/26/2010		5	5	0.48%, 5/25/2037 (e)		85		35
			223	Wells Fargo Home Equity Trust
Finance - Credit Card (0.19%)				0.81%, 4/25/2034 (e)		39		20
American Express Co				0.60%, 10/25/2035 (e)		102		81
7.25%, 5/20/2014		60	62					474
8.13%, 5/20/2019		15	15
				Home Equity - Sequential (0.09%)
Capital One Bank USA NA				Countrywide Asset-Backed Certificates
6.50%, 6/13/2013		24	24	5.39%, 4/25/2036		63		24
			101

See accompanying notes

116

Schedule of Investments Balanced Account June 30, 2009 (unaudited)

	Principal						Principal
	Amount		Value				Amount	Value
	(000's)		(000's)				(000's)	(000's)
BONDS (continued)					BONDS (continued)
Home Equity - Sequential (continued)					Medical - Hospitals (continued)
Countrywide Asset-Backed Certificates					HCA Inc/DE
(continued)					9.25%, 11/15/2016	$ 60 $			59
5.51%, 8/25/2036	$ 58 $			22	8.50%, 4/15/2019 (f)		5		5
				46					84
Independent Power Producer (0.05%)					Medical - Outpatient & Home Medical Care (0.05%)
NRG Energy Inc					Select Medical Corp
7.25%, 2/ 1/2014		25		24	7.63%, 2/ 1/2015		30		24
8.50%, 6/15/2019		5		5
				29	Medical - Wholesale Drug Distribution (0.07%)
Investment Companies (0.10%)					AmerisourceBergen Corp
					5.63%, 9/15/2012		40		39
Xstrata Finance Canada Ltd
5.80%, 11/15/2016 (f)		5		5
					Medical Laboratory & Testing Service (0.07%)
Xstrata Finance Dubai Ltd					Quest Diagnostics Inc
1.27%, 11/13/2009 (e)(f)		50		49	6.40%, 7/ 1/2017		10		10
				54	Roche Holdings Inc
Life & Health Insurance (0.64%)					6.00%, 3/ 1/2019 (f)		25		27
Lincoln National Corp									37
5.65%, 8/27/2012		20		19
					Medical Products (0.03%)
7.00%, 5/17/2066 (e)		25		16	Angiotech Pharmaceuticals Inc
Pacific Life Insurance Co					4.42%, 12/ 1/2013 (e)		20		15
9.25%, 6/15/2039 (f)	200			194
Prudential Financial Inc					Money Center Banks (0.18%)
7.38%, 6/15/2019		85		84	Comerica Bank
StanCorp Financial Group Inc					5.75%, 11/21/2016		5		4
6.88%, 10/ 1/2012		25		22	Unicredit Luxembourg Finance SA
				335	6.00%, 10/31/2017 (f)		100		90
Medical - Drugs (0.33%)									94
Axcan Intermediate Holdings Inc					Mortgage Backed Securities (7.00%)
9.25%, 3/ 1/2015		15		15	Banc of America Commercial Mortgage Inc
Elan Finance PLC/Elan Finance Corp					4.97%, 7/10/2043		40		14
4.88%, 11/15/2011 (e)		5		4	5.33%, 9/10/2045		100		96
7.75%, 11/15/2011		15		14	5.49%, 2/10/2051		25		18
Merck & Co Inc/NJ					6.35%, 2/10/2051 (e)		50		39
5.85%, 6/30/2039		10		10
					Banc of America Funding Corp
Novartis Securities Investment Ltd					0.60%, 7/20/2036 (e)		190		36
5.13%, 2/10/2019		5		5
					Bear Stearns Commercial Mortgage Securities
Schering-Plough Corp					0.60%, 5/11/2039 (e)(f)		407		4
5.55%, 12/ 1/2013 (e)		35		38
					5.47%, 6/11/2041		130		118
Wyeth
5.50%, 3/15/2013 (e)		80		86	Bella Vista Mortgage Trust
					0.56%, 5/20/2045 (d)(e)		98		38
				172
					Citigroup/Deutsche Bank Commercial
Medical - HMO (0.05%)					Mortgage Trust
Health Net Inc					5.89%, 11/15/2044		50		40
6.38%, 6/ 1/2017		15		11	0.62%, 10/15/2048 (d)(e)		2,307		35
Humana Inc					0.51%, 12/11/2049 (e)		1,694		19
7.20%, 6/15/2018		15		14	5.21%, 12/11/2049		175		160
				25	Commercial Mortgage Pass Through Certificates
					4.05%, 10/15/2037		137		137
Medical - Hospitals (0.16%)
Community Health Systems Inc					0.10%, 12/10/2046 (e)(f)		1,447		9
8.88%, 7/15/2015		20		20	5.25%, 12/10/2046		50		46

See accompanying notes

117

Schedule of Investments
Balanced Account
June 30, 2009 (unaudited)
	Principal				Principal
	Amount	Value			Amount	Value
	(000's)	(000's)			(000's)	(000's)
BONDS (continued)			BONDS (continued)
Mortgage Backed Securities (continued)			Mortgage Backed Securities (continued)
Commercial Mortgage Pass Through			JP Morgan Chase Commercial Mortgage
Certificates (continued)			Securities Corp (continued)
6.01%, 12/10/2049 (e)	$ 25 $	20	5.63%, 6/12/2041 (e)	$ 75 $			40
6.01%, 12/10/2049 (e)	100	18	0.32%, 1/15/2042 (e)(f)		1,350		14
Countrywide Alternative Loan Trust			6.07%, 4/15/2045 (e)		25		21
2.65%, 7/20/2035 (e)	37	16	5.59%, 5/12/2045 (e)		55		28
Countrywide Asset-Backed Certificates			5.30%, 5/15/2047 (d)(e)		105		91
0.71%, 4/25/2036 (e)	200	1	6.01%, 6/15/2049 (e)		30		14
Credit Suisse Mortgage Capital Certificates			6.40%, 2/12/2051 (e)(f)		55		12
6.02%, 6/15/2038 (e)	60	44
			5.88%, 2/15/2051		230		172
0.77%, 9/15/2039 (f)	1,398	26
			JP Morgan Mortgage Trust
5.47%, 9/15/2039	130	91	5.97%, 6/25/2036 (e)		19		16
0.86%, 12/15/2039 (e)	1,699	37	5.68%, 4/25/2037 (e)		55		31
CS First Boston Mortgage Securities Corp			LB-UBS Commercial Mortgage Trust
1.27%, 3/15/2036 (e)(f)	362	3	4.44%, 12/15/2029 (e)		100		96
0.43%, 5/15/2036 (e)(f)	548	3	0.49%, 3/15/2036 (e)(f)		400		9
0.76%, 7/15/2036 (e)(f)	594	7	1.23%, 3/15/2036 (e)(f)		276		4
4.95%, 7/15/2037	120	42	0.70%, 8/15/2036 (e)(f)		400		4
0.42%, 11/15/2037 (e)(f)	1,281	17	5.48%, 2/15/2040		210		65
8.11%, 9/15/2041 (e)	30	30	5.86%, 7/15/2040 (e)		95		69
Fannie Mae			6.45%, 7/17/2040 (e)		60		10
6.80%, 3/25/2039	29	30
			5.87%, 9/15/2045 (e)		70		54
6.44%, 4/25/2039 (b)	19	19
			Merrill Lynch Mortgage Trust
6.50%, 2/25/2047	29	31	5.79%, 5/12/2039 (e)		85		82
First Union National Bank Commercial			0.63%, 2/12/2042 (e)		1,045		9
Mortgage Securities Inc
8.09%, 5/17/2032	45	45	Merrill Lynch/Countrywide Commercial
			Mortgage Trust
Freddie Mac			5.94%, 6/12/2050 (e)		100		22
5.50%, 9/15/2031 (e)	100	104
			Morgan Stanley Capital I
GE Capital Commercial Mortgage Corp			0.57%, 6/12/2012 (e)		95		69
0.37%, 5/10/2014	2,736	21
			1.18%, 1/13/2041 (e)(f)		338		7
5.61%, 4/10/2017 (e)	135	57
			0.15%, 12/15/2043 (e)(f)		1,030		7
5.51%, 11/10/2045 (e)	60	19
			5.81%, 4/12/2049 (e)		70		51
Ginnie Mae
1.07%, 2/16/2047 (e)	538	25	5.81%, 4/12/2049 (e)		60		15
0.82%, 3/16/2047 (e)	480	24	Morgan Stanley REREMIC Trust
			5.81%, 8/12/2045 (b)(f)		220		189
Greenwich Capital Commercial Funding Corp
6.11%, 7/10/2038 (e)	70	36	Sequoia Mortgage Trust
			1.89%, 2/20/2034 (e)		64		35
0.51%, 3/10/2039 (d)(e)(f)	1,281	16
			Structured Asset Securities Corp
GS Mortgage Securities Corp II			5.50%, 6/25/2036 (e)		100		25
5.99%, 8/10/2045 (e)	95	72
			Wachovia Bank Commercial Mortgage Trust
Impac CMB Trust			0.38%, 11/15/2035 (f)		1,302		10
0.62%, 4/25/2035 (e)	18	6
			0.59%, 10/15/2041 (e)(f)		2,292		18
Impac Secured Assets CMN Owner Trust
0.59%, 3/25/2036 (e)	300	113	5.25%, 12/15/2043		65		57
Indymac Index Mortgage Loan Trust			5.48%, 12/15/2043		20		4
0.49%, 2/25/2037 (e)	160	55	5.60%, 12/15/2043		50		3
0.55%, 6/25/2037 (d)(e)	128	56	5.56%, 3/15/2045		25		21
JP Morgan Chase Commercial Mortgage			6.01%, 6/15/2045		140		110
Securities Corp			5.80%, 7/15/2045		100		51
5.29%, 9/12/2037 (e)	25	8	WAMU Commercial Mortgage Securities Trust
1.26%, 1/12/2039 (e)(f)	501	7	3.83%, 1/25/2035 (f)		20		19

See accompanying notes

118

Schedule of Investments
Balanced Account
June 30, 2009 (unaudited)
		Principal			Principal
		Amount	Value		Amount		Value
		(000's)	(000's)		(000's)		(000's)
BONDS (continued)				BONDS (continued)
Mortgage Backed Securities (continued)				Oil Company - Exploration & Production
WaMu Mortgage Pass Through Certificates				(continued)
4.68%, 5/25/2035 (e)	$ 40 $		31	Chesapeake Energy Corp
0.84%, 1/25/2045 (e)		75	10	7.63%, 7/15/2013	$ 20 $			19
0.69%, 11/25/2045 (d)(e)		72	57	7.25%, 12/15/2018		10		9
0.53%, 8/25/2046 (e)		225	92	Compton Petroleum Finance Corp
				7.63%, 12/ 1/2013		10		6
Washington Mutual Alternative Mortgage
Pass-Through Certificates				Denbury Resources Inc
0.59%, 6/25/2046 (e)		154	22	9.75%, 3/ 1/2016		15		15
			3,674	Devon Energy Corp
				6.30%, 1/15/2019		15		16
Multi-Line Insurance (0.19%)				OPTI Canada Inc
CNA Financial Corp				7.88%, 12/15/2014		5		3
6.00%, 8/15/2011		40	38	PetroHawk Energy Corp
Genworth Financial Inc				9.13%, 7/15/2013		20		20
6.15%, 11/15/2066 (e)		45	20	10.50%, 8/ 1/2014 (f)		5		5
ING Groep NV				Petroleum Development Corp
5.78%, 12/ 8/2035		30	18	12.00%, 2/15/2018		10		8
MetLife Inc				Pioneer Natural Resources Co
7.72%, 2/15/2019		7	7	6.65%, 3/15/2017		15		13
XL Capital Ltd				Plains Exploration & Production Co
6.50%, 12/31/2049 (e)		30	15	7.75%, 6/15/2015		5		5
			98	10.00%, 3/ 1/2016		10		10
Multimedia (0.02%)				Quicksilver Resources Inc
News America Inc				11.75%, 1/ 1/2016		5		5
7.85%, 3/ 1/2039 (f)		5	5	Swift Energy Co
Quebecor Media Inc				7.13%, 6/ 1/2017		25		18
7.75%, 3/15/2016		5	5					167
			10	Oil Company - Integrated (0.08%)
Music (0.05%)				Suncor Energy Inc
WMG Acquisition Corp				6.50%, 6/15/2038		45		42
7.38%, 4/15/2014		15	12
WMG Holdings Corp				Oil Refining & Marketing (0.04%)
0.00%, 12/15/2014 (a)(e)		20	16	Tesoro Corp
			28	6.63%, 11/ 1/2015		10		9
				Valero Energy Corp
Mutual Insurance (0.06%)				6.63%, 6/15/2037		15		13
Liberty Mutual Group Inc								22
7.00%, 3/15/2037 (e)(f)		35	20
10.75%, 6/15/2058 (e)(f)		15	11	Paper & Related Products (0.06%)
			31	Cascades Inc
				7.25%, 2/15/2013		5		4
Oil - Field Services (0.19%)				International Paper Co
Weatherford International Ltd				9.38%, 5/15/2019		25		26
9.63%, 3/ 1/2019		85	100					30
Oil & Gas Drilling (0.07%)				Pharmacy Services (0.05%)
Pride International Inc				Express Scripts Inc
7.38%, 7/15/2014		15	15	6.25%, 6/15/2014		20		21
8.50%, 6/15/2019		20	20	Omnicare Inc
			35	6.88%, 12/15/2015		5		5
								26
Oil Company - Exploration & Production (0.32%)
Anadarko Petroleum Corp
6.95%, 6/15/2019		15	15

See accompanying notes

119

Schedule of Investments
Balanced Account
June 30, 2009 (unaudited)
	Principal				Principal
	Amount		Value		Amount	Value
	(000's)		(000's)		(000's)	(000's)
BONDS (continued)				BONDS (continued)
Physician Practice Management (0.02%)				Regional Banks (continued)
US Oncology Inc				SunTrust Preferred Capital I
10.75%, 8/15/2014	$ 10 $		10	5.85%, 12/31/2049 (e)	$ 30 $		20
							152
Pipelines (0.30%)
Copano Energy LLC / Copano Energy Finance				REITS - Healthcare (0.04%)
Corp				Nationwide Health Properties Inc
8.13%, 3/ 1/2016		21	20	6.50%, 7/15/2011	15		15
7.75%, 6/ 1/2018		5	5	Ventas Realty LP / Ventas Capital Corp
DCP Midstream LLC				6.50%, 6/ 1/2016	5		4
9.75%, 3/15/2019 (f)		25	28				19
Energy Transfer Partners LP				REITS - Mortgage (0.12%)
9.00%, 4/15/2019		10	11	iStar Financial Inc
Kinder Morgan Energy Partners LP				8.00%, 3/15/2011 (f)	47		41
6.85%, 2/15/2020		15	15	5.85%, 3/15/2017	55		22
6.95%, 1/15/2038		10	10				63
Magellan Midstream Partners LP
6.55%, 7/15/2019		20	21	REITS - Office Property (0.09%)
MarkWest Energy Partners LP / MarkWest				Brandywine Operating Partnership LP
Energy Finance Corp				5.63%, 12/15/2010	27		26
8.75%, 4/15/2018		5	4	HRPT Properties Trust
Regency Energy Partners LP/Regency Energy				1.22%, 3/16/2011 (e)	25		22
Finance Corp							48
8.38%, 12/15/2013		33	32
TransCanada Pipelines Ltd				REITS - Regional Malls (0.03%)
6.20%, 10/15/2037		10	10	Simon Property Group LP
Transportadora de Gas del Sur SA				4.60%, 6/15/2010	15		15
7.88%, 5/14/2017 (f)		6	4
			160	REITS - Warehouse & Industrial (0.19%)
				ProLogis
Property & Casualty Insurance (0.08%)				0.91%, 8/24/2009 (e)	100		98
Travelers Cos Inc/The
6.25%, 3/15/2067 (e)		30	24	Rental - Auto & Equipment (0.02%)
WR Berkley Corp				H&E Equipment Services Inc
6.25%, 2/15/2037		30	21	8.38%, 7/15/2016	10		8
			45	Hertz Corp/The
				8.88%, 1/ 1/2014	5		5
Publishing - Periodicals (0.02%)							13
Nielsen Finance LLC / Nielsen Finance Co
10.00%, 8/ 1/2014		5	5	Retail - Auto Parts (0.13%)
11.50%, 5/ 1/2016 (f)		5	5	AutoZone Inc
			10	5.75%, 1/15/2015 (c)(e)	70		70
Real Estate Operator & Developer (0.04%)				Retail - Discount (0.06%)
Regency Centers LP				Dollar General Corp
8.45%, 9/ 1/2010		20	20	11.88%, 7/15/2017	10		11
				Target Corp
Regional Banks (0.29%)				6.50%, 10/15/2037	10		10
BAC Capital Trust XIII				7.00%, 1/15/2038	8		8
1.03%, 3/15/2043 (e)		75	33				29
BAC Capital Trust XIV
5.63%, 3/15/2043 (e)		34	17	Retail - Drug Store (0.07%)
Capital One Financial Corp				CVS Pass-Through Trust
5.70%, 9/15/2011		30	30	8.35%, 7/10/2031 (f)	35		36
PNC Funding Corp
6.70%, 6/10/2019		50	52

See accompanying notes

120

Schedule of Investments Balanced Account June 30, 2009 (unaudited)

