N-CSR

This report is not to be construed as an offering for sale of any contracts participating in the Subaccounts (Series) of the Transamerica Partners Variable Funds or the Transamerica Asset Allocation Variable Funds, or as a solicitation of an offer to buy contracts unless preceded by or accompanied by a current prospectus which contains complete information about charges and expenses.

This report consists of the annual report of the Transamerica Asset Allocation Variable Funds and the annual reports of the Transamerica Partners Portfolios and the Calvert Social Balanced Portfolio, the underlying portfolios in which the Transamerica Partners Variable Funds invest.

Proxy Voting Policies and Procedures

A description of the proxy voting policies and procedures of the Transamerica Asset Allocation Variable Funds and Transamerica Partners Portfolios is included in the Statement of Additional Information (“SAI”), which is available without charge, upon request: (i) by calling 1-800-755-5801; (ii) on the Subaccounts’ website at www.divinvest.com (Click on the icon for Participants, then click on Fund Information, choose Investment Funds, click on a Fund, then click on the Fund Information tab) or (iii) on the SEC’s website at www.sec.gov. In addition, the Transamerica Asset Allocation Variable Funds and the Transamerica Partners Portfolios are required to file Form N-PX, with the complete proxy voting record for the twelve months ended June 30, no later than August 31 of each year. Form N-PX for the twelve months ended June 30, 2008, is available without charge, upon request.

Quarterly Portfolios

The Transamerica Asset Allocation Variable Funds will file their portfolios of investments on Form N-Q with the SEC for the first and third quarters of each fiscal year. The Subaccounts’ Form N-Q is available on the SEC’s website at www.sec.gov. The Subaccounts’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. For information on the operation of the SEC’s Public Reference Room, call 1-800-SEC-0330. You may also obtain a copy of Form N-Q without charge, upon request, by calling 1-800-755-5801. Form N-Q for the corresponding Transamerica Partners Portfolios is also available without charge on the SEC website, at the SEC’s Public Reference Room, or by calling 1-800-755-5801.

TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY, INC.

Four Manhattanville Road

Purchase, New York 10577

December 31, 2008

To Contractholders with Interests

in the Transamerica Partners Variable Funds:

We are pleased to present the most recent annual reports for the Transamerica Partners Portfolios and for the Calvert Social Balanced Portfolio. As required under applicable law, we are sending these annual reports to contract holders of Group Variable Annuity Contracts issued by Transamerica Financial Life Insurance Company, Inc. with unit interests in one or more of the Transamerica Partners Variable Funds. Each subaccount available within the Transamerica Partners Variable Funds, other than the Calvert Subaccount, invests its assets in a corresponding mutual fund that is a series of Transamerica Partners Portfolios. The Calvert Subaccount invests in the Calvert Social Balanced Portfolio, a series of Calvert Variable Series. Inc.

Please call your retirement plan administrator, Diversified Investment Advisors, Inc., at (800) 755-5801 if you have any questions regarding these reports.

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
AN EXPLANATION OF FUND EXPENSES
(Unaudited)

Transamerica Asset Allocation Variable Funds (formerly, Diversified Investors Strategic Variable Funds) (individually, a “Subaccount” and collectively, the “Subaccounts”) is a separate investment account established by Transamerica Financial Life Insurance Company, Inc. (“TFLIC”), and is used as an investment vehicle under certain tax-deferred annuity contracts issued by TFLIC. Each Subaccount invests in underlying subaccounts of Transamerica Partners Variable Funds (formerly, Diversified Investors Variable Funds) (“TPVF”), a unit investment trust. As a contractholder of a Subaccount, you will bear the ongoing costs of managing the corresponding subaccount in which your Subaccount invests. You will also bear the cost of operating the Subaccount.

The first column in the table shown below assumes an investment of $1,000 on July 1, 2008. The second column will show your ending balance (per $1,000) on December 31, 2008. The third column will show how much of your investment (per $1,000) went to the ongoing costs of your Subaccount. The figures in both of these columns are based on the actual total return and the actual expenses incurred for the period July 1, 2008-December 31, 2008. In order to approximate how much you paid in expenses during the six months, divide your balance by 1,000, and multiply the result by the dollar amount shown under the heading “Expenses Paid During the Period July 1, 2008-December 31, 2008”.

The fourth and fifth columns will also show your ending balance (per $1,000) on December 31, 2008 and how much of your investment (per $1,000) went to the ongoing costs of your Subaccount, but assumes a total annual return rate of 5% before expenses. Since the 5% is hypothetical, the ending account values and the expenses paid for the period July 1, 2008-December 31, 2008 will not be the actual values per $1,000 of your investment. This information is presented so you may compare the cost of investing in a Transamerica Asset Allocation Variable Fund against the cost of investing in other funds. Other funds should provide this information based on a hypothetical annual return of 5% before expenses in their most recent report in order for you to make a fair comparison.


					Expenses Paid				Expenses Paid
			Ending Account		During the Period		Ending Account		During the Period
	Beginning Account		Value		July 1, 2008-		Value		July 1, 2008-		Annualized
	Value		December 31,		December 31,		December 31,		December 31,		Expense
Subaccount	July 1, 2008		2008(1)		2008(1)(2)(3)		2008(4)		2008(2)(3)(4)		Ratio(2)
Short Horizon	$	1,000	$	908.87	$	0.96	$	1,024.13	$	1.02		0.20	%

Intermediate Horizon		1,000		792.23		0.90		1,024.13		1.02		0.20

Intermediate/Long Horizon		1,000		735.31		0.87		1,024.13		1.02		0.20


(1)		Based on actual returns and expenses.

(2)		These figures exclude fees and expenses of the underlying investments in TPVF.

(3)		Expenses are equal to each Fund’s annualized expense ratio multiplied by the average account value over the period, divided by 366, multiplied by 184 (to reflect the one-half year period).

(4)		Based on hypothetical 5% annual returns before actual expenses.

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
SHORT HORIZON

STATEMENT OF ASSETS AND LIABILITIES
December 31, 2008


Assets:
Investments in affiliates, at value (Notes 1 and 2)	$	9,451,808
Cash		—
Receivable for units sold		67,317
Receivable for securities sold		—

Total assets		9,519,125


Liabilities:
Due to Custodian		—
Payable for units redeemed		4,103
Payable for securities purchased		63,214
Accrued investment advisory fees		1,673

Total liabilities		68,990


Net assets	$	9,450,135


Net assets consist of:
Cost of accumulation units	$	7,776,575
Undistributed (accumulated) net investment income (loss)		(165,087	)
Undistributed (accumulated) net realized gains (losses)		2,232,345
Net unrealized appreciation (depreciation) on investments		(393,698	)


Net assets	$	9,450,135


Accumulation units		644,661


Unit value	$	14.66


Investments in affiliates, at cost	$	9,845,506

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment advisory fees (Note 3)	$	(21,681	)


Realized and unrealized gains (losses) on investments in affiliates (Note 2):
Net realized gains (losses) on investments in affiliates		592,873
Change in net unrealized appreciation (depreciation) on investments in affiliates		(1,723,348	)

Net realized and unrealized gains (losses) on investments in affiliates		(1,130,475	)

Net increase (decrease) in net assets resulting from operations	$	(1,152,156	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07
From operations:
Investment advisory fees	$	(21,681	)	$	(21,447	)
Net realized gains (losses) on investments in affiliates		592,873			242,773
Change in net unrealized appreciation (depreciation) on investments in affiliates		(1,723,348	)		249,785

Net increase (decrease) in net assets resulting from operations		(1,152,156	)		471,111


From unit transactions:
Units sold		4,786,093			3,890,370
Units redeemed		(5,280,703	)		(3,469,492	)

Net increase (decrease) in net assets resulting from unit transactions		(494,610	)		420,878

Total increase (decrease) in net assets		(1,646,766	)		891,989

Net assets:
Beginning of year		11,096,901			10,204,912

End of year	$	9,450,135		$	11,096,901


Units outstanding beginning of year		681,662			654,393
Units sold		302,679			245,586
Units redeemed		(339,680	)		(218,317	)

Units outstanding end of year		644,661			681,662

See notes to financial statements.

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
INTERMEDIATE HORIZON

STATEMENT OF ASSETS AND LIABILITIES
December 31, 2008


Assets:
Investments in affiliates, at value (Notes 1 and 2)	$	21,993,767
Cash		—
Receivable for units sold		10,868
Receivable for securities sold		133,078

Total assets		22,137,713


Liabilities:
Due to Custodian		—
Payable for units redeemed		143,946
Payable for securities purchased		—
Accrued investment advisory fee		3,860

Total liabilities		147,806


Net assets	$	21,989,907


Net assets consist of:
Cost of accumulation units	$	20,587,999
Undistributed (accumulated) net investment income (loss)		(488,746	)
Undistributed (accumulated) net realized gains (losses)		5,173,016
Net unrealized appreciation (depreciation) on investments		(3,282,362	)


Net assets	$	21,989,907


Accumulation units		1,633,325


Unit value	$	13.46


Investments in affiliates, at cost	$	25,276,129

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment advisory fees (Note 3)	$	(56,271	)


Realized and unrealized gains (losses) on investments in affiliates (Note 2):
Net realized gains (losses) on investments in affiliates		2,214,327
Change in net unrealized appreciation (depreciation) on investments in affiliates		(10,272,210	)

Net realized and unrealized gains (losses) on investments in affiliates		(8,057,883	)

Net increase (decrease) in net assets resulting from operations	$	(8,114,154	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07
From operations:
Investment advisory fees	$	(56,271	)	$	(63,294	)
Net realized gains (losses) on investments in affiliates		2,214,327			198,466
Change in net unrealized appreciation (depreciation) on investments in affiliates		(10,272,210	)		1,124,330

Net increase (decrease) in net assets resulting from operations		(8,114,154	)		1,259,502


From unit transactions:
Units sold		6,324,573			6,971,209
Units redeemed		(8,803,875	)		(5,603,555	)

Net increase (decrease) in net assets resulting from unit transactions		(2,479,302	)		1,367,654

Total increase (decrease) in net assets		(10,593,456	)		2,627,156

Net assets:
Beginning of year		32,583,363			29,956,207

End of year	$	21,989,907		$	32,583,363


Units outstanding beginning of year		1,794,207			1,717,863
Units sold		389,711			387,964
Units redeemed		(550,593	)		(311,620	)

Units outstanding end of year		1,633,325			1,794,207

See notes to financial statements.

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
INTERMEDIATE/LONG HORIZON

STATEMENT OF ASSETS AND LIABILITIES
December 31, 2008


Assets:
Investments in affiliates, at value (Notes 1 and 2)	$	33,458,530
Cash		—
Receivable for units sold		11,378
Receivable for securities sold		63,952

Total assets		33,533,860


Liabilities:
Due to Custodian		—
Payable for units redeemed		75,330
Payable for securities purchased		—
Accrued investment advisory fees		5,766

Total liabilities		81,096


Net assets	$	33,452,764


Net assets consist of:
Cost of accumulation units	$	35,732,375
Undistributed (accumulated) net investment income (loss)		(692,997	)
Undistributed (accumulated) net realized gains (losses)		6,428,513
Net unrealized appreciation (depreciation) on investments		(8,015,127	)


Net assets	$	33,452,764


Accumulation units		2,596,241


Unit value	$	12.89


Investments in affiliates, at cost	$	41,473,657

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment advisory fees (Note 3)	$	(87,849	)


Realized and unrealized gains (losses) on investments in affiliates (Note 2):
Net realized gains (losses) on investments in affiliates		2,836,963
Change in net unrealized appreciation (depreciation) on investments in affiliates		(19,435,674	)

Net realized and unrealized gains (losses) on investments in affiliates		(16,598,711	)

Net increase (decrease) in net assets resulting from operations	$	(16,686,560	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07
From operations:
Investment advisory fees	$	(87,849	)	$	(103,143	)
Net realized gains (losses) on investments in affiliates		2,836,963			321,871
Change in net unrealized appreciation (depreciation) on investments in affiliates		(19,435,674	)		1,661,060

Net increase (decrease) in net assets resulting from operations		(16,686,560	)		1,879,788


From unit transactions:
Units sold		7,759,794			11,094,717
Units redeemed		(10,324,144	)		(7,564,308	)

Net increase (decrease) in net assets resulting from unit transactions		(2,564,350	)		3,530,409

Total increase (decrease) in net assets		(19,250,910	)		5,410,197

Net assets:
Beginning of year		52,703,674			47,293,477

End of year	$	33,452,764		$	52,703,674


Units outstanding beginning of year		2,731,348			2,548,307
Units sold		486,824			576,621
Units redeemed		(621,931	)		(393,580	)

Units outstanding end of year		2,596,241			2,731,348

See notes to financial statements.

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
SHORT HORIZON
PORTFOLIO OF INVESTMENTS

December 31, 2008


Shares			Value

		Investments
	134,264	Transamerica Partners Variable Funds — Core Bond	$	4,359,424
	98,276	Transamerica Partners Variable Funds — High Quality Bond		1,523,687
	71,453	Transamerica Partners Variable Funds — High Yield Bond		951,563
	63,698	Transamerica Partners Variable Funds — Inflation-Protected Securities		1,380,638
	13,832	Transamerica Partners Variable Funds — International Equity		201,483
	8,246	Transamerica Partners Variable Funds — Large Growth		277,539
	8,825	Transamerica Partners Variable Funds — Large Value		307,370
	11,781	Transamerica Partners Variable Funds — Money Market		248,460
	8,617	Transamerica Partners Variable Funds — Small Core		201,644

		Total Investments — 100.0% (Cost $9,845,506)		9,451,808
		Liabilities less other assets — (0.0)%*		(1,673	)

		Net Assets — 100.0%	$	9,450,135

The aggregate cost of investments for federal income tax purposes at December 31, 2008 is $9,845,506.

The following amounts are based on cost for federal income tax purposes:


Gross unrealized appreciation	$	186,010
Gross unrealized depreciation		(579,708	)

Net unrealized depreciation	$	(393,698	)


*		Amount rounds to less than (0.05)%

See notes to financial statements.

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
INTERMEDIATE HORIZON
PORTFOLIO OF INVESTMENTS

December 31, 2008


Shares			Value

		Investments
	158,222	Transamerica Partners Variable Funds — Core Bond	$	5,137,322
	110,332	Transamerica Partners Variable Funds — High Quality Bond		1,710,605
	102,664	Transamerica Partners Variable Funds — High Yield Bond		1,367,219
	99,868	Transamerica Partners Variable Funds — Inflation-Protected Securities		2,164,593
	184,955	Transamerica Partners Variable Funds — International Equity		2,694,186
	91,842	Transamerica Partners Variable Funds — Large Growth		3,091,269
	94,400	Transamerica Partners Variable Funds — Large Value		3,287,902
	14,081	Transamerica Partners Variable Funds — Money Market		296,976
	95,879	Transamerica Partners Variable Funds — Small Core		2,243,695

		Total Investments — 100.0% (Cost $25,276,129)		21,993,767
		Liabilities less other assets — (0.0)%*		(3,860	)

		Net Assets — 100.0%	$	21,989,907

The aggregate cost of investments for federal income tax purposes at December 31, 2008 is $25,276,129.

The following amounts are based on cost for federal income tax purposes:


Gross unrealized appreciation	$	290,667
Gross unrealized depreciation		(3,573,029	)

Net unrealized depreciation	$	(3,282,362	)


*		Amount rounds to less than (0.05)%

See notes to financial statements.

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
INTERMEDIATE/LONG HORIZON
PORTFOLIO OF INVESTMENTS

December 31, 2008


Shares			Value

		Investments
	147,469	Transamerica Partners Variable Funds — Core Bond	$	4,788,183
	41,607	Transamerica Partners Variable Funds — High Quality Bond		645,086
	103,687	Transamerica Partners Variable Funds — High Yield Bond		1,380,847
	101,993	Transamerica Partners Variable Funds — Inflation-Protected Securities		2,210,656
	422,578	Transamerica Partners Variable Funds — International Equity		6,155,569
	192,089	Transamerica Partners Variable Funds — Large Growth		6,465,431
	190,055	Transamerica Partners Variable Funds — Large Value		6,619,496
	23,025	Transamerica Partners Variable Funds — Money Market		485,620
	201,169	Transamerica Partners Variable Funds — Small Core		4,707,642

		Total Investments — 100.0% (Cost $41,473,657)		33,458,530
		Liabilities less other assets — (0.0)%*		(5,766	)

		Net Assets — 100.0%	$	33,452,764

The aggregate cost of investments for federal income tax purposes at December 31, 2008 is $41,473,657.

The following amounts are based on cost for federal income tax purposes:


Gross unrealized appreciation	$	161,809
Gross unrealized depreciation		(8,176,936	)

Net unrealized depreciation	$	(8,015,127	)


*		Amount rounds to less than (0.05)%

See notes to financial statements.

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
NOTES TO FINANCIAL STATEMENTS


1.	Organization

Transamerica Asset Allocation Variable Funds (formerly, Diversified Investors Strategic Variable Funds) (the “Separate Account”), a separate account of Transamerica Financial Life Insurance Company (“TFLIC”), is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a management investment company. The Separate Account is composed of three different subaccounts that are, in effect, separate investment funds: Transamerica Asset Allocation — Short Horizon Subaccount (formerly, Short Horizon Strategic Variable Fund) (“Short Horizon”), Transamerica Asset Allocation — Intermediate Horizon Subaccount (formerly, Intermediate Horizon Strategic Variable Fund) (“Intermediate Horizon”), and Transamerica Asset Allocation — Intermediate/Long Horizon Subaccount (formerly, Intermediate Long Horizon Strategic Variable Fund) (“Intermediate/Long Horizon”) (individually, a “Subaccount” and collectively, the “Subaccounts”). The Separate Account established and designated each of the Subaccounts as separate subaccounts on April 15, 1996 and commenced operations on January 2, 1997. The effective date of the name changes for the Separate Account and the Subaccounts was May 1, 2008. Each Subaccount seeks to achieve its investment objective by investing all of its investable assets among certain Transamerica Partners Variable Funds (formerly, Diversified Investors Variable Funds) (“TPVF”). TPVF is a separate investment account offering thirteen subaccounts, each with a different investment objective. Certain TPVF subaccounts seek to achieve their investment objective by investing all of their investable assets in the Transamerica Partners Portfolios (formerly, Diversified Investors Portfolios) (“Portfolios”). TPVF operates as a unit investment trust under the 1940 Act and commenced operations on August 18, 1994. The financial statements of the Portfolios accompany this report.


2.	Significant Accounting Policies

The following is a summary of significant accounting policies consistently followed by the Separate Account in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America.


A.	Investment Valuation:

The value of each Subaccount’s investment in a corresponding subaccount of TPVF is valued at the unit value per share determined as of the close of the New York Stock Exchange (typically, 4:00 P.M. Eastern time) on the valuation date.

The Subaccounts adopted the Financial Accounting Standards Board (“FASB”) Standard No. 157, “Fair Value Measurements” (“FAS 157”) on January 1, 2008. FAS 157 is designed to unify guidance for the measurement of fair value of all types of assets, including financial instruments, and certain liabilities, throughout a number of accounting standards. FAS 157 also establishes a hierarchy for measuring fair value in generally accepted accounting principals and expands financial statement disclosures about fair value measurements that are relevant to mutual funds.

Various inputs are used in determining the value of each Subaccount’s investments. These inputs are summarized in the three broad levels listed below:

Level 1 — Quoted prices in active markets for identical securities.

Level 2 — Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3 — Significant unobservable inputs (including the Subaccount’s own assumptions in determining the fair value of investments).

The inputs or methodology used for valuing securities are not an indication of the risks associated with investing in those securities.

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)


2.	Significant Accounting Policies (continued)

The following is a summary of fair valuations according to the inputs used to value the Subaccounts’ net assets as of December 31, 2008.


							Total		Other Financial
	Investment in Securities						Investment in		Instruments*
Subaccount	Level 1		Level 2		Level 3		Securities		Level 1		Level 2		Level 3

Short Horizon	$	—	$	9,451,808	$	—	$	9,451,808	$	—	$	—	$	—
Intermediate Horizon		—		21,993,767		—		21,993,767		—		—		—
Intermediate/Long Horizon		—		33,458,530		—		33,458,530		—		—		—


*		Other financial instruments, if any, are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation (depreciation) on the investment.


B.	Operating Expenses:

The Separate Account accounts separately for the assets, liabilities and operations of each Subaccount. Each Subaccount will indirectly bear its share of fees and expenses incurred by TPVF. These expenses are not reflected in the expenses in the Statement of Operations and are not included in the ratios to average net assets shown in the financial highlights.


C.	Federal Income Taxes:

The operations of the Separate Account form a part of, and are taxed with, the operations of TFLIC, a wholly-owned subsidiary of AEGON USA, LLC (“AEGON USA”). AEGON USA is a financial services holding company whose primary emphasis is on life and health insurance, and annuity and investment products. AEGON USA is owned by AEGON US Holding Corporation, which is owned by Transamerica Corporation (DE). Transamerica Corporation (DE) is owned by The AEGON Trust, which is owned by AEGON International B.V., which is owned by AEGON NV, a Netherlands corporation, and a publicly traded international group. TFLIC does not expect, based upon current tax law, to incur any income tax upon the earnings or realized capital gains attributable to the Separate Account. Based upon this expectation, no charges are currently being deducted from the Separate Account for federal income tax purposes.


D.	Other:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.


3.	Fees and Transactions with Affiliates

The Separate Account has entered into an Investment Advisory Agreement with Transamerica Asset Management, Inc. (the “Advisor” or “TAM”). TAM is directly owned by Western Reserve Life Assurance Co. of Ohio (77%) (“Western Reserve”) and AUSA Holding Company (23%) (“AUSA”), both of which are indirect, wholly-owned subsidiaries of AEGON NV. AUSA is wholly-owned by AEGON USA. The Advisor provides general investment advice to each Subaccount. For providing these services and facilities and for bearing the related expenses, the Advisor receives a monthly fee from each Subaccount at an annual rate equal to 0.20% of the average daily net assets of each Subaccount.

In addition, TFLIC deducts a mortality and expense risk charge at an annual rate equivalent to 1.10% of the average daily net assets from TPVF. TFLIC reserves the right to charge maximum fees of 1.25% upon notice.

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)


3.	Fees and Transactions with Affiliates (continued)

TFLIC bears sales distribution expenses and any other expenses in excess of the mortality and expense risk charge. TFLIC reserves the right to deduct an annual contract charge from a participant’s account to reimburse TFLIC for administrative expenses relating to the maintenance of the group variable annuity contracts. TFLIC has no present intention to impose such a charge but may do so in the future. Any such annual charge will not exceed $50.

Certain managing board members and officers of the Separate Account are also directors, officers or employees of the Advisor or its affiliates. None of the non-independent managing board members so affiliated receive compensation for services as managing board members of the Separate Account. Similarly, none of the Separate Account’s officers receive compensation from the Subaccounts. The independent board members are also trustees of the Portfolios for which they receive fees.

Each eligible independent board member may elect participation in a non-qualified deferred compensation plan (“the Plan”). Under the Plan, such board members may defer payment of all or a portion of their total fees earned as a Separate Account board member. Each board member who is a participant in the Plan may elect that the earnings, gains or losses credited to his/her deferred fee amounts be determined based on a deemed investment in investment options in Transamerica Partners Institutional Funds Group, Transamerica Institutional Asset Allocation Funds, Class A shares of any series of Transamerica Funds and/or funds of Transamerica Investors, Inc.


4.	Purchases and Sales of Investments

The aggregate cost of investments purchased and proceeds from sales for the year ended December 31, 2008 were as follows:


	Cost of		Proceeds
	Purchases		from Sales

Short Horizon	$	13,504,223	$	14,020,725
Intermediate Horizon		31,355,004		33,892,238
Intermediate/Long Horizon		46,422,124		49,077,538


5.	Concentrations and Indemnifications

From time to time, the Subaccounts may have a concentration of several contractholders holding a significant percentage of units outstanding. Investment activities of these contractholders could have a material impact on the Subaccounts.

In the normal course of business, the Subaccounts enter into contracts that contain a variety of representations and warranties which provide general indemnifications. The Subaccounts’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Subaccounts that have not yet occurred. However, based on experience, the Subaccounts expect the risk of loss to be remote.

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)


6.	Financial Highlights

For an accumulation unit outstanding throughout the year:


			Income (Loss) from																Ratios to Average
			Investment Operations																Net Assets
	Unit		Net			Net Realized			Total			Unit										Net
For the	Value,		Investment			and Unrealized			Income (Loss)			Value,					Net Assets,					Investment
Year	Beginning		Income			Gains (Losses)			from Investment			End of		Total			End of					Income			Portfolio
Ended	of Year		(Loss)(a)			on Investments			Operations			Year		Return			Year		Expenses			(Loss)			Turnover

Short Horizon
12/31/2008	$	16.28	$	(0.03	)	$	(1.59	)	$	(1.62	)	$	14.66		(9.95	)%	$	9,450,135		0.20	%		(0.20	)%		125	%
12/31/2007		15.59		(0.03	)		0.72			0.69			16.28		4.43			11,096,901		0.20			(0.20	)		55
12/31/2006		14.91		(0.03	)		0.71			0.68			15.59		4.56			10,204,912		0.20			(0.20	)		86
12/31/2005		14.68		(0.03	)		0.26			0.23			14.91		1.57			11,574,072		0.20			(0.20	)		46
12/31/2004		14.14		(0.03	)		0.57			0.54			14.68		3.82			10,191,299		0.20			(0.20	)		50
Intermediate Horizon
12/31/2008		18.16		(0.03	)		(4.67	)		(4.70	)		13.46		(25.88	)		21,989,907		0.20			(0.20	)		111
12/31/2007		17.44		(0.04	)		0.76			0.72			18.16		4.13			32,583,363		0.20			(0.20	)		18
12/31/2006		16.11		(0.03	)		1.36			1.33			17.44		8.26			29,956,207		0.20			(0.20	)		55
12/31/2005		15.50		(0.03	)		0.64			0.61			16.11		3.94			29,281,323		0.20			(0.20	)		29
12/31/2004		14.52		(0.03	)		1.01			0.98			15.50		6.75			28,720,023		0.20			(0.20	)		28
Intermediate/Long Horizon
12/31/2008		19.30		(0.03	)		(6.38	)		(6.41	)		12.89		(33.21	)		33,452,764		0.20			(0.20	)		105
12/31/2007		18.56		(0.04	)		0.78			0.74			19.30		3.99			52,703,674		0.20			(0.20	)		21
12/31/2006		16.87		(0.03	)		1.72			1.69			18.56		10.02			47,293,477		0.20			(0.20	)		63
12/31/2005		16.06		(0.03	)		0.84			0.81			16.87		5.04			45,441,180		0.20			(0.20	)		25
12/31/2004		14.83		(0.03	)		1.26			1.23			16.06		8.29			40,122,473		0.20			(0.20	)		34


(a)		Calculated based upon average units outstanding.

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)


7.	Investments in Affiliates

The market value of investments in affiliates (as defined in the 1940 Act, “Affiliated Companies” are those in which the Separate Account is under common control with an affiliated entity) at December 31, 2008 totaled $9,451,808, $21,993,767 and $33,458,530 for Short Horizon, Intermediate Horizon, and Intermediate/Long Horizon, respectively.

Affiliates and the gain/(loss) from sales of affiliates are as follows:


	Beginning		Units		Units		Ending		Purchase		Sale		Gain/(Loss)
	Units		Purchased		Sold		Units		Cost		Cost		on Sales

Short Horizon
Investments:
Transamerica Partners Variable Funds — Core Bond		177,681		33,343		76,760		134,264	$	1,130,430	$	2,256,493	$	295,183
Transamerica Partners Variable Funds — High Quality Bond		184,617		26,593		112,934		98,276		417,768		1,635,445		129,608
Transamerica Partners Variable Funds — High Yield Bond		50,602		43,239		22,388		71,453		710,752		258,056		115,140
Transamerica Partners Variable Funds — Inflation-Protected Securities		—		78,260		14,562		63,698		1,775,362		330,129		(14,102	)
Transamerica Partners Variable Funds — International Equity		5,475		11,641		3,284		13,832		240,142		43,946		21,077
Transamerica Partners Variable Funds — Large Core		5,230		—		5,230		—		—		118,819		21,442
Transamerica Partners Variable Funds — Large Growth		6,211		4,305		2,270		8,246		179,382		89,424		8,568
Transamerica Partners Variable Funds — Large Value		5,540		5,429		2,144		8,825		232,025		75,847		21,449
Transamerica Partners Variable Funds — Money Market		11,108		408,777		408,104		11,781		8,560,143		8,542,460		3,685
Transamerica Partners Variable Funds — Small Core		2,303		8,684		2,370		8,617		258,219		77,233		(9,177	)

									$	13,504,223	$	13,427,852	$	592,873

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)


7.	Investments in Affiliates (continued)


	Beginning		Units		Units		Ending		Purchase		Sale		Gain/(Loss)
	Units		Purchased		Sold		Units		Cost		Cost		on Sales

Intermediate Horizon
Investments:
Transamerica Partners Variable Funds — Core Bond		282,973		30,644		155,395		158,222	$	1,016,527	$	4,343,214	$	786,272
Transamerica Partners Variable Funds — High Quality Bond		302,883		28,095		220,646		110,332		437,369		3,187,244		262,838
Transamerica Partners Variable Funds — High Yield Bond		80,265		47,429		25,030		102,664		798,381		296,477		134,183
Transamerica Partners Variable Funds — Inflation-Protected Securities		—		150,834		50,966		99,868		3,402,070		1,155,456		(34,213	)
Transamerica Partners Variable Funds — International Equity		90,574		114,123		19,742		184,955		2,569,650		343,688		132,884
Transamerica Partners Variable Funds — Large Core		75,767		—		75,767		—		—		1,750,228		281,894
Transamerica Partners Variable Funds — Large Growth		93,746		19,304		21,208		91,842		833,078		839,234		235,377
Transamerica Partners Variable Funds — Large Value		77,720		32,810		16,130		94,400		1,455,454		640,730		246,140
Transamerica Partners Variable Funds — Money Market		38,020		878,040		901,979		14,081		18,371,934		18,863,465		10,601
Transamerica Partners Variable Funds — Small Core		31,254		77,737		13,112		95,879		2,470,541		258,175		158,351

									$	31,355,004	$	31,677,911	$	2,214,327


Intermediate/Long Horizon
Investments:
Transamerica Partners Variable Funds — Core Bond		269,499		49,564		171,594		147,469	$	1,632,885	$	5,091,207	$	563,566
Transamerica Partners Variable Funds — High Quality Bond		286,827		13,726		258,946		41,607		213,149		3,829,335		230,040
Transamerica Partners Variable Funds — High Yield Bond		77,676		66,567		40,556		103,687		1,104,148		472,568		205,682
Transamerica Partners Variable Funds — Inflation-Protected Securities		—		175,491		73,498		101,993		3,944,712		1,666,281		(51,271	)
Transamerica Partners Variable Funds — International Equity		205,200		254,536		37,158		422,578		5,782,006		761,135		197,958
Transamerica Partners Variable Funds — Large Core		170,874		—		170,874		—		—		4,215,250		367,732
Transamerica Partners Variable Funds — Large Growth		212,707		40,911		61,529		192,089		1,887,395		2,672,660		555,483
Transamerica Partners Variable Funds — Large Value		175,601		39,303		24,849		190,055		1,620,671		989,451		427,640
Transamerica Partners Variable Funds — Money Market		57,952		1,212,632		1,247,559		23,025		25,364,829		26,081,816		14,855
Transamerica Partners Variable Funds — Small Core		74,212		150,227		23,270		201,169		4,872,329		460,872		325,278

									$	46,422,124	$	46,240,575	$	2,836,963

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees and the Contractholders of Transamerica Asset
Allocation Variable Funds:

In our opinion, the accompanying statements of assets and liabilities, including the portfolios of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Short Horizon Subaccount, Intermediate Horizon Subaccount and Intermediate/Long Horizon Subaccount; (constituting the Transamerica Asset Allocation Variable Funds, hereafter referred to as the “Funds”) at December 31, 2008, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2008 by correspondence with the transfer agent, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

New York, New York

February 26, 2009

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
MANAGEMENT OF THE SEPARATE ACCOUNT
(Unaudited)

MANAGING BOARD MEMBERS AND OFFICERS

The Separate Account is governed by a Managing Board. Subject to the supervision of the Managing Board, the assets of each Subaccount are managed by the Advisor. The Managing Board is responsible for managing the business and affairs of the Separate Account and oversees the operation of the Separate Account by its officers. It also reviews the management of the Separate Account’s assets by the investment advisor. The Separate Account’s portfolios are among the funds advised and sponsored by Transamerica Asset Management, Inc. (“TAM”) (collectively, the “Transamerica Asset Management Group”). The Transamerica Asset Management Group (“TAMG”) consists of Transamerica Funds, Transamerica Series Trust (“TST”), Transamerica Investors, Inc. (“TII”), Transamerica Income Shares, Inc. (“TIS”), Transamerica Partners Funds Group (“TPFG”), Transamerica Partners Funds Group II (“TPFG II”), Transamerica Partners Portfolios (“TPP”), and Transamerica Asset Allocation Variable Funds (“TAAVF”) and consists of 176 portfolios.

Additional information about the Managing Board Members may be found in the Statement of Additional Information, which is available without charge upon request by calling 1-800-755-5801. The respective Managing Board Members (also referred to as Board Members) and officers of each Subaccount and their principal occupation during the past five years are set forth below. Their titles may have varied during that period. The mailing address of each Board Member is c/o Secretary of the Funds, 570 Carillon Parkway, St. Petersburg, Florida 33716.

Term of

Number of

Office and

Funds in

Position(s)

Length of

Principal Occupation(s) During

Complex Overseen

Name

Held

Time Served*

Past 5 Years

by Board Members

Other Directorships

INTERESTED BOARD MEMBER**

John K. Carter (DOB: 1961)

Chairman, Board Member, President, and Chief Executive Officer

Since 2007

Chairman and Board Member (2008 — present), President (2007 — present), Chief Executive Officer (2006 — present), Vice President, Secretary and Chief Compliance Officer (2003 — 2006), TII; Chairman, Board Member, President and Chief Executive Officer, TPP, TPFG, TPFG II and TAAVF (2007 — present); Chairman (2007 — present), Board Member (2006 — present), President and Chief Executive Officer (2006 — present), Senior Vice President (1999 — 2006), Chief Compliance Officer, General Counsel and Secretary (1999 — 2006), Transamerica Funds and TST; Chairman (2007 — present), Board Member (2006 — present), President and Chief Executive Officer (2006 — present), Senior Vice President (2002 — 2006), General Counsel, Secretary and Chief Compliance Officer (2002 — 2006), TIS; President and Chief Executive Officer (2006 — present),

176

N/A

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
MANAGEMENT OF THE SEPARATE ACCOUNT (Continued)
(Unaudited)

Term of

Number of

Office and

Funds in

Position(s)

Length of

Principal Occupation(s) During

Complex Overseen

Name

Held

Time Served*

Past 5 Years

by Board Members

Other Directorships

Senior Vice President (1999 — 2006), Director (2000 — present), General Counsel and Secretary (2000 — 2006), Chief Compliance Officer (2004 — 2006), TAM; President and Chief Executive

Officer (2006 — present), Senior Vice President (1999 — 2006), Director (2001 — present), General Counsel and Secretary (2001 — 2006), Transamerica Fund Services, Inc. (“TFS”); Vice President, AFSG Securities Corporation (2001 — present); Senior Vice President, General Counsel and Secretary, Transamerica Index Funds, Inc. (“TIF”) (2002 — 2004); Director (2008 — present); and Vice President,Transamerica Investment Services, Inc.(“TISI”) (2003 — 2005) and Transamerica Investment Management, LLC(“TIM”) (2001 — 2005).

INDEPENDENT BOARD MEMBERS***

Sandra N. Bane
(DOB: 1952)

Board Member

Since 2008

Retired, KPMG (1999 — present); and Board Member, TII (2003 — present), Transamerica Funds, TST, TIS, TPP, TPFG, TPFG II and TAAVF (2008 — present).

176

Big 5 Sporting Goods (2002 — present); AGL Resources, Inc. (energy services holding company) (2008 — present)

Leo J. Hill
(DOB: 1956)

Lead Independent Board Member

Since 2007

Principal, Advisor Network Solutions, LLC (business consulting) (2006 — present); Board Member, TST (2001 — present); Board Member, Transamerica Funds and TIS (2002 — present); Board Member, TPP, TPFG, TPFG II and TAAVF (2007 — present); TII (2008 — present); Owner and President, Prestige Automotive Group (2001 — 2005); President, L. J. Hill & Company (1999 — present); Market President, Nations Bank of Sun Coast Florida (1998 — 1999); President and Chief Executive Officer, Barnett Banks of Treasure Coast Florida (1994 — 1998);Executive Vice President and Senior Credit Officer,

176

N/A

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
MANAGEMENT OF THE SEPARATE ACCOUNT (Continued)
(Unaudited)

Term of

Number of

Office and

Funds in

Position(s)

Length of

Principal Occupation(s) During

Complex Overseen

Name

Held

Time Served*

Past 5 Years

by Board Members

Other Directorships

Barnett Banks of Jacksonville, Florida (1991 — 1994); and Senior Vice President and Senior Loan Administration Officer, Wachovia Bank of Georgia (1976 — 1991).

Neal M. Jewell (DOB: 1935)

Board Member

Since 1993

Retired (2004 — present); Board Member, TPP, TPFG, TPFG II and TAAVF (1993 — present); Board Member, Transamerica Funds, TST and TIS (2007 — present); Board Member, TII (2008 — present); and Independent Trustee, EAI Select Managers Equity Fund (a mutual fund) (1996 — 2004).

176

N/A

Russell A. Kimball, Jr. (DOB: 1944)

Board Member

Since 2007

General Manager, Sheraton Sand Key Resort (1975 — present); Board Member, TST (1986 — present); Board Member, Transamerica Funds and TIS (2002 — present); TPP, TPFG, TPFG II and TAAVF (2007 — present); and Board Member, TII (2008 — present).

176

N/A

Eugene M. Mannella (DOB: 1954)

Board Member

Since 1994

Chief Executive Officer, HedgeServ Corporation (hedge fund administration) (2008 — present); Self-employed consultant (2006 — present); President, ARAPAHO Partners LLC (limited purpose broker-dealer) (1998 — 2008); Board Member, TPP, TPFG, TPFG II and TAAVF (1994 — present); Board Member, Transamerica Funds, TST and TIS (2007 — present); Board Member, TII (2008 — present); and President, International Fund Services (alternative asset administration) (1993 — 2005).

176

N/A

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
MANAGEMENT OF THE SEPARATE ACCOUNT (Continued)
(Unaudited)

Term of

Number of

Office and

Funds in

Position(s)

Length of

Principal Occupation(s) During

Complex Overseen

Name

Held

Time Served*

Past 5 Years

by Board Members

Other Directorships

Norman R. Nielsen (DOB: 1939)

Board Member

Since 2007

Retired (2005 — present); Director, Iowa Student Loan Service Corporation (2006 — present); Board Member, Transamerica Funds, TST and TIS (2006 — present); Board Member, TPP, TPFG, TPFG II and TAAVF (2007 — present); Board Member, TII (2008 — present); Director, League for Innovation in the Community Colleges (1985 — 2005); Director, Iowa Health Systems (1994 — 2003); Director, U.S. Bank (1987 — 2006); and President, Kirkwood Community College (1985 — 2005).

176

Buena Vista University Board of Trustees (2004 — present)

Joyce G. Norden (DOB: 1939)

Board Member

Since 1993

Retired (2004 — present); Board Member, TPFG, TPFG II and TAAVF (1993 — present); Board Member, TPP (2002 — present); Board Member, Transamerica Funds, TST and TIS (2007 — present); Board Member, TII (2008 — present); and Vice President, Institutional Advancement, Reconstructionist Rabbinical College (1996 — 2004).

176

Board of Governors, Reconstructionist Rabbinical College (2007 — present)

Patricia L. Sawyer (DOB: 1950)

Board Member

Since 1993

Retired (2007 — present); President/Founder, Smith & Sawyer LLC (management consulting) (1989 — 2007); Board Member, Transamerica Funds, TST and TIS (2007 — present); Board Member, TII (2008 — present); Board Member, TPP, TPFG, TPFG II and TAAVF (1993 — present); Vice President, American Express (1987 — 1989); Vice President, The Equitable (1986 — 1987); and Strategy Consultant, Booz, Allen & Hamilton (1982 — 1986).

176

N/A

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
MANAGEMENT OF THE SEPARATE ACCOUNT (Continued)
(Unaudited)

Term of

Number of

Office and

Funds in

Position(s)

Length of

Principal Occupation(s) During

Complex Overseen

Name

Held

Time Served*

Past 5 Years

by Board Members

Other Directorships

John W. Waechter (DOB: 1952)

Board Member

Since 2007

Attorney, Englander & Fischer, P.A. (2008 — present); Retired (2004 — 2008); Board Member, TST and TIS (2004 — present); Board Member, Transamerica Funds (2005 — present); Board Member, TPP, TPFG, TPFG II and TAAVF (2007 — present); Board Member, TII (2008 — present); Executive Vice President, Chief Financial Officer and Chief Compliance Officer, William R. Hough & Co. (securities dealer) (1979 — 2004); and Treasurer, The Hough Group of Funds (1993 — 2004).

176

N/A


*		Each Board Member shall hold office until: 1) his or her successor is elected and qualified or 2) he or she resigns, retires or his or her term as a Board Member is terminated in accordance with the by-laws.

**		May be deemed an “interested person” (as that term is defined in the 1940 Act) of the Trust because of his employment with TAM or an affiliate of TAM.

***		Independent Board Member means a Board Member who is not an “interested person” (as that term is defined under the 1940 Act) of the Trust.

OFFICERS


		Term of
		Office and
	Position(s)	Length of	Principal Occupation(s) or
Name	Held	Time Served*	Employment During Past 5 Years

John K. Carter (DOB: 1961)	Chairman, Board Member, President, and Chief Executive Officer	Since 2007	See the table above.
Dennis P. Gallagher (DOB: 1970)	Vice President, General Counsel and Secretary	Since 2007	Vice President, General Counsel and Secretary, TII, Transamerica Funds, TST and TIS (2006 — present); Vice President, General Counsel and Secretary, TPP, TPFG, TPFG II and TAAVF (2007 — present); Director, Senior Vice President, General Counsel and Secretary, TAM and TFS (2006 — present); Assistant Vice President, Transamerica Capital, Inc. (2007 -- present); and Director, Deutsche Asset Management (1998 — 2006).

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
MANAGEMENT OF THE SEPARATE ACCOUNT (Continued)
(Unaudited)


		Term of
		Office and
	Position(s)	Length of	Principal Occupation(s) or
Name	Held	Time Served*	Employment During Past 5 Years

Joseph P. Carusone (DOB: 1965)	Vice President, Treasurer and Principal Financial Officer	Since 2001	Vice President, Treasurer and Principal Financial Officer, Transamerica Funds, TST, TIS and TII (2007 — present); Vice President (2007 — present), Treasurer and Principal Financial Officer (2001 — present), TPP, TPFG, TPFG II and TAAVF; Senior Vice President, TAM and TFS (2007 — present); Senior Vice President (2008 — present), Vice President (2001 — 2008); Diversified Investment Advisors, Inc. (“DIA”); Director and President, Diversified Investors Securities Corp. (“DISC”) (2007 — present); Director, Transamerica Financial Life Insurance Company (“TFLIC”) (2004 — present); and Treasurer, Diversified Actuarial Services, Inc. (December 2002 — present).

Christopher A. Staples (DOB: 1970)	Vice President and Chief Investment Officer	Since 2007	Vice President and Chief Investment Officer (2007 — present); Vice President — Investment Administration (2005 — 2007), TII; Vice President and Chief Investment Officer (2007 — present), Senior Vice President — Investment Management (2006 — 2007), Vice President — Investment Management (2005 — 2006), Transamerica Funds, TST and TIS; Vice President and Chief Investment Officer, TPP, TPFG, TPFG II and TAAVF (2007 — present); Director (2005 — present), Senior Vice President — Investment Management (2006 — present) and Chief Investment Officer (2007 — present), TAM; Director, TFS (2005 — present); and Assistant Vice President, Raymond James & Associates (1999 — 2004).

Rick B. Resnik (DOB: 1967)	Vice President, Chief Compliance Officer and Conflicts of Interest Officer	Since 1998	Chief Compliance Officer, TPP, TPFG, TPFG II and TAAVF (1998 — present); Chief Compliance Officer, Transamerica Funds, TST, TIS and TII (2008 — present); Vice President and Conflicts of Interest Officer, TPP, TPFG, TPFG II, TAAVF, Transamerica Funds, TST, TIS and TII (2008 — present); Senior Vice President and Chief Compliance Officer, TAM (2008 — present); Senior Vice President, TFS (2008 — present); Director (2000 — present), Vice President and Chief Compliance Officer (1997 — present), DISC; and Assistant Vice President, TFLIC (1999 — present).

Robert A. DeVault Jr. (DOB: 1965)	Assistant Treasurer	Since 2009	Assistant Treasurer, Transamerica Funds, TST, TII, TIS, TPP, TPFG, TPFG II and TAAVF (January 2009 — Present); and Assistant Vice President, (2007 — Present), Manager, Fund Administration (2002 — 2007), TFS.

TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
MANAGEMENT OF THE SEPARATE ACCOUNT (Continued)
(Unaudited)


		Term of
		Office and
	Position(s)	Length of	Principal Occupation(s) or
Name	Held	Time Served*	Employment During Past 5 Years

Suzanne Valerio- Montemurro (DOB: 1964)	Assistant Treasurer	Since 2007	Assistant Treasurer, Transamerica Funds, TST, TIS, TII, TPP, TPFG, TPFG II and TAAVF (2007 — present); and Vice President, DIA (1998 — present).

Sarah L. Bertrand (DOB: 1967)	Assistant Secretary	Since 2009	Assistant Secretary, Transamerica Funds, TST, TIS, TII, TPP, TPFG, TPFG II and TAAVF (January 2009 — present); Assistant Vice President and Manager, Legal Administration, TAM and TFS (2007 — present); Assistant Secretary and Chief Compliance Officer, 4086 Series Trust and 4086 Strategic Income Fund (2000 — 2007); and Second Vice President and Assistant Secretary, Legal and Compliance, 4086 Capital Management, Inc. (1994 — 2007).

Timothy J. Bresnahan (DOB: 1968)	Assistant Secretary	Since 2009	Assistant Secretary, Transamerica Funds, TST, TIS, TII, TPP, TPFG, TPFG II and TAAVF (January 2009 — present); Counsel, TAM (2008 — present); Counsel (contract), Massachusetts Financial Services, Inc. (2007); Assistant Counsel, BISYS Fund Services Ohio, Inc. (2005 — 2007); and Associate, Greenberg Traurig, P.A. (2004 — 2005).

Richard E. Shield, Jr. (DOB: 1974)	Tax Officer	Since 2008	Tax Officer, Transamerica Funds, TST, TIS, TII, TPP, TPFG, TPFG II and TAAVF (2008 — present); Tax Manager, Jeffrey P. McClanathan, CPA (2006 — 2007) and Gregory, Sharer & Stuart (2005 — 2006); Tax Senior, Kirkland, Russ, Murphy & Tapp, P.A. (2003 — 2005); and Certified Public Accountant, Schultz, Chaipel & Co., LLP (1998 — 2003).

* Elected and serves at the pleasure of the Managing Board of the Separate Account.

If an officer has held offices for different Funds for different periods of time, the earliest applicable date is shown.

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT REVIEW

December 31, 2008
(Unaudited)

Please note that any performance figures discussed on the following pages represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Visit www.transamericafunds.com for performance information current to the most recent month-end. The return provided for a particular issuer held by a Portfolio represents the return from the security for the actual period held by the Portfolio, which may be shorter than the twelve-month reporting period.

The market overview and strategy review provided by individual sub-advisors in portfolios having multiple sub-advisors, apply only to the portion of the portfolio to which they have subadvisory responsibility.

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT REVIEW (Continued)

December 31, 2008
(Unaudited)

Transamerica Partners High Quality Bond Portfolio

Sub-advisor:
Merganser Capital Management, LP

Market Overview:

The year ended 2008 will be remembered as one of the most difficult in the history of the U.S. bond market. The problems in the housing and sub-prime mortgage markets quickly spread throughout the economy, causing not only a full blown credit crisis but a crisis in investor confidence resulting in a sharp reduction in credit availability and a rapid deceleration in economic growth. In response to rapidly weakening economic conditions, the Federal Reserve Board moved aggressively by reducing the Federal Funds target rate by 400 basis points to 0%-0.25%.

The entire financial sector came under more serious stress in early September, as the government placed Fannie Mae and Freddie Mac into conservatorship, Lehman Brothers filed for bankruptcy protection and Merrill Lynch was forced by market uncertainty to sell itself to Bank of America.

As the credit crisis unfolded, liquidity in the capital markets all but disappeared as investor confidence plummeted. The heightened fears surrounding banks and finance companies drove the corporate sector to record wide spread levels. In response to the crisis in the capital markets, Treasury Secretary, Hank Paulson, brought the full resources of the U.S. Treasury Department to the fore with multiple programs including the $750 billion Troubled Asset Relief Program, designed to restore confidence in the U.S. financial system and to get credit flowing again.

Performance:

For the year ended December 31, 2008, the Transamerica Partners High Quality Bond Portfolio returned 0.55%. By comparison, its benchmark, the Merrill Lynch 1-3 Year Government/Corporate Bond Index (the “Index”), returned 4.69%. This Index became effective May 1, 2008. This Index comes closest to matching the investment objective of Transamerica High Quality Bond Portfolio. Prior to May 1, 2008, the Portfolio’s benchmark was the Merrill Lynch 1-3 year Treasury Index, which returned 6.61% for the year ended December 31, 2008.

Strategy Review:

We utilize a bottom up sector and security selection process that emphasizes high quality spread product sectors which include U.S. Treasuries and Agencies, Asset Backed Securities, Domestic Corporates, U.S. dollar denominated Yankee Notes, Commercial Mortgage Backed Securities, Agency Pass-throughs and Collateralized Mortgage Obligations and Non-Agency Residential Mortgage Backed Securities and maintain a duration neutral strategy versus the index.

Sector selection was the leading detractor of performance during the year as almost all spread sectors underperformed Treasuries, with the Portfolio’s over-weights in corporate financials, asset-backed, commercial mortgage-backed and non-agency residential mortgage-backed sectors contributing significantly to the underperformance versus the index.

The underweight in the U.S. Treasury and Agency sectors of the Portfolio versus the index also contributed to the underperformance as these were the two top performing sectors in the index for 2008. Steady withdrawals from the Portfolio throughout the year necessitated the sale of many of the Portfolio’s Treasury and Agency holdings which adversely affected the performance.

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December 31, 2008
(Unaudited)

Individual security selection contributed favorably to the performance during the year. In the corporate sector, GE Capital, Merrill Lynch, and Credit Suisse saw spreads tighten from record wides reached during the year. Several Government National Mortgage Association project loan deals had a positive contribution due to strong demand for government guaranteed paper. The liquidation of the Lehman Brothers holdings in late August and early September (prior to the bankruptcy filing) was a net positive for the Portfolio’s relative performance as the market value declined precipitously at the announcement of the bankruptcy filing.

The duration overweight at the wings (inside of one year and longer than three years) detracted from the Portfolio performance during the year.

Douglas A. Kelly, Chief Investment Officer

Peter S. Kaplan, Vice President

Merganser Capital Management, LP

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT REVIEW (Continued)

December 31, 2008
(Unaudited)

Transamerica Partners Inflation-Protected Securities Portfolio

Sub-advisor:
BlackRock Financial Management, Inc.

Market Overview:

The US economy and fixed income market found 2008 to be one of the most difficult years in decades. It can be best characterized by the persistent deterioration of the country’s economic fundamentals and severe technical disturbances that led to countless unprecedented, historical events. A toxic investment environment fueled a massive flight-to-quality, leading to the lowest Treasury yields in more than fifty years. The yield on the 10-year Treasury hit 2.06% on December 30. Within the Barclays Capital Indices, the Treasury sector returned 13.74% for the year. Spread sectors underperformed dramatically, led by commercial mortgage-backed securities (“CMBS”) and asset-backed securities (“ABS”), which were down 20.52% and 12.72%, respectively. Investment-grade corporates were also down 4.94% on the year. While posting positive returns for the year, agencies and mortgages also underperformed Treasuries and were up 9.08% and 8.34%, respectively. By year-end, however, tentative signs appeared that aggressive and creative actions taken by the Federal Reserve (“Fed”) and the U.S. Treasury were working to stabilize the financial markets.

The housing market is at the core of the crisis, with its collapse the cause and recovery believed to be the cure of the ongoing turmoil. While home affordability has improved with the drop in price levels and mortgage rates, steadily rising unemployment is reducing the number of potential buyers. The unemployment rate reached a 15-year high of 7.2% in December, and is expected to continue to rise through the new year.

A large driver behind the increased joblessness is the wave of bankruptcies and layoffs started by Bear Stearns in March. In rapid succession, we witnessed the US government takeover of Fannie Mae and Freddie Mac, the bankruptcy of Lehman Brothers, the sale of Merrill Lynch to Bank of America, the US government takeover of AIG, the reorganization of Goldman Sachs and Morgan Stanley, the collapse of Washington Mutual, and the forced takeover of Wachovia by Wells Fargo. US automakers teetered on the brink of insolvency but would become parties to the bailout programs created to salvage American industry.

The Fed and US Treasury created an “alphabet soup” of initiatives, including the Term Auction Facility (TAF), Temporary Liquidity Guarantee Program (TLGP), Commercial Paper Funding Facility (CPFF), Term Asset-Backed Securities Loan Facility (TALF), and most notably the Troubled Asset Relief Program (TARP) to help steady the economy. The most aggressive action from the Fed came in the form of monetary easing, lowering the Fed Funds target rate 400 basis points (“bps”) over the course of the year. At the Federal Open Market Committee December 16th meeting, it established a 0-0.25% target range for the Federal Funds rate. This is despite automobile sales, oil prices, and valuations on inflation-linked securities pointing toward a collapse in consumption and an emerging threat of deflation; a dramatic shift from the upward momentum in consumer and producer prices earlier in the year that took oil over $145 a barrel and caused concerns of stagflation. The Fed also implemented the open market purchase of agency debt and mortgage-backed securities.

We believe that December brought some indication that the worst of the crisis may be behind us. By year-end, money markets had recovered substantially from the unprecedented flight-to-quality that had caused huge money fund outflows and malfunctioning inter-bank markets. Improvement in the bond markets was more tentative, but the out-performance of spread sectors during December offered hope of relief from the relentless pressure of de-leveraging.

The Treasury Inflation-Protected Securities (“TIPS”) market sold off dramatically during the later portion of 2008, driven by both technical and fundamental factors. The market suffered dramatic de-leveraging from hedge

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT REVIEW (Continued)

December 31, 2008
(Unaudited)

funds and commodities funds. As oil and other commodities fell from their peaks, inflation portfolios used in commodity portable alpha programs were forced to sell. From a fundamental perspective, the global slowdown, US recession and fall in commodities led to deflationary fears, which also weighed on the TIPS market.

Performance:

For the year ended December 31, 2008, the Transamerica Partners Inflation-Protected Securities Portfolio returned (2.14%). By comparison, its benchmark, the Barclays Capital US TIPS Index (formerly, Lehman Brothers US TIPS Index), returned (2.35%).

Strategy Review:

BlackRock applies a controlled duration, relative value sector rotation, and security selection style to the management of our fixed income mandates. The distinguishing feature of BlackRock’s investment management style has been the ability to generate alpha within a risk-controlled framework. Real-time analysis of a vast array of risk measures allows assessment of the potential impact of various sector and security strategies on total return. As a result, we believe consistent value is added and performance volatility is controlled.

BlackRock’s disciplined investment process seeks to add value through:


•	relative value sector/sub-sector rotation and security selection,

•	rigorous quantitative security and portfolio valuations,

•	intense fundamental credit analysis,

•	portfolio duration controlled within a narrow band around a benchmark, and

•	the judgment of experienced portfolio managers

We believe the basis of successful investment performance is research and analysis of sectors and securities, not interest rate speculation. We believe that market-timing strategies are highly volatile and produce potentially inconsistent results. Our philosophy has not changed since the inception of the firm.

During 2008, the Portfolio had a TIPS curve flattening bias and has been underweight breakevens. We were biased towards on-the-run issues, and underweight off-the-runs. To add yield, we have held opportunistic allocations to spread sectors, including MBS, CMBS, ABS, and both nominal and inflation-linked corporate bonds. De-leveraging and technical factors have led to opportunity in these sectors as Treasuries have become increasingly expensive. The level of deflation that was priced in TIPS towards the end of the year made the securities costly to hold and increased the attractiveness of these alternatives. The small allocation to CMBS is in seasoned AAA paper and high subordination super-senior AAA bonds, which are well-protected from any deterioration in credit. We continue to monitor deal quality and swap into better names on opportunity. The corporates are primarily financials, though we are selective in this space and are avoiding regional names. The ABS holdings are short-dated paper from top-tier prime issuers.

Performance was predominately driven by the Portfolio’s TIPS curve flattener, overweight to on-the-run issues and underweight to off-the-runs. The Portfolio’s non-TIPS allocation had a negative impact on performance. The long Europe versus US trade had a slight negative impact. We closed out of this trade during the fourth quarter.

Stuart Spodek, Managing Director/Portfolio Manager

Brian Weinstein, Portfolio Manager

BlackRock Financial Management, Inc.

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MANAGEMENT REVIEW (Continued)

December 31, 2008
(Unaudited)

Transamerica Partners Core Bond Portfolio

Sub-advisor:
BlackRock Financial Management, Inc.

Market Overview:

Performance:

For the year ended December 31, 2008, Transamerica Partners Core Bond Portfolio returned (1.83%). By comparison, its benchmark, Barclays Capital US Aggregate Bond Index (formerly, Lehman Brothers Aggregate Bond Index), returned 5.24%.

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT REVIEW (Continued)

December 31, 2008
(Unaudited)

Strategy Review:

BlackRock’s disciplined investment process seeks to add value through:


•	relative value sector/sub-sector rotation and security selection,

•	rigorous quantitative security and portfolio valuations,

•	intense fundamental credit analysis,

•	portfolio duration controlled within a narrow band around a benchmark, and

•	the judgment of experienced portfolio managers.

Over the year, the Portfolio was underweight Treasuries, which we view as expensive, and see better relative value in other high quality spread product. Our allocation to Agency debt increased given the attractive spread pickup to Treasuries and strong government support. We have maintained our over-weights to residential and commercial mortgage-backed securities (“MBS”). In Agency pass-through MBS, we are biased toward lower coupon paper, as the Fed absorbs the majority of supply in these relatively small coupons. We continue to hold non-agency MBS positions, primarily prime hybrid adjustable rate mortgages (“ARMs”), and prime 15- and 30-year conforming balance whole loan collateralized mortgage obligations (“CMOs”). We also have a small allocation to option ARM securities with approximately 45-50% credit enhancement. The CMBS allocation is focused in seasoned AAA paper and high subordination super-senior AAA bonds, which are well-protected from any deterioration in credit. We continue to monitor deal quality and swap into better names on opportunity. We have maintained a small underweight to corporate bonds, but are overweight financials at current levels. We are selective in this space and are avoiding regional names, but opportunistically adding exposure through attractively valued new issues. The Portfolio is overweight ABS, and maintains an up-in-quality bias. We continue to focus on short-dated credit card and auto paper from top-tier prime issuers. The Portfolio has had limited exposure to the non-U.S. investment grade sectors over the year, with a high yield allocation ranging between 1-2%. We have also maintained non-US dollar exposure through Euro, UK, Japanese, and Mexican bonds and futures.

Over 2008, the best strategy would have been to hold 100% Treasuries, as all spread sectors underperformed. The major detractors from performance were our over-weights to CMBS and ABS, and non-Agency mortgage allocations. The Porfolio’s exposure to Lehman Brothers’ corporate debt was the only notable issuer with a markedly negative impact on performance. As to be expected in any instance of bankruptcy, the name sold off dramatically in September.

Scott Amero, Managing Director, Global Chief Investment Officer — Fixed Income

Matthew Marra, Managing Director
Andrew Phillips, Managing Director

BlackRock Financial Management, Inc.

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT REVIEW (Continued)

December 31, 2008
(Unaudited)

Transamerica Partners Total Return Bond Portfolio

Sub-advisors:
Western Asset Management Company
Western Asset Management Company, Ltd.

Market Overview:

The Federal Reserve (“Fed”) intensified its campaign against downside risks to growth in response to the deepening financial crisis. The spread between Treasuries and LIBOR surged beyond previous extreme levels, and without the provision of credit, investors began to question the durability of the underlying economy. The Federal Funds rate was reduced a cumulative 425 basis points (“bps”) (525 bps for the cycle) to near 0% by year end; this essentially moved the Fed beyond its traditional form of stimulus. A number of new lending facilities, designed to meet the liquidity demands of financial intermediaries across the full banking spectrum, were implemented. The Fed and the Treasury recently announced plans to channel up to $600 billion directly to the mortgage market, and up to $200 billion directly to consumer and small business finance, including credit card, auto and student loans. Details emerged that much of this funding would result in a major increase in the money supply. Yields on 30-year fixed-rate conventional mortgages declined roughly 1% as a result, to the lowest level on record. The Treasury allocated the first $250 billion of funds authorized under the Troubled Assets Relief Program (“TARP”) by taking direct equity stakes in the U.S. banking system. Economic data was negative and third-quarter GDP contracted 0.5% on falling consumption expenditures. Consumer confidence fell as labor market conditions deteriorated and equity prices plunged. The unemployment rate increased 1.7% to 6.7% (as of early December), though the U.S. dollar gained close to 6% against a trade-weighted basket of currencies. The dollar’s negative correlation with oil held strong as the price per barrel fell 54% after temporarily spiking in the summer. All in all, the year was the worst year for risk-taking in a quarter century. Spreads widened over 350 bps on investment-grade issues and more than 1,100 bps on high-yield issues. Mortgage-backed securities performed better, though even these government-backed securities underperformed Treasuries by 2.32% over the period. The S&P 500 Index lost 37% as volatility soared, marking 2008 as the worst year for equities since 1931.

Performance:

For the year ended December 31, 2008, Transamerica Partners Total Return Bond Portfolio returned (8.43%). By comparison, its benchmark, Barclays Capital US Aggregate Bond Index (formerly, Lehman Brothers Aggregate Bond Index), returned 5.24%.

Strategy Review:

Our strategies produced significantly negative results. A large overweight exposure to the mortgage-backed sector detracted from returns as volatility remained high and negative housing news continued to damage market sentiment. We had diversified into a number of non-agency issues that were particularly impacted and further detracted from performance due to rising defaults, uncertainty in that marketplace and a lack of liquidity. An emphasis on lower-quality credits and select financial issues was also a large negative as spreads soared in the wake of the sub-prime lending crisis, deteriorating liquidity conditions and slowing economic growth. Spreads widened to new all-time highs in mid-March before partially recovering in April and May. These gains were given back later in the period, however, on deteriorating investor sentiment and poor earnings. The high-yield sector performed poorly on news of more ratings downgrades, rising defaults, and a volatile and declining stock market. A modest exposure to international bonds in other advanced economies had a negative impact as the flight-to-safety outside the U.S. was minimal relative to U.S. Treasury markets. A modest exposure to Treasury Inflation-Protected Securities had a negative impact as oil plunged to approximately $40/barrel and inflation

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT REVIEW (Continued)

December 31, 2008
(Unaudited)

Transamerica Partners High Yield Bond Portfolio

Sub-advisor:
Eaton Vance Management

Market Overview:

For much of 2008, the high yield market was on pace to report a modest decline. The market had weathered such major events as the collapse of Bear Stearns, the debacles of Fannie and Freddie, along with such other events as the demise of AIG. The bankruptcy of Lehman Brothers was the catalyst that drove all credit markets into a major tailspin. All credit markets came to an abrupt halt as a liquidity crisis of epic proportions developed driving high yield spreads to unprecedented levels. Efforts by the Federal government, while numerous, were erratic and unpredictable. Margin calls, increased financing costs and large redemptions forced hedge funds to implement large selling programs into illiquid markets. The de-leveraging of the financial system along with the complete aversion to risk resulted in the worst year in recorded history for the high yield market. For the full year, the Merrill Lynch High Yield Master II Index (the “Index”) declined 26.39%.

The final two weeks of December saw the high yield market shift dramatically. The Index rose 9.96% in the period from December 15th to December 31st, compared to a decline of 2.26% in the first two weeks of the month. For the month of December, the Index gained 7.47%. Driving the market higher was the government’s decision to assist General Motors followed by the decision to allow General Motors Acceptance Corp. (“GMAC”) to become a bank holding company. GMAC alone contributed approximately 200 basis points to the Index return in December.

Performance:

For the year ended December 31, 2008, Transamerica Partners High Yield Bond Portfolio returned (28.90%). By comparison, its benchmark, the Merrill Lynch High Yield Master II Index, returned (26.39%).

Strategy Review:

While the Transamerica Partners High Yield Bond Portfolio outperformed the Index for the first nine months of 2008, the Portfolio’s fourth quarter return of (21.75%)was below that of the Merrill Lynch High Yield Index, which declined 17.63%. The Portfolio’s return of 4.22% in December was 3.25% less than that of the Index. The Portfolio was underweighted in autos. With a modest exposure to GMAC, performance was negatively affected by 2.1% in the fourth quarter. Security selection in names such as Charter Communications and Hospital Corp. of America had positive affects on the Portfolio for the quarter.

Throughout the year our strategy emphasized an overweight to the shorter maturity segment of the high yield marketplace, while staying senior in the capital structure. We remained focused on those companies generating free cash flow with no need to access the capital markets for the next few years, as we expected and ultimately experienced a declining earnings environment. From an industry perspective, we favored those such as Healthcare that are non-cyclical. This benefited our relative performance throughout most of the year. Sectors which affected the Portfolio returns negatively were Energy, Gaming and Paper. Sectors contributing positively were Healthcare, Broadcasting and Banking. Cash positions also provided positive returns as well.

Linda Carter, CFA

Michael Weilheimer, CFA

Co-Portfolio Managers

Eaton Vance Management

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT REVIEW (Continued)

December 31, 2008
(Unaudited)

Transamerica Partners Balanced Portfolio

Sub-advisors:
Goldman Sachs Asset Management, LP
Western Asset Management Company

Western Asset Management Company, Ltd.

Market Overview:

The S&P 500 Index (the “Index”) returned (37.00%) in the year 2008. All ten sectors in the Index were down for the period, particularly the Financials (–55.35%) and Materials (–45.67%) sectors. The heavily-weighted Financials sector was also the largest detractor (weight times performance) from Index returns.

The Barclays Capital US Aggregate Bond Index (formerly, Lehman Brothers Aggregate Bond Index) returned 5.24% in 2008. The Federal Reserve intensified its campaign against downside risks to growth in response to the deepening financial crisis. The spread between Treasuries and LIBOR surged beyond previous extreme levels, and without the provision of credit, investors began to question the durability of the underlying economy. Economic data was negative and third-quarter Gross Domestic Product contracted 0.5% on falling consumption expenditures. Consumer confidence fell as labor market conditions deteriorated and equity prices plunged. The unemployment rate increased 1.7% to 6.7% (as of early December), though the US dollar gained close to 6% against a trade-weighted basket of currencies.

Performance:

For the year ended December 31, 2008, Transamerica Partners Balanced Portfolio returned (26.71%). By comparison, its benchmarks, the S&P 500 Index and Barclays Capital US Aggregate Bond Index (formerly, Lehman Brothers Aggregate Bond Index), returned (37.00%) and 5.24%, respectively. The two benchmarks had a blended return of (22.06%).

Strategy Review:

Goldman Sachs Asset Management, LP (Equity Portion) — Returns to the investment themes were positive overall for the year. Quality contributed most positively to excess returns, followed by Momentum, Management, and Sentiment. Profitability also added value, albeit to a lesser extent. Conversely, Valuation detracted from relative performance for the period.

Among sectors, stock selection was positive overall. Holdings in the Financials, Healthcare and Information Technology sectors outpaced their peers in the Index most. Meanwhile, holdings in the Consumer Staples, Consumer Discretionary and Materials sectors were least successful relative to their peers in the Index for the period.

Western Asset Management Company and Western Asset Management Company, Ltd. (Fixed Income Portion) — Our strategies produced significantly negative results. A large overweight exposure to the mortgage-backed sector detracted from returns as volatility remained high and negative housing news continued to damage market sentiment. We had diversified into a number of non-agency issues that were particularly impacted and further detracted from performance due to rising defaults, uncertainty in that marketplace and a lack of liquidity. An emphasis on lower quality credits and select financial issues was also a large negative as spreads soared in the wake of the sub-prime lending crisis, deteriorating liquidity conditions and slowing economic growth. Spreads widened to new all-time highs in mid-March, before partially recovering in April and May. These gains were given back later in the period, however, on deteriorating investor sentiment and poor

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT REVIEW (Continued)

December 31, 2008
(Unaudited)

Transamerica Partners Large Value Portfolio

Sub-advisors:
Alliance Bernstein, LP
TCW Investment Management Company

Market Overview:

AllianceBernstein, LP — The US equity market collapsed in 2008 amid continuing disarray in the global credit markets and a deepening US recession. The S&P 500 Index dropped 21.9% in the fourth quarter and 37% for the year, one of the worst downturns on record. The carnage was pervasive, with Financials, Industrial Resources and other cyclical sectors leading the sell-off. Defensive sectors, such as Utilities, Consumer Staples and Healthcare, fell less than the market.

In this climate of widespread panic, the Russell 1000^® Value Index and the Russell 1000^® Growth Index also fell 36.9% and 38.4%, respectively, for the year. However, value metrics, which value managers like ourselves depend on, did poorly in 2008. Stocks trading at low valuations based on trailing earnings and book value underperformed, in sharp contrast to history.

TCW Investment Management Company — While the excitement of the presidential election and subsequent victory of Barack Obama stirred the country and the world, financial and economic issues set the tone for the market. Financial turmoil led the Federal Reserve Board (“Fed”) to slash the federal-funds rate to a range between 0%-0.25%, from 4.25% at the beginning of the year. The 10-year Treasury note dropped to nearly 2% from 4% at the end of 2007, the lowest level since the Depression era. These interest rate cuts were part of a major stimulus effort by Congress, the Treasury, and the Fed to stem the spiraling financial crisis. The “allowed” Lehman Brothers bankruptcy in mid-September is cited by many as the breaking point of the financial crisis and the economy. Gross Domestic Product dipped into negative territory in the third quarter and went over the cliff in the fourth quarter with the threatened collapse of the U.S. automotive industry and a few stumbles in the enactment and execution of the Treasury’s Troubled Asset Relief Program (TARP). The economic slowdown led to a rising unemployment rate throughout the year that reached 7.2% at the end of December.

Consumers experienced asset value reductions in both real estate and equity holdings and faced tightening credit while trying to pay down debt amidst concerns of future job losses. Retail sales were negatively impacted by a shortened holiday season (by one less weekend) as well as by bad weather swaying already reluctant shoppers to stay home. Only the announcement by the Fed to purchase mortgage backed securities in an effort to lower home financing costs and falling prices at the gas pump helped offset consumers’ economic travails. Crude prices dropped precipitously since their high in July of $147/barrel to approximately $45 at year end.

Performance:

For the year ended December 31, 2008, Transamerica Partners Large Value Portfolio returned (42.94%). By comparison, its benchmark, the Russell 1000^® Value Index, returned (36.85%).

Strategy Review:

AllianceBerstein, LP — During the period, the Portfolio underperformed its benchmark, the Russell 1000^® Value Index, before fees. Stock selection in the financial sector accounted for most of the performance drag. Global recession fears also undermined many of our consumer-related holdings. Our extensive analysis of financial companies focused primarily on our holdings’ ability to absorb significant economic losses resulting from deteriorating credit-market conditions. We clearly underestimated the severity and abruptness of the

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT REVIEW (Continued)

December 31, 2008
(Unaudited)

downward spiral of mark-to market losses and rating-agency downgrades that ultimately prevented these firms from accessing credit markets or raising equity without heavy dilution. The worst detractor in 2008 was American International Group, which relinquished 80% ownership to the government in exchange for financing. Other big detractors included Fannie Mae and Freddie Mac, which we exited, and Hartford Financial, where we see considerable return potential based on our long-term estimates.

While we are disappointed with recent results, we remain confident that we can ultimately deliver on our portfolios’ return potential. They now trade at some of the most attractive valuations versus their benchmarks in our history and at prices to book value comparable to levels of the early 1990’s banking crisis, which heralded one of our strongest periods of out-performance. We expect these pricing distortions to correct as the crisis runs its course and anxiety eventually subsides, which we believe should enable our portfolios to recover the losses of the past year and to restore the premium performance we and our clients expect.

TCW Investment Management Company — There have been no changes to our investment objective or strategy. However, given the precipitous decline in oil prices, we have found exciting opportunities in the Energy sector by initiating new names Valero, Anadarko Petroleum and Marathon Oil. Although we remain underweighted in Financials, we added Invesco and Lazard to the Portfolio.

The stocks that had the greatest positive impact over 2008 were Travelers Companies, Millennium Pharmaceuticals, Watson Pharmaceuticals and Bristol Myers-Squibb.

The stocks that had the greatest negative impact on performance were Fannie Mae, Tenet Healthcare, Flextronics and MeadWestvaco.

Marilyn G. Fedak, Co-Chief Investment Officer — US Value Equities

John P. Mahedy, Co-Chief Investment Officer — US Value Equities

John D. Phillips, Jr., Senior Portfolio Manager

Christopher Marx, Senior Portfolio Manager

Alliance Bernstein, LP

Diane E. Jaffee, Group Managing Director

TCW Investment Management Company

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT REVIEW (Continued)

December 31, 2008
(Unaudited)

Transamerica Partners Value Portfolio

Sub-advisor:
Hotchkis and Wiley Capital Management, LLC

Market Overview:

Several long-standing records fell in 2008, as an anxious market confronted a financial crisis. The volatility level reached three times its previous high and short Treasury yields turned negative for the first time since the early 1940’s, as investors struggled to navigate through the economic turmoil. The outcome was the worst performance for the S&P 500 Index since 1937. To say this was a challenging year is clearly an understatement, but we believe there is a thick silver lining. Other unprecedented events that occurred during 2008 that we see as positive signals for equities include the government taking extraordinary action by infusing capital into financial companies and cutting the federal funds rate to near zero. Legitimate concerns abound in today’s environment, but investors must balance these risks with long term fundamentals and future cash flows. Eventually investors should understand the attractive valuations of many great companies and focus on ultimate intrinsic worth.

The credit crisis and its consequences dominated financial headlines throughout 2008. As a fundamental value manager, we became interested in a number of financial companies that had fallen deeply out of favor. Our research indicated that several hard-hit banks had sufficient capital on hand to absorb large future loan losses, which appeared to be the market’s primary concern. While this assessment may have indeed been accurate, we underestimated political and behavioral responses that eventually overwhelmed several of these positions. For example, early ad hoc government intervention that was intended to calm markets was astonishingly hostile to equity investors. This accelerated panic and punished stocks with either real or perceived credit risk. The bottom line: a focus on company fundamentals did not aid performance in 2008, as it would in other environments.

Having learned from its previous actions, the government changed course and decided to embrace, rather than punish, common shareholders of banks with the Troubled Assets Relief Program (“TARP”). The most important characteristic from a fundamental investor’s perspective was its sweeping scope. The plan increased the transparency of potential government action, which had been a main obstacle throughout the year. As the environment changed, our investment positions changed accordingly. The Portfolio holdings shifted to banks with dominant regional deposit share and TARP access. This included several banks that were able to purchase competitors at fire-sale prices with government backing. We maintain a meaningful weight in the Financials sector at year-end as the sector’s risk profile has declined considerably, based on our analysis.

We entered the year underweight in energy and global commodities as we believed the “decoupling” thesis surrounding the growth of emerging markets was overplayed. As energy prices have decelerated, we believe further investment opportunities may develop, but we remain underweight in these areas. The contraction of the U.S. economy has led the rest of the world into recession and has ended the leadership of the momentum style of investing. Eventually, as the U.S. economy emerges from recession, we believe that valuation will again become investors’ paramount criteria and a more rational investment period will ensue.

Performance:

For the year ended December 31, 2008, Transamerica Partners Value Portfolio, returned (46.62%). By comparison, its benchmark, the Russell 1000^® Value Index, returned (36.85%).

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT REVIEW (Continued)

December 31, 2008
(Unaudited)

Strategy Review:

Events in the financial sector trumped all else and caused a great deal of our underperformance for the year, as we underestimated the degree and unpredictability of government intervention. Freddie Mac was placed into conservatorship by the Federal Housing Finance Agency despite having complied with its long-established capital requirements. Washington Mutual was seized by the Federal Deposit Insurance Company (“FDIC”) following rapid withdrawals by depositors, many of whom were fully insured. Wachovia was purchased by Wells Fargo, after it came under regulatory pressure to sell itself quickly. Currently, all of our bank holdings have either issued shares to the Treasury to access TARP or have received full approval to do so.

Defensive areas such as Consumer Staples, Healthcare, and Utilities declined less than the market. Our stock selection in these areas was the strongest aspect of the Portfolio during the year. Within Consumer Staples, Wal-Mart Stores advanced 20% as the company’s under-levered balance sheet, economies of scale, and stronger than expected results attracted investors to the stock. Within Healthcare, our positions in pharmaceutical companies Astrazeneca, Schering Plough, and Bristol-Myers Squibb aided performance. We made gains from Astrazeneca when we sold out of the position in August, but maintained our investments in Schering Plough and Bristol Myers. Both have strong balance sheets with little or no debt and are returning valuable cash to shareholders. Within Utilities, Entergy, Exelon and FPL have traded down in step with falling prices for oil and natural gas. As gas prices fall, utility company revenues decline as operating costs remain unchanged. This compresses their profit margins.

This year has been one of the most difficult we have faced in our nearly 30-year history, but we have faced demanding times before and prevailed. In a market beset by confusion, we focus on what we know. Valuation remains the beacon that guides us. At the end of the day, a stock’s value continues to be the present value of its future cash flows. We are willing to incorporate new facts and new experiences, but our history tells us that our best course of action is to remain faithful to our core competency — fundamental value investing. Recent events have not eradicated the exceptional value we feel is embedded in our portfolios. We believe that several years from now we will look back at these rare times and be astounded by the risk/reward opportunities that were available.

George Davis, Chief Executive Officer, Portfolio Manager

Sheldon Lieberman, Portfolio Manager

Stan Majcher, Portfolio Manager

David Green, Portfolio Manager

Patty McKenna, Portfolio Manager

Hotchkis and Wiley Capital Management, LLC

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Transamerica Partners Large Core Portfolio

Sub-advisors:
Aronson+Johnson+Ortiz, LP
BlackRock Financial Management, Inc.

Market Overview:

Aronson+Johnson+Ortiz, LP — To put our performance into context, we start with a description of the drivers of the broad market and then focus on the particular positioning of the Transamerica Partners Large Core Portfolio. It was a brutal year for stocks — any stocks. Within the U.S. equity market, in particular, the largest stocks (as represented by the Russell Top 200 Index) fell over 36%; mid-cap stocks (the Russell Midcap Index) were the biggest losers, dropping over 41%; and small-caps (the Russell 2000 Index) weren’t far behind, down nearly 34%. Across the cap spectrum, value fell slightly less than growth according to various style indices, despite the preponderance of financials classified as value stocks. Overall, the breadth, depth, and rapidity of declines mark the bursting of the “Risk Bubble,” making the Government the market’s biggest risk-taker.

BlackRock Financial Management, Inc. — 2008 turned out to be among the worst performing years for the U.S. equity market. The period was further marked by a massive increase in equity volatility as investors observed more than 40 days in which the S&P 500 Index advanced or declined by 3% or more. The origin of 2008’s trouble was the sub-prime lending market which rapidly spread to the overall housing market. Although equities fell steadily through most of the first eight months of the year, the pivotal event appeared to be the September bankruptcy of Lehman Brothers. Fear seemed to grip the market as selling continued to be driven by de-leveraging, escalating recession fear, and frozen credit markets. The housing downturn spread further into the rest of the economy while the credit crunch moved well beyond the financial sector into most other sectors. Monetary and fiscal authorities around the world launched an all out effort to stabilize the financial system. With these authorities still working on appropriate policy responses, 2008 ended with the S&P 500 Index down 37%. On an absolute basis, Financials led the market decline followed by Basic Materials and Industrials. Consumer Staples and Healthcare fell the least in 2008.