	Principal					Principal
	Amount		Value			Amount	Value
	(000's)		(000's)			(000's)	(000's)
BONDS (continued)					BONDS (continued)
Retail - Restaurants (0.10%)					Steel - Producers (continued)
Darden Restaurants Inc					Steel Dynamics Inc
6.80%, 10/15/2037 (e)	$ 15 $			13	8.25%, 4/15/2016 (e)(f)	$ 15 $		14
Yum! Brands Inc								61
6.25%, 3/15/2018		40		41
					Supranational Bank (0.02%)
				54
					Corp Andina de Fomento
Rubber - Tires (0.04%)					8.13%, 6/ 4/2019	11		12
Goodyear Tire & Rubber Co/The
8.63%, 12/ 1/2011		15		15	Telecommunication Services (0.18%)
10.50%, 5/15/2016		5		5	Fairpoint Communications Inc
				20	13.13%, 4/ 1/2018	10		2
					MasTec Inc
Satellite Telecommunications (0.15%)					7.63%, 2/ 1/2017	10		9
DigitalGlobe Inc					Maxcom Telecomunicaciones SAB de CV
10.50%, 5/ 1/2014 (f)		15		15	11.00%, 12/15/2014	5		4
Intelsat Bermuda Ltd					Qwest Corp
11.25%, 2/ 4/2017 (e)(f)		20		18	7.88%, 9/ 1/2011	60		60
Intelsat Subsidiary Holding Co Ltd					Telcordia Technologies Inc
8.88%, 1/15/2015 (f)		25		24	4.88%, 7/15/2012 (d)(e)(f)	15		11
8.88%, 1/15/2015		10		10	West Corp
Telesat Canada/Telesat LLC					9.50%, 10/15/2014	10		9
11.00%, 11/ 1/2015 (f)		10		10				95
				77
					Telephone - Integrated (1.34%)
Sovereign (0.25%)					AT&T Inc
Brazilian Government International Bond					6.15%, 9/15/2034	55		52
8.88%, 10/14/2019		25		31	France Telecom SA
Colombia Government International Bond					4.38%, 7/ 8/2014 (c)	40		40
8.25%, 12/22/2014		10		11	5.38%, 7/ 8/2019 (c)	20		20
Mexico Government International Bond					Koninklijke KPN NV
8.13%, 12/30/2019		10		12	8.38%, 10/ 1/2030	15		17
Republic of Peru					Level 3 Financing Inc
7.13%, 3/30/2019		5		5	9.25%, 11/ 1/2014	25		21
Russian Foreign Bond - Eurobond					Sprint Nextel Corp
7.50%, 3/31/2030 (f)		38		38	1.00%, 6/28/2010 (e)	15		14
Turkey Government International Bond					Telecom Italia Capital SA
7.00%, 6/ 5/2020		10		10	1.51%, 2/ 1/2011 (e)	25		24
Venezuela Government International Bond					1.72%, 7/18/2011 (e)	45		43
8.50%, 10/ 8/2014		20		14	5.25%, 11/15/2013	110		108
13.63%, 8/15/2018		10		9	7.18%, 6/18/2019	95		96
				130	Telefonica Emisiones SAU
Special Purpose Entity (0.09%)					4.95%, 1/15/2015 (c)	55		56
AES Red Oak LLC					6.22%, 7/ 3/2017	10		11
8.54%, 11/30/2019		8		7	5.88%, 7/15/2019 (c)	45		47
Goldman Sachs Capital I					7.05%, 6/20/2036	30		33
6.35%, 2/15/2034		40		32	Verizon Communications Inc
Goldman Sachs Capital II					6.35%, 4/ 1/2019	100		104
5.79%, 12/29/2049 (e)		10		6	Windstream Corp
				45	8.63%, 8/ 1/2016	20		19
Steel - Producers (0.12%)								705
Ispat Inland ULC					Theaters (0.02%)
9.75%, 4/ 1/2014		45		47	AMC Entertainment Inc
					11.00%, 2/ 1/2016	5		5

See accompanying notes

121

Schedule of Investments Balanced Account June 30, 2009 (unaudited)

		Principal				Principal
		Amount	Value			Amount	Value
		(000's)	(000's)			(000's)	(000's)
BONDS (continued)				U.S. GOVERNMENT & GOVERNMENT AGENCY
Theaters (continued)				OBLIGATIONS (continued)
Cinemark USA Inc				Federal Home Loan Mortgage Corporation
8.63%, 6/15/2019 (f)	$ 5 $		5	(FHLMC) (continued)
				4.50%, 6/ 1/2039	$ 375 $		374
			10	4.68%, 8/ 1/2035 (e)		25	26
Tobacco (0.47%)				4.80%, 8/ 1/2035 (e)		113	117
Altria Group Inc				6.49%, 7/ 1/2036 (e)		64	67
9.70%, 11/10/2018		105	120	5.69%, 6/ 1/2037 (e)		70	73
9.25%, 8/ 6/2019		45	51				2,837
Reynolds American Inc
7.25%, 6/ 1/2013		75	77	Federal National Mortgage Association (FNMA) (7.86%)
			248	5.00%, 7/ 1/2024 (g)		245	253
				4.00%, 7/ 1/2039 (g)		50	48
Transport - Rail (0.01%)				5.00%, 7/ 1/2039 (g)		910	926
CSX Corp
6.25%, 3/15/2018		5	5	5.50%, 7/ 1/2039 (g)		1,320	1,362
				6.00%, 5/ 1/2010		1	1
Wire & Cable Products (0.01%)				4.50%, 9/ 1/2010		61	62
Coleman Cable Inc				4.50%, 1/ 1/2020		33	35
9.88%, 10/ 1/2012		10	8	6.00%, 2/ 1/2025		108	114
				6.50%, 2/ 1/2032		31	34
Wireless Equipment (0.03%)				3.96%, 6/ 1/2034 (e)		21	21
Crown Castle International Corp				4.31%, 7/ 1/2034 (e)		12	12
9.00%, 1/15/2015		5	5	4.31%, 12/ 1/2034 (e)		32	34
Nokia OYJ
5.38%, 5/15/2019		10	10	4.59%, 3/ 1/2035 (e)		39	41
			15	5.50%, 7/ 1/2035		180	187
				5.70%, 2/ 1/2036 (e)		31	33
TOTAL BONDS		$ 14,476		6.50%, 4/ 1/2036		33	36
U.S. GOVERNMENT & GOVERNMENT AGENCY				6.50%, 8/ 1/2036		49	52
OBLIGATIONS (19.28%)				5.48%, 1/ 1/2037 (e)		39	40
Federal Home Loan Mortgage Corporation				6.00%, 1/ 1/2037		149	156
(FHLMC) (5.40%)
4.50%, 7/ 1/2024 (g)		125	127	6.50%, 1/ 1/2037		126	134
5.00%, 7/ 1/2024 (g)		115	119	5.71%, 4/ 1/2037 (e)		88	93
5.00%, 7/ 1/2039 (g)		165	168	6.00%, 4/ 1/2037		182	191
5.50%, 7/ 1/2039 (g)		430	444	5.74%, 5/ 1/2037 (e)		72	75
6.50%, 6/ 1/2017		50	53	6.50%, 7/ 1/2037		18	19
5.50%, 12/ 1/2022		63	65	6.50%, 7/ 1/2037		19	20
7.00%, 12/ 1/2027		34	37	6.50%, 2/ 1/2038		22	24
6.00%, 1/ 1/2029		43	46	6.00%, 3/ 1/2038		43	45
7.50%, 8/ 1/2030		3	4	5.00%, 4/ 1/2039		80	81
8.00%, 12/ 1/2030		46	50				4,129
7.50%, 1/ 1/2031		10	10	Government National Mortgage Association
6.50%, 5/ 1/2031		11	12	(GNMA) (1.05%)
6.50%, 6/ 1/2031		37	39	5.50%, 7/ 1/2039 (g)		180	186
6.50%, 11/ 1/2031		14	15	6.00%, 1/15/2029		83	88
5.00%, 12/ 1/2033		344	352	7.00%, 5/15/2031		16	18
6.50%, 10/ 1/2035		64	68	6.00%, 6/15/2032		13	13
6.00%, 10/ 1/2036 (e)		74	77	5.00%, 2/15/2039		174	178
6.00%, 8/ 1/2037		163	170	6.00%, 9/20/2026		40	41
6.00%, 8/ 1/2037		158	165	7.00%, 2/20/2032		24	26
6.00%, 1/ 1/2038 (e)		30	32				550
6.00%, 7/ 1/2038		121	127

See accompanying notes

122

Schedule of Investments Balanced Account June 30, 2009 (unaudited)

		Principal		(a)	Non-Income Producing Security
		Amount	Value	(b)	Market value is determined in accordance with procedures established in
		(000's)	(000's)		good faith by the Board of Directors. At the end of the period, the value
					of these securities totaled $347 or 0.66% of net assets.
U.S. GOVERNMENT & GOVERNMENT AGENCY				(c)	Security purchased on a when-issued basis.
OBLIGATIONS (continued)				(d)	Security is Illiquid
U.S. Treasury (4.97%)
1.88%, 4/30/2014	$ 15 $		15	(e)	Variable Rate. Rate shown is in effect at June 30, 2009.
				(f)	Security exempt from registration under Rule 144A of the Securities Act
2.25%, 5/31/2014		1,000	987		of 1933. These securities may be resold in transactions exempt from
2.63%, 2/29/2016		350	340		registration, normally to qualified institutional buyers. Unless otherwise
4.00%, 8/15/2018		80	83		indicated, these securities are not considered illiquid. At the end of the
2.75%, 2/15/2019		15	14		period, the value of these securities totaled $2,134 or 4.06% of net
					assets.
3.13%, 5/15/2019		320	309	(g)	Security was purchased in a "to-be-announced" ("TBA") transaction.
8.13%, 8/15/2019		175	240		See Notes to Financial Statements.
6.00%, 2/15/2026		305	368	(h)	Rate shown is the discount rate.
6.25%, 5/15/2030		150	190
4.50%, 5/15/2038		5	5	Unrealized Appreciation (Depreciation)
3.50%, 2/15/2039		70	60	The net federal income tax unrealized appreciation (depreciation) and federal tax cost
				of investments held by the account as of the period end were as follows:
			2,611
TOTAL U.S. GOVERNMENT & GOVERNMENT				Unrealized Appreciation		$ 3,108
AGENCY OBLIGATIONS		$ 10,127		Unrealized Depreciation			(10,018)
SHORT TERM INVESTMENTS (0.49%)				Net Unrealized Appreciation (Depreciation)			(6,910)
Commercial Paper (0.49%)				Cost for federal income tax purposes			63,324
Investment in Joint Trading Account; Federal				All dollar amounts are shown in thousands (000's)
Home Loan Bank Discount Notes
0.01%, 7/ 1/2009 (h)	$ 256 $		256		Portfolio Summary (unaudited)
TOTAL SHORT TERM INVESTMENTS		$ 256		Sector			Percent
REPURCHASE AGREEMENTS (1.15%)				Mortgage Securities			21.80%
				Financial			16.22%
Diversified Banking Institutions (1.15%)				Consumer, Non-cyclical			15.24%
Investment in Joint Trading Account; Bank				Communications			9.86%
of America Repurchase Agreement; 0.05%				Energy			8.07%
dated 06/30/09 maturing 07/01/09				Industrial			7.53%
(collateralized by Sovereign Agency				Technology			6.89%
Issues; $280,000; 0.00% - 6.25%; dated				Consumer, Cyclical			6.64%
07/10/09 - 02/16/17)	$ 275 $		275	Government			5.24%
Investment in Joint Trading Account; Credit				Asset Backed Securities			3.74%
Suisse Repurchase Agreement; 0.02%				Utilities			3.33%
dated 06/30/09 maturing 07/01/09				Basic Materials			2.67%
(collateralized by US Treasury Note;				Exchange Traded Funds			0.15%
$112,000; 0.88%; dated 03/31/11)		110	110	Diversified			0.05%
				Liabilities in Excess of Other Assets, Net			(7.43%)
Investment in Joint Trading Account;
Deutsche Bank Repurchase Agreement;				TOTAL NET ASSETS			100.00%
0.08% dated 06/30/09 maturing 07/01/09					Other Assets Summary (unaudited)
(collateralized by Sovereign Agency
Issues; $112,000; 3.12% - 4.63%; dated				Asset Type			Percent
12/06/10 - 10/10/12)		110	110	Futures			0.71%
Investment in Joint Trading Account;
Morgan Stanley Repurchase Agreement;
0.03% dated 06/30/09 maturing 07/01/09
(collateralized by Sovereign Agency
Issues; $112,000; 2.38% - 5.00%; dated
02/25/11-06/25/14)		110	110
			605
TOTAL REPURCHASE AGREEMENTS		$ 605
Total Investments		$ 56,414
Liabilities in Excess of Other Assets, Net - (7.43)%			(3,904)
TOTAL NET ASSETS - 100.00%		$ 52,510

See accompanying notes

123

	Schedule of Investments
	Balanced Account
	June 30, 2009 (unaudited)
	Futures Contracts
				Current		Unrealized
			Original	Market		Appreciation/
Type	Buy/Sell	Contracts	Value	Value		(Depreciation)
Russell 2000 Mini; September 2009	Buy	1	$ 50	$ 51		$ 1
S&P 500 eMini; September 2009	Buy	7	328		320	(8)
All dollar amounts are shown in thousands (000's)

See accompanying notes

124

     Schedule of Investments Bond & Mortgage Securities Account June 30, 2009 (unaudited)

	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (0.00%)			PREFERRED STOCKS (continued)
Independent Power Producer (0.00%)			Investment Management & Advisory Services
Dynegy Inc (a)	71 $	-	(continued)
			Deutsche Bank Contingent Capital Trust II	13,000 $		234
TOTAL COMMON STOCKS	$ -
						316
PREFERRED STOCKS (3.22%)
Cable/Satellite TV (0.11%)			Life & Health Insurance (0.15%)
Comcast Corp 6.63%	8,200	177	Delphi Financial Group Inc 7.38%	3,400		51
Comcast Corp 7.00%; Series B	8,437	193	Delphi Financial Group Inc 8.00%	4,100		75
		370	Lincoln National Corp 6.75%	2,900		52
			PLC Capital Trust IV	2,100		41
Commercial Banks (0.18%)			PLC Capital Trust V	6,400		105
ASBC Capital I	7,400	142	Protective Life Corp	6,800		129
Barclays Bank PLC 7.10%	6,150	113	Torchmark Capital Trust III	1,100		23
BB&T Capital Trust V	6,600	168				476
M&T Capital Trust IV	4,200	104
National Bank of Greece SA	2,100	45	Money Center Banks (0.12%)
		572	National Westminster Bank Plc	4,650		61
			Santander Finance Preferred SA Unipersonal
Diversified Banking Institutions (0.04%)			6.50%	11,100		200
Royal Bank of Scotland Group PLC 6.35%;			Santander Finance Preferred SA Unipersonal
Series N	1,950	21	6.80%	5,100		98
Royal Bank of Scotland Group PLC 6.60%;			UBS Preferred Funding Trust IV	2,400		29
Series S	8,100	90				388
Royal Bank of Scotland Group PLC 6.75%;
Series Q	1,900	22	Multi-Line Insurance (0.25%)
		133	Aegon NV 6.375%	11,700		169
			Allianz SE	9,700		218
Diversified Financial Services (0.07%)			ING Groep NV 6.38%	4,300		66
Citigroup Capital X	15,300	215
			ING Groep NV 7.05%	8,500		140
Harris Preferred Capital Corp	1,000	21
			ING Groep NV 7.38%	3,400		60
		236
			ING Groep NV 8.50%	8,900		173
Electric - Integrated (0.44%)						826
Alabama Power Co - Series 2007B	7,500	185
			Multimedia (0.03%)
Entergy Texas Inc (a)	5,500	139
			Viacom Inc	4,700		98
FPL Group Capital Inc 7.45%	13,300	346
Georgia Power Co 5.90%	12,600	313	Property & Casualty Insurance (0.16%)
PPL Capital Funding Inc	8,000	194	Arch Capital Group Ltd 7.88%	3,900		80
Xcel Energy Inc 7.60%	9,300	236	Berkley W R Capital Trust	14,800		331
		1,413	Markel Corp	4,500		108
Fiduciary Banks (0.08%)						519
BNY Capital V	11,400	256	Regional Banks (0.54%)
			BAC Capital Trust II	800		15
Finance - Consumer Loans (0.04%)			Bank One Capital VI	4,900		113
HSBC Finance Corp 6.88%	6,600	141
			Fleet Capital Trust VIII	11,800		215
Finance - Investment Banker & Broker (0.13%)			KeyCorp Capital IX	8,200		139
JP Morgan Chase Capital XXVI	9,400	236	PNC Capital Trust D	16,400		329
Morgan Stanley Capital Trust IV	3,300	63	SunTrust Capital IX	4,600		98
Morgan Stanley Capital Trust V	7,000	126	USB Capital VI	13,900		276
		425	USB Capital XII	3,800		80
			Wachovia Capital Trust IV	2,500		47
Investment Management & Advisory Services (0.10%)			Wachovia Capital Trust IX	13,000		246
Ameriprise Financial Inc (a)	3,800	82	Wells Fargo Capital VII	6,000		117

See accompanying notes

125

     Schedule of Investments Bond & Mortgage Securities Account

June 30, 2009 (unaudited)