During the year, larger cap stocks underperformed small cap names as the Russell 2000^® Index (–33.8%) beat the Russell 1000^® Index (–37.6%) by 3.8%. From a style perspective, larger value stocks performed modestly better than large growth stocks as the Russell 1000^® Value Index (–36.9%) beat the Russell 1000^® Growth Index (–38.4%) by 1.6%.

Across our large cap core universe, dividend-paying stocks held no advantage over non-yielding stocks as both groups performed similarly during the year. As might be expected during periods of great turmoil, higher quality stocks (ranked B+ and above by Standard & Poor’s (“S&P”)) significantly out performed lower quality stocks (ranked B and below by S&P) during the same period.

Performance:

For the year ended December 31, 2008, the Transamerica Partners Large Core Portfolio returned (36.65%). By comparison, its benchmark, the Russell 1000^® Index, returned (37.60%).

Strategy Review:

Aronson+Johnson+Ortiz, LP — The Portfolio is disciplined and maintains a broadly diversified portfolio of large-cap stocks. We are committed to being fully invested in U.S. equities, avoiding broad sector bets, and taking only modest, stock-specific bets. Our goal is to outperform the Russell 1000^® Index, with incremental

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gains across the names held in the Portfolio. Using a bottom-up style of stock selection, we evaluate companies relative to their industry peers using three broad categories of measures: value, management, and momentum. Value means the somewhat traditional ratios of price to fundamental value; management means we look for evidence that a company’s executive team has and will continue to emphasize earning power; momentum indicates when stocks might begin to rise toward full valuation. As we search for opportunities, we keep a sharp eye on minimizing transaction costs, helping us to maximize profits in our stock-selection effort.

BlackRock Financial Management, Inc. — During the year, the Portfolio’s losses were mitigated relative to its Russell 1000^® Value Index benchmark primarily by what it was driven to avoid. In the normal course of seeking companies with effective management and positive momentum characteristics, the Portfolio avoided some of the major financial stock disasters, including AIG, Citigroup, Merrill Lynch, Wachovia, Fannie Mae, and Lehman Brothers. Of course, the Portfolio experienced its share of disappointment — Goldman Sachs, TRW Automotive, Assurant Inc., Fifth Third Bancorp, and Sprint Nextel were the five biggest detractors from the Portfolio’s benchmark-relative return. That said, our philosophy of prudent diversification works to ensure that the net impact of any individual name won’t have a significant effect on the overall relative return. On the whole, our stock-picking effort was most successful in the financial sector compared to the financial holdings of the benchmark. We continue to make every effort to outperform the Portfolio’s benchmark by sticking to our value-oriented investment philosophy and disciplined investment process. We can only hope that 2009 will provide the once-in-a-lifetime investment opportunities of investors’ dreams!

During the year, the BlackRock large cap quantitative growth model was mixed and essentially flat, producing little predictive power across our large cap growth universe. Breaking down the year, the model was modestly positive during the first two quarters of the year but turned negative as the market was traumatized by the financial crisis during the second half. Further, difficult performance in a few sectors led to the Portfolio’s underperformance. Individual factor performance within our model was also mixed. Generally, valuation factors as a group produced very negative predictive power throughout the year with our Forecast Earnings to Price and Book to Price the most negative. Given the distress in the market, particularly in the second half of the year, investors may have been reluctant to put their faith in current estimates of earnings and book values leading to the very negative performance of these factors and valuation in general. Offsetting some of the negative performance from valuation was positive performance from our earnings expectations group of factors where Earnings Revisions Up and Earnings Surprise were good predictors. Our Forecast Estimate Dispersion factor also produced positive results. Price Momentum was mixed during the year producing some extreme monthly results, both positive and negative.

From a relative return perspective, Healthcare, Basic Materials and Consumer Non-cyclicals were the worst performing sectors. Holding overweight positions in highly ranked Kinetic Concepts (–64%), Charles River Labs (–60%), Merck (–45%), Life Technologies (–50%), Celanese (–70%), Freeport-McMoRan (–76%), Massey Energy (–61%), AK Steel (–80%), Herbalife (–45%), Jarden (–51%) and Pepsi Bottling (–42%) each hurt relative performance.

Offsetting some of the negative performance was strong relative performance from the Technology and Consumer Services sectors. Avoiding or holding underweight positions in lower ranked Cisco Systems (–40%), Dell (–58%), Adobe Systems (–50%), Electronic Arts (–73%), Honeywell (–45%), Sirius XM Radio (–96%), Dish Network (–64%), Las Vegas Sands (–94%), MGM Mirage (–84%) and Viacom (–57%) each contributed positively to relative performance.

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The team applies quantitative techniques to analyze a universe of approximately 800 companies, including those in the Russell 1000 Growth^® Index and about 125 other large and medium capitalization companies. Using a multifactor model, the team identifies stocks with rising earnings expectations that sell at low relative valuations when compared to their sector peers. Based on this information, and using sophisticated risk measurement tools, the management team selects stocks, together with their appropriate weightings, that it believes will maximize the Portfolio’s return per unit of risk. The Portfolio seeks to maintain the market capitalization, sector allocations, and style characteristics of the Russell 1000^® Growth Index.

Theodore A. Aronson, Managing Principal

Kevin M. Johnson, Principal

Martha E. Ortiz, Principal

Stefani Cranston, Principal

Gina Marie N. Moore, Principal

R. Brian Wenzinger, Principal

Aronson+Johnson+Ortiz, LP

Fred Herrman, Managing Director

David Byrket, Managing Director, Portfolio Manager

BlackRock Financial Management, Inc.

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Transamerica Partners Large Growth Portfolio

Sub-advisors:
Marsico Capital Management, LLC
OFI Institutional Asset Management, Inc.
Wellington Management Company, LLP

Market Overview:

Marsico Capital Management, LLC — U.S. large capitalization growth equities, as measured by the Russell 1000^® Growth Index (“Russell 1000 Growth”), posted sharp declines for the one-year period ended December 31, 2008.

From the perspective of economic sector performance (using Global Industry Classification Standards for the Russell 1000 Growth as a reference point), weakness was widespread. All ten sectors in the Russell 1000^® Growth Index posted negative returns. Financials (–53%), Energy (–50%), and Materials (–46%) were the worst-performing sectors. Consumer Staples was the best-performing sector with a return of (16%). All other sectors were down between (25%) and (44%).

Large capitalization equities underperformed their small capitalization counterparts by more than 3% (based on the Russell 1000^® Index and Russell 2000^® Index performance), although it bears mentioning that both indexes — with returns of (37.60%) and (33.79%), respectively — were deeply “in the red”. Within the US large capitalization arena, value narrowly outperformed growth during the period. The Russell 1000^® Value Index and Russell 1000^® Growth Index had total returns of (36.85%) and (38.44%), respectively.

OFI Institutional Asset Management, Inc. — This has been a year like no other in recent memory, with the global economy seriously weakened and confidence in equity markets shaken to a degree unseen in a generation or more. The ongoing credit crisis, housing collapse, and its far-reaching impact on financial markets has been unprecedented as the bear market that began in October 2007 reduced equity index values by more than half before recovering somewhat in the closing weeks of 2008.

The pervasive lack of credit in 2008 fueled a massive scaling back among U.S. corporations, increasing unemployment, and decreasing consumer spending. And while the third quarter Gross Domestic Product was only slightly negative, economists anticipate the fourth quarter will be among the worst on record, bringing unprecedented volatility to the markets.

While we would hesitate to call November 20th the ultimate low in the bear market that has ravaged equities over the past 14 months, the subsequent rally has been significant. From the intra-quarter low through December 31, the S&P 500 Index gained 20.5%. In an absolute sense, this rally surpasses the technical definition of a bull market; however, its brief duration precludes this designation as we typically look for a sustained rally over at least three months. Although not quite across that 20% threshold, the Russell 1000^® Growth also soared in the closing weeks of 2008, gaining 19.3% from its intra-quarter low through quarter-end.

Wellington Management Company, LLP — The fiscal year ended December 31, 2008 was a difficult time for virtually all equity styles. Problems in the sub-prime mortgage market spread throughout the financial system, creating a full-blown liquidity/credit crisis that roiled global markets. The final two months of the fiscal year proved exceptionally tumultuous and were capped by an alarming series of events: the US government’s takeover of the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac”), and American International Group, Inc. (“AIG”); the failure of Lehman Brothers Holdings Inc.(“Brothers”); the distressed sales of the commercial banking franchises of Washington Mutual, Inc. and

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Wachovia Corporation; Bank of America Corporation’s acquisition of Merrill Lynch & Co., Inc.; and the conversion of investment banks, The Goldman Sachs Group, Inc. and Morgan Stanley, to commercial banks.

Concerns about inflation persisted through much of the fiscal year, fueled by record-high commodity prices. These worries were largely abated as the period came to a close, when slowing US demand and the weakening global economy caused oil and other commodities prices to drop. Over the year, the Fed lowered the fed funds rate from 4.25% to virtually 0.00%. The ongoing correction in the housing market, debt deflation, rising unemployment, and sluggish production and consumption patterns increasingly pointed to recession, as the effects of the credit crisis worked through the real economy.

Performance:

For the year ended December 31, 2008, Transamerica Partners Large Growth Portfolio returned (39.87%). By comparison, its benchmark, the Russell 1000^® Growth Index, returned (38.44%).

Strategy Review:

Marsico Capital Management, LLC — The Portfolio’s performance was hurt by both stock selection and positioning in the Healthcare and Consumer Staples sectors. Healthcare and Consumer Staples were the strongest-performing areas of the Russell 1000^® Growth Index and the Portfolio could have benefited by having more investments in these areas. The Portfolio’s results were also hampered by stock selection in the sectors. The Portfolio’s position in healthcare services company UnitedHealth Group Inc. slid 49% prior to being sold from the Portfolio. Consumer Staples position, CVS Caremark Corp., dropped 27%.

Information Technology positions Apple, Inc. and Google, Inc. hindered performance. In the Telecommunication Services sector, wireless provider China Mobile Ltd. and AT&T, Inc. each declined sharply prior to being sold. The Portfolio’s positions in hotel/casino operators Las Vegas Sands, Inc. and Wynn Resorts Ltd. also posted disappointing performance results. Energy holdings Transocean Ltd., Petroleo Brasileiro and Schlumberger Ltd. were also among the Portfolio’s weakest performing individual positions.

There were a few areas that had a positive impact on the Portfolio’s 12-month performance. While the Portfolio’s Financials positions posted a collective return of (33%), the return exceeded the (53%) return of the Russell 1000^® Growth Index Financials sector. Similarly, the Portfolio’s Industrials holdings, in aggregate, posted a return that surpassed that of the Russell 1000^® Growth Index Industrials sector. Certain of the Portfolio’s individual positions posted solid, positive returns, including McDonald’s Corp., Visa, Inc., and biotechnology company Genentech, Inc.

During the reporting period, the Portfolio’s average sector allocations emphasized the Consumer Discretionary, Industrials, Information Technology, and Energy sectors.

OFI Institutional Asset Management, Inc. — September and October were particularly difficult months as both the Portfolio and its benchmark suffered double-digit declines. In fact, October was the second worst one-month return in the benchmark’s 30-year history.

Over the course of the period for the Portfolio, six sectors added value while four detracted from it. Strong selectivity in the Consumer Discretionary sector proved beneficial, adding 0.6 percentage points of outperformance versus the Russell 1000^® Growth Index. Toy-maker Hasbro was overweighted versus the index,

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gaining 16.8% for the year. The Portfolio also benefited from positions in DirecTV Group (–3.6%) and Nike (–19.4%). Although both were lower in 2008, the individual stock returns were ahead of the Portfolio’s overall return, making each attractive on a relative basis.

Materials, with –0.8 percentage points of underperformance, was the most costly sector relative to the Russell 1000^® Growth Index. AK Steel Holding (–84.2%) was among the Portfolio’s weakest holdings. The steel maker faced dwindling orders, production cuts and layoffs in the face of the economic slowdown, falling over 84% while held. Fertilizer producer, Mosaic (–75.4%), impacted by falling commodities prices, lost nearly three-quarters of its value in 2008.

The top five contributing stocks (in rank) were: Wal-Mart, IBM, Exxon Mobil, McDonald’s, and Philip Morris.

The Portfolio’s largest detractors for the period were: Apple, UnitedHealth, Schlumberger, and Google.

Our quantitative investment process can be summed with just two words: systematic and disciplined. We employ a dynamic, time-tested approach, based on a foundation of quantitative techniques combined with fundamental analysis to identify investment opportunities. The investment process is designed to create portfolios that closely reflect a benchmark’s fundamental characteristics.

The position we are in now, following the credit and housing burst, is strikingly similar to the bursting of the technology bubble at the start of the decade. Following that tumult, valuation and risk measures swung back into favor and our quantitative portfolios outperformed for the next several years. As was the case then, we have seen choppiness (with unprecedented volatility) and indiscriminate selling moving the markets back towards a historically normal risk-averse stance — something we consider as good for our process.

In our best case scenario, the economy shifts away from a deflationary spiral — a concern of many economists — and the financial system gradually moves out of its recession toward the middle or end of the year. As the market stabilizes, and our risk and valuation factors once again swing back into favor, we envision a prolonged period in which our fundamental-driven investment process is generating alpha with the potential to add value for the Transamerica Partners Large Growth Portfolio in 2009 and beyond.

Wellington Management Company, LLP — The Portfolio is a result of fundamental, bottom up stock selection. Our investment process leverages the extensive research resources of the firm and emphasizes a balance of growth, valuation, and quality criteria in selecting stocks. Our underweight to Consumer Staples along with weak stock selection within Healthcare was the primary driver of the Portfolio’s relative underperformance.

Healthcare holdings, including Humana, Bristol Myers Squibb and Gilead Sciences, detracted from performance. Within Industrials, capital goods firms Caterpillar, Rockwell Collins, and Fluor also hurt relative performance. These stocks declined, in part, as a result of the global credit crisis which reduced near term demand for large infrastructure projects.

Our underweight allocation to, and security selection within, the Consumer Staples sector also detracted from relative performance. Portfolio positioning reflects our belief that stocks within this traditionally defensive sector generally trade at relatively high multiples and do not offer the kind of growth and return opportunities that are consistent with our investment philosophy and objective.

The Portfolio’s three largest absolute detractors, Microsoft, Cisco, and, Cadence Design, were within the Information Technology sector. Cadence Design was also the Portfolio’s largest relative detractor. Shares declined on news of lower-than-expected guidance for the second half of the year, and their withdrawal of the proposal to acquire Mentor Graphics. We eliminated our position in the company as the fiscal year drew to a close.

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Transamerica Partners Growth Portfolio

Sub-advisor:
Turner Investment Partners, Inc.

Market Overview:

The global stock market’s dismal performance in 2008 reflected a global economic slowdown, a downright recession in the U.S., and a financial crisis that first surfaced in the sub-prime mortgage market. A relatively minor percentage of homeowners unable to meet their sub-prime mortgage obligations morphed into about 2 million home foreclosures, billions of dollars of complex, toxic mortgage securities that proved nearly impossible for financial institutions to either value or unload, and the most severe contraction of credit in modern times. In March, the once-storied New York investment firm Bear Stearns collapsed. The unemployment rate rose to 7.2%, and, alas, was widely expected to go higher still in the months ahead. Financial titans Merrill Lynch, Washington Mutual, and Wachovia found themselves starved for cash and ended up being acquired by better-capitalized competitors. Mortgage giants Fannie Mae and Freddie Mac were nationalized. The Treasury Department had to provide an immediate bridge loan to American International Group, the world’s largest insurance company, in order for it to survive. All of it culminated in a $700-billion bailout package by the federal government and a slashing of the Federal Reserve’s short-term interest rate to near zero to help stabilize a teetering global financial system.

Governments around the world were quick to act in an attempt to mitigate the meltdown in the credit and equity markets in 2008. Following rate cuts in the U.S., countries from Australia to Japan to the European Union also lowered their short term interest rates while U.S. President-elect Obama pledged a fiscal stimulus package of approximately $1 trillion. Even with these actions, the US economy continued to weaken. In December, the National Bureau of Economic Research said that America officially fell into a recession back in December 2007.

Performance:

For the year ended December 31, 2008, Transamerica Partners Growth Portfolio returned (51.00%). By comparison, its benchmark, the Russell 1000^® Growth Index, returned (38.44%).

Strategy Review:

The Portfolio seeks to invest in fundamentally attractive companies with strong earnings growth rates. In the Consumer Discretionary sector, slower growth companies that we did not own held the high ground, while the market punished the higher growth companies that we favor. For example, well known companies that we did not own like Wal-Mart and McDonald’s held up reasonably well. On the other hand, shares of Google, the Portfolio’s largest position, traded substantially lower. We continue to hold shares of this company, as an improving economic environment could provide for a more favorable earnings outlook and improved valuation in 2009. Also of note in this sector was the poor showing posted by Baidu — a Chinese internet search provider. We sold this company during the fourth quarter due to concerns that its paid-search listings include unlicensed pharmaceutical companies among its top bidders for medical keywords. With the company’s integrity in doubt, this company was sold.

In the technology sector, the Portfolio’s holdings in Broadcom and Qualcomm held up reasonably well. Additionally, the Portfolio is poised to benefit from key holdings Apple and Hewlett Packard. Apple, a well known leader and innovator when it comes to consumer electronics, is currently trading at a mid-teens price-to-earnings multiple, with an earnings growth rate in the low 20% area. Hewlett Packard has a balanced worldwide

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Transamerica Partners Mid Value Portfolio

Sub-advisors:
Cramer, Rosenthal, McGlynn, LLC
LSV Asset Management
RiverSource Investments, LLC

Market Overview:

Cramer, Rosenthal, McGlynn, LLC — Reality has set in. The lack of a functioning credit market finally caught up to the global economy this past quarter. We have discussed for the past year the critical relevance of credit and commodities for a stable economy and strong equity markets. Commodity prices from Aluminum to Zinc have collapsed as a result of weakening global demand and an inability to maintain the financial leverage supporting many positions. In a strange virtuous circle, high commodity prices (including housing as a commodity for this purpose) hurt the economy, which then hurt the credit markets, which further hurt commodities, and so forth. The expression “negative feedback loop” is becoming cliché, but it is still descriptive for what has happened to the global economy over the past few months. Fears of inflation have rapidly transformed into fears of deflation, with global central bankers undertaking dramatic and, in many cases, unconventional monetary easing to pump life back into the credit markets. Governments around the world are proposing fiscal spending programs by the day to further stimulate their economies and mollify depression-like conditions. In addition to credit and commodities, the third “C” is confidence, and whether referring to consumer or business or even government, it has been eroded. This loss of confidence has caused a shedding of the disbelief and denial that seemed to be holding the economy together through most of the year. It is really this lack of confidence that fuels the negative feedback loop.

The inability or unwillingness of banks and financing sources to provide basic credit for day to day transactions has resulted in companies taking a variety of self-help measures that make good sense in isolation, but further drive the economic contraction. These steps include: liquidating their inventories to raise cash; cutting headcount and discretionary expenditures; and paring back capital spending to maintenance levels. The cumulative impact of all of these logical decisions is a precipitous decline in economic activity the likes of which this generation has never experienced. It now appears that most developed economies will have contracted at a mid to high single digit rate in the fourth quarter and most businesses are witnessing ten percent or greater declines in revenues and orders.

We continue to approach the investment climate with a balance of optimism and realism. To be an investor, one has to maintain an optimistic mind set and believe that our free market system, while imperfect, is resilient and that innovation and superior management execution will be recognized. It is always impossible to call a bottom and we know that cheap can get cheaper over the near term. However, we believe those investors who will allow themselves the luxury of looking out beyond the next few months to properly value a security based upon its longer term opportunities and cash flows, may be handsomely rewarded.

LSV Asset Management — The fiscal year ended December 31, 2008 was an awful year for stocks around the globe. It was the worst year for the S&P 500 Index since 1931 and all segments of the U.S. stock market declined sharply as the economy quickly soured in the face of worsening economic news and perhaps the worst credit crisis the country has seen in the past 80 years! The Portfolio’s benchmark, the Russell Mid Cap Value Index declined 38.4% in 2008, marking the worst year for that index since it started back in 1987.

Problems in the sub-prime mortgage market spread throughout the financial system, creating a full-blown liquidity/credit crisis that roiled global markets. The final two months of the fiscal year proved exceptionally tumultuous and were capped by an alarming series of events: the US government’s takeover of the Federal

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National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac”) and American International Group, Inc. (“AIG”); the failure of Lehman Brothers Holdings; the distressed sales of the commercial banking franchises of Washington Mutual, Inc. and Wachovia Corporation; Bank of America Corporation’s acquisition of Merrill Lynch & Co., Inc.; and the conversion of investment banks, The Goldman Sachs Group, Inc. and Morgan Stanley, to commercial banks. Investor panic peaked in late November and the term ‘bail out’ became a household name to many Americans. Clear signs of panic were abound in the market as intraday volatility hit unprecedented levels. Commodity prices also saw a roller coaster ride in 2008 with oil prices rising from $90 per barrel to nearly $150 by mid July only to fall to approximately $40 late in 2008.

With an unprecedented level of coordination and cooperation, the US Treasury Department and the Federal Reserve Board (“Fed”) presided over efforts to resuscitate credit markets and stabilize the financial system, culminating in the creation of the $700 billion Troubled Asset Relief Program (“TARP”). Over the year, the Fed lowered the fed funds rate from 4.50% to a range between 0%-0.25% The ongoing correction in the housing market, debt deflation, rising unemployment, and sluggish production and consumption patterns increasingly pointed to recession, as the effects of the credit crisis worked through the real economy.

RiverSource Investments, LLC - The annual period was dominated by skyrocketing oil and gasoline prices, the after-shocks of the mortgage market collapse, ongoing deterioration of the housing market, and concerns about whether the U.S. economy was or was not in a recession. Unprecedented intervention by the government saved several financial institutions, while others collapsed. Investor sentiment shifted from hope for a market recovery, to heightened concern over extreme levels of volatility, to eventual panic by the end of the year. Investors sought safe havens for investments — defensive areas such as Consumer Staples, Utilities and Healthcare. Overall, mid-cap equities slightly trailed their large-cap counterparts during the twelve-month period.

Against this challenging backdrop, the Portfolio’s sector allocation was the primary detractor to performance. The Portfolio’s overweight in the Producer Durables and Energy sectors hurt results as these were two of the worst performing sectors in the Russell Mid Cap Value^® Index. In addition, the Utilities and Consumer Staples sectors were two of the best performing sectors in the Russell Mid Cap Value^® Index and the Portfolio’s underweight detracted from relative performance.

The Portfolio benefited from positive stock selection in the consumer discretionary sector, specifically Family Dollar Stores, which rose sharply during the period. Early in the year, we purchased a basket of several retail holdings including Kohl’s, Nordstrom, JCPenney, Bed Bath and Beyond and Macy’s. We sold the majority of the basket during the third quarter for a profit. Finally, positive stock selection in the technology sector helped results, in particular McAfee and EDS.

Toward the end of the annual period, we increased the Portfolio’s allocation to the Financials sector, specifically financial services holdings because we felt valuations were attractive. We also added a basket of regional banks to the Portfolio because we felt banks were trading at favorable discounts. We reduced the Portfolio’s tobacco holding in Lorillard and eliminated Ford Motor Co. from the Portfolio. We exited the position in Ford when our long-term view of the company changed during the period as a result of the government’s involvement in the auto industry.

Performance:

For the year ended December 31, 2008, Transamerica Partners Mid Value Portfolio returned (37.73%). By comparison, its benchmark, the Russell Mid Cap Value^® Index (“RMCV”), returned (38.44%).

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Strategy Review:

Cramer, Rosenthal, McGlynn, LLC — The leading contributors to this year’s performance were UnionBanCal, Dollar Tree and ENSCO International Inc. Shares of the commercial bank, UnionBanCal, rose during the third quarter on the announced tender offer from its majority parent, Mitsubishi UFJ Financial Group. We tendered our shares into the offering, which closed on Sept. 26th. Dollar Tree stock was strong during the second quarter of the year as the value retailer delivered better than expected same store sales and earnings. Dollar Tree benefited from increased customer traffic, as consumers focused on basic household items and looked to stretch their discretionary dollars. Dollar Tree continued to post strong results through the third quarter as consumers responded to its value offerings. Shares of ENSCO, an owner of offshore drilling rigs, gained in the first quarter of the year, as day rates continued to accelerate worldwide and utilization in the sluggish U.S. Gulf of Mexico began to recover.

Electronic Arts Inc., Textron and Goodrich Corp. were the leading detractors for the strategy during the year. We increased our position in Electronic Arts during the third quarter as quality initiatives driven by the new management at the video game developer were beginning to show positive results. Further, the company had announced imminent plans to launch a slate of new games which we believed would drive significant profit improvements. Textron underperformed during the second half of the year as the strains of the broader financial pinch pressured the financing outlook for both its Cessna jet customers and its financial services subsidiary. We exited our position, as we believe that the losses at Textron will be higher than estimated and the soft earnings at Cessna will linger longer than current expectations are discounting. Goodrich Corp. shares fell in the second quarter as investors feared the negative impact of the reduction in schedules of commercial airlines on its lucrative aftermarket business. We believe these fears are misplaced as Goodrich has relatively little exposure to the older planes that are being retired and greater exposure on newer platforms that are still ramping up. Further, we expect that as Boeing and Airbus finally increase the production of the 787 and A380, respectively, cash flow will accelerate dramatically, which should more than pay back the last few years of investment.

LSV Asset Management — LSV Asset Management is a quantitative value manager focused on building a diversified portfolio of stocks with attractive fundamentals. The Portfolio could be characterized as “deep value” in nature because LSV maintains below benchmark valuations metrics like price/cash flow, price/earnings, price/book and price/sales values. Stock selection and this style bias are the primary contributors to results over time.

During the year, the RMCV actually outperformed the Russell Mid Cap^® Index by about 3%, indicating that value stocks held up modestly better than growth stocks. However, within the RMCV, it was the more growth oriented companies that did best. For example, if you sort the companies in the RMCV into five buckets based on Market/Book (“M/B”) ratios, the group with the lowest (more value oriented) M/B declined by 53% during the year while the most expensive group fell just 34%. LSV’s emphasis on being “deep value” certainly didn’t help by that analysis, yet stock selection helped overcome the style bias contained in the Portfolio. The impact of LSV’s deep value bias was a negative 3.25%, so stock selection proved most helpful during the year to help boost the relative returns.

Some of the larger contributors to our relative outperformance were takeover companies like Nationwide Financial Services, UnionBanCal and Safeco, all of which posted positive returns in a very tough year. We also benefitted from owning Hess Corp. in the Portfolio in the first half of the year as oil prices were rising, but, we sold the stock prior to the plunge in oil prices and energy company shares.

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RiverSource Investments, LLC — In our view, economic activity will continue to contract through 2009; however, volatility should lessen from the extremes seen in 2008. As volatility slowly fades and the aggressive government intervention in the economy begins to take effect, we believe equity markets will begin an eventual recovery that will run into 2010. With risk aversion and valuations at highs not seen for decades, we believe equities have become very compelling. Within the Portfolio, we have de-emphasized areas that are defensive in nature in favor of sectors and industries that have typically benefited from market recoveries.

Jay B. Abramson, Chief Investment Officer

Robert L. Rewey, Senior Vice President

Cramer, Rosenthal, McGlynn, LLC

Josef Lakonishok, Ph.D., Chief Investment Officer

Puneet Mansharamani, CFA

Menno Vermeulen, CFA

Co-Portfolio Managers

LSV Asset Management

Warren Spitz, Senior Portfolio Manager

Steven Schroll, Portfolio Manager

Laton Spahr, Portfolio Manager

Paul Stocking, Associate Portfolio Manager

RiverSource Investments, LLC

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Transamerica Partners Mid Growth Portfolio

Sub-advisor:
Columbus Circle Investors

Market Overview:

Stocks plummeted during the fourth quarter of 2008, capping the market’s single worst year since the Great Depression. As the financial crisis worsened, economic activity and corporate profits began to contract sharply as consumers and businesses both cut spending. Following lows set in October and November, the impact of the Federal Reserve’s increasingly aggressive easing efforts and future stimulus plans will be closely watched for signs of success in arresting the economic decline.

Although significant monetary and fiscal policy stimulus is being undertaken in an effort to stem the contractionary effects of the shift from excess consumer spending to excess consumer savings, real damage has already been done to the economy and corporate profits. Having discounted a significant earnings decline, the stock market is now seeking to gauge the new reality before embarking on its future path. Over the next several quarters, it is likely that the market will remain fairly volatile until a consensus emerges with regard to the future.

In this environment, we continue to focus on stocks benefiting from strong secular trends and company-specific stories, especially those having more predictable earnings streams. We are carefully monitoring the effect that monetary and fiscal stimulus is having on the economy, however, it is to determine if a more aggressive investment posture is warranted. In the meantime, we have added some names to the Portfolio that could benefit from the significant domestic infrastructure investment associated with the proposed stimulus plans.

Performance:

For the year ended December 31, 2008, Transamerica Partners Mid Growth Portfolio returned (41.55%). By comparison, its benchmark, the Russell Mid Cap Growth^® Index, returned (44.32%).

Strategy Review:

Columbus Circle Investor’s team of investment analysts monitors numerous factors including political and/or economic developments, secular trends, industry and/or group dynamics, and company specific events to determine which companies are best positioned to benefit in revenue and earnings acceleration. Investments are selected on the basis of their potential to exceed consensus forecasts. All sectors lost value, but on a relative basis the portfolios saw out-performance in the Consumer Staples, Materials, and Energy sectors, partially offset by underperformance in the Industrial and Consumer Discretionary sectors.

Southwestern Energy was one of several exploration and production stocks that we owned throughout 2008 that focuses on developing unconventional natural gas reserves in promising U.S. onshore gas fields such as the Fayetteville Shale. Due in large part to improving drilling techniques and operating experience, results from their core properties continue to improve, leading to upward revisions to their reserves and potential future production. We sold the stock during 2008, however, as natural gas prices declined with the worsening economy.

Millennium Pharmaceutical is a biotechnology company focusing on hematology and oncology products. We owned the stock for its promising multiple myeloma drug, Velcade, whose clinical data continued to suggest upside potential. Our investment thesis was validated when the company reported sales significantly above expectations, causing management to raise guidance. Takeda Pharmaceuticals, the large Japanese drug

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company, announced the strategic acquisition of Millennium during the quarter for a significant premium and we sold the stock shortly thereafter.

SPX Corp, a diversified manufacturing company, succumbed to the fears that infected the stocks of companies that serve the Energy sector, despite robust order growth that continued for power plant cooling systems and power transformers embedded in transmission systems. Although we have meaningfully reduced it, we still own a small position in the stock as the company remains ahead of schedule for improving the operating margins of its APV unit and management is aggressively buying back the company’s shares.

Cameron International, a leading oil service equipment company, also succumbed to the fears that infected the stocks of companies that serve the Energy sector despite operating results and backlog growth that were better than expectations. We maintain a reduced position in Cameron as it is benefiting from the trend toward increased offshore activity, as more construction and drilling occurs in deeper and more remote waters.

Clifford Fox, CFA, Portfolio Manager

Michael Iacono, CFA, Co-Portfolio Manager

Columbus Circle Investors

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Transamerica Partners Small Value Portfolio

Sub-advisors:
OFI Institutional Asset Management, Inc.
Mesirow Financial Investment Management, Inc.

Market Overview:

OFI Institutional Asset Management, Inc. — This has been a year like no other in recent memory with the global economy seriously weakened and confidence in equity markets shaken to a degree unseen in a generation or more. The ongoing credit crisis, housing collapse, and its far-reaching impact on financial markets has been unprecedented as the bear market that began in October 2007 reduced equity index values by more than half before recovering somewhat in the closing weeks of 2008.

The pervasive lack of credit in 2008 fueled a massive scaling back among U.S. corporations, increasing unemployment, and decreasing consumer spending. And while third quarter Gross Domestic Product was only slightly negative, economists anticipate the fourth quarter will be among the worst on record, bringing unprecedented volatility to the markets.

While we would hesitate to call November 20th the ultimate low in the bear market that has ravaged equities over the past 14 months, the subsequent rally has been significant. From the intra-quarter low through December 31, small-cap value stocks outpaced all other size and style breakdowns: The Russell 2000^® Value Index gaining 31.2% (the S&P 500 Index returned 20.5% over this same horizon). In an absolute sense, this surpasses the technical definition of a bull market (a gain of 20%); however, its brief duration (just six weeks) precludes this designation. We typically look for a sustained rally of at least three months.

The position we are in now, following the credit and housing burst, is strikingly similar to the bursting of the technology bubble at the start of the decade. Following that tumult, valuation and risk measures swung back into favor and our portfolios outperformed for the next several years. As was the case then, we have seen choppiness (with unprecedented volatility) and indiscriminate selling moving the markets back towards a historically normal risk-averse stance — something we consider as good for our process.

Mesirow Financial Investment Management, Inc. — The fiscal year ended December 31, 2008 represented the toughest investment year that any of us had experienced in our investment careers. Simply put, there was no place to hide. Value stocks, growth stocks, small cap and large cap all were hit with “tsunami-like” force. In 2008, the S&P 500 Index experienced the highest volatility since 1938 (Source: Leuthold Weeden Institutional Research). The volatility rippled through the market, leaving no sector untouched.

It is tempting to blame the market debacle in 2008 on the sub-prime mortgage crisis. Certainly that played a part. Nevertheless, other factors contributed significantly as well. Lax, sometimes non-existent, regulation let these excesses grow. Overly accommodative monetary policy fueled the bubble. The Federal Deposit Insurance Company was forced to shut an unprecedented 28 banks in 2008. Most notably, the ad hoc response by the Treasury and the Federal Reserve in these unprecedented conditions, left doubt and uncertainty to prey on the investing public and likely led to the panic that characterized this year. Finally, allowing Lehman Brothers to fail put the topper on the credit crunch and ignited the tinder that had been built up by these other factors.

The credit crunch has led the global economy into a world wide recession. Even the high-growth emerging market economies are suffering from a severe slowdown in their growth rates.

The outcome is that most major equity indexes were down around 35-40% in 2008. Indexes are off over 40-45% from their highs late in 2007. As a result, we are finding values that we have not seen in some time in the market.

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It is not unusual to find companies that are trading at low single digit price to earnings multiples, even after factoring in worst case assumptions for 2009 earnings. With massive monetary stimulus already in place, and massive fiscal stimulus promised by the incoming administration, the building blocks may be in place for markets to begin to improve.

Performance:

For the year ended December 31, 2008, Transamerica Partners Small Value Portfolio returned (26.63%). By comparison, its benchmark, the Russell 2000^® Value Index, returned (28.92%).

Strategy Review:

OFI Institutional Asset Management, Inc. — Our quantitative investment process can be summed with just two words: systematic and disciplined. We employ a dynamic, time-tested approach based on a foundation of quantitative techniques combined with fundamental analysis to identify investment opportunities. The investment process is designed to create portfolios that closely reflect a benchmark’s fundamental characteristics.

Consumer Discretionary was costly on both an absolute and relative basis in 2008, with much of the sector’s shortfall attributable to the Specialty Retail group. Asbury Automotive Group (–86.0%), for example, fell sharply late in the year after announcing that tighter lending standards and declining consumer confidence led to lower third-quarter earnings. The stock was sold from the Portfolio. Similarly, Sonic Automotive (–69.2%) announced a third-quarter loss due to the weak vehicle market.

The Financials sector also contributed to the Portfolio’s shortfall in 2008. Virtually all of the sector’s shortfall came as a result of weak stock selectivity of the Portfolio’s Real Estate Investment Trust holdings. The collapsing housing bubble pulled Ashford Hospitality and Glimcher Realty Trust down 81.8% and 65.0%, respectively, for the year, while held by the Portfolio.

On a more positive note, the top five contributing stocks during the period (in rank) were: Arkansas Best, Encore Acquisition, Whiting Petroleum, CH Energy Group, and Pantry Inc.

The market rally in the final weeks of 2008 was a welcome respite from a difficult year and performance from the November 20th low through quarter-end was strong. The Portfolio gained 32.8% over the final six weeks of 2008, 1.6 percentage points ahead of the Russell 2000^® Value Index. Both the Portfolio and its benchmark outperformed the broad-market S&P 500 Index which returned 20.5% over this same period.

Mesirow Financial Investment Management, Inc. — We construct a portfolio from the bottom up. Our proprietary screening models help to identify a pool of inexpensive, “value” stocks to focus on. We concentrate our fundamental analysis to help identify companies with sustainable free cash flow, progressive dividend policy and strong balance sheets that we believe are currently trading below their true value. We expect that over time, catalysts will emerge to drive these companies back to fair valuation.

In 2008, we were extra sensitive to maintaining a “margin of safety” in analyzing the companies we invested in. We remained on the lookout for potential disappointments. For example, we trimmed several regional banks from our portfolios as they showed signs of weakening capital and increasing non-performing loans.

We found few “fat pitches” and preferred to hold less stocks that we were more confident in, rather than forcing ourselves to invest. Our turnover was lower than usual.

Arkansas Best was one of our best performing stocks in 2008. Earnings held up well and the company performed strongly. We sold our position mid year, near its annual high for 2008.

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EZCORP has been another strong performer. EZCORP is the largest publicly traded pawn shop and pay day loan operator. Ironically, in a tough economic environment, there is ever increasing demand for their services.

Stock selection in Financials and Healthcare was strong and they were our two strongest performing sectors, relative to the underlying benchmark.

Osh Kosh Truck (“Osh Kosh”) was a disappointing holding in 2008 and negatively impacted the Portfolio. Osh Kosh makes trucks for military uses, garbage trucks and fire trucks. Concerns over military orders for its armored trucks and price competition in Europe have been headwinds for Osh Kosh. Nevertheless, we still believe that this is a well managed company that will ride out the cyclical headwinds.

Holly Corp. and Frontier Oil, both oil refinery companies, suffered as well. The downturn has negatively impacted gasoline demand, thus putting pressure on refinery margins. As the price of energy has come down, our overweight in Energy has also negatively impacted the Portfolio, although our stock picks in the energy sector outpaced the sector within the Portfolio’s benchmark.

David E. Schmidt, Portfolio Manager

OFI Institutional Asset Management, Inc.

Michael A. Crowe, Senior Managing Director

Rosa Welton, Senior Vice President

Mesirow Financial Investment Management, Inc.

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Transamerica Partners Small Core Portfolio

Sub-advisors:
Fort Washington Investment Advisors, Inc.
RS Investment Management Co., LLC
INVESCO Institutional (NA), Inc.
Wellington Management Company, LLP

Market Overview:

Fort Washington Investment Advisors, Inc. — The problems that plagued the markets in the second half of 2008 include but are not limited to:


•	The demise of several former bellwether financial firms.

•	The continued housing slump.

•	The freezing of the credit markets.

•	Rapid decline in commodity prices and commodity stocks.

What was different about fourth quarter, as compared to the prior quarter, is that the market seemed to find some solid footing, even if only since November 20-21, as several catalysts materialized to halt the rapid deterioration in investor sentiment.

The returns of the Portfolio were negatively impacted by the aforementioned issues and although the market rallied fairly significantly in the last five weeks of the year, it was not enough to offset the prior damage. The impact on the Portfolio from the market/economic environment was most acutely felt in the Energy sector from a negative absolute return perspective, as deteriorating global economic growth reduced demand for most commodities. In general, though, all sectors were impacted as well from the credit freeze that occurred.

RS Investment Management Co., LLC — Overall, 2008 was a year in which investors found few safe harbors. Most major sectors of the Russell 2000 Growth^® Index experienced declines of more than 30%, with some sectors losing over 50%. Hardest hit in this environment were companies with weak balance sheets that relied on excess leverage. All of 2008 will likely be remembered for many years, and perhaps for decades, as one of the most turbulent periods in the modern history of equity markets.

INVESCO Institutional (NA), Inc. — The financial and economic crisis led to historic levels of market turbulence in 2008. The carnage intensified as the year progressed, with the fourth quarter generating negative returns for the Russell 2000^® Value Index in excess of 20%, despite a positive return in December. For the year, U.S. equity markets across the style and capitalization range fell more than 30%. There was nowhere to hide as global equity markets generally fared worse than the U.S. There was no meaningful difference between U.S. growth and value stocks but large stocks underperformed small stocks in 2008, which was surprising given increased risk aversion.

A global flight to quality led to positive returns for U.S. treasuries, gold held fairly steady, and the U.S. dollar rose against all major currencies except the Japanese Yen.

Governments and central banks worldwide injected liquidity into the credit markets to stave off the near-collapse of the global financial system and to restrain the economic slowdown. The U.S Federal Funds rate dropped from 4.25% at year-end 2007 to near 0% at year-end 2008. During the year, we witnessed the largest bank failures in U.S. history. The investment banking industry was under severe duress, which led Bear Stearns and Merrill Lynch to be acquired by J.P. Morgan and Bank of America, respectively, while Lehman Brothers declared

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bankruptcy. Commodities were strong until global demand slowed, which led to a meaningful sell-off in the second half. Crude oil, which started the year around $100, peaked at $145 in July and ended the year around $44. By year-end, the financial crisis had spread to Main Street and the U.S. government extended bridge loans to the Big Three Detroit automakers to avoid their bankruptcy.

Wellington Management Company, LLP — The year ended December 31, 2008 was a difficult time for virtually all equity styles. Problems in the sub-prime mortgage market spread throughout the financial system, creating a full-blown liquidity/credit crisis that roiled global markets. The latter half of 2008 proved exceptionally tumultuous and was capped by an alarming series of events: the US government’s takeover of the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac”), and American International Group, Inc. (“AIG”); the failure of Lehman Brothers Holdings Inc.; the distressed sales of the commercial banking franchises of Washington Mutual, Inc. and Wachovia Corporation; Bank of America Corporation’s acquisition of Merrill Lynch & Co., Inc.; and the conversion of investment banks, The Goldman Sachs Group, Inc. and Morgan Stanley, to commercial banks.

Portfolio Performance:

For the year ended December 31, 2008, Transamerica Partners Small Core Portfolio returned (36.06%). By comparison, its benchmark, the Russell 2000^® Index, returned (33.79%).

Strategy Review:

Fort Washington Investment Advisors, Inc. — On the positive side of the ledger, relative returns in the Consumer Discretionary, Industrials, and Telecommunication Services sectors, along with a benefit from cash holdings helped to nearly offset the negative impact of the Energy, Healthcare and Technology sectors. Several healthcare names were particularly weak primarily due to company specific events. In addition, several energy names declined significantly due to the large drop in energy prices.

Individual names that added to performance include:


•	Industrials — Aerovironment, Duff & Phelps and ESCO Electronics

•	Consumer discretionary — Panera Bread Company, BJ’s Restaurants and PetMed Express

•	Healthcare — Genomic Health and Alexion Pharma

•	Financials — Ezcorp

•	Technology — Foundry Networks

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Among the individual names that detracted from performance:


•	Healthcare — RTI Biologics, Spectranetics, and BioMarin Pharma

•	Energy — ION Geophysical, Berry Petroleum, Lufkin Industries, and Atwood Oceanics

•	Industrials — Energy Conversion Devices

•	Technology — Wright Express

•	Materials — Terra Industries

The Portfolio is positioned as follows:


•	As has been the case for several years, our largest sector overweight continues to be Healthcare, by about 3% relative to the Portfolio’s benchmark. We continue to see the greatest number of opportunities in that sector for sustained, high growth relative to other sectors with less sensitivity to the broader economy.

•	The Consumer Staples sector is a new overweight position at about 2.6% over the Portfolio’s benchmark.

•	We are still about 2.5% underweight in Industrials and Technology as we are concerned about the impact of slowing global growth on the companies in these sectors. However, in Industrials, we saw opportunities to add to or initiate positions in stocks that were at extremely depressed levels due to concerns about domestic and/or global economic activity. We believe some of these companies should benefit from the new administration’s infrastructure stimulus package.

•	We have used the nearly unprecedented sell-off in some Energy names to take our energy sector position from what was an underweight to neutral.

•	Financials are now slightly underweight by about 1% relative to the Portfolio’s benchmark weight. We still own no banks or thrifts due to continuing concerns about the credit cycle. However, we are becoming more interested in those two groups and would begin to initiate positions once we believe we can appropriately assess the worst case credit cycle scenario.

RS Investment Management Co., LLC — Healthcare and Financial stocks detracted most significantly from relative performance. We believed that these economic sectors were well-positioned to weather a U.S. consumer-led recession and a global commodities-led slowdown, and they did decline by less within the Russell 2000^® Growth Index than the Russell 2000^® Index. Nonetheless, poor stock selection led to relative losses for the Portfolio. On the positive side, strong stock selection in the Energy sector— where we had anticipated challenges — aided relative returns.

In technology, EPIQ Systems, a software provider which processes bankruptcy claims, delivered positive returns for the year and was a clear beneficiary of the failures of several large companies in 2008. EPIQ is a good example of a technology company with high levels of recurring business — a meaningful focus in our approach to the sector. We continue to believe that this company could be well positioned for a prosperous 2009 and beyond.

During the year, the Healthcare sector detracted significantly from returns on both an absolute and relative basis. Key holdings included RTI Biologics, which performed poorly as the business was hampered by the macro environment.

While our relative overweighting in the financial services sector aided relative results, this benefit was more than offset by poor stock selection in the sector. We had particular trouble in the area of payments processing, which we had expected to be fairly recession-resistant. Declines in two large holdings — Cardtronics and TNS, Inc. — were primarily due to currency impacts and collateral damage from the consolidation and business failures in the financial services industry. In the case of Cardtronics, these troubles were compounded by the company’s self-

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inflicted execution issues. We exited the TNS position during the fourth quarter as business conditions deteriorated too rapidly and currency headwinds were too severe to overcome. Entering the new year, we have positioned the Portfolio with an overweight position in the Financial Services sector, employing a barbell approach that balances investments in recurring revenue businesses such as RiskMetrics Group and CyberSource with exposure to more credit-sensitive investments such as PrivateBancorp and Stifel Financial.

During these challenging times, and always, we remain committed to our principles of investing in fast-growing, high-margin companies with unique proprietary advantages and strong management teams. While the stock market punished all sectors and styles in the fourth quarter, our style was clearly not rewarded on an absolute basis. Nonetheless, we have not changed our investment process and we believe that, once the economy recovers and investment horizons lengthen, our fundamental research will again be rewarded.

Above all, we are committed to focusing on our core expertise and investment process. As fellow investors in the strategy, we thank you for your long-term investment.

INVESCO Institutional (NA), Inc. (Small Cap Core Strategy) — Small Cap Core is an active small capitalization strategy designed to capture excess returns through Invesco Quantitative Strategies’ proprietary multi-factor stock selection model. We believe that relative returns are predictable based on certain fundamental and behavioral concepts.

To capture excess return, our process:


1.	Systematically evaluates stocks within their industry using four key investment concepts: Earnings Momentum, Price Trend, Management Action, and Relative Value.

2.	Constructs the Portfolio and manages risk to limit the impact of unintended beta, size, and industry biases, through an optimization technique that seeks to maximize expected return at a specified level of risk.

3. Quantifies and rigorously tests investment themes.

Portfolio management decisions to underweight Energy and transportation sectors contributed favorably to excess returns, while decisions to overweight the Consumer Services sector detracted from relative returns. While overall portfolio management activities during 2008 did not produce excess returns for the Portfolio, the stock selection model used to assess the attractiveness of stocks within industries contributed favorably to relative returns.

Stock selection contributed to positive relative performance. The largest contribution came from the Consumer Services Company CSG Systems International. Oil States International, an Energy company, detracted from excess returns. Despite the crisis in the Financial sector, investments in First Bancorp and Platinum Underwriters Holdings added to excess return. Some of the portfolio holdings that are exposed to the production side of the economy fared poorly as signs of economic contraction became increasingly evident. Investments in Terra Industries and Olympic Steel, both from the Basic Materials sector, reduced relative returns as did an investment in Tecumseh Products, an Industrial sector manufacturer.

INVESCO Institutional (NA), Inc. (Small Cap Value Strategy) — Small Cap Value is an active small capitalization strategy designed to capture excess returns through Invesco Quantitative Strategies’ proprietary multi-factor stock selection model. We believe that relative returns are predictable based on certain fundamental and behavioral concepts.

To capture excess return, our process:


1.	Systematically evaluates stocks within their industry using four key investment concepts: Earnings Momentum, Price Trend, Management Action, and Relative Value.

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2.	Constructs the Portfolio and manages risk to limit the impact of unintended beta, size, and industry biases, through an optimization technique that seeks to maximize expected return at a specified level of risk.

3.	Quantifies and rigorously tests investment themes.

While overall portfolio management activities during 2008 did not produce excess returns for the Portfolio, the stock selection model used to assess the attractiveness of stocks within industries contributed favorably to relative returns.

Stock selection contributed positively to excess returns as did decisions to hold stocks with lower than market betas. Exposure to stocks with historically higher relative strength detracted from returns. While our decisions regarding which stocks to overweight aided returns, stocks that were in the Portfolio’s benchmark and that were not held in the Portfolio lowered relative returns. Favorable return contributions came from holdings in CSG Systems International (Consumer Services sector), Stone Energy (Energy sector), and First Bancorp (Financial sector). Stocks detracting from returns include Blyth Inc. (Consumer sector), Graftech International (Industrials sector), and Tecumseh Products (Industrials sector).

Wellington Management Company, LLP — Our investment approach emphasizes bottom up stock selection. The Portfolio is constructed without regard to sector weights however, we do carefully consider diversification to limit risk. Relative out-performance was aided by strong stock selection within the Consumer Discretionary, Materials, and Energy sectors.

Within Consumer Discretionary, holdings in Cato, Choice Hotels, and Helen of Troy outperformed.

Materials holdings Compass Mineral and Zep were the Portfolio’s largest absolute contributors. Compass Mineral owns very long-lived reserves of salt in North America and England which are used for highway de-icing and consumer, agricultural, and industrial applications. The company also produces and markets sulfate of potash, a specialty fertilizer. Severe winter weather in the Midwest, as well as rapidly escalating potash prices, significantly increased the company’s earnings prospects for 2008. We trimmed our position over the period as escalating potash prices pushed the stock toward our target price.

The Portfolio’s largest relative contributor during the period was independent oil and gas exploration and production company, Whiting Petreoleum. The company benefited from favorable oil and gas pricing trends given its strong and growing reserve position and exploration potential. We trimmed the position during the third quarter on strength following the run-up in oil prices.

Stock selection in Industrials detracted from relative performance as a weakening economy contributed to price declines in several holdings including ACCO, Belden, AirTran, Albany, and Carlisle. Positive relative performance was also modestly offset by our underweight to and our security selection within the Financials sector.

Bihag N. Patel, CFA, Senior Portfolio Manager

David K. Robinson, CFA, Senior Portfolio Manager

Daniel J. Kapusta, Senior Portfolio Manager

Richard R. Jandrain III, Managing Director/Senior Portfolio Manager

Fort Washington Investment Advisors, Inc.

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Transamerica Partners Small Growth Portfolio

Sub-advisor:
Perimeter Capital Partners LLC

Market Overview:

The fiscal year ended December 31, 2008 was the worst year for U.S. equities since 1931 and was a particularly difficult year for small cap growth managers, where fewer than 20% of managers beat the Russell 2000^® Growth Index (Source: Merrill Lynch). The market began the year poorly, posting double digit negative returns in the first quarter as sub prime fears and the eventual collapse of Bear Stearns weighed on stocks. In fact, Energy was the only sector to post positive returns in that quarter. The Federal Reserve target interest rate began 2008 at 4.25%, down from 5.25% in September 2007.

By mid-year Energy continued its ascent as oil increased to over $140 per barrel. Energy stocks in the Russell 2000^® Growth Index contributed 3.61% of the total second quarter benchmark return of 4.48%. There was also a large cap bias to the second quarter as investors fled to larger companies with less perceived risk. Managers that remained true to their small cap style were negatively impacted by this phenomenon. Credit concerns and unemployment accelerated and by the third quarter the government began debating the bailout bill. It also became clear that the credit fever was not limited to the U.S. but the global economy would also be roiled. Upon this development, the U.S. dollar surged, creating a tailwind for small cap stocks since small caps tend to have less international exposure.

Poor economic data accelerated into the end of year while the market managed to bottom on November 21st. This date marked what appears to be the early stages of sector and cyclical rotation, an event that we have been anticipating, where defensive sectors and stocks that had been outperforming begin to under-perform. After November 21st, the market rallied more than 20% as investors began the shift toward early cyclical stocks, oversold stocks, and companies likely to benefit from the infrastructure stimulus planned to begin in 2009.

Performance:

For the year ended December 31, 2008, Transamerica Partners Small Growth Portfolio returned (37.87%). By comparison, its benchmark, the Russell 2000^® Growth Index, returned (38.54%).

Strategy Review:

The Portfolio is designed as a highly-diversified, equally-weighted portfolio. Our process is systematic and has been tested in both up and downward trending markets. Our investment process concentrates our focus on stocks that exhibit sustainable relative growth characteristics that we believe are paramount to future out-performance. In 2008, stock selection represented all of the alpha generation in the Portfolio beating the Russell 2000^® Growth Index in seven out of ten sectors, with notable strength in Consumer Discretionary, Healthcare, and Materials sectors.

A significant contributor was Emergent Biosolutions (EBS). This biopharmaceutical company with the only FDA approved vaccine for Anthrax prevention received a large vaccine contract to increase strategic government stockpiles, essentially securing revenues through 2011. After the company demonstrated insider selling, the intent to raise equity, and exceptional out-performance, we exited our position.

In another example, software company EPIQ Systems (EPIQ) is benefiting from accelerating bankruptcies, including such high profile cases such as Lehman Brothers. The company services the legal profession with a

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focus on corporate bankruptcy proceedings. Given this environment, we expect bankruptcies to escalate further, fueling strong earnings growth over the next couple of years, and we maintain a large position on that basis.

In the Energy sector, oil service company Hercules Offshore (HERO) was a detractor from performance in 2008 as it provides shallow water drilling rigs, inland barge rigs, and lift-boats to energy producers in the Gulf of Mexico. Production in the shallow water Gulf of Mexico is very sensitive to changes in commodity prices and as a result the stock sold off drastically.

Economic uncertainty is the topic of discussion at every turn and it is this uncertainty that keeps a lid on the market as bulls and bears jockey for position. We remain committed to our investment discipline, which once again prevailed in a very difficult market, and we are excited about the prospects for the Portfolio going forward.

Mark D. Garfinkel, CFA

Portfolio Manager

Perimeter Capital Partners LLC

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Transamerica Partners International Equity Portfolio

Sub-advisors:
LSV Asset Management
Wellington Management Company, LLP

Market Environment:

LSV Asset Management — The fiscal year ended December 31, 2008 was the worst year for foreign stocks in the 38 year history of the MSCI EAFE Index (the “Index”), which fell 43.4% in U.S. dollar terms. A global economic slowdown and credit crisis impacted markets around the globe with every country in the Index falling sharply. Japan was the best performer with a return of (29.2%) in U.S. dollar terms while Ireland fell nearly 72%. The U.S. dollar strengthened against most currencies and added to the woes of U.S. dollar based investors. Stocks in the Index fell 40.3% in local currency terms indicating that an additional 3.1% of the total return was due to the currency effect of a stronger dollar.

Problems in the credit markets spread around the globe as what was perceived to be a U.S. sub-prime crisis impacted banks all over the planet. Even the largest bank in Iceland was impacted by the credit crisis and had to be rescued by its government. All over Europe, banks sought refuge with the same fury we saw here in the United States. At the same time, there was a global effort on the part of central banks to try and stabilize the financial system and re-instill confidence on the part of investors. There were several coordinated ’rate-cuts’ and multiple stimulus packages announced to try and reverse the downward economic spiral.

While it is too early to tell if these stimulus packages will work, one thing that is clear is that the bear market has created some amazing bargains in terms of stock prices. Many companies are trading at single digit price/earnings ratios and the overall market is trading at 1.3x book value. Clearly, corporate earnings are distressed, but stock prices are as well and opportunities to pick up quality companies at low multiples exist all over the world.

Wellington Management Company, LLP — The fiscal year ended December 31, 2008 was a difficult time for virtually all equity styles. Problems in the sub-prime mortgage market spread throughout the financial system, creating a full-blown liquidity/credit crisis that roiled global markets. The final two months of the fiscal year proved exceptionally tumultuous and were capped by an alarming series of events: the US government’s takeover of the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac”), and American International Group, Inc. (“AIG”); the failure of Lehman Brothers Holdings Inc.; the distressed sales of the commercial banking franchises of Washington Mutual, Inc. and Wachovia Corporation; Bank of America Corporation’s acquisition of Merrill Lynch & Co., Inc.; and the conversion of investment banks, The Goldman Sachs Group, Inc. and Morgan Stanley, to commercial banks.

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Performance:

For the year ended December 31, 2008, Transamerica Partners International Equity Portfolio returned (49.94%). By comparison, its benchmark, the MSCI World Ex-US Index, returned (43.23%).

Strategy Review:

For the year, LSV lagged the Portfolio’s benchmark by about 1%. Value stocks performed worse than growth stocks during the year, as the Portfolio’s benchmark lagged the MSCI World Ex-US Index by 0.7%. LSV’s deep value bias was the single largest detractor for the year. Low price/earnings multiple stocks performed worse than high price/earnings multiple stocks even within our ‘value’ benchmark. Our bias focusing on the cheaper stocks cost us around 3% for the year.

The single largest contributor (+65bp) for the year, relative to the benchmark, was The Royal Bank of Scotland Group (RBS) which declined sharply but was not owned in the Portfolio. RBS was a large position in the Portfolio’s benchmark and we were fortunate not to own that stock. The next largest contributors were NTT Docomo and Nippon Telegraph and Telephone Corp. from Japan where we had overweights. However, we were also overweight in some of the auto companies which pared back results as that industry underperformed the market. Positions in Peugeot (France) and Nissan Motor (Japan) cost us more than 70bp relative to the Portfolio’s benchmark.

Wellington Management Company, LLP — Portfolio positioning is the result of fundamental, bottom up stock selection. As growth investors, we look for companies with improving fundamentals that are likely to exceed market expectations. We prefer to buy companies after we are able to confirm that fundamentals are getting better. Underperformance during the year was led by unfavorable stock selection in Financials, Consumer Discretionary, and Industrials.

Stock selection within Financials detracted from relative performance, particularly our positions in global financial services firm UBS, and United Kingdom based bank, Barclays. Both firms were negatively impacted by the global credit crisis. Shares of UBS declined on news that exposures to subprime loans were larger than expected which resulted in a dilutive capital raise.

Performance within Consumer Discretionary was hurt by our position in Arcandor. The German retailer was the Portfolio’s largest absolute and relative detractor during the reporting period. The company reduced its full year earnings guidance amid a challenging retail environment in Western Europe given the slowing economy. We eliminated our position on the expectation of further global weakness.

Within Industrials our capital goods holdings detracted from performance, particularly our positions in Suntech Power, Renewable Energy, and Hansen Transmissions. These alternative energy stocks were impacted by both falling oil prices and lower demand due to the global credit crisis.

TRANSAMERICA PARTNERS PORTFOLIOS

MONEY MARKET

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008


Assets:
Securities, at value, including investments held as collateral for securities out on loan (Notes 2 and 4)	$	1,198,284,597
Repurchase agreements (cost equals market value)		126,452,311
Cash at broker		—
Foreign currency holdings, at value		—
Receivable for securities sold		—
Receivable for principal paydowns		—
Unrealized appreciation on foreign currency forward contracts (Note 8)		—
Swap contracts, at value		—
Variation margin receivable		—
Interest receivable		1,441,153
Dividends receivable		—
Foreign tax reclaim receivable		—
Receivable from Advisor		—
Receivable from securities lending (net)		—

Total assets		1,326,178,061


Liabilities:
Due to Advisor		—
Due to Custodian		—
Due to Broker for swap contracts		—
Collateral for securities out on loan		—
Payable for securities purchased		—
Securities sold short, at value		—
Written options, at value		—
Swap contracts, at value		—
Unrealized depreciation on foreign currency forward contracts (Note 8)		—
Variation margin payable		—
Accrued investment advisory fees		296,958
Accrued expenses		79,354

Total liabilities		376,312


Net assets	$	1,325,801,749


Securities, at cost	$	1,198,284,597

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment income (Note 2):
Interest income	$	32,676,307
Securities lending income (net)		—
Dividend income		—
Less: foreign withholding taxes		—

Total income		32,676,307

Expenses (Note 2):
Investment advisory fees		3,029,823
Custody fees		124,447
Audit fees		29,136
Legal fees		52,713
Reports to shareholders		13,766
Other fees		32,081

Total expenses		3,281,966
Expenses reimbursed by the Advisor		—

Net expenses		3,281,966


Net investment income (loss)		29,394,341


Realized and unrealized gains (losses) on investments (Note 2):
Net realized gains (losses) on transactions from:
Securities		(546,399	)
Swap contracts		—
Futures		—
Written options		—
Foreign currency transactions		—

		(546,399	)

Change in net unrealized appreciation (depreciation) on:
Securities		—
Futures		—
Written options		—
Short sales		—
Swap contracts		—
Foreign currency translations		—

		—


Net realized and unrealized gains (losses) on investments		(546,399	)

Net increase (decrease) in net assets resulting from operations	$	28,847,942

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07
From operations:
Net investment income (loss)	$	29,394,341		$	49,560,669
Net realized gains (losses) on investments		(546,399	)		—
Change in net unrealized appreciation (depreciation) on investments		—			—

Net increase (decrease) in net assets resulting from operations		28,847,942			49,560,669


From transactions in investors’ beneficial interests:
Contributions		4,260,151,227			2,954,349,154
Withdrawals		(4,013,993,525	)		(2,879,054,327	)

Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests		246,157,702			75,294,827

Net increase (decrease) in net assets		275,005,644			124,855,496

Net assets:
Beginning of year		1,050,796,105			925,940,609

End of year	$	1,325,801,749		$	1,050,796,105

See notes to financial statements.

TRANSAMERICA PARTNERS PORTFOLIOS

HIGH QUALITY BOND

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008


Assets:
Securities, at value, including investments held as collateral for securities out on loan (Notes 2 and 4)	$	426,608,085
Repurchase agreements (cost equals market value)		2,244,128
Cash at broker		—
Foreign currency holdings, at value		—
Receivable for securities sold		—
Receivable for principal paydowns		4,774
Unrealized appreciation on foreign currency forward contracts (Note 8)		—
Swap contracts, at value		—
Variation margin receivable		—
Interest receivable		2,949,860
Dividends receivable		—
Foreign tax reclaim receivable		—
Receivable from Advisor		—
Receivable from securities lending (net)		12,372

Total assets		431,819,219


Liabilities:
Due to Advisor		—
Due to Custodian		—
Due to Broker for swap contracts		—
Collateral for securities out on loan		10,391,435
Payable for securities purchased		—
Securities sold short, at value		—
Written options, at value		—
Swap contracts, at value		—
Unrealized depreciation on foreign currency forward contracts (Note 8)		—
Variation margin payable		—
Accrued investment advisory fees		133,008
Accrued expenses		63,273

Total liabilities		10,587,716


Net assets	$	421,231,503


Securities, at cost	$	445,227,379

STATEMENT OF OPERATIONS
For the year ended December 31, 2008


Investment income (Note 2):
Interest income	$	24,026,900
Securities lending income (net)		248,119
Dividend income		—
Less: foreign withholding taxes		—

Total income		24,275,019

Expenses (Note 2):
Investment advisory fees		1,839,044
Custody fees		95,462
Audit fees		31,320
Legal fees		19,076
Reports to shareholders		6,845
Other fees		16,865

Total expenses		2,008,612
Expenses reimbursed by the Advisor		—

Net expenses		2,008,612


Net investment income (loss)		22,266,407


Realized and unrealized gains (losses) on investments (Note 2):
Net realized gains (losses) on transactions from:
Securities		3,031,998
Swap contracts		—
Futures		—
Written options		—
Foreign currency transactions		—

		3,031,998

Change in net unrealized appreciation (depreciation) on:
Securities		(20,430,574	)
Futures		—
Written options		—
Short sales		—
Swap contracts		—
Foreign currency translations		—

		(20,430,574	)


Net realized and unrealized gains (losses) on investments		(17,398,576	)

Net increase (decrease) in net assets resulting from operations	$	4,867,831

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07
From operations:
Net investment income (loss)	$	22,266,407		$	37,058,128
Net realized gains (losses) on investments		3,031,998			(1,923,414	)
Change in net unrealized appreciation (depreciation) on investments		(20,430,574	)		8,617,100

Net increase (decrease) in net assets resulting from operations		4,867,831			43,751,814


From transactions in investors’ beneficial interests:
Contributions		202,813,678			284,629,480
Withdrawals		(619,741,245	)		(312,713,241	)

Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests		(416,927,567	)		(28,083,761	)

Net increase (decrease) in net assets		(412,059,736	)		15,668,053

Net assets:
Beginning of year		833,291,239			817,623,186

End of year	$	421,231,503		$	833,291,239

See notes to financial statements.

TRANSAMERICA PARTNERS PORTFOLIOS

INFLATION-PROTECTED SECURITIES

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008


Assets:
Securities, at value, including investments held as collateral for securities out on loan (Notes 2 and 4)	$	367,010,700
Repurchase agreements (cost equals market value)		17,373,040
Cash at broker		—
Foreign currency holdings, at value (cost $785)		641
Receivable for securities sold		1,446,198
Receivable for principal paydowns		—
Unrealized appreciation on foreign currency forward contracts (Note 8)		—
Swap contracts, at value		—
Variation margin receivable		217,532
Interest receivable		3,230,575
Dividends receivable		—
Foreign tax reclaim receivable		—
Receivable from Advisor		—
Receivable from securities lending (net)		88,937

Total assets		389,367,623


Liabilities:
Due to Advisor		819
Due to Custodian		—
Due to Broker for swap contracts		—
Collateral for securities out on loan		—
Payable for securities purchased		—
Securities sold short, at value		—
Written options, at value		—
Swap contracts, at value		—
Unrealized depreciation on foreign currency forward contracts (Note 8)		602
Variation margin payable		—
Accrued investment advisory fees		124,135
Accrued expenses		44,193

Total liabilities		169,749


Net assets	$	389,197,874


Securities, at cost	$	390,207,359

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment income (Note 2):
Interest income	$	23,970,791
Securities lending income (net)		962,266
Dividend income		—
Less: foreign withholding taxes		—

Total income		24,933,057

Expenses (Note 2):
Investment advisory fees		1,624,043
Custody fees		68,688
Audit fees		31,350
Legal fees		59,258
Reports to shareholders		4,001
Other fees		10,927

Total expenses		1,798,267
Expenses reimbursed by the Advisor		(1,560	)

Net expenses		1,796,707


Net investment income (loss)		23,136,350


Realized and unrealized gains (losses) on investments (Note 2):
Net realized gains (losses) on transactions from:
Securities		(11,524,452	)
Swap contracts		—
Futures		(324,134	)
Written options		438,028
Foreign currency transactions		1,066,842

		(10,343,716	)

Change in net unrealized appreciation (depreciation) on:
Securities		(28,387,680	)
Futures		(246,704	)
Written options		—
Short sales		—
Swap contracts		—
Foreign currency translations		5,249

		(28,629,135	)


Net realized and unrealized gains (losses) on investments		(38,972,851	)

Net increase (decrease) in net assets resulting from operations	$	(15,836,501	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07
From operations:
Net investment income (loss)	$	23,136,350		$	7,583,583
Net realized gains (losses) on investments		(10,343,716	)		805,098
Change in net unrealized appreciation (depreciation) on investments		(28,629,135	)		5,212,164

Net increase (decrease) in net assets resulting from operations		(15,836,501	)		13,600,845


From transactions in investors’ beneficial interests:
Contributions		509,258,026			72,255,744
Withdrawals		(253,237,047	)		(87,524,361	)

Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests		256,020,979			(15,268,617	)

Net increase (decrease) in net assets		240,184,478			(1,667,772	)

Net assets:
Beginning of year		149,013,396			150,681,168

End of year	$	389,197,874		$	149,013,396

See notes to financial statements.

TRANSAMERICA PARTNERS PORTFOLIOS

CORE BOND

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008


Assets:
Securities, at value, including investments held as collateral for securities out on loan (Notes 2 and 4)	$	2,035,413,009
Repurchase agreements (cost equals market value)		8,044,299
Cash at broker		—
Foreign currency holdings, at value (cost $840,794)		775,349
Receivable for securities sold		446,707,833
Receivable for principal paydowns		546,113
Unrealized appreciation on foreign currency forward contracts (Note 8)		1,777,139
Swap contracts, at value		86,452,741
Variation margin receivable		—
Interest receivable		16,355,729
Dividends receivable		—
Foreign tax reclaim receivable		—
Receivable from Advisor		—
Receivable from securities lending (net)		6,910

Total assets		2,596,079,122


Liabilities:
Due to Advisor		—
Due to Custodian		—
Due to Broker for swap contracts		—
Collateral for securities out on loan		2,425,000
Payable for securities purchased		593,609,189
Securities sold short, at value (proceeds $247,817,336)		249,802,832
Written options, at value (premium $5,578,640)		11,129,683
Swap contracts, at value		68,795,481
Unrealized depreciation on foreign currency forward contracts (Note 8)		1,331,381
Variation margin payable		991,224
Accrued investment advisory fees		522,400
Accrued expenses		159,247

Total liabilities		928,766,437


Net assets	$	1,667,312,685


Securities, at cost	$	2,182,914,107

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment income (Note 2):
Interest income	$	105,857,454
Securities lending income (net)		190,713
Dividend income		1,162,915
Less: foreign withholding taxes		—

Total income		107,211,082

Expenses (Note 2):
Investment advisory fees		6,828,373
Custody fees		333,670
Audit fees		34,278
Legal fees		74,061
Reports to shareholders		22,295
Other fees		58,756

Total expenses		7,351,433
Expenses reimbursed by the Advisor		—

Net expenses		7,351,433


Net investment income (loss)		99,859,649


Realized and unrealized gains (losses) on investments (Note 2):
Net realized gains (losses) on transactions from:
Securities		9,935,943
Swap contracts		12,985,532
Futures		3,361,537
Written options		1,442,401
Foreign currency transactions		4,747,104

		32,472,517

Change in net unrealized appreciation (depreciation) on:
Securities		(164,963,161	)
Futures		4,704,952
Written options		(5,580,075	)
Short sales		(1,647,598	)
Swap contracts		(3,995,346	)
Foreign currency translations		431,115

		(171,050,113	)


Net realized and unrealized gains (losses) on investments		(138,577,596	)

Net increase (decrease) in net assets resulting from operations	$	(38,717,947	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07
From operations:
Net investment income (loss)	$	99,859,649		$	103,906,486
Net realized gains (losses) on investments		32,472,517			(16,401,628	)
Change in net unrealized appreciation (depreciation) on investments		(171,050,113	)		52,800,139

Net increase (decrease) in net assets resulting from operations		(38,717,947	)		140,304,997


From transactions in investors’ beneficial interests:
Contributions		611,898,545			568,414,773
Withdrawals		(1,154,747,429	)		(537,661,703	)

Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests		(542,848,884	)		30,753,070

Net increase (decrease) in net assets		(581,566,831	)		171,058,067

Net assets:
Beginning of year		2,248,879,516			2,077,821,449

End of year	$	1,667,312,685		$	2,248,879,516

See notes to financial statements.

TRANSAMERICA PARTNERS PORTFOLIOS

TOTAL RETURN BOND

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008


Assets:
Securities, at value, including investments held as collateral for securities out on loan (Notes 2 and 4)	$	370,821,558
Repurchase agreements (cost equals market value)		8,409,852
Cash at broker		1,979,276
Foreign currency holdings, at value		—
Receivable for securities sold		4,681,444
Receivable for principal paydowns		64,769
Unrealized appreciation on foreign currency forward contracts (Note 8)		254,125
Swap contracts, at value		—
Variation margin receivable		—
Interest receivable		2,873,524
Dividends receivable		—
Foreign tax reclaim receivable		—
Receivable from Advisor		—
Receivable from securities lending (net)		1,436

Total assets		389,085,984

Liabilities:
Due to Advisor		1,122
Due to Custodian		—
Payable for written options		1,190
Collateral for securities out on loan		464,950
Payable for securities and options purchased		85,844,550
Securities sold short, at value		—
Written options, at value (premium $790,246)		1,832,872
Swap contracts, at value		—
Unrealized depreciation on foreign currency forward contracts (Note 8)		100,312
Variation margin payable		270,258
Accrued investment advisory fees		94,757
Accrued expenses		62,973

Total liabilities		88,672,984


Net assets	$	300,413,000


Securities, at cost	$	436,741,912

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment income (Note 2):
Interest income	$	20,330,889
Securities lending income (net)		209,470
Dividend income		107,084
Less: foreign withholding taxes		—

Total income		20,647,443

Expenses (Note 2):
Investment advisory fees		1,337,043
Custody fees		125,558
Audit fees		26,870
Legal fees		14,270
Reports to shareholders		4,061
Other fees		10,837

Total expenses		1,518,639
Expenses reimbursed by the Advisor		(148	)

Net expenses		1,518,491


Net investment income (loss)		19,128,952


Realized and unrealized gains (losses) on investments (Note 2):
Net realized gains (losses) on transactions from:
Securities		1,457,431
Swap contracts		—
Futures		2,134,369
Written options		711,289
Foreign currency transactions		458,927

		4,762,016

Change in net unrealized appreciation (depreciation) on:
Securities		(60,927,610	)
Futures		2,286,198
Written options		(790,097	)
Short sales		—
Swap contracts		—
Foreign currency translations		206,722

		(59,224,787	)


Net realized and unrealized gains (losses) on investments		(54,462,771	)

Net increase (decrease) in net assets resulting from operations	$	(35,333,819	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07
From operations:
Net investment income (loss)	$	19,128,952		$	14,141,643
Net realized gains (losses) on investments		4,762,016			2,612,690
Change in net unrealized appreciation (depreciation) on investments		(59,224,787	)		(5,712,368	)

Net increase (decrease) in net assets resulting from operations		(35,333,819	)		11,041,965


From transactions in investors’ beneficial interests:
Contributions		156,252,922			333,268,808
Withdrawals		(210,793,599	)		(74,659,704	)

Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests		(54,540,677	)		258,609,104

Net increase (decrease) in net assets		(89,874,496	)		269,651,069

Net assets:
Beginning of year		390,287,496			120,636,427

End of year	$	300,413,000		$	390,287,496

See notes to financial statements.

TRANSAMERICA PARTNERS PORTFOLIOS
HIGH YIELD BOND

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008


Assets:
Securities, at value, including investments held as collateral for securities out on loan (Notes 2 and 4)	$	388,747,535
Repurchase agreements (cost equals market value)		39,226,732
Cash at broker		—
Foreign currency holdings, at value		—
Receivable for securities sold		495,494
Receivable for principal paydowns		—
Unrealized appreciation on foreign currency forward contracts (Note 8)		—
Swap contracts, at value		—
Variation margin receivable		—
Interest receivable		13,353,487
Dividends receivable		—
Foreign tax reclaim receivable		—
Receivable from Advisor		—
Receivable from securities lending (net)		—

Total assets		441,823,248


Liabilities:
Due to Advisor		—
Due to Custodian		—
Due to Broker for swap contracts		—
Collateral for securities out on loan		—
Payable for securities purchased		1,697,349
Securities sold short, at value		—
Written options, at value		—
Swap contracts, at value		—
Unrealized depreciation on foreign currency forward contracts (Note 8)		—
Variation margin payable		—
Accrued investment advisory fees		204,874
Accrued expenses		57,571

Total liabilities		1,959,794


Net assets	$	439,863,454


Securities, at cost	$	589,080,397

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment income (Note 2):
Interest income	$	55,315,675
Securities lending income (net)		—
Dividend income		178,660
Less: foreign withholding taxes		—

Total income		55,494,335

Expenses (Note 2):
Investment advisory fees		3,006,017
Custody fees		100,557
Audit fees		31,332
Legal fees		20,377
Reports to shareholders		5,834
Other fees		19,423

Total expenses		3,183,540
Expenses reimbursed by the Advisor		—


Net expenses		3,183,540


Net investment income (loss)		52,310,795


Realized and unrealized gains (losses) on investments (Note 2):
Net realized gains (losses) on transactions from:
Securities		(47,659,274	)
Swap contracts		—
Futures		—
Written options		—
Foreign currency transactions		—

		(47,659,274	)

Change in net unrealized appreciation (depreciation) on:
Securities		(177,504,943	)
Futures		—
Written options		—
Short sales		—
Swap contracts		—
Foreign currency translations		—

		(177,504,943	)


Net realized and unrealized gains (losses) on investments		(225,164,217	)

Net increase (decrease) in net assets resulting from operations	$	(172,853,422	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07
From operations:
Net investment income (loss)	$	52,310,795		$	43,380,175
Net realized gains (losses) on investments		(47,659,274	)		2,952,445
Change in net unrealized appreciation (depreciation) on investments		(177,504,943	)		(36,569,793	)

Net increase (decrease) in net assets resulting from operations		(172,853,422	)		9,762,827


From transactions in investors’ beneficial interests:
Contributions		263,465,864			201,336,632
Withdrawals		(189,476,006	)		(174,702,497	)

Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests		73,989,858			26,634,135

Net increase (decrease) in net assets		(98,863,564	)		36,396,962

Net assets:
Beginning of year		538,727,018			502,330,056

End of year	$	439,863,454		$	538,727,018

See notes to financial statements.

TRANSAMERICA PARTNERS PORTFOLIOS

BALANCED

STATEMENTS OF ASSETS AND LIABILITIES

December 31, 2008


Assets:
Securities, at value, including investments held as collateral for securities out on loan (Notes 2 and 4)	$	178,762,974
Repurchase agreements (cost equals market value)		3,771,297
Cash at broker		1,291,676

Foreign currency holdings, at value		—
Receivable for securities sold		3,170,356
Receivable for principal paydowns		—
Unrealized appreciation on foreign currency forward contracts (Note 8)		141,181
Swap contracts, at value		—
Variation margin receivable		—
Interest receivable		910,946
Dividends receivable		202,448
Foreign tax reclaim receivable		—
Receivable from Advisor		6,656
Receivable from securities lending (net)		5,523

Total assets		188,263,057


Liabilities
Due to Advisor		—
Due to Custodian		—
Payable for written options		289
Collateral for securities out on loan		1,911,215
Payable for securities and options purchased		16,137,515
Securities sold short, at value		—
Written options, at value (premium $205,967)		486,063
Swap contracts, at value		—
Unrealized depreciation on foreign currency forward contracts (Note 8)		37,687
Variation margin payable		611,171
Accrued investment advisory fees		67,414
Accrued expenses		81,593

Total liabilities		19,332,947


Net assets	$	168,930,110


Securities, at cost	$	230,029,462

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment income (Note 2):
Interest income	$	6,296,976
Securities lending income (net)		54,332
Dividend income		3,260,803
Less: foreign withholding taxes		(20	)

Total income		9,612,091

Expenses (Note 2):
Investment advisory fees		1,093,922
Custody fees		149,403
Audit fees		34,733
Legal fees		6,516
Reports to shareholders		1,354
Other fees		8,974

Total expenses		1,294,902
Expenses reimbursed by the Advisor		(79,435	)

Net expenses		1,215,467


Net investment income (loss)		8,396,624


Realized and unrealized gains (losses) on investments (Note 2):
Net realized gains (losses) on transactions from:
Securities		(18,595,341	)
Swap contracts		—
Futures		(376,725	)
Written options		212,221
Foreign currency transactions		222,603

		(18,537,242	)

Change in net unrealized appreciation (depreciation) on:
Securities		(62,133,235	)
Futures		1,004,345
Written options		(179,508	)
Short sales		—
Swap contracts		—
Foreign currency translations		119,278

		(61,189,120	)


Net realized and unrealized gains (losses) on investments		(79,726,362	)

Net increase (decrease) in net assets resulting from operations	$	(71,329,738	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07
From operations:
Net investment income (loss)	$	8,396,624		$	10,529,981
Net realized gains (losses) on investments		(18,537,242	)		22,785,211
Change in net unrealized appreciation (depreciation) on investments		(61,189,120	)		(25,666,220	)

Net increase (decrease) in net assets resulting from operations		(71,329,738	)		7,648,972


From transactions in investors’ beneficial interests:
Contributions		40,381,517			87,795,282
Withdrawals		(118,756,852	)		(158,457,872	)

Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests		(78,375,335	)		(70,662,590	)

Net increase (decrease) in net assets		(149,705,073	)		(63,013,618	)

Net assets:
Beginning of year		318,635,183			381,648,801

End of year	$	168,930,110		$	318,635,183

See notes to financial statements.

TRANSAMERICA PARTNERS PORTFOLIOS
LARGE VALUE
(FORMERLY, VALUE & INCOME)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008


Assets:
Securities, at value, including investments held as collateral for securities out on loan (Notes 2 and 4)	$	1,436,124,647
Repurchase agreements (cost equals market value)		11,411,786
Cash at broker		—
Foreign currency holdings, at value		—
Receivable for securities sold		—
Receivable for principal paydowns		—
Unrealized appreciation on foreign currency forward contracts (Note 8)		—
Swap contracts, at value		—
Variation margin receivable		—
Interest receivable		3
Dividends receivable		4,033,614
Foreign tax reclaim receivable		1,600
Receivable from Advisor		1,478
Receivable from securities lending (net)		94,715

Total assets		1,451,667,843


Liabilities:
Due to Advisor		—
Due to Custodian		—
Due to Broker for swap contracts		—
Collateral for securities out on loan		—
Payable for securities purchased		—
Securities sold short, at value		—
Written options, at value		—
Swap contracts, at value		—
Unrealized depreciation on foreign currency forward contracts (Note 8)		—
Variation margin payable		—
Accrued investment advisory fees		573,116
Accrued expenses		124,580

Total liabilities		697,696


Net assets	$	1,450,970,147


Securities, at cost	$	2,137,281,482

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment income (Note 2):
Interest income	$	348,288
Securities lending income (net)		1,373,828
Dividend income		67,852,034
Less: foreign withholding taxes		(186,310	)

Total income		69,387,840

Expenses (Note 2):
Investment advisory fees		10,367,668
Custody fees		324,082
Audit fees		27,983
Legal fees		278,122
Reports to shareholders		28,310
Other fees		79,970

Total expenses		11,106,135
Expenses reimbursed by the Advisor		(1,478	)

Net expenses		11,104,657


Net investment income (loss)		58,283,183


Realized and unrealized gains (losses) on investments (Note 2):
Net realized gains (losses) on transactions from:
Securities		(202,203,330	)
Swap contracts		—
Futures		—
Written options		—
Foreign currency transactions		—

		(202,203,330	)

Change in net unrealized appreciation (depreciation) on:
Securities		(1,044,249,653	)
Futures		—
Written options		—
Short sales		—
Swap contracts		—
Foreign currency translations		—

		(1,044,249,653	)


Net realized and unrealized gains (losses) on investments		(1,246,452,983	)

Net increase (decrease) in net assets resulting from operations	$	(1,188,169,800	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07
From operations:
Net investment income (loss)	$	58,283,183		$	59,270,899
Net realized gains (losses) on investments		(202,203,330	)		217,908,338
Change in net unrealized appreciation (depreciation) on investments		(1,044,249,653	)		(321,315,389	)

Net increase (decrease) in net assets resulting from operations		(1,188,169,800	)		(44,136,152	)


From transactions in investors’ beneficial interests:
Contributions		536,264,110			819,077,669
Withdrawals		(1,062,148,938	)		(1,148,860,468	)

Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests		(525,884,828	)		(329,782,799	)

Net increase (decrease) in net assets		(1,714,054,628	)		(373,918,951	)

Net assets:
Beginning of year		3,165,024,775			3,538,943,726

End of year	$	1,450,970,147		$	3,165,024,775

See notes to financial statements.

TRANSAMERICA PARTNERS PORTFOLIOS

VALUE

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008


Assets:
Securities, at value, including investments held as collateral for securities out on loan (Notes 2 and 4)	$	62,637,003
Repurchase agreements (cost equals market value)		1,274,730
Cash at broker		—
Foreign currency holdings, at value		—
Receivable for securities sold		—
Receivable for principal paydowns		—
Unrealized appreciation on foreign currency forward contracts (Note 8)		—
Swap contracts, at value		—
Variation margin receivable		—
Interest receivable		18
Dividends receivable		118,210
Foreign tax reclaim receivable		—
Receivable from Advisor		—
Receivable from securities lending (net)		470

Total assets		64,030,431


Liabilities:
Due to Advisor		1,440
Due to Custodian		—
Due to Broker for swap contracts		—
Collateral for securities out on loan		2,594,000
Payable for securities purchased		671,845
Securities sold short, at value		—
Written options, at value		—
Swap contracts, at value		—
Unrealized depreciation on foreign currency forward contracts (Note 8)		—
Variation margin payable		—
Accrued investment advisory fees		25,979
Accrued expenses		33,603

Total liabilities		3,326,867


Net assets	$	60,703,564


Securities, at cost	$	93,701,072

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment income (Note 2):
Interest income	$	50,596
Securities lending income (net)		52,958
Dividend income		3,171,970
Less: foreign withholding taxes		(2,594	)

Total income		3,272,930

Expenses (Note 2):
Investment advisory fees		544,167
Custody fees		29,117
Audit fees		26,875
Legal fees		3,170
Reports to shareholders		1,349
Other fees		4,091

Total expenses		608,769
Expenses reimbursed by the Advisor		(10,265	)

Net expenses		598,504


Net investment income (loss)		2,674,426


Realized and unrealized gains (losses) on investments (Note 2):
Net realized gains (losses) on transactions from:
Securities		(56,111,388	)
Swap contracts		—
Futures		—
Written options		—
Foreign currency transactions		—

		(56,111,388	)

Change in net unrealized appreciation (depreciation) on:
Securities		(5,216,768	)
Futures		—
Written options		—
Short sales		—
Swap contracts		—
Foreign currency translations		—

		(5,216,768	)


Net realized and unrealized gains (losses) on investments		(61,328,156	)

Net increase (decrease) in net assets resulting from operations	$	(58,653,730	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07
From operations:
Net investment income (loss)	$	2,674,426		$	2,237,723
Net realized gains (losses) on investments		(56,111,388	)		11,397,018
Change in net unrealized appreciation (depreciation) on investments		(5,216,768	)		(32,193,595	)

Net increase (decrease) in net assets resulting from operations		(58,653,730	)		(18,558,854	)


From transactions in investors’ beneficial interests:
Contributions		49,620,283			102,985,023
Withdrawals		(71,828,915	)		(44,143,149	)

Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests		(22,208,632	)		58,841,874

Net increase (decrease) in net assets		(80,862,362	)		40,283,020

Net assets:
Beginning of year		141,565,926			101,282,906

End of year	$	60,703,564		$	141,565,926

See notes to financial statements.

TRANSAMERICA PARTNERS PORTFOLIOS

LARGE CORE

(FORMERLY, GROWTH & INCOME)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008


Assets:
Securities, at value, including investments held as collateral for securities out on loan (Notes 2 and 4)	$	274,318,610
Repurchase agreements (cost equals market value)		1,295,878
Cash at broker		—
Foreign currency holdings, at value		—
Receivable for securities sold		16,351,569
Receivable for principal paydowns		—
Unrealized appreciation on foreign currency forward contracts (Note 8)		—
Swap contracts, at value		—
Variation margin receivable		40,724
Interest receivable		28
Dividends receivable		485,190
Foreign tax reclaim receivable		—
Receivable from Advisor		—
Receivable from securities lending (net)		16,733

Total assets		292,508,732


Liabilities:
Due to Advisor		7,620
Due to Custodian		4,428,383
Due to Broker for swap contracts		—
Collateral for securities out on loan		4,004,157
Payable for securities purchased		2,023,924
Securities sold short, at value		—
Written options, at value		—
Swap contracts, at value		—
Unrealized depreciation on foreign currency forward contracts (Note 8)		—
Variation margin payable		—
Accrued investment advisory fees		152,673
Accrued expenses		117,994

Total liabilities		10,734,751


Net assets	$	281,773,981


Securities, at cost	$	357,237,301

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment income (Note 2):
Interest income	$	111,257
Securities lending income (net)		156,129
Dividend income		8,739,039
Less: foreign withholding taxes		(8,512	)

Total income		8,997,913

Expenses (Note 2):
Investment advisory fees		2,754,656
Custody fees		147,305
Audit fees		34,702
Legal fees		16,285
Reports to shareholders		7,237
Other fees		18,165

Total expenses		2,978,350
Expenses reimbursed by the Advisor		—

Net expenses		2,978,350


Net investment income (loss)		6,019,563


Realized and unrealized gains (losses) on investments (Note 2):
Net realized gains (losses) on transactions from:
Securities		(69,106,523	)
Swap contracts		—
Futures		(3,449,144	)
Written options		—
Foreign currency transactions		—

		(72,555,667	)

Change in net unrealized appreciation (depreciation) on:
Securities		(139,037,717	)
Futures		45,619
Written options		—
Short sales		—
Swap contracts		—
Foreign currency translations		—

		(138,992,098	)


Net realized and unrealized gains (losses) on investments		(211,547,765	)

Net increase (decrease) in net assets resulting from operations	$	(205,528,202	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07
From operations:
Net investment income (loss)	$	6,019,563		$	11,495,679
Net realized gains (losses) on investments		(72,555,667	)		107,197,849
Change in net unrealized appreciation (depreciation) on investments		(138,992,098	)		(89,687,401	)

Net increase (decrease) in net assets resulting from operations		(205,528,202	)		29,006,127


From transactions in investors’ beneficial interests:
Contributions		90,488,196			165,902,628
Withdrawals		(506,447,834	)		(450,667,179	)

Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests		(415,959,638	)		(284,764,551	)

Net increase (decrease) in net assets		(621,487,840	)		(255,758,424	)

Net assets:
Beginning of year		903,261,821			1,159,020,245

End of year	$	281,773,981		$	903,261,821

See notes to financial statements.

TRANSAMERICA PARTNERS PORTFOLIOS

LARGE GROWTH

(FORMERLY, EQUITY GROWTH)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008


Assets:
Securities, at value, including investments held as collateral for securities out on loan (Notes 2 and 4)	$	1,154,549,362
Repurchase agreements (cost equals market value)		11,992,800
Cash at broker		—
Foreign currency holdings, at value		—
Receivable for securities sold		4,408,960
Receivable for principal paydowns
Unrealized appreciation on foreign currency forward contracts (Note 8)		—
Swap contracts, at value		—
Variation margin receivable		—
Interest receivable		267
Dividends receivable		2,385,724
Foreign tax reclaim receivable		242,161
Receivable from Advisor		—
Receivable from securities lending (net)		111,038

Total assets		1,173,690,312


Liabilities:
Due to Advisor		—
Due to Custodian		975,148
Due to Broker for swap contracts		—
Collateral for securities out on loan		38,010,546
Payable for securities purchased		3,181,276
Securities sold short, at value		—
Written options, at value		—
Swap contracts, at value		—
Unrealized depreciation on foreign currency forward contracts (Note 8)		—
Variation margin payable		—
Accrued investment advisory fees		619,616
Accrued expenses		120,973

Total liabilities		42,907,559


Net assets	$	1,130,782,753


Securities, at cost	$	1,429,056,484

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment income (Note 2):
Interest income	$	1,047,633
Securities lending income (net)		721,689
Dividend income		25,874,240
Less: foreign withholding taxes		(242	)

Total income		27,643,320

Expenses (Note 2):
Investment advisory fees		10,928,969
Custody fees		286,839
Audit fees		33,207
Legal fees		56,449
Reports to shareholders		22,341
Other fees		64,151

Total expenses		11,391,956
Expenses reimbursed by the Advisor		—

Net expenses		11,391,956


Net investment income (loss)		16,251,364


Realized and unrealized gains (losses) on investments (Note 2):
Net realized gains (losses) on transactions from:
Securities		(312,714,370	)
Swap contracts		—
Futures		—
Written options		—
Foreign currency transactions		(6,083	)

		(312,720,453	)

Change in net unrealized appreciation (depreciation) on:
Securities		(519,835,635	)
Futures		—
Written options		—
Short sales		—
Swap contracts		—
Foreign currency translations		(2,374	)

		(519,838,009	)


Net realized and unrealized gains (losses) on investments		(832,558,462	)

Net increase (decrease) in net assets resulting from operations	$	(816,307,098	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07

From operations:
Net investment income (loss)	$	16,251,364		$	14,990,153
Net realized gains (losses) on investments		(312,720,453	)		348,453,513
Change in net unrealized appreciation (depreciation) on investments		(519,838,009	)		(77,577,264	)

Net increase (decrease) in net assets resulting from operations		(816,307,098	)		285,866,402


From transactions in investors’ beneficial interests:
Contributions		359,020,573			418,682,402
Withdrawals		(856,691,575	)		(786,705,407	)

Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests		(497,671,002	)		(368,023,005	)

Net increase (decrease) in net assets		(1,313,978,100	)		(82,156,603	)

Net assets:
Beginning of year		2,444,760,853			2,526,917,456

End of year	$	1,130,782,753		$	2,444,760,853

See notes to financial statements.

TRANSAMERICA PARTNERS PORTFOLIOS

GROWTH

(FORMERLY, AGGRESSIVE EQUITY)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008


Assets:
Securities, at value, including investments held as collateral for securities out on loan (Notes 2 and 4)	$	184,496,052
Repurchase agreements (cost equals market value)		2,477,105
Cash at broker		—
Foreign currency holdings, at value		—
Receivable for securities sold		567,303
Receivable for principal paydowns		—
Unrealized appreciation on foreign currency forward contracts (Note 8)		—
Swap contracts, at value		—
Variation margin receivable		—
Interest receivable		36
Dividends receivable		166,564
Foreign tax reclaim receivable		15,799
Receivable from Advisor		—
Receivable from securities lending (net)		16,722

Total assets		187,739,581


Liabilities:
Due to Advisor		3,899
Due to Custodian		—
Due to Broker for swap contracts		—
Collateral for securities out on loan		5,037,923
Payable for securities purchased		—
Securities sold short, at value		—
Written options, at value		—
Swap contracts, at value		—
Unrealized depreciation on foreign currency forward contracts (Note 8)		—
Variation margin payable		—
Accrued investment advisory fees		124,015
Accrued expenses		45,936

Total liabilities		5,211,773


Net assets	$	182,527,808


Securities, at cost	$	227,943,017

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment income (Note 2):
Interest income	$	65,391
Securities lending income (net)		318,942
Dividend income		2,084,971
Less: foreign withholding taxes		(18,371	)

Total income		2,450,933

Expenses (Note 2):
Investment advisory fees		2,310,037
Custody fees		71,940
Audit fees		30,240
Legal fees		9,316
Reports to shareholders		3,691
Other fees		11,412

Total expenses		2,436,636
Expenses reimbursed by the Advisor		(33,918	)

Net expenses		2,402,718


Net investment income (loss)		48,215


Realized and unrealized gains (losses) on investments (Note 2):
Net realized gains (losses) on transactions from:
Securities		(68,303,731	)
Swap contracts		—
Futures		—
Written options		—
Foreign currency transactions		—

		(68,303,731	)

Change in net unrealized appreciation (depreciation) on:
Securities		(132,858,969	)
Futures		—
Written options		—
Short sales		—
Swap contracts		—
Foreign currency translations		—

		(132,858,969	)


Net realized and unrealized gains (losses) on investments		(201,162,700	)

Net increase (decrease) in net assets resulting from operations	$	(201,114,485	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07
From operations:
Net investment income (loss)	$	48,215		$	(608,496	)
Net realized gains (losses) on investments		(68,303,731	)		61,547,685
Change in net unrealized appreciation (depreciation) on investments		(132,858,969	)		34,636,483

Net increase (decrease) in net assets resulting from operations		(201,114,485	)		95,575,672


From transactions in investors’ beneficial interests:
Contributions		100,062,106			153,288,730
Withdrawals		(143,792,807	)		(204,159,316	)

Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests		(43,730,701	)		(50,870,586	)

Net increase (decrease) in net assets		(244,845,186	)		44,705,086

Net assets:
Beginning of year		427,372,994			382,667,908

End of year	$	182,527,808		$	427,372,994

See notes to financial statements.

TRANSAMERICA PARTNERS PORTFOLIOS

MID VALUE

(FORMERLY, MID-CAP VALUE)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008


Assets:
Securities, at value, including investments held as collateral for securities out on loan (Notes 2 and 4)	$	624,895,502
Repurchase agreements (cost equals market value)		18,202,898
Cash at broker		—
Foreign currency holdings, at value		—
Receivable for securities sold		12,560,844
Receivable for principal paydowns		—
Unrealized appreciation on foreign currency forward contracts (Note 8)		—
Swap contracts, at value		—
Variation margin receivable		—
Interest receivable		1,225
Dividends receivable		1,540,533
Foreign tax reclaim receivable		—
Receivable from Advisor		—
Receivable from securities lending (net)		129,924

Total assets		657,330,926


Liabilities:
Due to Advisor		—
Due to Custodian		—
Due to Broker for swap contracts		—
Collateral for securities out on loan		14,077,125
Payable for securities purchased		12,552,535
Securities sold short, at value		—
Written options, at value		—
Swap contracts, at value		—
Unrealized depreciation on foreign currency forward contracts (Note 8)		—
Variation margin payable		—
Accrued investment advisory fees		362,926
Accrued expenses		88,856

Total liabilities		27,081,442


Net assets	$	630,249,484


Securities, at cost	$	931,120,120

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment income (Note 2):
Interest income	$	425,476
Securities lending income (net)		815,222
Dividend income		18,930,274
Less: foreign withholding taxes		(13,594	)

Total income		20,157,378

Expenses (Note 2):
Investment advisory fees		5,666,154
Custody fees		137,489
Audit fees		34,682
Legal fees		28,944
Reports to shareholders		9,841
Other fees		29,673

Total expenses		5,906,783
Expenses reimbursed by the Advisor		—

Net expenses		5,906,783


Net investment income (loss)		14,250,595


Realized and unrealized gains (losses) on investments (Note 2):
Net realized gains (losses) on transactions from:
Securities		(84,755,112	)
Swap contracts		—
Futures		—
Written options		—
Foreign currency transactions		—

		(84,755,112	)

Change in net unrealized appreciation (depreciation) on:
Securities		(307,127,354	)
Futures		—
Written options		—
Short sales		—
Swap contracts		—
Foreign currency translations		—

		(307,127,354	)


Net realized and unrealized gains (losses) on investments		(391,882,466	)

Net increase (decrease) in net assets resulting from operations	$	(377,631,871	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07
From operations:
Net investment income (loss)	$	14,250,595		$	14,406,029
Net realized gains (losses) on investments		(84,755,112	)		107,278,549
Change in net unrealized appreciation (depreciation) on investments		(307,127,354	)		(98,285,078	)

Net increase (decrease) in net assets resulting from operations		(377,631,871	)		23,399,500


From transactions in investors’ beneficial interests:
Contributions		281,951,760			375,357,719
Withdrawals		(262,247,615	)		(347,554,214	)

Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests		19,704,145			27,803,505

Net increase (decrease) in net assets		(357,927,726	)		51,203,005

Net assets:
Beginning of year		988,177,210			936,974,205

End of year	$	630,249,484		$	988,177,210

See notes to financial statements.

TRANSAMERICA PARTNERS PORTFOLIOS

MID GROWTH

(FORMERLY, MID-CAP GROWTH)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008


Assets:
Securities, at value, including investments held as collateral for securities out on loan (Notes 2 and 4)	$	238,994,881
Repurchase agreements (cost equals market value)		5,792,445
Cash at broker		—
Foreign currency holdings, at value		—
Receivable for securities sold		2,351,127
Receivable for principal paydowns		—
Unrealized appreciation on foreign currency forward contracts (Note 8)		—
Swap contracts, at value		—
Variation margin receivable		—
Interest receivable		107
Dividends receivable		56,821
Foreign tax reclaim receivable		—
Receivable from Advisor		3,729
Receivable from securities lending (net)		69,456

Total assets		247,268,566


Liabilities:
Due to Advisor		—
Due to Custodian		—
Due to Broker for swap contracts		—
Collateral for securities out on loan		15,114,459
Payable for securities purchased		2,993,357
Securities sold short, at value		—
Written options, at value		—
Swap contracts, at value		—
Unrealized depreciation on foreign currency forward contracts (Note 8)		—
Variation margin payable		—
Accrued investment advisory fees		145,307
Accrued expenses		49,540

Total liabilities		18,302,663


Net assets	$	228,965,903


Securities, at cost	$	298,908,283

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment income (Note 2):
Interest income	$	174,832
Securities lending income (net)		357,071
Dividend income		1,855,794
Less: foreign withholding taxes		(825	)

Total income		2,386,872

Expenses (Note 2):
Investment advisory fees		2,347,376
Custody fees		47,100
Audit fees		37,188
Legal fees		11,076
Reports to shareholders		3,726
Other fees		11,476

Total expenses		2,457,942
Expenses reimbursed by the Advisor		(12,761	)

Net expenses		2,445,181


Net investment income (loss)		(58,309	)


Realized and unrealized gains (losses) on investments (Note 2):
Net realized gains (losses) on transactions from:
Securities		(28,806,028	)
Swap contracts		—
Futures		—
Written options		—
Foreign currency transactions		—

		(28,806,028	)

Change in net unrealized appreciation (depreciation) on:
Securities		(127,522,362	)
Futures		—
Written options		—
Short sales		—
Swap contracts		—
Foreign currency translations		—

		(127,522,362	)


Net realized and unrealized gains (losses) on investments		(156,328,390	)

Net increase (decrease) in net assets resulting from operations	$	(156,386,699	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07
From operations:
Net investment income (loss)	$	(58,309	)	$	(703,627	)
Net realized gains (losses) on investments		(28,806,028	)		53,287,127
Change in net unrealized appreciation (depreciation) on investments		(127,522,362	)		30,493,595

Net increase (decrease) in net assets resulting from operations		(156,386,699	)		83,077,095


From transactions in investors’ beneficial interests:
Contributions		152,813,962			87,068,838
Withdrawals		(104,650,264	)		(142,866,090	)

Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests		48,163,698			(55,797,252	)

Net increase (decrease) in net assets		(108,223,001	)		27,279,843

Net assets:
Beginning of year		337,188,904			309,909,061

End of year	$	228,965,903		$	337,188,904

See notes to financial statements.

TRANSAMERICA PARTNERS PORTFOLIOS
SMALL VALUE
(FORMERLY, SMALL-CAP VALUE)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008


Assets:
Securities, at value, including investments held as collateral for securities out on loan (Notes 2 and 4)	$	160,267,540
Repurchase agreements (cost equals market value)		465,974
Cash at broker		—
Foreign currency holdings, at value		—
Receivable for securities sold		3,384,380
Receivable for principal paydowns		—
Unrealized appreciation on foreign currency forward contracts (Note 8)		—
Swap contracts, at value		—
Variation margin receivable		—
Interest receivable		51
Dividends receivable		419,529
Foreign tax reclaim receivable		—
Receivable from Advisor		3,615
Receivable from securities lending (net)		156,145

Total assets		164,697,234


Liabilities:
Due to Advisor		—
Due to Custodian		44,516
Due to Broker for swap contracts		—
Collateral for securities out on loan		7,266,311
Payable for securities purchased		608,230
Securities sold short, at value		—
Written options, at value		—
Swap contracts, at value		—
Unrealized depreciation on foreign currency forward contracts (Note 8)		—
Variation margin payable		—
Accrued investment advisory fees		109,739
Accrued expenses		40,255

Total liabilities		8,069,051


Net assets	$	156,628,183


Securities, at cost	$	197,882,490

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment income (Note 2):
Interest income	$	168,020
Securities lending income (net)		1,177,838
Dividend income		4,496,519
Less: foreign withholding taxes		(624	)

Total income		5,841,753

Expenses (Note 2):
Investment advisory fees		1,715,321
Custody fees		51,719
Audit fees		26,845
Legal fees		6,612
Reports to shareholders		3,227
Other fees		7,262

Total expenses		1,810,986
Expenses reimbursed by the Advisor		(32,928	)

Net expenses		1,778,058


Net investment income (loss)		4,063,695


Realized and unrealized gains (losses) on investments (Note 2):
Net realized gains (losses) on transactions from:
Securities		(36,930,139	)
Swap contracts		—
Futures		—
Written options		—
Foreign currency transactions		—

		(36,930,139	)

Change in net unrealized appreciation (depreciation) on:
Securities		(19,172,892	)
Futures		—
Written options		—
Short sales		—
Swap contracts		—
Foreign currency translations		—

		(19,172,892	)


Net realized and unrealized gains (losses) on investments		(56,103,031	)

Net increase (decrease) in net assets resulting from operations	$	(52,039,336	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07
From operations:
Net investment income (loss)	$	4,063,695		$	2,956,143
Net realized gains (losses) on investments		(36,930,139	)		12,414,521
Change in net unrealized appreciation (depreciation) on investments		(19,172,892	)		(30,333,479	)

Net increase (decrease) in net assets resulting from operations		(52,039,336	)		(14,962,815	)


From transactions in investors’ beneficial interests:
Contributions		131,998,850			55,225,734
Withdrawals		(108,467,936	)		(91,443,032	)

Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests		23,530,914			(36,217,298	)

Net increase (decrease) in net assets		(28,508,422	)		(51,180,113	)

Net assets:
Beginning of year		185,136,605			236,316,718

End of year	$	156,628,183		$	185,136,605

See notes to financial statements.

TRANSAMERICA PARTNERS PORTFOLIOS

SMALL CORE

(FORMERLY, SPECIAL EQUITY)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008


Assets:
Securities, at value, including investments held as collateral for securities out on loan (Notes 2 and 4)	$	415,559,414
Repurchase agreements (cost equals market value)		2,630,335
Cash at broker		—
Foreign currency holdings, at value		—
Receivable for securities sold		2,086,046
Receivable for principal paydowns		—
Unrealized appreciation on foreign currency forward contracts (Note 8)		—
Swap contracts, at value		—
Variation margin receivable		58,241
Interest receivable		206
Dividends receivable		749,897
Foreign tax reclaim receivable		—
Receivable from Advisor		10,847
Receivable from securities lending (net)		170,979

Total assets		421,265,965


Liabilities:
Due to Advisor		—
Due to Custodian		1,693,623
Due to Broker for swap contracts		—
Collateral for securities out on loan		29,536,670
Payable for securities purchased		—
Securities sold short, at value		—
Written options, at value		—
Swap contracts, at value		—
Unrealized depreciation on foreign currency forward contracts (Note 8)		—
Variation margin payable		—
Accrued investment advisory fees		269,775
Accrued expenses		103,434

Total liabilities		31,603,502


Net assets	$	389,662,463


Securities, at cost	$	549,743,312

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment income (Note 2):
Interest income	$	371,295
Securities lending income (net)		2,045,972
Dividend income		8,928,452
Less: foreign withholding taxes		(2,463	)

Total income		11,343,256

Expenses (Note 2):
Investment advisory fees		5,065,556
Custody fees		247,130
Audit fees		34,706
Legal fees		18,786
Reports to shareholders		7,562
Other fees		24,604

Total expenses		5,398,344
Expenses reimbursed by the Advisor		(16,567	)

Net expenses		5,381,777


Net investment income (loss)		5,961,479


Realized and unrealized gains (losses) on investments (Note 2):
Net realized gains (losses) on transactions from:
Securities		(150,806,621	)
Swap contracts		—
Futures		(1,120,752	)
Written options		—
Foreign currency transactions		—

		(151,927,373	)

Change in net unrealized appreciation (depreciation) on:
Securities		(115,565,865	)
Futures		(8,356	)
Written options		—
Short sales		—
Swap contracts		—
Foreign currency translations		—

		(115,574,221	)


Net realized and unrealized gains (losses) on investments		(267,501,594	)

Net increase (decrease) in net assets resulting from operations	$	(261,540,115	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07

From operations:
Net investment income (loss)	$	5,961,479		$	6,536,955
Net realized gains (losses) on investments		(151,927,373	)		127,888,258
Change in net unrealized appreciation (depreciation) on investments		(115,574,221	)		(173,960,096	)

Net increase (decrease) in net assets resulting from operations		(261,540,115	)		(39,534,883	)


From transactions in investors’ beneficial interests:
Contributions		160,448,103			275,074,602
Withdrawals		(459,442,988	)		(496,898,715	)

Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests		(298,994,885	)		(221,824,113	)

Net increase (decrease) in net assets		(560,535,000	)		(261,358,996	)

Net assets:
Beginning of year		950,197,463			1,211,556,459

End of year	$	389,662,463		$	950,197,463

See notes to financial statements.

TRANSAMERICA PARTNERS PORTFOLIOS

SMALL GROWTH

(FORMERLY, SMALL-CAP GROWTH)

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008


Assets:
Securities, at value, including investments held as collateral for securities out on loan (Notes 2 and 4)	$	167,721,961
Repurchase agreements (cost equals market value)		—
Cash at broker		—
Foreign currency holdings, at value		—
Receivable for securities sold		3,896,335
Receivable for principal paydowns		—
Unrealized appreciation on foreign currency forward contracts (Note 8)		—
Swap contracts, at value		—
Variation margin receivable		—
Interest receivable		119
Dividends receivable		52,155
Foreign tax reclaim receivable		—
Receivable from Advisor		4,732
Receivable from securities lending (net)		96,587

Total assets		171,771,889


Liabilities:
Due to Advisor		—
Due to Custodian		1,466,074
Due to Broker for swap contracts		—
Collateral for securities out on loan		17,132,330
Payable for securities purchased		505,272
Securities sold short, at value		—
Written options, at value		—
Swap contracts, at value		—
Unrealized depreciation on foreign currency forward contracts (Note 8)		—
Variation margin payable		—
Accrued investment advisory fees		114,144
Accrued expenses		41,210

Total liabilities		19,259,030


Net assets	$	152,512,859


Securities, at cost	$	217,580,768

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment income (Note 2):
Interest income	$	88,684
Securities lending income (net)		557,565
Dividend income		839,687
Less: foreign withholding taxes		(514	)

Total income		1,485,422

Expenses (Note 2):
Investment advisory fees		1,807,291
Custody fees		72,610
Audit fees		26,846
Legal fees		7,114
Reports to shareholders		1,689
Other fees		6,908

Total expenses		1,922,458
Expenses reimbursed by the Advisor		(52,899	)

Net expenses		1,869,559


Net investment income (loss)		(384,137	)


Realized and unrealized gains (losses) on investments (Note 2):
Net realized gains (losses) on transactions from:
Securities		(24,788,914	)
Swap contracts		—
Futures		—
Written options		—
Foreign currency transactions		—

		(24,788,914	)

Change in net unrealized appreciation (depreciation) on:
Securities		(59,829,205	)
Futures		—
Written options		—
Short sales		—
Swap contracts		—
Foreign currency translations		—

		(59,829,205	)


Net realized and unrealized gains (losses) on investments		(84,618,119	)

Net increase (decrease) in net assets resulting from operations	$	(85,002,256	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07
From operations:
Net investment income (loss)	$	(384,137	)	$	(707,686	)
Net realized gains (losses) on investments		(24,788,914	)		18,244,723
Change in net unrealized appreciation (depreciation) on investments		(59,829,205	)		(4,729,580	)

Net increase (decrease) in net assets resulting from operations		(85,002,256	)		12,807,457


From transactions in investors’ beneficial interests:
Contributions		132,973,836			53,591,068
Withdrawals		(62,276,042	)		(54,584,208	)

Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests		70,697,794			(993,140	)

Net increase (decrease) in net assets		(14,304,462	)		11,814,317

Net assets:
Beginning of year		166,817,321			155,003,004

End of year	$	152,512,859		$	166,817,321

See notes to financial statements.

TRANSAMERICA PARTNERS PORTFOLIOS

INTERNATIONAL EQUITY

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2008


Assets:
Securities, at value, including investments held as collateral for securities out on loan (Notes 2 and 4)	$	1,100,694,577
Repurchase agreements (cost equals market value)		11,897,953
Cash at broker		—
Foreign currency holdings, at value (cost $4,443,231)		4,366,774
Receivable for securities sold		—
Receivable for principal paydowns		—
Unrealized appreciation on foreign currency forward contracts (Note 8)		—
Swap contracts, at value		—
Variation margin receivable		—
Interest receivable		3
Dividends receivable		2,780,474
Foreign tax reclaim receivable		2,085,707
Receivable from Advisor		—
Receivable from securities lending (net)		26,145

Total assets		1,121,851,633


Liabilities:
Due to Advisor		—
Due to Custodian		20,649,438
Due to Broker for swap contracts		—
Collateral for securities out on loan		—
Payable for securities purchased		—
Securities sold short, at value		—
Written options, at value		—
Swap contracts, at value		—
Unrealized depreciation on foreign currency forward contracts (Note 8)		—
Variation margin payable		—
Accrued investment advisory fees		720,375
Accrued expenses		422,176

Total liabilities		21,791,989


Net assets	$	1,100,059,644


Securities, at cost	$	1,526,871,660

STATEMENT OF OPERATIONS

For the year ended December 31, 2008


Investment income (Note 2):
Interest income	$	700,774
Securities lending income (net)		1,836,239
Dividend income		70,967,698
Less: foreign withholding taxes		(6,919,306	)

Total income		66,585,405

Expenses (Note 2):
Investment advisory fees		13,803,875
Custody fees		1,511,986
Audit fees		31,968
Legal fees		57,681
Reports to shareholders		21,991
Other fees		64,079

Total expenses		15,491,580
Expenses reimbursed by the Advisor		—

Net expenses		15,491,580


Net investment income (loss)		51,093,825


Realized and unrealized gains (losses) on investments (Note 2):
Net realized gains (losses) on transactions from:
Securities		(376,772,967	)
Swap contracts		—
Futures		—
Written options		—
Foreign currency transactions		(3,460,031	)

		(380,232,998	)

Change in net unrealized appreciation (depreciation) on:
Securities		(815,588,043	)
Futures		—
Written options		—
Short sales		—
Swap contracts		—
Foreign currency translations		(199,762	)

		(815,787,805	)


Net realized and unrealized gains (losses) on investments		(1,196,020,803	)

Net increase (decrease) in net assets resulting from operations	$	(1,144,926,978	)

STATEMENTS OF CHANGES IN NET ASSETS


	For the year			For the year
	ended 12/31/08			ended 12/31/07

From operations:
Net investment income (loss)	$	51,093,825		$	50,970,128
Net realized gains (losses) on investments		(380,232,998	)		308,302,384
Change in net unrealized appreciation (depreciation) on investments		(815,787,805	)		(116,113,249	)

Net increase (decrease) in net assets resulting from operations		(1,144,926,978	)		243,159,263


From transactions in investors’ beneficial interests:
Contributions		764,741,276			730,849,563
Withdrawals		(783,816,168	)		(811,099,785	)

Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests		(19,074,892	)		(80,250,222	)

Net increase (decrease) in net assets		(1,164,001,870	)		162,909,041

Net assets:
Beginning of year		2,264,061,514			2,101,152,473

End of year	$	1,100,059,644		$	2,264,061,514

MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS

December 31, 2008


Principal			Value

		Commercial Paper — 33.1%
$	42,240,000	Abbey National NA, LLC, 0.13%, 01/02/09	$	42,239,854
	10,530,000	Abbey National NA, LLC, 1.50%, 03/02/09		10,503,675
	43,750,000	Bank of America Corp. NA, 3.10%, 02/12/09		43,591,771
	39,770,000	BP Capital Markets PLC, 1.58%, 01/08/09		39,757,782
	12,900,000	Calyon — North America, 0.25%, 01/02/09		12,899,910
	31,100,000	CBA (DE) Finance, Inc., 1.83%, 01/28/09		31,057,315
	18,970,000	CBA (DE) Finance, Inc., 1.08%, 03/17/09		18,927,318
	26,290,000	ConocoPhilips, 1.30%, 01/29/09		26,263,418
	21,520,000	Danske Corp., 1.30%, 01/12/09		21,511,452
	28,550,000	Danske Corp., 1.49%, 02/17/09		28,494,462
	23,260,000	HSBC Americas, Inc., 0.30%, 01/21/09		23,256,123
	26,200,000	HSBC Americas, Inc., 1.87%, 01/21/09		26,172,781
	32,870,000	ING (US) Funding LLC, 1.90%, 01/15/09		32,845,713
	35,080,000	Royal Bank of Scotland, 2.74%, 01/30/09		35,002,571
	13,720,000	Societe Generale North America, 1.39%, 03/16/09		13,680,799
	32,910,000	Westpac Banking Corp. New York, 1.90%, 02/18/09		32,826,628

		Total Commercial Paper (Cost $439,031,572)		439,031,572

		Domestic Certificates of Deposit — 3.0%
	39,620,000	Chase Bank USA, NA, 2.50%, 02/06/09 (Cost $39,620,000)		39,620,000

		Yankee Certificates of Deposit — 26.5%
	26,100,000	Bank of Nova Scotia, 1.40%, 01/07/09		26,100,000
	38,890,000	Barclays Bank PLC, 2.25%, 02/10/09		38,890,000
	14,800,000	Barclays Bank PLC, 2.42%, 02/26/09		14,815,292
	33,060,000	BNP Paribas — New York Branch, 2.38%, 01/06/09		33,060,000
	15,400,000	BNP Paribas — New York Branch, 1.68%, 02/05/09		15,400,000
	39,620,000	Calyon — New York Branch, 3.88%, 01/27/09		39,620,000
	28,390,000	Lloyds Bank PLC — New York Branch, 2.05%, 03/02/09		28,389,983
	32,000,000	Rabobank Nederland, 3.80%, 01/05/09		32,000,000
	20,300,000	Rabobank Nederland, 0.50%, 03/19/09		20,300,000
	39,230,000	Royal Bank of Canada, 1.69%, 02/04/09		39,230,000
	38,710,000	Societe Generale — New York Branch, 2.20%, 03/03/09		38,710,000
	24,290,000	Toronto Dominion Bank, 1.75%, 01/22/09		24,290,000

		Total Yankee Certificates of Deposit (Cost $350,805,275)		350,805,275

		Short Term US Government Agency Securities — 22.9%
		Fannie Mae — 9.5%
	28,980,000	1.90%, 01/20/09		28,950,940
	29,690,000	2.05%, 03/02/09		29,588,559
	28,910,000	1.05%, 03/09/09		28,853,505
	39,270,000	0.47%, 06/10/09		39,187,969

				126,580,973

		Federal Home Loan Bank — 7.3%
	31,030,000	2.40%, 01/14/09		31,003,108
	29,880,000	1.00%, 02/23/09		29,836,010
	15,000,000	2.52%, 04/21/09		14,999,392
	21,670,000	0.25%, 05/15/09		21,649,835

				97,488,345

		Freddie Mac — 6.1%
	28,980,000	1.95%, 01/12/09		28,962,733
	25,479,000	2.71%, 02/02/09		25,417,623
	26,020,000	1.11%, 03/11/09		25,964,642

				80,344,998

		Total Short Term US Government Agency Securities (Cost $304,414,316)		304,414,316

		Short Term Corporate Notes — 4.9%
	28,540,000	Bank of Montreal — Chicago Branch, Series YCD1, Variable Rate, 1.82%, 01/12/09(1)		28,543,434
	35,870,000	Toyota Motor Credit Corp., Series MTM, Variable Rate, 1.22%, 09/15/09(1)		35,870,000

		Total Short Term Corporate Notes (Cost $64,413,434)		64,413,434

		Total Securities (Cost $1,198,284,597)		1,198,284,597

		Repurchase Agreements — 9.5%
	16,800,000	With Barclays Bank PLC, dated 12/31/08, 0.04%, due 01/02/09, repurchase proceeds at maturity $16,800,037 (Collateralized by Fannie Mae, 4.00%, due 05/14/13, with a value of $17,136,720)		16,800,000
	33,600,000	With Deutsche Bank, dated 12/31/08, 0.05%, due 01/02/09, repurchase proceeds at maturity $33,600,093 (Collateralized by Fannie Mae, 6.25%, due 02/01/11, with a value of $34,272,608)		33,600,000

See notes to financial statements.

MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Repurchase Agreements (continued)

$	62,900,000	With Goldman Sachs & Company, dated 12/31/08, 0.01%, due 01/02/09, repurchase proceeds at maturity $62,900,017 (Collateralized by US Treasury Inflation Index Note, 2.38%, due 01/15/17, with a value of $64,158,087)	$	62,900,000
	13,152,311	With State Street Bank & Trust, dated 12/31/08, 0.01%, due 01/02/09, repurchase proceeds at maturity $13,152,318 (Collateralized by US Treasury Bill, 0.01%, due 01/02/09, with a value of $13,586,400)		13,152,311

		Total Repurchase Agreements (Cost $126,452,311)		126,452,311

		Total Investments — 99.9% (Cost $1,324,736,908)		1,324,736,908
		Other assets less liabilities — 0.1%		1,064,841

		Net Assets — 100.0%	$	1,325,801,749

The aggregate cost of securities for federal income tax purposes at December 31, 2008 is $1,324,736,908.

See summary of footnotes and abbreviations to portfolios.

See notes to financial statements.

HIGH QUALITY BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS

December 31, 2008


Principal			Value

		US Treasury Securities — 3.9%
		US Treasury Notes
$	4,000,000	1.25%, 11/30/10	$	4,042,960
	4,500,000	4.63%, 10/31/11		4,967,577
	7,000,000	3.13%, 08/31/13(8)		7,547,421

		Total US Treasury Securities (Cost $15,908,003)		16,557,958

		US Government Agency Securities — 26.5%
		Asset Backed: Mortgage and Home Equity — 17.1%
	2,991,453	Fannie Mae, Series 2003-32, Class PE, 4.00%, 03/25/26		2,990,064
	285,668	Fannie Mae, Series 2003-34, Class GT, 4.00%, 01/25/27		285,361
	1,797,439	Fannie Mae, Series 2003-62, Class OD, 3.50%, 04/25/26		1,793,413
	266,822	Fannie Mae, Series 2003-63, Class GU, 4.00%, 07/25/33		267,731
	148,724	Fannie Mae, Series 2003-67, Class GL, 3.00%, 01/25/25		148,444
	619,435	Fannie Mae, Series 2003-92, Class KQ, 3.50%, 06/25/23		618,531
	2,245,853	Fannie Mae, Series 2004-70, Class DN, 4.00%, 12/25/29		2,230,495
	2,765,970	Fannie Mae, Series 2004-80, Class LG, 4.00%, 10/25/16		2,784,072
	3,611,556	Federal Home Loan Bank, Series 1Y-9009, Class A, 4.06%, 08/25/09		3,618,345
	1,872,752	Federal Home Loan Bank, Series 3Q-9009, Class 1, 3.92%, 09/25/09		1,876,778
	5,106,310	Freddie Mac, Series 2416, Class PE, 6.00%, 10/15/21		5,274,824
	322,491	Freddie Mac, Series 2454, Class BG, 6.50%, 08/15/31		324,703
	3,192,323	Freddie Mac, Series 2627, Class KP, 2.87%, 12/15/16		3,143,813
	3,697,596	Freddie Mac, Series 2630, Class HC, 4.00%, 01/15/17		3,709,567
	4,613,968	Freddie Mac, Series 2631, Class CD, 4.00%, 10/15/26		4,617,254
	4,042,656	Freddie Mac, Series 2637, Class A, 3.38%, 03/15/18		3,987,557
	2,899,504	Freddie Mac, Series 2672, Class HA, 4.00%, 09/15/16		2,909,858
	1,360,424	Freddie Mac, Series 2782, Class HE, 4.00%, 09/15/17		1,359,948
	1,957,369	Freddie Mac, Series 3056, Class AP, 5.50%, 01/15/27		1,985,621
	7,392,847	Government National Mortgage Association, Series 2005-29, Class A, 4.02%, 07/16/27		7,430,597
	5,110,140	Government National Mortgage Association, Series 2006-67, Class A, 3.95%, 11/16/30		5,131,926
	5,272,430	Government National Mortgage Association, Series 2007-15, Class A, 4.51%, 10/16/28		5,325,053
	2,863,348	Government National Mortgage Association, Series 2007-34, Class A, 4.27%, 11/16/26		2,884,303
	7,547,169	Government National Mortgage Association, Series 2007-4, Class A, 4.21%, 06/16/29		7,608,236

				72,306,494

		Fannie Mae — 6.8%
	5,300,000	6.00%, 05/15/11		5,858,000
	6,000,000	3.25%, 04/09/13(8)		6,252,000
	6,000,000	3.88%, 07/12/13		6,367,181
	285,929	PL# 254062, 6.00%, 10/01/11		294,013
	1,089,346	PL# 254754, 4.50%, 05/01/10		1,091,584
	1,332,681	PL# 254758, 4.50%, 06/01/13		1,362,086
	1,261,345	PL# 254807, 5.00%, 07/01/13		1,297,607
	2,540,162	PL# 254914, 4.50%, 09/01/13		2,598,258
	350,310	PL# 323743, 5.00%, 04/01/14		358,848
	184,908	PL# 429168, 6.00%, 05/01/13		192,765
	2,451	PL# 50973, 6.00%, 01/01/09		2,461
	232,838	PL# 517699, 6.00%, 07/01/14		242,732
	590,988	PL# 545038, 6.00%, 09/01/14		615,361
	1,906,291	PL# 555154, 5.50%, 12/01/22		1,963,509

				28,496,405

		Federal Home Loan Bank — 0.9%
	3,786,868	Series 6T-9009, 3.84%, 11/25/09		3,850,476

		Freddie Mac Gold — 1.4%
	68,984	PL# E00532, 6.50%, 02/01/13		71,458
	119,052	PL# E00542, 6.50%, 04/01/13		123,268
	334,877	PL# E00676, 5.50%, 06/01/14		344,463
	635,781	PL# E89557, 5.50%, 04/01/17		658,028
	983,237	PL# G40426, 5.50%, 03/01/11		989,323
	3,534,267	PL# M80812, 4.50%, 04/01/10		3,535,595

				5,722,135

See notes to financial statements.

HIGH QUALITY BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		US Government Agency Securities (continued)

		Government National Mortgage Association — 0.3%
$	1,160,784	PL# 436708, 5.75%, 12/15/22	$	1,207,925

		Total US Government Agency Securities (Cost $108,925,277)		111,583,435

		Corporate Bonds and Notes — 64.5%
		Banks and Financial Services — 17.9%
	5,000,000	American Express Bank FSB, Series BKNT, Floating Rate, 0.57%, 06/22/09(3)		4,860,360
	4,330,000	Bank of America Corp., 7.13%, 03/01/09		4,336,127
	1,375,000	Bank of America Corp., 7.80%, 02/15/10		1,408,743
	2,500,000	Bank of America Corp., Series MTNL, 3.13%, 06/15/12		2,597,955
	3,475,000	Citigroup, Inc., 5.10%, 09/29/11		3,354,696
	2,275,000	CME Group, Inc., 5.40%, 08/01/13		2,259,801
	6,155,000	Credit Suisse First Boston USA, Inc., 4.70%, 06/01/09		6,155,221
	7,200,000	General Electric Capital Corp., Series MTNA, 4.13%, 09/01/09		7,224,306
	2,800,000	Goldman Sachs Group, Inc. (The), 6.88%, 01/15/11		2,820,454
	4,000,000	Goldman Sachs Group, Inc. (The), Series MTNB, Floating Rate, 4.73%, 10/07/11(2)		3,546,888
	5,600,000	JPMorgan Chase & Company, 4.75%, 05/01/13		5,525,906
	6,000,000	Merrill Lynch & Company, Inc., Series MTNC, 4.13%, 01/15/09		5,997,426
	6,125,000	Morgan Stanley, 6.75%, 04/15/11		6,026,547
	3,025,000	National City Bank, Series BKNT, 4.25%, 01/29/10		2,914,240
	3,670,000	NYSE Euronext, 4.80%, 06/28/13		3,559,731
	5,675,000	SLM Corp., Series MTNA, 4.50%, 07/26/10		4,925,145
	4,500,000	Wells Fargo & Company, Floating Rate, 1.56%, 03/23/10(2)		4,409,888
	3,000,000	Wells Fargo Bank, NA, Series BKNT, 6.45%, 02/01/11		3,109,626

				75,033,060

		Chemicals — 0.4%
	1,855,000	Praxair, Inc., 3.95%, 06/01/13		1,799,582

		Consumer Goods and Services — 0.8%
	3,455,000	Clorox Company, 4.20%, 01/15/10		3,413,281

		Diversified Operations and Services — 0.3%
	3,825,000	Capmark Financial Group, 5.88%, 05/10/12		1,304,291

		Equipment Rental and Leasing — 0.9%
	5,420,000	International Lease Finance Corp., Series MTNQ, 5.75%, 06/15/11		3,952,719

		Insurance — 2.7%
	6,000,000	Met Life Global Funding I — 144A, Series MTN, 5.75%, 07/25/11		5,772,191
	2,500,000	New York Life Global Funding — 144A, 3.88%, 01/15/09		2,500,608
	3,115,000	Principal Life Income Funding Trust, Series MTN, 5.20%, 11/15/10		3,164,236

				11,437,035

		Machinery — 0.5%
	2,000,000	Caterpillar, Inc., 7.25%, 09/15/09		2,036,392

		Office Equipment, Supplies, and Services — 0.6%
	3,005,000	Xerox Corp., 5.50%, 05/15/12		2,518,340

		Private Asset Backed: Automobiles/Motor Vehicles, Automotive Equipment and Repairs — 10.2%
	2,491,605	Bay View Auto Trust, Series 2005-LJ1, Class A4, 4.09%, 05/25/12		2,226,483
	2,500,000	BMW Vehicle Owner Trust, Series 2006-A, Class A4, 5.07%, 08/25/11		2,438,034
	3,000,000	Capital One Prime Auto Receivables Trust, Series 2007-1, Class B1, 5.76%, 12/15/13		2,211,571
	2,344,956	Carmax Auto Owner Trust, Series 2005-2, Class A4, 4.34%, 09/15/10		2,331,425
	948,633	Chase Manhattan Auto Owner Trust, Series 2006-A, Class CTFS, 5.47%, 01/15/13		941,310
	3,200,000	Chase Manhattan Auto Owner Trust, Series 2006-B, Class A4, 5.11%, 04/15/14		3,090,242
	3,800,000	Ford Credit Auto Owner Trust, Series 2005-C, Class B, 4.52%, 09/15/10		3,668,154
	1,000,000	Ford Credit Auto Owner Trust, Series 2007-A, Class B, 5.60%, 10/15/12		761,799
	1,666,667	Hertz Vehicle Financing LLC — 144A, Series 2005-2A, Class A2, 4.93%, 02/25/10		1,655,953
	2,000,000	Hertz Vehicle Financing LLC — 144A, Series 2005-2A, Class A4, 5.01%, 02/25/11		1,826,427

See notes to financial statements.

HIGH QUALITY BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Private Asset Backed: Automobiles/Motor Vehicles, Automotive Equipment and Repairs (continued)

$	5,500,000	Huntington Auto Trust — 144A, Series 2008-1A, Class A3A, 4.81%, 04/16/12	$	5,073,018
	3,000,000	Hyundai Auto Receivables Trust, Series 2006-B, Class B, 5.19%, 05/15/13		2,820,674
	3,500,000	Hyundai Auto Receivables Trust, Series 2008-A, Class A3, 4.93%, 12/17/12		3,232,689
	1,250,000	Susquehanna Auto Lease Trust — 144A, Series 2007-1, Class B, 5.31%, 07/14/10		1,213,769
	5,400,000	USAA Auto Owner Trust, Series 2007-2, Class A4, 5.07%, 06/15/13		5,098,723
	4,550,000	World Omni Auto Receivables Trust, Series 2006-B, Class A4, 5.12%, 06/15/12		4,404,644

				42,994,915

		Private Asset Backed: Banks and Financial Services — 3.5%
	796,710	Bear Stearns Asset Backed Securities, Inc., Series 2003-AC3, Class A1, Floating Rate, 4.50%, 07/25/33(3)		634,333
	3,000,000	Caterpillar Financial Asset Trust, Series 2006-A, Class B, 5.71%, 06/25/12		2,608,160
	1,552,234	Community Program Loan Trust, Series 1987-A, Class A4, 4.50%, 10/01/18		1,555,107
	2,499,291	Greenwich Capital Commercial Funding Corp., Series 2005-GG3, Class A2, 4.31%, 08/10/42		2,364,989
	3,151,046	Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A1, 4.79%, 04/10/37		3,093,072
	3,358,853	Greenwich Capital Commercial Funding Corp., Series 2006-GG7, Class A1, 5.74%, 07/10/38		3,251,693
	1,380,750	Morgan Stanley Capital I, Series 2005-HQ6, Class A1, 4.65%, 08/13/42		1,340,369

				14,847,723

		Private Asset Backed: Credit Cards — 4.4%
	3,000,000	Cabela’s Master Credit Card Trust — 144A, Series 2006-3A, Class A1, 5.26%, 10/15/14		2,689,424
	3,000,000	Capital One Multi-Asset Execution Trust, Series 2006-A6, Class A6, 5.30%, 02/18/14		2,811,494
	4,000,000	Citibank Credit Card Issuance Trust, Series 2006-A4, Class A4, 5.45%, 05/10/13		3,829,717
	1,925,000	Citibank Credit Card Issuance Trust, Series 2006-B2, Class B2, 5.15%, 03/07/11		1,903,372
	4,940,000	GE Capital Credit Card Master Note Trust, Series 2006-1, Class A, 5.08%, 09/15/12		4,818,062
	3,000,000	GE Capital Credit Card Master Note Trust, Series 2007-3, Class B, 5.49%, 06/15/13		2,477,261

				18,529,330

		Private Asset Backed: Mortgage and Home Equity — 9.5%
	19,851	American General Mortgage Loan Trust — 144A, Series 2006-1, Class A1, 5.75%, 12/25/35		19,748
	217,162	Bear Stearns Commercial Mortgage Securities, Inc., Series 2001-TOP4, Class A1, 5.06%, 11/15/16		211,725
	974,999	Bear Stearns Commercial Mortgage Securities, Inc., Series 2002-PBW1, Class A1, 3.97%, 11/11/35		945,960
	811,318	Bear Stearns Commercial Mortgage Securities, Inc., Series 2005-PWR9, Class A1, 4.50%, 09/11/42		789,972
	1,958,994	Bear Stearns Commercial Mortgage Securities, Inc., Series 2006-T22, Class A1, 5.42%, 04/12/38		1,888,131
	7,000,000	Bear Stearns Commercial Mortgage Securities, Inc., Series 2007-PW15, Class A2, 5.21%, 02/11/44		5,458,630
	2,896,551	Chase Funding Mortgage Loan Asset-Backed, Series 2003-4, Class 1A6, 4.43%, 10/25/14		2,620,953
	2,522,905	Citigroup/Deutsche Bank Commercial Mortgage Trust, Series 2005-CD1, Class A1, 5.05%, 07/15/44		2,480,605
	3,373,844	Credit Suisse First Boston Mortgage Securities Corp., Series 2004-C5, Class A2, 4.18%, 11/15/37		3,278,064
	231,870	GE Capital Commercial Mortgage Corp., Series 2001-3, Class A1, 5.56%, 06/10/38		226,087
	2,815,174	GE Capital Commercial Mortgage Corp., Series 2002-1A, Class A2, 5.99%, 12/10/35		2,779,780
	315,049	GE Capital Commercial Mortgage Corp., Series 2005-C1, Class A1, 4.01%, 06/10/48		312,165

See notes to financial statements.

HIGH QUALITY BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Private Asset Backed: Mortgage and Home Equity (continued)

$	567,886	GMAC Mortgage Corp. Loan Trust, Series 2004-GH1, Class A2, 4.39%, 12/25/25	$	551,602
	379,151	Interstar Millennium Trust, Series 2003-3G, Class A2, (Australia), Floating Rate, 1.72%, 09/27/35(2)		371,931
	717,631	Interstar Millennium Trust, Series 2004-2G, Class A, (Australia), Floating Rate, 2.20%, 03/14/36(2)		688,096
	441,856	JPMorgan Chase Commercial Mortgage Securities Corp., Series 2002-C2, Class A1, 4.33%, 12/12/34		418,680
	4,445,718	JPMorgan Mortgage Trust, Series 2006-S2, Class 1A17, 6.00%, 07/25/36		2,785,898
	19,078	LB-UBS Commercial Mortgage Trust, Series 2003-C1, Class A2, 3.32%, 03/15/27		19,021
	27,009	LB-UBS Commercial Mortgage Trust, Series 2003-C5, Class A2, 3.48%, 07/15/27		26,848
	4,550,000	LB-UBS Commercial Mortgage Trust, Series 2003-C7, Class A3, 4.56%, 09/15/27		4,298,469
	2,328,925	Popular ABS Mortgage Pass-Through Trust, Series 2005-3, Class AF3, 4.44%, 07/25/35		2,125,018
	5,369,203	Washington Mutual Mortgage Pass-Through Certificates, Series 2005-8, Class 1A8, 5.50%, 10/25/35		4,390,583
	26,924	Wells Fargo Mortgage Backed Securities Trust, Series 2003-11, Class 1A1, 3.50%, 10/25/18		26,830
	3,560,469	Wells Fargo Mortgage Backed Securities Trust, Series 2005-9, Class 1A1, 4.75%, 10/25/35		3,296,764

				40,011,560

		Private Asset Backed: Other — 5.8%
	3,017,241	ALG Student Loan Trust — 144A, Series 2006-1A, Class A1, Floating Rate, 3.53%, 10/28/18(2)		2,937,567
	354,865	CIT Equipment Collateral, Series 2006-VT1, Class A3, 5.13%, 12/21/09		354,776
	3,000,000	CNH Equipment Trust, Series 2006-B, Class B, 5.36%, 06/17/13		2,168,615
	2,000,000	CNH Equipment Trust, Series 2007-A, Class B, 5.09%, 06/16/14		1,346,391
	4,200,000	CNH Equipment Trust, Series 2007-B, Class A3A, 5.40%, 10/17/11		4,129,787
	842,629	Crusade Global Trust, Series 2004-2, Class A1, (Australia), Floating Rate, 2.37%, 11/19/37(2)		779,690
	1,227,825	Goal Capital Funding Trust, Series 2006-1, Class A1, Floating Rate, 2.16%, 08/25/20(2)		1,206,679
	1,343,336	Great America Leasing Receivables — 144A, Series 2006-1, Class A3, 5.34%, 01/15/10		1,342,234
	4,000,000	John Deere Owner Trust, Series 2007-A, Class A4, 5.07%, 04/15/14		3,806,888
	3,501,000	Marlin Leasing Receivables LLC — 144A, Series 2006-1A, Class A4, 5.33%, 09/15/13		3,375,502
	3,004,663	Massachusetts RRB Special Purpose Trust, Series 1999-1, Class A5, 7.03%, 03/15/12		3,072,143

				24,520,272

		Private Asset Backed: Transportation — 1.1%
	1,321,398	E-Trade RV and Marine Trust, Series 2004-1, Class A3, 3.62%, 10/08/18		1,238,827
	3,451,939	Railcar Leasing LLC — 144A, Series 1, Class A2, 7.13%, 01/15/13		3,291,748

				4,530,575

		Real Estate Investment Trusts — 0.6%
	3,190,000	Boston Properties LP, 6.25%, 01/15/13		2,368,119

		Retail — 1.2%
	5,035,000	CVS Caremark Corp., 5.75%, 08/15/11		5,052,411

		Telecommunications Equipment and Services — 1.4%
	5,925,000	BellSouth Corp., 6.00%, 10/15/11		6,045,923

		Utilities — 2.7%
	5,125,000	Consolidated Edison Company of New York, Inc., 4.70%, 06/15/09		5,124,406
	6,420,000	Exelon Generation Company LLC, 6.95%, 06/15/11		6,231,887

				11,356,293

		Total Corporate Bonds and Notes (Cost $293,747,689)		271,751,821

See notes to financial statements.

HIGH QUALITY BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Municipal Bonds — 1.5%
		Texas
$	6,350,000	Brazos Texas Higher Education Authority, Revenue Bond, Series A-5, 4.91%, 12/01/40 (Cost $6,281,539)	$	6,350,000

		Securities Lending Collateral — 2.5%
	10,391,435	Securities Lending Collateral Investment (Note 4) (Cost $10,391,435)		10,391,435

		Short Term US Government Agency Securities — 2.4%
		Fannie Mae — 1.7%
	4,000,000	0.20%, 02/18/09		3,998,933
	1,000,000	1.45%, 04/01/09		996,375
	2,000,000	0.40%, 05/11/09		1,997,111

				6,992,419

		Federal Home Loan Bank — 0.7%
	3,000,000	1.70%, 05/15/09		2,981,017

		Total Short Term US Government Agency Securities (Cost $9,973,436)		9,973,436

		Total Securities (Cost $445,227,379)		426,608,085

		Repurchase Agreements — 0.5%
	2,244,128	With State Street Bank and Trust, dated 12/31/08, 0.01%, due 01/02/09, repurchase proceeds at maturity $2,244,129 (Collateralized by US Treasury Bill, 0.02%, due 05/14/09, with a value of $2,289,771) (Cost $2,244,128)		2,244,128

		Total Investments — 101.8% (Cost $447,471,507)		428,852,213
		Liabilities less other assets — (1.8)%		(7,620,710	)

		Net Assets — 100.0%	$	421,231,503

The aggregate cost of securities for federal income tax purposes at December 31, 2008 is $447,471,507.

The following amounts are based on cost for federal income tax purposes:


Gross unrealized appreciation	$	3,766,536
Gross unrealized depreciation		(22,385,830	)

Net unrealized depreciation	$	(18,619,294	)

See summary of footnotes and abbreviations to portfolios.

See notes to financial statements.

INFLATION-PROTECTED SECURITIES PORTFOLIO
PORTFOLIO OF INVESTMENTS

December 31, 2008


Principal			Value

		US Treasury Securities — 88.6%
		US Treasury Bonds — 0.8%
$	2,285,000	4.50%, 05/15/38	$	3,118,669

		US Treasury Inflation Index — 87.8%
	7,161,928	3.38%, 01/15/12		7,084,716
	25,703,192	2.00%, 04/15/12		25,064,622
	13,049,284	3.00%, 07/15/12		12,789,316
	12,258,641	0.63%, 04/15/13		11,720,413
	13,370,426	1.88%, 07/15/13		12,588,042
	26,879,104	2.00%, 01/15/14		25,467,951
	31,008,923	2.00%, 07/15/14		29,325,233
	6,801,867	1.63%, 01/15/15		6,307,671
	27,315,945	1.88%, 07/15/15		25,802,887
	13,775,109	2.00%, 01/15/16		13,191,815
	12,658,450	2.50%, 07/15/16(5)		12,558,562
	14,561,865	2.38%, 01/15/17		14,446,958
	4,364,128	2.63%, 07/15/17		4,472,209
	24,456,938	1.63%, 01/15/18		23,213,083
	9,569,387	1.38%, 07/15/18		8,949,616
	29,032,076	2.38%, 01/15/25		28,533,072
	21,994,330	2.00%, 01/15/26		20,717,625
	11,381,997	2.38%, 01/15/27		11,434,456
	16,370,120	1.75%, 01/15/28		15,124,452
	3,161,126	3.63%, 04/15/28		3,765,937
	22,594,367	3.88%, 04/15/29		27,905,805
	909,295	3.38%, 04/15/32		1,121,203

				341,585,644

		Total US Treasury Securities (Cost $365,058,420)		344,704,313

		US Government Agency Securities — 2.7%
		Fannie Mae — 0.6%
	2,340,000	Floating Rate, 6.08%, 02/17/09(3)		2,337,075

		Federal Home Loan Bank — 2.1%
	7,100,000	Series 656, 5.38%, 05/18/16		8,118,225

		Total US Government Agency Securities (Cost $9,639,843)		10,455,300

		Corporate Bonds and Notes — 3.0%
		Banks and Financial Services — 1.4%
	649,000	Bear Stearns Companies, Inc. (The), Series CPI, Floating Rate, 6.74%, 03/10/14(3)		526,261
	2,545,000	General Electric Capital Corp., 5.63%, 05/01/18(5)		2,563,449
	315,000	International Bank for Reconstruction & Development, Series CPI (Supra National), Floating Rate, 6.91%, 12/10/13(3)		262,215
	1,530,000	JPMorgan Chase & Company, Series MTNC, Floating Rate, 5.39%, 06/28/09(3)		1,542,638
	1,055,000	Lehman Brothers Holdings, Inc., Series MTN, 5.63%, 01/24/13(9)		100,225
	1,243,000	Lehman Brothers Holdings, Inc., Series MTNG, Floating Rate, 6.29%, 06/02/09(3)(9)		111,870
	370,000	SLM Corp., Series CPI, Floating Rate, 6.31%, 06/01/09(3)		324,242
	900,000	SLM Corp., Series CPI, Floating Rate, 7.06%, 01/31/14(3)		476,721

				5,907,621

		Private Asset Backed: Credit Cards — 0.3%
	1,100,000	Chase Issuance Trust, Series 2007-A17, Class A, 5.12%, 10/15/14		1,020,459

		Private Asset Backed: Mortgage and Home Equity — 1.0%
	585,000	Banc of America Commercial Mortgage, Inc., Series 2005-3, Class A4, 4.67%, 07/10/43		470,669
	685,000	Bank of America Commercial Mortgage, Inc., Series 2005-4, Class A5A, 4.93%, 07/10/45		555,725
	252,648	Citigroup Mortgage Loan Trust, Inc., Series 2007-AMC3, Class A2A, Floating Rate, 0.58%, 03/25/37(3)		218,023
	1,996,854	Countrywide Alternative Loan Trust, Series 2006-OA21, Class A1, Floating Rate, 0.70%, 03/20/47(3)		818,243
	695,000	GMAC Commercial Mortgage Securities, Inc., Series 2004-C3, Class A4, 4.55%, 12/10/41		627,796
	765,000	Wachovia Bank Commercial Mortgage Trust, Series 2005-C22, Class A4, Floating Rate, 5.27%, 12/15/44(3)		612,832
	750,000	Wachovia Bank Commercial Mortgage Trust, Series 2006-C25, Class A4, Floating Rate, 5.74%, 05/15/43(3)		597,131

				3,900,419

See notes to financial statements.

INFLATION-PROTECTED SECURITIES PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)

		Telecommunications Equipment and Services — 0.3%
$	850,000	Verizon Wireless — 144A, 8.50%, 11/15/18	$	995,925

		Total Corporate Bonds and Notes (Cost $15,465,921)		11,824,424

Contracts

		Purchased Put Options — 0.0%
	11,000,000	Expiring 09/14/09. If exercised the Series receives floating 3 month LIBOR, and pays 6.50%, expiring 09/16/39, European Style (Cost $43,175)		26,663

		Total Securities (Cost $390,207,359)		367,010,700

Principal

		Repurchase Agreements — 4.5%
$	17,373,040	With State Street Bank and Trust, dated 12/31/08, 0.01%, due 01/02/09, repurchase proceeds at maturity $17,373,049 (Collateralized by US Treasury Bill, 0.01%, due 01/02/09, with a value of $17,782,200) (Cost $17,373,040)		17,373,040

		Total Investments — 98.8% (Cost $407,580,399)		384,383,740
		Other assets less liabilities — 1.2%		4,814,134

		Net Assets — 100.0%	$	389,197,874

The aggregate cost of securities for federal income tax purposes at December 31, 2008 is $410,603,014.

The following amount is based on cost for federal income tax purposes:


Gross/Net unrealized depreciation (includes gross unrealized appreciation of $0)	$	(26,219,274	)

See summary of footnotes and abbreviations to portfolios.

See notes to financial statements.

CORE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS

December 31, 2008


Principal			Value

		US Treasury Securities — 2.4%
		US Treasury Inflation Index — 1.1%
$	7,786,711	2.38%, 01/15/25	$	7,652,872
	4,611,714	2.00%, 01/15/26		4,344,018
	3,018,727	2.38%, 01/15/27		3,032,640
	4,234,721	1.75%, 01/15/28		3,912,485

				18,942,015

		US Treasury Strips — 1.3%
	39,505,000	Zero coupon, 11/15/27		21,780,411

		Total US Treasury Securities (Cost $35,994,694)		40,722,426

		US Government Agency Securities — 65.7%
		Asset Backed: Mortgage and Home Equity — 0.7%
	16,862,792	Fannie Mae IO Strips, Series 360, Class 2, 5.00%, 08/01/35		1,925,672
	20,380,562	Fannie Mae IO Strips, Series 378, Class 4, 5.00%, 07/01/36		1,953,025
	3,929,113	Fannie Mae IO Strips, Series 387, Class 5, 5.00%, 03/25/38		566,904
	2,204,548	Fannie Mae, Series 1999-7, Class AB, 6.00%, 03/25/29		2,280,988
	4,861,230	Freddie Mac, Series 2825, Class VP, 5.50%, 06/15/15		5,090,173

				11,816,762

		Asset Backed: US Government Agencies — 0.1%
	937,233	Small Business Administration, Series 2002-P10B, Class 1, 5.20%, 08/10/12		952,104
	1,251,556	Small Business Administration, Series 2004-P10A, Class 1, 4.50%, 02/10/14		1,230,846

				2,182,950

		Fannie Mae — 33.7%
	4,100,000	5.25%, 08/01/12		4,321,482
	10,200,000	4.63%, 05/01/13		10,567,302
	15,875,000	2.88%, 12/11/13		16,260,334
	12,480,000	5.38%, 06/12/17(8)		14,580,584
	228,460	PL# 252571, 7.00%, 07/01/29		241,709
	3,301	PL# 252716, 7.00%, 09/01/29		3,493
	1,001	PL# 253264, 7.00%, 05/01/30		1,059
	692	PL# 253346, 7.50%, 06/01/30		733
	11,434	PL# 253479, 7.00%, 10/01/30		12,098
	20,620	PL# 253990, 7.00%, 09/01/16		21,541
	18,589	PL# 254008, 7.00%, 10/01/31		19,670
	264,599	PL# 254346, 6.50%, 06/01/32		276,092
	227,758	PL# 254406, 6.50%, 08/01/32		237,651
	10,651	PL# 255032, 5.50%, 12/01/18		11,023
	121,442	PL# 255950, 6.00%, 09/01/15		127,749
	357,815	PL# 256137, 6.00%, 02/01/16		376,821
	376,399	PL# 256335, 6.00%, 07/01/16		389,464
	2,535,062	PL# 256936, 6.00%, 10/01/37		2,572,863
	510,788	PL# 323842, 5.50%, 07/01/14		531,374
	34,084	PL# 323967, 7.00%, 10/01/29		36,061
	3,999	PL# 492742, 7.00%, 05/01/29		4,231
	1,071	PL# 503916, 7.50%, 06/01/29		1,135
	1,788	PL# 508415, 7.00%, 08/01/29		1,891
	8,489	PL# 515946, 7.00%, 10/01/29		8,982
	265	PL# 524164, 7.00%, 11/01/29		280
	107,533	PL# 524657, 7.00%, 01/01/30		113,779
	19,085	PL# 526053, 7.00%, 12/01/29		20,192
	333	PL# 527717, 7.50%, 01/01/30		353
	3,412	PL# 528107, 7.00%, 02/01/30		3,610
	4,668	PL# 531497, 7.00%, 02/01/30		4,939
	6,264	PL# 531735, 7.00%, 02/01/30		6,628
	914	PL# 533841, 7.50%, 12/01/30		968
	17,022	PL# 535030, 7.00%, 12/01/29		18,010
	22,854	PL# 535103, 7.00%, 01/01/15		23,751
	6,639	PL# 535159, 7.00%, 02/01/30		7,024
	30,904	PL# 535195, 7.00%, 03/01/30		32,697
	8,705	PL# 535277, 7.00%, 04/01/30		9,210
	260,398	PL# 535675, 7.00%, 01/01/16		271,412
	725	PL# 535722, 7.00%, 02/01/31		767
	4,609	PL# 535723, 7.00%, 02/01/31		4,876
	1,077	PL# 535811, 6.50%, 04/01/31		1,127
	66,755	PL# 535880, 7.00%, 02/01/31		70,628
	469	PL# 540211, 7.50%, 06/01/30		497
	1,308	PL# 542999, 7.50%, 08/01/30		1,384
	79,691	PL# 545249, 5.50%, 10/01/16		82,654
	424,089	PL# 545298, 5.50%, 11/01/16		439,856
	4,562	PL# 545363, 5.50%, 11/01/16		4,732
	1,615,242	PL# 545411, 5.50%, 01/01/17		1,675,295
	21,982	PL# 545477, 7.00%, 03/01/32		23,262
	181,638	PL# 545759, 6.50%, 07/01/32		189,528
	730,842	PL# 545760, 6.50%, 07/01/32		762,588
	133,960	PL# 545762, 6.50%, 07/01/32		139,779
	21,125	PL# 549659, 7.00%, 02/01/16		22,068
	11,664	PL# 549962, 7.00%, 10/01/30		12,342
	43,356	PL# 549975, 7.00%, 10/01/30		45,874
	4,740	PL# 550440, 7.00%, 02/01/16		4,952
	39,637	PL# 554493, 7.00%, 10/01/30		41,939
	190,365	PL# 555114, 5.50%, 12/01/17		197,086
	23,145	PL# 555144, 7.00%, 10/01/32		24,490
	314,035	PL# 555254, 6.50%, 01/01/33		328,657
	182,334	PL# 555798, 6.50%, 05/01/33		190,824

See notes to financial statements.

CORE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		US Government Agency Securities (continued)
		Fannie Mae (continued)

$	1,564	PL# 558362, 7.50%, 11/01/30	$	1,656
	365	PL# 558519, 7.50%, 11/01/30		387
	1,338	PL# 559277, 7.00%, 10/01/30		1,415
	29,644	PL# 559313, 7.00%, 12/01/30		31,366
	1,243	PL# 559741, 7.50%, 01/01/31		1,317
	20,799	PL# 560384, 7.00%, 11/01/30		22,007
	2,712	PL# 561678, 7.50%, 12/01/30		2,871
	1,446	PL# 564080, 7.50%, 12/01/30		1,531
	6,109	PL# 564183, 7.00%, 12/01/30		6,464
	1,372	PL# 564529, 7.50%, 12/01/30		1,452
	6,063	PL# 566658, 7.00%, 02/01/31		6,416
	55,895	PL# 572453, 5.50%, 04/01/16		57,973
	6,238	PL# 575285, 7.50%, 03/01/31		6,609
	4,368	PL# 579161, 6.50%, 04/01/31		4,571
	304,304	PL# 580165, 5.50%, 09/01/16		315,618
	9,923	PL# 580179, 7.00%, 10/01/16		10,366
	38,391	PL# 580515, 5.50%, 04/01/16		39,819
	9,351	PL# 584811, 7.00%, 05/01/31		9,895
	88,920	PL# 585248, 7.00%, 06/01/31		94,085
	138,961	PL# 589120, 5.50%, 11/01/16		144,127
	1,088	PL# 589405, 7.50%, 06/01/31		1,153
	5,662	PL# 589893, 7.00%, 06/01/31		5,992
	4,560	PL# 592129, 7.50%, 06/01/31		4,831
	4,092	PL# 596895, 6.50%, 07/01/31		4,283
	7,172	PL# 598125, 7.00%, 09/01/16		7,492
	6,741	PL# 602148, 5.50%, 09/01/16		6,991
	55,836	PL# 604517, 5.50%, 11/01/16		57,912
	5,963	PL# 606551, 6.50%, 10/01/31		6,241
	2,562	PL# 606600, 7.00%, 10/01/31		2,711
	32,990	PL# 607386, 5.50%, 11/01/16		34,216
	49,403	PL# 607493, 5.50%, 11/01/16		51,240
	21,880	PL# 610128, 7.00%, 10/01/31		23,152
	167,890	PL# 610579, 5.50%, 12/01/16		174,132
	7,700	PL# 611323, 7.00%, 10/01/16		8,044
	21,711	PL# 612071, 5.50%, 11/01/16		22,519
	130,317	PL# 614506, 5.50%, 11/01/16		135,162
	1,297,981	PL# 619054, 5.50%, 02/01/17		1,343,805
	5,139	PL# 622119, 6.50%, 01/01/32		5,378
	194,389	PL# 624035, 6.50%, 01/01/32		204,611
	7,594	PL# 629236, 6.50%, 02/01/32		7,924
	491,615	PL# 631321, 5.50%, 02/01/17		508,971
	31,001	PL# 631606, 5.50%, 03/01/17		32,096
	34,805	PL# 632269, 7.00%, 05/01/32		36,828
	6,902	PL# 634563, 6.50%, 03/01/32		7,202
	57,240	PL# 634949, 7.00%, 05/01/32		60,571
	191,214	PL# 635164, 6.50%, 08/01/32		199,520
	2,360	PL# 644932, 6.50%, 07/01/32		2,462
	4,559	PL# 647556, 7.00%, 01/01/30		4,824
	422,233	PL# 648795, 6.50%, 08/01/32		440,573
	136,928	PL# 650206, 5.50%, 01/01/18		141,762
	68,805	PL# 650291, 6.50%, 07/01/32		71,794
	193,456	PL# 651649, 6.50%, 08/01/32		201,860
	746,676	PL# 652127, 6.50%, 06/01/32		779,110
	2,076	PL# 663353, 6.50%, 09/01/32		2,166
	28,889	PL# 664188, 5.50%, 09/01/17		29,908
	39,244	PL# 664194, 5.50%, 09/01/17		40,629
	335,767	PL# 670402, 6.50%, 06/01/32		350,352
	148,437	PL# 675314, 5.50%, 12/01/17		153,677
	245,052	PL# 676800, 5.50%, 01/01/18		253,703
	345,087	PL# 679631, 5.50%, 02/01/18		357,054
	6,408	PL# 681343, 5.50%, 02/01/18		6,631
	278,993	PL# 683199, 5.50%, 02/01/18		288,668
	4,428,931	PL# 687889, 5.50%, 03/01/33		4,550,915
	5,454	PL# 694372, 6.50%, 11/01/32		5,691
	58,750	PL# 695925, 5.50%, 05/01/18		60,788
	6,695	PL# 701236, 5.50%, 05/01/18		6,927
	6,433	PL# 708637, 5.50%, 06/01/18		6,656
	10,630	PL# 725071, 5.50%, 12/01/18		10,998
	7,011,293	PL# 725162, 6.00%, 02/01/34		7,240,554
	9,088	PL# 725269, 5.50%, 03/01/19		9,409
	176,233	PL# 725407, 6.50%, 01/01/34		184,439
	251,072	PL# 725418, 6.50%, 05/01/34		262,763
	3,674,395	PL# 725519, 5.50%, 05/01/19		3,804,114
	4,094,973	PL# 725704, 6.00%, 08/01/34		4,228,874
	9,653,388	PL# 725946, 5.50%, 11/01/34(4)(5)		9,913,234
	8,845	PL# 732724, 5.50%, 08/01/18		9,152
	13,973,233	PL# 735141, 5.50%, 01/01/35		14,349,359
	3,209,471	PL# 735454, 5.50%, 11/01/18		3,322,776
	21,879,021	PL# 735504, 6.00%, 04/01/35		22,608,114
	878,470	PL# 735611, 5.50%, 03/01/20		909,483
	13,645,734	PL# 739821, 5.00%, 09/01/33		13,968,270
	6,956	PL# 741355, 5.50%, 10/01/18		7,197
	9,091,692	PL# 745193, 5.50%, 06/01/20		9,412,662
	49,408,290	PL# 745275, 5.00%, 02/01/36		50,514,361
	20,156,120	PL# 745412, 5.50%, 12/01/35		20,698,674
	3,698	PL# 748655, 6.50%, 09/01/33		3,856
	2,453	PL# 749118, 5.50%, 11/01/18		2,538
	11,645	PL# 749153, 5.50%, 11/01/18		12,049
	6,957	PL# 753643, 5.50%, 11/01/18		7,198
	16,395	PL# 755167, 5.50%, 11/01/18		16,963
	119,280	PL# 757687, 5.50%, 07/01/34		122,491
	9,584	PL# 759423, 5.50%, 01/01/19		9,904
	7,176	PL# 761018, 5.50%, 12/01/18		7,425
	25,785	PL# 761808, 5.50%, 05/01/18		26,695
	349,745	PL# 766312, 5.50%, 03/01/19		361,436

See notes to financial statements.