	Shares	Value			Shares	Value
	Held	(000's)			Held	(000's)
PREFERRED STOCKS (continued)			PREFERRED STOCKS (continued)
Regional Banks (continued)			Special Purpose Entity (continued)
Wells Fargo Capital XIV	2,500 $	63	SATURNS 2004-2 5.75%; Series GS		400 $	7
		1,738				623
Reinsurance (0.08%)			Telephone - Integrated (0.08%)
Everest Re Capital Trust II	3,000	60	AT&T Inc		6,500	166
PartnerRe Ltd 6.75%	2,600	53	Telephone & Data Systems Inc 6.63%		4,600	85
RenaissanceRe Holdings Ltd - Series C	2,500	45				251
RenaissanceRe Holdings Ltd - Series D	4,900	95	Television (0.03%)
		253	CBS Corp 6.75%		5,200	89
REITS - Apartments (0.03%)			TOTAL PREFERRED STOCKS		$ 10,402
BRE Properties Inc - Series C	4,900	89			Principal
					Amount	Value
REITS - Diversified (0.12%)					(000's)	(000's)
Duke Realty Corp 6.60%	15,000	200
			BONDS (67.70%)
PS Business Parks Inc - Series H	5,800	107
			Advertising Agencies (0.04%)
PS Business Parks Inc - Series I	2,000	36
			Interpublic Group of Cos Inc
Vornado Realty Trust - Series I	3,500	65	6.25%, 11/15/2014	$ 165		144
		408
REITS - Office Property (0.03%)			Aerospace & Defense Equipment (0.09%)
HRPT Properties Trust - Series B	5,400	97	GenCorp Inc
			9.50%, 8/15/2013		398	295
REITS - Shopping Centers (0.11%)
Kimco Realty Corp 7.75%	12,200	252	Airlines (0.61%)
			American Airlines Pass Through Trust 2001-02
Weingarten Realty Investors 6.50%	6,000	94	7.86%, 10/ 1/2011 (c)		180	169
		346	American Airlines Pass Through Trust 2009-1A
REITS - Single Tenant (0.07%)			10.38%, 7/ 2/2019 (c)(d)		845	845
Realty Income Corp - Series D	10,500	221	Delta Air Lines Inc
			7.11%, 9/18/2011 (b)(c)		250	235
REITS - Storage (0.01%)			7.92%, 5/18/2012 (c)		300	276
Public Storage Inc 7.00%; Series N	1,200	25	6.72%, 1/ 2/2023 (c)		371	295
			Southwest Airlines Co 2007-1 Pass Through
REITS - Warehouse & Industrial (0.03%)			Trust
AMB Property Corp - Series P	3,945	73	6.15%, 8/ 1/2022 (c)		152	141
First Industrial Realty Trust Inc - Series J	1,800	20				1,961
		93	Apparel Manufacturers (0.02%)
Special Purpose Entity (0.19%)			Rafaella Apparel Group Inc
Corporate-Backed Trust Certificates - Series			11.25%, 6/15/2011		268	51
BMY	2,800	65
CORTS Trust II for Bellsouth			Asset Backed Securities (3.02%)
Telecommunications (b)	1,900	42	Ameriquest Mortgage Securities Inc
Deutsche Bank Capital Funding Trust VIII	2,832	52	0.61%, 3/25/2035 (e)		72	56
Deutsche Bank Capital Funding Trust X	3,400	65	0.54%, 7/25/2035 (e)		22	22
Merrill Lynch Capital Trust I	6,200	101	Chase Funding Mortgage Loan Asset-Backed
			Certificates
Merrill Lynch Capital Trust II	2,500	40	1.06%, 9/25/2033 (e)		268	72
PreferredPlus TR-CCR1 5.75%; Series GSG2	1,200	22	Countrywide Asset-Backed Certificates
PreferredPlus TR-CCR1 6.00%; Series GSC3	1,800	32	0.83%, 6/25/2035 (e)		720	529
PreferredPlus TR-CCR1 6.00%; Series GSC4	3,900	68	0.56%, 3/25/2036 (b)(e)		995	519
PreferredPlus TR-CCR1 6.00%; Series GSG1	5,200	97	0.48%, 6/25/2037 (e)		1,425	247
SATURNS 2004-06 6.00%; Series GS	1,800	32	0.44%, 11/25/2037 (e)		985	513

See accompanying notes

126

Schedule of Investments
Bond & Mortgage Securities Account
June 30, 2009 (unaudited)
		Principal				Principal
		Amount	Value			Amount	Value
		(000's)	(000's)			(000's)	(000's)
BONDS (continued)				BONDS (continued)
Asset Backed Securities (continued)				Automobile Sequential (continued)
Countrywide Home Equity Loan Trust				Ford Credit Auto Owner Trust
0.55%, 12/15/2035 (e)	$ 630 $		243	5.30%, 6/15/2012	$ 600 $		581
0.52%, 5/15/2036 (e)		585	98	5.60%, 10/15/2012		240	213
First Horizon Asset Back Trust				5.69%, 11/15/2012 (e)		180	169
0.47%, 10/25/2034 (e)		576	140	Hyundai Auto Receivables Trust
First-Citizens Home Equity Loan LLC				0.72%, 1/17/2012 (e)		234	233
0.53%, 9/15/2022 (e)(f)		261	147	WFS Financial Owner Trust
GMAC Mortgage Corp Loan Trust				4.50%, 5/17/2013		410	410
0.49%, 8/25/2035 (e)		771	211				2,879
0.52%, 11/25/2036 (e)		1,455	444
				Beverages - Non-Alcoholic (0.15%)
Great America Leasing Receivables
5.39%, 9/15/2011 (f)		255	260	Coca-Cola Enterprises Inc
				4.25%, 3/ 1/2015		130	132
JP Morgan Mortgage Acquisition Corp
0.48%, 4/25/2036 (e)		1,501	960	Dr Pepper Snapple Group Inc
				6.82%, 5/ 1/2018		320	338
5.45%, 11/25/2036		1,225	1,040
							470
0.39%, 3/25/2037 (e)		348	276
0.46%, 3/25/2037 (e)		720	259	Beverages - Wine & Spirits (0.05%)
Lehman XS Trust				Constellation Brands Inc
0.51%, 9/25/2035 (e)		346	335	8.38%, 12/15/2014		160	160
Long Beach Mortgage Loan Trust
0.84%, 6/25/2034 (e)		170	87	Brewery (1.78%)
0.46%, 7/25/2036 (e)		1,245	338	Anheuser-Busch InBev Worldwide Inc
0.42%, 10/25/2036 (b)(e)		2,300	571	5.38%, 11/15/2014 (f)		2,505	2,527
0.48%, 12/25/2036 (e)		1,600	357	7.75%, 1/15/2019 (f)		410	449
Marriott Vacation Club Owner Trust				6.88%, 11/15/2019 (f)		2,685	2,784
5.52%, 5/20/2029 (e)(f)		242	192				5,760
MSDWCC Heloc Trust				Broadcasting Services & Programming (0.03%)
0.50%, 7/25/2017 (e)		159	67	Grupo Televisa SA
SACO I Inc				6.63%, 3/18/2025		100	91
0.45%, 6/25/2036 (b)(e)		603	261
Swift Master Auto Receivables Trust				Building & Construction - Miscellaneous (0.05%)
0.42%, 6/15/2012 (e)		600	561	Dycom Investments Inc
Washington Mutual Asset-Backed Certificates				8.13%, 10/15/2015		200	168
0.49%, 4/25/2036 (e)		1,400	928
			9,733	Building Products - Cement & Aggregate (0.30%)
				CRH America Inc
Auto/Truck Parts & Equipment - Original (0.12%)				6.40%, 10/15/2033		180	135
Stanadyne Corp				Martin Marietta Materials Inc
10.00%, 8/15/2014		100	78	1.19%, 4/30/2010 (e)		855	842
Tenneco Inc							977
10.25%, 7/15/2013		217	205
8.13%, 11/15/2015		125	99	Building Products - Wood (0.09%)
			382	Masco Corp
				0.94%, 3/12/2010 (e)		300	289
Automobile Sequential (0.89%)
AmeriCredit Automobile Receivables Trust				Cable/Satellite TV (2.26%)
0.34%, 4/ 6/2012 (e)		192	188	Charter Communications Operating LLC /
Capital Auto Receivables Asset Trust				Charter Communications Operating Capital
0.69%, 6/15/2010 (e)		19	19	10.00%, 4/30/2012 (f)		160	154
5.52%, 3/15/2011 (e)		670	530	10.38%, 4/30/2014 (e)(f)		15	14
Capital One Auto Finance Trust				Comcast Corp
0.33%, 7/15/2011 (e)		138	137	5.70%, 7/ 1/2019		1,745	1,729
0.36%, 10/15/2012 (e)		411	399	6.55%, 7/ 1/2039		1,835	1,832

See accompanying notes

127

Schedule of Investments
Bond & Mortgage Securities Account
June 30, 2009 (unaudited)
		Principal			Principal
		Amount	Value		Amount	Value
		(000's)	(000's)		(000's)	(000's)
BONDS (continued)				BONDS (continued)
Cable/Satellite TV (continued)				Cellular Telecommunications (continued)
COX Communications Inc				iPCS Inc
6.75%, 3/15/2011	$ 395 $		417	3.15%, 5/ 1/2013 (e)	$ 85 $	67
5.50%, 10/ 1/2015		275	266	MetroPCS Wireless Inc
8.38%, 3/ 1/2039 (f)		735	820	9.25%, 11/ 1/2014	100	99
CSC Holdings Inc/United States				Nextel Communications Inc
8.50%, 4/15/2014 (f)		40	40	7.38%, 8/ 1/2015	560	447
DirecTV Holdings LLC/DirecTV Financing Co				Rogers Wireless Inc
8.38%, 3/15/2013		115	115	6.38%, 3/ 1/2014	430	461
7.63%, 5/15/2016		235	229	VIP Finance Ireland Ltd for OJSC Vimpel
DISH DBS Corp				Communications
6.63%, 10/ 1/2014		260	240	9.13%, 4/30/2018 (f)	200	169
7.75%, 5/31/2015		285	271	Vodafone Group PLC
				0.97%, 6/15/2011 (e)	415	405
Kabel Deutschland GmbH
10.63%, 7/ 1/2014		285	294	0.94%, 2/27/2012 (e)	800	765
Rainbow National Services LLC				5.45%, 6/10/2019	2,050	2,016
10.38%, 9/ 1/2014 (f)		140	145			5,426
Time Warner Cable Inc				Chemicals - Diversified (0.59%)
6.75%, 6/15/2039		475	462	Dow Chemical Co/The
UPC Holding BV				8.55%, 5/15/2019	1,045	1,047
9.88%, 4/15/2018 (f)		275	262	Huntsman LLC
			7,290	11.50%, 7/15/2012	700	709
Casino Hotels (0.32%)				Phibro Animal Health Corp
Ameristar Casinos Inc				10.00%, 8/ 1/2013 (f)	100	88
9.25%, 6/ 1/2014 (f)		60	61	Reichhold Industries Inc
Harrah's Operating Co Inc				9.00%, 8/15/2014 (f)	175	61
10.00%, 12/15/2018 (f)		42	24			1,905
10.00%, 12/15/2018 (f)		502	289	Chemicals - Specialty (0.04%)
Harrahs Operating Escrow LLC/Harrahs				Nalco Co
Escrow Corp				7.75%, 11/15/2011	25	25
11.25%, 6/ 1/2017 (f)		15	14	NewMarket Corp
MGM Mirage				7.13%, 12/15/2016	125	112
8.50%, 9/15/2010		325	295			137
13.00%, 11/15/2013 (f)		80	88
Wynn Las Vegas LLC / Wynn Las Vegas				Commercial Banks (1.92%)
Capital Corp				American Express Bank FSB
6.63%, 12/ 1/2014		293	252	5.50%, 4/16/2013	550	540
			1,023	Barclays Bank PLC
				6.75%, 5/22/2019	775	769
Casino Services (0.26%)				BOI Capital Funding No 2 LP
Choctaw Resort Development Enterprise				5.57%, 8/29/2049 (e)(f)	70	26
7.25%, 11/15/2019 (f)		332	189	CBA Capital Trust II
International Game Technology				6.02%, 3/15/2036 (f)	350	233
7.50%, 6/15/2019		530	535	Credit Suisse/New York NY
Scientific Games International Inc				3.45%, 7/ 2/2012	250	250
9.25%, 6/15/2019 (f)		70	70	HSBC Americas Capital Trust I
Snoqualmie Entertainment Authority				7.81%, 12/15/2026 (f)	850	770
9.13%, 2/ 1/2015 (f)		100	52	KeyBank NA
			846	1.17%, 11/ 3/2009 (e)	1,000	991
Cellular Telecommunications (1.68%)				M&I Marshall & Ilsley Bank
Alltel Corp				0.92%, 12/ 4/2012 (e)	1,100	765
7.00%, 7/ 1/2012		695	751	Nordea Bank Sweden AB
Cricket Communications Inc				8.95%, 11/29/2049 (f)	250	162
9.38%, 11/ 1/2014		250	246

See accompanying notes

128

Schedule of Investments
Bond & Mortgage Securities Account
June 30, 2009 (unaudited)
		Principal			Principal
		Amount	Value		Amount	Value
		(000's)	(000's)		(000's)	(000's)
BONDS (continued)				BONDS (continued)
Commercial Banks (continued)				Credit Card Asset Backed Securities
Rabobank Nederland NV				(continued)
11.00%, 12/29/2049 (e)(f)	$ 356 $		396	Bank One Issuance Trust
RSHB Capital SA for OJSC Russian				0.64%, 3/15/2012 (e)	$ 1,000 $	999
Agricultural Bank				Cabela's Master Credit Card Trust
9.00%, 6/11/2014 (f)		100	101	4.31%, 12/16/2013 (f)	540	547
Standard Chartered PLC				Discover Card Master Trust
5.50%, 11/18/2014 (f)		100	102	5.65%, 3/16/2020	462	463
Svenska Handelsbanken AB						2,854
4.88%, 6/10/2014 (f)		700	693	Data Processing & Management (0.03%)
VTB Capital SA				First Data Corp
6.88%, 5/29/2018 (f)		100	90	9.88%, 9/24/2015	150	106
Woori Bank
6.21%, 5/ 2/2037 (e)(f)		445	323	Distribution & Wholesale (0.04%)
			6,211	Wesco Distribution Inc
Commercial Services (0.04%)				7.50%, 10/15/2017	175	130
Iron Mountain Inc
8.00%, 6/15/2020		145	135	Diversified Banking Institutions (3.30%)
				Bank of America Corp
Computer Services (0.07%)				5.38%, 9/11/2012	300	301
Sungard Data Systems Inc				7.38%, 5/15/2014	2,290	2,366
10.25%, 8/15/2015		260	240	5.42%, 3/15/2017	235	195
				Citigroup Inc
Computers (0.22%)				6.50%, 8/19/2013	625	607
Dell Inc				5.00%, 9/15/2014	1,200	1,006
3.38%, 6/15/2012		255	259	8.50%, 5/22/2019	1,710	1,740
5.88%, 6/15/2019		230	235	GMAC LLC
Hewlett-Packard Co				7.75%, 1/19/2010 (f)	125	122
2.95%, 8/15/2012		225	227	6.88%, 9/15/2011 (f)	177	155
			721	6.00%, 12/15/2011 (f)	136	116
Computers - Memory Devices (0.09%)				6.63%, 5/15/2012 (f)	104	87
Seagate Technology HDD Holdings				Goldman Sachs Group Inc/The
6.80%, 10/ 1/2016		210	180	1.19%, 2/ 6/2012 (e)	500	477
Seagate Technology International				5.63%, 1/15/2017	580	551
10.00%, 5/ 1/2014 (f)		95	98	6.25%, 9/ 1/2017	275	272
			278	6.75%, 10/ 1/2037	258	229
Consumer Products - Miscellaneous (0.04%)				JP Morgan Chase & Co
Blyth Inc				5.25%, 5/ 1/2015	1,000	962
5.50%, 11/ 1/2013		150	116	Morgan Stanley
				5.55%, 4/27/2017	400	372
Containers - Metal & Glass (0.03%)				7.30%, 5/13/2019	850	881
Impress Holdings BV				Royal Bank of Scotland Group PLC
4.26%, 9/15/2013 (e)(f)		110	96	5.05%, 1/ 8/2015	200	157
				4.70%, 7/ 3/2018	77	51
Containers - Paper & Plastic (0.04%)						10,647
Intertape Polymer US Inc
8.50%, 8/ 1/2014		100	44	Diversified Financial Services (0.39%)
				Capmark Financial Group Inc
Norampac Industries Inc				3.61%, 5/10/2010 (e)	650	265
6.75%, 6/ 1/2013		110	94
				General Electric Capital Corp
			138	6.38%, 11/15/2067 (e)	955	637
Credit Card Asset Backed Securities (0.88%)				TNK-BP Finance SA
BA Credit Card Trust				7.50%, 3/13/2013 (f)	125	115
0.92%, 3/15/2012 (e)		850	845

See accompanying notes

129

     Schedule of Investments Bond & Mortgage Securities Account

June 30, 2009 (unaudited)