CORE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		US Government Agency Securities (continued)
		Fannie Mae (continued)

$	168,917	PL# 768313, 5.50%, 01/01/19	$	174,774
	160,408	PL# 781889, 5.50%, 03/01/17		166,372
	4,348,182	PL# 806549, Variable Rate, 4.56%, 01/01/35(1)		4,301,993
	964,886	PL# 826273, 6.00%, 07/01/20		1,002,417
	50,990	PL# 831500, 6.00%, 05/01/16		53,752
	3,303,564	PL# 831511, 6.00%, 06/01/16		3,483,412
	761,199	PL# 845420, 6.00%, 02/01/36		784,662
	7,852,620	PL# 850867, Variable Rate, 5.61%, 01/01/36(1)		7,997,217
	1,616,349	PL# 869713, 6.50%, 04/01/36		1,680,751
	41,937,108	PL# 888306, 5.00%, 12/01/36		42,875,926
	2,275,536	PL# 888892, 7.50%, 11/01/37		2,388,530
	759,999	PL# 891805, 6.00%, 06/01/36		783,306
	66,339	PL# 893318, 6.50%, 08/01/36		68,983
	3,503,668	PL# 900700, 6.50%, 09/01/36		3,643,267
	3,180,824	PL# 911480, 6.50%, 03/01/37		3,307,381
	3,326,775	PL# 911650, 6.50%, 01/01/37		3,459,327
	7,875,049	PL# 915203, 6.00%, 04/01/37		8,116,115
	70,865	PL# 917972, 5.50%, 05/01/37		72,724
	1,057,465	PL# 918503, 5.50%, 06/01/37		1,085,209
	4,103,218	PL# 922227, 6.50%, 12/01/36		4,266,705
	16,522,832	PL# 929822, 5.50%, 08/01/38		16,954,678
	4,514,565	PL# 929825, 5.50%, 08/01/38		4,632,559
	8,991,336	PL# 929940, 6.00%, 09/01/38		9,266,573
	48,757	PL# 929956, 5.50%, 09/01/38		50,031
	4,923,712	PL# 934576, 5.50%, 10/01/38		5,052,399
	45,189	PL# 940841, 5.50%, 08/01/37		46,375
	39,361	PL# 944027, 6.50%, 08/01/37		40,927
	2,599,318	PL# 959905, 6.50%, 11/01/37		2,702,739
	4,908,389	PL# 964272, 6.00%, 07/01/38		5,058,151
	9,238,954	PL# 964452, 5.50%, 07/01/38		9,480,427
	5,294,201	PL# 970610, 5.50%, 10/01/38		5,432,572
	10,257,281	PL# 983344, 6.00%, 07/01/38		10,570,244
	171,556	PL# 985516, 5.50%, 06/01/38		176,040
	3,416,941	PL# 990637, 6.50%, 09/01/38		3,552,551
	58,695	PL# 990710, 6.00%, 09/01/38		60,486
	2,800,327	PL# 991387, 6.50%, 10/01/38		2,911,465
	14,900,000	TBA, 4.50%, 01/01/24		15,225,938
	53,000,000	TBA, 5.00%, 01/01/24		54,391,249
	11,300,000	TBA, 5.50%, 01/01/39		11,582,502
	37,700,000	TBA, 6.00%, 01/01/39		38,807,437
	400,000	TBA, 6.50%, 01/01/39		415,375
	45,100,000	TBA, 4.50%, 02/01/39		45,508,695

				560,509,696

		Federal Agricultural Mortgage Corporation — 4.2%
	20,230,000	3.88%, 08/19/11		21,491,280
	45,175,000	144A, 5.50%, 07/15/11		48,089,510

				69,580,790

		Federal Home Loan Bank — 4.3%
	9,195,000	5.63%, 06/13/16		9,655,090
	38,390,000	5.86%, 03/02/17		38,661,878
	20,865,000	5.38%, 05/15/19		23,477,298

				71,794,266

		Freddie Mac — 4.8%
	16,800,000	4.75%, 06/28/12		18,253,166
	9,800,000	5.75%, 06/27/16		10,514,832
	14,775,000	4.88%, 06/13/18		16,980,760
	3,509,054	PL# 1B2853, Variable Rate, 4.35%, 04/01/35(1)		3,493,443
	9,911,851	PL# 1G1119, Variable Rate, 4.75%, 09/01/35(1)		9,980,577
	12,377,736	PL# 1J1827, HB, 5.30%, 07/01/38		12,593,434
	8,528,776	PL# 1L0289, Variable Rate, 5.20%, 12/01/35(1)		8,618,344

				80,434,556

		Freddie Mac Gold — 10.3%
	215,688	PL# A32037, 5.00%, 03/01/35		220,719
	23,281	PL# A38585, 5.50%, 10/01/35		23,861
	539,256	PL# A62169, 5.50%, 06/01/37		552,561
	1,865,921	PL# A63042, 5.50%, 07/01/37		1,911,960
	2,552,953	PL# A65021, 5.50%, 08/01/37(5)(6)		2,615,944
	1,219,486	PL# A68033, 5.50%, 08/01/37		1,249,576
	2,228,180	PL# A68438, 5.50%, 11/01/37		2,283,158
	765,140	PL# C01271, 6.50%, 12/01/31		799,332
	2,367,485	PL# C57150, 6.00%, 05/01/31		2,450,078
	2,878	PL# C67653, 7.00%, 06/01/32		3,024
	39,760	PL# C67868, 7.00%, 06/01/32		41,784
	9,884	PL# C67999, 7.00%, 06/01/32		10,387
	66,975	PL# C68001, 7.00%, 06/01/32		70,385
	93,118	PL# C90229, 7.00%, 08/01/18		98,091

See notes to financial statements.

CORE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		US Government Agency Securities (continued)
		Freddie Mac Gold (continued)

$	11,242	PL# E00570, 6.00%, 09/01/13	$	11,615
	240,764	PL# E00592, 6.00%, 12/01/13		248,466
	12,140	PL# E00720, 6.00%, 07/01/14		12,531
	13,447	PL# E01007, 6.00%, 08/01/16		13,912
	44,814	PL# E01095, 6.00%, 01/01/17		46,375
	11,866	PL# E69171, 6.00%, 02/01/13		12,304
	6,038	PL# E73319, 6.00%, 11/01/13		6,261
	18,160	PL# E73769, 6.00%, 12/01/13		18,830
	9,376	PL# E75990, 6.00%, 04/01/14		9,687
	17,942	PL# E76341, 6.00%, 04/01/14		18,605
	25,546	PL# E76730, 6.00%, 05/01/14		26,489
	18,637	PL# E76731, 6.00%, 05/01/14		19,325
	14,026	PL# E78995, 6.00%, 11/01/14		14,543
	159,077	PL# E84191, 6.00%, 07/01/16		164,955
	2,611	PL# E84758, 5.50%, 07/01/16		2,708
	11,527	PL# E85885, 6.00%, 11/01/16		11,953
	155,184	PL# E86502, 5.50%, 12/01/16		160,905
	3,532	PL# E86565, 5.50%, 12/01/16		3,663
	159,092	PL# E87961, 6.00%, 02/01/17		164,970
	265,773	PL# E88001, 6.00%, 02/01/17		275,597
	37,332	PL# E88452, 6.00%, 03/01/17		38,712
	167,703	PL# E88749, 6.00%, 03/01/17		173,900
	284,478	PL# E88789, 6.00%, 04/01/17		294,994
	103,025	PL# E88979, 5.50%, 04/01/17		106,630
	202,222	PL# E89282, 6.00%, 04/01/17		209,697
	430,357	PL# E89336, 6.00%, 05/01/17		446,266
	14,551	PL# E89653, 6.00%, 04/01/17		15,088
	286,482	PL# E89913, 6.00%, 05/01/17		297,072
	533,154	PL# E91644, 5.50%, 10/01/17		551,809
	149,954	PL# E91754, 5.50%, 10/01/17		155,201
	232,376	PL# E91774, 5.50%, 10/01/17		240,507
	109,101	PL# E91968, 5.50%, 10/01/17		112,918
	188,226	PL# E92113, 5.50%, 10/01/17		194,812
	948,757	PL# G01391, 7.00%, 04/01/32		997,078
	2,542,853	PL# G03358, 5.50%, 08/01/37(5)(6)		2,605,595
	16,377,776	PL# G03850, 6.00%, 02/01/38(5)(6)		16,889,358
	17,579,486	PL# G04544, 6.00%, 08/01/38(5)(6)		18,128,605
	9,987	PL# G11111, 6.00%, 04/01/16		10,356
	2,347,908	PL# M80813, 4.00%, 04/01/10		2,347,662
	24,000,000	TBA, 4.50%, 01/01/24		24,532,512
	3,000,000	TBA, 5.00%, 01/01/24		3,078,750
	68,300,000	TBA, 5.50%, 01/01/39		69,900,815
	16,900,000	TBA, 6.00%, 01/01/39		17,407,000

				172,309,891

		Government National Mortgage Association — 7.5%
	80,543	PL# 3173, 6.50%, 12/20/31		84,817
	549	PL# 434615, 7.00%, 11/15/29		581
	140,872	PL# 435071, 7.00%, 03/15/31		148,964
	17,101	PL# 493966, 7.00%, 06/15/29		18,098
	36,135	PL# 494742, 7.00%, 04/15/29		38,240
	907	PL# 530260, 7.00%, 02/15/31		959
	159,790	PL# 531025, 6.00%, 04/15/32		165,456
	386	PL# 538271, 7.00%, 11/15/31		408
	62,815	PL# 538312, 6.00%, 02/15/32		65,042
	95,117	PL# 543989, 7.00%, 03/15/31		100,580
	767	PL# 547545, 7.00%, 04/15/31		811
	187,306	PL# 550985, 7.00%, 10/15/31		198,066
	243	PL# 551549, 7.00%, 07/15/31		256
	16,936	PL# 552413, 7.00%, 02/15/32		17,808
	71,322	PL# 554808, 6.00%, 05/15/31		73,918
	55,119	PL# 555360, 6.00%, 06/15/31		57,126
	62,298	PL# 555733, 6.00%, 03/15/32		64,507
	445	PL# 557664, 7.00%, 08/15/31		471
	53,259	PL# 557678, 7.00%, 08/15/31		56,318
	3,687	PL# 561050, 7.00%, 05/15/31		3,899

See notes to financial statements.

CORE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		US Government Agency Securities (continued)
		Government National Mortgage Association (continued)

$	274	PL# 561996, 7.00%, 07/15/31	$	290
	9,900	PL# 563346, 7.00%, 09/15/31		10,469
	37,807	PL# 563599, 7.00%, 06/15/32		39,754
	62,587	PL# 564086, 7.00%, 07/15/31		66,182
	34,634	PL# 564300, 6.00%, 08/15/31		35,895
	5,924	PL# 564706, 7.00%, 07/15/31		6,265
	50,139	PL# 565808, 6.00%, 11/15/31		51,964
	123,193	PL# 567622, 6.00%, 04/15/32		127,561
	64,322	PL# 569567, 7.00%, 01/15/32		67,634
	50,917	PL# 570517, 6.00%, 01/15/32		52,723
	38,402	PL# 572821, 6.00%, 12/15/31		39,800
	60,878	PL# 574873, 6.00%, 12/15/31		63,094
	75,452	PL# 575906, 6.00%, 01/15/32		78,127
	33,943	PL# 576323, 6.00%, 12/15/31		35,179
	1,228	PL# 579377, 7.00%, 04/15/32		1,291
	178,269	PL# 581015, 7.00%, 02/15/32		187,447
	72,549	PL# 581070, 6.00%, 02/15/32		75,121
	30,955	PL# 582956, 7.00%, 02/15/32		32,549
	171,533	PL# 587122, 7.00%, 06/15/32		180,365
	4,767	PL# 587494, 7.00%, 06/15/32		5,013
	436	PL# 589696, 7.00%, 05/15/32		458
	12,571	PL# 780802, 6.50%, 05/15/28		13,251
	20,848	PL# 781113, 7.00%, 11/15/29		22,062
	135,455	PL# 781148, 6.00%, 07/15/29		140,707
	64,958	PL# 781276, 6.50%, 04/15/31		68,490
	18,528	PL# 781287, 7.00%, 05/15/31		19,603
	29,091	PL# 781324, 7.00%, 07/15/31		30,770
	163,849	PL# 781328, 7.00%, 09/15/31		173,364
	130,007	PL# 781330, 6.00%, 09/15/31		134,993
	32,731	PL# 781496, 6.50%, 09/15/32		34,518
	42,632	PL# 781548, 7.00%, 11/15/32		45,089
	25,842	PL# 781584, 7.00%, 05/15/32		27,335
	2,169,820	PL# 781804, 6.00%, 09/15/34		2,244,029
	1,867,332	PL# 781847, 6.00%, 12/15/34		1,931,118
	1,835,271	PL# 781902, 6.00%, 02/15/35		1,897,912
	100,400,000	TBA, 5.50%, 02/01/39		103,161,918
	12,500,000	TBA, 6.00%, 02/01/39		12,908,203

				125,106,868

		Resolution Funding Strips — 0.1%
	1,200,000	Zero coupon, 07/15/18(20)		860,379
	1,200,000	Zero coupon, 10/15/18(20)		849,532

				1,709,911

		Total US Government Agency Securities (Cost $1,069,324,451)		1,095,445,690

		Corporate Bonds and Notes — 48.2%
		Banks and Financial Services — 10.0%
	3,000,000	Bank of America Corp., 7.80%, 09/15/16		3,053,958
	4,550,000	Bank of America Corp., 6.00%, 09/01/17		4,621,080
	2,675,000	Bank of America Corp., 5.75%, 12/01/17		2,670,830
	105,000	Bank of America Corp., 5.65%, 05/01/18		105,623
	7,565,000	Bear Stearns Companies, Inc. (The), Series MTN, 6.95%, 08/10/12		7,856,805
	1,000,000	Bear Stearns Companies, Inc. (The), Series MTNB, 4.55%, 06/23/10		998,515
	14,330,000	Citigroup, Inc., 3.63%, 02/09/09(4)(5)		14,284,330
	3,980,000	Citigroup, Inc., 4.13%, 02/22/10		3,921,992
	1,000,000	Citigroup, Inc., 5.30%, 10/17/12		963,726
	14,675,000	General Electric Capital Corp., 5.00%, 11/15/11		14,871,792
	5,820,000	General Electric Capital Corp., Series GMTN, 6.15%, 08/07/37		5,835,225
	5,680,000	General Electric Capital Corp., Series MTN, 5.00%, 04/10/12		5,630,067
	8,095,000	Goldman Sachs Group, Inc., 5.25%, 10/15/13		7,436,488
	390,000	Icahn Enterprises Finance Corp., 8.13%, 06/01/12		300,300
	4,045,000	Icahn Enterprises Finance Corp., 7.13%, 02/15/13		2,791,050
	1,100,000	JPMorgan Chase & Company, 7.00%, 11/15/09		1,111,620
	7,750,000	JPMorgan Chase Bank NA, Series BKNT, 6.00%, 07/05/17		7,816,635
	1,945,000	JPMorgan Chase Bank NA, Series BKNT, 6.00%, 10/01/17		1,961,881
	630,000,000	Kreditanstalt fur Wiederaufbau (Germany), Series EMTN, Floating Rate, 0.67%, 08/08/11(2)(17)		6,950,884
	2,250,000	Lehman Brothers Holdings, Inc., 6.50%, 07/19/17(9)		225
	4,400,000	Lehman Brothers Holdings, Inc., Series MTN, 5.25%, 02/06/12(9)		418,000
	5,730,000	Lehman Brothers Holdings, Inc., Series MTN, 5.63%, 01/24/13(9)		544,350
	2,005,000	Lehman Brothers Holdings, Inc., Series MTN, 6.75%, 12/28/17(9)		201

See notes to financial statements.

CORE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Banks and Financial Services (continued)

$	3,800,000	Lehman Brothers Holdings, Inc., Series MTN, 7.00%, 09/27/27(9)	$	361,000
	425,000	Morgan Stanley, 6.75%, 04/15/11		418,169
	19,360,000	Morgan Stanley, Floating Rate, 4.57%, 01/09/12(2)		15,275,271
	565,000	Morgan Stanley, Series MTN, 6.25%, 08/28/17		481,316
	18,175,000	Private Expert Funding Corp., Series Y, 3.55%, 04/15/13		18,935,914
	3,365,000	SLM Corp., Series MTN, 5.40%, 10/25/11		2,545,400
	3,972,000	SLM Corp., Series MTNA, 4.00%, 01/15/09		3,953,860
	2,370,000	SLM Corp., Series MTNA, 4.00%, 01/15/10		2,145,307
	1,535,000	SunTrust Banks, Inc., Series CD, 4.42%, 06/15/09		1,529,501
	10,780,000	UBS AG Stamford Branch, Series DPNT (Switzerland), 5.88%, 12/20/17		9,902,993
	5,900,000	UBS AG Stamford Branch, Series MTN (Switzerland), 5.75%, 04/25/18		5,354,811
	7,565,000	Wachovia Bank NA, Series BKNT, 6.60%, 01/15/38		8,207,329
	4,090,000	Wells Fargo & Company, 4.63%, 08/09/10		4,108,806

				167,365,254

		Broadcast Services/Media — 1.9%
	5,279,000	Comcast Cable Communications Holdings, 8.38%, 03/15/13		5,461,252
	1,800,000	Comcast Cable Communications, Inc., 6.75%, 01/30/11		1,806,844
	965,000	Comcast Corp., 7.05%, 03/15/33		1,006,583
	7,165,000	Comcast Corp., 6.95%, 08/15/37		7,545,118
	465,000	Cox Communications, Inc., 7.75%, 11/01/10		456,404
	475,000	CSC Holdings, Inc., Series B, 8.13%, 07/15/09		472,625
	555,000	CSC Holdings, Inc., Series B, 8.13%, 08/15/09		552,225
	1,070,000	News America Holdings, 7.63%, 11/30/28		1,073,229
	260,000	News America, Inc., 7.28%, 06/30/28		250,200
	1,675,000	TCI Communications, Inc., 7.13%, 02/15/28		1,584,039
	9,150,000	Time Warner Cable, Inc., 6.20%, 07/01/13		8,654,939
	725,000	Time Warner Entertainment, 8.38%, 07/15/33		731,619
	1,910,000	Time Warner, Inc., 7.57%, 02/01/24		1,840,745

				31,435,822

		Computer Equipment, Software and Services — 0.7%
	1,945,000	International Business Machines Corp., 5.70%, 09/14/17		2,079,429
	5,000,000	International Business Machines Corp., 7.63%, 10/15/18		5,995,974
	2,980,000	Oracle Corp., 5.75%, 04/15/18		3,116,985

				11,192,388

		Construction Services and Supplies — 0.1%
	2,875,000	Belvoir Land LLC — 144A, 5.40%, 12/15/47		1,852,449

		Electronics — 0.0%
	470,000	L-3 Communications Corp., 5.88%, 01/15/15		423,000
	155,000	L-3 Communications Corp., Series B, 6.38%, 10/15/15		144,925

				567,925

		Entertainment, Leisure and Recreation — 0.0%
	3,285,000	Harrah’s Operating Company, Inc. — 144A, 10.75%, 02/01/18(12)		427,050
	810,088	Harrah’s Operating Company, Inc. — 144A, 10.00%, 12/15/18		295,682

				722,732

		Environmental Waste Management and Recycling Services — 0.0%
	560,000	Aleris International, Inc., 9.00%, 12/15/14(12)		33,600

		Food and Beverage — 0.5%
	4,792,000	Kraft Foods, Inc., 6.50%, 08/11/17		4,816,641
	4,375,000	Kraft Foods, Inc., 6.13%, 02/01/18		4,287,049

				9,103,690

See notes to financial statements.

CORE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)

		Insurance — 0.7%
$	5,355,000	Hartford Life Global Funding, Series MTN, Floating Rate, 2.17%, 09/15/09(2)	$	4,987,856
	6,550,000	MetLife Global Funding I — 144A, 5.13%, 04/10/13		6,103,021

				11,090,877

		Machinery — 0.1%
	2,150,000	Atlantic Marine, Inc. — 144A, 5.34%, 12/01/50		1,410,271

		Medical Equipment, Supplies, and Services — 0.2%
	3,600,000	WellPoint, Inc., 5.95%, 12/15/34		2,990,765

		Metals and Mining — 0.4%
	730,000	AK Steel Corp., 7.75%, 06/15/12		569,400
	1,695,000	Freeport-McMoRan Copper & Gold, Inc., 8.25%, 04/01/15		1,440,750
	3,080,000	Freeport-McMoRan Copper & Gold, Inc., 8.38%, 04/01/17		2,525,600
	1,999,000	Ispat Inland ULC (Canada), 9.75%, 04/01/14		1,710,988

				6,246,738

		Oil, Coal and Gas — 1.1%
	4,000,000	Anadarko Petroleum Corp., 5.95%, 09/15/16		3,533,237
	2,965,000	Arch Western Finance, 6.75%, 07/01/13		2,579,550
	2,000,000	Canadian National Resources (Canada), 6.25%, 03/15/38		1,571,990
	120,000	Compton Petroleum Finance Corp. (Canada), 7.63%, 12/01/13		36,000
	1,425,000	Consolidated Natural Gas, Series A, 5.00%, 03/01/14		1,325,052
	365,000	El Paso Natural Gas, 8.63%, 01/15/22		328,874
	2,600,000	Enterprise Products Operating LP, 4.95%, 06/01/10		2,490,254
	3,680,000	Gaz Capital (Gazprom) — 144A (Russia), 7.29%, 08/16/37		2,171,200
	1,795,000	Petrobras International Finance Company (Cayman Islands), 5.88%, 03/01/18		1,613,705
	665,000	Tennessee Gas Pipeline Company, 7.00%, 10/15/28		508,815
	1,700,000	XTO Energy, Inc., 6.75%, 08/01/37		1,592,159

				17,750,836

		Paper and Forest Products — 0.1%
	400,000	Catalyst Paper Corp., Series D (Canada), 8.63%, 06/15/11		176,000
	845,000	Georgia-Pacific LLC — 144A, 7.13%, 01/15/17		709,800

				885,800

		Pharmaceuticals/Research and Development — 0.2%
	530,000	Bio-Rad Laboratories, Inc., 6.13%, 12/15/14		425,325
	600,000	Bristol-Myers Squibb, 6.88%, 08/01/97		662,867
	1,580,000	Wyeth, 6.00%, 02/15/36		1,695,191

				2,783,383

		Private Asset Backed: Automobiles/Motor Vehicles, Automotive Equipment and Repairs — 1.3%
	3,558,377	Daimler Chrysler Auto Trust, Series 2006-B, Class A3, 5.33%, 08/08/10		3,533,234
	18,911,000	Nissan Auto Receivables Owner Trust, Series 2006-B, Class A4, 5.22%, 11/15/11		18,628,061

				22,161,295

		Private Asset Backed: Banks and Financial Services — 3.8%
	3,028,833	Banc of America Alternative Loan Trust, Series 2004-7, Class 4A1, 5.00%, 08/25/19		2,563,150
	4,271,413	Bear Stearns Adjustable Rate Mortgage Trust, Series 2004-8, Class 14A1, Floating Rate, 5.47%, 11/25/34(3)		3,876,232
	3,330,000	Greenwich Capital Commercial Funding Corp., Series 2004-GG1, Class A4, 4.76%, 06/10/36		3,232,270
	11,200,000	Greenwich Capital Commercial Funding Corp., Series 2005-GG3, Class A3, 4.57%, 01/10/12		9,333,605

See notes to financial statements.

CORE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Private Asset Backed: Banks and Financial Services (continued)

$	1,759,582	JPMorgan Chase Commercial Mortgage Securities Corp. — 144A, Series 2004-CB8, Class A1A, 4.16%, 01/12/39	$	1,446,450
	106,915	Morgan Stanley Capital I, Series 1999-FNV1, Class A2, 6.53%, 03/15/31		106,592
	7,875,000	Morgan Stanley Capital I, Series 2007-IQ15, Class AM, Floating Rate, 5.88%, 01/11/17(3)		3,658,023
	997,283	SLM Student Loan Trust, Series 2005-5, Class A1 (Luxembourg), Floating Rate, 3.54%, 01/25/18(2)		994,816
	18,210,000	SLM Student Loan Trust, Series 2008-5, Class A2 (Luxembourg), Floating Rate, 4.64%, 10/25/16(2)		17,040,576
	4,600,000	SLM Student Loan Trust, Series 2008-5, Class A3 (Luxembourg), Floating Rate, 4.84%, 01/25/18(2)		4,078,188
	12,410,000	SLM Student Loan Trust, Series 2008-5, Class A4 (Luxembourg), Floating Rate, 5.24%, 07/25/23(2)		10,228,555
	7,854,654	Washington Mutual Asset Securities Corp. — 144A, Series 2005-C1A, Class A2, 5.15%, 05/25/36		7,594,082

				64,152,539

		Private Asset Backed: Credit Cards — 1.1%
	19,800,000	Chase Issuance Trust, Series 2007-A17, Class A, 5.12%, 10/15/14		18,368,256

		Private Asset Backed: Mortgage and Home Equity — 22.3%
	4,605,054	American Home Mortgage Assets, Series 2006-6, Class A1A, Floating Rate, 0.66%, 12/25/46(3)		1,906,586
	10,051,292	Banc of America Commercial Mortgage, Inc., Series 2000-1, Class A2A, 7.33%, 11/15/31		10,023,042
	7,637,356	Banc of America Commercial Mortgage, Inc., Series 2001-1, Class A2, 6.50%, 04/15/36		7,495,604
	16,715,000	Banc of America Commercial Mortgage, Inc., Series 2002-2, Class A3, 5.12%, 07/11/43		15,508,440
	11,170,000	Banc of America Commercial Mortgage, Inc., Series 2002-PB2, Class A4, 6.19%, 06/11/35		10,695,246
	13,250,000	Banc of America Commercial Mortgage, Inc., Series 2007-2, Class A4, Floating Rate, 5.69%, 04/10/49(3)		10,066,552
	4,526,309	Bear Stearns Adjustable Rate Mortgage Trust, Series 2005-1, Class 4A1, Floating Rate, 5.34%, 03/25/35(3)		2,867,218
	215,218	Bear Stearns Commercial Mortgage Securities, Inc., Series 2001, Class A1, 6.08%, 02/15/35		212,655
	2,545,000	Bear Stearns Commercial Mortgage Securities, Inc., Series 2005-PWR8, Class A4, 4.67%, 06/11/41		2,150,108
	3,085,350	Chase Commercial Mortgage Securities Corp., Series 2000-3, Class A2, 7.32%, 10/15/32		3,070,366
	2,430,000	Citigroup Commercial Mortgage Trust, Series 2006-C5, Class A4, 5.43%, 10/15/49		1,904,722
	12,075,947	Citigroup Mortgage Loan Trust, Inc., Series 2005-4, Class A, Floating Rate, 5.34%, 08/25/35(3)		8,350,800
	3,761,647	Citigroup Mortgage Loan Trust, Inc., Series 2007-AMC3, Class A2A, Floating Rate, 0.58%, 03/25/37(3)		3,246,118
	1,037,500	Citigroup/Deutsche Bank Commercial Mortgage Trust, Series 2007-CD4, Class A4, 5.32%, 12/11/49		724,275
	3,487,500	Commercial Mortgage Pass-Through Certificate, Series 2007-C9, Class A4, Floating Rate, 5.82%, 07/10/17(3)		2,644,448
	6,104,616	Countrywide Alternative Loan Trust, Series 2005-50CB, Class 1A1, 5.50%, 11/25/35		3,021,785
	2,098,320	Countrywide Alternative Loan Trust, Series 2006-OA10, Class 1A1, Floating Rate, 3.22%, 08/25/46(3)		881,294
	5,577,804	Countrywide Alternative Loan Trust, Series 2006-OA21, Class A1, Floating Rate, 0.70%, 03/20/47(3)		2,285,595

See notes to financial statements.

CORE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Private Asset Backed: Mortgage and Home Equity (continued)

$	5,922,319	Countrywide Alternative Loan Trust, Series 2007-5CB, Class 1A31, 5.50%, 04/25/37	$	3,509,060
	2,488,784	Countrywide Home Loans, Series 2006-OA5, Class 2A1, Floating Rate, 0.67%, 04/25/36(3)		974,522
	8,344,802	Countrywide Home Loans, Series 2007-16, Class A1, 6.50%, 10/25/37		5,661,431
	10,280,000	Credit Suisse First Boston Mortgage Securities Corp., Series 2002-CKS4, Class A2, 5.18%, 11/15/36		9,396,289
	14,005,000	Credit Suisse First Boston Mortgage Securities Corp., Series 2003-C3, Class A5, 3.94%, 05/15/38		11,913,139
	584,957	Credit Suisse Mortgage Capital Certificates, Series 2006-3, Class 1A1A, Floating Rate, 0.56%, 04/25/36(3)		577,982
	4,773,584	Deutsche Alt-A Securities, Inc., Mortgage Loan Trust, Series 2006-OA1, Class A1, Floating Rate, 0.67%, 02/25/47(3)		1,937,468
	4,220,166	DLJ Commercial Mortgage Corp., Series 2000-CKP1, Class A1B, 7.18%, 11/10/33		4,202,949
	12,337,108	First Union National Bank Commercial Mortgage, Series 2001-C2, Class A2, 6.66%, 01/12/43		12,125,440
	10,380,000	GE Capital Commercial Mortgage Corp., Series 2002-1A, Class A3, 6.27%, 12/10/35		9,747,885
	11,875,000	GE Capital Commercial Mortgage Corp., Series 2002-2A, Class A3, 5.35%, 08/11/36		10,783,746
	3,537,445	GMAC Commercial Mortgage Securities, Inc., Series 1999-C2, Class A2, 6.95%, 09/15/33		3,523,502
	4,866,891	GMAC Commercial Mortgage Securities, Inc., Series 1999-C3, Class A2, 7.18%, 08/15/36		4,850,351
	12,905,000	Greenwich Capital Commercial Funding Corp., Series 2007-GG9, Class A4, 5.44%, 03/10/39		9,822,407
	3,175,000	GS Mortgage Securities Corp. II, Series 2005-GG4, Class A4A, 4.75%, 07/10/39		2,561,005
	5,027,000	GS Mortgage Securities Corp. II, Series 2005-GG4, Class AJ, 4.78%, 07/10/39		2,249,026
	2,556,050	GSR Mortgage Loan Trust, Series 2004-9, Class 3A1, Floating Rate, 4.35%, 08/25/34(3)		1,750,349
	2,951,873	GSR Mortgage Loan Trust, Series 2005-AR1, Class 2A1, Floating Rate, 4.91%, 01/25/35(3)		1,727,964
	8,523,777	GSR Mortgage Loan Trust, Series 2005-AR4, Class 6A1, 5.25%, 07/25/35		6,256,491
	5,968,182	GSR Mortgage Loan Trust, Series 2006-OA1, Class 2A1, Floating Rate, 0.66%, 08/25/46(3)		2,900,281
	632,422	Harborview Mortgage Loan Trust, Series 2005-8, Class 1A2A, Floating Rate, 0.91%, 09/19/35(3)		293,219
	8,827,103	Harborview Mortgage Loan Trust, Series 2006-11, Class A1A, Floating Rate, 0.75%, 12/19/36(3)		3,503,408
	8,673,345	Harborview Mortgage Loan Trust, Series 2006-9, Class 2A1A, Floating Rate, 0.79%, 11/19/36(3)		3,730,280
	4,283,661	IndyMac INDA Mortgage Loan Trust, Series 2006-AR2, Class 4A1, Floating Rate, 5.90%, 09/25/36(3)		2,322,205
	10,490,000	JPMorgan Chase Commercial Mortgage Securities Corp., Series 2001-C1, Class A3, 5.86%, 10/12/35		10,012,977
	6,650,000	JPMorgan Chase Commercial Mortgage Securities Corp., Series 2001-CIB2, Class A3, 6.43%, 04/15/35		6,467,414
	8,802,067	JPMorgan Chase Commercial Mortgage Securities Corp., Series 2001-CIBC, Class A3, 6.26%, 03/15/33		8,603,237
	9,350,000	JPMorgan Chase Commercial Mortgage Securities Corp., Series 2005-CB12, Class A4, 4.90%, 09/12/37		7,390,473
	1,665,000	JPMorgan Chase Commercial Mortgage Securities Corp., Series 2006-CB17, Class A4, 5.43%, 12/12/43		1,263,759
	14,046,876	JPMorgan Mortgage Trust, Series 2006-A2, Class 4A1, Floating Rate, 3.88%, 08/25/34(3)		10,489,083

See notes to financial statements.

CORE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Private Asset Backed: Mortgage and Home Equity (continued)

$	1,553,824	JPMorgan Mortgage Trust, Series 2006-S2, Class 2A2, 5.88%, 07/25/36	$	1,145,945
	4,974,457	JPMorgan Mortgage Trust, Series 2006-S3, Class 1A12, 6.50%, 08/25/36		3,652,961
	1,337,367	JPMorgan Mortgage Trust, Series 2007-S1, Class 1A2, 5.50%, 03/25/22		908,992
	4,055,440	JPMorgan Mortgage Trust, Series 2007-S1, Class 2A22, 5.75%, 03/25/37		2,674,594
	4,677,190	JPMorgan Mortgage Trust, Series 2007-S2, Class 1A15, 6.75%, 06/25/37		3,014,466
	13,111,619	LB-UBS Commercial Mortgage Trust, Series 2000-C3, Class A2, 7.95%, 05/15/25		13,168,289
	5,937,586	LB-UBS Commercial Mortgage Trust, Series 2000-C4, Class A2, 7.37%, 08/15/26		5,933,538
	7,395,000	LB-UBS Commercial Mortgage Trust, Series 2003-C7, Class A3, 4.56%, 09/15/27		6,986,193
	9,100,000	LB-UBS Commercial Mortgage Trust, Series 2004-C8, Class A4, 4.51%, 12/15/29		8,268,815
	11,910,000	LB-UBS Commercial Mortgage Trust, Series 2006-C7, Class A3, 5.35%, 11/15/38		9,276,753
	9,658,000	LB-UBS Commercial Mortgage Trust, Series 2007-C2, Class A3, 5.43%, 02/15/40		6,941,247
	11,842,000	LB-UBS Commercial Mortgage Trust, Series 2007-C7, Class A2, 5.59%, 09/15/45		9,005,760
	8,918,777	Merrill Lynch Mortgage Investors Trust, Series 2006-A3, Class 3A1, Floating Rate, 5.82%, 05/25/36(3)		4,433,619
	10,675,000	Morgan Stanley Capital I, Series 2008-T29, Class A4, 6.28%, 01/11/18		8,275,479
	3,786,992	Popular ABS Mortgage Pass-Through Trust, Series 2006-D, Class A1, Floating Rate, 0.53%, 11/25/46(3)		3,555,438
	7,732,103	Residential Asset Securitization Trust, Series 2005-A14, Class A4, 5.50%, 12/25/35		6,340,044
	8,500,452	Salomon Brothers Mortgage Securities VII, Series 2001-C2, Class A3, 6.50%, 10/13/11		8,257,127
	4,780,044	Structured Adjustable Rate Mortgage Loan, Series 2007-3, Class 3A1, Floating Rate, 5.71%, 04/25/37(3)		2,312,177
	16,230,000	Wachovia Bank Commercial Mortgage Trust, Series 2007-C33, Class A4, Floating Rate, 5.90%, 07/15/17(3)		11,729,017
	2,805,037	Washington Mutual Mortgage Pass-Through Certificates, Series 2007-OA4, Class 1A, Floating Rate, 3.03%, 05/25/47(3)		1,199,154
	6,578,430	Washington Mutual Mortgage Pass-Through Certificaties, Series 2007-HY1, Class 1A1, Floating Rate, 5.71%, 02/25/37(3)		3,588,394
	4,959,358	Wells Fargo Mortgage Backed Securities Trust, Series 2006-3, Class A9, 5.50%, 03/25/36		4,331,855
	400,000	Wells Fargo Mortgage Backed Securities Trust, Series 2006-AR4, Class 2A4, Floating Rate, 5.78%, 04/25/36(3)		228,869

				372,830,922

		Private Asset Backed: Other — 0.2%
	3,715,429	Structured Asset Securities Corp. — 144A, Series 2003-AL2, Class A, 3.36%, 01/25/31		2,741,511

		Private Asset Backed: Utilities — 0.5%
	8,000,000	Peco Energy Transition Trust, Series 2000-A, Class A4, 7.65%, 03/01/10		8,180,576

		Telecommunications Equipment and Services — 2.2%
	625,000	America Movil SA de CV (Mexico), 6.38%, 03/01/35		530,007
	10,025,000	AT&T, Inc., 6.50%, 09/01/37		10,796,825
	810,000	Cincinnati Bell, Inc., 7.25%, 07/15/13		712,800

See notes to financial statements.

CORE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Telecommunications Equipment and Services (continued)

$	800,000	Citizens Communications Company, 6.25%, 01/15/13	$	680,000
	2,350,000	New England Telephone & Telegraph, 7.88%, 11/15/29		2,065,516
	970,000	New Jersey Bell Telephone, 7.85%, 11/15/29		862,583
	2,755,000	Qwest Communications International, Inc., 7.50%, 02/15/14		1,969,825
	755,000	Qwest Communications International, Inc., Series B, 7.50%, 02/15/14		539,825
	675,000	Qwest Corp., Floating Rate, 5.25%, 06/15/13(2)		502,875
	890,000	Rogers Wireless, Inc. (Canada), 7.50%, 03/15/15		881,214
	1,950,000	Sprint Nextel Corp., 6.00%, 12/01/16		1,374,750
	1,725,000	Telecom Italia Capital (Luxembourg), 5.25%, 10/01/15		1,313,156
	75,000	Telefonica Emisiones SAU (Spain), 6.42%, 06/20/16		74,870
	850,000	Telefonica Europe BV (the Netherlands), 7.75%, 09/15/10		863,058
	6,700,000	Verizon Communications, Inc., 8.75%, 11/01/18		7,860,587
	215,000	Verizon Maryland, Inc., Series B, 5.13%, 06/15/33		156,525
	1,470,000	Vodafone Group PLC (United Kingdom), 5.00%, 12/16/13		1,414,100
	500,000	Vodafone Group PLC (United Kingdom), 5.00%, 09/15/15		458,502
	890,000	Wind Acquistion Finance SA — 144A (Luxembourg), 10.75%, 12/01/15		765,400
	1,375,000	Windstream Corp., 8.13%, 08/01/13		1,265,000
	1,220,000	Windstream Corp., 8.63%, 08/01/16		1,079,700

				36,167,118

		Transportation — 0.2%
	560,000	Overseas Shipholding Group, 7.50%, 02/15/24		372,400
	2,495,000	United Parcel Service, Inc., 6.20%, 01/15/38		2,750,623

				3,123,023

		Utilities — 0.6%
	321,176	AES Ironwood LLC, 8.86%, 11/30/25		279,423
	235,000	AES Red Oak LLC, Series B, 9.20%, 11/30/29		202,100
	2,735,000	Centerpoint Energy, Inc., Series B, 7.25%, 09/01/10		2,692,534
	264,556	Elwood Energy LLC, 8.16%, 07/05/26		179,359
	1,000,000	Florida Power & Light Company, 5.63%, 04/01/34		1,061,161
	1,700,000	Florida Power Corp., 6.40%, 06/15/38		1,898,458
	81,813	Homer City Funding LLC, 8.73%, 10/01/26		75,268
	560,000	NRG Energy, Inc., 7.38%, 02/01/16		520,800
	4,355,000	Texas Competitive Electric Holdings Company LLC — 144A, 10.50%, 11/01/15		3,092,049

				10,001,152

		Total Corporate Bonds and Notes (Cost $942,083,651)		803,158,922

		Preferred Corporate Bonds and Notes — 3.2%
		Banks and Financial Services — 2.4%
	3,840,000	Bank of America Corp., Series K, Variable Rate, 8.00%, perpetual(1)		2,762,066
	4,775,000	Bank of America Corp., Series M, Variable Rate, 8.13%, perpetual(1)		3,571,700
	2,245,000	Barclays Bank PLC — 144A (United Kingdom), Variable Rate, 7.43%, perpetual(1)		1,135,027
	2,670,000	Citigroup Capital XXI, Variable Rate, 8.30%, 12/21/57(1)		2,059,203
	6,885,000	Credit Suisse (Guernsey), Variable Rate, 5.86%, perpetual(1)		3,213,457
	5,375,000	General Electric Capital Corp., Variable Rate, 6.38%, 11/15/67(1)		3,378,558
	3,230,000	Goldman Sachs Capital II, Variable Rate, 5.79%, perpetual(1)		1,241,686
	6,685,000	JPMorgan Chase & Company, Series 1, Variable Rate, 7.90%, perpetual(1)		5,560,783
	5,795,000	JPMorgan Chase Capital XXV, 6.80%, 10/01/37		5,339,426

See notes to financial statements.

CORE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Preferred Corporate Bonds and Notes (continued)
		Banks and Financial Services (continued)

$	1,015,000	Lehman Brothers Capital Trust VII, Series MTN, Variable Rate, 5.86%, perpetual(1)(9)	$	102
	6,450,000	Royal Bank of Scotland Group PLC — 144A (United Kingdom), Variable Rate, 6.99%, perpetual(1)		3,015,607
	980,000	UBS Preferred Funding Trust I, Variable Rate, 8.62%, perpetual(1)		592,063
	6,240,000	Wachovia Corp., Series K, Variable Rate, 7.98%, perpetual(1)		5,318,976
	2,895,000	ZFS Finance USA Trust V — 144A, Variable Rate, 6.50%, 05/09/37(1)		1,186,950

				38,375,604

		Insurance — 0.8%
	7,320,000	American International Group — 144A, Variable Rate, 8.18%, 05/15/58(1)		2,847,663
	3,800,000	Chubb Corp., Variable Rate, 6.38%, 03/29/67(1)		2,356,730
	2,350,000	Lincoln National Corp., Variable Rate, 7.00%, 05/17/66(1)		987,000
	4,455,000	MetLife, Inc., 6.40%, 12/15/36		2,673,000
	3,595,000	Progressive Corp., Variable Rate, 6.70%, 06/15/37(1)		1,767,241
	2,150,000	Reinsurance Group of America, Inc., Variable Rate, 6.75%, 12/15/65(1)		812,648
	4,125,000	Travelers Companies, Inc. (The), Variable Rate, 6.25%, 03/15/37(1)		2,702,028

				14,146,310

		Total Preferred Corporate Bonds and Notes (Cost $86,418,156)		52,521,914

		Foreign Government Obligations — 2.4%
	9,700,000	AID-Israel (Israel), 5.50%, 09/18/23		11,989,879
	1,155,000	Bundesrepublik Deutschland, Series 05 (Germany), 4.00%, 01/04/37(16)		1,720,205
	2,975,000	Bundesrepublik Deutschland, Series 07 (Germany), 4.25%, 07/04/39(16)		4,696,655
	52,300,000	Mexican Bonos De Desarrollo, Series M10 (Mexico), 7.25%, 12/15/16(19)		3,619,099
	175,210,000	Mexican Bonos De Desarrollo, Series M20 (Mexico), 10.00%, 12/05/24(19)		14,533,251
	2,645,000	United Kingdom Treasury Bond (United Kingdom), 4.25%, 12/07/49(15)		4,160,811

		Total Foreign Government Obligations (Cost $43,799,105)		40,719,900

Contracts

		Purchased Put Options — 0.0%
	69,900,000	Expiring 08/09/10. If exercised the Series receives floating 3 month LIBOR, and pays 5.78%, expiring 08/11/20, European Style		341,930
	31,200,000	Expiring 10/21/09. If exercised the Series receives floating 3 month LIBOR, and pays 6.50%, expiring 10/23/09, European Style		77,227

		Total Purchased Put Options (Cost $2,869,050)		419,157

Principal

		Securities Lending Collateral — 0.1%
$	2,425,000	Securities Lending Collateral Investment (Note 4) (Cost $2,425,000)		2,425,000

		Total Securities (Cost $2,182,914,107)		2,035,413,009

		Repurchase Agreements — 0.5%
	8,044,299	With State Street Bank and Trust, dated 12/31/08, 0.01%, due 01/02/09, repurchase proceeds at maturity $8,044,303 (Collateralized by US Treasury Bill, 0.01%, due 01/02/09, with a value of $8,291,700) (Cost $8,044,299)		8,044,299

		Total Investments before Call and Put Options Written and Securities Sold Short — 122.5% (Cost $2,190,958,406)		2,043,457,308

See notes to financial statements.

CORE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Contracts				Value

			Call Options Written — (0.6)%
	(35,600,000	)	Expiring 05/04/10. If exercised the Series receives floating 3 month LIBOR, and pays 4.88%, expiring 05/06/20, European Style	$	(6,797,528	)
	(20,000,000	)	Expiring 10/14/11. If exercised the Series receives floating 3 month LIBOR, and pays 4.98%, expiring 10/18/21, European Style		(3,692,912	)

			Total Call Options Written (Premium $2,789,320)		(10,490,440	)

			Put Options Written — (0.0)%
	(35,600,000	)	Expiring 05/04/10. If exercised the Series receives 4.88%, and pays floating 3 month LIBOR, expiring 05/06/20, European Style		(299,813	)
	(20,000,000	)	Expiring 10/14/11. If exercised the Series receives 4.98%, and pays floating 3 month LIBOR, expiring 10/18/21, European Style		(339,430	)

			Total Put Options Written (Premium $2,789,320)		(639,243	)

Principal

			Securities Sold Short — (15.0)%
$	(24,600,000	)	Fannie Mae, TBA, 5.50%, 01/01/24		(25,330,325	)
	(900,000	)	Fannie Mae, TBA, 6.00%, 01/01/24		(933,187	)
	(45,900,000	)	Fannie Mae, TBA, 5.00%, 01/01/39		(46,861,054	)
	(90,600,000	)	Fannie Mae, TBA, 5.50%, 01/01/39		(92,865,000	)
	(40,700,000	)	Fannie Mae, TBA, 6.00%, 01/01/39		(41,895,562	)
	(29,900,000	)	Fannie Mae, TBA, 6.50%, 01/01/39		(31,049,296	)
	(8,000,000	)	Fannie Mae, TBA, 5.50%, 02/01/39		(8,175,000	)
	(1,900,000	)	Freddie Mac Gold, TBA, 6.00%, 01/01/24		(1,966,500	)
	(700,000	)	Freddie Mac Gold, TBA, 6.50%, 01/01/39		(726,908	)

			Total Securities Sold Short (Proceeds $247,817,336)		(249,802,832	)

			Total Investments net of Call and Put Options Written and Securities Sold Short — 106.9% (Cost $1,937,562,430)		1,782,524,793
			Liabilities less other assets — (6.9)%		(115,212,108	)

			Net Assets — 100.0%	$	1,667,312,685

The aggregate cost of securities for federal income tax purposes at December 31, 2008 is $2,191,657,611.

The following amounts are based on cost for federal income tax purposes:


Gross unrealized appreciation	$	46,643,819
Gross unrealized depreciation		(194,844,122	)

Net unrealized depreciation	$	(148,200,303	)

See summary of footnotes and abbreviations to portfolios.

See notes to financial statements.

TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS

December 31, 2008


Principal			Value

		US Treasury Securities — 3.7%
		US Treasury Bonds — 1.0%
$	50,000	8.75%, 05/15/17	$	73,578
	740,000	8.88%, 08/15/17		1,101,617
	550,000	6.38%, 08/15/27		804,891
	670,000	5.38%, 02/15/31		920,622
	80,000	4.75%, 02/15/37		111,475

				3,012,183

		US Treasury Inflation Index — 2.0%
	44,552	1.88%, 07/15/15		42,084
	130,984	2.00%, 01/15/16		125,437
	461,283	2.50%, 07/15/16		457,643
	20,906	2.63%, 07/15/17		21,424
	206,879	2.38%, 01/15/25		203,324
	87,322	2.00%, 01/15/26		82,254
	1,804,790	2.38%, 01/15/27(5)		1,813,108
	3,464,302	1.75%, 01/15/28(5)		3,200,688

				5,945,962

		US Treasury Notes — 0.1%
	10,000	1.75%, 11/15/11		10,228
	170,000	1.13%, 12/15/11		170,758
	130,000	1.50%, 12/31/13		129,705

				310,691

		US Treasury Strips — 0.6%
	2,995,000	Zero coupon, 11/15/24		1,950,584

		Total US Treasury Securities (Cost $9,856,561)		11,219,420

		US Government Agency Securities — 58.7%
		Fannie Mae — 40.3%
	790,000	3.00%, 07/12/10		814,234
	940,000	5.25%, 08/01/12		990,779
	1,165,226	PL# 256219, 5.50%, 04/01/36		1,171,211
	2,286,719	PL# 256552, 5.50%, 01/01/37		2,346,843
	2,749,395	PL# 735580, 5.00%, 06/01/35		2,812,662
	268,479	PL# 735809, Variable Rate, 4.83%, 08/01/35(1)		269,126
	4,247,892	PL# 745275, 5.00%, 02/01/36		4,342,987
	2,029,109	PL# 745959, 5.50%, 11/01/36		2,082,460
	27,386	PL# 759626, 6.00%, 02/01/34		28,290
	41,130	PL# 795774, 6.00%, 10/01/34		42,442
	183,584	PL# 796050, 6.00%, 08/01/34		189,443
	1,104,858	PL# 796278, 6.00%, 12/01/34		1,140,122
	39,921	PL# 801516, HB, Variable Rate, 4.71%, 08/01/34(1)		39,862
	437,862	PL# 809169, 6.00%, 01/01/35		451,838
	85,595	PL# 810896, HB, Variable Rate, 4.83%, 01/01/35(1)		86,047
	17,275	PL# 820426, 6.00%, 03/01/35		17,808
	460,001	PL# 852523, 5.50%, 02/01/36		472,095
	1,030,209	PL# 888022, 5.00%, 02/01/36		1,053,272
	889,900	PL# 888893, 5.50%, 08/01/37		913,298
	95,447	PL# 889745, 5.50%, 06/01/36		98,076
	377,729	PL# 893681, 6.00%, 10/01/36		389,313
	674,508	PL# 893923, 6.00%, 10/01/36		695,194
	919,556	PL# 894005, 6.00%, 10/01/36		947,757
	1,306,340	PL# 904000, 6.00%, 01/01/37		1,346,402
	2,906,986	PL# 916397, 6.50%, 05/01/37		3,022,648
	1,346,558	PL# 918653, 6.00%, 06/01/37		1,387,778
	135,466	PL# 929774, 5.50%, 07/01/38		139,007
	380,273	PL# 934327, 6.00%, 07/01/38		391,876
	91,539	PL# 950385, HB, Variable Rate, 5.86%, 08/01/37(1)		95,101
	9,337,922	PL# 950694, 6.00%, 10/01/37		9,623,768
	796,214	PL# 975639, 5.00%, 07/01/38		813,790
	2,934,054	PL# 981034, 5.00%, 04/01/38		2,998,820
	661,830	PL# 983897, 5.50%, 06/01/38		679,128
	298,614	PL# 985143, 5.00%, 09/01/38		305,206
	5,060,621	PL# 985730, 5.50%, 06/01/38		5,192,887
	996,319	PL# 987420, 5.00%, 07/01/38		1,018,311
	7,100,000	TBA, 5.50%, 01/01/24		7,310,785
	4,800,000	TBA, 6.00%, 01/01/24		4,977,000
	55,730,000	TBA, 5.00%, 01/01/39		56,896,876
	2,400,000	TBA, 5.50%, 01/01/39		2,460,000
	1,000,000	TBA, 6.00%, 01/01/39		1,029,375

				121,083,917

		Federal Agricultural Mortgage Corp. — 0.3%
	900,000	144A, 5.13%, 04/19/17(5)		1,015,758

		Federal Home Loan Bank — 0.2%
	490,000	5.50%, 07/15/36(4)		627,950

		Freddie Mac — 2.7%
	90,575	PL# 1B2694, Variable Rate, 4.36%, 12/01/34(1)(5)		90,325
	759,020	PL# 1G2201, HB, Variable Rate, 6.09%, 09/01/37(1)(4)		776,873
	3,478,560	PL# 1G2403, HB, Variable Rate, 5.57%, 01/01/38(1)		3,557,037
	323,385	PL# 1N1447, HB, Variable Rate, 5.77%, 02/01/37(1)(4)		330,733
	1,882,410	PL# 1N1454, HB, Variable Rate, 5.88%, 04/01/37(1)(4)		1,924,165
	612,333	PL# 1N1463, HB, Variable Rate, 5.88%, 05/01/37(1)(4)		627,092
	820,318	PL# 1N1582, HB, Variable Rate, 5.93%, 05/01/37(1)(4)		840,282

				8,146,507

		Freddie Mac Gold — 11.7%
	802,912	PL# A39644, 5.50%, 11/01/35		822,894

See notes to financial statements.

TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		US Government Agency Securities (continued)
		Freddie Mac Gold (continued)

$	768,976	PL# A39756, 5.00%, 11/01/35(4)	$	786,912
	9,487,670	PL# G02427, 5.50%, 12/01/36(4)(5)		9,722,300
	917,641	PL# G03092, 5.50%, 07/01/37(4)		940,283
	4,364,309	PL# G03695, 5.50%, 11/01/37(4)		4,472,239
	8,031,949	PL# G03696, 5.50%, 01/01/38(4)		8,230,128
	5,698,832	PL# G04222, 5.50%, 04/01/38(4)		5,839,444
	1,500,000	TBA, 5.00%, 01/01/24		1,539,375
	400,000	TBA, 5.00%, 01/01/39		408,750
	2,400,000	TBA, 6.00%, 01/01/39		2,472,000

				35,234,325

		Government National Mortgage Association — 3.3%
	530,891	PL# 605617, 5.00%, 07/15/34		546,291
	1,260,804	PL# 612902, 5.00%, 07/15/33		1,298,165
	537,799	PL# 636084, 5.00%, 01/15/35		553,063
	1,577,313	PL# 644631, 5.00%, 09/15/35		1,622,081
	2,400,000	TBA, 5.00%, 01/01/39		2,460,000
	3,400,000	TBA, 5.50%, 01/01/39		3,505,719

				9,985,319

		Tennessee Valley Authority — 0.2%
	440,000	5.98%, 04/01/36		571,120

		Total US Government Agency Securities (Cost $171,989,787)		176,664,896

		Corporate Bonds and Notes — 52.4%
		Advertising — 0.0%
	90,000	Lamar Media Corp., Series B, 6.63%, 08/15/15		65,025

		Aerospace and Defense — 0.0%
	45,000	DRS Technologies, Inc., 6.63%, 02/01/16(5)		45,000

		Airlines — 0.2%
	300,000	Continental Airlines, Inc., Series A, 5.98%, 04/19/22(5)		201,000
	73,889	Delta Air Lines, Inc., Series 2001-1, Class A-1, 6.62%, 03/18/11(5)		64,283
	373,974	Delta Air Lines, Inc., Series 2007-1, Class A, 6.82%, 08/10/22(5)		217,089

				482,372

		Apparel: Manufacturing and Retail — 0.0%
	200,000	Neiman Marcus Group, Inc., 7.13%, 06/01/28		94,000

		Automobile: Rental — 0.0%
	75,000	Hertz Corp., 8.88%, 01/01/14		46,125
	135,000	Hertz Corp., 10.50%, 01/01/16		61,594

				107,719

		Automobiles/Motor Vehicles, Automotive Equipment and Repairs — 0.3%
	600,000	Daimler Chrysler NA Holding, 5.88%, 03/15/11(5)		523,201
	1,100,000	Ford Motor Company, 7.45%, 07/16/31		308,000
	840,000	General Motors Corp., 8.25%, 07/15/23(8)		138,600
	150,000	General Motors Corp., 8.38%, 07/15/33		26,250
	55,000	Visteon Corp., 8.25%, 08/01/10		17,050
	141,000	Visteon Corp. — 144A, 12.25%, 12/31/16		33,840

				1,046,941

		Banks and Financial Services — 11.9%
	100,000	AGFC Capital Trust I — 144A, Variable Rate, 6.00%, 01/15/67(1)(5)		23,885
	420,000	Aiful Corp. — 144A (Japan), 5.00%, 08/10/10(5)		230,916
	420,000	American Express Company, Variable Rate, 6.80%, 09/01/66(1)(5)		217,413
	220,000	American Express Credit Company, Series MTNC, 5.88%, 05/02/13(5)		211,194
	220,000	American General Finance Corp. Series MTNJ, 6.90%, 12/15/17(5)		95,210
	30,000	BAC Capital Trust XIV, Variable Rate, 5.63%, perpetual(1)(5)		12,020
	800,000	Bear Stearns Companies, Inc. (The), 7.25%, 02/01/18(5)		876,685
	860,000	Caterpillar Financial Service Corp., Series MTNF, 6.20%, 09/30/13(5)		886,589
	1,160,000	Citigroup, Inc., 6.50%, 08/19/13(5)		1,170,540
	1,260,000	Citigroup, Inc., 5.00%, 09/15/14(5)		1,108,273
	1,030,000	Citigroup, Inc., 6.88%, 03/05/38(5)		1,172,024

See notes to financial statements.

TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Banks and Financial Services (continued)

$	80,000	Countrywide Financial Corp., Series MTN, Floating Rate, 4.35%, 01/05/09(2)	$	80,000
	2,440,000	Countrywide Financial Corp., Series MTNA, 4.50%, 06/15/10(5)		2,397,331
	3,645,000	Ford Motor Credit Company LLC, 5.80%, 01/12/09		3,634,673
	720,000	Ford Motor Credit Company LLC, 7.38%, 10/28/09		632,319
	1,110,000	Ford Motor Credit Company LLC, 12.00%, 05/15/15		828,902
	800,000	General Motors Acceptance Corp., 5.85%, 01/14/09(8)		794,786
	290,000	Glitnir Banki HF — 144A (Iceland), 6.33%, 07/28/11(9)		13,775
	800,000	Glitnir Banki HF — 144A (Iceland), Variable Rate, 6.69%, 06/15/16(1)(9)		120
	2,040,000	GMAC LLC, 5.63%, 05/15/09		1,960,370
	1,184,103	GMAC LLC — 144A, 6.63%, 05/15/12(14)		1,129,622
	295,081	GMAC LLC — 144A, 7.50%, 12/31/13(14)		234,404
	256,840	GMAC LLC — 144A, 8.00%, 12/31/18(14)		152,520
	362,272	GMAC LLC — 144A, 8.00%, 11/01/31(14)		247,701
	380,000	Goldman Sachs Group, Inc. (The), 4.50%, 06/15/10		374,448
	140,000	Goldman Sachs Group, Inc. (The), 5.45%, 11/01/12		133,547
	100,000	HBOS Treasury Services PLC — 144A, 5.25%, 02/21/17		97,298
	960,000	HSBC Finance Corp., 4.63%, 09/15/10		947,646
	100,000	HSBK Europe BV — 144A (the Netherlands), 9.25%, 10/16/13		73,000
	270,000	ICICI Bank, Ltd. — 144A (India), Variable Rate, 6.38%, 04/30/22(1)		141,780
	920,000	ICICI Bank, Ltd. — REG S (India), Variable Rate, 6.38%, 04/30/22(1)		484,951
	920,000	JPMorgan Chase & Company, 5.13%, 09/15/14		891,552
	1,100,000	JPMorgan Chase & Company, 5.15%, 10/01/15		1,038,683
	950,000	JPMorgan Chase & Company, 6.13%, 06/27/17		934,916
	80,000	JPMorgan Chase & Company, Series 2, 2.13%, 06/22/12		80,333
	200,000	Kaupthing Bank hf — 144A (Iceland), 7.13%, 05/19/16(9)		1,500
	2,400,000	Kaupthing Bank hf — 144A, Series 1 (Iceland), 7.63%, 02/28/15(9)(14)(20)		144,000
	320,000	Landisbanki Islands hf — 144A (Iceland), 6.10%, 08/25/11(9)		5,600
	410,000	Lehman Brothers E — Capital Trust I, Floating Rate, 3.02%, 08/19/65(2)(9)		41
	480,000	Lehman Brothers Holdings, Inc., Series MTN, 5.25%, 02/06/12(9)		45,600
	970,000	Lehman Brothers Holdings, Inc., Series MTN, 6.75%, 12/28/17(9)		97
	1,420,000	Merrill Lynch & Company, Inc., Series MTN, 6.88%, 04/25/18		1,485,357
	350,000	Mitsubishi UFJ Financial Group Capital Financial I, Ltd. (Cayman Islands), Variable Rate, 6.35%, perpetual(1)		243,853
	610,000	Morgan Stanley, Series MTN, 5.63%, 01/09/12		578,467
	200,000	Morgan Stanley, Series MTNF, Floating Rate, 4.95%, 10/18/16(2)		137,611
	10,000	Rabobank Capital Funding Trust II — 144A, Variable Rate, 5.26%, perpetual(1)		5,290
	20,000	Rabobank Capital Funding Trust III — 144A, Variable Rate, 5.25%, perpetual(1)		10,965
	490,000	Resona Preferred Global Securities — 144A (Cayman Islands), Variable Rate, 7.19%, perpetual(1)		233,283
	200,000	Royal Bank of Scotland Group PLC, Series MTNU (United Kingdom), Variable Rate, 7.64%, perpetual(1)		79,657
	780,000	RSHB Capital — 144A (Luxembourg), 6.30%, 05/15/17		444,600
	220,000	Santander Issuances — 144A (Spain), Variable Rate, 5.81%, 06/20/16(1)		197,923
	610,000	Shinsei Financial, Ltd. — 144A (Cayman Islands), Variable Rate, 6.42%, perpetual(1)		127,583

	120,000	SLM Corp., Series MTN, 5.05%, 11/14/14		79,859

See notes to financial statements.

TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Banks and Financial Services (continued)

$	675,000	SLM Corp., Series MTNA, 5.00%, 10/01/13	$	482,976
	1,005,000	SLM Corp., Series MTNA, 5.38%, 05/15/14		678,248
	40,000	SLM Corp., Series MTNA, 5.00%, 04/15/15		25,376
	105,000	SLM Corp., Series MTNA, 5.63%, 08/01/33		63,698
	400,000	SunTrust Banks, Inc., Series CD, 4.42%, 06/15/09		398,567
	150,000	SunTrust Capital VIII, Variable Rate, 6.10%, 12/15/36(1)		105,602
	270,000	TNK-BP Finance SA — 144A (Luxembourg), 7.50%, 07/18/16		140,400
	100,000	TNK-BP Finance SA — 144A (Luxembourg), 6.63%, 03/20/17		48,000
	108,000	TNK-BP Finance SA — REG S (Luxembourg), 7.50%, 07/18/16		56,700
	510,000	TNK-BP Finance SA, Series 6 — 144A, (Luxembourg), 7.88%, 03/13/18		255,000
	520,000	Turanalem Finance BV — 144A (the Netherlands), 8.25%, 01/22/37		223,600
	1,860,000	Turanalem Finance BV (the Netherlands), 8.25%, 01/22/37		799,800
	1,300,000	UBS AG Stamford Branch, Series MTN (Switzerland), 5.75%, 04/25/18		1,179,874
	460,000	Wachovia Capital Trust III, Variable Rate, 5.80%, perpetual(1)		271,400
	1,150,000	Wachovia Corp., 5.25%, 08/01/14		1,071,241
	940,000	Wachovia Corp., Series MTNG, 5.50%, 05/01/13		929,511
	340,000	Wells Fargo Capital X, 5.95%, 12/15/36		291,396
	1,300,000	Wells Fargo Capital XV, Variable Rate, 9.75%, perpetual(1)		1,313,000

				35,465,101

		Broadcast Services/Media — 1.2%
	130,000	CCH I, LLC/CCH I Capital Corp., 11.00%, 10/01/15		22,750
	20,000	Clear Channel Communications, Inc., 6.25%, 03/15/11		6,000
	90,000	Clear Channel Communications, Inc., 5.50%, 09/15/14		10,800
	50,000	Clear Channel Communications, Inc., 4.90%, 05/15/15		5,500
	320,000	Comcast Cable Communications, 8.88%, 05/01/17(5)		341,713
	730,000	Comcast Corp., 6.50%, 01/15/15(5)		717,539
	50,000	Comcast Corp., 6.50%, 01/15/17(5)		49,386
	210,000	Comcast Corp., 5.88%, 02/15/18(5)		198,996
	235,000	CSC Holdings, Inc., Series B, 7.63%, 04/01/11		221,488
	115,000	Echostar DBS Corp., 7.00%, 10/01/13		99,763
	145,000	Echostar DBS Corp., 7.75%, 05/31/15		123,250
	20,000	News America, Inc., 6.20%, 12/15/34		18,251
	40,000	News America, Inc., 6.65%, 11/15/37		39,590
	60,000	Rogers Cable, Inc. (Canada), 6.75%, 03/15/15		58,429
	450,000	Time Warner Cable, Inc., 5.85%, 05/01/17		411,099
	180,000	Time Warner Entertainment, 8.38%, 07/15/33		181,643
	720,000	Time Warner, Inc., 6.88%, 05/01/12(5)		691,701
	290,000	Time Warner, Inc., 7.70%, 05/01/32(5)		290,358

				3,488,256

		Chemicals — 0.4%
	1,020,000	Dow Chemical Company, 5.70%, 05/15/18(5)		906,177
	60,000	Georgia Gulf Corp., 9.50%, 10/15/14		18,000
	400,000	PPG Industries, Inc., 6.65%, 03/15/18		394,022
	44,000	Westlake Chemical Corp., 6.63%, 01/15/16		25,520

				1,343,719

		Computer Equipment, Software and Services — 0.2%
	530,000	Electronic Data Systems, 7.13%, 10/15/09		538,811
	240,000	Sungard Data Systems, Inc., 10.25%, 08/15/15		158,400

				697,211

		Consumer Goods and Services — 0.1%
	110,000	Reynolds American, Inc., 7.63%, 06/01/16		91,609
	190,000	Reynolds American, Inc., 6.75%, 06/15/17		150,820

				242,429

See notes to financial statements.

TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)

		Containers and Packaging — 0.0%
$	110,000	Graham Packaging Company, LP, 8.50%, 10/15/12	$	78,375

		Electronics — 0.0%
	15,000	NXP BV/NXP Funding LLC (the Netherlands), 7.88%, 10/15/14		5,850
	55,000	NXP BV/NXP Funding LLC (the Netherlands), 9.50%, 10/15/15		10,450

				16,300

		Entertainment, Leisure and Recreation — 0.1%
	15,000	Boyd Gaming Corp., 6.75%, 04/15/14		9,450
	40,000	Boyd Gaming Corp., 7.13%, 02/01/16		23,600
	60,000	Inn of The Mountain Gods, 12.00%, 11/15/10		19,800
	135,000	MGM MIRAGE, 7.63%, 01/15/17		87,075
	30,000	River Rock Entertainment Authority, 9.75%, 11/01/11		24,900
	140,000	Station Casinos, Inc., 7.75%, 08/15/16		26,600

				191,425

		Environmental Waste Management and Recycling Services — 0.2%
	600,000	Waste Management, Inc., 6.38%, 11/15/12		559,517

		Equipment Rental and Leasing — 0.4%
	3,330,000	International Lease Finance Corp. E-Capital Trust I — 144A, Variable Rate, 5.90%, 12/21/65(1)		1,067,301
	440,000	International Lease Finance Corp. E-Capital Trust II — 144A, Variable Rate, 6.25%, 12/21/65(1)		183,750

				1,251,051

		Food and Beverage — 0.7%
	1,290,000	Diageo Capital PLC (United Kingdom), 7.38%, 01/15/14(5)		1,374,174
	600,000	Pepsico, Inc., 7.90%, 11/01/18		735,388

				2,109,562

		Funeral Services — 0.0%
	50,000	Service Corp. International, 7.63%, 10/01/18		37,000
	55,000	Service Corp. International, 7.50%, 04/01/27		35,200

				72,200

		Insurance — 0.5%
	130,000	American International Group, Inc., Series MTNG, 5.85%, 01/16/18(5)		87,137
	20,000	ASIF Global Financing XIX — 144A, 4.90%, 01/17/13(5)		16,055
	825,000	Chubb Corp., 5.75%, 05/15/18(5)		792,138
	220,000	Humana, Inc., 7.20%, 06/15/18		176,921
	600,000	Merna Reinsurance, Ltd., Series B — 144A (Bermuda), Floating Rate, 3.21%, 07/07/10(2)		541,740

				1,613,991

		Machinery — 0.0%
	60,000	Terex Corp., 7.38%, 01/15/14		52,200

		Manufacturing — 0.2%
	120,000	Tyco International Group SA (Luxembourg), 6.38%, 10/15/11		117,953
	440,000	Tyco International Group SA (Luxembourg), 6.00%, 11/15/13		412,859

				530,812

		Medical Equipment, Supplies, and Services — 0.6%
	190,000	Community Health Systems, Inc., 8.88%, 07/15/15		174,800
	230,000	DaVita, Inc., 6.63%, 03/15/13		218,500
	3,000	HCA, Inc., 6.30%, 10/01/12		2,115
	56,000	HCA, Inc., 6.25%, 02/15/13		35,000
	110,000	HCA, Inc., 6.75%, 07/15/13		69,300
	50,000	HCA, Inc., 9.13%, 11/15/14		46,375
	100,000	HCA, Inc., 9.25%, 11/15/16		91,750
	707,000	HCA, Inc., 9.63%, 11/15/16(12)		551,460
	555,000	Tenet Healthcare Corp., 9.88%, 07/01/14		446,775

See notes to financial statements.

TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Medical Equipment, Supplies, and Services (continued)

$	50,000	WellPoint, Inc., 5.88%, 06/15/17	$	45,507

				1,681,582

		Metals and Mining — 1.2%
	730,000	Alcoa, Inc., 6.00%, 07/15/13(5)		660,054
	880,000	Evraz Group SA — 144A (Luxembourg), 8.88%, 04/24/13		448,800
	320,000	Freeport-McMoRan Copper & Gold, Inc., 8.38%, 04/01/17		262,400
	870,000	Rio Tinto Finance USA, Ltd. (Australia), 6.50%, 07/15/18		637,859
	155,000	Steel Dynamics, Inc., 7.38%, 11/01/12		113,150
	105,000	Steel Dynamics, Inc., 6.75%, 04/01/15		72,450
	1,304,000	Vale Overseas, Ltd. (Cayman Islands), 6.88%, 11/21/36		1,183,640
	520,000	Vedanta Resources PLC — 144A (United Kingdom), 8.75%, 01/15/14		312,000

				3,690,353

		Office Equipment, Supplies, and Services — 0.0%
	30,000	Xerox Corp., 6.75%, 02/01/17		21,769

		Oil, Coal and Gas — 5.5%
	740,000	Anadarko Finance Company, Series B, 7.50%, 05/01/31(5)		654,365
	80,000	Anadarko Petroleum Corp., 5.95%, 09/15/16(5)		70,665
	1,250,000	Anadarko Petroleum Corp., 6.45%, 09/15/36(5)		986,043
	240,000	Apache Corp., 5.25%, 04/15/13(5)		243,186
	950,000	Apache Corp., 5.63%, 01/15/17(5)		956,380
	800,000	Baker Hughes, Inc., 7.50%, 11/15/18(5)		886,926
	60,000	Chesapeake Energy Corp., 6.38%, 06/15/15		47,400
	140,000	Chesapeake Energy Corp., 6.25%, 01/15/18		103,600
	195,000	Complete Production Services, Inc., 8.00%, 12/15/16		122,850
	210,000	Conoco, Inc., 6.95%, 04/15/29(5)		225,981
	305,000	Dynegy Holdings, Inc., 7.75%, 06/01/19		210,450
	1,420,000	El Paso Corp., 7.00%, 06/15/17		1,111,298
	19,000	El Paso Corp., Series MTN, 7.80%, 08/01/31		12,379
	92,000	El Paso Corp., Series MTN, 7.75%, 01/15/32		59,719
	110,000	El Paso Natural Gas, 8.38%, 06/15/32(5)		94,918
	770,000	Gaz Capital (Gazprom) — 144A (Luxembourg), 6.51%, 03/07/22		458,150
	80,000	Hess Corp., 7.88%, 10/01/29(5)		76,799
	440,000	Hess Corp., 7.30%, 08/15/31(5)		400,337
	760,000	Intergas Finance BV — 144A (the Netherlands), 6.38%, 05/14/17		440,800
	1,010,000	KazMunaiGaz Finance Sub BV — 144A (Kazakhstan), 8.38%, 07/02/13		787,800
	200,000	Kerr-McGee Corp., 6.95%, 07/01/24		175,370
	295,000	Kerr-McGee Corp., 7.88%, 09/15/31		271,561
	310,000	Key Energy Services, Inc., 8.38%, 12/01/14		204,600
	30,000	Kinder Morgan Energy Partners LP, 6.30%, 02/01/09		29,971
	470,000	Kinder Morgan Energy Partners LP, 6.75%, 03/15/11		457,141
	130,000	Kinder Morgan Energy Partners LP, 5.85%, 09/15/12		119,054
	260,000	Kinder Morgan Energy Partners LP, 6.00%, 02/01/17		225,726
	1,030,000	Kinder Morgan Energy Partners LP, Series MTN, 6.95%, 01/15/38		833,009
	1,060,000	Occidental Petroleum Corp., 7.00%, 11/01/13		1,156,931
	160,000	OPTI Canada, Inc. (Canada), 7.88%, 12/15/14		81,600
	120,000	OPTI Canada, Inc. (Canada), 8.25%, 12/15/14		64,800
	45,000	Peabody Energy Corp., Series B, 6.88%, 03/15/13		42,638
	1,300,000	Pemex Project Funding Master Trust, 6.63%, 06/15/35		1,100,450
	120,000	Pemex Project Funding Master Trust — 144A, 6.63%, 06/15/35		101,580
	720,000	Petrobas International Finance Company (Cayman Islands), 6.13%, 10/06/16		702,000

See notes to financial statements.

TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Oil, Coal and Gas (continued)

$	125,000	Semgroup LP — 144A, 8.75%, 11/15/15(8)(9)(20)	$	4,375
	5,000	Southern Natural Gas, 8.00%, 03/01/32		4,166
	60,000	Southern Natural Gas — 144A, 5.90%, 04/01/17		47,547
	65,000	Suburban Propane Partners, 6.88%, 12/15/13		53,300
	20,000	Tennessee Gas Pipeline, 7.63%, 04/01/37		15,875
	120,000	Transocean, Inc. (Cayman Islands), 5.25%, 03/15/13		111,456
	370,000	Williams Companies, Inc., 7.88%, 09/01/21		283,050
	380,000	Williams Companies, Inc., 7.75%, 06/15/31		260,300
	130,000	Williams Companies, Inc., 8.75%, 03/15/32		96,850
	840,000	Williams Companies, Inc., Series A, 7.50%, 01/15/31		562,800
	550,000	XTO Energy, Inc., 7.50%, 04/15/12		543,597
	340,000	XTO Energy, Inc., 5.65%, 04/01/16		311,939
	10,000	XTO Energy, Inc., 6.25%, 08/01/17		9,603
	270,000	XTO Energy, Inc., 5.50%, 06/15/18		244,425
	70,000	XTO Energy, Inc., 6.75%, 08/01/37		65,559

				16,131,319

		Paper and Forest Products — 0.2%
	820,000	Weyerhaeuser Company, 6.75%, 03/15/12		734,023

		Pharmaceuticals/Research and Development — 0.3%
	200,000	Abbott Laboratories, 5.60%, 11/30/17(5)		216,436
	280,000	FMC Finance III SA (Luxembourg), 6.88%, 07/15/17		261,800
	470,000	Wyeth, 5.95%, 04/01/37		521,835

				1,000,071

		Printing and Publishing — 0.0%
	440,000	Idearc, Inc., 8.00%, 11/15/16		33,000
	40,000	RH Donnelley Corp., Series A-4, 8.88%, 10/15/17		6,000
	40,000	Sun Media Corp. (Canada), 7.63%, 02/15/13		32,200
	80,000	TL Acquisitions, Inc. — 144A, 10.50%, 01/15/15		32,800

				104,000

		Private Asset Backed: Automobiles/Motor Vehicles, Automotive Equipment and Repairs — 0.5%
	1,450,666	Wells Fargo Financial Auto Owner Trust, Series 2005-A, Class A4, 4.28%, 05/15/12		1,412,087

		Private Asset Backed: Banks and Financial Services — 1.6%
	2,376,270	Conseco Finance Securitizations Corp., Series 2002-1, Class A, 6.68%, 12/01/33(5)		1,914,030
	2,490,923	Conseco Finance Securitizations Corp., Series 2002-2, Class A2, 6.03%, 03/01/33(5)		1,800,389
	140,000	Morgan Stanley Capital I, Series 2005-HQ6, Class A4A, 4.99%, 08/13/42		114,377
	630,000	Morgan Stanley Capital I, Series 2006-IQ12, Class A4, 5.33%, 12/15/43		473,951
	750,000	Morgan Stanley Capital I, Series 2007-IQ14, Class A4, 5.69%, 04/15/49		562,840

				4,865,587

		Private Asset Backed: Credit Cards — 0.4%
	1,530,000	Washington Mutual Master Note Trust — 144A, Series 2006-A3A, Class A3, Floating Rate, 1.23%, 09/15/13(3)		1,339,326

		Private Asset Backed: Mortgage and Home Equity — 19.1%
	504,844	AAMES Mortgage Investment Trust — 144A, Series 2005-3, Class A1, Floating Rate, 0.62%, 08/25/35(3)		470,181
	123,835	Accredited Mortgage Loan Trust, Series 2005-3, Class A1, Floating Rate, 0.71%, 09/25/35(3)		96,906
	55,766	Adjustable Rate Mortgage Trust, Series 2004-2, Class 7A2, Floating Rate, 0.89%, 02/25/35(3)		27,115
	27,262	Adjustable Rate Mortgage Trust, Series 2004-5, Class 7A2, Floating Rate, 0.85%, 04/25/35(3)		12,919

See notes to financial statements.

TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Private Asset Backed: Mortgage and Home Equity (continued)

$	1,621,027	American Home Mortgage Assets Trust, Series 2006-2, Class 2A1, Floating Rate, 0.66%, 09/25/46(3)	$	642,180
	274,749	American Home Mortgage Investment Trust, Series 2005-4, Class 1A1, Floating Rate, 0.76%, 11/25/45(3)		131,579
	514,502	Amortizing Residential Collateral Trust, Series 2002-BC5, Class M1, Floating Rate, 1.51%, 07/25/32(3)		357,909
	1,214,000	Banc of America Commercial Mortgage, Inc., Series 2005-3, Class A4, 4.67%, 07/10/43(5)		976,738
	280,000	Banc of America Commercial Mortgage, Inc., Series 2007-3, Class A3, Floating Rate, 5.66%, 06/10/49(3)(5)		183,033
	811,594	Banc of America Funding Corp., Series 2005-E, Class 4A1, Floating Rate, 4.52%, 03/20/35(3)		573,516
	498,647	Banc of America Mortgage Securities, Series 2005-A, Class 2A1, Floating Rate, 4.44%, 02/25/35(3)		330,932
	206,579	Bear Stearns ALT-A Trust, Series 2004-11, Class 2A2, Floating Rate, 5.41%, 11/25/34(3)		113,335
	977,466	Bear Stearns Mortgage Funding Trust, Series 2006-AR1, Class 2A2, Floating Rate, 0.73%, 08/25/36(3)		192,434
	1,571,972	Bear Stearns Mortgage Funding Trust, Series 2006-AR5, Class 1A2, Floating Rate, 0.68%, 12/25/46(3)		448,459
	1,417,832	Bear Stearns Second Lien Trust — 144A, Series 2007-SV1A, Class A3, Floating Rate, 0.72%, 12/25/36(3)		584,998
	7,449,727	Bear Stearns Structured Products, Inc. — 144A, Series 2007-R11, Class A1A, Floating Rate, 1.07%, 09/27/37(3)		7,244,711
	1,150,000	Chase Funding Mortgage Loan Asset-Backed, Series 2003-4, Class 1A5, 5.42%, 05/25/33(5)		906,553
	2,434,071	Countrywide Alternative Loan Trust, Series 2005-36, Class 2A1A, Floating Rate, 0.78%, 08/25/35(3)		1,080,376
	297,026	Countrywide Alternative Loan Trust, Series 2005-36, Class 3A1, Floating Rate, 4.91%, 08/25/35(3)(5)		179,887
	674,950	Countrywide Alternative Loan Trust, Series 2005-38, Class A3, Floating Rate, 0.82%, 09/25/35(3)		304,377
	150,014	Countrywide Alternative Loan Trust, Series 2005-44, Class 1A1, Floating Rate, 0.80%, 10/25/35(3)		69,283
	2,113,069	Countrywide Alternative Loan Trust, Series 2005-51, Class 3A3A, Floating Rate, 0.83%, 11/20/35(3)		984,249
	322,265	Countrywide Alternative Loan Trust, Series 2005-59, Class 1A1, Floating Rate, 0.84%, 11/20/35(3)		161,094
	707,176	Countrywide Alternative Loan Trust, Series 2005-72, Class A1, Floating Rate, 0.74%, 01/25/36(3)		332,409
	936,132	Countrywide Alternative Loan Trust, Series 2005-J12, Class 2A1, Floating Rate, 0.74%, 08/25/35(3)		451,473
	940,915	Countrywide Alternative Loan Trust, Series 2006-OA2, Class A5, Floating Rate, 0.74%, 05/20/46(3)		341,857
	420,099	Countrywide Alternative Loan Trust, Series 2006-OA6, Class 1A1A, Floating Rate, 0.68%, 07/25/46(3)		147,784
	58,775	Countrywide Asset-Backed Certificates, Series 2005-4, Class AF3, 4.46%, 10/25/35(5)		47,889
	446,186	Countrywide Home Equity Loan Trust — 144A, Series 2006-RES, Class 4Q1B, Floating Rate, 1.50%, 12/15/33(3)		89,103
	156,716	Countrywide Home Equity Loan Trust, Series 2005-G, Class 2A, Floating Rate, 1.42%, 12/15/35(3)		61,287
	312,532	Countrywide Home Loans — 144A, Series 2005-R3, Class AF, Floating Rate, 0.87%, 09/25/35(3)		239,745

See notes to financial statements.

TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Private Asset Backed: Mortgage and Home Equity (continued)

$	411,148	Countrywide Home Loans, Series 2003-60, Class 1A1, Floating Rate, 5.02%, 02/25/34(3)	$	287,040
	162,860	Countrywide Home Loans, Series 2004-23, Class A, Floating Rate, 6.41%, 11/25/34(3)		79,347
	458,131	Countrywide Home Loans, Series 2005-3, Class 1A2, Floating Rate, 0.76%, 04/25/35(3)		224,439
	279,569	Credit Suisse Mortgage Capital Certificates — 144A, Series 2006-CF2, Class A1, Floating Rate, 0.73%, 05/25/36(3)		153,794
	3,110,000	Credit Suisse Mortgage Capital Certificates, Series 2006-C4, Class A3, 5.47%, 09/15/39(5)		2,288,226
	888,138	CS First Boston Mortgage Securities Corp., Series 2004-AR5, Class 7A2, Floating Rate, 4.61%, 06/25/34(3)		651,411
	1,270,000	Deutsche Mortgage Securities, Inc. — 144A, Series 2005-WF1, Class 1A3, Floating Rate, 5.10%, 06/26/35(3)(5)		917,912
	725,329	First Horizon Alternative Mortgage Securities, Series 2006-FA8, Class 1A8, Floating Rate, 0.84%, 02/25/37(3)		217,081
	310,000	GE Capital Commercial Mortgage Corp., Series 2005-C4, Class A4, Floating Rate, 5.33%, 11/10/45(3)		256,812
	210,000	GE Capital Commercial Mortgage Corp., Series 2007-C1, Class A4, 5.54%, 02/10/17		156,523
	1,000,000	GMAC Commercial Mortgage Securities, Inc., Series 2006-C1, Class A4, 5.24%, 11/10/45		796,877
	55,177	GMAC Mortgage Corp. Loan Trust, Series 2003-AR2, Class 1A1, Floating Rate, 5.63%, 12/19/33(3)		54,790
	256,218	GMAC Mortgage Corp. Loan Trust, Series 2005-AR1, Class 3A, Floating Rate, 4.64%, 03/18/35(3)		151,483
	388,717	Greenpoint Mortgage Funding Trust, Series 2006-AR4, Class A1A, Floating Rate, 0.57%, 09/25/46(3)		292,366
	1,304,781	Greenpoint Mortgage Funding Trust, Series 2007-AR1, Class 1A1A, Floating Rate, 0.55%, 02/25/47(3)		658,765
	200,000	GS Mortgage Securities Corp. II, Series 2005-GG4, Class AABA, 4.68%, 07/10/39		177,079
	2,516,374	Harborview Mortgage Loan Trust, Series 2006-10, Class 2A1A, Floating Rate, 0.76%, 11/19/36(3)		1,002,100
	110,240	Impac CMB Trust, Series 2004-6, Class 1A1, Floating Rate, 1.27%, 10/25/34(3)		43,384
	1,347,921	IndyMac INDA Mortgage Loan Trust, Series 2007-AR7, Class 1A1, Floating Rate, 6.18%, 11/25/37(3)		880,040
	2,352,119	IndyMac Index Mortgage Loan Trust, Series 2005-AR14, Class 2A1A, Floating Rate, 0.77%, 07/25/35(3)		1,080,905
	101,201	IndyMac Index Mortgage Loan Trust, Series 2005-AR15, Class A2, 5.10%, 09/25/35		48,590
	2,051,685	IndyMac Index Mortgage Loan Trust, Series 2007-AR15, Class 2A1, Floating Rate, 5.94%, 08/25/37(3)		832,966
	1,100,000	JPMorgan Chase Commercial Mortgage Securities Corp., Series 2007-LD11, Class A3, Floating Rate, 5.82%, 06/15/49(3)		688,789
	1,590,000	JPMorgan Chase Commercial Mortgage Securities Corp., Series 2007-LD11, Class A4, Floating Rate, 5.82%, 06/15/49(3)		1,122,899
	934,091	JPMorgan Mortgage Trust, Series 2004-A1, Class 1A1, Floating Rate, 4.80%, 02/25/34(3)		703,821
	218,621	JPMorgan Mortgage Trust, Series 2004-A3, Class 1A1, Floating Rate, 4.30%, 07/25/34(3)		167,833
	492,013	JPMorgan Mortgage Trust, Series 2006-A2, Class 5A1, Floating Rate, 5.14%, 11/25/33(3)		370,987
	900,000	LB-UBS Commercial Mortgage Trust, Series 2005-C3, Class A5, 4.74%, 07/15/30		727,364

See notes to financial statements.

TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Private Asset Backed: Mortgage and Home Equity (continued)

$	100,000	LB-UBS Commercial Mortgage Trust, Series 2005-C3, Class AAB, 4.66%, 07/15/30	$	80,453
	200,000	LB-UBS Commercial Mortgage Trust, Series 2005-C5, Class A4, 4.95%, 09/15/40		163,260
	197,954	Lehman XS Trust, Series 2005-5N, Class 1A1, Floating Rate, 0.77%, 11/25/35(3)		89,014
	1,185,385	Lehman XS Trust, Series 2005-5N, Class 3A1A, Floating Rate, 0.77%, 11/25/35(3)		551,714
	159,518	Lehman XS Trust, Series 2005-7N, Class 1A1B, Floating Rate, 0.77%, 12/25/35(3)		45,659
	340,669	Lehman XS Trust, Series 2006-GP4, Class 3A1A, Floating Rate, 0.54%, 08/25/46(3)		261,696
	994,334	Lehman XS Trust, Series 2007-2N, Class 3A1, Floating Rate, 0.56%, 02/25/37(3)		806,302
	1,193,227	Master Adjustable Rate Mortgages Trust — 144A, Series 2007-R5, Class A1, Floating Rate, 5.65%, 11/25/35(3)		640,697
	1,411,636	Master Adjustable Rate Mortgages Trust, Series 2006-OA2, Class 1A1, Floating Rate, 3.06%, 12/25/46(3)		288,016
	280,000	Merrill Lynch Countrywide Commercial Mortgage Trust, Series 2007-5, Class A4, 5.38%, 08/12/48		206,984
	370,000	Merrill Lynch Countrywide Commercial Mortgage Trust, Series 2007-6, Class A4, 5.49%, 03/12/51		254,738
	832,149	Merrill Lynch Mortgage Investors Trust, Series 2004-A1, Class 2A1, Floating Rate, 4.85%, 02/25/34(3)		678,273
	864,944	Merrill Lynch Mortgage Investors Trust, Series 2004-A3, Class 4A3, Floating Rate, 5.03%, 05/25/34(3)		627,548
	136,233	Merrill Lynch Mortgage Investors Trust, Series 2005-A3, Class A1, Floating Rate, 0.74%, 04/25/35(3)		53,359
	1,800,819	Merrill Lynch Mortgage Investors Trust, Series 2007-SD1, Class A1, Floating Rate, 0.92%, 02/25/47(3)		1,311,713
	500,000	Merrill Lynch Mortgage Investors, Inc., Series 2005-A4, Class 2A2, 4.46%, 07/25/35		254,200
	400,000	Merrill Lynch Mortgage Investors, Inc., Series 2005-A5, Class A3, 4.44%, 06/25/35		199,724
	330,000	Merrill Lynch Mortgage Trust, Series 2006-C1, Class A4, Floating Rate, 5.66%, 05/12/39(3)		268,751
	129,236	MLCC Mortgage Investors, Inc., Series 2003-F, Class A1, Floating Rate, 0.79%, 10/25/28(3)		94,871
	528,624	Morgan Stanley Mortgage Loan Trust, Series 2004-8AR, Class 4A2, Floating Rate, 5.36%, 10/25/34(3)		275,960
	1,188,406	Morgan Stanley Mortgage Loan Trust, Series 2006-3AR, Class 2A3, Floating Rate, 5.78%, 03/25/36(3)		542,544
	417,861	Prime Mortgage Trust — 144A, Series 2006-DR1, Class 1A1, 5.50%, 05/25/35		322,683
	197,819	Prime Mortgage Trust — 144A, Series 2006-DR1, Class 1A2, 6.00%, 05/25/35		154,214
	1,064,756	Prime Mortgage Trust — 144A, Series 2006-DR1, Class 2A1, 5.50%, 05/25/35		666,165
	890,384	Prime Mortgage Trust — 144A, Series 2006-DR1, Class 2A2, 6.00%, 05/25/35		575,585
	2,076,277	RAAC — 144A, Series 2007-RP4, Class A, Floating Rate, 0.82%, 11/25/46(3)		933,411
	1,200,404	RBSGC Mortgage Pass Through Certificates, Series 2007-B, Class 1A4, Floating Rate, 0.92%, 01/25/37(3)		607,575
	1,500,000	Renaissance Home Equity Loan Trust, Series 2007-2, Class AF6, 5.88%, 06/25/37		861,406

See notes to financial statements.

TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Private Asset Backed: Mortgage and Home Equity (continued)

$	1,040,738	Residential Accredited Loans, Inc., Series 2006-QO10, Class A1, Floating Rate, 0.63%, 01/25/37(3)	$	393,597
	1,233,309	Residential Accredited Loans, Inc., Series 2007-QO1, Class A1, Floating Rate, 0.62%, 02/25/47(3)		468,656
	2,359,000	Residential Accredited Loans, Inc., Series 2007-QO4, Class A1A, Floating Rate, 0.66%, 05/25/47(3)		855,142
	1,353,498	Residential Accredited Loans, Inc., Series 2007-QS1, Class 2A2, Floating Rate, 0.83%, 01/25/37(3)		315,268
	2,700,000	Securitized Asset Backed Receivables LLC, Series 2007-BR3, Class A2B, Floating Rate, 0.69%, 04/25/37(3)		1,012,631
	880,098	Structured Adjustable Rate Mortgage Loan Trust, Series 2004-20, Class 3A1, Floating Rate, 5.35%, 01/25/35(3)		458,875
	1,404,383	Structured Adjustable Rate Mortgage Loan Trust, Series 2005-15, Class 1A1, 5.06%, 07/25/35		843,566
	552,754	Structured Adjustable Rate Mortgage Loan Trust, Series 2005-16XS, Class A1, Floating Rate, 0.81%, 08/25/35(3)		226,716
	713,390	Structured Adjustable Rate Mortgage Loan Trust, Series 2005-19XS, Class 1A1, Floating Rate, 0.79%, 10/25/35(3)		321,241
	128,400	Structured Asset Mortgage Investments, Inc., Series 2003-AR4, Class A1, Floating Rate, 0.93%, 01/19/34(3)		85,814
	419,198	Structured Asset Mortgage Investments, Inc., Series 2006-AR6, Class 1A3, Floating Rate, 0.66%, 07/25/46(3)		144,318
	2,332,201	Structured Asset Securities Corp. — 144A, Series 2007-TC1, Class A, Floating Rate, 0.77%, 04/25/31(3)		1,474,627
	1,417,441	Thornburg Mortgage Securities Trust, Series 2006-1, Class A3, Floating Rate, 0.64%, 01/25/46(3)		1,412,035
	230,985	Washington Mutual Mortgage Pass-Through Certificates, Series 2005-AR13, Class A1A1, Floating Rate, 0.76%, 10/25/45(3)		126,159
	255,621	Washington Mutual Mortgage Pass-Through Certificates, Series 2005-AR15, Class A1A2, Floating Rate, 0.75%, 11/25/45(3)		125,550
	150,066	Washington Mutual Mortgage Pass-Through Certificates, Series 2005-AR8, Class 2A1A, Floating Rate, 0.76%, 07/25/45(3)		69,643
	3,005,925	Washington Mutual Mortgage Pass-Through Certificates, Series 2006-AR3, Class A1A, Floating Rate, 3.23%, 05/25/46(3)		1,327,266
	1,832,543	Washington Mutual Mortgage Pass-Through Certificates, Series 2006-AR6, Class 2A, Floating Rate, 3.22%, 08/25/46(3)		693,434
	625,718	Washington Mutual Mortgage Pass-Through Certificates, Series 2007-HY4, Class 4A1, 5.51%, 09/25/36		437,885
	2,722,270	Washington Mutual Mortgage Pass-Through Certificates, Series 2007-OA6, Class 1A1B, Floating Rate, 3.07%, 07/25/47(3)		639,788
	1,106,157	Zuni Mortgage Loan Trust, Series 2006-OA1, Class A1, Floating Rate, 0.60%, 08/25/36(3)		1,048,572


				57,115,232

		Private Asset Backed: Student Loans — 0.4%
	780,000	Nelnet Student Loan Trust, Series 2008-4, Class A4, Floating Rate, 5.02%, 04/25/24(2)		631,904

	400,000	SLC Student Loan Trust, Series 2008-1, Class A4A, Floating Rate, 3.60%, 12/15/32(2)		316,763
	224,171	SLM Student Loan Trust, Series 2006-5, Class A2, Floating Rate, 3.53%, 07/25/17(2)		217,408

				1,166,075

		Real Estate Development and Services — 0.0%
	35,000	Forest City Enterprises, Inc., 7.63%, 06/01/15		12,250

See notes to financial statements.

TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Real Estate Development and Services (continued)

$	30,000	Forest City Enterprises, Inc., 6.50%, 02/01/17	$	10,500
	520,000	Realogy Corp., 12.38%, 04/15/15		70,200

				92,950

		Real Estate Investment Trusts — 0.0%
	40,000	Host Hotels & Resorts LP, Series Q, 6.75%, 06/01/16		29,200
	10,000	Ventas Realty LP/Ventas Capital Corp., 9.00%, 05/01/12		8,900
	30,000	Ventas Realty LP/Ventas Capital Corp., 6.50%, 06/01/16		21,975

				60,075

		Retail — 0.2%
	766,045	CVS Caremark Corp. — 144A, 6.94%, 01/10/30(5)		481,666

		Scientific and Technical Instruments — 0.0%
	100,000	Cie Generale de Geophysique (France), 7.50%, 05/15/15		62,000
	105,000	Cie Generale de Geophysique (France), 7.75%, 05/15/17		60,900

				122,900

		Semiconductors — 0.0%
	260,000	Freescale Semiconductor, Inc., 8.88%, 12/15/14		114,400

		Telecommunications Equipment and Services — 2.6%
	340,000	America Movil SAB de CV (Mexico), 5.63%, 11/15/17(5)		302,270
	410,000	AT&T, Inc., 5.10%, 09/15/14		403,025
	540,000	AT&T, Inc., 5.50%, 02/01/18(5)		545,738
	10,000	Bellsouth Corp., 4.75%, 11/15/12(5)		9,811
	75,000	Citizens Communications Company, 7.13%, 03/15/19		50,250
	100,000	Citizens Communications Company, 7.88%, 01/15/27		58,000
	375,000	Deutsche Telecom International Finance BV (the Netherlands), 5.75%, 03/23/16(5)		358,964
	1,290,000	Embarq Corp., 6.74%, 06/01/13(5)		1,090,049
	40,000	Intelsat Jackson Holdings (Bermuda), 11.25%, 06/15/16		36,400
	320,000	Koninklijke KPN NV (the Netherlands), 8.00%, 10/01/10		322,945
	445,000	Koninklijke KPN NV (the Netherlands), 8.38%, 10/01/30		502,624
	170,000	Level 3 Financing, Inc., 9.25%, 11/01/14		98,600
	300,000	Nextel Communications, Inc., Series E, 6.88%, 10/31/13		127,500
	63,000	Qwest Communications International, Inc., Floating Rate, 5.65%, 02/15/09(2)		62,685
	360,000	Qwest Communications International, Inc., Series B, 7.50%, 02/15/14		257,400
	150,000	Sprint Capital Corp., 8.38%, 03/15/12		120,000
	540,000	Sprint Capital Corp., 6.90%, 05/01/19		383,400
	80,000	Sprint Capital Corp., 8.75%, 03/15/32		54,000
	390,000	Telecom Italia Capital (Luxembourg), 5.25%, 10/01/15		296,888
	650,000	Telecom Italia Capital (Luxembourg), 7.00%, 06/04/18		527,313
	990,000	Verizon Communications, Inc., 6.90%, 04/15/38		1,114,000
	210,000	Verizon Communications, Inc., 8.95%, 03/01/39		271,255
	160,000	Verizon Global Funding Corp., 7.38%, 09/01/12		167,385
	560,000	Verizon New York, Inc., Series A, 6.88%, 04/01/12		557,173
	165,000	Windstream Corp., 8.63%, 08/01/16		146,025

				7,863,700

		Transportation — 0.1%
	40,000	Gulfmark Offshore, Inc., 7.75%, 07/15/14		28,400
	130,000	Teekay Shipping Corp. (Marshall Islands), 8.88%, 07/15/11		109,850
	180,000	Union Pacific Corp., 5.38%, 05/01/14		169,786

				308,036

See notes to financial statements.

TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)

		Utilities — 3.3%
$	67,000	AES Corp., 7.75%, 03/01/14	$	58,960
	210,000	AES Corp., 7.75%, 10/15/15		176,400
	1,130,000	AES Corp., 8.00%, 10/15/17		926,600
	1,590,000	AES Corp. — 144A, 8.00%, 06/01/20		1,232,250
	30,000	Dominion Resources, Inc., 4.75%, 12/15/10(5)		29,664
	580,000	Dominion Resources, Inc., 5.70%, 09/17/12(5)		574,304
	560,000	Dominion Resources, Inc., Series D, 8.88%, 01/15/19(5)		603,898
	590,000	Duke Energy Carolinas, 5.63%, 11/30/12(5)		600,860
	110,000	Edison Mission Energy, 7.00%, 05/15/17		95,700
	140,000	Edison Mission Energy, 7.20%, 05/15/19		114,800
	50,000	Edison Mission Energy, 7.63%, 05/15/27		38,750
	10,000	Energy Future Holdings Corp. — 144A, 10.88%, 11/01/17		7,100
	3,580,000	Energy Future Holdings Corp. — 144A, 11.25%, 11/01/17(12)		1,736,301
	370,000	Exelon Corp., 5.63%, 06/15/35(5)		233,567
	650,000	FirstEnergy Corp., Series B, 6.45%, 11/15/11		614,416
	515,000	FirstEnergy Corp., Series C, 7.38%, 11/15/31		487,198
	286,249	Mirant Mid-Atlantic LLC, Series B, 9.13%, 06/30/17		257,624
	75,000	NRG Energy, Inc., 7.25%, 02/01/14		70,125
	170,000	NRG Energy, Inc., 7.38%, 02/01/16		158,100
	45,000	NRG Energy, Inc., 7.38%, 01/15/17		41,400
	620,000	Pacific Gas & Electric Company, 5.63%, 11/30/17		634,998
	210,000	Pacific Gas & Electric Company, 6.05%, 03/01/34		223,032
	140,000	Pacific Gas & Electric Company, 5.80%, 03/01/37		145,209
	440,000	TXU Corp., Series P, 5.55%, 11/15/14		205,580
	200,000	TXU Corp., Series Q, 6.50%, 11/15/24		70,758
	635,000	TXU Corp., Series R, 6.55%, 11/15/34		214,371

				9,551,965

		Total Corporate Bonds and Notes (Cost $224,929,792)		157,410,322

		Preferred Corporate Bonds and Notes — 0.9%
		Banks and Financial Services — 0.5%
	610,000	Bank of America Corp., Series K, Variable Rate, 8.00%, perpetual(1)(5)		438,766
	90,000	Bank of America Corp., Series M, Variable Rate, 8.13%, perpetual(1)(5)		67,320
	160,000	Credit Suisse (Guernsey), Variable Rate, 5.86%, perpetual(1)(5)		74,677
	1,190,000	General Electric Capital Corp., Variable Rate, 6.38%, 11/15/67(1)		747,997
	40,000	Goldman Sachs Capital II, Variable Rate, 5.79%, perpetual(1)		15,377
	930,000	Lehman Brothers Capital Trust VII, Series MTN, Variable Rate, 5.86%, perpetual(1)(9)		93

	300,000	Royal Bank of Scotland Group PLC — 144A (United Kingdom), Variable Rate, 6.99%, perpetual(1)		140,261

				1,484,491

		Insurance — 0.4%
	1,140,000	MetLife, Inc., 6.40%, 12/15/36		684,000
	670,000	Travelers Companies, Inc. (The), Variable Rate, 6.25%, 03/15/37(1)		438,875

				1,122,875

		Total Preferred Corporate Bonds and Notes (Cost $5,035,944)		2,607,366

Shares

		Preferred Stocks — 0.0%
		Banks and Financial Services
	1,300	Fannie Mae, Series O, Floating Rate, 7.00%,(2)		975

See notes to financial statements.

TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares				Value

			Preferred Stocks (continued)
			Banks and Financial Services (continued)

	31,175		Fannie Mae, Series S, Variable Rate, 8.25%,(1)	$	25,875
	43,300		Freddie Mac, Series Z, Variable Rate, 8.38%,(1)		16,887
	342		Preferred Blocker, Inc. — 144A,(14)		57,414

			Total Preferred Stocks (Cost $1,931,035)		101,151

Principal

			Convertible Bonds — 0.0%
			Automobiles/Motor Vehicles, Automotive Equipment and Repairs
$	30,000		Ford Motor Company, 4.25%, 12/15/36 (Cost $30,000)		7,725

			Municipal Bonds — 0.2%
			Virginia
	515,763		Virginia State Housing Development Authority, Series C, Revenue Bond, 6.00%, 06/25/34 (Cost $507,539)		503,014

			Foreign Government Obligations — 0.4%
	725,200		Russian Federation (Russia), 7.50%, 03/31/30		632,490
	8,000		United Mexican States (Mexico), 5.63%, 01/15/17		8,000
	439,000		United Mexican States, Series MTNA, (Mexico), 6.75%, 09/27/34		463,145

			Total Foreign Government Obligations (Cost $1,257,225)		1,103,635

			Short Term US Government Agency Securities — 6.9%
			Fannie Mae — 3.5%
	10,400,000		2.32%, 01/20/09		10,387,266
			Federal Home Loan Bank — 3.4%
	10,400,000		1.20%, 05/20/09		10,351,813

			Total Short Term US Government Agency Securities (Cost $20,739,079)		20,739,079

			Securities Lending Collateral — 0.2%
	464,950		Securities Lending Collateral Investment (Note 4) (Cost $464,950)		464,950

			Total Securities (Cost $436,741,912)		370,821,558

			Repurchase Agreements — 2.8%
	8,409,852		With State Street Bank and Trust, dated 12/31/08, 0.01%, due 01/02/09, repurchase proceeds at maturity $8,409,857 (Collateralized by US Treasury Bill, 0.01%, due 01/02/09, with a value of $8,591,400) (Cost $8,409,852)		8,409,852

			Total Investments before Call and Put Options Written — 126.2% (Cost $445,151,764)		379,231,410

Contracts

			Call Options Written — (0.6)%
	(185	)	Eurodollar Interest Rate Future, Expiring March 2009 @ 98.25		(335,313	)
	(179	)	US Treasury Note (10 Year) March Future, Expiring February 2009 @ 118		(1,468,359	)

			Total Call Options Written (Premium $299,434)		(1,803,672	)

			Put Options Written — (0.0)%
	(282	)	Eurodollar Interest Rate Future, Expiring March 2009 @ 96.75		(1,763	)
	(170	)	US Treasury Note (10 Year) March Future, Expiring February 2009 @ 110		(21,250	)
	(44	)	US Treasury Note (10 Year) March Future, Expiring February 2009 @ 111		(6,187	)

			Total Put Options Written (Premium $490,812)		(29,200	)

			Total Investments net of Call and Put Options Written — 125.6% (Cost $444,361,518)		377,398,538
			Liabilities less other assets — (25.6)%		(76,985,538	)

			Net Assets — 100.0%	$	300,413,000

The aggregate cost of securities for federal income tax purposes at December 31, 2008 is $445,280,505.

The following amounts are based on cost for federal income tax purposes:


Gross unrealized appreciation	$	7,223,139
Gross unrealized depreciation		(73,272,234	)

Net unrealized depreciation	$	(66,049,095	)

See summary of footnotes and abbreviations to portfolios.

HIGH YIELD BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS

December 31, 2008


Principal			Value

		Corporate Bonds and Notes — 82.4%
		Advertising — 0.3%
$	470,000	Affinion Group, Inc., 10.13%, 10/15/13	$	343,100
	1,685,000	Affinion Group, Inc., 11.50%, 10/15/15		1,013,106

				1,356,206

		Aerospace and Defense — 1.8%
	2,600,000	BE Aerospace, Inc., 8.50%, 07/01/18		2,340,000
	2,460,000	DRS Technologies, Inc., 7.63%, 02/01/18		2,460,000
	480,000	Hawker Beechcraft Acquisition Company LLC, 8.50%, 04/01/15		196,800
	2,700,000	Hawker Beechcraft Acquisition Company LLC, 9.75%, 04/01/17		729,000
	1,975,000	Transdigm, Inc., 7.75%, 07/15/14		1,619,500
	905,000	Vought Aircraft Industries, Inc., 8.00%, 07/15/11		610,875

				7,956,175

		Airlines — 0.1%
	444,176	Continental Airlines, Inc., Series 2001-1, 7.03%, 06/15/11		257,622

		Apparel: Manufacturing and Retail — 2.5%
	4,135,000	Levi Strauss & Company, 9.75%, 01/15/15		3,059,900
	3,915,000	Levi Strauss & Company, 8.88%, 04/01/16		2,662,200
	2,005,000	Oxford Industries, Inc., 8.88%, 06/01/11		1,513,775
	4,520,000	Perry Ellis International, Inc., Series B, 8.88%, 09/15/13		2,712,000
	205,000	Phillips Van-Heusen Corp., 8.13%, 05/01/13		169,125
	2,305,000	Quiksilver, Inc., 6.88%, 04/15/15		743,363

				10,860,363

		Automobile: Rental — 0.9%
	260,000	Hertz Corp., 8.88%, 01/01/14		159,900
	3,425,000	Hertz Corp., 10.50%, 01/01/16		1,562,656
	3,790,000	RSC Equipment Rental, Inc., 9.50%, 12/01/14		2,084,500

				3,807,056

		Automobiles/Motor Vehicles, Automotive Equipment and Repairs — 0.2%
	1,245,000	Allison Transmission, Inc. — 144A, 11.00%, 11/01/15		610,050
	395,000	Commercial Vehicle Group, 8.00%, 07/01/13		185,650
	480,000	Tenneco, Inc., 8.13%, 11/15/15		220,800

				1,016,500

		Banks and Financial Services — 3.2%
	1,465,000	Ford Motor Credit Company, 7.88%, 06/15/10		1,172,264
	100,000	Ford Motor Credit Company, 9.88%, 08/10/11		73,772
	1,965,000	Ford Motor Credit Company LLC, 7.38%, 10/28/09		1,725,704
	3,190,000	Ford Motor Credit Company LLC, 5.70%, 01/15/10		2,710,958
	8,655,000	Ford Motor Credit Company LLC, 9.75%, 09/15/10		6,923,948
	1,210,000	GMAC LLC, Floating Rate, 3.40%, 05/15/09(2)		1,155,550
	1,400,000	Nuveen Investments, Inc. — 144A, 10.50%, 11/15/15		309,750

				14,071,946

		Broadcast Services/Media — 5.2%
	4,705,000	Cablevision Systems Corp., Series B, 8.00%, 04/15/12		4,187,450
	6,690,000	CCO Holdings LLC/Capital Corp., 8.75%, 11/15/13		4,214,700
	7,565,000	Charter Communications Operating LLC/Capital Corp. — 144A, 8.38%, 04/30/14		5,787,224
	1,850,000	Charter Communications Operating LLC/Capital Corp. — 144A, 10.88%, 09/15/14		1,480,000
	460,000	CSC Holdings, Inc., Series B, 8.13%, 08/15/09		457,700
	4,255,000	DIRECTV Holdings LLC/DIRECTV Financing Company, Inc., 7.63%, 05/15/16		4,127,350
	1,235,000	Kabel Deutschland GMBH (Germany), 10.63%, 07/01/14		1,099,150
	570,000	LBI Media, Inc., 11.00%, 10/15/13		228,000
	1,315,000	Mediacom Broadband LLC/Mediacom Broadband Corp., 8.50%, 10/15/15		856,394
	605,000	Rainbow National Services LLC — 144A, 10.38%, 09/01/14		538,450

				22,976,418

		Business Services and Supplies — 0.9%
	1,625,000	Aramark Corp., 8.50%, 02/01/15		1,470,625
	1,848,000	Catalina Marketing Corp. — 144A, 11.63%, 10/01/17(20)		960,960

See notes to financial statements.

100

HIGH YIELD BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Business Services and Supplies (continued)

$	2,050,000	CEVA Group PLC — 144A (United Kingdom), 10.00%, 09/01/14	$	1,519,563
	110,000	First Data Corp, 9.88%, 09/24/15		66,550

				4,017,698

		Chemicals — 0.7%
	2,570,000	Ineos Group Holdings PLC — 144A (United Kingdom), 8.50%, 02/15/16		231,300
	830,000	Nova Chemicals Corp. (Canada), Floating Rate, 5.72%, 11/15/13(11)		315,400
	3,900,000	Reichhold Industries, Inc. — 144A, 9.00%, 08/15/14(20)		2,574,000

				3,120,700

		Commercial Services — 0.3%
	2,065,000	Ticketmaster — 144A, 10.75%, 08/01/16		1,115,100

		Computer Equipment, Software and Services — 1.6%
	3,460,000	Ceridian Corp. — 144A, 11.50%, 11/15/15		1,838,125
	170,000	Interface, Inc., 9.50%, 02/01/14		136,000
	5,985,000	Sungard Data Systems, Inc. — 144A, 10.63%, 05/15/15		5,117,175

				7,091,300

		Construction Services and Supplies — 1.5%
	775,000	ESCO Corp. — 144A, Floating Rate, 5.87%, 12/15/13(2)(20)		496,000
	775,000	ESCO Corp. — 144A, 8.63%, 12/15/13		542,500
	545,000	Interline Brands, Inc., 8.13%, 06/15/14		430,550
	2,245,000	Nortek, Inc., 10.00%, 12/01/13		1,526,600
	3,025,000	Panolam Industries International, 10.75%, 10/01/13		1,210,000
	2,475,000	Ply Gem Industries, 11.75%, 06/15/13		1,336,500
	1,260,000	Texas Industries, Inc. — 144A, 7.25%, 07/15/13		973,350

				6,515,500

		Consumer Goods and Services — 1.2%
	3,365,000	Amscan Holdings, Inc., 8.75%, 05/01/14		1,968,525
	6,960,000	Yankee Acquisition Corp., Series B, 8.50%, 02/15/15		3,245,100

				5,213,625

		Containers and Packaging — 0.8%
	1,055,000	Intertape Polymer US, Inc., 8.50%, 08/01/14		685,750
	400,000	Jefferson Smurfit Corp., 7.50%, 06/01/13		70,000
	795,000	Owens-Brockway Glass Containers, 8.25%, 05/15/13		783,075
	1,246,577	Pliant Corp., 11.63%, 06/15/09(14)		660,353
	1,645,000	Smurfit-Stone Container Corp., 8.38%, 07/01/12		271,425
	1,140,000	Smurfit-Stone Container Corp., 8.25%, 10/01/12		193,800
	260,000	Solo Cup Company, 8.50%, 02/15/14		166,400
	3,255,000	Stone Container, 8.00%, 03/15/17		618,450

				3,449,253

		Distribution — 1.0%
	645,000	Sally Holdings LLC, 9.25%, 11/15/14		554,700
	5,650,000	Sally Holdings LLC, 10.50%, 11/15/16		3,842,000

				4,396,700

		Education — 2.8%
	3,135,000	Education Management LLC, 8.75%, 06/01/14		2,382,600
	3,610,000	Education Management LLC, 10.25%, 06/01/16		2,617,250
	5,165,000	Laureate Education, Inc. — 144A, 10.00%, 08/15/15		3,363,707
	5,042,885	Laureate Education, Inc. — 144A, 10.25%, 08/15/15(12)(14)		2,614,453
	2,160,000	Laureate Education, Inc. — 144A, 11.75%, 08/15/17		1,215,000

				12,193,010

		Electronics — 0.1%
	550,000	Muzak LLC, 10.00%, 02/15/09		330,000

		Energy Services — 0.1%
	475,000	Verasun Energy Corp., 9.88%, 12/15/12(9)		285,000

		Engineering — 0.1%
	740,000	Alion Science & Technology Corp., 10.25%, 02/01/15		333,925

		Entertainment, Leisure and Recreation — 9.3%
	2,505,000	AMC Entertainment, Inc., 8.00%, 03/01/14		1,540,575
	5,395,000	AMC Entertainment, Inc., 11.00%, 02/01/16		3,769,755
	3,095,000	Buffalo Thunder Development Authority — 144A, 9.38%, 12/15/14		619,000
	3,935,000	Caesars Entertainment, Inc., 7.88%, 03/15/10		2,597,100

See notes to financial statements.

101

HIGH YIELD BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Entertainment, Leisure and Recreation (continued)

$	2,075,000	CCM Merger, Inc. — 144A, 8.00%, 08/01/13	$	1,068,625
	935,000	Chukchansi Economic Development Authority — 144A, Floating Rate, 6.10%, 11/15/12(11)(20)		465,163
	126,058	Eldorado Casino Shreveport, 10.00%, 08/01/12		112,822
	5,645,000	Fontainebleau Las Vegas — 144A, 10.25%, 06/15/15		550,388
	3,255,000	Galaxy Entertainment Finance — 144A (British Virgin Islands), 9.88%, 12/15/12		1,432,200
	1,495,000	GreekTown Holdings — 144A, 10.75%, 12/01/13(9)		351,325
	1,336,966	HRP Myrtle Beach Holdings/CA — 144A, 14.50%, 04/01/14(9) (12)(20)		3,342
	1,730,000	HRP Myrtle Beach Operations/CA — 144A, Floating Rate, 8.58%, 04/01/12(9)(11)(20)		86,500
	945,000	HRP Myrtle Beach Operations/CA — 144A, 12.50%, 04/01/13(9)(20)		18,900
	1,590,000	Indianapolis Downs Capital LLC & Capital Corp. — 144A, 11.00%, 11/01/12		866,550
	2,060,000	Inn of The Mountain Gods, 12.00%, 11/15/10		679,800
	890,000	Majestic Holdco LLC — 144A, 12.50%, 10/15/11(20)		2,225
	1,850,000	Mandalay Resort Group, 6.50%, 07/31/09		1,794,500
	2,710,000	Marquee Holdings, Inc., 9.51%, 08/15/14		1,382,100
	210,000	MGM MIRAGE, 7.50%, 06/01/16		133,088
	2,670,000	Mohegan Tribal Gaming Authority, 6.38%, 07/15/09		2,509,800
	1,180,000	Mohegan Tribal Gaming Authority, 8.00%, 04/01/12		719,800
	2,225,000	Mohegan Tribal Gaming Authority, 7.13%, 08/15/14		1,123,625
	2,340,000	Mohegan Tribal Gaming Authority, 6.88%, 02/15/15		1,181,700
	2,275,000	OED Corp./Diamond JO, 8.75%, 04/15/12		1,558,375
	240,000	Pinnacle Entertainment, Inc., 8.25%, 03/15/12		182,400
	1,605,000	Pinnacle Entertainment, Inc., 7.50%, 06/15/15		930,900
	555,000	Pokagon Gaming Authority — 144A, 10.38%, 06/15/14		477,300
	985,000	Royal Caribbean Cruises, Ltd. (Liberia), 7.00%, 06/15/13		561,450
	385,000	Royal Caribbean Cruises, Ltd. (Liberia), 6.88%, 12/01/13		215,600
	250,000	Royal Caribbean Cruises, Ltd. (Liberia), 7.25%, 06/15/16		136,250
	510,000	Royal Caribbean Cruises, Ltd. (Liberia), 7.25%, 03/15/18		260,100
	475,000	San Pasqual Casino — 144A, 8.00%, 09/15/13(20)		344,375
	595,000	Scientific Games Corp. — 144A, 7.88%, 06/15/16		478,975
	995,000	Seminole Hard Rock Entertainment — 144A, Floating Rate, 4.50%, 03/15/14(2)(20)		504,963
	2,635,000	Travelport LLC, 9.88%, 09/01/14		988,125
	300,000	Trump Entertainment Resorts, Inc., 8.50%, 06/01/15		39,750
	2,435,000	Tunica-Biloxi Gaming Authority — 144A, 9.00%, 11/15/15(20)		1,923,650
	2,130,000	Universal City Development Partners, Ltd., 11.75%, 04/01/10		1,373,850
	6,495,000	Universal City Florida, Floating Rate, 7.94%, 05/01/10(2)		2,792,849
	3,443,000	Waterford Gaming LLC/Waterford Gaming Finance — 144A, 8.63%, 09/15/14(20)		2,194,568
	640,000	WMG Acquisition Corp., 7.38%, 04/15/14		374,400
	3,670,000	Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., 6.63%, 12/01/14		2,770,850

				41,117,613

		Environmental Waste Management and Recycling Services — 0.3%
	3,090,000	Aleris International, Inc., 9.00%, 12/15/14(12)		185,400
	1,800,000	Waste Services, Inc., 9.50%, 04/15/14		1,278,000

				1,463,400

		Food and Beverage — 2.2%
	3,980,000	ASG Consolidated LLC/ASG Finance, Inc., 11.50%, 11/01/11		3,383,000
	6,935,000	Dole Foods Company, Inc., 8.63%, 05/01/09		6,276,175

				9,659,175

		Insurance — 0.9%
	1,120,000	Alliant Holdings I, Inc. — 144A, 11.00%, 05/01/15		604,800

See notes to financial statements.

102

HIGH YIELD BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Insurance (continued)

$	1,340,000	Hub International Holdings — 144A, 9.00%, 12/15/14	$	819,075
	2,825,000	Multiplan, Inc. — 144A, 10.38%, 04/15/16		2,288,250
	980,000	USI Holdings Corp. — 144A, Floating Rate, 6.02%, 11/15/14(2)		398,125

				4,110,250

		Internet Services — 0.4%
	2,565,000	Expedia, Inc. — 144A, 8.50%, 07/01/19		1,910,925

		Machinery — 1.0%
	1,680,000	Altra Industrial Motion, Inc., 9.00%, 12/01/11		1,587,600
	830,000	Chart Industries, Inc., 9.13%, 10/15/15		622,500
	3,385,000	Stewart & Stevenson LLC, 10.00%, 07/15/14		2,098,700

				4,308,800

		Manufacturing — 0.8%
	1,000,000	American Railcar Industries, Inc., 7.50%, 03/01/14		660,000
	1,535,000	Bombardier, Inc. — 144A (Canada), 8.00%, 11/15/14		1,350,800
	285,000	Harland Clarke Holdings, 9.50%, 05/15/15		108,300
	965,000	RBS Global & Rexnord Corp., 9.50%, 08/01/14		718,925
	870,000	RBS Global & Rexnord Corp., 11.75%, 08/01/16		493,725
	720,000	Venture Holdings Trust, Series B, 9.50%, 07/01/05(9)(13)		72

				3,331,822

		Medical Equipment, Supplies, and Services — 8.2%
	2,035,000	Accellent, Inc., 10.50%, 12/01/13		1,393,975
	2,595,000	Advanced Medical Optics, 7.50%, 05/01/17		1,323,450
	2,235,000	AMR Holding Company/Emcare Holding Company, 10.00%, 02/15/15		2,078,550
	5,510,000	Biomet, Inc., 11.63%, 10/15/17		4,711,050
	820,000	Community Health Systems, Inc., 8.88%, 07/15/15		754,400
	500,000	DaVita, Inc., 6.63%, 03/15/13		475,000
	2,340,000	DJO Finance LLC/DJO Finance Corp., 10.88%, 11/15/14		1,684,800
	2,790,000	HCA, Inc., 8.75%, 09/01/10		2,678,400
	168,000	HCA, Inc., 7.88%, 02/01/11		147,840
	2,420,000	HCA, Inc., 9.13%, 11/15/14		2,244,550
	9,650,000	HCA, Inc., 9.25%, 11/15/16		8,853,874
	2,085,000	National Mentor Holdings, Inc., 11.25%, 07/01/14		1,641,938
	2,140,000	Omnicare, Inc., 6.88%, 12/15/15		1,754,800
	1,590,000	Res-Care, Inc., 7.75%, 10/15/13		1,295,850
	4,015,000	US Oncology, Inc., 9.00%, 08/15/12		3,653,650
	1,775,000	US Oncology, Inc., 10.75%, 08/15/14		1,446,625
	289,000	Viant Holdings, Inc. — 144A, 10.13%, 07/15/17(20)		95,370

				36,234,122

		Metals and Mining — 1.2%
	1,630,000	CII Carbon LLC — 144A, 11.13%, 11/15/15		1,043,200
	1,500,000	FMG Finance Property, Ltd. — 144A (Australia), 10.63%, 09/01/16		870,000
	1,635,000	Freeport-McMoRan Copper & Gold, Inc., 8.38%, 04/01/17		1,340,700
	2,145,000	RathGibson, Inc., 11.25%, 02/15/14		477,263
	2,285,000	Steel Dynamics, Inc., 7.38%, 11/01/12		1,668,050

				5,399,213

		Oil, Coal and Gas — 6.3%
	580,000	Airgas, Inc. — 144A, 7.13%, 10/01/18		495,900
	1,380,000	Allis-Chalmers Energy, Inc., 9.00%, 01/15/14		731,400
	2,050,000	Chesapeake Energy Corp., 7.25%, 12/15/18		1,599,000
	695,000	Cimarex Energy Company, 7.13%, 05/01/17		542,100
	1,195,000	Clayton William Energy, 7.75%, 08/01/13		669,200
	2,020,000	Compton Petroleum Finance Corp. (Canada), 7.63%, 12/01/13		606,000
	660,000	Denbury Resources, Inc., 7.50%, 12/15/15		468,600
	1,550,000	Dynegy Holdings, Inc., 7.63%, 10/15/26		751,750
	740,000	El Paso Corp., 9.63%, 05/15/12		628,341
	685,000	Encore Acquisition Corp., 7.25%, 12/01/17		441,825

See notes to financial statements.

103

HIGH YIELD BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Oil, Coal and Gas (continued)

$	3,120,000	Forbes Energy Services (Bermuda), 11.00%, 02/15/15	$	1,872,000
	1,075,000	OPTI Canada, Inc. (Canada), 7.88%, 12/15/14		548,250
	970,000	OPTI Canada, Inc. (Canada), 8.25%, 12/15/14		523,800
	525,000	Parker Drilling Company, 9.63%, 10/01/13		406,875
	4,280,000	Petrohawk Energy Corp., 9.13%, 07/15/13		3,466,799
	1,455,000	Petrohawk Energy Corp. — 144A, 7.88%, 06/01/15		1,076,700
	1,170,000	Petroleum Development Company, 12.00%, 02/15/18		731,250
	255,000	Petroplus Finance, Ltd. — 144A (Bermuda), 6.75%, 05/01/14		161,925
	5,155,000	Petroplus Finance, Ltd. — 144A (Bermuda), 7.00%, 05/01/17		3,144,550
	995,000	Plains Exploration & Production Company, 7.00%, 03/15/17		681,575
	260,000	Quicksilver Resources, Inc., 8.25%, 08/01/15		165,100
	1,960,000	Quicksilver Resources, Inc., 7.13%, 04/01/16		1,048,600
	3,040,000	Sandridge Energy, Inc., 8.63%, 04/01/15(12)		1,596,000
	2,960,000	Sandridge Energy, Inc. — 144A, 8.00%, 06/01/18		1,642,800
	2,985,000	Semgroup LP — 144A, 8.75%, 11/15/15(9)(20)		104,475
	290,000	SESI LLC, 6.88%, 06/01/14		223,300
	5,970,000	United Refining Company, 10.50%, 08/15/12		3,462,600

				27,790,715

		Paper and Forest Products — 1.5%
	115,000	Georgia-Pacific Corp., 9.50%, 12/01/11		108,675
	1,015,000	Georgia-Pacific LLC — 144A, 7.00%, 01/15/15		862,750
	745,000	Georgia-Pacific LLC — 144A, 7.13%, 01/15/17		625,800
	665,000	NewPage Corp., Floating Rate, 9.44%, 05/01/12(2)		254,363
	5,445,000	NewPage Corp., 10.00%, 05/01/12		2,395,800
	3,795,000	NewPage Corp., 12.00%, 05/01/13		1,081,575
	200,000	Rock-Tenn Company — 144A, 9.25%, 03/15/16		186,000
	3,765,000	Verso Paper Holdings LLC, Series B, 11.38%, 08/01/16		1,129,500

				6,644,463

		Pharmaceuticals/Research and Development — 0.1%
	925,000	Elan Finance PLC/Elan Finance Corp. (Ireland), 8.88%, 12/01/13		481,000

		Printing and Publishing — 1.8%
	1,266,000	Dex Media West Finance Company, Series B, 9.88%, 08/15/13		300,675
	445,000	Local Insight Regatta Holdings, 11.00%, 12/01/17		115,700
	1,365,000	Medimedia USA, Inc. — 144A, 11.38%, 11/15/14(20)		819,000
	7,125,000	Nielsen Finance LLC/Nielsen Finance Company, 10.00%, 08/01/14		5,699,999
	1,455,000	Nielsen Finance LLC/Nielsen Finance Company, zero coupon, 08/01/16(7)		527,438
	4,115,000	Reader’s Digest Association, 9.00%, 02/15/17		354,919

				7,817,731

		Real Estate Development and Services — 0.0%
	630,000	Ashton Woods USA LLC/Ashton Woods Finance Company, 9.50%, 10/01/15(9)		126,000

		Real Estate Investment Trusts — 0.4%
	2,560,000	Host Hotels & Resorts LP, Series Q, 6.75%, 06/01/16		1,868,800

		Retail — 5.0%
	3,770,000	GameStop Corp., 8.00%, 10/01/12		3,506,100
	5,055,000	General Nutrition Centers, Inc., Floating Rate, 7.58%, 03/15/14(11)(12)		2,830,800
	2,150,000	General Nutrition Centers, Inc., 10.75%, 03/15/15		1,204,000
	5,505,000	Neiman Marcus Group, Inc., 9.00%, 10/15/15		2,422,200
	10,130,000	Neiman Marcus Group, Inc., 10.38%, 10/15/15		4,355,900
	265,000	Rite Aid Corp., 10.38%, 07/15/16		194,775
	10,430,000	Rite Aid Corp., 7.50%, 03/01/17		6,779,500
	1,560,000	Toys “R” Us, Inc., 7.38%, 10/15/18		561,600

				21,854,875

See notes to financial statements.

104

HIGH YIELD BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)

		Retail: Restaurants — 0.7%
$	1,720,000	El Pollo Loco, Inc., 11.75%, 11/15/13	$	1,272,800
	2,595,000	NPC International, Inc., Series WI, 9.50%, 05/01/14		1,881,375

				3,154,175

		Semiconductors — 1.1%
	2,335,000	Advanced Micro Devices, Inc., 7.75%, 11/01/12		1,027,400
	435,000	Amkor Technologies, Inc., 7.13%, 03/15/11		292,538
	510,000	Amkor Technologies, Inc., 7.75%, 05/15/13		290,700
	1,940,000	Amkor Technologies, Inc., 9.25%, 06/01/16		1,125,200
	825,000	Avago Technologies Finance Pte., Ltd., 10.13%, 12/01/13		628,031
	1,890,000	Avago Technologies Finance Pte., Ltd., 11.88%, 12/01/15		1,313,550

				4,677,419

		Telecommunications Equipment and Services — 11.1%
	1,460,000	Centennial Cellular/Communications, 10.13%, 06/15/13		1,474,600
	2,890,000	Citizens Communications Company, 7.13%, 03/15/19		1,936,300
	4,862,000	Digicel Group, Ltd. — 144A (Bermuda), 9.13%, 01/15/15		3,063,060
	3,075,000	Digicel, Ltd. — 144A (Bermuda), 9.25%, 09/01/12		2,613,750
	3,070,000	Intelsat Corp. — 144A, 9.25%, 08/15/14		2,855,100
	6,030,000	Intelsat Jackson Holdings — 144A (Bermuda), 9.50%, 06/15/16		5,547,600
	6,685,000	Intelsat Jackson Holdings (Bermuda), 11.25%, 06/15/16		6,083,349
	1,000,000	Intelsat Subsidiary Holdings — 144A (Bermuda), 8.88%, 01/15/15		910,000
	4,065,000	Nortel Networks, Ltd. — 144A (Canada), 10.75%, 07/15/16		1,077,225
	1,345,000	Nortel Networks, Ltd. (Canada), 10.75%, 07/15/16		356,425
	2,505,000	Qwest Capital Funding, Inc., 7.90%, 08/15/10		2,279,550
	1,365,000	Qwest Communications International, Inc., Series B, 7.50%, 02/15/14		975,975
	420,000	Qwest Corp., 7.50%, 10/01/14		348,600
	470,000	Qwest Corp., 7.63%, 06/15/15		385,400
	765,000	Sprint Capital Corp., 6.88%, 11/15/28		455,175
	8,050,000	Telesat Canada — 144A, 11.00%, 11/01/15		5,755,750
	3,375,000	Telesat Canada — 144A, 12.50%, 11/01/17		2,025,000
	2,775,000	Verizon Wireless — 144A, 8.50%, 11/15/18		3,251,404
	375,000	Virgin Media Finance PLC (United Kingdom), 8.75%, 04/15/14		281,250
	2,275,000	Virgin Media Finance PLC (United Kingdom), 9.13%, 08/15/16		1,683,500
	2,140,000	West Corp., 9.50%, 10/15/14		1,177,000
	4,660,000	Windstream Corp., 8.63%, 08/01/16		4,124,100
	2,230,000	XM Satellite Radio Holdings — 144A, 13.00%, 08/01/13		512,900

				49,173,013

		Transportation — 2.5%
	1,590,000	Greenbrier Companies, Inc., 8.38%, 05/15/15		1,130,888
	1,695,000	Kansas City Southern, 7.50%, 06/15/09		1,699,238
	2,655,000	Kansas City Southern de Mexico (Mexico), 7.63%, 12/01/13		2,177,099
	805,000	Kansas City Southern de Mexico (Mexico), 7.38%, 06/01/14		658,651
	1,845,000	Kansas City Southern Railway, 13.00%, 12/15/13		1,849,613
	1,945,000	Kansas City Southern Railway, 8.00%, 06/01/15		1,536,550
	2,325,000	TFM, SA de CV (Mexico), 9.38%, 05/01/12		2,127,375

				11,179,414

		Utilities — 2.3%
	1,500,000	AES Corp., 8.00%, 10/15/17		1,230,000
	182,000	AES Corp. — 144A, 8.75%, 05/15/13		174,720
	425,697	AES Eastern Energy, Series 99-A, 9.00%, 01/02/17		378,871
	1,040,000	Edison Mission Energy, 7.50%, 06/15/13		951,600
	555,000	NRG Energy, Inc., 7.25%, 02/01/14		518,925

See notes to financial statements.

105

HIGH YIELD BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Utilities (continued)

$	1,105,000	NRG Energy, Inc., 7.38%, 02/01/16	$	1,027,650
	3,260,000	NRG Energy, Inc., 7.38%, 01/15/17		2,999,200
	210,000	Reliant Energy, Inc., 7.63%, 06/15/14		174,300
	3,235,000	Reliant Energy, Inc., 7.88%, 06/15/17		2,620,350

				10,075,616

		Total Corporate Bonds and Notes (Cost $543,657,876)		362,742,638

		Loan Participations — 4.9%
	2,679,918	ADESA, Inc., Term Loan B, Variable Rate, 3.71%, 10/20/13(1)		1,524,203
	975,333	Advanced Medical Optics, Inc., Term Loan B, Variable Rate, 4.38%, 04/02/14(1)		633,967
	866,800	AMSCAN Holdings, Inc., Term Loan, Variable Rate, 3.93%, 05/25/13(1)		574,255
	2,010,000	BLB Worldwide Holdings, 2nd Lien Term Loan, Variable Rate, 5.69%, 07/18/12(1)(9)		217,749
	860,000	Cannery Casino Resorts LLC, 2nd Lien Term Loan, Variable Rate, 4.76%, 05/15/14(1)		688,000
	255,304	Ceva Sante Animale, Letter of Credit, Variable Rate, 6.66%, 08/02/15(1)		158,288
	768,904	Ceva Sante Animale, US Term Loan, Variable Rate, 5.05%, 08/02/15(1)		476,721
	6,058	Community Health Systems, Inc., Delayed Draw Loan, Variable Rate, 1.80%, 07/25/14(1)		4,746
	780,103	Community Health Systems, Inc., Term Loan B, Variable Rate, 4.45%, 07/25/14(1)		611,211
	560,000	Dresser, Inc., 2nd Lien Term Loan, Variable Rate, 7.99%, 05/02/15(1)		323,400
	905,381	Ford Motor Company, Term Loan 5.00%, 12/16/13		368,943
	1,280,252	General Nutrition Centers, Inc., Term Loan, Variable Rate, 4.89%, 09/16/13(1)		853,502
	1,938,345	Great Lakes Entertainment, LLC, Term Loan, Variable Rate, 9.00%, 08/15/12(1)		1,792,969
	241,386	Hawker Beechcraft Acquisition Company, LLC, Letter of Credit, Variable Rate, 3.46%, 03/26/14(1)		126,848
	4,114,688	Hawker Beechcraft Acquisition Company, LLC, Term Loan, Variable Rate, 2.79%, 03/26/14(1)		2,162,269
	3,260,000	Hit Entertainment, Inc., Tranche LN227528, 2nd Lien Term Loan, Variable Rate, 8.21%, 02/05/13(1)		1,141,000
	30,683	HRP Myrtle Beach, Debtor in Possession Loan, Variable Rate, 13.78%, 03/30/10(1)(14)		30,683
	750,000	Neff Rental, Inc., 2nd Lien Term Loan, Variable Rate, 5.40%, 11/20/14(1)		174,375
	1,517,811	Nielsen Finance, LLC, Term Loan, Variable Rate, 4.24%, 08/09/13(1)		1,033,060
	2,250,000	Panolam Industries, Term Loan, Variable Rate, 3.21%, 09/30/12(1)		1,462,500
	3,365,625	Quicksilver Resources, Inc., 2nd Lien Term Loan, Variable Rate, 7.75%, 08/08/13(1)		2,221,312
	1,707,674	Rental Services Corp., 2nd Lien Term Loan, Variable Rate, 7.29%, 11/30/13(1)		917,875
	3,095,406	Sabre, Inc., Term Loan B, Variable Rate, 4.80%, 09/30/14(1)		1,358,883
	176,332	Smurfit-Stone Container Corp., Term Loan CI, Variable Rate, 2.50%, 11/01/10(1)		114,490
	275,129	Smurfit-Stone Container Corp., Deposit Fund Loan, Variable Rate, 3.83%, 11/01/11(1)		182,961
	583,230	Smurfit-Stone Container Corp., Term Loan C, Variable Rate, 2.50% — 4.25%, 11/01/11(1)		378,683
	308,629	Smurfit-Stone Container Corp., Term Loan B, Variable Rate, 3.50% — 4.25%, 11/01/11(1)		205,238
	1,790,955	TXU Corp., Term Loan B2, Variable Rate, 5.58%, 10/10/14(1)		1,249,938
	1,440,000	Veyance Technologies, Inc., 2nd Lien Term Loan, Variable Rate, 7.63%, 07/20/15(1)		396,000

		Total Loan Participations (Cost $34,773,901)		21,384,069

See notes to financial statements.

106

HIGH YIELD BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks — 0.2%
		Airlines — 0.0%
	11,466	Delta Air Lines, Inc.*	$	131,400
	500,000	Delta Air Lines, Inc. (Escrow Certificates)*		9,375

				140,775

		Banks and Financial Services — 0.0%
	2,697,805	Adelphia Contingent Value Vehicle CVV, Series Acc — 1*		47,212

		Broadcast Services/Media — 0.0%
	620,000	Adelphia Communications (Escrow Certificates)*		17,825
	840,000	Adelphia Communications (Escrow Certificates)*		24,150
	1,305,000	Adelphia Communications, Series B (Escrow Certificates)*		37,519
	270	Time Warner Cable, Inc. — Class A*		5,787

				85,281

		Chemicals — 0.0%
	547	Texas Petrochemicals, Inc.*		2,762

		Entertainment, Leisure and Recreation — 0.0%
	970	HRP — Class B* (14)		—
	889	Shreveport Gaming Holdings, Inc.(14)		14,313

		Telecommunications Equipment and Services — 0.2%
	15,853	American Tower Corp. — Class A*		464,810

		Utilities — 0.0%
	550,000	Mirant Corp. (Escrow Certifcates)*(14)(20)		55
	1,220,000	Mirant Corp. (Escrow Certificates)*(14)(20)		122

				177

		Total Common Stocks (Cost $3,265,059)		755,330

		Preferred Stocks — 0.2%
		Entertainment, Leisure and Recreation
	3,488,830	Fontainebleau Resorts, 12.50%(12)(14)(20) (Cost $3,418,733)		701,255

		Convertible Preferred Stocks — 0.4%
		Oil, Coal and Gas — 0.2%
	2,304	Chesapeake Energy Corp. — 144A, 5.00%*		124,416
	19,142	Chesapeake Energy Corp., 4.50%*		1,107,844

				1,232,260

		Telecommunications Equipment and Services — 0.2%
	18,825	Crown Castle International Corp., 6.25%*		674,170

		Total Convertible Preferred Stocks (Cost $3,003,505)		1,906,430

Principal

		Convertible Bonds — 0.3%
		Medical Equipment, Supplies, and Services
$	1,750,000	LifePoint Hospitals, Inc., 3.25%, 08/15/25 (Cost $961,323)		1,257,813

		Total Securities (Cost $589,080,397)		388,747,535

		Repurchase Agreements — 8.9%
	39,226,732	With State Street Bank and Trust, dated 12/31/08, 0.01%, due 01/02/09, repurchase proceeds at maturity $39,226,754 (Collateralized by US Treasury Bill, 0.15%, due 06/04/09, with a value of $40,013,988) (Cost $39,226,732)		39,226,732

		Total Investments — 97.3% (Cost $628,307,129)		427,974,267
		Other assets less liabilities — 2.7%		11,889,187

		Net Assets — 100.0%	$	439,863,454

The aggregate cost of securities for federal income tax purposes at December 31, 2008 is $629,365,217.

The following amounts are based on cost for federal income tax purposes:


Gross unrealized appreciation	$	1,710,742
Gross unrealized depreciation		(203,101,692	)

Net unrealized depreciation	$	(201,390,950	)

See summary of footnotes and abbreviations to portfolios.

See notes to financial statements.

107

BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS

December 31, 2008


Shares			Value

		Common Stocks — 56.6%
		Aerospace and Defense — 1.2%
	8,829	Boeing Company (The)	$	376,733
	9,532	General Dynamics Corp.		548,948
	4,187	Lockheed Martin Corp.		352,043
	4,942	Northrop Grumman Corp.		222,588
	8,998	United Technologies Corp.		482,293

				1,982,605

		Agriculture — 0.8%
	13,483	Archer-Daniels-Midland Company		388,715
	4,835	Bunge, Ltd. (Bermuda)(8)		250,308
	10,928	Monsanto Company		768,785

				1,407,808

		Airlines — 0.0%
	3,763	Southwest Airlines Company		32,437

		Apparel: Manufacturing and Retail — 0.4%
	296	Aeropostale, Inc.*		4,766
	5,906	Coach, Inc.*		122,668
	4,332	NIKE, Inc. — Class B		220,931
	792	Polo Ralph Lauren Corp.		35,965
	6,187	Ross Stores, Inc.		183,939
	3,025	Urban Outfitters, Inc.*		45,315

				613,584

		Automobiles/Motor Vehicles, Automotive Equipment and Repairs — 0.2%
	296	AutoZone, Inc.*		41,283
	18,102	Johnson Controls, Inc.		328,732

				370,015

		Banks and Financial Services — 6.0%
	17,037	American Express Company		316,036
	6,585	Ameriprise Financial, Inc.		153,826
	69,616	Bank of America Corp.		980,193
	19,966	Bank of New York Mellon Corp.		565,637
	5,807	BB&T Corp.(8)		159,460
	1,247	BlackRock, Inc.		167,285
	2,412	Broadridge Financial Solutions, Inc.		30,246
	8,597	Capital One Financial Corp.		274,158
	18,971	Charles Schwab Corp. (The)		306,761
	63,434	Citigroup, Inc.		425,642
	1,778	CME Group, Inc.		370,020
	2,247	Comerica, Inc.		44,603
	5,459	Discover Financial Services		52,024
	9,087	Eaton Vance Corp.		190,918
	2,846	Federated Investors, Inc. — Class B		48,268
	5,867	Fifth Third Bancorp		48,461
	2,568	Franklin Resources, Inc.		163,787
	12,050	Hudson City Bancorp, Inc.		192,318
	7,099	Huntington Bancshares, Inc.		54,378
	866	IntercontinentalExchange, Inc.*		71,393
	3,717	Invesco, Ltd. (Bermuda)		53,673
	45,391	JPMorgan Chase & Company		1,431,179
	7,600	Marshall & Ilsley Corp.		103,664
	4,646	Merrill Lynch & Company, Inc.		54,079
	7,061	Moody’s Corp.		141,855
	10,506	Morgan Stanley		168,516
	2,925	Northern Trust Corp.		152,510
	3,945	NYSE Euronext*		108,014
	3,662	PNC Financial Services Group, Inc.		179,438
	1,199	Raymond James Financial, Inc.		20,539
	20,626	Regions Financial Corp.		164,183
	6,202	State Street Corp.		243,925
	7,303	SunTrust Banks, Inc.		215,731
	15,503	Synovus Financial Corp.		128,675
	7,259	T Rowe Price Group, Inc.(8)		257,259
	20,780	US Bancorp		519,708
	11,390	Wachovia Corp.		63,101
	43,890	Wells Fargo & Company		1,293,878
	2,147	Zions Bancorp		52,623

				9,967,964

		Broadcast Services/Media — 1.7%
	11,109	CBS Corp. — Class B		90,983
	42,530	Comcast Corp. — Class A		717,906
	9,365	Comcast Corp. — Special Class A		151,245
	11,232	DIRECTV Group, Inc. (The)*		257,325
	4,332	McGraw-Hill Companies, Inc. (The)		100,459
	14,186	News Corp. — Class A		128,951
	81,108	Time Warner, Inc.		815,946
	29,143	Walt Disney Company (The)		661,255

				2,924,070

		Business Services and Supplies — 0.6%
	13,848	Accenture, Ltd. — Class A (Bermuda)		454,077
	2,472	Fidelity National Information Services, Inc.		40,219
	3,664	Genpact, Ltd (Bermuda)*		30,118
	3,703	Manpower, Inc.		125,865
	1,423	Paychex, Inc.		37,396
	6,465	Robert Half International, Inc.		134,602
	7,409	SEI Investments Company		116,395

				938,672

		Chemicals — 0.3%
	2,184	Air Products & Chemicals, Inc.		109,790
	7,015	Dow Chemical Company (The)		105,856

See notes to financial statements.

108

BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Chemicals (continued)

	5,631	EI du Pont de Nemours and Company	$	142,464
	2,433	FMC Corp.		108,828
	1,473	Rohm and Haas Company		91,017

				557,955

		Computer Equipment, Software and Services — 4.4%
	17,472	Adobe Systems, Inc.*		371,979
	12,126	Apple, Inc.*		1,034,954
	3,772	Autodesk, Inc.*		74,120
	2,365	Automatic Data Processing, Inc.		93,039
	1,878	Cognizant Technology Solutions Corp. — Class A*		33,917
	1,429	Computer Sciences Corp.*		50,215
	28,574	Dell, Inc.*		292,598
	28,010	EMC Corp.*		293,265
	29,006	Hewlett-Packard Company		1,052,628
	10,863	Ingram Micro, Inc. — Class A*		145,456
	14,399	International Business Machines Corp.		1,211,819
	88,470	Microsoft Corp.		1,719,856
	10,177	NetApp, Inc.*		142,173
	44,856	Oracle Corp.*		795,297
	1,225	Salesforce.com, Inc.*		39,212
	13,305	Sun Microsystems, Inc.*		50,825

				7,401,353

		Construction Services and Supplies — 0.1%
	6,595	Centex Corp.		70,171
	1,993	Toll Brothers, Inc.*		42,710

				112,881

		Consumer Goods and Services — 3.8%
	38,598	Altria Group, Inc.(5)		581,286
	10,311	Avon Products, Inc.		247,773
	9,493	Colgate-Palmolive Company		650,650
	3,522	Fortune Brands, Inc.		145,388
	6,255	Herbalife, Ltd. (Cayman Islands)		135,608
	657	Kimberly-Clark Corp.		34,650
	7,082	Lorillard, Inc.		399,071
	26,508	Philip Morris International, Inc.		1,153,363
	37,253	Procter & Gamble Company (The)		2,302,981
	10,573	United Parcel Service, Inc. — Class B		583,207
	1,813	UST, Inc.		125,786
	1,514	Whirlpool Corp.		62,604

				6,422,367

		Containers and Packaging — 0.0%
	1,073	Sonoco Products Company*		24,851

		Distribution — 0.0%
	819	Fastenal Company		28,542
	2,590	Tech Data Corp.*		46,206

				74,748

		Diversified Operations and Services — 1.2%
	124,043	General Electric Company		2,009,497
	1,923	Leucadia National Corp.*		38,075

				2,047,572

		Education — 0.1%
	1,778	Apollo Group, Inc. — Class A*		136,230
	269	ITT Educational Services, Inc.*		25,550

				161,780

		Electronics — 0.5%
	21,890	Emerson Electric Company		801,393
	3,241	Harman International Industries, Inc.		54,222
	2,381	Tyco Electronics, Ltd. (Bermuda)		38,596

				894,211

		Engineering — 0.1%
	3,027	Fluor Corp.		135,821

		Environmental Waste Management and Recycling Services — 0.0%
	2,272	Waste Management, Inc.		75,294

		Food and Beverage — 1.7%
	6,195	Campbell Soup Company		185,912
	16,797	Coca-Cola Company (The)		760,400
	6,985	Coca-Cola Enterprises, Inc.		84,030
	3,466	Corn Products International, Inc.		99,994
	4,378	Del Monte Foods Company		31,259
	4,593	Dr Pepper Snapple Group, Inc.*		74,636
	1,751	Hansen Natural Corp.*		58,711
	3,444	Hershey Company (The)		119,645
	1,575	HJ Heinz Company		59,220
	4,207	Hormel Foods Corp.		130,754
	1,045	JM Smucker Company (The)		45,311
	17,870	PepsiCo, Inc.		978,739
	5,054	Smithfield Foods, Inc.*(8)		71,110
	11,908	Tyson Foods, Inc. — Class A		104,314

				2,804,035

		Insurance — 1.6%
	15,073	Aflac, Inc.		690,945
	1,977	Allstate Corp. (The)		64,767
	500	Arch Capital Group, Ltd. (Bermuda)*		35,050

See notes to financial statements.

109

BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Insurance (continued)

	4,224	Chubb Corp. (The)	$	215,424
	1,769	Endurance Specialty Holdings, Ltd. (Bermuda)		54,008
	2,428	First American Corp.		70,145
	1,841	Hartford Financial Services Group, Inc. (The)		30,229
	3,057	Lincoln National Corp.		57,594
	4,606	Loews Corp.		130,120
	11,364	MetLife, Inc.		396,148
	7,292	Old Republic International Corp.		86,921
	2,045	Principal Financial Group, Inc.		46,156
	10,338	Progressive Corp. (The)		153,106
	6,653	Prudential Financial, Inc.		201,320
	9,359	Travelers Companies, Inc. (The)		423,026
	4,616	Unum Group		85,858

				2,740,817

		Internet Services — 1.9%
	4,217	Amazon.com, Inc.*		216,248
	85,709	Cisco Systems, Inc.*		1,397,058
	15,288	eBay, Inc.*		213,420
	2,948	Google, Inc. — Class A*		906,952
	13,227	Symantec Corp.*		178,829
	6,527	VeriSign, Inc.*		124,535
	12,406	Yahoo!, Inc.*		151,353

				3,188,395

		Machinery — 0.6%
	4,350	AGCO Corp.*		102,617
	11,422	Caterpillar, Inc.		510,221
	1,611	Cummins, Inc.		43,062
	7,192	Deere & Company		275,597

				931,497

		Manufacturing — 0.7%
	4,443	3M Company		255,650
	2,006	AptarGroup, Inc.		70,691
	1,059	Dover Corp.		34,862
	10,553	Honeywell International, Inc.		346,456
	7,715	Illinois Tool Works, Inc.		270,411
	965	Sherwin-Williams Company (The)		57,659
	7,902	Tyco International, Ltd. (Bermuda)		170,683

				1,206,412

		Medical Equipment, Supplies, and Services — 2.6%
	4,716	Baxter International, Inc.		252,730
	3,131	Becton, Dickinson and Company		214,129
	36,219	Boston Scientific Corp.*		280,335
	4,383	Cardinal Health, Inc.		151,082
	1,749	Community Health Systems, Inc.*		25,500
	626	CR Bard, Inc.		52,747
	728	Gen-Probe, Inc.*		31,188
	1,592	Hill-Rom Holdings, Inc.		26,204
	2,886	Hologic, Inc.*		37,720
	31,281	Johnson & Johnson		1,871,542
	5,178	McKesson Corp.		200,544
	15,088	Medtronic, Inc.		474,065
	3,078	St Jude Medical, Inc.*		101,451
	10,937	UnitedHealth Group, Inc.		290,924
	3,567	Varian Medical Systems, Inc.*		124,988
	5,769	WellPoint, Inc.*		243,048
	1,709	Zimmer Holdings, Inc.*		69,078

				4,447,275

		Metals and Mining — 0.3%
	10,970	Alcoa, Inc.		123,522
	2,532	Freeport-McMoRan Copper & Gold, Inc.		61,882
	1,304	Newmont Mining Corp.		53,073
	824	Nucor Corp.		38,069
	5,277	Southern Copper Corp.		84,749
	2,767	United States Steel Corp.		102,932

				464,227

		Oil, Coal and Gas — 8.4%
	3,396	Alpha Natural Resources, Inc.*		54,981
	5,909	Anadarko Petroleum Corp.		227,792
	6,819	Apache Corp.		508,220
	3,401	Cameron International Corp.*		69,721
	2,715	Chesapeake Energy Corp.		43,902
	27,560	Chevron Corp.		2,038,613
	1,406	Cimarex Energy Company		37,653
	17,830	ConocoPhillips		923,594
	956	CONSOL Energy, Inc.		27,322
	8,540	Devon Energy Corp.		561,163
	4,382	EOG Resources, Inc.		291,754
	1,580	Exterran Holdings, Inc.*		33,654
	62,372	Exxon Mobil Corp.		4,979,156
	3,629	FMC Technologies, Inc.*		86,479
	19,030	Halliburton Company		345,965
	5,561	Hess Corp.		298,292
	2,978	Marathon Oil Corp.		81,478
	5,029	Murphy Oil Corp.		223,036
	4,238	National-Oilwell Varco, Inc.*		103,577
	1,090	Noble Energy, Inc.		53,650
	12,173	Occidental Petroleum Corp.		730,258
	3,473	Patterson-UTI Energy, Inc.		39,974

See notes to financial statements.

110

BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Oil, Coal and Gas (continued)

	3,044	Peabody Energy Corp.	$	69,251
	3,386	Pioneer Natural Resources Company		54,785
	1,150	Praxair, Inc.		68,264
	14,364	Schlumberger, Ltd. (Netherland Antilles)		608,028
	1,856	Smith International, Inc.		42,484
	7,889	Southwestern Energy Company*		228,544
	1,756	St Mary Land & Exploration Company		35,664
	3,530	Sunoco, Inc.(8)		153,414
	14,332	Tesoro Corp.		188,752
	3,718	Transocean, Ltd. (Switzerland)*		175,676
	825	Ultra Petroleum Corp. (Canada)*		28,471
	19,679	Valero Energy Corp.		425,854
	2,023	W&T Offshore, Inc.		28,969
	2,773	XTO Energy, Inc.		97,804

				13,966,194

		Paper and Forest Products — 0.0%
	6,022	International Paper Company		71,060

		Pharmaceuticals/Research and Development — 5.6%
	14,100	Abbott Laboratories		752,517
	1,784	Allergan, Inc.		71,931
	4,246	AmerisourceBergen Corp.		151,412
	15,510	Amgen, Inc.*		895,703
	6,333	Biogen Idec, Inc.*		301,641
	19,957	Bristol-Myers Squibb Company		464,000
	5,325	Celgene Corp.*		294,366
	20,568	Eli Lilly and Company		828,273
	4,776	Express Scripts, Inc.*		262,584
	2,177	Facet Biotech Corp.*		20,877
	1,219	Forest Laboratories, Inc.*		31,048
	747	Genzyme Corp.*		49,578
	19,720	Gilead Sciences, Inc.*		1,008,482
	10,483	King Pharmaceuticals, Inc.*		111,329
	11,498	Medco Health Solutions, Inc.*		481,881
	26,318	Merck & Company, Inc.		800,067
	6,628	Mylan, Inc.*		65,551
	10,889	PDL BioPharma, Inc.		67,294
	85,118	Pfizer, Inc.		1,507,441
	29,110	Schering-Plough Corp.		495,743
	15,600	Wyeth		585,156

				9,246,874

		Printing and Publishing — 0.0%
	5,591	Gannett Company, Inc.		44,728

		Real Estate Development and Services — 0.1%
	3,657	Jones Lang LaSalle, Inc.		101,299

		Real Estate Investment Trusts — 0.6%
	3,719	AMB Property Corp.		87,099
	3,361	AvalonBay Communities, Inc.		203,609
	3,189	Equity Residential		95,096
	1,132	Kilroy Realty Corp.		37,877
	1,275	Kimco Realty Corp.		23,307
	5,320	Nationwide Health Properties, Inc.		152,790
	920	Regency Centers Corp.		42,964
	7,315	Simon Property Group, Inc.		388,646
	2,030	SL Green Realty Corp.		52,577

				1,083,965

		Retail — 2.5%
	2,951	Bed Bath & Beyond, Inc.*		75,014
	6,470	BJ’s Wholesale Club, Inc.*		221,662
	8,456	Costco Wholesale Corp.		443,940
	15,588	CVS Caremark Corp.		447,999
	2,700	Dollar Tree, Inc.*		112,860
	2,759	Family Dollar Stores, Inc.		71,927
	15,729	Home Depot, Inc. (The)		362,082
	18,605	Lowe’s Companies, Inc.		400,380
	3,037	PetSmart, Inc.		56,033
	2,270	RadioShack Corp.		27,104
	8,791	Target Corp.(8)		303,553
	10,566	TJX Companies, Inc. (The)		217,343
	2,891	Walgreen Company		71,321
	26,295	Wal-Mart Stores, Inc.		1,474,097

				4,285,315

		Retail: Restaurants — 1.3%
	24,460	McDonald’s Corp.		1,521,167
	3,267	Panera Bread Company — Class A*(8)		170,668
	17,626	YUM! Brands, Inc.		555,219

				2,247,054

		Retail: Supermarkets — 0.3%
	14,430	Kroger Company (The)		381,096
	5,450	Safeway, Inc.		129,547
	3,293	SUPERVALU, Inc.		48,078

				558,721

		Scientific and Technical Instruments — 0.2%
	8,723	Thermo Fisher Scientific, Inc.*		297,193

		Semiconductors — 1.1%
	13,302	Advanced Micro Devices, Inc.*		28,732
	9,074	Broadcom Corp. — Class A*		153,986
	88,423	Intel Corp.		1,296,281

See notes to financial statements.

111

BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Semiconductors (continued)

	19,134	LSI Corp.*	$	62,951
	22,117	Texas Instruments, Inc.		343,256

				1,885,206

		Telecommunications Equipment and Services — 2.9%
	2,357	American Tower Corp. — Class A*		69,107
	80,613	AT&T, Inc.(5)		2,297,471
	1,584	CenturyTel, Inc.		43,291
	21,187	Motorola, Inc.		93,858
	19,617	QUALCOMM, Inc.		702,877
	6,623	Qwest Communications International, Inc.		24,108
	80,479	Sprint Nextel Corp.*		147,277
	19,833	Tellabs, Inc.*		81,712
	42,437	Verizon Communications, Inc.		1,438,614
	10,581	Virgin Media, Inc.		52,799

				4,951,114

		Transportation — 1.1%
	3,962	Burlington Northern Santa Fe Corp.		299,963
	2,184	CH Robinson Worldwide, Inc.		120,186
	4,153	CSX Corp.		134,848
	4,560	Expeditors International of Washington, Inc.		151,711
	3,828	FedEx Corp.		245,566
	12,106	JB Hunt Transport Services, Inc.(8)		318,025
	1,518	Landstar System, Inc.		58,337
	3,926	Norfolk Southern Corp.		184,718
	6,540	Union Pacific Corp.		312,612
	5,906	Werner Enterprises, Inc.		102,410

				1,928,376

		Utilities — 1.7%
	1,663	American Electric Power Company, Inc.		55,345
	34,157	Duke Energy Corp.		512,696
	15,959	Dynegy, Inc. — Class A*		31,918
	2,024	Edison International		65,011
	1,360	Entergy Corp.		113,057
	12,473	Exelon Corp.		693,623
	4,549	FirstEnergy Corp.		220,990
	3,436	FPL Group, Inc.		172,934
	2,106	Integrys Energy Group, Inc.		90,516
	1,232	MDU Resources Group, Inc.		26,587
	3,591	Mirant Corp.*		67,762
	3,581	NiSource, Inc.		39,284
	7,076	NRG Energy, Inc.*(8)		165,083
	1,756	PG&E Corp.		67,975
	7,591	PPL Corp.		232,967
	6,219	Public Service Enterprise Group, Inc.		181,408
	6,096	Reliant Energy, Inc.*		35,235
	971	Sempra Energy		41,394
	1,785	Southern Company		66,045

				2,879,830

		Total Common Stocks (Cost $125,463,620)		95,475,575

Principal

		US Treasury Securities — 0.1%
		US Treasury Inflation Index
$	186,142	1.75%, 01/15/28 (Cost $149,996)		171,977

		US Government Agency Securities — 19.0%
		Asset Backed: Mortgage and Home Equity — 1.4%
	600,000	Fannie Mae Grantor Trust, Series 2001-T2, Class B, 6.02%, 11/25/10(5)	$	638,054
	158,886	Fannie Mae, Series 1999-7, Class AB, 6.00%, 03/25/29(5)		164,396
	760,000	Fannie Mae, Series 2003-35, Class TE, 5.00%, 05/25/18(5)		772,541
	353,165	Fannie Mae, Series 2004-60, Class LB, 5.00%, 04/25/34(5)		362,134
	460,332	Fannie Mae, Series 2004-99, Class AO, 5.50%, 01/25/34(5)		475,553

				2,412,678

		Fannie Mae — 13.0%
	1,708,999	PL# 256219, 5.50%, 04/01/36(5)		1,717,777
	78,302	PL# 535675, 7.00%, 01/01/16(5)		81,613
	924	PL# 549906, 7.50%, 09/01/30(5)		978
	1,426	PL# 552549, 7.50%, 09/01/30(5)		1,510
	568	PL# 558384, 7.50%, 01/01/31(5)		601
	1,933	PL# 568677, 7.50%, 01/01/31(5)		2,046
	269	PL# 572762, 7.50%, 03/01/31(5)		285
	15,488	PL# 582178, 7.50%, 06/01/31(5)		16,409
	12,791	PL# 594316, 6.50%, 07/01/31(5)		13,387
	2,409	PL# 602859, 6.50%, 10/01/31		2,520
	12,066	PL# 614924, 7.00%, 12/01/16(5)		12,604
	687,349	PL# 735580, 5.00%, 06/01/35(5)		703,166
	66,419	PL# 745000, 6.00%, 10/01/35(5)		68,467
	1,240,906	PL# 745275, 5.00%, 02/01/36(5)		1,268,686
	50,249	PL# 779545, 6.00%, 06/01/34(5)		51,852
	43,335	PL# 785183, 6.00%, 07/01/34(5)		44,718
	197,713	PL# 787311, 6.00%, 06/01/34(5)		204,023

See notes to financial statements.