		Principal				Principal
		Amount	Value			Amount	Value
		(000's)	(000's)			(000's)	(000's)
BONDS (continued)				BONDS (continued)
Diversified Financial Services (continued)				Electric - Integrated (1.34%)
TNK-BP Finance SA (continued)				Baltimore Gas & Electric Co
6.63%, 3/20/2017 (f)	$ 300 $		237	5.90%, 10/ 1/2016	$ 255 $		255
			1,254	CMS Energy Corp
				8.75%, 6/15/2019		140	142
Diversified Manufacturing Operations (0.08%)
				Commonwealth Edison Co
Tyco International Finance SA				5.80%, 3/15/2018		65	66
8.50%, 1/15/2019		240	266
				Dominion Resources Inc/VA
Diversified Minerals (0.99%)				8.88%, 1/15/2019		375	447
Anglo American Capital PLC				Duke Energy Carolinas LLC
9.38%, 4/ 8/2014 (f)		290	315	6.10%, 6/ 1/2037		90	94
Rio Tinto Finance USA Ltd				E.ON International Finance BV
8.95%, 5/ 1/2014		215	239	6.65%, 4/30/2038 (f)		275	297
6.50%, 7/15/2018		285	285	EDF SA
				6.50%, 1/26/2019 (f)		210	230
9.00%, 5/ 1/2019		285	317	Jersey Central Power & Light Co
Teck Cominco Ltd				7.35%, 2/ 1/2019		425	467
7.00%, 9/15/2012		50	49	Mirant Americas Generation LLC
Teck Resources Ltd				8.30%, 5/ 1/2011		155	155
9.75%, 5/15/2014 (f)		300	311	Oncor Electric Delivery Co
10.25%, 5/15/2016 (f)		700	733	6.38%, 5/ 1/2012		375	396
10.75%, 5/15/2019 (f)		815	876	5.95%, 9/ 1/2013		795	827
Vale Overseas Ltd				Potomac Electric Power Co
6.25%, 1/23/2017		55	56	7.90%, 12/15/2038		200	247
			3,181	Texas Competitive Electric Holdings Co LLC
Diversified Operations (0.08%)				10.25%, 11/ 1/2015 (e)		820	510
Susser Holdings LLC / Susser Finance Corp				Virginia Electric & Power Co
10.63%, 12/15/2013		260	261	6.00%, 5/15/2037		200	207
							4,340
Diversified Operations & Commercial Services (0.03%)				Electronic Components - Miscellaneous (0.13%)
Aramark Corp				Communications & Power Industries Inc
8.50%, 2/ 1/2015		100	97	8.00%, 2/ 1/2012		225	217
Electric - Generation (0.61%)				NXP BV/NXP Funding LLC
				3.88%, 10/15/2013 (e)		175	70
AES Corp/The
9.75%, 4/15/2016 (f)		335	339	9.50%, 10/15/2015		375	133
CE Casecnan Water & Energy							420
11.95%, 11/15/2010		21	21	Electronics - Military (0.02%)
CE Generation LLC				L-3 Communications Corp
7.42%, 12/15/2018		145	135	7.63%, 6/15/2012		55	55
Edison Mission Energy
7.20%, 5/15/2019		275	205	Finance - Auto Loans (0.14%)
Elwood Energy LLC				Ford Motor Credit Co LLC
8.16%, 7/ 5/2026		412	343	7.38%, 10/28/2009		155	154
Indiantown Cogeneration LP				2.70%, 1/15/2010 (e)		190	181
9.26%, 12/15/2010		339	332	7.88%, 6/15/2010		110	104
Korea East-West Power Co Ltd							439
4.88%, 4/21/2011 (f)		105	105
Midwest Generation LLC				Finance - Commercial (0.57%)
8.56%, 1/ 2/2016		92	90	CIT Group Inc
Reliant Energy Mid-Atlantic Power Holdings				4.25%, 2/ 1/2010		140	126
LLC				0.76%, 3/12/2010 (e)		165	141
9.24%, 7/ 2/2017		408	392	1.32%, 4/27/2011 (e)		900	637
			1,962	5.00%, 2/13/2014		85	50

See accompanying notes

130

Schedule of Investments
Bond & Mortgage Securities Account
June 30, 2009 (unaudited)
		Principal			Principal
		Amount	Value		Amount	Value
		(000's)	(000's)		(000's)	(000's)
BONDS (continued)				BONDS (continued)
Finance - Commercial (continued)				Food - Retail (0.19%)
Textron Financial Corp				Delhaize America Inc
0.79%, 2/25/2011 (e)	$ 1,000 $		887	9.00%, 4/15/2031	$ 320 $	388
			1,841	Ingles Markets Inc
				8.88%, 5/15/2017 (f)	230	227
Finance - Consumer Loans (0.77%)
						615
HSBC Finance Capital Trust IX
5.91%, 11/30/2035		160	85	Gambling (Non-Hotel) (0.04%)
HSBC Finance Corp				Pinnacle Entertainment Inc
1.13%, 11/16/2009 (e)		925	918	7.50%, 6/15/2015	170	145
4.13%, 11/16/2009		475	478
John Deere Capital Corp				Gas - Distribution (0.09%)
1.41%, 10/16/2009 (e)		260	260	Sempra Energy
SLM Corp				6.15%, 6/15/2018	275	276
1.25%, 7/26/2010 (e)		650	590
4.50%, 7/26/2010		175	165	Home Equity - Other (1.47%)
			2,496	American Home Mortgage Investment Trust
				0.50%, 11/25/2030 (b)(e)	603	233
Finance - Credit Card (0.51%)				Bear Stearns Asset Backed Securities Trust
American Express Co				0.91%, 3/25/2034 (e)	460	251
7.25%, 5/20/2014		665	688	0.47%, 8/25/2036 (e)	1,530	508
7.00%, 3/19/2018		350	340	Countrywide Asset-Backed Certificates
8.13%, 5/20/2019		205	213	6.09%, 6/25/2021 (e)	602	174
6.80%, 9/ 1/2066 (e)		250	180	First NLC Trust
Capital One Bank USA NA				0.61%, 9/25/2035 (e)	516	478
6.50%, 6/13/2013		220	217	GMAC Mortgage Corp Loan Trust
			1,638	5.75%, 10/25/2036	850	527
				5.81%, 10/25/2036	325	107
Finance - Investment Banker & Broker (1.06%)
				GSAA Trust
Charles Schwab Corp/The				0.45%, 4/25/2047 (b)(e)	1,497	206
4.95%, 6/ 1/2014		400	407
				New Century Home Equity Loan Trust
Credit Suisse USA Inc				0.60%, 3/25/2035 (b)(e)	25	11
1.37%, 1/15/2010 (e)		550	549
				Option One Mortgage Loan Trust
Jefferies Group Inc				1.36%, 5/25/2034 (e)	396	234
6.45%, 6/ 8/2027		860	633
				0.76%, 3/25/2037 (b)(e)	825	17
Merrill Lynch & Co Inc
1.24%, 2/ 5/2010 (e)		400	395	Residential Asset Securities Corp
				0.46%, 9/25/2036 (e)	750	380
1.23%, 11/ 1/2011 (e)		875	802
				Saxon Asset Securities Trust
0.87%, 6/ 5/2012 (e)		400	356	2.01%, 3/25/2035 (e)	261	75
7.75%, 5/14/2038		180	167	Soundview Home Equity Loan Trust
UBS Preferred Funding Trust V				0.40%, 7/25/2036 (e)	92	91
6.24%, 5/29/2049		175	103	Specialty Underwriting & Residential Finance
			3,412	1.08%, 2/25/2035 (e)	247	122
Finance - Leasing Company (0.16%)				0.54%, 3/25/2036 (e)	27	26
International Lease Finance Corp				WAMU Asset-Backed Certificates
1.53%, 1/15/2010 (e)		550	511	0.48%, 5/25/2037 (e)	795	330
				0.48%, 7/25/2047 (e)	2,000	465
Finance - Other Services (0.09%)				Wells Fargo Home Equity Trust
American Real Estate Partners LP/Finance Corp				0.60%, 10/25/2035 (e)	662	524
7.13%, 2/15/2013		160	144			4,759
Icahn Enterprises LP / Icahn Enterprises
Finance Corp				Home Equity - Sequential (0.14%)
8.13%, 6/ 1/2012		175	161	Countrywide Asset-Backed Certificates
			305	5.39%, 4/25/2036	633	238

See accompanying notes

131

     Schedule of Investments Bond & Mortgage Securities Account

June 30, 2009 (unaudited)

	Principal				Principal
	Amount	Value			Amount	Value
	(000's)	(000's)			(000's)	(000's)
BONDS (continued)			BONDS (continued)
Home Equity - Sequential (continued)			Medical - Drugs (continued)
Countrywide Asset-Backed Certificates			Novartis Securities Investment Ltd
(continued)			5.13%, 2/10/2019	$ 25 $		26
5.51%, 8/25/2036	$ 561 $	220	Schering-Plough Corp
		458	5.55%, 12/ 1/2013 (e)		775	832
Independent Power Producer (0.17%)			Wyeth
NRG Energy Inc			5.50%, 3/15/2013 (e)		650	695
7.25%, 2/ 1/2014	430	417				2,317
8.50%, 6/15/2019	130	126	Medical - HMO (0.35%)
		543	Aetna Inc
Investment Companies (0.15%)			6.75%, 12/15/2037		210	195
Xstrata Finance Canada Ltd			Health Net Inc
5.80%, 11/15/2016 (f)	90	81	6.38%, 6/ 1/2017		335	254
Xstrata Finance Dubai Ltd			Humana Inc
1.27%, 11/13/2009 (e)(f)	400	395	7.20%, 6/15/2018		505	455
		476	8.15%, 6/15/2038		295	236
						1,140
Life & Health Insurance (1.40%)
Hartford Life Global Funding Trusts			Medical - Hospitals (0.43%)
0.80%, 9/15/2009 (e)	950	946	Community Health Systems Inc
Lincoln National Corp			8.88%, 7/15/2015		245	240
5.65%, 8/27/2012	200	194	HCA Inc
7.00%, 5/17/2066 (e)	525	331	7.88%, 2/ 1/2011		20	20
New York Life Global Funding			9.88%, 2/15/2017 (f)		200	202
4.65%, 5/ 9/2013 (f)	341	346	HCA Inc/DE
Pacific Life Insurance Co			9.25%, 11/15/2016		835	822
9.25%, 6/15/2039 (f)	1,500	1,456	8.50%, 4/15/2019 (f)		115	113
Prudential Financial Inc						1,397
4.75%, 6/13/2015	150	138	Medical - Outpatient & Home Medical Care (0.14%)
7.38%, 6/15/2019	885	869	Select Medical Corp
StanCorp Financial Group Inc			7.63%, 2/ 1/2015		560	455
6.88%, 10/ 1/2012	210	185
Stingray Pass-Through Trust			Medical - Wholesale Drug Distribution (0.10%)
5.90%, 1/12/2015 (c)(f)	600	54	AmerisourceBergen Corp
		4,519	5.63%, 9/15/2012		320	315
Machinery - Material Handling (0.07%)			Medical Laboratory & Testing Service (0.62%)
Columbus McKinnon Corp/NY			Quest Diagnostics Inc
8.88%, 11/ 1/2013	225	225	5.45%, 11/ 1/2015		175	170
Medical - Biomedical/Gene (0.02%)			6.40%, 7/ 1/2017		105	107
Bio-Rad Laboratories Inc			Roche Holdings Inc
8.00%, 9/15/2016 (f)	55	54	6.00%, 3/ 1/2019 (f)		1,615	1,722
						1,999
Medical - Drugs (0.72%)			Medical Products (0.26%)
Axcan Intermediate Holdings Inc			Angiotech Pharmaceuticals Inc
12.75%, 3/ 1/2016	385	390	4.42%, 12/ 1/2013 (e)		450	340
Elan Finance PLC/Elan Finance Corp			Hospira Inc
4.88%, 11/15/2011 (e)	90	79	1.08%, 3/30/2010 (e)		500	495
7.75%, 11/15/2011	40	37				835
4.79%, 12/ 1/2013 (e)	325	253
Merck & Co Inc/NJ			Metal - Copper (0.03%)
5.85%, 6/30/2039	5	5	Freeport-McMoRan Copper & Gold Inc
			5.00%, 4/ 1/2015 (e)		100	94

See accompanying notes

132

Schedule of Investments
Bond & Mortgage Securities Account
June 30, 2009 (unaudited)
	Principal				Principal
	Amount	Value			Amount	Value
	(000's)	(000's)			(000's)	(000's)
BONDS (continued)			BONDS (continued)
Metal - Diversified (0.04%)			Mortgage Backed Securities (continued)
Vedanta Resources PLC			Citigroup/Deutsche Bank Commercial
6.63%, 2/22/2010 (f)	$ 30 $	30	Mortgage Trust (continued)
Xstrata Canada Corp			5.21%, 12/11/2049	$ 250 $			229
7.25%, 7/15/2012	120	116	Commercial Mortgage Loan Trust
		146	6.22%, 9/10/2017 (e)		470		348
			Commercial Mortgage Pass Through Certificates
Miscellaneous Manufacturers (0.04%)			0.10%, 12/10/2046 (e)(f)		12,057		77
Trimas Corp			6.01%, 12/10/2049 (e)		1,075		854
9.88%, 6/15/2012	147	126	6.01%, 12/10/2049 (e)		1,120		198
Money Center Banks (0.10%)			Countrywide Alternative Loan Trust
			2.65%, 7/20/2035 (e)		255		110
Comerica Bank
0.42%, 5/10/2010 (e)	250	243	0.58%, 7/25/2046 (e)		257		55
5.75%, 11/21/2016	105	85	Countrywide Home Loan Mortgage Pass
			Through Trust
		328	0.51%, 4/25/2046 (e)		1,030		438
Mortgage Backed Securities (18.27%)			Credit Suisse Mortgage Capital Certificates
Banc of America Commercial Mortgage Inc			6.02%, 6/15/2038 (e)		615		449
4.97%, 7/10/2043	365	125	5.91%, 6/15/2039 (e)		665		453
5.33%, 9/10/2045	930	897	0.77%, 9/15/2039 (f)		13,977		262
5.31%, 10/10/2045 (e)	390	359	5.47%, 9/15/2039		500		350
5.67%, 1/15/2049 (e)(f)	185	13	0.14%, 12/15/2039		4,068		40
5.63%, 4/10/2049	1,000	908	0.86%, 12/15/2039 (e)		17,008		370
5.87%, 4/10/2049 (e)	1,000	757	5.38%, 2/15/2040 (e)		150		101
5.84%, 6/10/2049 (e)	1,975	1,398	5.69%, 9/15/2040 (e)		600		412
5.49%, 2/10/2051	765	537	5.87%, 9/15/2040		900		416
5.94%, 2/10/2051 (e)	985	795	6.42%, 2/15/2041 (e)(f)		525		244
6.35%, 2/10/2051 (e)	905	702	CS First Boston Mortgage Securities Corp
Banc of America Funding Corp			1.27%, 3/15/2036 (e)(f)		2,232		18
0.39%, 7/20/2036 (e)	858	734	0.43%, 5/15/2036 (e)(f)		3,564		20
Bear Stearns Alt-A Trust			0.76%, 7/15/2036 (e)(f)		3,513		42
0.47%, 11/25/2036 (e)	227	84	0.42%, 11/15/2037 (e)(f)		7,258		96
Bear Stearns Asset Backed Securities Trust			8.11%, 9/15/2041 (e)		160		159
0.54%, 4/25/2036 (e)	976	332	DLJ Commercial Mortgage Corp
Bear Stearns Commercial Mortgage Securities			7.34%, 10/10/2032		19		19
7.00%, 5/20/2030	310	316	Downey Savings & Loan Association Mortgage
0.60%, 5/11/2039 (e)(f)	2,240	20	Loan Trust
Bear Stearns Mortgage Funding Trust			0.57%, 4/19/2047 (e)		943		163
0.52%, 7/25/2036 (e)	1,729	685	Fannie Mae
Bella Vista Mortgage Trust			0.61%, 2/25/2018 (e)		231		231
0.56%, 5/20/2045 (b)(e)	207	81	0.56%, 11/25/2022 (e)		245		242
Chase Commercial Mortgage Securities Corp			0.51%, 1/25/2023 (e)		354		349
7.63%, 7/15/2032	898	908	0.61%, 2/25/2032 (e)		355		351
Chase Mortgage Finance Corp			0.56%, 3/25/2035 (e)		325		319
5.43%, 3/25/2037 (e)	1,131	692	6.80%, 3/25/2039		533		567
Citigroup Commercial Mortgage Trust			6.44%, 4/25/2039 (c)		343		343
0.71%, 10/15/2049 (e)	12,629	220
5.89%, 12/10/2049 (e)	500	395	6.50%, 2/25/2047		331		354
			Fannie Mae Whole Loan
Citigroup/Deutsche Bank Commercial			0.51%, 5/25/2035 (e)		466		451
Mortgage Trust
5.89%, 11/15/2044	950	757	First Union National Bank Commercial
			Mortgage Securities Inc
0.62%, 10/15/2048 (b)(e)	20,960	314	8.09%, 5/17/2032		275		273
0.51%, 12/11/2049 (e)	18,052	202