112

BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		US Government Agency Securities (continued)
		Fannie Mae (continued)

$	1,409,078	PL# 792113, 6.00%, 09/01/34(5)	$	1,454,052
	45,020	PL# 793193, 5.50%, 07/01/19(5)		46,525
	333,739	PL# 793693, 6.00%, 08/01/34(5)		344,391
	1,039,496	PL# 835136, 6.00%, 09/01/35(5)		1,071,537
	1,116,289	PL# 844183, 6.00%, 11/01/35(5)		1,150,698
	220,759	PL# 888022, 5.00%, 02/01/36(5)		225,701
	4,869,339	PL# 911205, 6.50%, 05/01/37(4)(5)		5,063,077
	900,000	TBA, 5.50%, 01/01/24		926,719
	200,000	TBA, 6.00%, 01/01/24		207,375
	6,440,000	TBA, 5.00%, 01/01/39		6,574,841
	600,000	TBA, 5.50%, 01/01/39		615,000

				21,870,558

		Federal Agricultural Mortgage Corp. — 0.2%
	350,000	144A, 5.13%, 04/19/17(5)		395,017

		Freddie Mac Gold — 1.6%
	80,291	PL# A39644, 5.50%, 11/01/35		82,289
	900,000	TBA, 5.00%, 01/01/24		923,625
	1,000,000	TBA, 5.00%, 01/01/39		1,021,875
	700,000	TBA, 5.50%, 01/01/39		716,407

				2,744,196


		Government National Mortgage Association—2.6%
	2,726	PL# 461836, 7.00%, 01/15/28(4)		2,886
	191,513	PL# 604404, 5.00%, 06/15/33(4)		197,188
	459,270	PL# 637934, 5.00%, 01/15/35(4)		472,305
	489,550	PL# 639093, 5.00%, 01/15/35(4)		503,444
	391,638	PL# 639865, 5.00%, 06/15/35(4)		402,754
	86,563	PL# 781881, 5.00%, 03/15/35(4)		88,971
	1,300,000	TBA, 5.00%, 01/01/39		1,332,500
	1,300,000	TBA, 5.50%, 01/01/39		1,340,423

				4,340,471

		Resolution Funding Strips — 0.2%
	250,000	Zero coupon, 07/15/18(20)		179,246
	250,000	Zero coupon, 10/15/18(20)		176,986

				356,232

		Total US Government Agency Securities (Cost $31,387,704)		32,119,152

		Corporate Bonds and Notes — 27.8%
		Advertising — 0.0%
	60,000	Lamar Media Corp., Series B, 6.63%, 08/15/15		43,350

		Aerospace and Defense — 0.0%
	25,000	DRS Technologies, Inc., 6.63%, 02/01/16(5)		25,000

		Airlines — 0.2%
	300,000	Delta Air Lines, Inc., Series 2000-1, Class A-2, 7.57%, 11/18/10(5)		252,000
	93,494	Delta Air Lines, Inc., Series 2007-1, Class A, 6.82%, 08/10/22(5)		54,272

				306,272

		Automobile: Rental — 0.0%
	35,000	Hertz Corp., 8.88%, 01/01/14		21,525
	20,000	Hertz Corp., 10.50%, 01/01/16		9,125

				30,650

		Automobiles/Motor Vehicles, Automotive Equipment and Repairs — 0.4%
	300,000	Daimler Chrysler NA Holding, 5.88%, 03/15/11(5)		261,600
	580,000	Ford Motor Company, 7.45%, 07/16/31		162,400
	970,000	General Motors Corp., 8.25%, 07/15/23(8)		160,050
	16,000	Visteon Corp., 8.25%, 08/01/10		4,960
	38,000	Visteon Corp. — 144A, 12.25%, 12/31/16		9,120

				598,130

		Banks and Financial Services — 7.2%
	100,000	AGFC Capital Trust I — 144A, Variable Rate, 6.00%, 01/15/67(1)(5)		23,885
	200,000	Aiful Corp. — 144A (Japan), 5.00%, 08/10/10(5)		109,960
	190,000	American Express Company, Variable Rate, 6.80%, 09/01/66(1)(5)		98,354
	10,000	BAC Capital Trust XIV, Variable Rate, 5.63%, perpetual(1)(5)		4,007
	140,000	Bear Stearns Companies, Inc. (The), 7.25%, 02/01/18(5)		153,420
	280,000	BP Capital Markets PLC (United Kingdom), 5.25%, 11/07/13(5)		292,302
	210,000	Caterpillar Financial Service Corp., Series MTNF, 6.20%, 09/30/13(5)		216,493
	320,000	Citigroup, Inc., 6.50%, 08/19/13(5)		322,908
	330,000	Citigroup, Inc., 5.00%, 09/15/14(5)		290,262
	300,000	Citigroup, Inc., 6.88%, 03/05/38(5)		341,366

See notes to financial statements.

113

BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Banks and Financial Services (continued)

$	760,000	Countrywide Financial Corp., Series MTNA, 4.50%, 06/15/10(5)	$	746,709
	2,645,000	Ford Motor Credit Company LLC, 5.80%, 01/12/09		2,637,506
	220,000	Ford Motor Credit Company LLC, 7.38%, 10/28/09		193,209
	129,000	Ford Motor Credit Company LLC, Floating Rate, 7.25%, 06/15/11(2)		85,140
	1,130,000	General Motors Acceptance Corp., 5.85%, 01/14/09(8)		1,122,635
	160,000	Glitnir Banki hf — 144A (Iceland), 6.33%, 07/28/11(9)		7,600
	380,000	Glitnir Banki hf — 144A (Iceland), Variable Rate, 6.69%, 06/15/16(1)(9)		57
	645,000	GMAC LLC — 144A, 6.63%, 05/15/12(14)		615,323
	109,000	GMAC LLC — 144A, 7.50%, 12/31/13(14)		86,586
	85,000	GMAC LLC — 144A, 8.00%, 12/31/18(14)		50,476
	165,000	GMAC LLC — 144A, 8.00%, 11/01/31(14)		112,818
	170,000	Goldman Sachs Group, Inc. (The), 4.50%, 06/15/10(4)		167,516
	70,000	Goldman Sachs Group, Inc. (The), 5.45%, 11/01/12(4)		66,774
	162,000	ICICI Bank, Ltd. — 144A (India), Variable Rate, 6.38%, 04/30/22(1)(4)		85,068
	200,000	ICICI Bank, Ltd. — REG S (India), Variable Rate, 6.38%, 04/30/22(1)		105,424
	220,000	JPMorgan Chase & Company, 5.13%, 09/15/14(4)		213,197
	270,000	JPMorgan Chase & Company, 5.15%, 10/01/15(4)		254,949
	220,000	JPMorgan Chase & Company, 6.13%, 06/27/17(4)		216,507
	130,000	Kaupthing Bank hf — 144A (Iceland), 7.13%, 05/19/16(9)		975
	710,000	Kaupthing Bank hf — 144A, Series 1 (Iceland), 7.63%, 02/28/15(9)(14)(20)		42,600
	140,000	Landisbanki Islands hf — 144A (Iceland), 6.10%, 08/25/11(9)		2,450
	120,000	Lehman Brothers E — Capital Trust I, Floating Rate, 3.59%, 08/19/65(2)(9)		12
	100,000	Lehman Brothers Holdings, Inc., Series MTN, 5.25%, 02/06/12(9)		9,500
	480,000	Lehman Brothers Holdings, Inc., Series MTN, 6.75%, 12/28/17(9)		48
	170,000	Mitsubishi UFJ Financial Group Capital Financial I, Ltd. (Cayman Islands), Variable Rate, 6.35%, perpetual(1)		118,443
	260,000	Morgan Stanley, Series MTN, 5.63%, 01/09/12		246,560
	100,000	Morgan Stanley, Series MTNF, Floating Rate, 4.95%, 10/18/16(2)		68,805
	20,000	Rabobank Capital Funding Trust II — 144A, Variable Rate, 5.26%, perpetual(1)		10,581
	40,000	Rabobank Capital Funding Trust III — 144A, Variable Rate, 5.25%, perpetual(1)		21,931
	235,000	Resona Preferred Global Securities — 144A (Cayman Islands), Variable Rate, 7.19%, perpetual(1)		111,881
	100,000	Royal Bank of Scotland Group PLC, Series MTNU (United Kingdom), Variable Rate, 7.64%, perpetual(1)		39,828
	270,000	RSHB Capital Bank — 144A (Luxembourg), 6.30%, 05/15/17		153,900
	260,000	Santander Issuances — 144A (Spain), Variable Rate, 5.81%, 06/20/16(1)		233,910
	300,000	Shinsei Financial, Ltd. — 144A (Cayman Islands), Variable Rate, 6.42%, perpetual(1)		62,746
	60,000	SLM Corp., Series MTN, 5.05%, 11/14/14		39,929
	265,000	SLM Corp., Series MTNA, 5.00%, 10/01/13		189,613
	500,000	SLM Corp., Series MTNA, 5.38%, 05/15/14		337,437
	10,000	SLM Corp., Series MTNA, 5.00%, 04/15/15		6,344
	45,000	SLM Corp., Series MTNA, 5.63%, 08/01/33		27,299
	215,000	SunTrust Banks, Inc., Series CD, 4.42%, 06/15/09		214,230
	310,000	TNK-BP Finance SA — 144A (Luxembourg), 7.50%, 07/18/16		161,200

See notes to financial statements.

114

BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Banks and Financial Services (continued)

$	100,000	TNK-BP Finance SA, Series 6 — 144A (Luxembourg), 7.88%, 03/13/18	$	50,000
	390,000	Turanalem Finance BV — 144A (the Netherlands), 8.25%, 01/22/37		167,700
	350,000	Turanalem Finance BV (the Netherlands), 8.25%, 01/22/37		150,500
	170,000	Wachovia Capital Trust III, Variable Rate, 5.80%, perpetual(1)		100,300
	430,000	Wachovia Corp., 5.25%, 08/01/14		400,550
	130,000	Wells Fargo Capital X, 5.95%, 12/15/36		111,416
	270,000	Wells Fargo Capital XV, Variable Rate, 9.75%, perpetual (1)		272,700

				11,973,839

		Broadcast Services/Media — 0.6%
	60,000	CCH I, LLC/CCH I Capital Corp., 11.00%, 10/01/15		10,500
	100,000	Clear Channel Communications, Inc., 4.25%, 05/15/09		88,000
	170,000	Clear Channel Communications, Inc., 5.50%, 09/15/14		20,400
	60,000	Clear Channel Communications, Inc., 4.90%, 05/15/15		6,600
	150,000	Comcast Cable Communications, 8.88%, 05/01/17(5)		160,178
	240,000	Comcast Corp., 6.50%, 01/15/15(5)		235,904
	20,000	Comcast Corp., 6.50%, 01/15/17(5)		19,754
	20,000	Comcast Corp., 5.88%, 02/15/18(5)		18,952
	10,000	CSC Holdings, Inc., Series B, 7.63%, 04/01/11		9,425
	70,000	DIRECTV Holdings LLC/ DIRECTV Financing Company, Inc., 8.38%, 03/15/13		69,650
	30,000	Echostar DBS Corp., 7.00%, 10/01/13		26,025
	25,000	Echostar DBS Corp., 7.13%, 02/01/16		20,875
	10,000	Liberty Media Corp., 5.70%, 05/15/13		6,556
	10,000	News America, Inc., 6.65%, 11/15/37		9,898
	35,000	Rogers Cable, Inc. (Canada), 6.75%, 03/15/15		34,083
	80,000	Time Warner Entertainment, 8.38%, 07/15/33		80,730
	180,000	Time Warner, Inc., 6.88%, 05/01/12(5)		172,926
	75,000	Time Warner, Inc., 7.70%, 05/01/32(5)		75,092

				1,065,548

		Chemicals — 0.0%
	30,000	Georgia Gulf Corp., 9.50%, 10/15/14		9,000
	27,000	Westlake Chemical Corp., 6.63%, 01/15/16		15,660

				24,660

		Computer Equipment, Software and Services — 0.0%
	20,000	Electronic Data Systems, 7.13%, 10/15/09		20,333

		Construction Services and Supplies — 0.0%
	65,000	K Hovnanian Enterprises, Inc., 6.25%, 01/15/15		16,900

		Consumer Goods and Services — 0.0%
	100,000	Reynolds American, Inc., 6.75%, 06/15/17		79,379

		Containers and Packaging — 0.0%
	50,000	Graham Packaging Company, LP, 8.50%, 10/15/12		35,625

		Electronics — 0.0%
	15,000	NXP BV/NXP Funding LLC (the Netherlands), 7.88%, 10/15/14		5,850

		Entertainment, Leisure and Recreation — 0.1%
	25,000	Boyd Gaming Corp., 6.75%, 04/15/14		15,750
	80,000	Boyd Gaming Corp., 7.13%, 02/01/16		47,200
	30,000	Inn of The Mountain Gods, 12.00%, 11/15/10		9,900
	50,000	MGM MIRAGE, 8.50%, 09/15/10		42,000
	5,000	MGM MIRAGE, 6.63%, 07/15/15		3,050
	45,000	MGM MIRAGE, 7.63%, 01/15/17		29,025
	15,000	Mohegan Tribal Gaming Authority, 6.13%, 02/15/13		9,450
	10,000	Station Casinos, Inc., 6.88%, 03/01/16		575
	90,000	Station Casinos, Inc., 7.75%, 08/15/16		17,100

				174,050

See notes to financial statements.

115

BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)

		Environmental Waste Management and Recycling Services — 0.1%
$	270,000	Waste Management, Inc., 6.38%, 11/15/12	$	251,783

		Equipment Rental and Leasing — 0.1%
	250,000	International Lease Finance Corp. E-Capital Trust II — 144A, Variable Rate, 6.25%, 12/21/65(1)(4)		104,403

		Food and Beverage — 0.2%
	310,000	Diageo Capital PLC (United Kingdom), 7.38%, 01/15/14(5)		330,228

		Funeral Services — 0.0%
	10,000	Service Corp. International, 6.75%, 04/01/16		7,600
	40,000	Service Corp. International, 7.63%, 10/01/18		29,600
	35,000	Service Corp. International, 7.50%, 04/01/27		22,400

				59,600

		Insurance — 0.2%
	40,000	American International Group, Inc., Series MTNG, 5.85%, 01/16/18(5)		26,811
	40,000	ASIF Global Financing XIX — 144A, 4.90%, 01/17/13(5)		32,110
	50,000	Humana, Inc., 7.20%, 06/15/18(4)		40,209
	300,000	Merna Reinsurance, Ltd., Series B — 144A (Bermuda), Floating Rate, 3.21%, 07/07/10(2)		270,870

				370,000

		Manufacturing — 0.1%
	30,000	Tyco International Group SA (Luxembourg), 6.38%, 10/15/11		29,488
	110,000	Tyco International Group SA (Luxembourg), 6.00%, 11/15/13		103,215

				132,703

		Medical Equipment, Supplies, and Services — 0.3%
	60,000	Community Health Systems, Inc., 8.88%, 07/15/15		55,200
	125,000	DaVita, Inc., 6.63%, 03/15/13		118,750
	6,000	HCA, Inc., 6.30%, 10/01/12		4,230
	160,000	HCA, Inc., 6.75%, 07/15/13		100,800
	11,000	HCA, Inc., 5.75%, 03/15/14		6,655
	20,000	HCA, Inc., 9.13%, 11/15/14		18,550
	160,000	HCA, Inc., 9.25%, 11/15/16		146,800
	26,000	HCA, Inc., 9.63%, 11/15/16(12)		20,280
	60,000	Tenet Healthcare Corp., 6.38%, 12/01/11		46,350
	30,000	Tenet Healthcare Corp., 6.50%, 06/01/12		22,800
	20,000	WellPoint, Inc., 5.88%, 06/15/17		18,203

				558,618

		Metals and Mining — 0.6%
	180,000	Alcoa, Inc., 6.00%, 07/15/13(5)		162,753
	230,000	Evraz Group SA — 144A (Luxembourg), 8.88%, 04/24/13		117,300
	190,000	Freeport-McMoRan Copper & Gold, Inc., 8.38%, 04/01/17(4)		155,800
	210,000	Rio Tinto Finance USA, Ltd. (Australia), 6.50%, 07/15/18		153,966
	65,000	Steel Dynamics, Inc., 6.75%, 04/01/15		44,850
	341,000	Vale Overseas, Ltd. (Cayman Islands), 6.88%, 11/21/36		309,526
	130,000	Vedanta Resources PLC — 144A (United Kingdom), 8.75%, 01/15/14		78,000

				1,022,195

		Office Equipment, Supplies, and Services — 0.0%
	40,000	Xerox Corp., 6.75%, 02/01/17		29,025

		Oil, Coal and Gas — 2.7%
	235,000	Anadarko Finance Company, Series B, 7.50%, 05/01/31(5)		207,805
	35,000	Anadarko Petroleum Corp., 6.45%, 09/15/36(5)		27,609
	150,000	Apache Corp., 6.00%, 09/15/13(5)		155,561
	5,000	Chesapeake Energy Corp., 6.38%, 06/15/15		3,950
	20,000	Chesapeake Energy Corp., 6.25%, 01/15/18		14,800
	5,000	Chesapeake Energy Corp., 7.25%, 12/15/18		3,900
	105,000	Complete Production Services, Inc., 8.00%, 12/15/16		66,150

See notes to financial statements.

116

BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Oil, Coal and Gas (continued)

$	80,000	Conoco, Inc., 6.95%, 04/15/29(5)	$	86,088
	125,000	Dynegy Holdings, Inc., 7.75%, 06/01/19		86,250
	86,000	El Paso Corp., Series MTN, 7.80%, 08/01/31		56,029
	25,000	El Paso Corp., Series MTN, 7.75%, 01/15/32		16,228
	220,000	El Paso Natural Gas, 8.38%, 06/15/32(5)		189,836
	500,000	El Paso Performance-Link — 144A, 7.75%, 07/15/11		432,874
	250,000	Enterprise Products Operating LLP, 9.75%, 01/31/14(5)		254,572
	120,000	Gaz Capital (Gazprom) — 144A (Luxembourg), 6.21%, 11/22/16(4)		79,200
	20,000	Hess Corp., 7.88%, 10/01/29(5)		19,200
	110,000	Hess Corp., 7.30%, 08/15/31(5)		100,084
	260,000	Intergas Finance BV — 144A (the Netherlands), 6.38%, 05/14/17(4)		150,800
	250,000	KazMunaiGaz Finance Sub BV — 144A (Kazakhstan), 8.38%, 07/02/13(4)		195,000
	180,000	Kerr-McGee Corp., 6.95%, 07/01/24(4)		157,833
	110,000	Kerr-McGee Corp., 7.88%, 09/15/31(4)		101,260
	50,000	Kinder Morgan Energy Partners LP, 6.30%, 02/01/09		49,952
	190,000	Kinder Morgan Energy Partners LP, 6.75%, 03/15/11		184,802
	50,000	Kinder Morgan Energy Partners LP, 5.85%, 09/15/12		45,790
	20,000	Kinder Morgan Energy Partners LP, 6.00%, 02/01/17		17,364
	200,000	Kinder Morgan Energy Partners LP, Series MTN, 6.95%, 01/15/38		161,749
	250,000	Occidental Petroleum Corp., 7.00%, 11/01/13		272,861
	50,000	OPTI Canada, Inc. (Canada), 7.88%, 12/15/14		25,500
	75,000	OPTI Canada, Inc. (Canada), 8.25%, 12/15/14		40,500
	40,000	Peabody Energy Corp., Series B, 6.88%, 03/15/13		37,900
	17,000	Pemex Project Funding Master Trust, 6.63%, 06/15/35		14,391
	290,000	Pemex Project Funding Master Trust — 144A, 6.63%, 06/15/35		245,485
	190,000	Petrobas International Finance Company (Cayman Islands), 6.13%, 10/06/16		185,250
	30,000	Pride International, Inc., 7.38%, 07/15/14		27,900
	25,000	Semgroup LP — 144A, 8.75%, 11/15/15(9)(20)		875
	160,000	Shell International Finance (the Netherlands), 6.38%, 12/15/38		179,998
	95,000	Suburban Propane Partners, 6.88%, 12/15/13		77,900
	20,000	Williams Companies, Inc., 8.75%, 03/15/32		14,900
	320,000	Williams Companies, Inc., Series A, 7.50%, 01/15/31		214,400
	190,000	XTO Energy, Inc., 7.50%, 04/15/12		187,788
	60,000	XTO Energy, Inc., 6.50%, 12/15/18		58,081

				4,448,415

		Paper and Forest Products — 0.1%
	110,000	Weyerhaeuser Company, 6.75%, 03/15/12		98,467

		Pharmaceuticals/Research and Development — 0.2%
	40,000	AmerisourceBergen Corp., 5.88%, 09/15/15(5)		34,959
	120,000	FMC Finance III SA (Luxembourg), 6.88%, 07/15/17		112,200
	110,000	Wyeth, 5.95%, 04/01/37		122,132

				269,291

		Printing and Publishing — 0.0%
	105,000	Idearc, Inc., 8.00%, 11/15/16		7,875
	10,000	RH Donnelley Corp., Series A-4, 8.88%, 10/15/17		1,500
	30,000	Sun Media Corp. (Canada), 7.63%, 02/15/13		24,150
	40,000	TL Acquisitions, Inc. — 144A, 10.50%, 01/15/15		16,400

				49,925

		Private Asset Backed: Banks and Financial Services — 0.1%
	300,000	Morgan Stanley Capital I, Series 2005-HQ6, Class A4A, 4.99%, 08/13/42		245,093

See notes to financial statements.

117

BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)

		Private Asset Backed: Credit Cards — 0.3%
$	640,000	Washington Mutual Master Note Trust — 144A, Series 2006-A3A, Class A3, Floating Rate, 1.23%, 09/15/13(3)	$	560,241

		Private Asset Backed: Mortgage and Home Equity — 11.1%
	309,587	Accredited Mortgage Loan Trust, Series 2005-3, Class A1, Floating Rate, 0.71%, 09/25/35(3)		242,265
	139,415	Adjustable Rate Mortgage Trust, Series 2004-2, Class 7A2, Floating Rate, 0.89%, 02/25/35(3)		67,787
	68,154	Adjustable Rate Mortgage Trust, Series 2004-5, Class 7A2, Floating Rate, 0.85%, 04/25/35(3)		32,173
	280,000	Banc of America Commercial Mortgage, Inc., Series 2005-5, Class A4, 5.11%, 10/10/45(5)		228,202
	2,917,181	Bear Stearns Asset Backed Securities, Inc., Series 07-SD1, Class 1A3A, 6.50%, 10/25/36(5)		2,308,641
	1,397,308	Bear Stearns Mortgage Funding Trust, Series 2006-AR5, Class 1A2, Floating Rate, 0.68%, 12/25/36(3)		398,631
	297,026	Countrywide Alternative Loan Trust, Series 2005-36, Class 3A1, Floating Rate, 4.91%, 08/25/35(3)(5)		179,887
	739,760	Countrywide Alternative Loan Trust, Series 2005-56, Class 4A1, Floating Rate, 0.78%, 11/25/35(3)		341,562
	805,662	Countrywide Alternative Loan Trust, Series 2005-59, Class 1A1, Floating Rate, 0.84%, 11/20/35(3)		402,734
	176,324	Countrywide Asset-Backed Certificates, Series 2005-4, Class AF3, 4.46%, 10/25/35(5)		143,668
	365,670	Countrywide Home Equity Loan Trust, Series 2005-G, Class 2A, Floating Rate, 1.42%, 12/15/35(3)		143,510
	729,242	Countrywide Home Loans — 144A, Series 2005-R3, Class AF, Floating Rate, 0.87%, 09/25/35(3)		559,405
	720,000	GE Capital Commercial Mortgage Corp., Series 2007-C1, Class A4, 5.54%, 02/10/17(4)		536,651
	517,675	GMAC Commercial Mortgage Securities, Inc., Series 1999-C2, Class A2, 6.95%, 09/15/33		515,634
	768,653	GMAC Mortgage Corp. Loan Trust, Series 2005-AR1, Class 3A, Floating Rate, 4.64%, 03/18/35(3)		454,449
	1,200,818	GMAC Mortgage Corp. Loan Trust, Series 2006-HE1, Class A, Floating Rate, 0.68%, 11/25/36(3)		315,890
	552,501	GSAMP Trust — 144A, Series 2006-SD2, Class A1, Floating Rate, 0.58%, 05/25/46(3)		458,570
	257,226	Impac CMB Trust, Series 2004-6, Class 1A1, Floating Rate, 1.27%, 10/25/34(3)		101,229
	587,756	IndyMac INDA Mortgage Loan Trust, Series 2007-AR7, Class 1A1, Floating Rate, 6.18%, 11/25/37(3)(4)		362,346
	196,078	IndyMac Index Mortgage Loan Trust, Series 2005-AR15, Class A2, 5.10%, 09/25/35(4)		94,143
	606,735	IndyMac Index Mortgage Loan Trust, Series 2007-AR15, Class 2A1, Floating Rate, 5.94%, 08/25/37(3)		246,329
	1,080,000	JPMorgan Chase Commercial Mortgage Securities Corp., Series 2005-CB12, Class A4, 4.90%, 09/12/37(4)		853,659
	546,552	JPMorgan Mortgage Trust, Series 2004-A3, Class 1A1, Floating Rate, 4.30%, 07/25/34(3)		419,581
	461,893	Lehman XS Trust, Series 2005-5N, Class 1A1, Floating Rate, 0.77%, 11/25/35(3)		207,699
	348,039	Lehman XS Trust, Series 2005-7N, Class 1A1B, Floating Rate, 0.77%, 12/25/35(3)		99,620
	513,559	Lehman XS Trust, Series 2006-GP4, Class 3A1A, Floating Rate, 0.54%, 08/25/46(3)		394,507
	850,000	Merrill Lynch Countrywide Commercial Mortgage Trust, Series 2007-6, Class A4, 5.49%, 03/12/51		585,210

See notes to financial statements.

118

BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)
		Private Asset Backed: Mortgage and Home Equity (continued)

$	345,978	Merrill Lynch Mortgage Investors Trust, Series 2004-A3, Class 4A3, Floating Rate, 5.03%, 05/25/34(3)	$	251,019
	1,098,000	Merrill Lynch Mortgage Investors, Inc., Series 2005-A4, Class 2A2, 4.46%, 07/25/35		558,224
	1,300,000	Merrill Lynch Mortgage Investors, Inc., Series 2005-A5, Class A3, 4.44%, 06/25/35		649,104
	500,000	Merrill Lynch Mortgage Trust, Series 2006-C1, Class A4, Floating Rate, 5.66%, 05/12/39(3)		407,199
	176,231	MLCC Mortgage Investors, Inc., Series 2003-F, Class A1, Floating Rate, 0.79%, 10/25/28(3)		129,369
	187,606	Morgan Stanley Mortgage Loan Trust, Series 2004-6AR, Class 1A, Floating Rate, 0.92%, 07/25/34(3)		101,537
	696,434	Prime Mortgage Trust — 144A, Series 2006-DR1, Class 1A1, 5.50%, 05/25/35		537,805
	329,698	Prime Mortgage Trust — 144A, Series 2006-DR1, Class 1A2, 6.00%, 05/25/35		257,023
	1,638,087	Prime Mortgage Trust — 144A, Series 2006-DR1, Class 2A1, 5.50%, 05/25/35		1,024,869
	1,475,811	Residential Accredit Loans, Inc., Series 2005-QO3, Class A1, Floating Rate, 0.87%, 10/25/45(3)		678,418
	794,934	Structured Adjustable Rate Mortgage Loan Trust, Series 2005-15, Class 1A1, 5.06%, 07/25/35		477,490
	303,490	Structured Asset Mortgage Investments, Inc., Series 2003-AR4, Class A1, Floating Rate, 0.93%, 01/19/34(3)		202,833
	894,809	Thornburg Mortgage Securities Trust, Series 2006-1, Class A3, Floating Rate, 0.64%, 01/25/46(3)		891,396
	271,767	Washington Mutual Mortgage Pass-Through Certificates, Series 2005-AR1, Class A1A, Floating Rate, 0.79%, 01/25/45(3)		136,757
	476,961	Washington Mutual Mortgage Pass-Through Certificates, Series 2005-AR13, Class A1A1, Floating Rate, 0.76%, 10/25/45(3)		260,505
	511,030	Washington Mutual Mortgage Pass-Through Certificates, Series 2005-AR13, Class A1B3, Floating Rate, 0.83%, 10/25/45(3)		171,288
	596,450	Washington Mutual Mortgage Pass-Through Certificates, Series 2005-AR15, Class A1A2, Floating Rate, 0.75%, 11/25/45(3)		292,951
	469,289	Washington Mutual Mortgage Pass-Through Certificates, Series 2007-HY4, Class 4A1, 5.51%, 09/25/36		328,414
	553,079	Zuni Mortgage Loan Trust, Series 2006-OA1, Class A1, Floating Rate, 0.60%, 08/25/36(3)		524,286

				18,574,469

		Private Asset Backed: Student Loans — 0.1%
	170,000	Nelnet Student Loan Trust, Series 2008-4, Class A4, Floating Rate, 5.01%, 04/25/24(2)		137,723

		Real Estate Development and Services — 0.0%
	230,000	Realogy Corp., 12.38%, 04/15/15		31,050

		Real Estate Investment Trusts — 0.1%
	50,000	Host Hotels & Resorts LP, Series Q, 6.75%, 06/01/16(4)		36,500
	50,000	Ventas Realty LP/Ventas Capital Corp., 6.75%, 06/01/10		47,313
	40,000	Ventas Realty LP/Ventas Capital Corp., 6.75%, 04/01/17		30,400

				114,213

		Retail — 0.1%
	255,346	CVS Caremark Corp. — 144A, 6.94%, 01/10/30(5)		160,554
	20,000	JC Penney & Company, Inc., 7.40%, 04/01/37		13,168

				173,722

		Retail: Supermarkets — 0.1%
	93,000	Delhaize America, Inc., 9.00%, 04/15/31(5)		94,053

See notes to financial statements.

119

BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Corporate Bonds and Notes (continued)

		Scientific and Technical Instruments — 0.0%
$	80,000	Cie Generale de Geophysique (France), 7.50%, 05/15/15	$	49,600
	40,000	Cie Generale de Geophysique (France), 7.75%, 05/15/17		23,200

				72,800

		Semiconductors — 0.0%
	25,000	Freescale Semiconductor, Inc., 8.88%, 12/15/14		11,000
	40,000	MagnaChip Semiconductor, Ltd., Floating Rate, 5.25%, 12/15/11(2)(9)		1,400

				12,400

		Telecommunications Equipment and Services — 1.3%
	120,000	America Movil SAB de CV (Mexico), 5.63%, 11/15/17(5)		106,683
	190,000	AT&T, Inc., 5.10%, 09/15/14		186,768
	90,000	AT&T, Inc., 5.50%, 02/01/18(5)		90,956
	15,000	Citizens Communications Company, 9.25%, 05/15/11		14,250
	30,000	Citizens Communications Company, 7.88%, 01/15/27		17,400
	180,000	Deutsche Telecom International Finance BV (the Netherlands), 5.75%, 03/23/16(5)		172,303
	220,000	Koninklijke KPN NV (the Netherlands), 8.38%, 10/01/30		248,488
	90,000	Level 3 Financing, Inc., 9.25%, 11/01/14		52,200
	10,000	Nextel Communications, Inc., Series D, 7.38%, 08/01/15		4,200
	130,000	Nextel Communications, Inc., Series E, 6.88%, 10/31/13		55,250
	60,000	Nextel Communications, Inc., Series F, 5.95%, 03/15/14		25,200
	40,000	Rogers Wireless, Inc. (Canada), 6.38%, 03/01/14		38,024
	270,000	Sprint Capital Corp., 8.38%, 03/15/12		216,000
	60,000	Sprint Capital Corp., 8.75%, 03/15/32		40,500
	200,000	Telecom Italia Capital (Luxembourg), 5.25%, 10/01/15		152,250
	70,000	Telecom Italia Capital (Luxembourg), 7.00%, 06/04/18		56,788
	90,000	Verizon Communications, Inc., 8.95%, 03/01/39		116,252
	50,000	Verizon Global Funding Corp., 7.38%, 09/01/12		52,308
	300,000	Verizon New York, Inc., Series A, 6.88%, 04/01/12		298,485
	260,000	VIP FIN (VIMPELCOM) — 144A (Luxembourg), 8.38%, 04/30/13		166,400
	140,000	Windstream Corp., 8.63%, 08/01/16		123,900

				2,234,605

		Transportation — 0.1%
	20,000	Teekay Shipping Corp. (Marshall Islands), 8.88%, 07/15/11		16,900
	110,000	Union Pacific Corp., 5.38%, 05/01/14		103,758

				120,658

		Utilities — 1.4%
	80,000	AES Corp., 7.75%, 10/15/15		67,200
	410,000	AES Corp., 8.00%, 10/15/17		336,200
	70,000	Dominion Resources, Inc., 4.75%, 12/15/10(5)		69,215
	140,000	Dominion Resources, Inc., 5.70%, 09/17/12(5)		138,625
	80,000	Dominion Resources, Inc., Series D, 8.88%, 01/15/19(5)		86,271
	70,000	Edison Mission Energy, 7.00%, 05/15/17		60,900
	90,000	Edison Mission Energy, 7.20%, 05/15/19		73,800
	40,000	Edison Mission Energy, 7.63%, 05/15/27		31,000
	10,000	Energy Future Holdings Corp. — 144A, 10.88%, 11/01/17		7,100
	1,150,000	Energy Future Holdings Corp. — 144A, 11.25%, 11/01/17(12)		557,750
	5,000	Exelon Corp., 5.63%, 06/15/35(5)		3,156
	160,000	FirstEnergy Corp., Series B, 6.45%, 11/15/11(4)		151,241
	125,000	FirstEnergy Corp., Series C, 7.38%, 11/15/31(4)		118,252

See notes to financial statements.

120

BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal				Value

			Corporate Bonds and Notes (continued)
			Utilities (continued)

$	100,000		NRG Energy, Inc., 7.25%, 02/01/14	$	93,500
	10,000		NRG Energy, Inc., 7.38%, 02/01/16		9,300
	10,000		NRG Energy, Inc., 7.38%, 01/15/17		9,200
	40,000		Pacific Gas & Electric Company, 8.25%, 10/15/18		48,058
	90,000		Pacific Gas & Electric Company, 6.05%, 03/01/34		95,585
	60,000		Pacific Gas & Electric Company, 5.80%, 03/01/37		62,232
	210,000		TXU Corp., Series P, 5.55%, 11/15/14		98,118
	105,000		TXU Corp., Series Q, 6.50%, 11/15/24		37,148
	310,000		TXU Corp., Series R, 6.55%, 11/15/34		104,654

					2,258,505

			Total Corporate Bonds and Notes (Cost $67,680,478)		46,753,771

			Preferred Corporate Bonds and Notes — 0.4%
			Banks and Financial Services — 0.1%
	190,000		Bank of America Corp., Series K, Variable Rate, 8.00%, perpetual(1)(5)		136,665
	40,000		Bank of America Corp., Series M, Variable Rate, 8.13%, perpetual(1)(5)		29,920
	90,000		Credit Suisse (Guernsey), Variable Rate, 5.86%, perpetual(1)(5)		42,006
	20,000		Goldman Sachs Capital II, Variable Rate, 5.79%, perpetual(1)(4)		7,688
	200,000		Lehman Brothers Capital Trust VII, Series MTN, Variable Rate, 5.86%, perpetual(1)(9)		20

					216,299

			Insurance — 0.3%
	430,000		MetLife, Inc., 6.40%, 12/15/36		258,000
	250,000		Travelers Companies, Inc. (The), Variable Rate, 6.25%, 03/15/37(1)		163,759

					421,759

			Total Preferred Corporate Bonds and Notes (Cost $1,187,535)		638,058

Shares				Value

			Preferred Stocks — 0.0%
			Banks and Financial Services
	600		Fannie Mae, Series O, Floating Rate, 7.00%(2)	$	450
	10,800		Fannie Mae, Series S, Variable Rate, 8.25%(1)		8,964
	14,925		Freddie Mac, Series Z, Variable Rate, 8.38%(1)		5,821
	178		Preferred Blocker, Inc. — 144A(14)		29,980

			Total Preferred Stocks (Cost $675,045)		45,215

Principal

			Convertible Bonds — 0.0%
			Automobiles/Motor Vehicles, Automotive Equipment and Repairs
$	40,000		Ford Motor Company, 4.25%, 12/15/36 (Cost $40,000)		10,300

			Municipal Bonds — 0.6%
			Virginia
	1,106,095		Virginia State Housing Development Authority, Series C, Revenue Bond, 6.00%, 06/25/34 (Cost $1,088,458)		1,078,752

			Foreign Government Obligations — 0.3%
	450,000		AID-Israel (Israel), 5.50%, 04/26/24(4) (Cost $445,411)		558,959

			Securities Lending Collateral — 1.1%
	1,911,215		Securities Lending Collateral Investment (Note 4) (Cost $1,911,215)		1,911,215

			Total Securities (Cost $230,029,462)		178,762,974

			Repurchase Agreements — 2.2%
	3,771,297		With State Street Bank and Trust, dated 12/31/08, 0.01%, due 01/02/09, repurchase proceeds at maturity $3,771,300 (Collateralized by US Treasury Bill, 0.02%, due 05/14/09, with a value of $3,854,615) (Cost $3,771,297)		3,771,297

			Total Investments before Call and Put Options Written — 108.1% (Cost $233,800,759)		182,534,271

Contracts

			Call Options Written — (0.3)%
	(5	)	Eurodollar Future, Expiring September 2009 @ 97.63		(14,719	)

See notes to financial statements.

121

BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Contracts				Value

			Call Options Written (continued)

	(57	)	Eurodollar Interest Rate Future, Expiring March 2009 @ 98.25	$	(103,312	)
	(44	)	US Treasury Note (10 Year) March Future, Expiring February 2009 @ 118		(360,938	)

			Total Call Options Written (Premium $86,010)		(478,969	)

			Put Options Written — (0.0)%
	(70	)	Eurodollar Interest Rate Future, Expiring March 2009 @ 96.75		(438	)
	(42	)	US Treasury Note (10 Year) March Future, Expiring February 2009 @ 110		(5,250	)
	(10	)	US Treasury Note (10 Year) March Future, Expiring February 2009 @ 111		(1,406	)

			Total Put Options Written (Premium $119,957)		(7,094	)

			Total Investments net of Call and Put Options Written — 107.8% (Cost $233,594,792)		182,048,208
			Liabilities less other assets — (7.8)%		(13,118,098	)

			Net Assets — 100.0%	$	168,930,110

The aggregate cost of securities for federal income tax purposes at December 31, 2008 is $236,199,315.

The following amounts are based on cost for federal income tax purposes:


Gross unrealized appreciation	$	1,056,329
Gross unrealized depreciation		(54,721,373	)

Net unrealized depreciation	$	(53,665,044	)

See summary of footnotes and abbreviations to portfolios

LARGE VALUE PORTFOLIO
(FORMERLY, VALUE & INCOME PORTFOLIO)
PORTFOLIO OF INVESTMENTS

December 31, 2008


Shares			Value

		Common Stocks — 99.0%
		Advertising — 0.4%
	1,377,700	Interpublic Group of Companies, Inc. (The)*	$	5,455,692

		Agriculture — 0.5%
	151,700	Bunge, Ltd. (Bermuda)		7,853,509

		Apparel: Manufacturing and Retail — 1.2%
	1,123,700	Gap, Inc. (The)		15,046,343
	214,100	Limited Brands, Inc.		2,149,564

				17,195,907

		Automobiles/Motor Vehicles, Automotive Equipment and Repairs — 0.4%
	154,727	Autoliv, Inc.		3,320,441
	86,200	Magna International, Inc. — Class A (Canada)		2,579,966

				5,900,407

		Banks and Financial Services — 9.1%
	386,900	American Express Company		7,176,995
	1,142,082	Bank of America Corp.		16,080,515
	61,700	Capital One Financial Corp.		1,967,613
	1,450,670	Citigroup, Inc.		9,733,996
	76,928	Deutsche Bank AG (Germany)		3,130,200
	581,200	Fifth Third Bancorp		4,800,712
	126,200	Goldman Sachs Group, Inc. (The)		10,650,018
	218,600	Invesco, Ltd. (Bermuda)		3,156,584
	1,719,540	JPMorgan Chase & Company		54,217,096
	66,400	Lazard, Ltd. — Class A (Bermuda)		1,974,736
	555,000	Morgan Stanley		8,902,200
	215,800	SunTrust Banks, Inc.		6,374,732
	134,000	Wells Fargo & Company		3,950,320

				132,115,717

		Broadcast Services/Media — 5.3%
	813,500	CBS Corp. — Class B		6,662,565
	1,430,000	Comcast Corp. — Class A		24,138,400
	538,500	News Corp. — Class A		4,894,965
	3,671,200	Time Warner, Inc.		36,932,272
	200,000	Viacom, Inc. — Class B*		3,812,000

				76,440,202

		Chemicals — 0.2%
	92,155	Eastman Chemical Company		2,922,235

		Computer Equipment, Software and Services — 3.6%
	1,218,400	Dell, Inc.*		12,476,416
	219,000	Hewlett-Packard Company		7,947,510
	327,100	International Business Machines Corp.		27,528,736
	388,600	Western Digital Corp.*		4,449,470

				52,402,132

		Construction Services and Supplies — 0.5%
	109,500	Centex Corp.		1,165,080
	107,000	KB HOME		1,457,340
	530,779	Lennar Corp. — Class A		4,601,854

				7,224,274

		Consumer Goods and Services — 5.0%
	506,000	Altria Group, Inc.		7,620,360
	115,000	Black & Decker Corp. (The)		4,808,150
	106,100	Estee Lauder Companies, Inc. (The) — Class A		3,284,856
	484,000	Kimberly-Clark Corp.		25,526,160
	328,000	Philip Morris International, Inc.		14,271,280
	283,455	Procter & Gamble Company (The)		17,523,188

				73,033,994

		Containers and Packaging — 0.2%
	122,000	Owens-Illinois, Inc.*		3,334,260

		Diversified Operations and Services — 2.9%
	2,578,700	General Electric Company		41,774,940

		Electronics — 2.1%
	2,523,748	Flextronics International, Ltd. (Singapore)*		6,460,795
	674,802	Sanmina-SCI Corp.*		317,157
	517,000	Sony Corp. (ADR) (Japan)		11,306,790
	801,750	Tyco Electronics, Ltd. (Bermuda)		12,996,367

				31,081,109

		Environmental Waste Management and Recycling Services — 0.8%
	345,000	Waste Management, Inc.		11,433,300

		Food and Beverage — 4.9%
	447,400	Coca-Cola Enterprises, Inc.		5,382,222
	791,300	Dean Foods Company*		14,219,661
	39,427	JM Smucker Company (The)		1,709,555
	60,000	Kellogg Company		2,631,000
	1,001,100	Kraft Foods, Inc. — Class A		26,879,535
	70,000	Molson Coors Brewing Company — Class B		3,424,400
	1,668,805	Sara Lee Corp.		16,337,601
	79,195	Tyson Foods, Inc. — Class A		693,748

				71,277,722

See notes to financial statements.

123

LARGE VALUE PORTFOLIO
(FORMERLY, VALUE & INCOME PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)

		Insurance — 6.0%
	446,000	Allstate Corp. (The)	$	14,610,960
	942,700	American International Group, Inc.		1,480,039
	72,000	Fidelity National Financial, Inc. — Class A		1,278,000
	550,000	Genworth Financial, Inc. — Class A		1,556,500
	132,100	Hartford Financial Services Group, Inc. (The)		2,169,082
	330,415	MetLife, Inc.		11,518,267
	61,566	PartnerRe, Ltd. (Bermuda)		4,387,809
	117,300	RenaissanceRe Holdings, Ltd. (Bermuda)		6,047,988
	932,800	Travelers Companies, Inc. (The)		42,162,560
	313,000	XL Capital, Ltd. — Class A (Cayman Islands)		1,158,100

				86,369,305

		Internet Services — 0.3%
	298,700	Symantec Corp.*		4,038,424

		Machinery — 0.3%
	82,000	Caterpillar, Inc.		3,662,940

		Manufacturing — 1.9%
	483,000	Honeywell International, Inc.		15,856,890
	564,350	Tyco International, Ltd. (Bermuda)		12,189,960

				28,046,850

		Medical Equipment, Supplies, and Services — 3.9%
	1,798,100	Boston Scientific Corp.*		13,917,294
	217,000	Cardinal Health, Inc.		7,479,990
	733,800	Hologic, Inc.*		9,590,766
	290,000	Johnson & Johnson		17,350,700
	57,500	McKesson Corp.		2,226,975
	5,176,420	Tenet Healthcare Corp.*		5,952,883

				56,518,608

		Metals and Mining — 0.7%
	456,000	Alcoa, Inc.		5,134,560
	150,900	United States Steel Corp.		5,613,480

				10,748,040

		Oil, Coal and Gas — 15.8%
	171,100	Anadarko Petroleum Corp.		6,595,905
	157,000	Apache Corp.		11,701,210
	275,000	BP PLC (ADR) (United Kingdom)		12,853,500
	819,900	Chevron Corp.		60,648,004
	927,602	ConocoPhillips		48,049,784
	181,400	Devon Energy Corp.		11,919,794
	637,000	Exxon Mobil Corp.		50,851,710
	78,000	Occidental Petroleum Corp.		4,679,220
	213,400	Total SA (ADR) (France)		11,801,020
	374,600	Valero Energy Corp.		8,106,344

				227,206,491

		Paper and Forest Products — 0.8%
	1,046,700	MeadWestvaco Corp.		11,712,573

		Pharmaceuticals/Research and Development — 11.1%
	89,834	AmerisourceBergen Corp.		3,203,480
	111,000	Amgen, Inc.*		6,410,250
	904,000	Bristol-Myers Squibb Company		21,018,000
	150,000	Eli Lilly and Company		6,040,500
	611,300	Merck & Company, Inc.		18,583,520
	3,443,900	Pfizer, Inc.		60,991,469
	130,000	Sanofi-Aventis (ADR) (France)		4,180,800
	365,100	Schering-Plough Corp.		6,217,653
	926,500	Watson Pharmaceuticals, Inc.*		24,617,105
	205,000	Wyeth		7,689,550

				158,952,327

		Printing and Publishing — 0.2%
	450,200	Gannett Company, Inc.		3,601,600

		Retail — 2.9%
	289,900	CVS Caremark Corp.		8,331,726
	798,200	Home Depot, Inc. (The)		18,374,564
	360,000	JC Penney Company, Inc.		7,092,000
	210,000	Lowe’s Companies, Inc.		4,519,200
	415,100	Macy’s, Inc.		4,296,285

				42,613,775

		Retail: Supermarkets — 1.7%
	479,350	Kroger Company (The)		12,659,634
	270,525	Safeway, Inc.		6,430,379
	366,400	SUPERVALU, Inc.		5,349,440

				24,439,453

		Semiconductors — 2.1%
	760,300	Intel Corp.		11,145,998
	185,200	KLA-Tencor Corp.		4,035,508
	3,695,800	LSI Corp.*		12,159,182
	475,330	NVIDIA Corp.*		3,835,913

				31,176,601

See notes to financial statements.

124

LARGE VALUE PORTFOLIO
(FORMERLY, VALUE & INCOME PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)

		Telecommunications Equipment and Services — 9.3%
	2,420,355	AT&T, Inc.	$	68,980,117
	464,000	Corning, Inc.		4,421,920
	3,712,300	Motorola, Inc.		16,445,489
	250,000	Nokia (ADR) (Finland)		3,900,000
	5,588,500	Qwest Communications International, Inc.		20,342,140
	1,907,818	Sprint Nextel Corp.*		3,491,307
	736,700	Telefonaktiebolaget LM Ericsson (ADR) (Sweden)		5,753,627
	358,700	Verizon Communications, Inc.		12,159,930

				135,494,530

		Toys — 1.2%
	1,113,500	Mattel, Inc.		17,816,000

		Utilities — 3.7%
	259,500	Ameren Corp.		8,630,970
	972,780	American Electric Power Company, Inc.		32,374,118
	109,100	Dominion Resources, Inc. — Virginia		3,910,144
	416,300	Reliant Energy, Inc.*		2,406,214
	165,800	Wisconsin Energy Corp.		6,960,284

				54,281,730

		Total Common Stocks (Cost $2,137,281,482)		1,436,124,647

Principal

		Repurchase Agreements — 0.8%
$	11,411,786	With State Street Bank & Trust, dated 12/31/08, 0.01%, due 01/02/09, repurchase proceeds at maturity $11,411,793 (Collateralized by various US Treasury Bills, 0.01%-0.02%, due 01/02/09-05/14/09, with a total value of $11,831,391) (Cost $11,411,786)		11,411,786

		Total Investments — 99.8% (Cost $2,148,693,268)		1,447,536,433
		Other assets less liabilities — 0.2%		3,433,714

		Net Assets — 100.0%	$	1,450,970,147

The aggregate cost of securities for federal income tax purposes at December 31, 2008 is $2,163,266,936.

The following amounts are based on cost for federal income tax purposes:


Gross unrealized appreciation	$	67,174,003
Gross unrealized depreciation		(782,904,506	)

Net unrealized depreciation	$	(715,730,503	)

See summary of footnotes and abbreviations to portfolios.

See notes to financial statements.

125

VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS

December 31, 2008


Shares			Value

		Common Stocks — 98.9%
		Advertising — 1.0%
	158,200	Interpublic Group of Companies, Inc. (The)*	$	626,472

		Aerospace and Defense — 3.2%
	37,600	Empresa Brasileira de Aeronautica SA (ADR) (Brazil)(8)		609,496
	29,000	Northrop Grumman Corp.		1,306,160

				1,915,656

		Apparel: Manufacturing and Retail — 1.6%
	48,200	Gap, Inc. (The)		645,398
	34,800	Limited Brands, Inc.		349,392

				994,790

		Automobiles/Motor Vehicles, Automotive Equipment and Repairs — 1.5%
	32,800	PACCAR, Inc.		938,080

		Banks and Financial Services — 15.6%
	15,500	American Express Company		287,525
	164,755	Bank of America Corp.		2,319,750
	164,800	Citigroup, Inc.		1,105,808
	16,000	Comerica, Inc.		317,600
	64,300	JPMorgan Chase & Company		2,027,379
	92,075	KeyCorp		784,479
	605,900	National City Corp.		1,096,679
	276,500	Wachovia Corp.		1,531,810

				9,471,030

		Chemicals — 2.5%
	5,000	Eastman Chemical Company		158,550
	22,000	Rohm and Haas Company		1,359,380

				1,517,930

		Computer Equipment, Software and Services — 12.5%
	179,466	CA, Inc.		3,325,505
	132,400	Microsoft Corp.		2,573,856
	96,900	Oracle Corp.*		1,718,037

				7,617,398

		Consumer Goods and Services — 6.6%
	10,700	Lorillard, Inc.		602,945
	71,300	Philip Morris International, Inc.		3,102,263
	13,200	Unilever PLC (ADR) (United Kingdom)		303,864

				4,009,072

		Electronics — 2.7%
	101,050	Tyco Electronics, Ltd. (Bermuda)		1,638,021

		Food and Beverage — 2.7%
	29,200	Coca-Cola Company (The)		1,321,884
	11,200	Kraft Foods, Inc. — Class A		300,720

				1,622,604

		Insurance — 6.2%
	19,200	Allstate Corp. (The)		628,992
	77,000	Conseco, Inc.*		398,860
	81,500	Genworth Financial, Inc. — Class A		230,645
	26,059	MetLife, Inc.		908,417
	7,100	Prudential Financial, Inc.		214,846
	21,500	Travelers Companies, Inc. (The)		971,800
	107,600	XL Capital, Ltd. — Class A (Cayman Islands)		398,120

				3,751,680

		Internet Services — 1.5%
	66,200	eBay, Inc.*		924,152

		Manufacturing — 3.1%
	85,750	Tyco International, Ltd. (Bermuda)		1,852,200

		Medical Equipment, Supplies, and Services — 0.9%
	9,100	Johnson & Johnson		544,453

		Metals and Mining — 0.6%
	30,700	Alcoa, Inc.		345,682

		Oil, Coal and Gas — 5.8%
	7,800	Exxon Mobil Corp.		622,674
	56,500	Royal Dutch Shell PLC — Class B (ADR) (United Kingdom)(8)		2,905,795

				3,528,469

		Pharmaceuticals/Research and Development — 12.3%
	39,500	Bristol-Myers Squibb Company		918,375
	45,000	Eli Lilly and Company		1,812,150
	55,600	Merck & Company, Inc.		1,690,240
	52,500	Pfizer, Inc.		929,775
	122,900	Schering-Plough Corp.		2,092,987

				7,443,527

		Retail — 6.4%
	90,052	Home Depot, Inc. (The)		2,072,997
	52,900	JC Penney Company, Inc.		1,042,130
	14,200	Wal-Mart Stores, Inc.		796,052

				3,911,179

		Retail: Supermarkets — 2.8%
	71,900	Safeway, Inc.		1,709,063

		Semiconductors — 1.2%
	47,700	Texas Instruments, Inc.		740,304

See notes to financial statements.

126

VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)

		Telecommunications Equipment and Services — 1.4%
	387,100	Alcatel-Lucent (ADR) (France)*	$	832,265

		Utilities — 6.8%
	12,800	Entergy Corp.		1,064,064
	32,600	Exelon Corp.		1,812,886
	24,400	FPL Group, Inc.		1,228,052

				4,105,002

		Total Common Stocks (Cost $87,872,197)		60,039,029

		Preferred Stocks — 0.0%
		Banks and Financial Services
	369,700	Washington Mutual, Inc., Series S, 14.00%(14) (Cost $3,234,875)		3,974

Principal

		Securities Lending Collateral — 4.3%
$	2,594,000	Securities Lending Collateral Investment (Note 4) (Cost $2,594,000)		2,594,000

		Total Securities (Cost $93,701,072)		62,637,003

		Repurchase Agreements — 2.1%
	1,274,730	With State Street Bank and Trust, dated 12/31/08, 0.01%, due 01/02/09, repurchase proceeds at maturity $1,274,731 (Collateralized by US Treasury Bill, 0.01%, due 01/02/09, with a value of $1,398,600) (Cost $1,274,730)		1,274,730

		Total Investments — 105.3% (Cost $94,975,802)		63,911,733
		Liabilities less other assets — (5.3)%		(3,208,169	)

		Net Assets — 100.0%	$	60,703,564

The aggregate cost of securities for federal income tax purposes at December 31, 2008 is $100,845,203.

The following amount is based on cost for federal income tax purposes:


Gross/Net unrealized depreciation (includes gross unrealized appreciation of $0)	$	(36,933,470	)

See summary of footnotes and abbreviations to portfolios.

See notes to financial statements.

127

LARGE CORE PORTFOLIO
(FORMERLY, GROWTH & INCOME PORTFOLIO)
PORTFOLIO OF INVESTMENTS

December 31, 2008


Shares			Value

		Common Stocks — 95.9%
		Aerospace and Defense — 3.3%
	52,750	Goodrich Corp.	$	1,952,805
	36,650	L-3 Communications Holdings, Inc.		2,704,037
	25,375	Lockheed Martin Corp.		2,133,530
	33,800	Northrop Grumman Corp.		1,522,352
	17,500	Raytheon Company		893,200

				9,205,924

		Agriculture — 0.5%
	20,825	Monsanto Company		1,465,039

		Airlines — 0.1%
	36,500	Southwest Airlines Company		314,630

		Apparel: Manufacturing and Retail — 1.6%
	17,200	Aeropostale, Inc.*		276,920
	60,900	Coach, Inc.*		1,264,893
	41,800	Gap, Inc. (The)		559,702
	22,000	NIKE, Inc. — Class B		1,122,000
	17,000	Polo Ralph Lauren Corp.		771,970
	21,750	Ross Stores, Inc.		646,628

				4,642,113

		Automobiles/Motor Vehicles, Automotive Equipment and Repairs — 0.5%
	9,375	AutoZone, Inc.*		1,307,531

		Banks and Financial Services — 7.4%
	57,400	Ameriprise Financial, Inc.		1,340,864
	14,300	Astoria Financial Corp.		235,664
	41,200	Bank of America Corp.		580,096
	47,900	Capital One Financial Corp.		1,527,531
	56,950	Charles Schwab Corp. (The)		920,882
	23,500	Credicorp, Ltd. (Bermuda)		1,174,060
	69,650	Federated Investors, Inc. — Class B		1,181,264
	24,600	Franklin Resources, Inc.		1,568,988
	14,100	Global Payments, Inc.		462,339
	22,850	Goldman Sachs Group, Inc. (The)		1,928,312
	123,100	Hudson City Bancorp, Inc.		1,964,676
	41,500	Knight Capital Group, Inc. — Class A*		670,225
	5,425	MasterCard, Inc. — Class A		775,395
	37,900	Moody’s Corp.(8)		761,411
	17,500	NewAlliance Bancshares, Inc.		230,475
	11,900	PNC Financial Services Group, Inc.		583,100
	143,900	Regions Financial Corp.		1,145,444
	26,200	SunTrust Banks, Inc.		773,948
	15,100	SVB Financial Group*		396,073
	20,425	Visa, Inc. — Class A		1,071,291
	54,900	Wells Fargo & Company		1,618,452

				20,910,490

		Broadcast Services/Media — 2.5%
	68,775	Comcast Corp. — Class A		1,160,922
	94,975	DIRECTV Group, Inc. (The)*		2,175,877
	19,100	McGraw-Hill Companies, Inc. (The)		442,929
	64,400	Shaw Communications, Inc. — Class B (Canada)		1,138,592
	203,675	Time Warner, Inc.		2,048,971

				6,967,291

		Business Services and Supplies — 0.9%
	37,125	Accenture, Ltd. — Class A (Bermuda)		1,217,329
	24,713	Hewitt Associates, Inc. — Class A*		701,355
	30,700	SEI Investments Company		482,297

				2,400,981

		Chemicals — 1.3%
	15,800	Airgas, Inc.		616,042
	50,500	Dow Chemical Company (The)		762,045
	16,425	FMC Corp.		734,690
	31,600	Lubrizol Corp. (The)		1,149,924
	41,200	Methanex Corp. (Canada)(8)		463,088

				3,725,789

		Computer Equipment, Software and Services — 8.2%
	20,325	Apple, Inc.*		1,734,739
	50,325	BMC Software, Inc.*		1,354,246
	19,800	Computer Sciences Corp.*		695,772
	114,650	Hewlett-Packard Company		4,160,649
	59,725	International Business Machines Corp.		5,026,456
	319,875	Microsoft Corp.		6,218,370
	162,895	Oracle Corp.*		2,888,128
	9,300	Sybase, Inc.*		230,361
	61,225	Western Digital Corp.*		701,026

				23,009,747

		Construction Services and Supplies — 0.6%
	13,300	Granite Construction, Inc.		584,269
	17,000	Lennox International, Inc.		548,930
	34,400	Owens Corning, Inc.*		595,120

				1,728,319

		Consumer Goods and Services — 4.4%
	67,400	Altria Group, Inc.		1,015,044

See notes to financial statements.

128

LARGE CORE PORTFOLIO
(FORMERLY, GROWTH & INCOME PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Consumer Goods and Services (continued)

	22,725	Colgate-Palmolive Company	$	1,557,572
	53,825	Herbalife, Ltd. (Cayman Islands)		1,166,926
	26,875	Jarden Corp.*		309,063
	14,950	Lorillard, Inc.		842,433
	39,200	NBTY, Inc.*		613,480
	39,475	Philip Morris International, Inc.		1,717,556
	83,075	Procter & Gamble Company (The)		5,135,696

				12,357,770

		Containers and Packaging — 0.5%
	18,300	Ball Corp.		761,097
	22,650	Pactiv Corp.*		563,532

				1,324,629

		Diversified Operations and Services — 0.6%
	102,500	General Electric Company		1,660,500

		Education — 0.2%
	9,825	DeVry, Inc.		564,053

		Electronics — 0.8%
	35,500	Arrow Electronics, Inc.*		668,820
	30,900	Avnet, Inc.*		562,689
	17,200	Garmin, Ltd. (Cayman Islands)		329,724
	92,400	Jabil Circuit, Inc.		623,700

				2,184,933

		Energy Services — 0.1%
	2,925	First Solar, Inc.*(8)		403,533

		Engineering — 0.6%
	20,125	Fluor Corp.		903,008
	35,925	Foster Wheeler, Ltd. (Bermuda)*		839,927

				1,742,935

		Environmental Waste Management and Recycling Services — 0.4%
	50,460	Republic Services, Inc.		1,250,903

		Food and Beverage — 3.1%
	61,775	Coca-Cola Company (The)		2,796,554
	90,500	ConAgra Foods, Inc.		1,493,250
	47,725	Constellation Brands, Inc. — Class A*		752,623
	15,950	General Mills, Inc.		968,963
	15,400	HJ Heinz Company		579,040
	14,100	Kellogg Company		618,285
	62,800	Pepsi Bottling Group, Inc. (The)		1,413,628

				8,622,343

		Insurance — 6.0%
	10,650	ACE, Ltd. (Switzerland)		563,598
	20,400	Aetna, Inc.		581,400
	16,625	Aflac, Inc.		762,090
	62,400	Allstate Corp. (The)		2,044,224
	52,400	American Financial Group, Inc.		1,198,912
	24,500	Assurant, Inc.		735,000
	47,600	Axis Capital Holdings, Ltd. (Bermuda)		1,386,112
	38,000	Chubb Corp. (The)		1,938,000
	34,200	Endurance Specialty Holdings, Ltd. (Bermuda)		1,044,126
	29,400	Lincoln National Corp.		553,896
	9,600	Odyssey Re Holdings Corp.		497,376
	37,800	Platinum Underwriters Holdings, Ltd. (Bermuda)		1,363,824
	36,600	Progressive Corp. (The)		542,046
	48,000	Travelers Companies, Inc. (The)		2,169,600
	48,800	WR Berkley Corp.		1,512,800

				16,893,004

		Internet Services — 2.7%
	114,737	Cisco Systems, Inc.*		1,870,214
	19,148	eBay, Inc.*		267,306
	5,594	Google, Inc. — Class A*(5)		1,720,994
	26,300	Netflix, Inc.*(8)		786,107
	12,925	Priceline.com, Inc.*(8)		951,926
	111,900	Symantec Corp.*		1,512,888
	46,375	Yahoo!, Inc.*		565,775

				7,675,210

		Machinery — 1.6%
	22,900	AGCO Corp.*		540,211
	28,775	Caterpillar, Inc.		1,285,379
	65,563	Cummins, Inc.		1,752,499
	41,200	Gardner Denver, Inc.*		961,608

				4,539,697

		Manufacturing — 1.2%
	11,150	3M Company		641,571
	25,400	Dover Corp.		836,168
	14,150	Parker Hannifin Corp.		601,941
	23,500	Sherwin-Williams Company (The)		1,404,125

				3,483,805

		Medical Equipment, Supplies, and Services — 5.8%
	34,050	Baxter International, Inc.		1,824,740
	15,684	Becton, Dickinson and Company		1,072,629
	38,000	Cardinal Health, Inc.		1,309,860
	91,375	Johnson & Johnson		5,466,966

See notes to financial statements.

129

LARGE CORE PORTFOLIO
(FORMERLY, GROWTH & INCOME PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Medical Equipment, Supplies, and Services (continued)

	33,251	Kinetic Concepts, Inc.*	$	637,754
	40,701	LifePoint Hospitals, Inc.*		929,611
	4,700	Lincare Holdings, Inc.*		126,571
	34,200	McKesson Corp.		1,324,566
	19,881	Medtronic, Inc.		624,661
	45,700	UnitedHealth Group, Inc.		1,215,620
	30,650	Varian Medical Systems, Inc. *		1,073,976
	17,800	WellPoint, Inc.*		749,914

				16,356,868

		Metals and Mining — 1.0%
	37,000	Alcoa, Inc.		416,620
	16,400	Reliance Steel & Aluminum Company		327,016
	56,375	Timken Company (The)		1,106,641
	27,900	United States Steel Corp.		1,037,880

				2,888,157

		Office Equipment, Supplies, and Services — 0.3%
	29,475	Pitney Bowes, Inc.		751,023

		Oil, Coal and Gas — 12.9%
	44,025	Chesapeake Energy Corp.		711,884
	78,700	Chevron Corp.		5,821,439
	74,600	ConocoPhillips		3,864,280
	75,925	El Paso Corp.		594,493
	17,385	ENSCO International, Inc.		493,560
	157,100	Exxon Mobil Corp.		12,541,292
	48,825	Massey Energy Company		673,297
	12,500	Murphy Oil Corp.		554,375
	39,300	Nabors Industries, Ltd. (Bermuda)*		470,421
	23,870	Noble Corp. (Cayman Islands)		527,288
	25,975	Occidental Petroleum Corp.		1,558,240
	36,750	Schlumberger, Ltd. (Netherland Antilles)		1,555,628
	40,225	Southwestern Energy Company*		1,165,318
	29,875	Spectra Energy Corp.		470,233
	37,250	Sunoco, Inc.(8)		1,618,885
	29,750	Superior Energy Services, Inc.*		473,918
	11,048	Transocean, Ltd. (Switzerland)*		522,018
	73,700	Valero Energy Corp.		1,594,868
	39,650	W&T Offshore, Inc.		567,788
	14,800	Walter Industries, Inc.		259,148

				36,038,373

		Pharmaceuticals/Research and Development — 7.6%
	47,475	Abbott Laboratories		2,533,741
	37,700	AmerisourceBergen Corp.		1,344,382
	67,993	Amgen, Inc. *		3,926,596
	21,725	Biogen Idec, Inc.*		1,034,762
	29,075	Bristol-Myers Squibb Company		675,994
	14,700	Cephalon, Inc.*		1,132,488
	16,425	Eli Lilly and Company		661,435
	33,600	Endo Pharmaceuticals Holdings, Inc.*		869,568
	28,332	Express Scripts, Inc.*		1,557,693
	29,200	Forest Laboratories, Inc.*		743,724
	28,025	Gilead Sciences, Inc.*		1,433,199
	256,300	Pfizer, Inc.		4,539,072
	60,600	Schering-Plough Corp.		1,032,018

				21,484,672

		Real Estate Investment Trusts — 0.2%
	12,175	Simon Property Group, Inc.		646,858

		Retail — 3.2%
	99,387	Big Lots, Inc.*(8)		1,440,118
	25,400	BJ’s Wholesale Club, Inc.*		870,204
	21,500	CVS Caremark Corp.		617,910
	20,925	Dollar Tree, Inc.*		874,665
	30,909	TJX Companies, Inc. (The)		635,798
	82,993	Wal-Mart Stores, Inc.		4,652,587

				9,091,282

		Retail: Restaurants — 1.2%
	49,875	McDonald’s Corp.		3,101,726
	6,100	Panera Bread Company — Class A*(8)		318,664

				3,420,390

		Retail: Supermarkets — 1.5%
	104,983	Kroger Company (The)		2,772,601
	34,200	Safeway, Inc.		812,934
	51,500	SUPERVALU, Inc.		751,900

				4,337,435

		Scientific and Technical Instruments — 0.1%
	11,400	Thermo Fisher Scientific, Inc.*		388,398

		Security Services — 0.4%
	20,943	Brink’s Company (The)		562,947
	20,943	Brink’s Home Security Holdings, Inc.*		459,071

				1,022,018

		Semiconductors — 1.7%
	48,725	Altera Corp.		814,195

See notes to financial statements.

130

LARGE CORE PORTFOLIO
(FORMERLY, GROWTH & INCOME PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Semiconductors (continued)

	159,050	Intel Corp.	$	2,331,673
	174,675	LSI Corp.*		574,681
	89,325	QLogic Corp.*		1,200,528

				4,921,077

		Telecommunications Equipment and Services — 4.6%
	230,200	AT&T, Inc.		6,560,700
	22,946	Embarq Corp.		825,138
	30,750	Harris Corp.		1,170,038
	52,000	NeuStar, Inc. — Class A*		994,760
	25,075	QUALCOMM, Inc.		898,437
	71,100	Verizon Communications, Inc.		2,410,290

				12,859,363

		Toys — 0.4%
	41,300	Hasbro, Inc.		1,204,721

		Transportation — 2.4%
	14,400	CSX Corp.		467,568
	21,750	JB Hunt Transport Services, Inc.(8)		571,373
	49,675	Norfolk Southern Corp.		2,337,208
	12,600	Overseas Shipholding Group, Inc.		530,586
	18,700	Ryder System, Inc.		725,186
	41,625	Union Pacific Corp.		1,989,675

				6,621,596

		Utilities — 3.5%
	35,000	Alliant Energy Corp.		1,021,300
	54,550	CenterPoint Energy, Inc.		688,421
	37,500	DTE Energy Company		1,337,625
	77,876	Edison International		2,501,377
	29,400	FirstEnergy Corp.		1,428,252
	31,300	NRG Energy, Inc.*(8)		730,229
	89,100	NV Energy, Inc.		881,199
	45,000	Public Service Enterprise Group, Inc.		1,312,650

				9,901,053

		Total Common Stocks (Cost $353,233,144)		270,314,453

Principal

		Securities Lending Collateral—1.4%
$	4,004,157	Securities Lending Collateral Investment (Note 4) (Cost $4,004,157)		4,004,157

		Total Securities (Cost $357,237,301)		274,318,610

		Repurchase Agreements—0.5%
	1,295,878	With State Street Bank and Trust, dated 12/31/08, 0.01%, due 01/02/09, repurchase proceeds at maturity $1,295,879 (Collateralized by US Treasury Bill, 0.02%, due 05/14/09, with a value of $1,324,868) (Cost $1,295,878)		1,295,878

		Total Investments — 97.8%
		(Cost $358,533,179)		275,614,488
		Other assets less liabilities — 2.2%		6,159,493

		Net Assets — 100.0%	$	281,773,981

The aggregate cost of securities for federal income tax purposes at December 31, 2008 is $364,514,073.

The following amounts are based on cost for federal income tax purposes:


Gross unrealized appreciation	$	1,101,060
Gross unrealized depreciation		(90,000,645	)

Net unrealized depreciation	$	(88,899,585	)

See summary of footnotes and abbreviations to portfolios.

See notes to financial statements.

131

LARGE GROWTH PORTFOLIO
(FORMERLY, EQUITY GROWTH PORTFOLIO)
PORTFOLIO OF INVESTMENTS

December 31, 2008


Shares			Value

		Common Stocks — 98.7%
		Advertising — 0.1%
	303,900	Interpublic Group of Companies, Inc. (The)*	$	1,203,444

		Aerospace and Defense — 5.6%
	45,423	Boeing Company (The)		1,938,199
	341,722	General Dynamics Corp.		19,679,770
	9,700	L-3 Communications Holdings, Inc.		715,666
	296,038	Lockheed Martin Corp.		24,890,875
	32,300	Northrop Grumman Corp.		1,454,792
	200,488	Raytheon Company		10,232,908
	82,910	United Technologies Corp.		4,443,976

				63,356,186

		Agriculture — 2.5%
	23,300	CF Industries Holdings, Inc.		1,145,428
	305,687	Monsanto Company		21,505,080
	120,200	Mosaic Company (The)		4,158,920
	18,400	Potash Corp. of Saskatchewan, Inc. (Canada)		1,347,248

				28,156,676

		Apparel: Manufacturing and Retail — 1.2%
	171,100	Gap, Inc. (The)		2,291,029
	150,500	Limited Brands, Inc.		1,511,020
	110,603	NIKE, Inc. — Class B		5,640,753
	49,100	Ross Stores, Inc.		1,459,743
	173,500	Urban Outfitters, Inc.*		2,599,030

				13,501,575

		Automobile: Retail — 0.1%
	49,900	Copart, Inc.*		1,356,781

		Automobiles/Motor Vehicles, Automotive Equipment and Repairs — 0.8%
	80,100	Advance Auto Parts, Inc.		2,695,365
	47,450	AutoZone, Inc.*		6,617,852

				9,313,217

		Banks and Financial Services — 11.8%
	32,919	American Express Company		610,647
	106,675	Banco Itau Holding Financeira SA (ADR) (Brazil)		1,237,430
	23,400	Charles Schwab Corp. (The)		378,378
	36,000	Federated Investors, Inc. — Class B		610,560
	212,206	Goldman Sachs Group, Inc. (The)		17,908,064
	40,100	Hudson City Bancorp, Inc.		639,996
	20,154,000	Industrial and Commercial Bank of China, Ltd. — Class H (China)		10,700,099
	119,200	Invesco, Ltd. (Bermuda)		1,721,248
	412,017	JPMorgan Chase & Company		12,990,896
	48,400	M&T Bank Corp.(8)		2,778,644
	89,805	MasterCard, Inc. — Class A		12,835,829
	213,200	Morgan Stanley		3,419,728
	17,900	Nasdaq OMX Group, Inc. (The)*		442,309
	30,200	Northern Trust Corp.		1,574,628
	44,100	T Rowe Price Group, Inc.(8)		1,562,904
	562,985	US Bancorp		14,080,255
	487,030	Visa, Inc. — Class A		25,544,724
	641,677	Wells Fargo & Company		18,916,638
	298,500	Western Union Company		4,280,490

				132,233,467

		Broadcast Services/Media — 1.0%
	41,264	Comcast Corp. — Class A		696,536
	66,900	DIRECTV Group, Inc. (The)*		1,532,679
	52,236	DreamWorks Animation SKG, Inc. — Class A*		1,319,481
	63,100	Liberty Global, Inc. — Class A*(8)		1,004,552
	184,200	News Corp. — Class A		1,674,378
	60,500	Scripps Networks Interactive — Class A		1,331,000
	158,151	Time Warner, Inc.		1,590,999
	114,244	Viacom, Inc. — Class B*		2,177,491

				11,327,116

		Business Services and Supplies — 0.6%
	182,955	Accenture, Ltd. — Class A (Bermuda)		5,999,094
	36,900	Manpower, Inc.		1,254,231

				7,253,325

		Chemicals — 0.4%
	27,900	Air Products & Chemicals, Inc.		1,402,533
	55,850	FMC Corp.		2,498,171
	19,100	Sigma-Aldrich Corp.		806,784

				4,707,488

		Computer Equipment, Software and Services — 11.3%
	93,600	Adobe Systems, Inc.*		1,992,744
	17,400	Affiliated Computer Services, Inc. — Class A*		799,530
	210,979	Apple, Inc.*		18,007,058
	44,600	Automatic Data Processing, Inc.		1,754,564
	269,000	BMC Software, Inc.*		7,238,790
	73,600	Compuware Corp.*		496,800

See notes to financial statements.

132

LARGE GROWTH PORTFOLIO
(FORMERLY, EQUITY GROWTH PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Computer Equipment, Software and Services (continued)

	239,000	Dell, Inc.*	$	2,447,360
	34,500	DST Systems, Inc.*(8)		1,310,310
	45,200	Electronic Arts, Inc.*		725,008
	224,013	Hewlett-Packard Company		8,129,432
	256,736	International Business Machines Corp.		21,606,902
	1,615,867	Microsoft Corp.		31,412,453
	420,933	NetApp, Inc.*		5,880,434
	1,344,424	Oracle Corp.*		23,836,638
	25,000	Salesforce.com, Inc.*		800,250
	70,800	Western Digital Corp.*		810,660

				127,248,933

		Construction Services and Supplies — 0.2%
	5,400	NVR, Inc.*		2,463,750

		Consumer Goods and Services — 4.4%
	151,102	Altria Group, Inc.		2,275,596
	65,100	Avon Products, Inc.		1,564,353
	166,000	Colgate-Palmolive Company		11,377,640
	30,500	Estee Lauder Companies, Inc. (The) — Class A		944,280
	59,300	Herbalife, Ltd. (Cayman Islands)		1,285,624
	96,300	Kimberly-Clark Corp.		5,078,862
	484,155	Philip Morris International, Inc.		21,065,584
	73,072	Procter & Gamble Company (The)		4,517,311
	33,300	United Parcel Service, Inc. — Class B		1,836,828

				49,946,078

		Containers and Packaging — 0.0%
	29,000	Crown Holdings, Inc.*		556,800

		Diversified Operations and Services — 0.2%
	93,000	McDermott International, Inc. (Panama)*		918,840
	82,900	Textron, Inc.		1,149,823

				2,068,663

		Education — 0.6%
	37,300	Apollo Group, Inc. — Class A*		2,857,926
	42,100	ITT Educational Services, Inc.*(8)		3,998,658

				6,856,584

		Electronics — 1.0%
	274,564	Emerson Electric Company		10,051,788
	84,200	Gentex Corp.		743,486

				10,795,274

		Engineering — 1.0%
	153,600	Fluor Corp.		6,892,032
	49,700	Foster Wheeler, Ltd. (Bermuda)*		1,161,986
	73,224	Jacobs Engineering Group, Inc.*		3,522,074

				11,576,092

		Entertainment, Leisure and Recreation — 1.2%
	976,222	Las Vegas Sands Corp.*		5,788,996
	196,579	Wynn Resorts, Ltd.*(8)		8,307,429

				14,096,425

		Food and Beverage — 2.7%
	53,000	Campbell Soup Company		1,590,530
	101,504	Coca-Cola Company (The)		4,595,086
	56,600	Dean Foods Company*		1,017,102
	20,500	General Mills, Inc.		1,245,375
	38,100	Hershey Company (The)		1,323,594
	43,700	HJ Heinz Company		1,643,120
	150,500	Kellogg Company		6,599,425
	111,900	Nestle (ADR) (Switzerland)		4,442,430
	96,869	PepsiCo, Inc.		5,305,515
	99,088	Sysco Corp.		2,273,079
	83,000	Tyson Foods, Inc. — Class A		727,080

				30,762,336

		Insurance — 0.8%
	51,500	Aetna, Inc.		1,467,750
	36,400	Aflac, Inc.		1,668,576
	59,500	Chubb Corp. (The)		3,034,500
	49,300	Cigna Corp.		830,705
	53,600	Coventry Health Care, Inc.*		797,568
	28,200	Prudential Financial, Inc.		853,332

				8,652,431

		Internet Services — 4.1%
	1,602,780	Cisco Systems, Inc.*		26,125,314
	24,344	Ctrip.com International, Ltd. (ADR) (Cayman Islands)		579,387
	119,585	eBay, Inc.*		1,669,407
	362,000	Giant Interactive Group, Inc. (ADR) (Cayman Islands)*(8)		2,349,380
	30,986	Google, Inc. — Class A*		9,532,843
	30,600	McAfee, Inc.*		1,057,842
	10,100	Priceline.com, Inc.*		743,865

See notes to financial statements.