See accompanying notes

133

Schedule of Investments
Bond & Mortgage Securities Account
June 30, 2009 (unaudited)
	Principal			Principal
	Amount	Value		Amount	Value
	(000's)	(000's)		(000's)	(000's)
BONDS (continued)			BONDS (continued)
Mortgage Backed Securities (continued)			Mortgage Backed Securities (continued)
Freddie Mac			JP Morgan Chase Commercial Mortgage
0.77%, 6/15/2023 (e)	$ 348 $	340	Securities Corp (continued)
5.50%, 9/15/2031 (e)	950	987	6.01%, 6/15/2049 (e)	$ 475 $	228
GE Capital Commercial Mortgage Corp			6.30%, 2/12/2051 (e)	700	211
0.37%, 5/10/2014	29,233	220	6.40%, 2/12/2051 (e)(f)	550	125
5.61%, 4/10/2017 (e)	1,420	599	5.88%, 2/15/2051	1,700	1,273
0.76%, 3/10/2040 (e)(f)	5,939	58	JP Morgan Mortgage Trust
Ginnie Mae			5.81%, 6/25/2036 (e)	340	184
1.07%, 2/16/2047 (e)	5,660	262	5.97%, 6/25/2036 (e)	178	144
0.82%, 3/16/2047 (e)	4,799	241	5.95%, 8/25/2036 (e)	725	402
GMAC Commercial Mortgage Securities Inc			5.55%, 10/25/2036 (e)	855	422
1.01%, 3/10/2038 (e)(f)	3,034	41	5.68%, 4/25/2037 (e)	550	360
Greenpoint Mortgage Funding Trust			5.68%, 4/25/2037 (e)	540	301
0.58%, 6/25/2045 (e)	204	56	LB Commercial Conduit Mortgage Trust
0.61%, 6/25/2045 (e)	196	34	6.15%, 7/15/2044 (e)	175	127
Greenwich Capital Commercial Funding Corp			LB-UBS Commercial Mortgage Trust
0.45%, 6/10/2036 (e)(f)	22,485	130	0.49%, 3/15/2036 (e)(f)	2,136	47
6.11%, 7/10/2038 (e)	660	343	1.23%, 3/15/2036 (e)(f)	1,472	24
0.51%, 3/10/2039 (b)(e)(f)	13,442	163	0.70%, 8/15/2036 (e)(f)	2,363	25
GS Mortgage Securities Corp II			0.70%, 2/15/2040 (e)	23,330	386
0.89%, 11/10/2039 (f)	7,425	152	5.48%, 2/15/2040	650	202
5.56%, 11/10/2039 (e)	1,450	1,183	5.56%, 2/15/2040 (e)	440	117
5.99%, 8/10/2045 (e)	1,570	1,186	5.86%, 7/15/2040 (e)	955	693
GSR Mortgage Loan Trust			6.45%, 7/17/2040 (e)	675	108
0.67%, 12/25/2035 (e)	89	34	6.32%, 4/15/2041 (e)	375	142
0.57%, 8/25/2046 (b)(e)	1,595	423	6.32%, 4/15/2041 (e)	100	82
Harborview Mortgage Loan Trust
0.55%, 3/19/2037 (e)	667	281	5.87%, 9/15/2045 (e)	1,560	1,193
Homebanc Mortgage Trust			6.46%, 9/15/2045 (e)	440	107
0.65%, 1/25/2036 (e)	1,346	533	Merrill Lynch Mortgage Trust
Impac CMB Trust			5.78%, 8/12/2016	750	381
1.31%, 10/25/2033 (e)	81	48	5.79%, 5/12/2039 (e)	795	771
1.29%, 10/25/2034 (b)(e)	288	129	0.63%, 2/12/2042 (e)	10,793	95
0.62%, 4/25/2035 (e)	120	37	Merrill Lynch/Countrywide Commercial
			Mortgage Trust
0.74%, 4/25/2035 (e)	133	20	5.46%, 7/12/2046 (e)	500	253
Impac Secured Assets CMN Owner Trust			0.73%, 8/12/2048 (e)	8,082	145
0.47%, 3/25/2037 (e)	1,660	403
			5.70%, 9/12/2049	400	276
Indymac Index Mortgage Loan Trust
0.54%, 4/25/2035 (e)	170	78	0.16%, 12/12/2049 (e)(f)	7,020	46
0.49%, 2/25/2037 (e)	1,620	552	5.11%, 12/12/2049 (e)	795	752
0.55%, 6/25/2037 (b)(e)	1,239	538	5.39%, 12/12/2049 (e)(f)	435	88
JP Morgan Chase Commercial Mortgage			5.94%, 6/12/2050 (e)	1,120	250
Securities Corp			Morgan Stanley Capital I
5.72%, 11/15/2017	1,000	659	0.57%, 6/12/2012 (e)	1,660	1,207
5.29%, 9/12/2037 (e)	275	84	7.11%, 4/15/2033	12	12
1.26%, 1/12/2039 (e)(f)	3,004	45	1.18%, 1/13/2041 (e)(f)	1,996	38
5.63%, 6/12/2041 (e)	775	409	0.53%, 5/24/2043 (e)(f)	1,200	838
0.32%, 1/15/2042 (e)(f)	7,560	80	0.15%, 12/15/2043 (e)(f)	8,598	61
6.07%, 4/15/2045 (e)	500	424	5.36%, 3/15/2044 (e)	1,500	1,136
5.59%, 5/12/2045 (e)	40	21	0.69%, 8/25/2046 (e)(f)	1,500	15
5.44%, 5/15/2045 (e)	525	299	5.81%, 4/12/2049 (e)	750	549
5.30%, 5/15/2047 (b)(e)	500	432	5.81%, 4/12/2049 (e)	720	175
See accompanying notes		134

Schedule of Investments
Bond & Mortgage Securities Account
June 30, 2009 (unaudited)
		Principal				Principal
		Amount	Value			Amount	Value
		(000's)	(000's)			(000's)	(000's)
BONDS (continued)				BONDS (continued)
Mortgage Backed Securities (continued)				Multi-Line Insurance (continued)
Morgan Stanley REREMIC Trust				ING Groep NV
5.81%, 8/12/2045 (c)(f)	$ 3,260 $		2,793	5.78%, 12/ 8/2035	$ 460 $		269
Nomura Asset Acceptance Corp				MetLife Inc
0.66%, 2/25/2035 (e)		56	39	7.72%, 2/15/2019		155	166
Residential Accredit Loans Inc				Metropolitan Life Global Funding I
0.50%, 7/25/2037 (b)(e)		680	305	0.89%, 5/17/2010 (e)(f)		1,125	1,116
0.46%, 2/25/2047 (e)		1,665	638	XL Capital Ltd
Structured Adjustable Rate Mortgage Loan Trust				6.50%, 12/31/2049 (e)		300	147
1.01%, 8/25/2034 (b)(e)		600	27				2,547
0.50%, 7/25/2037 (e)		1,141	433	Multimedia (0.41%)
Structured Asset Mortgage Investments Inc				News America Inc
0.54%, 5/25/2045 (e)		1,320	566	7.85%, 3/ 1/2039 (f)		180	192
Structured Asset Securities Corp				Quebecor Media Inc
5.50%, 6/25/2036 (e)		1,000	248	7.75%, 3/15/2016		300	272
Wachovia Bank Commercial Mortgage Trust				Time Warner Inc
0.38%, 11/15/2035 (f)		12,371	95	1.15%, 11/13/2009 (e)		825	823
0.59%, 10/15/2041 (e)(f)		14,896	115	Vivendi SA
5.25%, 12/15/2043		695	606	5.75%, 4/ 4/2013 (f)		30	30
5.34%, 12/15/2043 (e)		1,750	1,151				1,317
5.48%, 12/15/2043		205	44
				Music (0.13%)
5.60%, 12/15/2043		540	37
				WMG Acquisition Corp
5.56%, 3/15/2045		675	577	7.38%, 4/15/2014		290	246
6.01%, 6/15/2045		1,340	1,058	WMG Holdings Corp
5.80%, 7/15/2045		1,000	515	0.00%, 12/15/2014 (a)(e)		204	160
5.82%, 5/15/2046 (e)		340	175				406
WAMU Commercial Mortgage Securities Trust
3.83%, 1/25/2035 (f)		167	162	Mutual Insurance (0.13%)
WaMu Mortgage Pass Through Certificates				Liberty Mutual Group Inc
0.95%, 12/25/2027 (b)(e)		454	350	7.00%, 3/15/2037 (e)(f)		375	215
4.68%, 5/25/2035 (e)		260	201	10.75%, 6/15/2058 (e)(f)		295	213
5.67%, 6/25/2037 (e)		416	258				428
0.62%, 1/25/2045 (e)		176	82	Non-Hazardous Waste Disposal (0.06%)
0.84%, 1/25/2045 (e)		487	64	WCA Waste Corp
0.54%, 4/25/2045 (e)		97	50	9.25%, 6/15/2014 (b)		200	182
0.58%, 4/25/2045 (e)		97	30
0.60%, 7/25/2045 (e)		242	111	Oil - Field Services (0.17%)
				Key Energy Services Inc
0.56%, 11/25/2045 (e)		103	81	8.38%, 12/ 1/2014		250	220
0.69%, 11/25/2045 (b)(e)		660	523	Weatherford International Ltd
Washington Mutual Alternative Mortgage				9.63%, 3/ 1/2019		270	318
Pass-Through Certificates
0.56%, 2/25/2036 (e)		243	99				538
0.59%, 6/25/2046 (e)		1,374	199	Oil & Gas Drilling (0.21%)
0.49%, 1/25/2047 (e)		975	189	Pride International Inc
			58,970	7.38%, 7/15/2014		135	134
				8.50%, 6/15/2019		540	533
Multi-Line Insurance (0.79%)							667
AXA SA
8.60%, 12/15/2030		300	281	Oil Company - Exploration & Production (1.28%)
CNA Financial Corp				Anadarko Petroleum Corp
6.00%, 8/15/2011		375	357	6.95%, 6/15/2019		70	71
Genworth Financial Inc				6.45%, 9/15/2036		155	139
6.15%, 11/15/2066 (e)		470	211	7.95%, 6/15/2039		65	68

See accompanying notes

135

     Schedule of Investments Bond & Mortgage Securities Account

June 30, 2009 (unaudited)

	Principal				Principal
	Amount	Value			Amount	Value
	(000's)	(000's)			(000's)	(000's)
BONDS (continued)			BONDS (continued)
Oil Company - Exploration & Production			Oil Refining & Marketing (0.07%)
(continued)			Tesoro Corp
Chesapeake Energy Corp			6.63%, 11/ 1/2015	$ 155 $			139
7.63%, 7/15/2013	$ 195 $	185	9.75%, 6/ 1/2019		75		74
9.50%, 2/15/2015	35	35					213
7.25%, 12/15/2018	215	187
Compton Petroleum Finance Corp			Paper & Related Products (0.21%)
7.63%, 12/ 1/2013	185	103	Cascades Inc
Denbury Resources Inc			7.25%, 2/15/2013		65		57
9.75%, 3/ 1/2016	280	288	Domtar Corp
Devon Energy Corp			10.75%, 6/ 1/2017		165		158
6.30%, 1/15/2019	485	518	International Paper Co
Gaz Capital SA			9.38%, 5/15/2019		455		464
7.29%, 8/16/2037 (f)	100	75					679
Gazprom International SA			Pharmacy Services (0.03%)
7.20%, 2/ 1/2020 (f)	75	71	Omnicare Inc
KazMunaiGaz Finance Sub BV			6.88%, 12/15/2015		100		90
9.13%, 7/ 2/2018 (f)	200	178
KCS Energy Inc			Physical Therapy & Rehabilitation Centers (0.03%)
7.13%, 4/ 1/2012	150	141	Healthsouth Corp
Linn Energy LLC			10.75%, 6/15/2016		95		95
9.88%, 7/ 1/2018 (c)	245	217
OPTI Canada Inc			Physician Practice Management (0.14%)
7.88%, 12/15/2014	160	104	US Oncology Inc
Pemex Project Funding Master Trust			9.00%, 8/15/2012		120		123
6.63%, 6/15/2035	105	95	10.75%, 8/15/2014		160		158
PetroHawk Energy Corp			9.13%, 8/15/2017 (f)		190		189
9.13%, 7/15/2013	215	214					470
10.50%, 8/ 1/2014 (f)	95	97
Petroleum Development Corp			Pipelines (1.29%)
12.00%, 2/15/2018	270	227	Copano Energy LLC / Copano Energy Finance
Pioneer Natural Resources Co			Corp
6.65%, 3/15/2017	180	157	8.13%, 3/ 1/2016		325		305
Plains Exploration & Production Co			7.75%, 6/ 1/2018		65		59
7.75%, 6/15/2015	110	103	DCP Midstream LLC
10.00%, 3/ 1/2016	260	267	9.75%, 3/15/2019 (f)		330		368
			Enbridge Energy Partners LP
Quicksilver Resources Inc			9.88%, 3/ 1/2019		115		133
11.75%, 1/ 1/2016	117	121
Swift Energy Co			7.50%, 4/15/2038		400		402
7.13%, 6/ 1/2017	475	335	Energy Transfer Partners LP
Talisman Energy Inc			9.70%, 3/15/2019		200		230
7.75%, 6/ 1/2019	130	144	9.00%, 4/15/2019		185		211
		4,140	Enterprise Products Operating LLC
			4.60%, 8/ 1/2012		500		503
Oil Company - Integrated (0.32%)			Kinder Morgan Energy Partners LP
ConocoPhillips			9.00%, 2/ 1/2019		210		239
4.60%, 1/15/2015	5	5	6.85%, 2/15/2020		270		277
Petro-Canada			6.95%, 1/15/2038		215		208
6.05%, 5/15/2018	400	398	Magellan Midstream Partners LP
Suncor Energy Inc			6.55%, 7/15/2019		285		292
6.50%, 6/15/2038	315	297	MarkWest Energy Partners LP / MarkWest
6.85%, 6/ 1/2039	350	344	Energy Finance Corp
		1,044	6.88%, 11/ 1/2014 (f)		25		21
			8.75%, 4/15/2018		180		156

See accompanying notes

136

Schedule of Investments
Bond & Mortgage Securities Account
June 30, 2009 (unaudited)
	Principal			Principal
	Amount	Value		Amount	Value
	(000's)	(000's)		(000's)	(000's)
BONDS (continued)			BONDS (continued)
Pipelines (continued)			Regional Banks (continued)
ONEOK Partners LP			PNC Preferred Funding Trust I
6.85%, 10/15/2037	$ 150 $	142	8.70%, 2/28/2049 (e)(f)	$ 200 $	164
Regency Energy Partners LP/Regency Energy			SunTrust Preferred Capital I
Finance Corp			5.85%, 12/31/2049 (e)	275	187
8.38%, 12/15/2013	180	174	Wells Fargo & Co
Rockies Express Pipeline LLC			1.01%, 8/20/2010 (e)	120	119
4.50%, 8/20/2009 (e)(f)	400	400			3,434
Transportadora de Gas del Sur SA
7.88%, 5/14/2017 (f)	63	46	REITS - Healthcare (0.06%)
		4,166	Nationwide Health Properties Inc
			6.50%, 7/15/2011	115	113
Printing - Commercial (0.07%)			Ventas Realty LP / Ventas Capital Corp
Cadmus Communications Corp			6.50%, 6/ 1/2016	90	81
8.38%, 6/15/2014	150	101			194
Sheridan Group Inc/The
10.25%, 8/15/2011	200	120	REITS - Mortgage (0.30%)
		221	iStar Financial Inc
			8.00%, 3/15/2011 (f)	807	704
Property & Casualty Insurance (0.38%)			5.85%, 3/15/2017	670	268
Crum & Forster Holdings Corp					972
7.75%, 5/ 1/2017	200	174
Travelers Cos Inc/The			REITS - Office Property (0.15%)
6.25%, 3/15/2067 (e)	1,050	846	Brandywine Operating Partnership LP
WR Berkley Corp			5.63%, 12/15/2010	225	219
6.25%, 2/15/2037	310	214	HRPT Properties Trust
		1,234	1.22%, 3/16/2011 (e)	288	251
					470
Publishing - Periodicals (0.10%)
Dex Media Inc			REITS - Regional Malls (0.04%)
0.00%, 11/15/2013 (a)	175	26	Simon Property Group LP
Nielsen Finance LLC / Nielsen Finance Co			4.60%, 6/15/2010	115	115
10.00%, 8/ 1/2014	215	203
11.50%, 5/ 1/2016 (f)	85	83	REITS - Warehouse & Industrial (0.30%)
		312	ProLogis
			0.91%, 8/24/2009 (e)	1,000	977
Quarrying (0.24%)
Vulcan Materials Co			Rental - Auto & Equipment (0.20%)
1.88%, 12/15/2010 (e)	775	771	Erac USA Finance Co
			0.91%, 8/28/2009 (b)(e)(f)	375	372
Real Estate Operator & Developer (0.06%)			H&E Equipment Services Inc
Regency Centers LP			8.38%, 7/15/2016	165	132
8.45%, 9/ 1/2010	180	180	Hertz Corp/The
			8.88%, 1/ 1/2014	150	138
Regional Banks (1.06%)					642
BAC Capital Trust XIII
1.03%, 3/15/2043 (e)	700	311	Retail - Auto Parts (0.30%)
BAC Capital Trust XIV			AutoZone Inc
5.63%, 3/15/2043 (e)	194	97	5.75%, 1/15/2015 (d)(e)	980	978
Capital One Financial Corp
0.93%, 9/10/2009 (e)	750	747	Retail - Automobile (0.06%)
5.70%, 9/15/2011	310	312	United Auto Group
			7.75%, 12/15/2016	250	202
NB Capital Trust II
7.83%, 12/15/2026	700	576	Retail - Discount (0.32%)
PNC Funding Corp			Dollar General Corp
1.18%, 1/31/2012 (e)	1,000	921	11.88%, 7/15/2017	100	108

See accompanying notes

137

Schedule of Investments
Bond & Mortgage Securities Account

June 30, 2009 (unaudited)

	Principal			Principal
	Amount	Value		Amount	Value
	(000's)	(000's)		(000's)	(000's)
BONDS (continued)			BONDS (continued)
Retail - Discount (continued)			Sovereign (continued)
Target Corp			Philippine Government International Bond
6.50%, 10/15/2037	$ 725 $	733	9.50%, 2/ 2/2030	$ 60 $	73
7.00%, 1/15/2038	181	193	Republic of Peru
		1,034	7.13%, 3/30/2019	86	92
			Republic of Turkey
Retail - Drug Store (0.60%)			7.50%, 11/ 7/2019	115	119
CVS Caremark Corp			Russian Foreign Bond - Eurobond
0.97%, 6/ 1/2010 (e)	935	928	7.50%, 3/31/2030 (f)	3	3
CVS Pass-Through Trust			South Africa Government International Bond
8.35%, 7/10/2031 (f)	895	915	6.88%, 5/27/2019	130	133
RITE AID CORP			Turkey Government International Bond
9.75%, 6/12/2016 (f)	80	80	6.88%, 3/17/2036	120	110
		1,923	Venezuela Government International Bond
Retail - Restaurants (0.35%)			8.50%, 10/ 8/2014	235	167
Darden Restaurants Inc			9.25%, 9/15/2027	85	58
6.80%, 10/15/2037 (e)	405	345			1,230
Landry's Restaurants Inc			Special Purpose Banks (0.06%)
14.00%, 8/15/2011 (f)	200	190
			Export-Import Bank of Korea
Yum! Brands Inc			4.50%, 8/12/2009	180	180
6.25%, 3/15/2018	580	597
		1,132	Special Purpose Entity (0.48%)
Rubber - Tires (0.09%)			AES Red Oak LLC
Goodyear Tire & Rubber Co/The			8.54%, 11/30/2019	169	151
8.63%, 12/ 1/2011	300	295	Goldman Sachs Capital I
			6.35%, 2/15/2034	125	101
Satellite Telecommunications (0.35%)			Goldman Sachs Capital II
Intelsat Bermuda Ltd			5.79%, 12/29/2049 (e)	200	122
11.25%, 2/ 4/2017 (e)(f)	335	294	ING USA Global Funding Trust
11.50%, 2/ 4/2017 (f)	90	70	1.45%, 10/ 9/2009 (e)	700	697
Intelsat Subsidiary Holding Co Ltd			Santander Perpetual SA Unipersonal
8.88%, 1/15/2015 (f)	420	406	6.67%, 10/29/2049 (e)(f)	100	74
8.88%, 1/15/2015	195	188	TDIC Finance Ltd
Telesat Canada/Telesat LLC			6.50%, 7/ 2/2014 (d)(f)	200	201
11.00%, 11/ 1/2015 (f)	170	174	Universal City Development Partners Ltd
		1,132	11.75%, 4/ 1/2010	200	190
					1,536
Seismic Data Collection (0.09%)
Cie Generale de Geophysique-Veritas			Specified Purpose Acquisition (0.09%)
7.50%, 5/15/2015	200	183	ESI Tractebel Acquisition Corp
9.50%, 5/15/2016 (f)	95	95	7.99%, 12/30/2011	288	280
		278
			Steel - Producers (0.30%)
Sovereign (0.38%)			Ispat Inland ULC
Colombia Government International Bond			9.75%, 4/ 1/2014	660	692
8.25%, 12/22/2014	35	40	Steel Dynamics Inc
7.38%, 3/18/2019	100	107	6.75%, 4/ 1/2015	210	187
El Salvador Government International Bond			8.25%, 4/15/2016 (e)(f)	100	94
7.65%, 6/15/2035 (f)	25	21			973
Indonesia Government International Bond
11.63%, 3/ 4/2019 (f)	112	142	Supranational Bank (0.04%)
7.75%, 1/17/2038 (f)	100	91	Corp Andina de Fomento
			8.13%, 6/ 4/2019	113	120
Mexico Government International Bond
5.88%, 1/15/2014	70	74

See accompanying notes

138

Schedule of Investments
Bond & Mortgage Securities Account
June 30, 2009 (unaudited)
	Principal			Principal
	Amount	Value		Amount	Value
	(000's)	(000's)		(000's)	(000's)
BONDS (continued)			BONDS (continued)
Telecommunication Services (0.36%)			Telephone - Integrated (continued)
Digicel Group Ltd			Windstream Corp
9.13%, 1/15/2015 (f)	$ 100 $	83	8.63%, 8/ 1/2016	$ 285 $	273
Fairpoint Communications Inc					9,897
13.13%, 4/ 1/2018	315	61
			Theaters (0.14%)
Globo Comunicacoe e Participacoes SA
7.25%, 4/26/2022 (f)	120	117	AMC Entertainment Inc
			11.00%, 2/ 1/2016	285	276
MasTec Inc
7.63%, 2/ 1/2017	175	152	8.75%, 6/ 1/2019 (f)	35	33
Maxcom Telecomunicaciones SAB de CV			Cinemark USA Inc
11.00%, 12/15/2014	20	17	8.63%, 6/15/2019 (f)	140	138
Qwest Corp					447
7.88%, 9/ 1/2011	200	200	Tobacco (0.93%)
Telcordia Technologies Inc			Altria Group Inc
4.88%, 7/15/2012 (b)(e)(f)	400	310	9.70%, 11/10/2018	1,145	1,313
West Corp			9.25%, 8/ 6/2019	970	1,089
9.50%, 10/15/2014	250	219	BAT International Finance PLC
		1,159	9.50%, 11/15/2018 (f)	155	182
Telephone - Integrated (3.07%)			Reynolds American Inc
AT&T Inc			7.25%, 6/ 1/2013	415	427
6.15%, 9/15/2034	275	261			3,011
British Telecommunications PLC			Tools - Hand Held (0.19%)
9.62%, 12/15/2030 (e)	50	55	Snap-On Inc
France Telecom SA			1.27%, 1/12/2010 (e)	625	619
4.38%, 7/ 8/2014 (d)	85	86
5.38%, 7/ 8/2019 (d)	600	604	Transport - Rail (0.17%)
Koninklijke KPN NV			CSX Corp
8.38%, 10/ 1/2030	150	171	6.25%, 3/15/2018	450	454
Level 3 Financing Inc			RailAmerica Inc
9.25%, 11/ 1/2014	355	291	9.25%, 7/ 1/2017 (f)	95	92
Qtel International Finance Ltd					546
7.88%, 6/10/2019 (f)	650	661
Qwest Capital Funding Inc			Transport - Services (0.03%)
7.00%, 8/ 3/2009	710	710	TGI International Ltd
			9.50%, 10/ 3/2017 (f)	100	101
Sprint Nextel Corp
1.00%, 6/28/2010 (e)	130	123
			Wire & Cable Products (0.06%)
6.00%, 12/ 1/2016	470	384	Coleman Cable Inc
Telecom Italia Capital SA			9.88%, 10/ 1/2012	240	193
1.51%, 2/ 1/2011 (e)	200	192
1.72%, 7/18/2011 (e)	450	430	Wireless Equipment (0.11%)
5.25%, 11/15/2013	1,280	1,255	Crown Castle International Corp
7.18%, 6/18/2019	1,430	1,450	9.00%, 1/15/2015	80	82
7.72%, 6/ 4/2038	10	10	Nokia OYJ
Telefonica Emisiones SAU			5.38%, 5/15/2019	285	288
1.35%, 2/ 4/2013 (e)	375	351			370
4.95%, 1/15/2015 (d)	780	793
			TOTAL BONDS	$ 218,485
5.88%, 7/15/2019 (d)	685	706
7.05%, 6/20/2036	125	139	SENIOR FLOATING RATE INTERESTS (1.14%)
Telemar Norte Leste SA			Aerospace & Defense (0.05%)
9.50%, 4/23/2019 (f)	100	109	Hawker Beechcraft Inc, Term Loan B
Verizon Communications Inc			2.62%, 3/26/2014 (e)	211	143
6.35%, 4/ 1/2019	810	843

See accompanying notes

139

Schedule of Investments
Bond & Mortgage Securities Account
June 30, 2009 (unaudited)
		Principal				Principal
		Amount	Value			Amount	Value
		(000's)	(000's)			(000's)	(000's)
SENIOR FLOATING RATE INTERESTS (continued)				BONDS (67.70%)
Aerospace & Defense (continued)				Identification Systems - Development (0.00%)
Hawker Beechcraft Inc, Term Loan LOC				L-1 Identity Solutions Inc
5.56%, 3/26/2014 (e)	$ 12 $		9	3.75%, 5/15/2027	$ 20 $		16
			152	TOTAL BONDS		$ 218,485
Auto - Medium & Heavy Duty Trucks (0.05%)				U.S. GOVERNMENT & GOVERNMENT AGENCY
Oshkosh Truck Corp, Term Loan B				OBLIGATIONS (43.73%)
6.81%, 12/ 6/2013 (e)		170	156	Federal Home Loan Mortgage Corporation
				(FHLMC) (15.14%)
Auto/Truck Parts & Equipment - Replacement (0.12%)				4.50%, 7/ 1/2024 (g)		1,220	1,244
Allison Transmission Inc, Term Loan B				5.00%, 7/ 1/2024 (g)		1,920	1,985
3.07%, 8/ 7/2014 (e)		482	384	5.00%, 7/ 1/2039 (g)		5,280	5,369
				5.50%, 7/ 1/2039 (g)		18,225	18,812
Auto-Cars/Light Trucks (0.20%)				6.00%, 7/ 1/2039 (g)		5,800	6,052
Ford Motor Co, Term Loan B				6.50%, 7/ 1/2039 (g)		1,170	1,243
3.59%, 12/16/2013 (e)		892	646	6.50%, 4/ 1/2016		30	32
				5.00%, 5/ 1/2018		1,649	1,728
Cable/Satellite TV (0.14%)
CSC Holdings Inc, Term Loan B				5.50%, 6/ 1/2024		1,874	1,948
2.07%, 3/30/2013 (e)		496	465	6.50%, 3/ 1/2029		31	33
				6.50%, 5/ 1/2029		46	49
Data Processing & Management (0.09%)				7.00%, 12/ 1/2029		63	68
First Data Corporation, Term Loan B1				7.50%, 4/ 1/2030		29	31
3.06%, 12/24/2014 (e)		394	295	7.00%, 6/ 1/2030		9	10
				7.50%, 9/ 1/2030		20	22
Machinery - General Industry (0.07%)				8.00%, 9/ 1/2030		90	99
Manitowoc Company Inc, Term Loan B
6.50%, 4/14/2014 (e)		249	225	7.00%, 12/ 1/2030		9	10
				7.00%, 1/ 1/2031		17	19
Medical Products (0.03%)				7.00%, 1/ 1/2031		5	6
Biomet Inc, Term Loan B				7.00%, 2/ 1/2031		11	12
3.58%, 3/25/2015 (e)		99	93	6.00%, 3/ 1/2031		58	61
				7.50%, 3/ 1/2031		83	90
Property & Casualty Insurance (0.13%)				6.00%, 4/ 1/2031		7	8
Asurion Corp, Term Loan B				6.50%, 4/ 1/2031		24	26
6.82%, 7/ 7/2015 (e)		500	431	7.00%, 6/ 1/2031		14	15
Publishing-Periodicals (0.06%)				7.00%, 12/ 1/2031		153	166
Nielsen Finance LLC / Nielsen Finance Corp,				6.50%, 2/ 1/2032		51	55
Term Loan B				6.50%, 5/ 1/2032		139	149
2.32%, 8/ 9/2013 (e)		218	196	6.50%, 5/ 1/2032		41	44
				6.00%, 6/ 1/2032		250	263
Retail-Building Products (0.06%)				6.00%, 10/ 1/2032		191	201
HD Supply Inc, Term Loan B				5.50%, 3/ 1/2033		1,251	1,298
1.57%, 8/30/2012 (e)		199	181
				6.50%, 4/ 1/2035		86	91
Satellite Telecommunications (0.14%)				5.00%, 7/ 1/2035		271	276
Telesat Canada Inc, Term Loan B				5.00%, 10/ 1/2035		549	560
3.32%, 9/ 1/2014 (e)		455	423	5.00%, 6/ 1/2037		570	581
Telesat Canada Inc, Term Loan DD				5.50%, 4/ 1/2038		499	516
4.22%, 10/31/2014 (e)		39	36	5.50%, 5/ 1/2038		1,084	1,121
			459	5.50%, 7/ 1/2038		1,560	1,613
TOTAL SENIOR FLOATING RATE INTERESTS		$ 3,683		5.70%, 2/ 1/2034 (e)		11	11
				4.68%, 8/ 1/2035 (e)		257	262
				6.49%, 7/ 1/2036 (e)		721	752
				5.63%, 2/ 1/2037 (e)		818	858
See accompanying notes			140

Schedule of Investments
Bond & Mortgage Securities Account
June 30, 2009 (unaudited)
		Principal				Principal
		Amount	Value			Amount	Value
		(000's)	(000's)			(000's)	(000's)
U.S. GOVERNMENT & GOVERNMENT AGENCY				U.S. GOVERNMENT & GOVERNMENT AGENCY
OBLIGATIONS (continued)				OBLIGATIONS (continued)
Federal Home Loan Mortgage Corporation				Federal National Mortgage Association (FNMA)
(FHLMC) (continued)				(continued)
5.97%, 2/ 1/2037 (e)	$ 1,009 $		1,063	6.00%, 2/ 1/2038	$ 1,040 $		1,089
			48,852	6.50%, 2/ 1/2038		262	279
Federal National Mortgage Association (FNMA) (19.11%)				6.50%, 3/ 1/2038		251	267
5.00%, 7/ 1/2024 (g)		1,490	1,542	6.50%, 5/ 1/2038		133	142
4.00%, 7/ 1/2039 (g)		715	693	6.00%, 5/ 1/2039		1,498	1,568
4.50%, 7/ 1/2039 (g)		4,660	4,650				61,673
5.00%, 7/ 1/2039 (g)		15,100	15,374	Government National Mortgage Association
5.50%, 7/ 1/2039 (g)		8,815	9,099	(GNMA) (3.65%)
6.00%, 7/ 1/2039 (g)		6,110	6,385	5.00%, 7/ 1/2039 (g)		655	668
6.50%, 12/ 1/2010		11	12	5.50%, 7/ 1/2039 (g)		4,270	4,409
5.50%, 6/ 1/2019		161	169	6.00%, 7/ 1/2039 (g)		445	463
5.50%, 7/ 1/2019		162	171	7.50%, 5/15/2029		24	26
5.50%, 7/ 1/2019		74	78	8.00%, 12/15/2030		19	22
5.50%, 8/ 1/2019		36	38	7.00%, 3/15/2031		41	45
5.50%, 8/ 1/2019		220	232	6.50%, 12/15/2032		1,312	1,410
5.50%, 10/ 1/2019		439	463	6.00%, 12/15/2033		140	147
5.50%, 10/ 1/2019		268	282	5.00%, 2/15/2034		1,965	2,007
4.50%, 1/ 1/2020		340	352	6.50%, 3/20/2028		24	26
5.50%, 12/ 1/2022		342	356	6.00%, 1/20/2029		151	158
4.50%, 5/ 1/2023		2,612	2,670	6.50%, 5/20/2029		19	21
6.00%, 5/ 1/2031		33	34	6.00%, 7/20/2029		29	30
6.50%, 8/ 1/2031		79	85	5.50%, 12/20/2033		1,009	1,044
7.00%, 2/ 1/2032		66	72	5.50%, 5/20/2035		141	145
6.50%, 3/ 1/2032		50	54	6.00%, 12/20/2036		1,117	1,163
5.50%, 7/ 1/2033		2,821	2,927				11,784
3.96%, 6/ 1/2034 (e)		141	145	U.S. Treasury (4.85%)
3.88%, 7/ 1/2034 (e)		8	8	4.25%, 11/15/2014		2,550	2,746
4.31%, 7/ 1/2034 (e)		80	81	4.13%, 5/15/2015		35	37
4.31%, 12/ 1/2034 (e)		220	227	3.13%, 5/15/2019		1,150	1,112
4.59%, 3/ 1/2035 (e)		267	276	8.13%, 8/15/2019		1,600	2,194
5.00%, 7/ 1/2035		260	266	6.00%, 2/15/2026		5,925	7,146
5.00%, 7/ 1/2035		444	454	4.50%, 2/15/2036		2,000	2,060
5.07%, 8/ 1/2035 (e)		667	695	3.50%, 2/15/2039		395	342
5.70%, 2/ 1/2036 (e)		246	258				15,637
3.50%, 3/ 1/2036 (e)		808	828	U.S. Treasury Inflation-Indexed Obligations (0.98%)
6.50%, 4/ 1/2036		173	185	2.00%, 1/15/2014		3,087	3,158
6.00%, 5/ 1/2036		199	209	TOTAL U.S. GOVERNMENT & GOVERNMENT
6.50%, 8/ 1/2036		257	274	AGENCY OBLIGATIONS		$ 141,104
6.50%, 8/ 1/2036		478	510	SHORT TERM INVESTMENTS (2.04%)
5.48%, 1/ 1/2037 (e)		2,190	2,223	Commercial Paper (2.04%)
6.50%, 1/ 1/2037		474	505	Investment in Joint Trading Account; Federal
5.50%, 2/ 1/2037		111	115	Home Loan Bank Discount Notes
6.00%, 4/ 1/2037		2,769	2,897	0.01%, 7/ 1/2009 (h)	$ 6,577 $		6,577
5.74%, 5/ 1/2037 (e)		812	855	TOTAL SHORT TERM INVESTMENTS		$ 6,577
6.16%, 5/ 1/2037 (e)		657	683
6.50%, 7/ 1/2037		287	306
6.50%, 7/ 1/2037		381	406
6.50%, 1/ 1/2038		173	184
See accompanying notes			141

     Schedule of Investments Bond & Mortgage Securities Account

June 30, 2009 (unaudited)

				Unrealized Appreciation (Depreciation)
		Principal		The net federal income tax unrealized appreciation (depreciation) and federal tax cost
		Amount	Value	of investments held by the account as of the period end were as follows:
		(000's)	(000's)
REPURCHASE AGREEMENTS (4.80%)				Unrealized Appreciation	$ 9,617
Diversified Banking Institutions (4.80%)				Unrealized Depreciation		(68,674)
Investment in Joint Trading Account; Bank				Net Unrealized Appreciation (Depreciation)		(59,057)
of America Repurchase Agreement; 0.05%				Cost for federal income tax purposes		454,812
dated 06/30/09 maturing 07/01/09				All dollar amounts are shown in thousands (000's)
(collateralized by Sovereign Agency
Issues; $7,188,000; 0.00% - 6.25%; dated
07/10/09 - 02/16/17)	$ 7,047 $		7,047	Portfolio Summary (unaudited)
Investment in Joint Trading Account; Credit				Sector		Percent
Suisse Repurchase Agreement; 0.02%				Mortgage Securities		58.21%
dated 06/30/09 maturing 07/01/09				Financial		21.83%
(collateralized by US Treasury Note;				Communications		9.01%
$2,875,000; 0.88%; dated 03/31/11)		2,819	2,819	Asset Backed Securities		6.41%
Investment in Joint Trading Account;				Consumer, Non-cyclical		6.35%
Deutsche Bank Repurchase Agreement;				Government		6.24%
0.08% dated 06/30/09 maturing 07/01/09				Consumer, Cyclical		3.82%
(collateralized by Sovereign Agency				Energy		3.42%
Issues; $2,875,000; 3.12% - 4.63%; dated				Utilities		2.64%
12/06/10 - 10/10/12)		2,819	2,819	Basic Materials		2.44%
				Industrial		1.58%
Investment in Joint Trading Account;				Technology		0.51%
Morgan Stanley Repurchase Agreement;				Diversified		0.17%
0.03% dated 06/30/09 maturing 07/01/09				Liabilities in Excess of Other Assets, Net		(22.63%)
(collateralized by Sovereign Agency
Issues; $2,875,000; 2.38% - 5.00%; dated				TOTAL NET ASSETS		100.00%
02/25/11-06/25/14)		2,819	2,819	Other Assets Summary (unaudited)
			15,504
				Asset Type		Percent
TOTAL REPURCHASE AGREEMENTS		$ 15,504		Credit Default Swaps		0.58%
Total Investments		$ 395,755
Liabilities in Excess of Other Assets, Net - (22.63)%			(73,044)
TOTAL NET ASSETS - 100.00%		$ 322,711

(a)	Non-Income Producing Security
(b)	Security is Illiquid
(c)	Market value is determined in accordance with procedures established in good faith by the Board of Directors. At the end of the period, the value of these securities totaled $5,368 or 1.66% of net assets.
(d)	Security purchased on a when-issued basis.
(e)	Variable Rate. Rate shown is in effect at June 30, 2009.
(f)	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. Unless otherwise indicated, these securities are not considered illiquid. At the end of the period, the value of these securities totaled $36,397 or 11.28% of net assets.
(g)	Security was purchased in a "to-be-announced" ("TBA") transaction. See Notes to Financial Statements.
(h)	Rate shown is the discount rate.