133

LARGE GROWTH PORTFOLIO
(FORMERLY, EQUITY GROWTH PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Internet Services (continued)

	83,600	Shanda Interactive Entertainment, Ltd. (ADR) (Cayman Islands)*(8)	$	2,705,296
	26,600	Sohu.com, Inc.*		1,259,244

				46,022,578

		Machinery — 1.5%
	23,200	AGCO Corp.*		547,288
	167,600	Caterpillar, Inc.		7,486,692
	123,300	Cummins, Inc.		3,295,809
	16,800	Flowserve Corp.		865,200
	195,600	Joy Global, Inc.		4,477,284

				16,672,273

		Manufacturing — 1.2%
	34,600	3M Company		1,990,884
	171,900	Dover Corp.		5,658,948
	50,800	Harsco Corp.		1,406,144
	96,622	Honeywell International, Inc.		3,172,100
	22,900	Lincoln Electric Holdings, Inc.		1,166,297

				13,394,373

		Medical Equipment, Supplies, and Services — 4.7%
	63,500	Baxter International, Inc.		3,402,965
	30,100	Beckman Coulter, Inc.		1,322,594
	23,600	Becton, Dickinson and Company		1,614,004
	54,505	Cardinal Health, Inc.		1,878,787
	39,900	Community Health Systems, Inc.*		581,742
	18,200	Edwards Lifesciences Corp.*		1,000,090
	32,400	Gen-Probe, Inc.*		1,388,016
	44,422	Humana, Inc.*		1,656,052
	26,425	Intuitive Surgical, Inc.*		3,355,711
	282,170	Johnson & Johnson		16,882,230
	130,800	Life Technologies Corp.*		3,048,948
	47,415	McKesson Corp.		1,836,383
	253,699	Medtronic, Inc.		7,971,223
	29,000	ResMed, Inc.*		1,086,920
	40,329	Stryker Corp.		1,611,144
	21,000	Techne Corp.		1,354,920
	83,700	Varian Medical Systems, Inc.*		2,932,848

				52,924,577

		Metals and Mining — 0.2%
	81,000	Alcoa, Inc.		912,060
	27,000	United States Steel Corp.		1,004,400

				1,916,460

		Office Equipment, Supplies, and Services — 0.1%
	49,200	Pitney Bowes, Inc.		1,253,616

		Oil, Coal and Gas — 6.9%
	40,800	Alpha Natural Resources, Inc.*		660,552
	24,100	Apache Corp.		1,796,173
	40,200	Arch Coal, Inc.		654,858
	44,000	Cameron International Corp.*		902,000
	85,100	Chesapeake Energy Corp.		1,376,067
	57,254	Diamond Offshore Drilling, Inc.		3,374,551
	42,300	ENSCO International, Inc.		1,200,897
	60,493	Exxon Mobil Corp.		4,829,156
	43,300	FMC Technologies, Inc.*		1,031,839
	127,000	Halliburton Company		2,308,860
	104,000	Hess Corp.		5,578,560
	18,600	Murphy Oil Corp.		824,910
	65,668	Noble Corp. (Cayman Islands)		1,450,606
	68,400	Noble Energy, Inc.		3,366,648
	253,800	Occidental Petroleum Corp.		15,225,462
	135,075	Petroleo Brasileiro SA — Petrobras (ADR) (Brazil)		3,307,987
	26,700	Plains Exploration & Production Company*		620,508
	12,400	Praxair, Inc.		736,064
	40,800	Pride International, Inc.*		651,984
	85,948	Schlumberger, Ltd. (Netherland Antilles)		3,638,179
	166,800	Smith International, Inc.		3,818,052
	42,900	Southwestern Energy Company*		1,242,813
	24,400	Sunoco, Inc.(8)		1,060,424
	274,205	Transocean, Ltd. (Switzerland)*		12,956,186
	32,100	Weatherford International, Ltd. (Bermuda)*		347,322
	98,400	Williams Companies, Inc. (The)		1,424,832
	109,352	XTO Energy, Inc.		3,856,845

				78,242,335

		Pharmaceuticals/Research and Development — 10.4%
	334,891	Abbott Laboratories		17,873,133
	38,288	AmerisourceBergen Corp.		1,365,350
	48,800	Amgen, Inc.*		2,818,200
	75,040	Amylin Pharmaceuticals, Inc.*(8)		814,184
	99,000	AstraZeneca PLC (ADR) (United Kingdom)(8)		4,061,970
	143,350	Bristol-Myers Squibb Company		3,332,888
	29,800	Celgene Corp.*		1,647,344

See notes to financial statements.

134

LARGE GROWTH PORTFOLIO
(FORMERLY, EQUITY GROWTH PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Pharmaceuticals/Research and Development (continued)

	373,459	Eli Lilly and Company	$	15,039,194
	35,720	Express Scripts, Inc.*		1,963,886
	355,644	Genentech, Inc.*		29,486,444
	18,700	Genzyme Corp.*		1,241,119
	320,730	Gilead Sciences, Inc.*		16,402,132
	67,800	Medco Health Solutions, Inc.*		2,841,498
	251,773	Merck & Company, Inc.		7,653,899
	32,200	Omnicare, Inc.		893,872
	50,600	Pharmaceutical Product Development, Inc.		1,467,906
	285,572	Schering-Plough Corp.		4,863,291
	22,030	Shionogi & Company, Ltd. (Japan)		568,926
	80,500	Wyeth		3,019,555

				117,354,791

		Real Estate Investment Trusts — 0.3%
	22,100	Digital Realty Trust, Inc.		725,985
	24,100	HCP, Inc.		669,257
	23,600	Nationwide Health Properties, Inc.		677,792
	10,000	Simon Property Group, Inc.		531,300
	23,000	Taubman Centers, Inc.		585,580

				3,189,914

		Retail — 8.2%
	55,300	Costco Wholesale Corp.		2,903,250
	688,950	CVS Caremark Corp.		19,800,423
	727,714	Lowe’s Companies, Inc.		15,660,405
	299,553	Target Corp.(8)		10,343,565
	325,400	TJX Companies, Inc. (The)		6,693,478
	25,000	Walgreen Company		616,750
	652,286	Wal-Mart Stores, Inc.		36,567,154

				92,585,025

		Retail: Restaurants — 3.9%
	718,191	McDonald’s Corp.		44,664,298

		Retail: Supermarkets — 0.1%
	35,200	Kroger Company (The)		929,632

		Scientific and Technical Instruments — 0.2%
	150,800	PerkinElmer, Inc.		2,097,628

		Semiconductors — 3.1%
	622,735	Altera Corp.		10,405,902
	143,200	Analog Devices, Inc.		2,723,664
	366,274	Emulex Corp.*		2,556,593
	418,444	Intel Corp.		6,134,389
	229,900	LSI Corp.*		756,371
	360,200	QLogic Corp.*		4,841,088
	162,029	Texas Instruments, Inc.		2,514,690
	305,610	Xilinx, Inc.		5,445,970

				35,378,667

		Telecommunications Equipment and Services — 2.3%
	14,100	American Tower Corp. — Class A*		413,412
	91,258	Brasil Telecom SA (ADR) (Brazil)(8)		1,635,343
	102,808	Corning, Inc.		979,760
	126,300	Frontier Communications Corp.		1,103,862
	55,100	NII Holdings, Inc.*		1,001,718
	565,962	QUALCOMM, Inc.		20,278,419
	87,900	Windstream Corp.		808,680

				26,221,194

		Toys — 0.2%
	44,602	Hasbro, Inc.		1,301,041
	3,003	Nintendo Company, Ltd. (Japan)		1,147,601

				2,448,642

		Transportation — 3.5%
	29,600	Burlington Northern Santa Fe Corp.		2,241,016
	34,100	CH Robinson Worldwide, Inc.		1,876,523
	20,400	CSX Corp.		662,388
	31,100	Frontline, Ltd. (Bermuda)(8)		920,871
	253,897	Norfolk Southern Corp.		11,945,854
	19,000	Tidewater, Inc.		765,130
	451,659	Union Pacific Corp.		21,589,300

				40,001,082

		Utilities — 0.3%
	137,700	AES Corp. (The)*		1,134,648
	90,400	CenterPoint Energy, Inc.		1,140,848
	10,400	Entergy Corp.		864,552
	21,800	PPL Corp.		669,042

				3,809,090

		Total Common Stocks (Cost $1,391,045,938)		1,116,538,816

See notes to financial statements.

135

LARGE GROWTH PORTFOLIO
(FORMERLY, EQUITY GROWTH PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Principal			Value

		Securities Lending Collateral — 3.4%
$	38,010,546	Securities Lending Collateral Investment (Note 4) (Cost $38,010,546)	$	38,010,546

		Total Securities (Cost $1,429,056,484)		1,154,549,362

		Repurchase Agreements — 1.1%
	11,992,800	With State Street Bank and Trust, dated 12/31//08, 0.01%, due 01/02/09 repurchase proceeds at maturity $11,992,806 (Collateralized by US Treasury Bill, 0.02%, due 05/14/09, with a value of $12,238,776) (Cost $11,992,800)		11,992,800

		Total Investments — 103.2% (Cost $1,441,049,284)		1,166,542,162
		Liabilities less other assets — (3.2)%		(35,759,409	)

		Net Assets — 100.0%	$	1,130,782,753

The aggregate cost of securities for federal income tax purposes at December 31, 2008 is $1,480,323,301.

The following amount is based on cost for federal income tax purposes:


Gross/Net unrealized depreciation (includes gross unrealized appreciation of $0)	$	(313,781,139	)

See summary of footnotes and abbreviations to portfolios.

See notes to financial statements.

136

GROWTH PORTFOLIO
(FORMERLY, AGGRESSIVE EQUITY PORTFOLIO)
PORTFOLIO OF INVESTMENTS

December 31, 2008


Shares			Value

		Common Stocks — 98.2%
		Agriculture — 3.6%
	96,200	Archer-Daniels-Midland Company	$	2,773,446
	55,120	Monsanto Company		3,877,692

				6,651,138

		Apparel: Manufacturing and Retail — 1.9%
	127,470	Guess?, Inc.		1,956,665
	101,640	Urban Outfitters, Inc.*		1,522,567

				3,479,232

		Banks and Financial Services — 11.3%
	17,700	BlackRock, Inc.		2,374,455
	106,500	Charles Schwab Corp. (The)		1,722,105
	148,990	Hudson City Bancorp, Inc.		2,377,880
	29,100	IntercontinentalExchange, Inc.*		2,399,004
	54,000	JPMorgan Chase & Company		1,702,620
	143,300	People’s United Financial, Inc.		2,555,039
	74,620	T Rowe Price Group, Inc.(8)		2,644,533
	35,000	Visa, Inc. — Class A		1,835,750
	91,800	Wells Fargo & Company		2,706,263
	31,130	Western Union Company		446,404

				20,764,053

		Broadcast Services/Media — 1.7%
	181,560	Comcast Corp. — Class A		3,064,733

		Business Services and Supplies — 2.9%
	29,150	FTI Consulting, Inc.*(8)		1,302,422
	188,345	Robert Half International, Inc.		3,921,343

				5,223,765

		Computer Equipment, Software and Services — 8.9%
	114,400	Activision Blizzard, Inc.*		988,416
	66,080	Adobe Systems, Inc.*		1,406,843
	56,270	Apple, Inc.*		4,802,645
	53,000	Citrix Systems, Inc.*		1,249,210
	163,290	Hewlett-Packard Company		5,925,794
	200,380	SanDisk Corp.*		1,923,648

				16,296,556

		Construction Services and Supplies — 4.1%
	20,500	Martin Marietta Materials, Inc.(8)		1,990,140
	6,333	NVR, Inc.*		2,889,431
	238,830	Pulte Homes, Inc.		2,610,412

				7,489,983

		Containers and Packaging — 1.0%
	72,230	Pactiv Corp.*		1,797,082

		Education — 0.7%
	16,640	Apollo Group, Inc. — Class A*		1,274,957

		Energy Services — 1.4%
	18,790	First Solar, Inc.*(8)		2,592,268

		Environmental Waste Management and Recycling Services — 1.7%
	58,360	Stericycle, Inc.*		3,039,389

		Insurance — 1.4%
	108,690	Marsh & McLennan Companies, Inc.		2,637,906

		Internet Services — 7.9%
	141,310	F5 Networks, Inc.*		3,230,347
	23,820	Google, Inc. — Class A*		7,328,223
	115,600	Juniper Networks, Inc.*		2,024,156
	53,000	McAfee, Inc.*		1,832,210

				14,414,936

		Manufacturing — 2.0%
	85,270	Pentair, Inc.		2,018,341
	27,280	Sherwin-Williams Company (The)		1,629,980

				3,648,321

		Medical Equipment, Supplies, and Services — 5.6%
	71,490	Baxter International, Inc.		3,831,149
	39,600	Covidien, Ltd. (Bermuda)		1,435,104
	31,000	DaVita, Inc.*		1,536,670
	13,140	Intuitive Surgical, Inc.*		1,668,649
	68,000	UnitedHealth Group, Inc.		1,808,800

				10,280,372

		Oil, Coal and Gas — 6.9%
	53,600	BHP Billiton, Ltd. (ADR) (Australia)		2,299,440
	29,000	Occidental Petroleum Corp.		1,739,710
	116,390	Petrohawk Energy Corp.*		1,819,176
	71,030	Schlumberger, Ltd. (Netherlands Antilles)		3,006,700
	73,140	Southwestern Energy Company*		2,118,866
	78,060	Valero Energy Corp.		1,689,218

				12,673,110

		Pharmaceuticals/Research and Development — 9.8%
	85,840	Alexion Pharmaceuticals, Inc.*		3,106,550
	23,900	Allergan, Inc.		963,648
	42,680	Express Scripts, Inc.*		2,346,546
	59,730	Genzyme Corp.*		3,964,280
	110,730	Gilead Sciences, Inc.*		5,662,733
	26,840	Myriad Genetics, Inc.*(8)		1,778,418

				17,822,175

See notes to financial statements.

137

GROWTH PORTFOLIO
(FORMERLY, AGGRESSIVE EQUITY PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)

		Retail — 4.6%
	47,000	Costco Wholesale Corp.	$	2,467,500
	42,210	Kohl’s Corp.*		1,528,002
	108,000	Lowe’s Companies, Inc.		2,324,160
	119,100	Staples, Inc.		2,134,272

				8,453,934

		Retail: Restaurants — 1.0%
	57,250	YUM! Brands, Inc.		1,803,375

		Retail: Supermarkets — 0.9%
	60,000	Kroger Company (The)		1,584,600

		Semiconductors — 10.6%
	385,690	Applied Materials, Inc.		3,907,040
	217,820	Broadcom Corp. — Class A*		3,696,405
	399,700	Intel Corp.		5,859,602
	118,360	Lam Research Corp.*		2,518,701
	187,770	Xilinx, Inc.		3,346,061

				19,327,809

		Telecommunications Equipment and Services — 6.8%
	61,660	China Mobile, Ltd. (ADR) (Hong Kong)		3,135,411
	108,030	MetroPCS Communications, Inc.*		1,604,246
	214,690	QUALCOMM, Inc.		7,692,342

				12,431,999

		Transportation — 1.5%
	56,620	Union Pacific Corp.		2,706,436

		Total Common Stocks (Cost $222,905,094)		179,458,129

Principal

		Securities Lending Collateral — 2.8%
$	5,037,923	Securities Lending Collateral Investment (Note 4) (Cost $5,037,923)		5,037,923

		Total Securities (Cost $227,943,017)		184,496,052

		Repurchase Agreements — 1.4%
	2,477,105	With State Street Bank and Trust, dated 12/31/08, 0.01%, due 01/02/09, repurchase proceeds at maturity $2,477,106 (Collateralized by US Treasury Bill, 0.01%, due 01/02/09, with a value of $2,597,400) (Cost $2,477,105)		2,477,105

		Total Investments — 102.4% (Cost $230,420,122)		186,973,157
		Liabilities less other assets — (2.4)%		(4,445,349	)

		Net Assets — 100.0%	$	182,527,808

The aggregate cost of securities for federal income tax purposes at December 31, 2008 is $232,435,715.

The following amounts are based on cost for federal income tax purposes:


Gross unrealized appreciation	$	5,019,214
Gross unrealized depreciation		(50,481,772	)

Net unrealized depreciation	$	(45,462,558	)

See summary of footnotes and abbreviations to portfolios.

See notes to financial statements.

138

MID VALUE PORTFOLIO
(FORMERLY, MID-CAP VALUE PORTFOLIO)
PORTFOLIO OF INVESTMENTS

December 31, 2008


Shares			Value

		Common Stocks — 96.9%
		Advertising — 0.6%
	1,689	Interpublic Group of Companies, Inc. (The)*	$	6,688
	138,000	Omnicom Group, Inc.		3,714,960

				3,721,648

		Aerospace and Defense — 2.5%
	316,945	Goodrich Corp.		11,733,304
	78,100	Raytheon Company		3,986,224
	18,999	Spirit AeroSystems Holdings, Inc. — Class A*		193,220

				15,912,748

		Agriculture — 0.5%
	70,700	Archer-Daniels-Midland Company		2,038,281
	20,300	Bunge, Ltd. (Bermuda)(8)		1,050,931

				3,089,212

		Airlines — 0.8%
	87,915	AMR Corp.*		938,053
	41,564	Continental Airlines, Inc. — Class B*		750,646
	163,794	Delta Air Lines, Inc.*		1,877,079
	46,052	UAL Corp.*(8)		507,493
	108,708	US Airways Group, Inc.*		840,313

				4,913,584

		Apparel: Manufacturing and Retail — 1.6%
	60,100	Cato Corp. — Class A (The)		907,510
	242,200	Coach, Inc.*		5,030,494
	74,500	Foot Locker, Inc.		546,830
	74,800	Gap, Inc. (The)		1,001,572
	114,000	Jones Apparel Group, Inc.		668,040
	36,700	VF Corp.		2,010,059

				10,164,505

		Automobiles/Motor Vehicles, Automotive Equipment and Repairs — 1.9%
	131,100	Advance Auto Parts, Inc.		4,411,515
	83,200	American Axle & Manufacturing Holdings, Inc.		240,448
	161,644	ArvinMeritor, Inc.(8)		460,685
	52,900	Autoliv, Inc.		1,135,234
	23,046	Genuine Parts Company		872,522
	96,100	Harley-Davidson, Inc.		1,630,817
	188,205	WABCO Holdings, Inc.		2,971,757

				11,722,978

		Banks and Financial Services — 10.4%
	164,800	Advance America Cash Advance Centers, Inc.		311,472
	27,700	Advanta Corp. — Class B		57,893
	80,700	AmeriCredit Corp.*(8)		616,548
	66,800	Ameriprise Financial, Inc.		1,560,448
	106,400	Banco Latinoamericano de Exportaciones, SA — Class E (Panama)		1,527,904
	335,450	Bank of New York Mellon Corp.		9,503,298
	461,641	CIT Group, Inc.		2,095,850
	103,700	Colonial BancGroup, Inc. (The)(8)		214,659
	53,200	Comerica, Inc.		1,056,020
	12,864	Cullen/Frost Bankers, Inc.		651,948
	35,400	Federated Investors, Inc. — Class B		600,384
	414,600	Fifth Third Bancorp		3,424,596
	275,175	Huntington Bancshares, Inc.		2,107,841
	441,155	Invesco, Ltd. (Bermuda)		6,370,278
	692,832	KeyCorp		5,902,929
	9,718	M&T Bank Corp.(8)		557,910
	66,700	Morgan Stanley		1,069,868
	94,500	Northern Trust Corp.		4,927,230
	595,149	People’s United Financial, Inc.		10,611,506
	65,000	PNC Financial Services Group, Inc.		3,185,000
	44,500	Provident Bankshares Corp.(8)		429,870
	268,231	Regions Financial Corp.		2,135,119
	442,800	Western Union Company		6,349,752

				65,268,323

		Broadcast Services/Media — 0.4%
	79,800	Belo Corp.		124,488
	88,600	CBS Corp. — Class B		725,634
	73,300	DISH Network Corp. — Class A*		812,897
	74,300	News Corp. — Class A		675,387

				2,338,406

		Business Services and Supplies — 4.0%
	65,400	Alliance Data Systems Corp.*(8)		3,043,062
	230,900	Convergys Corp.*		1,480,069
	131,300	Dun & Bradstreet Corp.		10,136,360
	306,000	Fidelity National Information Services, Inc.		4,978,620
	40,300	Kelly Services, Inc. — Class A		524,303
	90,350	Manpower, Inc.		3,070,997
	78,698	Ritchie Brothers Auctioneers, Inc. (Canada)(8)		1,685,711

				24,919,122

		Chemicals — 2.1%
	97,868	Eastman Chemical Company		3,103,394
	108,494	Lubrizol Corp. (The)		3,948,097

See notes to financial statements.

139

MID VALUE PORTFOLIO
(FORMERLY, MID-CAP VALUE PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Chemicals (continued)

	35,700	NewMarket Corp.	$	1,246,287
	146,500	PolyOne Corp.*		461,475
	108,794	PPG Industries, Inc.		4,616,129

				13,375,382

		Computer Equipment, Software and Services — 6.5%
	577,400	3Com Corp.*		1,316,472
	36,400	Adobe Systems, Inc.*		774,956
	43,827	Autodesk, Inc.*		861,201
	330,886	BMC Software, Inc.*		8,904,142
	273,200	Computer Sciences Corp.*		9,600,247
	408,300	Electronic Arts, Inc.*		6,549,132
	81,600	Lexmark International, Inc. — Class A*		2,195,040
	426,150	Parametric Technology Corp.*		5,390,798
	227,000	Seagate Technology (Cayman Islands)		1,005,610
	122,500	Sun Microsystems, Inc.*		467,950
	228,400	Teradata Corp.*		3,387,172
	60,000	Western Digital Corp.*		687,000

				41,139,720

		Construction Services and Supplies — 0.9%
	124,854	Cemex SAB de CV (ADR) (Mexico)*		1,141,166
	33,913	Centex Corp.		360,834
	46,668	Chicago Bridge & Iron Company NV (The Netherlands)(8)		469,013
	69,969	DR Horton, Inc.		494,681
	12,571	Insituform Technologies, Inc. — Class A*		247,523
	25,448	KB HOME		346,602
	72,300	Lennox International, Inc.		2,334,567
	44,961	Pulte Homes, Inc.		491,424
	10,448	USG Corp.*		84,002

				5,969,812

		Consumer Goods and Services — 2.0%
	59,400	American Greetings Corp. — Class A		449,658
	45,000	Black & Decker Corp. (The)		1,881,450
	55,900	Blyth, Inc.		438,256
	62,000	Eastman Kodak Company		407,960
	69,800	Ethan Allen Interiors, Inc.(8)		1,003,026
	78,522	Lorillard, Inc.		4,424,715
	26,336	Mohawk Industries, Inc.*		1,131,658
	74,940	Whirlpool Corp.		3,098,769

				12,835,492

		Containers and Packaging — 0.8%
	127,100	Pactiv Corp.*		3,162,248
	77,700	Sonoco Products Company*		1,799,532

				4,961,780

		Diversified Operations and Services — 0.3%
	151,415	McDermott International, Inc. (Panama)*		1,495,980
	18,200	Textron, Inc.		252,434

				1,748,414

		Electronics — 2.0%
	165,700	Amphenol Corp. — Class A		3,973,486
	188,200	Avnet, Inc.*		3,427,122
	250,176	Celestica, Inc. (Canada)*		1,153,311
	335,200	Sanmina-SCI Corp.*		157,544
	55,600	Technitrol, Inc.		193,488
	221,050	Tyco Electronics, Ltd. (Bermuda)		3,583,221
	99,500	Vishay Intertechnology, Inc.*		340,290

				12,828,462

		Engineering — 0.4%
	15,766	Fluor Corp.		707,420
	28,189	Foster Wheeler, Ltd. (Bermuda)*		659,059
	17,342	Jacobs Engineering Group, Inc.*		834,151
	25,491	KBR, Inc.		387,463

				2,588,093

		Entertainment, Leisure and Recreation — 0.7%
	99,994	National CineMedia, Inc.		1,013,939
	132,833	Regal Entertainment Group — Class A		1,356,225
	141,469	Royal Caribbean Cruises, Ltd. (Liberia)(8)		1,945,199

				4,315,363

		Equipment Rental and Leasing — 0.0%
	31,357	United Rentals, Inc.*		285,976

		Food and Beverage — 4.2%
	60,687	Brown-Forman Corp. — Class B		3,124,774
	131,100	Campbell Soup Company		3,934,311
	103,500	ConAgra Foods, Inc.		1,707,750
	130,200	Del Monte Foods Company		929,628
	143,600	HJ Heinz Company		5,399,360
	58,600	JM Smucker Company (The)		2,540,896
	149,550	McCormick & Company, Inc.		4,764,663
	95,600	Pepsi Bottling Group, Inc. (The)		2,151,956
	63,200	PepsiAmericas, Inc.		1,286,752
	35,280	Reddy Ice Holdings, Inc.		50,803

See notes to financial statements.

140

MID VALUE PORTFOLIO
(FORMERLY, MID-CAP VALUE PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Food and Beverage (continued)

	266	Seaboard Corp.	$	317,604

				26,208,497

		Insurance — 11.0%
	20,700	Allied World Assurance Holdings, Ltd. (Bermuda)		840,420
	56,700	Allstate Corp. (The)		1,857,492
	78,700	American Financial Group, Inc.		1,800,656
	177,508	Aon Corp.		8,108,565
	9,831	Arch Capital Group, Ltd. (Bermuda)*		689,153
	109,200	Aspen Insurance Holdings, Ltd. (Bermuda)		2,648,100
	191,773	Assurant, Inc.		5,753,190
	104,808	Axis Capital Holdings, Ltd. (Bermuda)		3,052,009
	39,400	Chubb Corp. (The)		2,009,400
	31,800	Cigna Corp.		535,830
	87,100	Cincinnati Financial Corp.		2,531,997
	201,500	Conseco, Inc.*		1,043,770
	80,800	Coventry Health Care, Inc.*		1,202,304
	99,210	Everest Re Group, Ltd. (Bermuda)		7,553,849
	142,300	Genworth Financial, Inc. — Class A		402,709
	70,100	Horace Mann Educators Corp.		644,219
	104,900	IPC Holdings, Ltd. (Bermuda)		3,136,510
	107,354	Lincoln National Corp.		2,022,549
	494,363	Marsh & McLennan Companies, Inc.		11,998,191
	10,800	Nationwide Financial Services, Inc. — Class A		563,868
	109,094	PartnerRe, Ltd. (Bermuda)		7,775,129
	41,700	Unitrin, Inc.(8)		664,698
	65,438	Willis Group Holdings, Ltd. (Bermuda)		1,628,097
	352,521	XL Capital, Ltd. — Class A (Cayman Islands)		1,304,328

				69,767,033

		Internet Services — 0.8%
	71,800	eBay, Inc.*		1,002,328
	60,622	McAfee, Inc.*		2,095,703
	111,900	Symantec Corp.*		1,512,888
	117,100	TIBCO Software, Inc.*		607,749

				5,218,668

		Machinery — 0.7%
	27,332	AGCO Corp.*		644,762
	25,276	Cummins, Inc.		675,627
	84,543	Manitowoc Company, Inc. (The)		732,142
	25,683	Rockwell Automation, Inc.		828,020
	90,471	Terex Corp.*		1,566,958

				4,447,509

		Manufacturing — 4.5%
	78,622	AO Smith Corp.		2,320,921
	81,318	Cooper Industries, Ltd. — Class A (Bermuda)		2,376,925
	39,900	Crane Company		687,876
	65,384	Eaton Corp.		3,250,239
	42,200	EnPro Industries, Inc.*		908,988
	407,595	Ingersoll-Rand Company, Ltd. — Class A (Bermuda)		7,071,773
	58,200	Leggett & Platt, Inc.		884,058
	48,800	Mueller Industries, Inc.		1,223,904
	88,092	Parker Hannifin Corp.		3,747,434
	69,550	Precision Castparts Corp.		4,136,834
	83,400	Tredegar Corp.		1,516,212

				28,125,164

		Medical Equipment, Supplies, and Services — 5.1%
	183,400	Cardinal Health, Inc.		6,321,798
	19,129	Covance, Inc.*		880,508
	112,050	CR Bard, Inc.		9,441,333
	369,900	Hologic, Inc.*		4,834,593
	43,951	Humana, Inc.*		1,638,493
	31,400	Kindred Healthcare, Inc.*		408,828
	44,600	Kinetic Concepts, Inc.*		855,428
	18,326	McKesson Corp.		709,766
	118,300	Millipore Corp.*		6,094,816
	23,000	Universal Health Services, Inc. — Class B		864,110

				32,049,673

		Metals and Mining — 0.8%
	41,100	Carpenter Technology Corp.		844,194
	35,371	Freeport-McMoRan Copper & Gold, Inc.		864,467
	60,349	Nucor Corp.		2,788,124
	13,101	United States Steel Corp.		487,357

				4,984,142

		Office Equipment, Supplies, and Services — 0.5%
	173,100	Steelcase, Inc. — Class A		972,822
	303,800	Xerox Corp.		2,421,286

				3,394,108

		Oil, Coal and Gas — 6.2%
	363,710	BJ Services Company		4,244,495

See notes to financial statements.

141

MID VALUE PORTFOLIO
(FORMERLY, MID-CAP VALUE PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Oil, Coal and Gas (continued)

	55,959	Cameron International Corp.*	$	1,147,160
	44,386	Chesapeake Energy Corp.		717,722
	32,800	Cimarex Energy Company		878,384
	145,575	El Paso Corp.		1,139,852
	86,223	Enbridge, Inc. (Canada)(8)		2,799,661
	24,652	Equitable Resources, Inc.		827,075
	50,800	Holly Corp.		926,084
	72,800	Marathon Oil Corp.		1,991,808
	64,162	Newfield Exploration Company*		1,267,200
	188,700	ONEOK, Inc.		5,494,943
	156,400	Patterson-UTI Energy, Inc.		1,800,164
	54,603	Pioneer Natural Resources Company		883,477
	138,485	Questar Corp.		4,527,074
	52,748	Southwestern Energy Company*		1,528,110
	90,236	Sunoco, Inc.(8)		3,921,657
	33,000	Swift Energy Company*		554,730
	15,996	Transocean, Ltd. (Switzerland)*		755,811
	30,944	Ultra Petroleum Corp. (Canada)*		1,067,877
	37,500	Valero Energy Corp.		811,500
	39,600	Walter Industries, Inc.		693,396
	104,329	Weatherford International, Ltd. (Bermuda)*		1,128,840

				39,107,020

		Paper and Forest Products — 0.2%
	84,800	International Paper Company		1,000,640

		Pharmaceuticals/Research and Development — 1.7%
	116,300	Forest Laboratories, Inc.*		2,962,161
	27,896	Hospira, Inc.*		748,171
	293,246	King Pharmaceuticals, Inc.*		3,114,273
	369,618	Mylan, Inc.*(8)		3,655,521

				10,480,126

		Printing and Publishing — 0.2%
	80,000	Gannett Company, Inc.		640,000
	49,800	Scholastic Corp.		676,284

				1,316,284

		Real Estate Development and Services — 0.1%
	37,996	St. Joe Company (The)*(8)		924,063

		Real Estate Investment Trusts — 2.2%
	247,400	Anthracite Capital, Inc.(8)		551,702
	20,108	AvalonBay Communities, Inc.		1,218,143
	10,122	Boston Properties, Inc.		556,710
	36,100	Capital Trust, Inc. — Class A(8)		129,960
	42,800	Entertainment Properties Trust		1,275,440
	57,006	Equity Residential		1,699,918
	166,841	General Growth Properties, Inc.		215,225
	97,500	Hospitality Properties Trust		1,449,825
	243,300	HRPT Properties Trust		819,921
	35,300	Liberty Property Trust		805,899
	128,200	Medical Properties Trust, Inc.(8)		808,942
	47,300	National Health Investors, Inc.		1,297,439
	38,998	RAIT Investment Trust		101,395
	48,376	Rayonier, Inc.		1,516,588
	128,100	Sunstone Hotel Investors, Inc.		792,939
	21,458	Ventas, Inc.		720,345

				13,960,391

		Retail — 2.2%
	65,800	Barnes & Noble, Inc.		987,000
	36,673	Bed Bath & Beyond, Inc.*		932,228
	27,800	Bon-Ton Stores, Inc. (The)(8)		28,634
	84,600	Dollar Tree, Inc.*		3,536,280
	125,464	Family Dollar Stores, Inc.		3,270,846
	150,350	JC Penney Company, Inc.		2,961,895
	96,211	Macy’s, Inc.		995,784
	82,300	RadioShack Corp.		982,662

				13,695,329

		Retail: Restaurants — 0.4%
	32,100	Bob Evans Farms, Inc.		655,803
	56,700	Brinker International, Inc.		597,618
	43,000	Darden Restaurants, Inc.		1,211,740
	110,900	Ruby Tuesday, Inc.*		173,004

				2,638,165

		Retail: Supermarkets — 0.5%
	17,800	Kroger Company (The)		470,098
	54,000	Safeway, Inc.		1,283,580
	83,500	SUPERVALU, Inc.		1,219,100

				2,972,778

		Rubber Products — 0.0%
	47,300	Goodyear Tire & Rubber Company (The)*		282,381

		Scientific and Technical Instruments — 0.2%
	100,537	Agilent Technologies, Inc.*		1,571,393

		Semiconductors — 2.6%
	153,400	Analog Devices, Inc.		2,917,668
	48,038	ASML Holding NV (The Netherlands)		868,047
	56,979	Lam Research Corp.*		1,212,513

See notes to financial statements.

142

MID VALUE PORTFOLIO
(FORMERLY, MID-CAP VALUE PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Semiconductors (continued)

	65,800	Linear Technology Corp.	$	1,455,496
	1,545,075	LSI Corp.*		5,083,296
	104,657	Maxim Integrated Products, Inc.		1,195,183
	71,869	Microchip Technology, Inc.(8)		1,403,602
	281,489	Micron Technology, Inc.*		743,131
	56,600	MKS Instruments, Inc.*		837,114
	55,100	Novellus Systems, Inc.*		679,934

				16,395,984

		Telecommunications Equipment and Services — 1.4%
	101,605	CenturyTel, Inc.		2,776,865
	57,966	Embarq Corp.		2,084,457
	625,913	Qwest Communications International, Inc.		2,278,323
	97,080	Tellabs, Inc.*		399,970
	137,644	Windstream Corp.		1,266,325

				8,805,940

		Tools — 0.4%
	65,817	Stanley Works (The)		2,244,360

		Toys — 1.8%
	80,831	Hasbro, Inc.		2,357,840
	545,900	Mattel, Inc.		8,734,400

				11,092,240

		Transportation — 2.4%
	31,300	Arkansas Best Corp.(8)		942,443
	45,386	CSX Corp.		1,473,683
	47,000	FedEx Corp.		3,015,050
	121,200	JB Hunt Transport Services, Inc.(8)		3,183,924
	76,243	Kansas City Southern*		1,452,429
	39,800	Overseas Shipholding Group, Inc.		1,675,978
	105,550	Pacer International, Inc.		1,100,887
	21,600	Ryder System, Inc.		837,648
	29,200	Tidewater, Inc.		1,175,884
	57,500	YRC Worldwide, Inc.*(8)		165,025

				15,022,951

		Utilities — 8.4%
	40,200	AGL Resources, Inc.		1,260,270
	265,843	Allegheny Energy, Inc.		9,001,443
	65,300	Alliant Energy Corp.		1,905,454
	68,200	American Electric Power Company, Inc.		2,269,696
	409,200	CMS Energy Corp.		4,137,012
	86,283	DTE Energy Company		3,077,715
	77,900	Mirant Corp.*		1,469,973
	119,300	NiSource, Inc.		1,308,721
	93,872	Pepco Holdings, Inc.		1,667,167
	105,781	Pinnacle West Capital Corp.		3,398,744
	140,600	PPL Corp.		4,315,014
	84,600	Puget Energy, Inc.		2,307,042
	45,600	SCANA Corp.		1,623,360
	116,540	Sempra Energy		4,968,100
	65,100	TECO Energy, Inc.		803,985
	165,037	Wisconsin Energy Corp.		6,928,253
	127,300	Xcel Energy, Inc.		2,361,415

				52,803,364

		Total Common Stocks (Cost $916,657,411)		610,607,223

Principal

		Convertible Bonds — 0.0%
		Telecommunications Equipment and Services
$	251,000	Qwest Communications International, Inc., 3.50%, 11/15/25 (Cost $385,584)		211,154

		Securities Lending Collateral — 2.2%
	14,077,125	Securities Lending Collateral Investment (Note 4) (Cost $14,077,125)		14,077,125

		Total Securities (Cost $931,120,120)		624,895,502

		Repurchase Agreements — 2.9%
	18,202,898	With State Street Bank and Trust, dated 12/31/08, 0.01%, due 1/02/09, repurchase proceeds at maturity $18,202,908 (Collateralized by various US Treasury Bills, 0.01%-0.02%, due 01/29/09-05/14/09, with a total value of $18,573,271) (Cost $18,202,898)		18,202,898

		Total Investments — 102.0% (Cost $949,323,018)		643,098,400
		Liabilities less other assets — (2.0)%		(12,848,916	)

		Net Assets — 100.0%	$	630,249,484

See notes to financial statements.

143

MID GROWTH PORTFOLIO
(FORMERLY, MID-CAP GROWTH PORTFOLIO)
PORTFOLIO OF INVESTMENTS

December 31, 2008


Shares			Value

		Common Stocks — 97.8%
		Airlines — 1.8%
	382,924	UAL Corp.*(8)	$	4,219,822

		Apparel: Manufacturing and Retail — 3.4%
	342,832	Urban Outfitters, Inc.*		5,135,623
	140,249	Warnaco Group, Inc. (The)*		2,753,088

				7,888,711

		Banks and Financial Services — 4.0%
	42,684	IntercontinentalExchange, Inc.*		3,518,869
	46,200	Northern Trust Corp.		2,408,868
	232,833	TD Ameritrade Holding Corp.*		3,317,870

				9,245,607

		Broadcast Services/Media — 1.5%
	104,831	Dolby Laboratories, Inc. — Class A*		3,434,264

		Business Services and Supplies — 4.1%
	118,253	FTI Consulting, Inc.*(8)		5,283,544
	210,389	SAIC, Inc.*		4,098,378

				9,381,922

		Commercial Services — 2.0%
	229,414	Quanta Services, Inc.*		4,542,397

		Computer Equipment, Software and Services — 8.3%
	692,307	Activision Blizzard, Inc.*		5,981,531
	101,000	BMC Software, Inc.*		2,717,910
	220,536	Citrix Systems, Inc.*		5,198,034
	151,677	Salesforce.com, Inc.*		4,855,181

				18,752,656

		Construction Services and Supplies — 1.1%
	25,407	Martin Marietta Materials, Inc.(8)		2,466,512

		Consumer Goods and Services — 2.1%
	85,771	Church & Dwight Company, Inc.		4,813,469

		Containers and Packaging — 4.0%
	111,719	Ball Corp.		4,646,394
	167,962	Owens-Illinois, Inc.*		4,590,401

				9,236,795

		Education — 4.1%
	47,055	Apollo Group, Inc. — Class A*		3,605,354
	60,571	ITT Educational Services, Inc.*(8)		5,753,034

				9,358,388

		Engineering and Construction — 1.1%
	83,336	Aecom Technology Corp.*		2,560,915

		Environmental Waste Management and Recycling Services — 3.0%
	133,170	Stericycle, Inc.*		6,935,494

		Food and Beverage — 4.0%
	95,242	Molson Coors Brewing Company — Class B		4,659,239
	77,950	Ralcorp Holdings, Inc.*		4,552,280

				9,211,519

		Internet Services — 5.1%
	91,263	Equinix, Inc.*(8)		4,854,279
	300,519	F5 Networks, Inc.*		6,869,864

				11,724,143

		Manufacturing — 3.4%
	166,063	AMETEK, Inc.		5,016,763
	67,718	SPX Corp.		2,745,965

				7,762,728

		Medical Equipment, Supplies, and Services — 14.5%
	77,950	CR Bard, Inc.		6,568,067
	58,437	Edwards Lifesciences Corp.*		3,211,113
	18,282	Intuitive Surgical, Inc.*		2,321,631
	105,400	ResMed, Inc.*		3,950,392
	209,052	St Jude Medical, Inc.*		6,890,353
	160,067	STERIS Corp.		3,824,001
	40,042	Techne Corp.		2,583,510
	106,162	Varian Medical Systems, Inc.*		3,719,916

				33,068,983

		Metals and Mining — 1.8%
	128,053	Goldcorp, Inc. (Canada)		4,037,511

		Oil, Coal and Gas — 5.2%
	115,795	Cameron International Corp.*		2,373,798
	604,890	Petrohawk Energy Corp.*		9,454,430

				11,828,228

		Pharmaceuticals/Research and Development — 2.9%
	121,966	Express Scripts, Inc.*		6,705,691

		Retail: Restaurants — 4.5%
	207,454	Burger King Holdings, Inc.		4,954,002
	104,140	Panera Bread Company — Class A*(8)		5,440,273

				10,394,275

		Retail: Supermarkets — 1.2%
	104,796	Kroger Company (The)		2,767,662

See notes to financial statements.

145

MID GROWTH PORTFOLIO
(FORMERLY, MID-CAP GROWTH PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)

		Scientific and Technical Instruments — 2.6%
	43,081	Mettler-Toledo International, Inc.*	$	2,903,659
	87,640	Thermo Fisher Scientific, Inc.*		2,985,895

				5,889,554

		Semiconductors — 1.4%
	487,212	Marvell Technology Group, Ltd. (Bermuda)*		3,249,704

		Telecommunications Equipment and Services — 7.2%
	226,559	American Tower Corp. — Class A*		6,642,710
	311,800	Crown Castle International Corp.*		5,481,444
	241,065	NII Holdings, Inc.*		4,382,562

				16,506,716

		Toys — 2.5%
	193,909	Hasbro, Inc.		5,656,326

		Transportation — 1.0%
	69,000	CSX Corp.		2,240,430

		Total Common Stocks
		(Cost $283,793,824)		223,880,422

Principal

		Securities Lending Collateral — 6.6%
$	15,114,459	Securities Lending Collateral Investment (Note 4) (Cost $15,114,459)		15,114,459

		Total Securities (Cost $298,908,283)		238,994,881

		Repurchase Agreements — 2.5%
	5,792,445	With State Street Bank and Trust, dated 12/31/08, 0.01%, due 01/02/09, repurchase proceeds at maturity $5,792,448 (Collateralized by US Treasury Bill, 0.02%, due 5/14/09, with a value of $5,909,409) (Cost $5,792,445)		5,792,445

		Total Investments — 106.9% (Cost $304,700,728)		244,787,326
		Liabilities less other assets — (6.9)%		(15,821,423	)

		Net Assets — 100.0%	$	228,965,903

The aggregate cost of securities for federal income tax purposes at December 31, 2008 is $308,301,216.

The following amount is based on cost for federal income tax purposes:


Gross/Net unrealized depreciation (includes gross unrealized appreciation of $0)	$	(63,513,890	)

See summary of footnotes and abbreviations to portfolios.

See notes to financial statements.

146

SMALL VALUE PORTFOLIO
(FORMERLY, SMALL-CAP VALUE PORTFOLIO)
PORTFOLIO OF INVESTMENTS

December 31, 2008


Shares			Value

		Common Stocks — 97.7%
		Aerospace and Defense — 1.3%
	122,002	Ducommun, Inc.	$	2,037,433

		Agriculture — 0.2%
	19,700	Andersons, Inc. (The)(8)		324,656

		Airlines — 0.1%
	33,900	Hawaiian Holdings, Inc.*		216,282

		Apparel: Manufacturing and Retail — 2.7%
	5,400	Carter’s, Inc.*		104,004
	28,400	Cato Corp. — Class A (The)		428,840
	31,300	Collective Brands, Inc.*		366,836
	23,300	Genesco, Inc.*		394,236
	105,851	Jos A Bank Clothiers, Inc.*(8)		2,768,004
	5,700	Steven Madden, Ltd.*		121,524

				4,183,444

		Automobiles/Motor Vehicles, Automotive Equipment and Repairs — 2.6%
	51,200	ArvinMeritor, Inc.		145,920
	68,616	BorgWarner, Inc.		1,493,770
	126,150	Oshkosh Truck Corp.		1,121,474
	12,300	Polaris Industries, Inc.		352,395
	215,447	Spartan Motors, Inc.(8)		1,019,064

				4,132,623

		Banks and Financial Services — 16.3%
	34,400	BGC Partners, Inc. — Class A		94,944
	208,762	Brookline Bancorp, Inc.		2,223,315
	10,960	Bryn Mawr Bank Corp.		220,296
	135,580	Calamos Asset Management, Inc. — Class A(8)		1,003,292
	4,400	Cash America International, Inc.		120,340
	3,600	Cathay General Bancorp		85,500
	11,400	City Holding Company		396,492
	10,200	Farmers Capital Bank Corp.		249,084
	10,200	Financial Federal Corp.		237,354
	14,879	Financial Institutions, Inc.		213,514
	39,400	First Commonwealth Financial Corp.		487,772
	29,200	First Financial Bancorp		361,788
	7,200	First Financial Bankshares, Inc.(8)		397,512
	1,400	First Financial Holdings, Inc.		28,336
	14,300	First Merchants Corp.		317,603
	27,000	First Niagara Financial Group, Inc.		436,590
	20,600	FirstMerit Corp.		424,154
	8,800	Flushing Financial Corp.		105,248
	10,300	Glacier Bancorp, Inc.		195,906
	9,300	Hancock Holding Company		422,778
	14,500	Independent Bank Corp. — Massachusetts		379,320
	18,700	Knight Capital Group, Inc. — Class A*		302,005
	29,596	Lakeland Bancorp, Inc.		333,251
	15,700	National Penn Bancshares, Inc.		227,807
	15,900	NBT Bancorp, Inc.		444,564
	11,500	NewAlliance Bancshares, Inc.		151,455
	17,900	Old National Bancorp — Indiana		325,064
	44,600	Oriental Financial Group, Inc.- Puerto Rico		269,830
	8,300	Pennsylvania Commerce Bancorp, Inc.*		221,278
	11,200	Republic Bancorp, Inc. — Class A		304,640
	10,900	S&T Bancorp, Inc.(8)		386,950
	36,200	Sanders Morris Harris Group, Inc.		216,838
	40,900	Seacoast Banking Corp.		269,940
	4,746	Simmons First National Corp. — Class A		139,865
	7,415	Southside Bancshares, Inc.		174,253
	25,400	Sterling Bancorp — New York		356,362
	60,862	Stifel Financial Corp.*		2,790,523
	30,900	Susquehanna Bancshares, Inc.		491,619
	2,200	SVB Financial Group*		57,706
	190,868	SWS Group, Inc.		3,616,948
	10,582	UMB Financial Corp.		519,999
	3,800	United Bankshares, Inc.(8)		126,236
	102,291	Washington Federal, Inc.		1,530,273
	74,492	WesBanco, Inc.		2,026,927
	95,915	Whitney Holding Corp.		1,533,681
	4,000	WSFS Financial Corp.		191,960

				25,411,112

		Broadcast Services/Media — 0.4%
	40,500	Outdoor Channel Holdings, Inc.*		303,345
	86,400	Sinclair Broadcast Group, Inc. — Class A		267,840

				571,185

		Business Services and Supplies — 0.7%
	12,000	Acxiom Corp.		97,320
	21,400	Deluxe Corp.		320,144
	68,500	On Assignment, Inc.*		388,395
	7,600	Portfolio Recovery Associates, Inc.*(8)		257,184

				1,063,043

		Chemicals — 1.3%
	32,700	A Schulman, Inc.		555,900

See notes to financial statements.

147

SMALL VALUE PORTFOLIO
(FORMERLY, SMALL-CAP VALUE PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Chemicals (continued)

	7,500	Compass Minerals International, Inc.	$	439,950
	39,000	Ferro Corp.		274,950
	22,700	Innospec, Inc.		133,703
	6,600	Minerals Technologies, Inc.		269,940
	4,000	Olin Corp.		72,320
	8,200	OM Group, Inc.*		173,102
	48,900	PolyOne Corp.*		154,035

				2,073,900

		Commercial Services — 0.5%
	16,500	Interactive Data Corp.		406,890
	10,200	TNS, Inc.*		95,778
	12,900	Viad Corp.		319,146

				821,814

		Computer Equipment, Software and Services — 4.3%
	10,274	CACI International, Inc. — Class A*		463,255
	119,900	CIBER, Inc.*		576,719
	196,985	Digi International, Inc.*(20)		1,597,548
	68,700	Epicor Software Corp.*		329,760
	17,800	Imation Corp.		241,546
	49,800	Insight Enterprises, Inc.*		343,620
	76,640	MTS Systems Corp.		2,041,690
	172,596	OpenTV Corp. (British Virgin Islands)*		212,293
	29,600	Palm, Inc.*		90,872
	32,565	RadiSys Corp.*		180,084
	69,000	Silicon Storage Technology, Inc.*		158,010
	18,493	Sybase, Inc.*		458,072
	1,300	SYNNEX Corp.*		14,729

				6,708,198

		Construction Services and Supplies — 2.2%
	56,900	Comfort Systems USA, Inc.		606,554
	43,800	Dycom Industries, Inc.*		360,036
	22,100	NCI Building Systems, Inc.*(8)		360,230
	78,315	Universal Forest Products, Inc.		2,107,457

				3,434,277

		Consumer Goods and Services — 3.2%
	19,800	American Greetings Corp. — Class A		149,886
	148,709	Helen of Troy, Ltd. (Bermuda)*		2,581,589
	12,700	Inter Parfums, Inc.		97,536
	143,421	Nutri System, Inc.(8)		2,092,512
	6,525	Regis Corp.		94,808

				5,016,331

		Distribution — 0.2%
	22,700	Nu Skin Enterprises, Inc. — Class A		236,761

		Education — 0.3%
	24,700	School Specialty, Inc.*		472,264

		Electronics — 0.7%
	66,300	Applied Micro Circuits Corp.*		260,559
	21,600	Benchmark Electronics, Inc.*		275,832
	13,700	EnerSys*		150,700
	5,600	Rogers Corp.*		155,512
	408,900	Sanmina-SCI Corp.*		192,183

				1,034,786

		Engineering — 1.7%
	117,187	EMCOR Group, Inc.*		2,628,504

		Entertainment, Leisure and Recreation — 1.7%
	49,400	Live Nation, Inc.*		283,556
	149,779	Marcus Corp. (The)(20)		2,430,913

				2,714,469

		Equipment Rental and Leasing — 0.3%
	34,273	Electro Rent Corp.		382,487
	7,500	Rent-A-Center, Inc.*		132,375

				514,862

		Food and Beverage — 1.3%
	14,000	Chiquita Brands International, Inc.*		206,920
	15,700	Flowers Foods, Inc.		382,452
	7,500	Fresh Del Monte Produce, Inc. (Cayman Islands)*		168,150
	16,400	J & J Snack Foods Corp.		588,432
	7,000	Nash Finch Company		314,230
	1,400	Ralcorp Holdings, Inc.*		81,760
	8,600	TreeHouse Foods, Inc.*		234,264
	7,400	United Natural Foods, Inc.*		131,868

				2,108,076

		Funeral Services — 0.9%
	274,699	Service Corp. International		1,365,254

		Insurance — 5.9%
	24,500	American Equity Investment Life Holding Company		171,500
	5,214	American Physicians Capital, Inc.		250,793
	22,637	Aspen Insurance Holdings, Ltd. (Bermuda)		548,947

See notes to financial statements.

148

SMALL VALUE PORTFOLIO
(FORMERLY, SMALL-CAP VALUE PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Insurance (continued)

	20,800	CNA Surety Corp.*	$	399,360
	5,500	Crawford & Company*		79,970
	15,631	Delphi Financial Group, Inc. — Class A		288,236
	17,300	Donegal Group, Inc. — Class A		290,121
	15,266	FBL Financial Group, Inc. — Class A		235,860
	5,600	Harleysville Group, Inc.		194,488
	12,400	Horace Mann Educators Corp.		113,956
	15,200	IPC Holdings, Ltd. (Bermuda)		454,480
	10,100	National Interstate Corp.		180,487
	7,400	Navigators Group, Inc. (The)*		406,334
	5,800	Odyssey Re Holdings Corp.		300,498
	76,600	Phoenix Companies, Inc. (The)		250,482
	13,937	Platinum Underwriters Holdings, Ltd. (Bermuda)		502,847
	3,200	ProAssurance Corp.*		168,896
	46,840	RLI Corp.		2,864,735
	20,900	Seabright Insurance Holdings*		245,366
	14,700	Selective Insurance Group, Inc.		337,071
	12,900	State Auto Financial Corp.		387,774
	20,700	Universal American Financial Corp.*		182,574
	14,639	Zenith National Insurance Corp.		462,153

				9,316,928

		Internet Services — 0.4%
	52,700	Ixia*		304,606
	32,045	Vignette Corp.*		301,543

				606,149

		Machinery — 1.9%
	97,085	Applied Industrial Technologies, Inc.		1,836,848
	6,400	Baldor Electric Company		114,240
	16,400	Columbus McKinnon Corp.*		223,860
	19,700	Robbins & Myers, Inc.		318,549
	30,000	Sauer-Danfoss, Inc.		262,500
	6,200	Wabtec Corp.		246,450

				3,002,447

		Manufacturing — 4.6%
	16,180	Acuity Brands, Inc.		564,844
	78,654	Ceradyne, Inc.*		1,597,463
	56,482	CIRCOR International, Inc.		1,553,255
	11,800	Coherent, Inc.*		253,228
	16,827	EnPro Industries, Inc.*		362,454
	37,571	Gibraltar Industries, Inc.		448,598
	92,536	Watts Water Technologies, Inc.		2,310,623
	5,600	Woodward Governor Company		128,912

				7,219,377

		Medical Equipment, Supplies, and Services — 5.5%
	13,523	AMERIGROUP Corp.*		399,199
	6,200	AmSurg Corp.*		144,708
	11,000	Centene Corp.*		216,810
	30,600	Cross Country Healthcare, Inc.*		268,974
	16,900	Gentiva Health Services, Inc.*		494,494
	15,700	Kindred Healthcare, Inc.*		204,414
	75,241	Magellan Health Services, Inc.*		2,946,438
	52,636	Owens & Minor, Inc.		1,981,745
	11,300	Res-Care, Inc.*		169,726
	33,300	Symmetry Medical, Inc.*		265,401
	177,748	Syneron Medical, Ltd. (Israel)*		1,482,418

				8,574,327

		Metals and Mining — 0.2%
	6,800	Olympic Steel, Inc.		138,516
	1,500	Royal Gold, Inc.		73,815
	14,800	Worthington Industries, Inc.(8)		163,096

				375,427

		Oil, Coal and Gas — 7.3%
	46,600	Allis-Chalmers Energy, Inc.*		256,300
	23,462	Berry Petroleum Company — Class A		177,373
	17,100	Bill Barrett Corp.*		361,323
	7,700	Dawson Geophysical Company*		137,137
	72,313	Frontier Oil Corp.		913,313
	48,010	Holly Corp.		875,222
	19,100	Hornbeck Offshore Services, Inc.*		312,094
	8,900	Lufkin Industries, Inc.		307,050
	46,775	National Fuel Gas Company		1,465,461
	15,800	Nicor, Inc.		548,892
	51,346	Penn Virginia Corp.		1,333,969
	16,200	Piedmont Natural Gas Company, Inc.		513,054
	17,000	Superior Well Services, Inc.*		170,000
	63,493	Swift Energy Company*		1,067,317
	79,133	World Fuel Services Corp.		2,927,921

				11,366,426

		Paper and Forest Products — 0.2%
	40,600	Glatfelter		377,580

		Pharmaceuticals/Research and Development — 4.8%
	74,524	Cytokinetics, Inc.*		212,393
	78,193	Exponent, Inc.*		2,352,046

See notes to financial statements.

149

SMALL VALUE PORTFOLIO
(FORMERLY, SMALL-CAP VALUE PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Pharmaceuticals/Research and Development (continued)

	170,103	Mannatech, Inc.(8)(20)	$	416,752
	12,700	Par Pharmaceutical Companies, Inc.*		170,307
	63,110	Perrigo Company		2,039,084
	28,700	ViroPharma, Inc.*		373,674
	50,732	West Pharmaceutical Services, Inc.		1,916,148

				7,480,404

		Printing and Publishing — 0.1%
	7,000	Courier Corp.		125,300

		Real Estate Investment Trusts — 7.7%
	161,398	Ashford Hospitality Trust		185,608
	22,200	Cedar Shopping Centers, Inc.		157,176
	3,600	Corporate Office Properties Trust		110,520
	11,324	Entertainment Properties Trust		337,455
	82,100	Glimcher Realty Trust		230,701
	104,119	Healthcare Realty Trust, Inc.		2,444,714
	44,603	Hersha Hospitality Trust		133,809
	10,000	Highwoods Properties, Inc.		273,600
	71,200	Lexington Realty Trust		356,000
	94,506	National Retail Properties, Inc.		1,624,558
	17,900	NorthStar Realty Finance Corp.		69,989
	14,400	Parkway Properties, Inc.		259,200
	49,900	Pennsylvania Real Estate Investment Trust(8)		371,755
	6,400	PS Business Parks, Inc.		285,824
	28,200	Ramco-Gershenson Properties Trust		174,276
	54,281	Rayonier, Inc.		1,701,709
	19,344	Realty Income Corp.(8)		447,814
	18,900	Senior Housing Properties Trust		338,688
	59,879	Sovran Self Storage, Inc.		2,155,644
	45,378	Sunstone Hotel Investors, Inc.		280,890
	40,600	U-Store-It Trust		180,670

				12,120,600

		Retail — 2.6%
	102,900	Blockbuster, Inc. — Class A*		129,654
	22,139	Casey’s General Stores, Inc.		504,105
	186,421	EZCORP, Inc. — Class A*		2,835,463
	16,900	Pantry, Inc. (The)*		362,505
	8,100	Tractor Supply Company*		292,734

				4,124,461

		Retail: Restaurants — 0.7%
	21,700	Bob Evans Farms, Inc.		443,331
	24,200	Cracker Barrel Old Country Store, Inc.		498,278
	9,200	Red Robin Gourmet Burgers, Inc.*		154,836

				1,096,445

		Retail: Supermarkets — 2.1%
	20,600	Ruddick Corp.		569,590
	81,237	Weis Markets, Inc.(20)		2,732,000

				3,301,590

		Rubber Products — 0.1%
	24,500	Myers Industries, Inc.		196,000

		Scientific and Technical Instruments — 0.3%
	14,062	Varian, Inc.*		471,218

		Semiconductors — 1.3%
	220,274	OmniVision Technologies, Inc.*(8)		1,156,439
	200,400	TriQuint Semiconductor, Inc.*		689,376
	26,100	Veeco Instruments, Inc.*		165,474

				2,011,289

		Sporting Goods and Equipment — 0.2%
	25,500	Callaway Golf Company		236,895

		Telecommunications Equipment and Services — 0.5%
	11,300	Atlantic Tele-Network, Inc.		300,015
	86,500	Cincinnati Bell, Inc.*		166,945
	18,500	Premiere Global Services, Inc.*		159,285
	26,000	tw telecom, Inc.*		220,220

				846,465

		Transportation — 3.4%
	82,783	Arkansas Best Corp.(8)		2,492,597
	8,800	Hub Group, Inc. — Class A*		233,464
	16,694	TAL International Group, Inc.		235,385
	49,252	Tidewater, Inc.		1,983,378
	20,600	Werner Enterprises, Inc.		357,204

				5,302,028

		Utilities — 5.0%
	66,159	American States Water Company		2,181,924
	6,600	Avista Corp.		127,908
	12,500	CH Energy Group, Inc.		642,375
	4,800	Connecticut Water Service, Inc.		113,328
	26,500	El Paso Electric Company*		479,385
	16,600	New Jersey Resources Corp.		653,210
	24,600	NorthWestern Corp.		577,362
	75,905	UIL Holdings Corp.		2,279,427

See notes to financial statements.

150

SMALL VALUE PORTFOLIO
(FORMERLY, SMALL-CAP VALUE PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Utilities (continued)

	16,700	Unisource Energy Corp.	$	490,312
	7,200	WGL Holdings, Inc.		235,368

				7,780,599

		Total Common Stocks (Cost $190,616,179)		153,001,229

Principal

		Securities Lending Collateral — 4.6%
$	7,266,311	Securities Lending Collateral Investment (Note 4) (Cost $7,266,311)		7,266,311

		Total Securities (Cost $197,882,490)		160,267,540

		Repurchase Agreements — 0.3%
	465,974	With State Street Bank and Trust, dated 12/31/08, 0.01%, due 01/02/09, repurchase proceeds at maturity $465,974 (Collateralized by US Treasury Bill, 0.01%, due 01/02/09, with a value of $475,524) (Cost $465,974)		465,974

		Total Investments — 102.6% (Cost $198,348,464)		160,733,514
		Liabilities less other assets — (2.6)%		(4,105,331	)

		Net Assets — 100.0%	$	156,628,183

The aggregate cost of securities for federal income tax purposes at December 31, 2008 is $203,091,753.

The following amounts are based on cost for federal income tax purposes:


Gross unrealized appreciation	$	2,879,357
Gross unrealized depreciation		(45,237,596	)

Net unrealized depreciation	$	(42,358,239	)

See summary of footnotes and abbreviations to portfolios.

See notes to financial statements.

151

SMALL CORE PORTFOLIO
(FORMERLY, SPECIAL EQUITY PORTFOLIO)
PORTFOLIO OF INVESTMENTS

December 31, 2008


Shares			Value

		Common Stocks — 98.9%
		Advertising — 0.0%
	3,300	Harte-Hanks, Inc.	$	20,592

		Aerospace and Defense — 0.5%
	27,987	Aerovironment, Inc.*(8)		1,030,201
	49,628	Ducommun, Inc.		828,788

				1,858,989

		Agriculture — 0.2%
	24,457	Andersons, Inc. (The)(8)		403,051
	20,500	Titan Machinery, Inc.*		288,230

				691,281

		Airlines — 0.6%
	3,200	Alaska Air Group, Inc.*		93,600
	12,080	Allegiant Travel Company*		586,726
	20,600	AMR Corp.*		219,802
	11,700	ExpressJet Holdings, Inc.*		19,890
	13,700	Hawaiian Holdings, Inc.*		87,406
	36,000	JetBlue Airways Corp.*		255,600
	6,500	Republic Airways Holdings, Inc.*		69,355
	29,600	SkyWest, Inc.		550,560
	27,400	UAL Corp.*(8)		301,948
	13,200	US Airways Group, Inc.*		102,036

				2,286,923

		Apparel: Manufacturing and Retail — 2.7%
	41,400	Aeropostale, Inc.*		666,540
	4,700	AnnTaylor Stores Corp.*		27,119
	206,241	Cato Corp. — Class A (The)		3,114,240
	4,700	Charlotte Russe Holding, Inc.*		30,503
	1,400	Cherokee, Inc.		24,290
	6,800	Children’s Place Retail Stores, Inc. (The)*		147,424
	11,100	Christopher & Banks Corp.		62,160
	2,800	Collective Brands, Inc.*		32,816
	14,258	Deckers Outdoor Corp.*		1,138,786
	25,900	Finish Line (The)		145,040
	4,000	Genesco, Inc.*		67,680
	900	Gymboree Corp. (The)*		23,481
	73,187	Iconix Brand Group, Inc.*		715,769
	13,100	Jones Apparel Group, Inc.		76,766
	17,383	Jos A Bank Clothiers, Inc.*(8)		454,565
	2,900	Maidenform Brands, Inc.*		29,435
	23,106	Men’s Wearhouse, Inc. (The)(8)		312,855
	4,200	Oxford Industries, Inc.		36,834
	322,958	Stage Stores, Inc.		2,664,404
	60,800	Talbots, Inc. (The)(8)		145,312
	17,600	Timberland Company (The) — Class A*		203,280
	10,000	Wet Seal, Inc. (The) — Class A*		29,700
	13,600	Wolverine World Wide, Inc.		286,144

				10,435,143

		Automobiles/Motor Vehicles, Automotive Equipment and Repairs — 1.0%
	28,400	ATC Technology Corp.*		415,492
	5,700	AutoNation, Inc.*		56,316
	13,900	Exide Technologies*		73,531
	12,100	Federal Signal Corp.		99,341
	10,800	Force Protection, Inc.*		64,584
	35,635	Fuel Systems Solutions, Inc.*(8)		1,167,403
	5,100	Midas, Inc.*		53,499
	177,474	Modine Manufacturing Company		864,298
	34,600	Polaris Industries, Inc.		991,290
	7,800	Standard Motor Products, Inc.		26,988
	1,800	Superior Industries International, Inc.		18,936
	37,200	Wabash National Corp.		167,400

				3,999,078

		Banks and Financial Services — 9.3%
	8,400	1st Source Corp.		198,492
	16,300	Advance America Cash Advance Centers, Inc.		30,807
	4,400	Ameris Bancorp		52,140
	1,900	Arrow Financial Corp.		47,766
	87,603	Asset Acceptance Capital Corp.*(8)		447,651
	9,300	BancFirst Corp.		492,156
	4,700	Bank Mutual Corp.		54,238
	5,300	Bank of Granite Corp.		12,985
	4,800	BankFinancial Corp.		48,912
	3,900	Beneficial Mutual Bancorp, Inc.*		43,875
	4,800	Berkshire Hills Bancorp, Inc.		148,128
	4,200	BGC Partners, Inc. — Class A		11,592
	2,200	BlackRock Kelso Capital Corp.		21,692
	1,700	Capital Southwest Corp.		183,872
	59,004	Cardtronics, Inc.*		76,115
	31,994	Cash America International, Inc.		875,036
	6,100	Center Financial Corp.		37,637
	1,400	Chemical Financial Corp.		39,032
	10,400	City Bank(8)		54,080
	10,400	City Holding Company		361,712
	4,200	Colonial BancGroup, Inc. (The)		8,694
	38,400	Community Bank System, Inc.		936,576
	8,900	Community Trust Bancorp, Inc.		327,075
	7,600	Corus Bankshares, Inc.(8)		8,436
	72,626	Credit Acceptance Corp.*(8)		994,976
	31,400	Dime Community Bancshares		417,620

See notes to financial statements.

152

SMALL CORE PORTFOLIO
(FORMERLY, SPECIAL EQUITY PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Banks and Financial Services (continued)

	42,500	Doral Financial Corp. — Puerto Rico*(8)	$	318,750
	49,908	Duff & Phelps Corp. — Class A*		954,241
	22,000	Encore Capital Group, Inc.*		158,400
	4,200	ESSA Bancorp, Inc.		59,346
	55,682	Financial Federal Corp.		1,295,720
	2,400	Financial Institutions, Inc.		34,440
	131,500	First BanCorp — Puerto Rico(8)		1,464,910
	2,650	First Citizens Bancshares, Inc. — Class A		404,920
	89,400	First Commonwealth Financial Corp.(8)		1,106,772
	900	First Community Bancshares, Inc.		31,383
	52,700	First Financial Bancorp		652,953
	9,600	First Financial Bankshares, Inc.(8)		530,016
	4,400	First Financial Corp.		180,356
	6,000	First Financial Holdings, Inc.		121,440
	1,300	First Merchants Corp.		28,873
	109,195	First Midwest Bancorp, Inc.		2,180,625
	47,400	First Niagara Financial Group, Inc.		766,458
	4,600	First Place Financial Corp.		17,618
	35,800	FirstMerit Corp.		737,122
	32,200	Flagstar Bancorp, Inc.*		22,862
	3,400	FNB Corp.		44,880
	20,500	Frontier Financial Corp.(8)		89,380
	48,200	GFI Group, Inc.		170,628
	70,500	Global Cash Access Holdings, Inc.*		156,510
	8,700	Great Southern Bancorp, Inc.(8)		99,528
	8,900	Guaranty Bancorp*		17,800
	1,400	Hancock Holding Company		63,644
	2,500	Home Bancshares, Inc.		67,375
	6,500	Horizon Financial Corp.		30,810
	14,100	Independent Bank Corp. — Massachusetts		368,856
	10,800	Interactive Brokers Group, Inc. — Class A*		193,212
	94,606	International Bancshares Corp.		2,065,249
	66,000	Knight Capital Group, Inc. — Class A*		1,065,900
	83,500	LaBranche & Company, Inc.*		399,965
	5,000	Lakeland Bancorp, Inc.		56,300
	3,900	MainSource Financial Group, Inc.		60,450
	52,631	MB Financial, Inc.		1,471,036
	8,500	Medallion Financial Corp.		64,855
	20,891	Morningstar, Inc.*(8)		741,631
	10,200	National Financial Partners Corp.		31,008
	5,000	NBT Bancorp, Inc.		139,800
	9,500	Net 1 UEPS Technologies, Inc.*		130,150
	73,455	NewAlliance Bancshares, Inc.		967,402
	13,100	OceanFirst Financial Corp.		217,460
	45,200	Old National Bancorp — Indiana		820,832
	2,800	Old Second Bancorp, Inc.		32,480
	14,000	optionsXpress Holdings, Inc.		187,040
	13,900	Oriental Financial Group, Inc.- Puerto Rico		84,095
	7,000	Pacific Capital Bancorp		118,160
	3,800	PacWest Bancorp		102,220
	400	Park National Corp.		28,700
	4,200	Patriot Capital Funding, Inc.		15,288
	5,200	People’s Bancorp, Inc.		99,476
	4,700	PHH Corp.*		59,831
	41,400	PRG-Schultz International, Inc.*		168,912
	15,220	PrivateBancorp, Inc.		494,041
	18,900	Provident Bankshares Corp.		182,574
	6,100	Provident Financial Services, Inc.		93,330
	18,600	Provident New York Bancorp		230,640
	1,400	S&T Bancorp, Inc.(8)		49,700
	5,900	Sanders Morris Harris Group, Inc.		35,341
	15,100	Santander BanCorp — Puerto Rico		188,599
	5,400	SCBT Financial Corp.		186,300
	4,200	Simmons First National Corp. — Class A		123,774
	3,200	Sterling Bancorp — New York		44,896
	11,160	Stifel Financial Corp.*		511,686
	11,200	Suffolk Bancorp		402,416
	11,200	Sun Bancorp, Inc. — New Jersey*		83,888
	2,300	SVB Financial Group*		60,329
	4,700	SWS Group, Inc.		89,065
	8,600	SY Bancorp, Inc.(8)		236,500
	20,900	TrustCo Bank Corp. NY		198,759
	14,400	Trustmark Corp.		310,896
	11,200	UMB Financial Corp.		550,368
	1,400	Umpqua Holdings Corp.		20,258
	4,000	Union Bankshares Corp.		99,200
	1,900	United Bankshares, Inc.(8)		63,118
	2,200	Univest Corp. of Pennsylvania		70,708
	4,400	US Global Investors, Inc. — Class A		21,516
	3,600	Washington Federal, Inc.		53,856

See notes to financial statements.

153

SMALL CORE PORTFOLIO
(FORMERLY, SPECIAL EQUITY PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Banks and Financial Services (continued)

	7,900	Washington Trust Bancorp, Inc.	$	156,025
	143,500	Webster Financial Corp.		1,977,430
	1,800	WesBanco, Inc.		48,978
	2,400	West Bancorp		29,400
	29,226	Westamerica Bancorp(8)		1,494,910
	9,900	WSFS Financial Corp.		475,101

				36,012,965

		Broadcast Services/Media — 0.2%
	6,500	CKX, Inc.*		23,855
	38,290	DG Fastchannel, Inc.*(8)		477,859
	56,000	Emmis Communications Corp. — Class A*		19,600
	9,400	Media General, Inc. — Class A		16,450
	64,600	Sinclair Broadcast Group, Inc. — Class A		200,260
	11,400	TiVo, Inc.*		81,624

				819,648

		Business Services and Supplies — 4.7%
	37,600	Acxiom Corp.		304,936
	135,362	Arbitron, Inc.		1,797,607
	21,123	Catalyst Health Solutions, Inc.*		514,345
	23,000	CBIZ, Inc.*		198,950
	6,800	CDI Corp.		87,992
	21,191	Coinstar, Inc.*		413,436
	12,100	Convergys Corp.*		77,561
	5,700	Corporate Executive Board Company (The)		125,742
	84,100	CSG Systems International, Inc.*		1,469,227
	80,100	Deluxe Corp.		1,198,296
	44,000	Diamond Management & Technology Consultants, Inc.		185,240
	28,500	Dice Holdings, Inc.*		116,280
	48,900	Fair Isaac Corp.		824,454
	12,970	FTI Consulting, Inc.*(8)		579,500
	9,100	Gartner, Inc.*		162,253
	20,000	Gevity HR, Inc.		30,200
	84,400	Hackett Group, Inc.*		246,448
	26,300	Hudson Highland Group, Inc.*		88,105
	99,268	MAXIMUS, Inc.		3,485,300
	68,500	ModusLink Global Solutions, Inc.*		197,965
	5,000	Navigant Consulting, Inc.*		79,350
	49,519	Portfolio Recovery Associates, Inc.*(8)		1,675,723
	42,640	Riskmetrics Group, Inc.*		634,910
	61,900	Spherion Corp.*		136,799
	4,500	SuccessFactors, Inc.*		25,830
	47,800	TrueBlue, Inc.*		457,446
	71,625	UniFirst Corp.		2,126,546
	23,343	Watson Wyatt Worldwide, Inc. — Class A		1,116,262

				18,356,703

		Chemicals — 2.0%
	31,567	Compass Minerals International, Inc.		1,851,720
	19,800	Ferro Corp.		139,590
	11,860	FMC Corp.		530,498
	39,700	Innospec, Inc.		233,833
	1,400	Minerals Technologies, Inc.		57,260
	900	NewMarket Corp.		31,419
	66,022	Olin Corp.		1,193,678
	8,700	Spartech Corp.		54,462
	15,000	Symyx Technologies, Inc.*		89,100
	18,400	Terra Industries, Inc.		306,728
	32,000	Tetra Tech, Inc.*		772,800
	140,164	Zep, Inc.		2,706,567

				7,967,655

		Collectibles — 0.1%
	25,300	RC2 Corp.*		269,951

		Commercial Services — 0.6%
	68,853	Euronet Worldwide, Inc.*		799,384
	2,200	Pre-Paid Legal Services, Inc.*		82,038
	8,700	Standard Parking Corp.*		168,258
	24,410	Team, Inc.*		676,157
	43,300	TNS, Inc.*		406,587
	31,669	Wright Express Corp.*		399,029

				2,531,453

		Computer Equipment, Software and Services — 5.3%
	177,300	3Com Corp.*		404,244
	5,600	ACI Worldwide, Inc.*		89,040
	30,700	Actuate Corp.*		90,872
	83,900	Adaptec, Inc.*		276,870
	11,800	AsiaInfo Holdings, Inc.*		139,712
	33,100	Avocent Corp.*		592,821
	13,280	CACI International, Inc. — Class A*		598,795
	84,800	CIBER, Inc.*		407,888
	12,500	Computer Task Group, Inc.*		40,250
	35,300	COMSYS IT Partners, Inc.*		79,072
	32,330	Data Domain, Inc.*(8)		607,804
	60,135	DivX, Inc.*		314,506

See notes to financial statements.

154

SMALL CORE PORTFOLIO
(FORMERLY, SPECIAL EQUITY PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Computer Equipment, Software and Services (continued)

	3,100	Double-Take Software, Inc.*	$	27,807
	38,050	Ebix, Inc.*		909,395
	148,562	Electronics For Imaging, Inc.*		1,420,253
	42,420	EPIQ Systems, Inc.*(8)		708,838
	16,300	Extreme Networks, Inc.*		38,142
	5,100	Hutchinson Technology, Inc.*		17,748
	106,960	Innerworkings, Inc.*(8)		700,588
	3,400	Insight Enterprises, Inc.*		23,460
	3,400	Interactive Intelligence, Inc.*		21,794
	10,100	Jack Henry & Associates, Inc.		196,041
	21,800	Manhattan Associates, Inc.*		344,658
	61,130	MedAssets, Inc.*		892,498
	7,500	Mentor Graphics Corp.*		38,775
	20,285	MICROS Systems, Inc.*		331,051
	2,700	MicroStrategy, Inc. — Class A*		100,251
	29,668	MSCI, Inc. — Class A*		526,904
	18,200	MTS Systems Corp.		484,848
	51,462	NetScout Systems, Inc.*		443,602
	46,242	Nuance Communications, Inc.*		479,067
	43,935	Omniture, Inc.*		467,468
	52,056	Parametric Technology Corp.*		658,508
	24,007	Progress Software Corp.*		462,375
	105,590	PROS Holdings, Inc.*		607,143
	12,000	Quest Software, Inc.*		151,080
	42,800	Rackable Systems, Inc.*		168,632
	25,600	RadiSys Corp.*		141,568
	3,300	Renaissance Learning, Inc.		29,667
	27,300	Silicon Storage Technology, Inc.*		62,517
	12,200	Solera Holdings, Inc.*		294,020
	74,343	Super Micro Computer, Inc.*		470,591
	84,625	Sybase, Inc.*		2,096,162
	38,530	Sykes Enterprises, Inc.*		736,694
	9,500	Synaptics, Inc.*		157,320
	28,600	Take-Two Interactive Software, Inc.*		216,216
	91,000	Unisys Corp.*		77,350
	376,550	Web.com Group, Inc.*		1,378,173
	62,055	Wind River Systems, Inc.*		560,357
	189,257	Xyratex, Ltd. (Bermuda)*		558,308

				20,641,743

		Construction Services and Supplies — 1.6%
	20,900	Beacon Roofing Supply, Inc.*		290,092
	59,900	Beazer Homes USA, Inc.*(8)		94,642
	39,400	BlueLinx Holdings, Inc.*		74,466
	103,300	Comfort Systems USA, Inc.		1,101,178
	6,610	Granite Construction, Inc.		290,377
	32,800	Hovnanian Enterprises, Inc. — Class A*		56,416
	63,000	M/I Homes, Inc.(8)		664,020
	3,200	Matrix Service Company*		24,544
	13,800	Meritage Homes Corp.*		167,946
	22,500	NCI Building Systems, Inc.*		366,750
	24,300	Ryland Group, Inc. (The)		429,381
	36,899	Simpson Manufacturing Company, Inc.(8)		1,024,316
	179,100	Standard Pacific Corp.*		318,798
	67,500	Sterling Construction Company, Inc.*		1,251,451

				6,154,377

		Consumer Goods and Services — 2.3%
	53,400	American Greetings Corp. — Class A		404,238
	86,600	Blyth, Inc.		678,944
	12,240	Chattem, Inc.*(8)		875,527
	3,600	CSS Industries, Inc.		63,864
	149,928	Helen of Troy, Ltd. (Bermuda)*		2,602,751
	101,202	Herbalife, Ltd. (Cayman Islands)		2,194,059
	12,800	Hooker Furniture Corp.		98,048
	42,600	La-Z-Boy, Inc.		92,442
	22,600	Parlux Fragrances, Inc.*		65,992
	24,600	Prestige Brands Holdings, Inc.*		259,530
	22,200	Regis Corp.		322,566
	22,100	Revlon, Inc. — Class A*		147,407
	19,755	Rollins, Inc.		357,170
	114,260	Tempur-Pedic International, Inc.(8)		810,103

				8,972,641

		Containers and Packaging — 0.2%
	17,666	Greif, Inc. — Class A		590,574

		Distribution — 1.3%
	900	Core-Mark Holding Company, Inc.*		19,368
	15,300	Houston Wire & Cable Company		142,443
	133,573	LKQ Corp.*		1,557,461
	9,600	Nu Skin Enterprises, Inc. — Class A		100,128
	89,836	United Stationers, Inc.*		3,008,608
	7,400	Universal Corp.		221,038
	2,900	WESCO International, Inc.*		55,767

				5,104,813

See notes to financial statements.

155

SMALL CORE PORTFOLIO
(FORMERLY, SPECIAL EQUITY PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)

		Diversified Operations and Services — 0.9%
	2,000	Chemed Corp.	$	79,540
	81,216	ESCO Technologies, Inc.*(8)		3,325,795

				3,405,335

		Education — 0.3%
	1,800	Career Education Corp.*		32,292
	12,700	Corinthian Colleges, Inc.*		207,899
	13,370	DeVry, Inc.		767,572

				1,007,763

		Electronics — 3.1%
	1,700	American Superconductor Corp.*		27,727
	20,793	Avnet, Inc.*		378,641
	205,206	Belden CDT, Inc.		4,284,701
	14,100	Benchmark Electronics, Inc.*		180,057
	55,700	CTS Corp.		306,907
	33,900	Cubic Corp.		922,080
	90,400	Diebold, Inc.		2,539,336
	4,800	Harman International Industries, Inc.		80,304
	58,052	LaBarge, Inc.*		833,046
	65,700	Methode Electronics, Inc.		442,818
	106,800	Micrel, Inc.		780,708
	9,400	Multi-Fineline Electronix, Inc.*		109,886
	181,858	Nam Tai Electronics, Inc. (British Virgin Islands)		1,000,219
	4,000	Park Electrochemical Corp.		75,840
	108,100	Sanmina-SCI Corp.*		50,807
	17,300	Stoneridge, Inc.*		78,888

				12,091,965

		Energy Services — 0.1%
	13,662	Energy Conversion Devices, Inc.*(8)		344,419
	49,800	Plug Power, Inc.*		50,796

				395,215

		Engineering — 0.1%
	13,500	EMCOR Group, Inc.*		302,805

		Entertainment, Leisure and Recreation — 1.2%
	20,000	Brunswick Corp.		84,200
	31,800	Carmike Cinemas, Inc.		116,070
	70,700	Choice Hotels International, Inc.		2,125,243
	26,102	Life Time Fitness, Inc.*(8)		338,021
	2,000	National CineMedia, Inc.		20,280
	25,570	Netflix, Inc.*(8)		764,287
	52,510	Scientific Games Corp. — Class A*		921,025
	51,800	Warner Music Group Corp.		156,436
	4,200	WMS Industries, Inc.*		112,980

				4,638,542

		Environmental Waste Management and Recycling Services — 0.1%
	17,200	Casella Waste Systems, Inc.*		70,176
	48,100	Darling International, Inc.*		264,069
	4,100	Waste Services, Inc.*		26,978

				361,223

		Equipment Rental and Leasing — 0.1%
	12,000	Rent-A-Center, Inc.*		211,800
	13,700	United Rentals, Inc.*		124,944

				336,744

		Food and Beverage — 2.1%
	900	Cal-Maine Foods, Inc.		25,830
	1,400	Coca-Cola Bottling Company Consolidated		64,344
	59,000	Del Monte Foods Company		421,260
	6,700	Diamond Foods, Inc.		135,005
	3,400	Farmer Brothers Company		84,796
	36,765	Flowers Foods, Inc.		895,595
	15,340	JM Smucker Company (The)		665,142
	137,800	Lance, Inc.		3,161,132
	31,100	Nash Finch Company		1,396,079
	21,810	Peet’s Coffee & Tea, Inc.*		507,083
	13,850	Ralcorp Holdings, Inc.*		808,840
	39,400	Reddy Ice Holdings, Inc.		56,736

				8,221,842

		Funeral Services — 0.0%
	13,400	Stewart Enterprises, Inc. — Class A		40,334

		Insurance — 5.7%
	4,400	Allied World Assurance Holdings, Ltd. (Bermuda)		178,640
	10,700	Ambac Financial Group, Inc.		13,910
	102,000	American Equity Investment Life Holding Company		714,000
	11,000	American Physicians Capital, Inc.		529,100
	8,500	Amerisafe, Inc.*		174,505
	94,510	AmTrust Financial Services, Inc.		1,096,316
	62,600	Aspen Insurance Holdings, Ltd. (Bermuda)		1,518,050
	132,966	Assured Guaranty, Ltd. (Bermuda)(8)		1,515,812
	11,700	Conseco, Inc.*		60,606

See notes to financial statements.