See accompanying notes

142

Schedule of Investments
Bond & Mortgage Securities Account
June 30, 2009 (unaudited)
Credit Default Swaps
						Unrealized
		Buy/Sell	(Pay)/Receive	Expiration	Notional	Appreciation/
Counterparty (Issuer)	Reference Entity	Protection	Fixed Rate	Date	Amount	(Depreciation)
Barclays Bank	CDX.NA.HY.11	Buy	(5.00)%	12/20/2013 $	445	$ (68)
Barclays Bank	CDX.NA.HY.11	Buy	(5.00)%	12/20/2013	712	(101)
Barclays Bank	CDX.NA.IG.12	Buy	(1.00)%	06/20/2014	3,500	(31)
Deutsche Bank	CMBX.NA.AAA.4	Sell	0.35 %	02/17/2051	1,250	46
Goldman Sachs	CDX.NA.HY.11	Buy	(5.00)%	12/20/2013	1,335	(192)
Goldman Sachs	CDX.NA.HY.11	Buy	(5.00)%	12/20/2013	2,848	(445)
Morgan Stanley	CDX.NA.HY.11	Buy	(5.00)%	12/20/2013	2,670	(370)
Morgan Stanley	CDX.NA.HY.11	Buy	(5.00)%	12/20/2013	1,335	(190)
Morgan Stanley	CDX.NA.HY.11	Buy	(5.00)%	12/20/2013	1,335	(204)
Morgan Stanley	CDX.NA.HY.11	Buy	(5.00)%	12/20/2013	712	(102)
Morgan Stanley	CDX.NA.HY.11	Buy	(5.00)%	12/20/2013	712	(102)
UBS AG	CDX.NA.IG.12	Buy	(1.00)%	06/20/2014	3,500	(19)
All dollar amounts are shown in thousands (000's)

See accompanying notes

143

Schedule of Investments
Diversified International Account

June 30, 2009 (unaudited)

	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (98.65%)			COMMON STOCKS (continued)
Advertising Sales (0.27%)			Auto - Car & Light Trucks (continued)
Teleperformance	25,928 $	791	Tofas Turk Otomobil Fabrikasi AS	31,990 $	55
			Toyota Motor Corp	81,833	3,095
Advertising Services (0.32%)					8,109
Aegis Group PLC	72,393	110
Publicis Groupe	27,899	854	Auto/Truck Parts & Equipment - Original (0.86%)
		964	Denso Corp	43,700	1,120
			GKN PLC	37,512	77
Aerospace & Defense (0.34%)			Hyundai Mobis	1,385	121
Meggitt PLC	31,053	81	Koito Manufacturing Co Ltd	5,991	72
MTU Aero Engines Holding AG	25,677	938	Nifco Inc/Japan	4,900	76
		1,019	Sumitomo Electric Industries Ltd	88,500	992
Aerospace & Defense Equipment (0.26%)			Takata Corp	6,000	95
Cobham PLC	271,596	774			2,553
			Auto/Truck Parts & Equipment - Replacement (0.03%)
Agricultural Chemicals (1.05%)
			Xinyi Glass Holdings Co Ltd	92,000	79
Agruim Inc (a)	23,800	951
Syngenta AG	9,314	2,167	Batteries & Battery Systems (0.05%)
		3,118	Simplo Technology Co Ltd	35,000	140
Agricultural Operations (0.60%)
Golden Agri-Resources Ltd - Rights (a)(b)(c)	427,332	58	Beverages - Wine & Spirits (0.03%)
Golden Agri-Resources Ltd	2,513,720	655	Davide Campari-Milano SpA	9,875	79
Indofood Agri Resources Ltd (a)	103,000	86
			Brewery (0.84%)
Wilmar International Ltd	288,000	994	Anheuser-Busch InBev NV	60,235	2,184
		1,793	Cia de Bebidas das Americas ADR	4,968	322
Airlines (0.06%)					2,506
Air China Ltd	198,000	96
			Building - Heavy Construction (1.30%)
easyJet PLC (a)	17,832	80	ACS Actividades de Construccion y
		176	Servicios SA	30,391	1,543
Airport Development & Maintenance (0.06%)			Aecon Group Inc	7,100	70
Beijing Capital International Airport Co Ltd	258,000	180	Daelim Industrial Co Ltd	5,277	254
			Hyundai Engineering & Construction Co Ltd	2,893	121
Apparel Manufacturers (0.03%)			Mota Engil SGPS SA	10,135	46
Benetton Group SpA	9,081	80	NCC AB	9,079	79
			Nippo Corp	8,996	83
Applications Software (0.37%)			Obrascon Huarte Lain SA	3,242	64
Check Point Software Technologies Ltd (a)	6,254	147	Tecnicas Reunidas SA	2,111	100
NSD Co Ltd	5,800	59	Vinci SA	33,191	1,498
Sage Group PLC	299,080	878			3,858
		1,084
			Building - Maintenance & Service (0.25%)
Audio & Video Products (0.46%)			Babcock International Group	93,455	741
Sony Corp	52,100	1,359
			Building - Residential & Commercial (0.35%)
Auto - Car & Light Trucks (2.73%)			Berkeley Group Holdings PLC (a)	29,972	397
Dongfeng Motor Group Co Ltd	229,920	193	Corp GEO SAB de CV (a)	86,500	167
Ford Otomotiv Sanayi AS	21,730	84	Gafisa SA	5,833	48
Honda Motor Co Ltd	92,700	2,550	Persimmon PLC	74,740	432
Hyundai Motor Co	3,387	196			1,044
Nissan Motor Co Ltd	187,900	1,140
Suzuki Motor Corp	35,500	796	Building & Construction - Miscellaneous (0.63%)
			Balfour Beatty PLC	166,753	850
See accompanying notes		144

Schedule of Investments
Diversified International Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Building & Construction - Miscellaneous			Coal (0.25%)
(continued)			Banpu Public Co Ltd (a)	16,100 $	159
China Communications Construction Co Ltd	51,000 $	59	China Shenhua Energy Co Ltd	38,500	140
Hochtief AG	17,472	883	Tambang Batubara Bukit Asam Tbk PT	212,500	240
Maeda Corp	3,868	15	Yanzhou Coal Mining Co Ltd	139,999	192
United Group Ltd	9,060	75			731
		1,882
			Commercial Banks (10.13%)
Building Products - Cement & Aggregate (0.98%)			ABSA Group Ltd	9,481	135
Adelaide Brighton Ltd	56,662	102	Asya Katilim Bankasi AS (a)	45,036	62
Anhui Conch Cement Co Ltd	32,000	199	Axis Bank Ltd	20,794	360
Cemex SAB de CV (a)	101,829	95	Banco do Brasil SA	15,257	165
CRH PLC	55,726	1,281	Banco Santander SA	337,255	4,077
Grasim Industries Ltd (a)	4,295	209	Bangkok Bank Public Co (a)	18,900	62
Italcementi SpA	40,232	461	Bank Mandiri Tbk PT	726,000	225
Sumitomo Osaka Cement Co Ltd	22,000	48	Bank of China Ltd	1,890,000	895
Taiheiyo Cement Corp	299,000	512	Bank of Montreal (a)	39,600	1,669
		2,907	Bank Rakyat Indonesia	487,500	299
Building Products - Wood (0.02%)			Bankinter SA	5,774	68
China Grand Forestry Green Resources			Busan Bank	23,780	162
Group Ltd (a)	1,020,000	53	Canadian Western Bank	5,500	80
			China Construction Bank Corp	1,140,183	878
Cable/Satellite TV (0.24%)
Jupiter Telecommunications Co Ltd	854	648	Danske Bank A/S	56,400	973
SKY Perfect JSAT Holdings Inc	142	54	DBS Group Holdings Ltd	165,000	1,338
		702	DnB NOR ASA	167,800	1,282
			Fukuoka Financial Group Inc	167,000	747
Casino Services (0.02%)			ICICI Bank Ltd ADR	8,397	248
Mars Engineering Corp	1,700	49	Industrial and Commercial Bank of China Ltd	1,234,000	855
			Intesa Sanpaolo SpA	251,223	812
Cellular Telecommunications (2.07%)
			Komercni Banka AS	1,030	142
Advanced Info Service PCL (a)(b)	49,300	130
			Korea Exchange Bank	20,060	155
America Movil SAB de CV ADR	22,093	855
			Malayan Banking Bhd	240,000	402
China Mobile Ltd	76,785	769
			National Bank of Canada	30,300	1,400
MTN Group Ltd	21,989	338
			National Bank of Greece SA	44,687	1,240
SK Telecom Co Ltd	550	75
			OTP Bank Plc	9,842	178
Vimpel-Communications ADR	6,358	75
			Oversea-Chinese Banking Corp Ltd	281,000	1,290
Vivo Participacoes SA ADR	6,122	116
			Royal Bank of Canada (a)	53,500	2,188
Vodacom Group Pty Ltd (a)	14,535	108
			Sberbank	182,890	229
Vodafone Group PLC	1,893,632	3,683
			Seven Bank Ltd	35	92
		6,149
			Siam Commercial Bank Public (a)	31,300	69
Chemicals - Diversified (0.06%)			Standard Bank Group Ltd	19,552	225
Hanwha Chem Corp	2,350	19	Standard Chartered PLC	78,580	1,477
Nippon Kayaku Co Ltd	12,791	88	State Bank of India Ltd	9,843	700
Nippon Soda Co Ltd	17,000	76	Sumitomo Mitsui Financial Group Inc	35,600	1,440
		183	Suruga Bank Ltd	101,000	966
Chemicals - Specialty (0.03%)			Swedbank AB	48,400	283
Lintec Corp	5,310	92	Sydbank A/S	2,965	68
			Taiwan Cooperative Bank (a)	379,000	217
Circuit Boards (0.30%)			Turkiye Halk Bankasi AS	44,952	176
Ibiden Co Ltd	31,400	880	Turkiye Vakiflar Bankasi Tao	188,675	282
			United Overseas Bank Ltd	133,000	1,342

See accompanying notes

145

     Schedule of Investments Diversified International Account

June 30, 2009 (unaudited)

	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Commercial Banks (continued)			Diversified Financial Services (continued)
VTB Bank OJSC	39,460 $	87	Yuanta Financial Holding Co Ltd	131,000 $	88
		30,040			503
Commercial Services (0.30%)			Diversified Manufacturing Operations (0.21%)
Intertek Group PLC	51,307	883	Charter International PLC	7,180	51
			Cookson Group PLC	26,500	114
Commercial Services - Finance (0.01%)			Smiths Group PLC	32,143	372
Companhia Brasileira de Meios de Pagamento	4,928	42	Ten Cate NV	3,090	75
(a)
					612
Computer Data Security (0.26%)			Diversified Minerals (3.12%)
Gemalto NV (a)	22,475	781	Anglo American PLC	56,391	1,648
			Anglo American PLC	10,799	314
Computer Services (0.41%)			BHP Billiton Ltd	134,833	3,694
CGI Group Inc (a)	106,500	947	BHP Billiton PLC	62,374	1,406
CSK Holdings Corp	10,100	48	Pan Australian Resources Ltd (a)	216,857	62
Infosys Technologies Ltd ADR	5,885	216	Xstrata PLC	195,701	2,127
		1,211			9,251
Computers (0.24%)			Diversified Operations (1.60%)
Acer Inc	83,195	144	Groupe Bruxelles Lambert SA	18,110	1,327
Compal Electronics Inc	232,000	188	Hutchison Whampoa Ltd	215,000	1,399
HTC Corp	12,000	169	LG Corp	6,123	291
Wincor Nixdorf AG	1,269	71	Mitie Group PLC	29,097	103
Wistron Corp	94,000	155	Noble Group Ltd	1,115,200	1,390
		727	Shanghai Industrial Holdings Ltd	56,000	225
Computers - Peripheral Equipment (0.04%)					4,735
Lite-On Technology Corp	150,000	130	E-Commerce - Services (0.42%)
Consulting Services (0.05%)			Rakuten Inc	2,057	1,240
Bureau Veritas SA	2,763	136	Electric - Generation (0.09%)
Distribution & Wholesale (0.27%)			Huaneng Power International Inc	387,884	272
Inchcape PLC	2,574,898	806	Electric - Integrated (3.19%)
Diversified Banking Institutions (5.92%)			Atco Ltd	4,400	149
Barclays PLC	482,411	2,242	Centrais Eletricas Brasileiras SA (a)	10,791	140
BNP Paribas	44,627	2,910	E.ON AG	66,536	2,363
Credit Agricole SA	56,231	705	Emera Inc	28,300	529
Credit Suisse Group AG	51,978	2,381	Empresa Nacional de Electricidad SA/Chile	120,835	200
Deutsche Bank AG	26,219	1,595	Enel SpA	211,650	1,033
HSBC Holdings PLC	471,816	3,931	GDF Suez	41,358	1,548
Mitsubishi UFJ Financial Group Inc	395,600	2,443	Hokuriku Electric Power Co	23,900	547
Natixis	281,240	547	Okinawa Electric Power Co Inc/The	800	43
UBS AG	65,034	799	Public Power Corp SA	44,445	917
		17,553	Reliance Infrastructure Ltd	8,555	213
			RWE AG	21,347	1,690
Diversified Financial Services (0.17%)			Tenaga Nasional BHD	43,800	95
KB Financial Group Inc ADR	5,948	198	TGK-2 (c)	1,600	-
Korea Investment Holdings Co Ltd	4,550	130			9,467
Mega Financial Holding Co Ltd	191,000	87

See accompanying notes

146

Schedule of Investments
Diversified International Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Electric - Transmission (0.26%)			Finance - Credit Card (0.03%)
Terna Rete Elettrica Nazionale SpA	232,291 $	775	Redecard SA	6,444 $	99
Electric Products - Miscellaneous (0.19%)			Finance - Investment Banker & Broker (1.40%)
LG Electronics Inc	4,677	427	Daishin Securities Co Ltd	3,960	48
Vossloh AG	1,139	137	Daiwa Securities Group Inc	144,000	856
		564	ICAP PLC	144,504	1,076
Electronic Components - Miscellaneous (0.66%)			KGI Securities Co Ltd	214,000	97
AU Optronics Corp	173,000	167	KIWOOM Securities Co Ltd	3,556	138
Chemring Group PLC	3,609	129	Mediobanca SpA	68,568	817
CMK Corp/Japan	7,400	73	Nomura Holdings Inc	132,300	1,117
Hon Hai Precision Industry Co Ltd	100,470	308			4,149
Hosiden Corp	6,700	86	Finance - Other Services (0.13%)
LG Display Co Ltd	4,430	111	BM&FBOVESPA SA	51,821	310
Nihon Dempa Kogyo Co Ltd	2,700	57	London Stock Exchange Group PLC	5,623	65
Nippon Electric Glass Co Ltd	91,000	1,017			375
		1,948	Fisheries (0.25%)
Electronic Components - Semiconductors (0.93%)			Nippon Suisan Kaisha Ltd	29,700	78
Chartered Semiconductor Manufacturing Ltd	44,700	63	Toyo Suisan Kaisha Ltd	32,000	659
(a)					737
MediaTek Inc	24,000	285
Megachips Corp	3,200	73	Food - Catering (0.34%)
Rohm Co Ltd	14,300	1,043	Compass Group PLC	181,109	1,022
Samsung Electronics Co Ltd	2,652	1,226	Food - Miscellaneous/Diversified (1.79%)
Shinko Electric Industries Co Ltd	5,400	67	Fuji Oil Co Ltd	9,300	108
		2,757	Maruha Nichiro Holdings Inc	38,000	57
Electronic Parts Distribution (0.05%)			Nestle SA	116,026	4,381
WPG Holdings Co Ltd	148,000	146	Unilever NV	25,782	624
			Uni-President Enterprises Corp	96,000	99
Engineering - Research & Development Services (0.41%)			Viscofan SA	2,202	47
COMSYS Holdings Corp	10,000	110			5,316
Imtech NV	4,914	96
Larsen & Toubro Ltd (b)	3,840	125	Food - Retail (1.16%)
Toyo Engineering Corp	29,000	98	Colruyt SA	3,203	732
WorleyParsons Ltd	42,075	802	Jeronimo Martins SGPS SA	11,105	76
		1,231	Koninklijke Ahold NV	146,369	1,687
			WM Morrison Supermarkets PLC	239,468	935
Enterprise Software & Services (0.89%)					3,430
Autonomy Corp PLC (a)	70,852	1,679
IT Holdings Corp	3,600	64	Forestry (0.22%)
Micro Focus International PLC	12,230	76	Sino-Forest Corp (a)	62,400	665
Software AG	10,696	757	Gas - Distribution (0.15%)
Temenos Group AG (a)	3,251	55	Canadian Utilities Ltd	13,800	450
		2,631
Entertainment Software (0.26%)			Gold Mining (1.86%)
Capcom Co Ltd	42,800	770	Barrick Gold Corp. (a)	41,618	1,401
			Franco-Nevada Corp	2,800	67
Finance - Consumer Loans (0.03%)			Harmony Gold Mining Co Ltd (a)	21,988	227
Provident Financial PLC	6,431	84	IAMGOLD Corp (a)	72,825	737
			Lihir Gold Ltd (a)	535,923	1,255
			Newcrest Mining Ltd	63,435	1,550
See accompanying notes		147

Schedule of Investments
Diversified International Account

June 30, 2009 (unaudited)

	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Gold Mining (continued)			Medical - Biomedical/Gene (0.36%)
Red Back Mining Inc (a)	14,765 $	129	CSL Ltd/Australia	39,974 $	1,033
Zijin Mining Group Co Ltd	152,000	137	Genmab A/S (a)	1,325	46
		5,503			1,079
Import & Export (2.08%)			Medical - Drugs (5.62%)
ITOCHU Corp	230,000	1,596	Actelion Ltd (a)	16,970	889
Marubeni Corp	248,000	1,097	AstraZeneca PLC	56,385	2,486
Mitsubishi Corp	91,300	1,685	China Pharmaceutical Group Ltd	223,890	115
Sumitomo Corp	176,200	1,791	Chugai Pharmaceutical Co Ltd	43,200	822
		6,169	Cipla Ltd/India	8,061	43
Industrial Gases (0.04%)			Dr Reddys Laboratories Ltd	13,618	222
Air Water Inc	10,000	109	GlaxoSmithKline PLC	69,622	1,230
			Grifols SA	40,174	713
Instruments - Controls (0.02%)			Hisamitsu Pharmaceutical Co Inc	20,800	646
Rotork PLC	5,263	72	Kyorin Co Ltd	4,000	61
			Miraca Holdings Inc	5,000	122
Internet Application Software (0.05%)			Novartis AG	33,385	1,359
Tencent Holdings Ltd	13,444	156	Novo Nordisk A/S	23,708	1,291
			Roche Holding AG	27,453	3,740
Internet Content - Entertainment (0.03%)			Sanofi-Aventis SA	37,113	2,193
Shanda Interactive Entertainment Ltd ADR (a)	1,569	82
			Shire PLC	54,342	750
Internet Content - Information & News (0.03%)					16,682
Kakaku.com Inc	23	87	Medical - Generic Drugs (0.17%)
			Teva Pharmaceutical Industries Ltd ADR	9,368	462
Investment Companies (0.35%)			Towa Pharmaceutical Co Ltd	1,100	55
Investor AB	60,707	939			517
Kinnevik Investment AB	9,140	94
		1,033	Medical - Hospitals (0.03%)
			Rhoen Klinikum AG	3,863	85
Investment Management & Advisory Services (0.03%)
Azimut Holding SpA	7,997	76	Medical - Nursing Homes (0.04%)
			Orpea (a)	2,637	117
Leisure & Recreation Products (0.03%)
Fields Corp	59	80	Medical - Wholesale Drug Distribution (0.03%)
			Alapis Holding Industrial and Commercial
Life & Health Insurance (0.41%)			SA of Pharmaceutical Chemical & Organic
Cathay Financial Holding Co Ltd	276,000	406	Products	63,357	90
China Life Insurance Co Ltd	152,000	559
Sanlam Ltd	114,403	256	Medical Products (0.07%)
		1,221	Nipro Corp	2,989	61
			SSL International PLC	15,625	134
Machinery - Construction & Mining (0.02%)					195
Danieli & Co SpA	3,652	62
			Metal - Copper (0.47%)
Machinery - Farm (0.39%)			Antofagasta PLC	28,731	279
Kubota Corp	139,000	1,145	Inmet Mining Corp	20,600	756
			Quadra Mining Ltd (a)	9,200	69
Machinery - General Industry (0.35%)			Sterlite Industries India Ltd ADR	24,054	299
Kone OYJ	29,971	921			1,403
STX Engine Co Ltd	5,390	114
			Metal - Diversified (1.13%)
		1,035	Boliden AB	17,741	134
			KGHM Polska Miedz SA	19,335	497
See accompanying notes		148

Schedule of Investments
Diversified International Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Metal - Diversified (continued)			Oil & Gas Drilling (0.50%)
MMC Norilsk Nickel ADR	25,487 $	232	Noble Corp	24,610 $	744
Pacific Metals Co Ltd	8,000	62	Transocean Ltd (a)	9,755	725
Rio Tinto Ltd - Rights (a)(b)	24,594	467			1,469
Rio Tinto Ltd	46,846	1,957	Oil Company - Exploration & Production (2.54%)
		3,349	Addax Petroleum Corp	21,400	908
Metal - Iron (0.03%)			Australian Worldwide Exploration Ltd	43,351	89
Mount Gibson Iron Ltd (a)	101,687	73	Baytex Energy Trust (a)	5,800	98
Novolipetsk Steel OJSC (a)	607	13	Canadian Natural Resources (a)	33,600	1,768
		86	CNOOC Ltd	309,000	381
Metal Processors & Fabrication (0.07%)			EnCana Corp (a)	35,258	1,748
Aurubis AG	1,836	54	Gazprom OAO (a)(b)(d)	3,832	194
Jiangxi Copper Co Ltd	32,000	52	Gazprom OAO (a)	32,859	666
TK Corp	3,857	95	Premier Oil PLC (a)	5,435	98
		201	Talisman Energy (a)	102,000	1,465
			TriStar Oil and Gas Ltd (a)	12,000	113
Miscellaneous Manufacturers (0.02%)					7,528
Faiveley SA	846	65
			Oil Company - Integrated (6.90%)
Mortgage Banks (0.05%)			BG Group PLC	175,400	2,954
Home Capital Group Inc	5,700	148	BP PLC	369,674	2,921
			China Petroleum & Chemical Corp	764,000	578
Multi-Line Insurance (2.22%)			ENI SpA	116,103	2,754
ACE Ltd	21,180	937	Lukoil OAO ADR	13,101	586
Allianz SE	11,860	1,090	PetroChina Co Ltd	375,199	415
AXA SA	43,261	819	Petroleo Brasileiro SA ADR	47,865	1,961
Baloise Holding AG	15,456	1,149	Rosneft Oil Co	97,452	532
CNP Assurances	9,263	886	Royal Dutch Shell PLC - A Shares	87,716	2,200
Zurich Financial Services	9,609	1,699	Royal Dutch Shell PLC - B Shares	54,479	1,372
		6,580	Sasol Ltd	3,593	126
Multimedia (0.71%)			Tatneft ADR	3,831	94
Informa PLC	19,988	72	Total SA	73,049	3,959
Vivendi	48,943	1,175			20,452
WPP PLC	127,202	846	Oil Refining & Marketing (0.56%)
		2,093	DCC Plc	5,447	112
Non-Ferrous Metals (0.05%)			Nippon Mining Holdings Inc	157,000	811
Korea Zinc Co Ltd	1,450	157	Reliance Industries Ltd (a)(d)	4,781	399
			SK Energy Co Ltd	928	74
Office Automation & Equipment (0.71%)			SK Holdings Co Ltd	2,960	246
Canon Inc	44,300	1,447	Tupras-Turkiye Petrol Rafinerileri AS	2,536	31
Neopost SA	7,290	656			1,673
		2,103
			Paper & Related Products (0.35%)
Oil - Field Services (0.71%)			Lee & Man Paper Manufacturing Ltd	53,600	52
Bourbon SA	2,413	95	Nine Dragons Paper Holdings Ltd	251,000	165
China Oilfield Services Ltd	228,000	246	Svenska Cellulosa AB	77,500	816
Fred Olsen Energy ASA	2,700	92			1,033
Maire Tecnimont SpA	24,295	80
			Petrochemicals (0.10%)
Petrofac Ltd	87,153	962
			Honam Petrochemical Corp	1,536	92
Technip SA	12,703	626
			LG Chem Ltd	1,422	155
		2,101

See accompanying notes

149

     Schedule of Investments Diversified International Account

June 30, 2009 (unaudited)

	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Petrochemicals (continued)			Real Estate Operator & Developer (continued)
PTT Chemical PLC (a)(b)	32,200 $	49	Sun Hung Kai Properties Ltd	110,000 $	1,366
		296			4,793
Pharmacy Services (0.02%)			Reinsurance (0.91%)
SXC Health Solutions Corp (a)	2,800	71	Hannover Rueckversicherung AG	21,490	789
			Korean Reinsurance Co	27,850	257
Platinum (0.07%)			Muenchener Rueckversicherungs AG	12,152	1,641
Impala Platinum Holdings Ltd	10,013	222			2,687
Printing - Commercial (0.28%)			REITS - Diversified (0.11%)
Toppan Printing Co Ltd	82,000	826	Champion REIT	215,000	70
			Fonciere Des Regions	768	58
Property & Casualty Insurance (1.80%)			Suntec Real Estate Investment Trust	139,238	83
Admiral Group PLC	4,426	64	Wereldhave NV	1,478	110
Amlin PLC	109,223	545			321
Beazley PLC	57,502	92
			REITS - Office Property (0.28%)
Catlin Group Ltd	11,524	61	Commonwealth Property Office Fund	181,855	121
Hiscox Ltd	17,712	84	Nippon Building Fund Inc	82	701
Lancashire Holdings Ltd	10,913	84			822
Mitsui Sumitomo Insurance Group Holdings
Inc	56,900	1,489	REITS - Shopping Centers (0.04%)
PICC Property & Casualty Co Ltd	108,000	74	Vastned Retail NV	2,168	108
RSA Insurance Group PLC	542,415	1,077
Tokio Marine Holdings Inc	64,700	1,776	REITS - Storage (0.02%)
		5,346	Big Yellow Group PLC	12,065	68
Protection - Safety (0.02%)			Retail - Apparel & Shoe (0.56%)
Nohmi Bosai Ltd	6,000	53	Aoyama Trading Co Ltd	4,100	71
			Fast Retailing Co Ltd	9,364	1,221
Public Thoroughfares (0.36%)			Point Inc	1,140	61
Atlantia SpA	45,754	926	Truworths International Ltd	62,130	298
Zhejiang Expressway Co Ltd	196,000	155			1,651
		1,081
			Retail - Automobile (0.09%)
Real Estate Management & Services (0.58%)			PT Astra International Tbk	120,000	279
Fabege AB	19,189	65
Mitsubishi Estate Co Ltd	90,000	1,494	Retail - Bookstore (0.06%)
Nexity	2,859	86	Culture Convenience Club Co Ltd	8,200	70
PSP Swiss Property AG (a)	1,817	87	WH Smith PLC	17,014	117
		1,732			187
Real Estate Operator & Developer (1.62%)			Retail - Building Products (0.45%)
Africa Israel Investments Ltd	5,005	85	Kingfisher PLC	430,178	1,262
Agile Property Holdings Ltd	110,000	157	Travis Perkins PLC	8,025	70
Brookfield Asset Management Inc (a)	68,104	1,165			1,332
Great Eagle Holdings Ltd	28,000	59
			Retail - Computer Equipment (0.03%)
Mitsui Fudosan Co Ltd	73,000	1,266
			Game Group PLC	32,757	89
Rossi Residencial SA	63,500	267
Shenzhen Investment Ltd	282,000	117	Retail - Consumer Electronics (0.08%)
Shimao Property Holdings Ltd	76,000	146	JB Hi-Fi Ltd	10,371	128
Shun Tak Holdings Ltd	156,000	97	K's Holdings Corp	4,500	117
Sino-Ocean Land Holdings Ltd	59,500	68			245

See accompanying notes

150

Schedule of Investments
Diversified International Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			COMMON STOCKS (continued)
Retail - Convenience Store (0.03%)			Steel - Producers (1.10%)
Alimentation Couche Tard Inc	6,700 $	81	ArcelorMittal	37,531 $	1,242
			China Steel Corp	186,000	159
Retail - Home Furnishings (0.44%)			Evraz Group SA (b)	18,168	345
Nitori Co Ltd	18,572	1,315	Godo Steel Ltd	27,000	81
			JSW Steel Ltd	12,600	161
Retail - Hypermarkets (0.04%)
			Kyoei Steel Ltd	2,300	65
Magnit OAO	11,888	106
			POSCO ADR	6,402	529
Retail - Major Department Store (0.06%)			Tokyo Steel Manufacturing Co Ltd	46,595	567
Lotte Shopping Co Ltd	913	187	Tung Ho Steel Enterprise Corp	131,000	125
					3,274
Retail - Miscellaneous/Diversified (0.04%)			Sugar (0.02%)
Dufry South America Ltd	9,300	116	Cosan SA Industria e Comercio (a)	7,552	55
Retail - Pubs (0.03%)			Telecommunication Equipment (0.02%)
Enterprise Inns PLC	41,373	85	Oki Electric Industry Co Ltd	47,000	50
Retail - Restaurants (0.05%)			Telecommunication Services (0.83%)
McDonald's Holdings Co Japan Ltd	4,569	85	China Communications Services Corp Ltd	183,884	113
Saizeriya Co Ltd	4,700	69	China Telecom Corp Ltd	452,000	224
		154	Chunghwa Telecom Co Ltd	87,000	174
Rubber - Tires (0.02%)			Indosat Tbk PT	250,489	122
Yokohama Rubber Co Ltd/The	13,000	64	Singapore Telecommunications Ltd	633,000	1,306
			Telefonica O2 Czech Republic AS	8,814	201
Satellite Telecommunications (0.54%)			Telekomunikasi Indonesia Tbk PT	306,000	226
Eutelsat Communications	31,607	818	Telenet Group Holding NV (a)	4,758	101
Inmarsat PLC	85,856	772			2,467
		1,590
			Telephone - Integrated (2.75%)
Schools (0.33%)			France Telecom SA	19,860	452
Benesse Corp	24,400	978	Koninklijke (Royal) KPN NV	103,139	1,423
			KT Corp	1,750	51
Security Services (0.45%)
G4S PLC	355,879	1,226	Magyar Telekom Telecommunications PLC	41,089	121
Prosegur Cia de Seguridad SA	3,104	100	Philippine Long Distance Telephone Co	2,410	120
		1,326	Softbank Corp	64,700	1,260
			Tele Norte Leste Participacoes SA	6,979	111
Semiconductor Component - Integrated Circuits (0.31%)			Telecom Italia SpA	795,403	1,103
Siliconware Precision Industries Co	242,000	280	Telefonica SA	142,243	3,230
Taiwan Semiconductor Manufacturing Co Ltd	387,205	635	Telefonos de Mexico SAB de CV ADR	12,859	208
		915	Telkom SA Ltd	14,535	72
Semiconductor Equipment (0.36%)					8,151
Aixtron AG	3,867	47	Tobacco (1.26%)
ASML Holding NV	46,493	1,008	British American Tobacco PLC	70,553	1,947
		1,055	Imperial Tobacco Group PLC	55,847	1,454
Shipbuilding (0.07%)			KT&G Corp	3,311	187
Samsung Heavy Industries Co Ltd	9,390	212	Souza Cruz SA (a)	5,100	146
					3,734
Soap & Cleaning Products (0.51%)
			Toys (0.49%)
Reckitt Benckiser Group PLC	33,158	1,514
			Nintendo Co Ltd	5,300	1,467

See accompanying notes

151

Schedule of Investments
Diversified International Account
June 30, 2009 (unaudited)
	Shares	Value		Shares	Value
	Held	(000's)		Held	(000's)
COMMON STOCKS (continued)			PREFERRED STOCKS (continued)
Transport - Marine (0.16%)			Steel - Producers (0.13%)
Inui Steamship Co Ltd	11,300 $	83	Gerdau SA	6,572 $	69
Sincere Navigation	97,000	109	Usinas Siderurgicas de Minas Gerais SA	14,609	313
Songa Offshore SE (a)	22,000	72			382
U-Ming Marine Transport Corp	107,000	208
			TOTAL PREFERRED STOCKS	$ 2,187
		472