156

SMALL CORE PORTFOLIO
(FORMERLY, SPECIAL EQUITY PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Insurance (continued)

	151,387	Delphi Financial Group, Inc. — Class A	$	2,791,576
	58,570	eHealth, Inc.*		777,810
	7,700	Employers Holdings, Inc.		127,050
	11,300	Endurance Specialty Holdings, Ltd. (Bermuda)		344,989
	4,200	FBL Financial Group, Inc. — Class A		64,890
	3,600	FPIC Insurance Group, Inc.*		157,608
	105,728	IPC Holdings, Ltd. (Bermuda)		3,161,267
	12,875	Life Partners Holdings, Inc.(8)		561,865
	43,500	Montpelier Re Holdings, Ltd. (Bermuda)		730,365
	200	National Western Life Insurance Company — Class A		33,834
	128,322	Platinum Underwriters Holdings, Ltd. (Bermuda)		4,629,858
	19,700	PMA Capital Corp. — Class A*		139,476
	15,900	Presidential Life Corp.		157,251
	290,851	Universal American Financial Corp.*		2,565,306
	11,000	Zenith National Insurance Corp.		347,270

				22,391,354

		Internet Services — 3.7%
	33,730	Akamai Technologies, Inc.*		508,986
	21,866	comScore, Inc.*		278,792
	55,700	CyberSource Corp.*		667,843
	52,532	Digital River, Inc.*		1,302,794
	47,000	EarthLink, Inc.*		317,720
	14,394	Equinix, Inc.*(8)		765,617
	193,145	eResearchTechnology, Inc.*		1,280,551
	24,889	F5 Networks, Inc.*		568,963
	192,968	Internet Brands, Inc. — Class A*(8)		1,123,074
	93,261	j2 Global Communications, Inc.*		1,868,950
	13,100	Limelight Networks, Inc.*		32,095
	11,800	Marchex, Inc. — Class B		68,794
	10,800	NIC, Inc.		49,680
	7,300	Priceline.com, Inc.*		537,645
	69,300	Rackspace Hosting, Inc.*		372,834
	97,000	S1 Corp.*		765,330
	17,500	Sapient Corp.*		77,700
	5,700	Sohu.com, Inc.*		269,838
	81,700	SonicWALL, Inc.*		325,166
	3,200	Syntel, Inc.		73,984
	14,800	TeleCommunications Systems, Inc. — Class A*		127,132
	69,700	TIBCO Software, Inc.*		361,743
	67,599	United Online, Inc.		410,326
	66,592	ValueClick, Inc.*		455,489
	125,700	Websense, Inc.*		1,881,728

				14,492,774

		Machinery — 1.2%
	11,600	Actuant Corp. — Class A		220,632
	3,300	Applied Industrial Technologies, Inc.		62,436
	16,950	Astec Industries, Inc.*		531,044
	7,500	Chart Industries, Inc.*		79,725
	5,600	Columbus McKinnon Corp.*		76,440
	289,301	Flow International Corp.*		700,108
	17,100	Gardner Denver, Inc.*		399,114
	6,000	Graham Corp.		64,920
	14,600	Robbins & Myers, Inc.		236,082
	44,100	Tecumseh Products Company — Class A*		422,478
	44,153	Wabtec Corp.		1,755,082

				4,548,061

		Manufacturing — 6.5%
	64,929	Acuity Brands, Inc.		2,266,671
	132,189	Albany International Corp. — Class A		1,697,307
	1,300	American Woodmark Corp.(8)		23,699
	9,600	Ameron International Corp.		604,032
	4,000	AO Smith Corp.		118,080
	66,004	AptarGroup, Inc.		2,325,981
	2,400	AZZ, Inc.*		60,240
	11,700	Blount International, Inc.*		110,916
	209,239	Carlisle Companies, Inc.		4,331,247
	1,400	Ceradyne, Inc.*		28,434
	3,100	China Fire & Security Group, Inc.*		21,111
	6,300	CIRCOR International, Inc.		173,250
	9,200	Cognex Corp.		136,160
	4,400	Coherent, Inc.*		94,424
	50,739	EnPro Industries, Inc.*		1,092,918
	34,300	Furniture Brands International, Inc.		75,803
	28,000	Gibraltar Industries, Inc.		334,320
	81,090	GrafTech International, Ltd.*		674,669
	77,170	Hexcel Corp.*		570,286
	1,900	LS Starrett Company (The) — Class A		30,590
	8,800	Lydall, Inc.*		50,600
	50,326	Matthews International Corp. — Class A		1,845,958

See notes to financial statements.

157

SMALL CORE PORTFOLIO
(FORMERLY, SPECIAL EQUITY PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Manufacturing (continued)

	149,172	Mueller Industries, Inc.	$	3,741,234
	6,600	Mueller Water Products, Inc. — Class A		55,440
	1,200	Powell Industries, Inc.*		34,824
	8,400	Steinway Musical Instruments, Inc.*		147,084
	21,000	Sturm, Ruger & Company, Inc.*		125,370
	48,300	Tredegar Corp.		878,094
	9,350	Valmont Industries, Inc.		573,716
	31,899	Woodward Governor Company		734,315
	109,000	Zebra Technologies Corp. — Class A*		2,208,340

				25,165,113

		Medical Equipment, Supplies, and Services — 9.3%
	3,800	Align Technology, Inc.*		33,250
	8,300	Allscripts-Misys Healthcare Solutions, Inc.		82,336
	15,070	Amedisys, Inc.*(8)		622,994
	42,500	American Medical Systems Holdings, Inc.*		382,075
	19,200	AMN Healthcare Services, Inc.*		162,432
	73,636	AmSurg Corp.*		1,718,664
	1,600	ArthroCare Corp.*		7,632
	14,490	athenahealth, Inc.*		545,114
	1,700	Bio-Rad Laboratories, Inc. — Class A*		128,027
	10,200	Cardiac Science Corp.*		76,500
	80,575	CardioNet, Inc.*		1,986,174
	134,390	Centene Corp.*		2,648,826
	36,644	Conceptus, Inc.*		557,722
	4,900	CONMED Corp.*		117,306
	38,948	CorVel Corp.*		856,077
	8,800	Cyberonics, Inc.*		145,816
	2,800	Emergency Medical Services Corp. — Class A*		102,508
	13,450	Genoptix, Inc.*		458,376
	33,462	Gen-Probe, Inc.*		1,433,512
	13,790	Haemonetics Corp.*		779,135
	36,600	Health Management Associates, Inc. — Class A*		65,514
	31,500	HealthSouth Corp.*		345,240
	65,900	ICU Medical, Inc.*		2,183,925
	53,400	Invacare Corp.		828,768
	29,284	IPC The Hospitalist Company*		492,850
	250,780	LeMaitre Vascular, Inc.*		506,576
	1,900	LHC Group, Inc.*		68,400
	38,700	Lincare Holdings, Inc.*		1,042,191
	22,670	Luminex Corp.*		484,231
	1,100	Magellan Health Services, Inc.*		43,076
	6,000	Meridian Bioscience, Inc.		152,820
	10,100	Merit Medical Systems, Inc.*		181,093
	33,438	Natus Medical, Inc.*		433,022
	5,100	Nighthawk Radiology Holdings, Inc.*		24,786
	214,504	NovaMed, Inc.*(8)		742,184
	60,840	NuVasive, Inc.*(8)		2,108,106
	100,500	Orthofix International NV (Netherland Antilles)*		1,540,665
	31,500	Owens & Minor, Inc.		1,185,975
	28,620	Phase Forward, Inc.*		358,322
	15,100	PSS World Medical, Inc.*		284,182
	16,230	Psychiatric Solutions, Inc.*(8)		452,006
	13,200	Quidel Corp.*		172,524
	4,400	RehabCare Group, Inc.*		66,704
	12,060	ResMed, Inc.*		452,009
	368,346	RTI Biologics, Inc.*		1,016,635
	3,000	Sirona Dental Systems, Inc,*		31,500
	64,925	SonoSite, Inc.*		1,238,769
	461,903	Spectranetics Corp. (The)*		1,205,567
	40,700	STERIS Corp.		972,323
	1,100	SurModics, Inc.*		27,797
	6,900	Synovis Life Technologies, Inc.*		129,306
	5,400	Techne Corp.		348,408
	8,110	Thoratec Corp.*		263,494
	116,312	TranS1, Inc.*		838,610
	4,500	US Physical Therapy, Inc.*		59,985
	50,334	VNUS Medical Technologies*		816,417
	30,160	Volcano Corp.*		452,400
	75,100	Wright Medical Group, Inc.*		1,534,293

				35,995,149

		Metals and Mining — 0.4%
	6,200	Hawk Corp. — Class A*		102,920
	5,300	Insteel Industries, Inc.		59,837
	4,400	Royal Gold, Inc.		216,524
	103,700	Worthington Industries, Inc.(8)		1,142,774

				1,522,055

		Office Equipment, Supplies, and Services — 0.6%
	311,843	Acco Brands Corp.*		1,075,858
	7,400	Ennis, Inc.		89,614
	21,100	Herman Miller, Inc.		274,933
	11,800	HNI Corp.		186,912
	57,600	Knoll, Inc.		519,552

See notes to financial statements.

158

SMALL CORE PORTFOLIO
(FORMERLY, SPECIAL EQUITY PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Office Equipment, Supplies, and Services (continued)

	41,800	Steelcase, Inc. — Class A	$	234,916

				2,381,785

		Oil, Coal and Gas — 4.5%
	20,290	Arena Resources, Inc.*		569,946
	31,676	Atwood Oceanics, Inc.*		484,009
	6,800	Bolt Technology Corp.*		47,328
	2,200	CARBO Ceramics, Inc.		78,166
	900	Chesapeake Utilities Corp.		28,332
	13,100	Clayton Williams Energy, Inc.*		595,264
	32,960	Comstock Resources, Inc.*		1,557,360
	12,500	Concho Resources, Inc.*		285,250
	8,180	Core Laboratories NV (the Netherlands)		489,655
	19,810	Dril-Quip, Inc.*		406,303
	54,700	Energy Partners, Ltd.*		73,845
	25,052	GMX Resources, Inc.*(8)		634,317
	4,600	HKN, Inc.*		13,662
	131,279	ION Geophysical Corp.*		450,287
	11,300	Key Energy Services, Inc.*		49,833
	18,971	Lufkin Industries, Inc.		654,500
	104,767	McMoRan Exploration Company*		1,026,717
	4,000	Mitcham Industries, Inc.*		15,880
	46,780	Natural Gas Services Group*		473,881
	50,600	Newpark Resources, Inc.*		187,220
	38,000	Nicor, Inc.		1,320,120
	9,100	Northwest Natural Gas Company		402,493
	13,000	Oil States International, Inc.*		242,970
	90,320	Penn Virginia Corp.		2,346,513
	33,018	PetroQuest Energy, Inc.*		223,202
	17,600	Piedmont Natural Gas Company, Inc.		557,392
	23,500	Rosetta Resources, Inc.*		166,380
	16,800	SEACOR Holdings, Inc.*		1,119,720
	6,600	Southwest Gas Corp.		166,452
	25,930	Superior Energy Services, Inc.*		413,065
	118,800	VAALCO Energy, Inc.*		883,872
	2,700	Westmoreland Coal Company*		29,970
	42,822	Whiting Petroleum Corp.*		1,432,824
	6,800	World Fuel Services Corp.		251,600

				17,678,328

		Paper and Forest Products — 0.5%
	40,900	Buckeye Technologies, Inc.*		148,876
	2,428	Clearwater Paper Corp.*		20,371
	37,801	Deltic Timber Corp.		1,729,396
	3,600	KapStone Paper and Packaging Corp.*		8,568
	8,100	Potlatch Corp.		210,681

				2,117,892

		Pharmaceuticals/Research and Development — 5.6%
	82,333	Acorda Therapeutics, Inc.*		1,688,650
	41,400	Albany Molecular Research, Inc.*		403,236
	66,843	Alexion Pharmaceuticals, Inc.*		2,419,048
	4,100	Alkermes, Inc.*		43,665
	3,800	Alnylam Pharmaceuticals, Inc.*(8)		93,974
	77,234	BioMarin Pharmaceutical, Inc.*(8)		1,374,765
	80,900	Charles River Laboratories International, Inc.*		2,119,580
	12,000	Columbia Laboratories, Inc.*		15,240
	16,400	Cubist Pharmaceuticals, Inc.*		396,224
	6,000	CV Therapeutics, Inc.*		55,260
	17,200	Dendreon Corp.*		78,776
	73,400	DepoMed, Inc.*		121,110
	102,400	Enzon Pharmaceuticals, Inc.*(8)		596,992
	3,200	Exponent, Inc.*		96,256
	2,040	Facet Biotech Corp.*		19,564
	84,497	Genomic Health, Inc.*(8)		1,646,002
	36,200	Human Genome Sciences, Inc.*		76,744
	2,900	Idera Pharmaceuticals, Inc.*		22,272
	26,600	Incyte Corp.*		100,814
	18,100	Indevus Pharmaceuticals, Inc.*		56,834
	6,200	Isis Pharmaceuticals, Inc.*		87,916
	12,300	Martek Biosciences Corp.(8)		372,813
	5,200	Matrixx Initiatives, Inc.*		85,748
	5,400	Medarex, Inc.*		30,132
	1,400	Medicines Company (The)*		20,622
	26,300	Medicis Pharmaceuticals Corp. — Class A		365,570
	1,600	Medivation, Inc.*		23,312
	14,159	Myriad Genetics, Inc.*(8)		938,175
	66,100	Nektar Therapeutics*		367,516
	38,400	Noven Pharmaceuticals, Inc.*		422,400
	45,900	NPS Pharmaceuticals, Inc.*		285,039
	31,438	Onyx Pharmaceuticals, Inc.*		1,073,922
	58,102	OSI Pharmaceuticals, Inc.*		2,268,883
	2,600	Pain Therapeutics, Inc.*		15,392
	1,900	Par Pharmaceutical Companies, Inc.*		25,479
	10,200	PDL BioPharma, Inc.		63,036

See notes to financial statements.

159

SMALL CORE PORTFOLIO
(FORMERLY, SPECIAL EQUITY PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Pharmaceuticals/Research and Development (continued)

	26,200	PharMerica Corp.*	$	410,554
	21,700	Regeneron Pharmaceuticals, Inc.*		398,412
	33,900	Salix Pharmaceuticals, Ltd.*		299,337
	4,000	Sequenom, Inc.*		79,360
	6,900	Synta Pharmaceuticals Corp.*(8)		42,228
	27,462	United Therapeutics Corp.*		1,717,748
	2,000	USANA Health Services, Inc.*		68,480
	44,600	Valeant Pharmaceuticals International*(8)		1,021,340

				21,908,420

		Printing and Publishing — 0.6%
	189,453	Bowne & Company, Inc.		1,113,983
	9,900	Dolan Media Company*		65,241
	22,500	Lee Enterprises, Inc.(8)		9,225
	10,300	Scholastic Corp.		139,874
	133,790	Valassis Communications, Inc.*		176,603
	48,454	VistaPrint, Ltd. (Bermuda)*(8)		901,729

				2,406,655

		Real Estate Investment Trusts — 4.3%
	92,907	Acadia Realty Trust		1,325,783
	6,600	Agree Realty Corp.		119,658
	54,341	American Campus Communities, Inc.		1,112,904
	6,400	American Capital Agency Corp.(8)		136,704
	21,100	Anworth Mortgage Asset Corp.		135,673
	25,700	Associated Estates Realty Corp.		234,641
	3,600	Brandywine Realty Trust		27,756
	8,900	CapLease, Inc.		15,397
	9,800	Care Investment Trust, Inc.		76,342
	4,200	Cogdell Spencer, Inc.		39,312
	2,600	Cousins Properties, Inc.		36,010
	24,800	DuPont Fabros Technology, Inc.		51,336
	40,200	Education Realty Trust, Inc.		209,844
	35,500	Extra Space Storage, Inc.		366,360
	2,200	Hatteras Financial Corp.		58,520
	24,000	Healthcare Realty Trust, Inc.		563,520
	32,700	Highwoods Properties, Inc.		894,672
	106,400	Inland Real Estate Corp.(8)		1,381,072
	64,300	Investors Real Estate Trust		688,653
	5,900	Kite Realty Group Trust		32,804
	19,900	Lexington Realty Trust		99,500
	40,100	LTC Properties, Inc.		813,228
	1,900	Mid-America Apartment Communities, Inc.		70,604
	21,000	Mission West Properties, Inc.		160,650
	9,300	Monmouth Real Estate Investment Corp. — Class A		65,100
	20,900	National Health Investors, Inc.		573,287
	1,400	Nationwide Health Properties, Inc.		40,208
	87,500	OMEGA Healthcare Investors, Inc.		1,397,375
	4,200	One Liberty Properties, Inc.		36,960
	30,304	PS Business Parks, Inc.		1,353,377
	103,246	Realty Income Corp.(8)		2,390,144
	5,400	Saul Centers, Inc.		213,300
	46,500	Senior Housing Properties Trust		833,280
	8,700	Urstadt Biddle Properties — Class A		138,591
	243,140	U-Store-It Trust		1,081,973

				16,774,538

		Registered Investment Companies — 0.6%
	220,475	Ares Capital Corp.		1,395,606
	8,700	Harris & Harris Group, Inc.*		34,365
	15,010	iShares Russell 2000 Growth Index Fund		763,409

				2,193,380

		Retail — 2.9%
	23,300	99 Cents Only Stores*		254,669
	25,741	Barnes & Noble, Inc.		386,115
	100,230	Big Lots, Inc.*(8)		1,452,333
	16,963	BJ’s Wholesale Club, Inc.*		581,152
	85,900	Blockbuster, Inc. — Class A*		108,234
	13,700	Build-A-Bear-Workshop, Inc.*		66,582
	83,825	Casey’s General Stores, Inc.		1,908,695
	5,000	Dillard’s, Inc. — Class A		19,850
	68,026	EZCORP, Inc. — Class A*		1,034,675
	85,970	FGX International Holdings, Ltd. (British Virgin Islands)*		1,181,228
	14,600	Fuqi International, Inc. (China)*		91,396
	141,714	Hibbett Sports, Inc.*(8)		2,226,328
	27,900	Jo-Ann Stores, Inc.*		432,171
	42,230	Lumber Liquidators, Inc.*		445,949
	1,700	Overstock.com, Inc.*		18,326
	38,148	PetMed Express, Inc.*		672,549
	15,900	Sally Beauty Holdings, Inc.*		90,471
	21,700	Systemax, Inc.		233,709
	3,500	Tractor Supply Company*		126,490
	6,800	Ulta Salon, Cosmetics & Fragrance, Inc.*		56,304

See notes to financial statements.

160

SMALL CORE PORTFOLIO
(FORMERLY, SPECIAL EQUITY PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Retail (continued)

	26,300	Zale Corp.*	$	87,579

				11,474,805

		Retail: Restaurants — 1.6%
	26,900	AFC Enterprises, Inc.*		126,161
	69,355	BJ’s Restaurants, Inc.*(8)		746,953
	8,700	Bob Evans Farms, Inc.		177,741
	58,288	CEC Entertainment, Inc.*		1,413,484
	8,960	Chipotle Mexican Grill, Inc. — Class A*		555,341
	27,900	Cracker Barrel Old Country Store, Inc.		574,461
	58,200	Denny’s Corp.*		115,818
	66,400	Krispy Kreme Doughnuts, Inc.*		111,552
	13,298	Panera Bread Company — Class A*(8)		694,688
	143,526	Sonic Corp.*		1,746,711

				6,262,910

		Rubber Products — 0.0%
	4,400	Myers Industries, Inc.		35,200

		Scientific and Technical Instruments — 0.2%
	16,067	Badger Meter, Inc.		466,264
	11,600	Varian, Inc.*		388,716

				854,980

		Security Service and Devices — 0.0%
	6,300	Cogent, Inc.*		85,491

		Semiconductors — 2.0%
	88,800	Amkor Technology, Inc.*		193,584
	40,250	Cavium Networks, Inc.*(8)		423,028
	73,600	Cirrus Logic, Inc.*		197,248
	65,300	Conexant Systems, Inc.*		44,731
	77,400	Emulex Corp.*		540,252
	84,100	Entegris, Inc.*		184,179
	72,100	Integrated Device Technology, Inc.*		404,481
	49,700	Integrated Silicon Solution, Inc.*		81,011
	72,200	Lattice Semiconductor Corp.*		109,022
	92,026	Microsemi Corp.*(8)		1,163,208
	21,210	Netlogic Microsystems, Inc.*		466,832
	85,300	PMC-Sierra, Inc.*		414,558
	47,100	QLogic Corp.*		633,024
	20,700	Semtech Corp.*		233,289
	117,200	Silicon Image, Inc.*		492,240
	191,041	Skyworks Solutions, Inc.*		1,058,367
	67,600	Teradyne, Inc.*		285,272
	53,314	Tessera Technologies, Inc.*		633,370
	37,600	TriQuint Semiconductor, Inc.*		129,344

				7,687,040

		Sporting Goods and Equipment — 0.1%
	49,600	Callaway Golf Company		460,784
	21,000	Nautilus Group, Inc. (The)*		46,410

				507,194

		Telecommunications Equipment and Services — 2.7%
	48,200	ADTRAN, Inc.		717,216
	2,200	Anaren, Inc.*		26,290
	16,373	Anixter International, Inc.*		493,155
	16,200	Arris Group, Inc.*		128,790
	255,600	Cincinnati Bell, Inc.*		493,308
	16,000	ICO Global Communications (Holdings), Ltd.*		18,080
	69,200	IDT Corp. — Class B*		27,680
	23,500	InterDigital, Inc.*		646,250
	32,700	Iowa Telecommunications Services, Inc.		466,956
	25,700	JDS Uniphase Corp.*		93,805
	56,900	Neutral Tandem, Inc.*		922,918
	35,083	NTELOS Holdings Corp.		865,147
	19,800	Plantronics, Inc.		261,360
	44,653	Polycom, Inc.*		603,262
	127,050	Premiere Global Services, Inc.*		1,093,901
	8,500	RCN Corp.*		50,150
	10,700	Shenandoah Telecommunications Company		300,135
	6,300	Starent Networks Corp.*(8)		75,159
	126,490	Syniverse Holdings, Inc.*		1,510,290
	33,000	Tekelec*		440,220
	94,200	USA Mobility, Inc.*		1,089,894
	94,900	UTStarcom, Inc.*		175,565

				10,499,531

		Toys — 0.0%
	4,600	Marvel Entertainment, Inc.*		141,450

		Transportation — 1.8%
	12,000	American Commercial Lines, Inc.*		58,800
	79,600	GATX Corp.		2,465,211
	46,762	Genesee & Wyoming, Inc. — Class A*		1,426,241
	10,700	Knightsbridge Tankers, Ltd. (Bermuda)		156,755
	3,400	Marten Transport, Ltd.*		64,464
	28,975	Old Dominion Freight Line, Inc.*		824,629

See notes to financial statements.

161

SMALL CORE PORTFOLIO
(FORMERLY, SPECIAL EQUITY PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Transportation (continued)

	7,000	Overseas Shipholding Group, Inc.	$	294,770
	23,100	Pacer International, Inc.		240,933
	158,569	Vitran Corp., Inc. — Class A (Canada)*		983,128
	35,700	Werner Enterprises, Inc.		619,038

				7,133,969

		Utilities — 3.5%
	59,861	Atmos Energy Corp.		1,418,706
	32,500	Black Hills Corp.		876,200
	10,400	El Paso Electric Company*		188,136
	1,400	IDACORP, Inc.		41,230
	19,595	ITC Holdings Corp.		855,910
	31,026	New Jersey Resources Corp.		1,220,873
	22,400	NorthWestern Corp.		525,728
	8,300	Pike Electric Corp.*		102,090
	60,300	Portland General Electric Company		1,174,041
	900	UIL Holdings Corp.		27,027
	119,200	Unisource Energy Corp.		3,499,712
	102,797	Westar Energy, Inc.		2,108,366
	50,639	WGL Holdings, Inc.		1,655,389

				13,693,408

		Total Common Stocks
		(Cost $519,651,678)		385,467,779

		Warrants—0.0%
	640	Lantronix, Inc.*(14) (Cost $0)		—

		Rights—0.0%
		Registered Investment Companies
	2	MCG Capital Corp.* (Cost $0)		1

Principal

		Short Term US Treasury Securities — 0.1%
		US Treasury Bills
$	555,000	0.03%, 03/19/09(5) (Cost $554,964)		554,964

		Securities Lending Collateral — 7.6%
	29,536,670	Securities Lending Collateral Investment (Note 4) (Cost $29,536,670)		29,536,670

		Total Securities (Cost $549,743,312)		415,559,414

		Repurchase Agreements — 0.7%
	2,630,335	With State Street Bank and Trust, dated 12/31/08, 0.01%, due 01/02/09, repurchase proceeds at maturity $2,630,337 (Collateralized by various US Treasury Bills, 0.01% — 0.05%, due 01/02/09-05/14/09, with a total value of $2,686,470) (Cost $2,630,335)		2,630,335

		Total Investments — 107.3% (Cost $552,373,647)		418,189,749
		Liabilities less other assets — (7.3)%		(28,527,286	)

		Net Assets — 100.0%	$	389,662,463

The aggregate cost of securities for federal income tax purposes at December 31, 2008 is $578,159,236.

The following amount is based on cost for federal income tax purposes:


Gross/Net unrealized depreciation (includes gross unrealized appreciation of $0)	$	(159,969,487	)

See summary of footnotes and abbreviations to portfolios.

See notes to financial statements.

162

SMALL GROWTH PORTFOLIO
(FORMERLY, SMALL-CAP GROWTH PORTFOLIO)
PORTFOLIO OF INVESTMENTS

December 31, 2008


Shares			Value

		Common Stocks — 98.8%
		Aerospace and Defense — 2.0%
	15,183	Aerovironment, Inc.*(8)	$	558,886
	28,651	Curtiss — Wright Corp.		956,658
	17,696	Esterline Technologies Corp.*		670,501
	20,100	Teledyne Technologies, Inc.*		895,455

				3,081,500

		Airlines — 0.8%
	284,400	AirTran Holdings, Inc.*		1,262,736

		Apparel: Manufacturing and Retail — 5.8%
	58,450	Aeropostale, Inc.*		941,045
	45,851	Brown Shoe Company, Inc.		388,358
	43,100	Buckle, Inc. (The)		940,442
	40,100	Children’s Place Retail Stores, Inc. (The)*		869,368
	85,100	Dress Barn, Inc. (The)*		913,974
	123,900	Foot Locker, Inc.		909,426
	43,500	Gymboree Corp. (The)*		1,134,915
	20,200	Jos A Bank Clothiers, Inc.*(8)		528,230
	78,800	Maidenform Brands, Inc.*		799,820
	54,400	Shoe Carnival, Inc.*		519,520
	39,878	Wolverine World Wide, Inc.		839,033

				8,784,131

		Automobile: Retail — 0.3%
	32,712	America’s Car-Mart, Inc.*		451,753

		Automobiles/Motor Vehicles, Automotive Equipment and Repairs — 0.7%
	144,702	Amerigon, Inc.*		471,729
	45,700	ATC Technology Corp.*		668,591

				1,140,320

		Banks and Financial Services — 5.1%
	57,008	City Bank(8)		296,442
	65,400	Encore Capital Group, Inc.*		470,880
	7,000	First Citizens Bancshares, Inc. — Class A		1,069,600
	53,374	Greene Bancshares, Inc.(8)		722,684
	99,300	Heckman Corp.*(8)		561,045
	45,991	Pacific Capital Bancorp		776,328
	13,749	Pinnacle Financial Partners, Inc.*		409,858
	22,200	Provident Financial Services, Inc.		339,660
	26,000	Stifel Financial Corp.*		1,192,099
	62,547	Texas Capital Bancshares, Inc.*		835,628
	45,497	United Community Banks, Inc. — Georgia(8)		617,844
	27,927	Whitney Holding Corp.		446,553

				7,738,621

		Business Services and Supplies — 4.0%
	157,213	CBIZ, Inc.*		1,359,892
	27,000	CRA International, Inc.*		727,110
	27,100	FTI Consulting, Inc.*(8)		1,210,828
	234,700	Hackett Group, Inc.*		685,324
	20,100	Huron Consulting Group, Inc.*		1,151,127
	77,857	Kforce, Inc.*		597,942
	37,098	TrueBlue, Inc.*		355,028

				6,087,251

		Chemicals — 1.2%
	69,805	ICO, Inc.*		220,584
	67,800	Landec Corp.*		446,124
	49,400	Sensient Technologies Corp.		1,179,672

				1,846,380

		Commercial Services — 0.6%
	30,419	Team, Inc.*		842,606

		Computer Equipment, Software and Services — 10.2%
	20,991	ACI Worldwide, Inc.*		333,757
	39,800	ANSYS, Inc.*		1,110,022
	103,924	Aspen Technology, Inc.*		771,116
	51,500	Avocent Corp.*		922,365
	100,049	Bluephoenix Solutions, Ltd. (Israel)*		186,091
	26,100	CACI International, Inc. — Class A*		1,176,849
	63,179	Compellent Technologies, Inc.*		614,732
	35,700	Ebix, Inc.*		853,230
	94,530	EPIQ Systems, Inc.*(8)		1,579,597
	68,098	FalconStor Software, Inc.*		189,312
	57,681	Integral Systems, Inc.*		695,056
	19,000	ManTech International Corp. — Class A*		1,029,610
	116,891	NetScout Systems, Inc.*		1,007,600
	108,554	Radiant Systems, Inc.*		365,827
	173,500	Soapstone Networks, Inc.*		447,630
	49,900	Solera Holdings, Inc.*		1,202,590
	40,870	Sybase, Inc.*		1,012,350
	38,200	Synaptics, Inc.*		632,592
	52,600	Ultimate Software Group, Inc. (The)*		767,960
	139,830	Web.com Group, Inc.*		511,778

				15,410,064

		Construction Services and Supplies — 1.9%
	76,100	Beacon Roofing Supply, Inc.*(8)		1,056,268
	79,891	Furmanite Corp.*		430,612
	44,474	Integrated Electrical Services, Inc.*		389,592

See notes to financial statements.

163

SMALL GROWTH PORTFOLIO
(FORMERLY, SMALL-CAP GROWTH PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Construction Services and Supplies (continued)

	38,400	Simpson Manufacturing Company, Inc.(8)	$	1,065,985

				2,942,457

		Consumer Goods and Services — 1.5%
	10,733	Chattem, Inc.*(8)		767,731
	33,300	Helen of Troy, Ltd. (Bermuda)*		578,088
	87,700	Jarden Corp.*		1,008,550

				2,354,369

		Containers and Packaging — 0.3%
	9,400	Silgan Holdings, Inc.		449,414

		Distribution — 0.6%
	52,300	Pool Corp.(8)		939,831

		Education — 1.4%
	10,800	Capella Education Company*		634,608
	62,300	Career Education Corp.*		1,117,662
	139,300	ChinaCast Education Corp.*		356,608

				2,108,878

		Electrical Equipment — 1.7%
	711,875	Capstone Turbine Corp.*(8)		597,975
	101,300	Cogent, Inc.*(8)		1,374,641
	23,200	Greatbatch, Inc.*		613,872

				2,586,488

		Electronics — 1.3%
	23,600	Diebold, Inc.		662,924
	58,000	EnerSys*		638,000
	26,937	NVE Corp.*(8)		703,864

				2,004,788

		Engineering — 1.7%
	36,658	EMCOR Group, Inc.*		822,239
	27,674	Stanley, Inc.*		1,002,352
	18,500	VSE Corp.		725,755

				2,550,346

		Entertainment, Leisure and Recreation — 0.3%
	16,800	Netflix, Inc.*(8)		502,152

		Environmental Waste Management and Recycling Services — 0.4%
	10,800	Clean Harbors, Inc.*		685,152

		Equipment Rental and Leasing — 0.9%
	49,000	Aaron Rents, Inc.		1,304,380

		Food and Beverage — 1.5%
	7,230	Central European Distribution Corp.*		142,431
	86,074	Chiquita Brands International, Inc.*(8)		1,272,174
	33,700	Flowers Foods, Inc.		820,932

				2,235,537

		Insurance — 1.4%
	29,361	FBL Financial Group, Inc. — Class A		453,627
	9,600	Infinity Property & Casualty Corp.		448,608
	40,100	IPC Holdings, Ltd. (Bermuda)		1,198,990

				2,101,225

		Internet Services — 5.4%
	170,100	Art Technology Group, Inc.*		328,293
	105,249	CyberSource Corp.*		1,261,936
	155,824	eResearchTechnology, Inc.*		1,033,113
	39,800	F5 Networks, Inc.*		909,828
	151,500	GigaMedia, Ltd. (Singapore)*(8)		852,945
	43,822	Shanda Interactive Entertainment, Ltd. (ADR) (Cayman Islands)*(8)		1,418,080
	158,900	TeleCommunications Systems, Inc. — Class A*		1,364,951
	70,300	Websense, Inc.*		1,052,391

				8,221,537

		Machinery — 0.8%
	45,304	Chart Industries, Inc.*		481,582
	103,900	Flow International Corp.*		251,438
	52,153	PMFG, Inc.*		498,582

				1,231,602

		Manufacturing — 2.3%
	18,600	AptarGroup, Inc.		655,464
	33,500	EnPro Industries, Inc.*		721,590
	126,100	GrafTech International, Ltd.*		1,049,152
	30,980	II-VI, Inc.*		591,408
	22,456	Woodward Governor Company		516,937

				3,534,551

		Medical Equipment, Supplies, and Services — 11.8%
	108,944	American Medical Systems Holdings, Inc.*		979,407
	222,354	Bruker BioSciences Corp.*		898,310
	109,512	Celera Corp.*		1,218,869
	44,555	Cross Country Healthcare, Inc.*		391,638
	94,548	CryoLife, Inc.*		918,061
	19,800	Emergency Medical Services Corp. — Class A*		724,878

See notes to financial statements.

164

SMALL GROWTH PORTFOLIO
(FORMERLY, SMALL-CAP GROWTH PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Medical Equipment, Supplies, and Services (continued)

	42,800	Ensign Group, Inc.	$	716,472
	47,500	ICON PLC (ADR) (Ireland)*		935,275
	49,600	Immucor, Inc.*		1,318,368
	86,600	inVentiv Health, Inc.*		999,364
	71,631	IRIS International, Inc.*		998,536
	6,428	LHC Group, Inc.*		231,408
	43,000	Merit Medical Systems, Inc.*		770,990
	32,800	Neogen Corp.*		819,344
	39,774	Psychiatric Solutions, Inc.*(8)		1,107,706
	34,306	RehabCare Group, Inc.*		520,079
	36,500	STERIS Corp.		871,985
	17,831	SurModics, Inc.*(8)		450,589
	73,391	Synovis Life Technologies, Inc.*		1,375,348
	54,764	US Physical Therapy, Inc.*		730,004
	56,400	VNUS Medical Technologies*		914,808

				17,891,439

		Metals and Mining — 1.5%
	55,900	AK Steel Holding Corp.		520,988
	5,454	Kaiser Aluminum Corp.		122,824
	25,600	Olympic Steel, Inc.		521,472
	30,800	Schnitzer Steel Industries, Inc. — Class A		1,159,620

				2,324,904

		Oil, Coal and Gas — 6.0%
	39,863	Arena Resources, Inc.*		1,119,751
	47,061	Bill Barrett Corp.*		994,399
	211,132	Cano Petroleum, Inc.*		92,898
	14,000	Core Laboratories NV (the Netherlands)		838,040
	107,000	EXCO Resources, Inc.*		969,420
	36,700	Gulf Island Fabrication, Inc.		528,847
	117,953	Hercules Offshore, Inc.*		560,277
	30,747	Hornbeck Offshore Services, Inc.*		502,406
	49,208	Natural Gas Services Group*		498,477
	206,791	North American Energy Partners, Inc. (Canada)*		690,682
	39,600	Oil States International, Inc.*		740,124
	65,800	Parker Drilling Company*		190,820
	21,000	Penn Virginia Corp.		545,580
	79,700	PetroQuest Energy, Inc.*		538,772
	42,157	T-3 Energy Services, Inc.*		397,962

				9,208,455

		Paper and Forest Products — 0.5%
	24,500	Rock-Tenn Company — Class A		837,410

		Pharmaceuticals/Research and Development — 5.0%
	63,999	Albany Molecular Research, Inc.*		623,350
	34,800	Alexion Pharmaceuticals, Inc.*		1,259,412
	50,400	Alnylam Pharmaceuticals, Inc.*(8)		1,246,392
	31,200	Cubist Pharmaceuticals, Inc.*		753,792
	25,564	Exponent, Inc.*		768,965
	34,900	Medicines Company (The)*		514,077
	18,400	Myriad Genetics, Inc.*(8)		1,219,184
	82,537	Oculus Innovative Sciences, Inc.*(8)		117,203
	32,200	Questcor Pharmaceuticals, Inc.*		299,782
	168,949	VIVUS, Inc.*		898,809

				7,700,966

		Real Estate Investment Trusts — 0.5%
	31,800	BioMed Realty Trust, Inc.		372,696
	15,400	Entertainment Properties Trust		458,920

				831,616

		Retail — 1.9%
	60,000	First Cash Financial Services, Inc.*		1,143,600
	36,700	Pantry, Inc. (The)*		787,215
	53,500	PetMed Express, Inc.*		943,205

				2,874,020

		Retail: Restaurants — 1.9%
	30,200	Bob Evans Farms, Inc.		616,986
	38,525	Buffalo Wild Wings, Inc.*(8)		988,166
	45,700	PF Chang’s China Bistro, Inc.*		956,958
	18,100	Red Robin Gourmet Burgers, Inc.*		304,623

				2,866,733

		Semiconductors — 3.2%
	125,320	Advanced Analogic Technologies, Inc.*		378,466
	279,300	ANADIGICS, Inc.*		413,364
	38,000	Monolithic Power Systems, Inc.*		479,180
	210,400	O2Micro International, Ltd. (ADR) (Cayman Islands)*		412,384
	185,700	PMC-Sierra, Inc.*		902,502
	84,400	Semtech Corp.*		951,188
	158,800	Silicon Motion Technology Corp. (ADR) (Cayman Islands)*(8)		363,652
	51,700	Techwell, Inc.*		336,050
	88,185	Zoran Corp.*		602,304

				4,839,090

See notes to financial statements.

165

SMALL GROWTH PORTFOLIO
(FORMERLY, SMALL-CAP GROWTH PORTFOLIO)
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value

		Common Stocks (continued)
		Semiconductors (continued)
		Telecommunications Equipment and Services — 7.1%
	50,400	ADTRAN, Inc.	$	749,952
	25,020	Comtech Telecommunications Corp.*		1,146,416
	30,062	EMS Technologies, Inc.*		777,704
	19,278	General Cable Corp.*(8)		341,028
	62,115	GeoEye, Inc.*(8)		1,194,471
	116,100	Globecomm Systems, Inc.*		637,389
	52,763	NICE — Systems, Ltd. (ADR) (Israel)*		1,185,585
	72,200	Oplink Communications, Inc.*		620,920
	107,800	SeaChange International, Inc.*		777,238
	95,647	Starent Networks Corp.*(8)		1,141,069
	96,500	Syniverse Holdings, Inc.*		1,152,210
	76,700	Tekelec*		1,023,178

				10,747,160

		Toys — 0.5%
	38,100	JAKKS Pacific, Inc.*		786,003

		Transportation — 4.3%
	23,900	Arkansas Best Corp.(8)		719,629
	114,363	Celadon Group, Inc.*		975,516
	17,300	DryShips, Inc. (Marshall Islands)(8)		184,418
	74,053	Excel Maritime Carriers, Ltd. (Liberia)(8)		521,333
	18,600	Genco Shipping & Trading, Ltd. (Marshall Islands)(8)		275,280
	61,500	Heartland Express, Inc.(8)		969,240
	28,366	Hub Group, Inc. — Class A*		752,550
	35,800	Kansas City Southern*		681,990
	27,500	Marten Transport, Ltd.*		521,400
	31,400	Old Dominion Freight Line, Inc.*		893,644

				6,495,000

		Utilities — 0.5%
	40,700	Avista Corp.		788,766

		Total Common Stocks (Cost $200,448,438)		150,589,631

Principal			Value

		Securities Lending Collateral—11.2%
$	17,132,330	Securities Lending Collateral Investment (Note 4) (Cost $17,132,330)	$	17,132,330

		Total Investments — 110.0% (Cost $217,580,768)		167,721,961
		Liabilities less other assets — (10.0)%		(15,209,102	)

		Net Assets — 100.0%	$	152,512,859

The aggregate cost of securities for federal income tax purposes at December 31, 2008 is $221,835,085.

The following amounts are based on cost for federal income tax purposes:


Gross unrealized appreciation	$	1,680,789
Gross unrealized depreciation		(55,793,913	)

Net unrealized depreciation	$	(54,113,124	)

See summary of footnotes and abbreviations to portfolios.

See notes to financial statements.

166

INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS

December 31, 2008


Shares			Value		Country

		Common Stocks — 100.0%
		Aerospace and Defense — 0.4%
	77,952	MTU Aero Engines Holding AG	$	2,156,323		GER
	210,174	Saab AB-Class B		1,967,111		SWE

				4,123,434

		Agriculture — 0.7%
	4,889,144	Chaoda Modern Agriculture (Holdings), Ltd.		3,141,814		CAY
	64,000	Potash Corp. of Saskatchewan, Inc.		4,686,080		CDA

				7,827,894

		Airlines — 2.0%
	2,009,000	Air New Zealand, Ltd.		1,128,815		NZE
	2,425,266	easyJet PLC*		9,970,171		BRI
	3,537,400	Qantas Airways, Ltd.		6,516,977		AUS
	612,671	Singapore Airlines, Ltd.		4,818,624		SIN

				22,434,587

		Apparel: Manufacturing and Retail — 0.9%
	364,500	Benetton Group SpA		3,163,086		ITA
	53,230	Hennes & Mauitz AB- Class B		2,117,229		SWE
	65,655	Industria de Diseno Textil SA		2,923,676		SPA
	104,480	Next PLC		1,641,809		BRI
	26,000	Onward Holdings Company, Ltd.		207,238		JPN

				10,053,038

		Automobiles/Motor Vehicles, Automotive Equipment and Repairs — 4.9%
	329,200	Alpine Electronics, Inc.		2,642,585		JPN
	1,119,000	Calsonic Kansei Corp.		1,598,745		JPN
	244,600	Daimler AG		9,319,724		GER
	1,521,000	Fuji Heavy Industries, Ltd.		4,179,898		JPN
	10,200	Georg Fischer AG		2,354,136		SWI
	1,726,700	GKN PLC		2,404,144		BRI
	351,600	Honda Motor Company, Ltd.		7,488,619		JPN
	77,600	Magna International, Inc. — Class A		2,310,085		CDA
	1,664,300	Nissan Motor Company, Ltd.		5,987,538		JPN
	105,400	PSA Peugeot Citroen SA		1,801,991		FRA
	258,600	Toyota Auto Body Company, Ltd.		3,789,313		JPN
	249,400	Toyota Motor Corp.		8,244,747		JPN
	104,788	Valeo SA		1,561,025		FRA

				53,682,550

		Banks and Financial Services — 19.0%
	772,498	3i Group PLC		3,025,162		BRI
	2,240	ACOM Company, Ltd.		94,672		JPN
	424,800	Allied Irish Banks PLC		1,016,134		IRE
	239,500	Alpha Bank AE		2,240,672		GRC
	2,594,000	Aozora Bank, Ltd.		2,437,054		JPN
	279,900	Banco Bilbao Vizcaya Argentaria SA		3,468,071		SPA
	721,700	Banco Espirito Santo SA		6,721,767		POR
	1,553,900	Banco Santander Central Hispano SA		15,011,774		SPA
	178,533	Banco Santander SA		1,618,478		SPA
	252,300	Bank of Montreal		6,386,695		CDA
	2,469,900	Barclays PLC		5,613,801		BRI
	185,900	BNP Paribas SA		8,024,287		FRA
	244,800	Canadian Imperial Bank of Commerce		10,131,092		CDA
	1,218,000	Chiba Bank, Ltd. (The)		7,617,184		JPN
	1,236,500	China Merchants Bank Company, Ltd. — Class H		2,313,582		CHN
	171,900	Commerzbank AG		1,633,243		GER
	440,100	Credit Agricole SA		4,943,266		FRA
	130,100	Credit Suisse Group		3,645,997		SWI
	288,500	Danske Bank A/S		2,906,348		DEN
	84,100	Deutsche Bank AG		3,325,841		GER
	190,500	Dexia		863,694		BEL
	956,400	DNB NOR ASA		3,794,653		NOR
	1,467,106	HBOS PLC		1,518,708		BRI
	398,100	Hitachi Capital Corp.		4,980,343		JPN
	2,311,000	Industrial and Commercial Bank of China, Ltd.		2,488,306		HNG
	1,082,900	Intesa Sanpaolo		3,933,843		ITA
	319,800	Irish Life & Permanent PLC		700,408		IRE
	166,039	Julius Baer Holding AG		6,435,226		SWI
	202,900	Laurentian Bank of Canada		5,670,352		CDA

See notes to financial statements.

167

INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value		Country

		Common Stocks (continued)
		Banks and Financial Services (continued)

	1,895,100	Lloyds TSB Group PLC	$	3,586,891		BRI
	129,000	Macquarie Group, Ltd.		2,618,102		AUS
	2,050	Mizuho Financial Group, Inc.(20)		5,827,744		JPN
	147,907	Muenchener Rueckversicherungs-Gesellschaft AG		22,962,258		GER
	246,000	National Australia Bank, Ltd.		3,616,610		AUS
	230,600	National Bank of Canada		5,846,723		CDA
	382,200	Nomura Holdings, Inc.		3,182,321		JPN
	435,900	Nordea Bank AB		3,106,959		SWE
	56,200	SFCG Company, Ltd.		2,479,232		JPN
	515,700	SNS Reaal		2,834,500		NET
	84,200	Societe Generale		4,271,719		FRA
	567,682	Standard Chartered PLC		7,264,076		BRI
	185,000	Sumitomo Trust and Banking Company, Ltd. (The)		1,093,581		JPN
	119,100	Sun Life Financial, Inc.		2,743,786		CDA
	579,293	Suncorp-Metway, Ltd.		3,414,535		AUS
	228,878	Svenska Handelsbanken AB — Class A		3,784,781		SWE
	182,300	Swedbank AB — Class A		1,076,791		SWE
	546,860	UBS AG*		7,956,461		SWI

				210,227,723

		Broadcast Services/Media — 1.8%
	140,500	Rogers Communications, Inc. — Class B		4,164,354		CDA
	466,259	Vivendi Universal SA		15,197,277		FRA

				19,361,631

		Business Services and Supplies — 1.7%
	897,203	Capita Group PLC		9,624,236		BRI
	1,396,000	Marubeni Corp.		5,344,668		JPN
	1,275,222	Michael Page International PLC		4,007,369		BRI

				18,976,273

		Chemicals — 1.3%
	321,000	ADEKA Corp.		2,366,936		JPN
	6,140	Arkema		105,813		FRA
	82,000	Kaneka Corp.		523,793		JPN
	264,800	Methanex Corp.		2,938,647		CDA
	601,000	Nippon Shokubai Company, Ltd.		4,631,316		JPN
	171,800	Nova Chemicals Corp.		814,119		CDA
	708,500	Sumitomo Bakelite Company, Ltd.		2,859,846		JPN

				14,240,470

		Computer Equipment, Software and Services — 0.7%
	560,712	Autonomy Corp. PLC*		7,802,376		BRI

		Construction Services and Supplies — 1.5%
	8,800	Cementos Portland Valderrivas SA		304,256		SPA
	3,358,000	China Communications Construction Company, Ltd. — Class H		4,195,724		CHN
	15,600	Ciments Francais SA		1,319,555		FRA
	84,600	Compagnie Generale de Geophysique Veritas (CGG — Veritas)		3,997,374		FRA
	43,500	Lafarge SA		2,660,526		FRA
	91,000	Maeda Road Construction Company, Ltd.		911,320		JPN
	910,000	Sanwa Shutter Corp.		3,500,083		JPN

				16,888,838

		Consumer Goods and Services — 2.2%
	244,576	British American Tobacco PLC		6,380,210		BRI
	302,100	Electrolux AB — Series B		2,643,396		SWE
	120,534	Reckitt Benckiser Group PLC		4,516,517		BRI
	289,755	Swedish Match AB		4,183,147		SWE
	80,400	Unicharm Corp.		6,048,629		JPN

				23,771,899

		Containers and Packaging — 0.1%
	153,784	Amcor, Ltd.		624,949		AUS

		Diversified Operations and Services — 1.9%
	257,200	BASF AG		9,993,172		GER
	318,000	Mitsubishi Corp.		4,504,171		JPN
	697,500	Sumitomo Corp.		6,186,324		JPN

				20,683,667

See notes to financial statements.

168

INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value		Country

		Common Stocks (continued)

		Electronics — 1.0%
	210,886	ABB, Ltd.	$	3,216,042		SWI
	387,500	Omron Corp.		5,206,394		JPN
	810,100	Toshiba Tec Corp.		2,442,188		JPN

				10,864,624

		Energy Services — 0.6%
	59,000	LDK Solar Company, Ltd. (ADR)*		774,080		CHN
	91,083	Vestas Wind Systems A/S*		5,359,942		DEN

				6,134,022

		Engineering — 0.1%
	494,000	Downer EDI, Ltd.		1,325,570		AUS

		Food and Beverage — 2.2%
	1,772	Barry Callebaut AG		1,160,076		SWI
	508,600	Cadbury PLC		4,494,211		BRI
	64,100	East Asiatic Company, Ltd.		2,182,635		DEN
	489,600	Foster’s Group, Ltd.		1,883,041		AUS
	280,500	Greene King PLC		1,612,338		BRI
	184,958	Nestle SA		7,323,993		SWI
	1,537,300	Northern Foods PLC		1,268,639		BRI
	799,400	Tate & Lyle PLC		4,657,851		BRI

				24,582,784

		Insurance — 6.1%
	58,555	Allianz SE		6,230,300		GER
	697,500	Amlin PLC		3,625,536		BRI
	730,700	Aviva PLC		4,140,499		BRI
	19,500	Fairfax Financial Holdings, Ltd.		6,160,389		CDA
	1,939,300	Friends Provident PLC		2,478,863		BRI
	564,500	ING Groep NV		6,212,856		NET
	1,003,300	Milano Assicurazioni SpA		3,150,940		ITA
	4,176,300	Old Mutual PLC		3,356,670		BRI
	2,049,500	Royal & Sun Alliance Insurance Group PLC		4,084,071		BRI
	311,100	SCOR SE		7,187,489		FRA
	94,700	Swiss Re		4,637,043		SWI
	71,400	Zurich Financial Services AG		15,599,542		SWI

				66,864,198

		Internet Services — 0.9%
	91,300	Ctrip.com International, Ltd. (ADR)		2,172,940		CAY
	54,884	Metro AG		2,182,658		GER
	12,550	Yahoo! Japan Corp.		5,149,442		JPN

				9,505,040

		Machinery — 0.6%
	135,700	Heidelberger Druckmaschinen AG		1,216,277		GER
	192,500	Komatsu, Ltd.		2,455,629		JPN
	15,900	Rieter Holding AG		2,605,071		SWI

				6,276,977

		Manufacturing — 1.9%
	914,000	Asahi Glass Company, Ltd.		5,210,080		JPN
	2,080,680	Hansen Transmissions*		3,446,588		BEL
	1,126,300	IMI PLC		4,473,693		BRI
	704,000	Kurabo Industries, Ltd.		1,175,003		JPN
	24,340	Siemens AG		1,832,400		GER
	1,155,936	Tomkins PLC		2,081,210		BRI
	350,300	Trelleborg AB — Class B		2,225,872		SWE

				20,444,846

		Medical Equipment, Supplies, and Services — 0.7%
	94,827	Fresenius Medical Care AG & Company		4,359,367		GER
	30,160	Synthes, Inc.		3,824,468		SWI

				8,183,835

		Metals and Mining — 4.2%
	248,676	Anglo American PLC		5,803,375		BRI
	229,900	Barrick Gold Corp.		8,453,422		CDA
	412,617	BHP Billiton PLC		8,002,941		BRI
	646,100	BlueScope Steel, Ltd.		1,587,402		AUS
	326,600	Companhia Vale do Rio Doce (ADR)		3,955,126		BRA
	1,202,100	Minara Resources, Ltd.		241,976		AUS
	37,300	Norddeutsche Affinerie AG		1,468,413		GER
	80,200	Rautaruukki Oyj		1,400,725		FIN
	60,461	Salzgitter AG		4,698,741		GER
	302,400	ThyssenKrupp AG		8,418,245		GER
	94,700	voestalpine AG		2,045,987		AST

				46,076,353

		Office Equipment, Supplies, and Services — 1.4%
	409,000	Brother Industries, Ltd.		2,439,965		JPN

See notes to financial statements.

169

INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value		Country

		Common Stocks (continued)
		Office Equipment, Supplies, and Services (continued)

	26,592	Neopost SA	$	2,412,915		FRA
	193,900	Oce NV		856,567		NET
	655,000	Ricoh Company, Ltd.		8,394,953		JPN
	3,314,500	TPV Technology, Ltd.		1,077,953		HNG

				15,182,353

		Oil, Coal and Gas — 13.5%
	194,430	BG Group PLC		2,691,215		BRI
	2,760,581	BP PLC		21,310,098		BRI
	124,900	Canadian Natural Resources, Ltd.		4,932,260		CDA
	1,420,200	Cosmo Oil Company, Ltd.		4,421,265		JPN
	73,700	EnCana Corp.		3,400,528		CDA
	822,300	Eni SpA		19,787,567		ITA
	987,100	Nippon Oil Corp.		5,004,957		JPN
	174,800	Norsk Hydro ASA		712,206		NOR
	139,900	Petro-Canada		3,028,050		CDA
	211,300	Petroleo Brasileiro SA — Petrobras (ADR)		5,174,737		BRA
	415,600	Repsol YPF SA		8,873,149		SPA
	363,460	Royal Dutch Shell PLC — Class A		9,549,205		NET
	835,800	Royal Dutch Shell PLC — Class B		21,186,195		NET
	196,350	Seadrill, Ltd.		1,600,253		BER
	735,500	Showa Shell Sekiyu KK		7,288,758		JPN
	150,712	StatoilHydro ASA		2,520,627		NOR
	254,900	Suncor Energy, Inc.		4,897,714		CDA
	414,378	Total SA		22,782,186		FRA

				149,160,970

		Pharmaceuticals/Research and Development — 11.6%
	72,271	Actelion, Ltd.*		4,088,480		SWI
	70,700	Astellas Pharma, Inc.		2,893,914		JPN
	772,252	AstraZeneca PLC		31,593,113		BRI
	338,900	Biovail Corp.		3,168,008		CDA
	154,707	CSL, Ltd.		3,648,279		AUS
	74,000	Eisai Company, Ltd.		3,087,990		JPN
	285,300	GlaxoSmithKline PLC		5,305,930		BRI
	205,876	H Lundbeck A/S		4,305,766		DEN
	324,400	Recordati SpA		1,780,737		ITA
	63,308	Roche Holding AG		9,801,162		SWI
	47,503	Sanofi-Aventis		3,010,218		FRA
	465,445	Sanofi-Aventis		29,771,374		FRA
	246,972	Shire PLC		3,637,886		JER
	6,204,100	Sigma Pharmaceuticals, Ltd.		4,689,584		AUS
	67,900	Takeda Pharmaceutical Company, Ltd.		3,539,105		JPN
	318,100	Teva Pharmaceutical Industries, Ltd. (ADR)		13,541,517		ISR

				127,863,063

		Real Estate Development and Services — 0.4%
	234,000	Mitsui Fudosan Company, Ltd.		3,901,304		JPN

		Retail — 0.7%
	308,300	Circle K Sunkus Company, Ltd.		5,577,718		JPN
	249,468	JJB Sports PLC		14,799		BRI
	27,243	PPR		1,783,746		FRA
	4,729	Valora Holding AG		692,547		SWI

				8,068,810

		Retail: Restaurants — 0.2%
	112,200	Plenus Company, Ltd.		2,020,454		JPN

		Retail: Supermarkets — 1.6%
	1,472,061	J Sainsbury PLC		7,024,696		BRI
	304,639	Koninklijke Ahold NV		3,754,044		NET
	1,768,147	William Morrison Supermarkets PLC		7,166,905		BRI

				17,945,645

		Rubber Products — 0.0%
	75,000	Zeon Corp.		256,748		JPN

		Semiconductors — 0.8%
	4,478,084	ARM Holdings PLC		5,669,167		BRI
	195,609	ASML Holding NV		3,526,278		NET

				9,195,445

		Telecommunications Equipment and Services — 9.1%
	4,188,000	BT Group PLC		8,422,500		BRI
	389,500	China Mobile, Ltd.		3,951,912		HNG
	265,098	Deutsche Telekom AG		4,008,102		GER
	151,951	Elcoteq Network Corp. — Class A*		261,212		FIN
	337,313	France Telecom SA		9,401,832		FRA
	608,577	Koninklijke (Royal) KPN NV		8,847,772		NET

See notes to financial statements.

170

INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2008


Shares			Value			Country

		Common Stocks (continued)
		Telecommunications Equipment and Services (continued)

	1,588,500	MobileOne, Ltd.	$	1,640,054			SIN
	2,324	Nippon Telegraph and Telephone Corp.		11,998,147			JPN
	6,913	NTT DoCoMo, Inc.		13,606,969			JPN
	232,300	Portugal Telecom SGPS SA		1,987,987			POR
	109,480	Research In Motion, Ltd.*		4,442,698			CDA
	515,900	Softbank Corp.		9,369,358			JPN
	11,000	Swisscom AG		3,568,233			SWI
	267,169	Telefonica SA		6,030,460			SPA
	5,201,474	Vodafone Group PLC		10,650,795			BRI
	395,600	VTech Holdings, Ltd.		1,675,928			BER

				99,863,959

		Toys — 0.8%
	23,700	Nintendo Company, Ltd.		9,056,995			JPN

		Transportation — 0.9%
	567	East Japan Railway Company(20)		4,309,575			JPN
	2,535,000	Neptune Orient Lines, Ltd.		1,992,119			SIN
	1,367,100	Orient Overseas International, Ltd.		3,065,432			BER

				9,367,126

		Utilities — 1.6%
	73,100	ATCO, Ltd. — Class I		2,250,142			CDA
	212,000	E.ON AG		8,324,654			GER
	643,700	Enel SpA		4,146,460			ITA
	81,566	Fortum Oyj		1,772,865			FIN
	43,116	Veolia Environment		1,360,006			FRA

				17,854,127

		Total Common Stocks (Cost $1,526,871,660)		1,100,694,577

		Rights — 0.0%
		Banks and Financial Services
	2,030,326	HBOS PLC*		—			BRI
	823,799	Lloyds TSB Group PLC*		—			BRI

		Total Rights (Cost $0)		—

		Total Securities (Cost $1,526,871,660)		1,100,694,577

Principal

		Repurchase Agreements — 1.1%
$	11,897,953	With State Street Bank and Trust, dated 12/31/08, 0.01%, due 01/02/09, repurchase proceeds at maturity $11,897,960 (Collateralized by US Treasury Bill, 0.01%, due 01/02/09, with a value of $12,187,800) (Cost $11,897,953)		11,897,953			USA

		Total Investments — 101.1% (Cost $1,538,769,613)		1,112,592,530
		Liabilities less other assets — (1.1)%		(12,532,886	)

		Net Assets — 100.0%	$	1,100,059,644

The aggregate cost of securities for federal income tax purposes at December 31, 2008 is $1,576,268,291.

The following amounts are based on cost for federal income tax purposes:


Gross unrealized appreciation	$	5,531,768
Gross unrealized depreciation		(469,207,529	)

Net unrealized depreciation	$	(463,675,761	)

See summary of footnotes and abbreviations to portfolios.

TRANSAMERICA PARTNERS PORTFOLIOS
PORTFOLIO OF INVESTMENTS (Continued)

SUMMARY OF FOOTNOTES AND ABBREVIATIONS TO PORTFOLIOS
December 31, 2008


Footnotes:

*		Non-income producing security.
144A		Securities are registered pursuant to Rule 144A of the Securities Act of 1933. These securities are deemed to be liquid for purposes of compliance limitations on holdings of illiquid securities and may be resold as transactions exempt from registration, normally to qualified institutional buyers.


1)		Variable rate security. The rate shown was in effect at December 31, 2008.
2)		Quarterly reset provision. The rate shown was in effect at December 31, 2008.
3)		Monthly reset provision. The rate shown was in effect at December 31, 2008.
4)		Security is segregated as collateral for written options.
5)		Security is segregated as initial margin for futures contracts.
6)		Security is segregated as collateral for swap contracts and/or for swaptions.
7)		Represents a zero coupon bond which will convert to an interest bearing security at a later date.
8)		All or part of this security is on loan.
9)		Bond is in default.
10)		Variable rate security. Interest rate is based on the credit rating of the issuer. The rate shown was in effect at December 31, 2008. Not applicable.
11)		Floating rate security. The interest rate is subject to change semi-annually based on the London Interbank Offered Rate (“LIBOR”). The rate shown was in effect at December 31, 2008.
12)		PIK (“Payment-In-Kind”) bond. These bonds pay interest in the form of additional bonds.
13)		Security was in bankruptcy reorganization at the time of maturity. Recovery will be determined at the conclusion of the bankruptcy.
14)		Fair valued at December 31, 2008.
		Following are the market values (as determined by fair valuation) and the corresponding percentage of Portfolio net assets of all fair valued securities at December 31, 2008.


Series	Market Value		Percentage
Total Return Bond	$	1,965,661		0.65	%
High Yield Bond		4,021,234		0.91
Balanced		937,783		0.56
Value		3,974		0.01
Small Core		—		—


		International Equity —
		The value and percentage based upon Portfolio net assets of the investments that apply the fair valuation policy as described in note 2A of the Notes to Financial Statements are $853,954,445 and 77.63%, respectively.
15)		Principal amount for this security is denominated in British Pound Sterling.
16)		Principal amount for this security is denominated in Euros.
17)		Principal amount for this security is denominated in Japanese Yen.
18)		Principal amount for this security is denominated in New Zealand Dollars. Not applicable.
19)		Principal amount for this security is denominated in Mexican Pesos.
20)		Security has been deemed illiquid pursuant to procedures approved by the Advisor and may be difficult to sell.


Abbreviations:
ADR		American Depository Receipt.
HB		High Coupon Bonds (a.k.a. “IO-ettes”) represent the right to receive interest payments on an underlying pool of mortgages with similar features as those associated with IO securities. Unlike IO’s, the owner also has a right to receive a very small portion of principal. The high interest rates result from taking interest payments from other classes in the Real Estate Mortgage Investment Conduit (REMIC) trust and allocating them to the small principal of the HB class.
IO		Interest Only represents the right to receive the monthly interest payment on an underlying pool of mortgage loans. The face amount shown represents the par value on the underlying pool. The yields on these securities generally exceed yields on other mortgage-backed securities because their cash flow patterns are more volatile and there is a greater risk that the initial investment will not be fully recouped. These securities are subject to accelerated principal paydowns as a result of prepayment or refinancing of the underlying pool of mortgage instruments. As a result, interest income may be reduced considerably.

See notes to financial statements.

173

TRANSAMERICA PARTNERS PORTFOLIOS
PORTFOLIO OF INVESTMENTS (Continued)

SUMMARY OF FOOTNOTES AND ABBREVIATIONS TO PORTFOLIOS (Continued)
December 31, 2008


Abbreviations:
REG S		Security is sold under Regulation S of the Securities Act of 1933, which governs offers and sales outside the US without registration under the Securities Act of 1933. Unless otherwise indicated, these securities have been determined to be liquid under procedures established by the Board of Trustees.
TBA		To be announced. Securities are purchased on a forward commitment basis with approximate principal amount and general stated maturity date. The actual principal amount and maturity date will be determined upon settlement when the specific mortgage pools are assigned.


		• Securities issued by companies registered outside the United States are denoted with their domestic country in parenthesis except the International Equity Portfolio.
		• Securities designated as Supra National jurisdictions are represented by an international organization, or union, whereby member states transcend national boundaries or interests to share in the decision-making and vote on issues pertaining to the wider grouping.
		• Fixed income securities designated as “perpetual” are securities that make (or are scheduled to make) a steady payment of interest. They do not have a maturity date, and the interest payments are indefinite.
		• Footnotes and abbreviations may or may not appear in each portfolio of investments.

See notes to financial statements.

174

TRANSAMERICA PARTNERS PORTFOLIOS
PORTFOLIO COMPOSITION

December 31, 2008

The following charts summarize the portfolio composition of each Series by asset type.


Money Market
Commercial Paper	33.1	%
Yankee Certificates of Deposit	26.5
Short Term US Government Agency Securities	22.9
Repurchase Agreements/Cash Equivalents	9.5
Short Term Corporate Notes	4.9
Domestic Certificates of Deposit	3.0
Other assets less liabilities	0.1

	100.0	%

High Quality Bond
Corporate Bonds and Notes	64.5	%
US Government Agency Securities	26.5
US Treasury Securities	3.9
Securities Lending Collateral	2.5
Short Term US Government Agency Securities	2.4
Municipal Bonds	1.5
Repurchase Agreements/Cash Equivalents	0.5
Liabilities less other assets	(1.8	)

	100.0	%

Inflation-Protected Securities
US Treasury Securities	88.6	%
Repurchase Agreements/Cash Equivalents	4.5
Corporate Bonds and Notes	3.0
US Government Agency Securities	2.7
Purchased Put Options	0.0	*
Other assets less liabilities	1.2

	100.0	%

Core Bond
US Government Agency Securities	65.7	%
Corporate Bonds and Notes	48.2
Preferred Corporate Bonds and Notes	3.2
Foreign Government Obligations	2.4
US Treasury Securities	2.4
Repurchase Agreements/Cash Equivalents	0.5
Securities Lending Collateral	0.1
Purchased Put Options	0.0	*
Put Options Written	(0.0	)*
Call Options Written	(0.6	)
Securities Sold Short	(15.0	)
Liabilities less other assets	(6.9	)

	100.0	%

Total Return Bond
US Government Agency Securities	58.7	%
Corporate Bonds and Notes	52.4
Short Term US Government Agency Securities	6.9
US Treasury Securities	3.7
Repurchase Agreements/Cash Equivalents	2.8
Preferred Corporate Bonds and Notes	0.9
Foreign Government Obligations	0.4
Municipal Bonds	0.2
Securities Lending Collateral	0.2
Preferred Stocks	0.0	*
Convertible Bonds	0.0	*
Put Options Written	(0.0	)*
Call Options Written	(0.6	)
Liabilities less other assets	(25.6	)

	100.0	%

High Yield Bond
Corporate Bonds and Notes	82.4	%
Repurchase Agreements/Cash Equivalents	8.9
Loan Participations	4.9
Convertible Preferred Stocks	0.4
Convertible Bonds	0.3
Common Stocks	0.2
Preferred Stocks	0.2
Other assets less liabilities	2.7

	100.0	%

Balanced
Common Stocks	56.6	%
Corporate Bonds and Notes	27.8
US Government Agency Securities	19.0
Repurchase Agreements/Cash Equivalents	2.2
Securities Lending Collateral	1.1
Municipal Bonds	0.6
Preferred Corporate Bonds and Notes	0.4
Foreign Government Obligations	0.3
US Treasury Securities	0.1
Convertible Bonds	0.0	*
Preferred Stocks	0.0	*
Put Options Written	(0.0	)*
Call Options Written	(0.3	)
Liabilities less other assets	(7.8	)

	100.0	%

See notes to financial statements.

175

TRANSAMERICA PARTNERS PORTFOLIOS
PORTFOLIO COMPOSITION (Continued)

December 31, 2008


Large Value (formerly, Value & Income)
Common Stocks	99.0	%
Repurchase Agreements/Cash Equivalents	0.8
Other assets less liabilities	0.2

	100.0	%

Value
Common Stocks	98.9	%
Securities Lending Collateral	4.3
Repurchase Agreements/Cash Equivalents	2.1
Preferred Stocks	0.0	*
Liabilities less other assets	(5.3	)

	100.0	%

Large Core (formerly, Growth & Income)
Common Stocks	95.9	%
Securities Lending Collateral	1.4
Repurchase Agreements/Cash Equivalents	0.5
Other assets less liabilities	2.2

	100.0	%

Large Growth (formerly, Equity Growth)
Common Stocks	98.7	%
Securities Lending Collateral	3.4
Repurchase Agreements/Cash Equivalents	1.1
Liabilities less other assets	(3.2	)

	100.0	%

Growth (formerly, Aggressive Equity)
Common Stocks	98.2	%
Securities Lending Collateral	2.8
Repurchase Agreements/Cash Equivalents	1.4
Liabilities less other assets	(2.4	)

	100.0	%

Mid Value (formerly, Mid-Cap Value)
Common Stocks	96.9	%
Repurchase Agreements/Cash Equivalents	2.9
Securities Lending Collateral	2.2
Convertible Bonds	0.0	*
Liabilities less other assets	(2.0	)

	100.0	%

Mid Growth (formerly, Mid-Cap Growth)
Common Stocks	97.8	%
Securities Lending Collateral	6.6
Repurchase Agreements/Cash Equivalents	2.5
Liabilities less other assets	(6.9	)

	100.0	%

Small Value (formerly, Small-Cap Value)
Common Stocks	97.7	%
Securities Lending Collateral	4.6
Repurchase Agreements/Cash Equivalents	0.3
Liabilities less other assets	(2.6	)

	100.0	%

Small Core (formerly, Special Equity)
Common Stocks	98.9	%
Securities Lending Collateral	7.6
Repurchase Agreements/Cash Equivalents	0.7
Short Term US Treasury Securities	0.1
Rights	0.0	*
Warrants	0.0	*
Liabilities less other assets	(7.3	)

	100.0	%

Small Growth (formerly, Small-Cap Growth)
Common Stocks	98.8	%
Securities Lending Collateral	11.2
Liabilities less other assets	(10.0	)

	100.0	%

International Equity
Common Stocks	100.0	%
Repurchase Agreements/Cash Equivalents	1.1
Rights	0.0	*
Liabilities less other assets	(1.1	)

	100.0	%


*		Amount rounds to less than 0.05% or (0.05)%.

See notes to financial statements.

176

TRANSAMERICA PARTNERS PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS

1. Organization and Business

Transamerica Partners Portfolios (formerly, Diversified Investors Portfolios) (the “Series Portfolio”), a series trust organized on September 1, 1993 under the laws of the State of New York, is composed of eighteen different series that are, in effect, separate investment funds: the Money Market Portfolio, the High Quality Bond Portfolio, the Inflation-Protected Securities Portfolio, the Core Bond Portfolio, the Total Return Bond Portfolio, the High Yield Bond Portfolio, the Balanced Portfolio, the Large Value Portfolio (formerly, the Value & Income Portfolio), the Value Portfolio, the Large Core Portfolio (formerly, the Growth & Income Portfolio), the Large Growth Portfolio (formerly, the Equity Growth Portfolio), the Growth Portfolio (formerly, the Aggressive Equity Portfolio), the Mid Value Portfolio (formerly, the Mid-Cap Value Portfolio), the Mid Growth Portfolio (formerly, the Mid-Cap Growth Portfolio), the Small Value Portfolio (formerly, the Small-Cap Value Portfolio), the Small Core Portfolio (formerly, the Special Equity Portfolio), the Small Growth Portfolio (formerly, the Small-Cap Growth Portfolio), and the International Equity Portfolio (each a “Series”). The effective date of name changes for the Series Portfolio and selected Series was May 1, 2008. The Declaration of Trust permits the Board of Trustees to issue an unlimited number of beneficial interests in each Series. Investors in a Series (e.g., investment companies, insurance company separate accounts and common and commingled trust funds) will each be liable for all obligations of that Series (and of no other Series).

The investment objectives of each Series are as follows:

Money Market — The Series’ goal is to provide liquidity and as high a level of income as is consistent with the preservation of capital.

High Quality Bond — The Series’ goal is to provide a high risk-adjusted return while focusing on the preservation of capital.

Inflation-Protected Securities — The Series’ goal is to seek maximum real return consistent with the preservation of capital.

Core Bond — The Series’ goal is to achieve maximum total return.

Total Return Bond — The Series’ goal is to maximize long-term total return.

High Yield Bond — The Series’ goal is to provide a high level of current income.

Balanced — The Series’ goal is to provide a high total investment return through investment in a broadly diversified portfolio of stocks, bonds and money market instruments.

Large Value — The Series’ goal is to provide a high level of current income through investment in a diversified portfolio of common stocks with relatively high current yield. Capital appreciation is a secondary goal.

Value — The Series’ goal is to provide capital appreciation. Dividend income is a secondary goal.

Large Core — The Series’ goal is to provide capital appreciation and current income.

Large Growth — The Series’ goal is to provide a high level of capital appreciation through investment in a diversified portfolio of common stocks with a potential for above-average growth in earnings. Current income is a secondary goal.

Growth — The Series’ goal is to provide a high level of capital appreciation primarily through investing in a diversified portfolio of common stocks.

Mid Value — The Series’ goal is to provide a high total investment return through investments primarily in a diversified portfolio of common stocks.

Mid Growth — The Series’ goal is to provide a high total investment return through investments primarily in a diversified portfolio of common stocks.

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1. Organization and Business (continued)

Small Value — The Series’ goal is to provide a high total investment return through investments primarily in a diversified portfolio of common stocks.

Small Core — The Series’ goal is to provide a high level of capital appreciation through investment in a diversified portfolio of common stocks of small to medium size companies.

Small Growth — The Series’ goal is to provide a high total investment return through investments primarily in a diversified portfolio of common stocks.

International Equity — The Series’ goal is to provide a high level of long-term capital appreciation through investment in a diversified portfolio of securities of foreign issuers.

2. Significant Accounting Policies

A. Security Valuation:

Short-term securities having remaining maturities of 60 days or less are valued at amortized cost, which approximates market value. The amortized cost of a security is determined by valuing it at original cost and thereafter amortizing any discount or premium at a constant rate until maturity. Equity securities are valued at the official closing price or last sale price on the exchange on which they are primarily traded or at the last quoted bid price for securities in which there were no sales during the day or for unlisted securities. Portfolio securities listed on the NASDAQ National Market and NASDAQ Small Cap Market for which reliable market quotations are available are valued at the official closing price or, if there is no official closing price on that day, at the last sale price. Bonds and warrants are valued at the last available bid prices by an independent pricing service. Option contracts that are traded on commodities or securities exchanges are normally valued at the last mean price on the exchange on which they are traded; if mean prices are not available, the bid price will be used. If neither mean nor bid prices are available, a broker quote will be obtained. Futures contracts traded on commodities or securities exchanges are normally valued at the last closing price on the exchange on which they are traded. If last closing price is not available for futures contracts, a broker quote will be obtained. Swap agreements are normally valued by an independent pricing service. If the independent pricing service is not able to value a swap contract, that contract will be valued at bid price. If bid is not available, a broker quote will be obtained. When valuations are not readily available, securities will be valued at their fair market value as determined in good faith by Transamerica Asset Management, Inc.’s (“TAM”) Valuation Committee, under the supervision of the Board of Trustees. Unlisted securities are valued at the last sales price provided by an independent pricing agent or the principal market maker.

Trading in securities on most foreign exchanges and over-the counter markets is normally completed before the close of the domestic market and may also take place on days when the domestic market is closed. Events or circumstances affecting the values of portfolio securities that occur between the closing of their principal markets and the time the net asset value is determined may be reflected in the calculation of net asset value when the investment advisor deems that the particular event or circumstance would materially affect its asset value. In accordance with procedures adopted by the Board of Trustees, all Series apply fair value pricing on a daily basis for all non-US and non-Canadian equity securities held in their portfolios by utilizing the quotations of an independent pricing service, unless the Series’ investment advisor determines that use of another valuation methodology is appropriate. The pricing service uses statistical analyses and quantitative models to adjust local market prices using factors such as subsequent movement and changes in the prices of indices, securities and exchange rates in other markets, in determining fair value each day.

The Series adopted the Financial Accounting Standards Board (“FASB”) Standard No. 157, “Fair Value Measurements” (“FAS 157”) on January 1, 2008. FAS 157 is designed to unify guidance for the measurement of fair value of all types of assets, including financial instruments, and certain liabilities, throughout a number of accounting standards. FAS 157 also establishes a hierarchy for measuring fair value in generally accepted

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2. Significant Accounting Policies (continued)

accounting principles and expands financial statement disclosures about fair value measurements that are relevant to the Series.

Various inputs are used in determining the value of each Series’ investments. These inputs are summarized in the three broad levels listed below:

Level 1 — Quoted prices in active markets for identical securities.

Level 2 — Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3 — Significant unobservable inputs (including the Series’ own assumptions in determining the fair value of investments).

The inputs or methodology used for valuing securities are not an indication of the risks associated with investing in those securities.

The following is a summary of the fair valuations according to the inputs used to value each Series’ net assets as of December 31, 2008:


							Total Investments in
	Investments in Securities						Securities (net of
	(net of Call and Put Options Written)						Call and Put		Other Financial Instruments *
Series	Level 1		Level 2		Level 3		Options Written)		Level 1		Level 2			Level 3

Money Market	$	—	$	1,324,736,908	$	—	$	1,324,736,908	$	—	$	—		$	—
High Quality		—		428,852,213		—		428,852,213		—		—			—
Inflation-Protected Securities		—		384,383,740		—		384,383,740		—		(207,296	)		—
Core Bond		—		1,782,524,793		—		1,782,524,793		—		19,848,548			—
Total Return Bond		43,737		375,389,140		1,965,661		377,398,538		—		1,946,268			—
High Yield		2,600,058		420,592,960		4,781,249		427,974,267		—		—			—
Balanced		95,490,810		85,619,614		937,784		182,048,208		—		934,020			—
Large Value		1,436,124,647		11,411,786		—		1,447,536,433		—		—			—
Value		60,039,029		3,872,704		—		63,911,733		—		—			—
Large Core		270,314,453		5,300,035		—		275,614,488		—		30,825			—
Large Growth		1,104,122,190		62,419,972		—		1,166,542,162		—		—			—
Growth		179,458,129		7,515,028		—		186,973,157		—		—			—
Mid Value		610,607,223		32,491,177		—		643,098,400		—		—			—
Mid Growth		223,880,422		20,906,904		—		244,787,326		—		—			—
Small Value		153,001,229		7,732,285		—		160,733,514		—		—			—
Small Core		385,467,779		32,721,970		—		418,189,749		—		75,774			—
Small Growth		150,589,631		17,132,330		—		167,721,961		—		—			—
International Equity		236,602,811		875,989,719		—		1,112,592,530		—		—			—


*		Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation (depreciation) on the instrument.

For fair valuations using significant unobservable inputs, FAS 157 requires a reconciliation of the beginning to ending balances for reported market values that represents changes attributable to total realized and unrealized gains or losses, purchases and sales, and transfers in/out of the Level 3 category during the period.

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2. Significant Accounting Policies (continued)

In accordance with this requirement, the following reconciliation is provided for applicable Series for the year ended December 31, 2008:


	Beginning Balance							Total							Ending Balance
	of Investments,		New			Accrued		Realized		Total Unrealized					of Investments,
	at Value		Purchases/			Discounts/		Gain/		Appreciation/			Net Transfers In/		at Value
Series	at 12/31/2007		(Sales)			(Premiums)		(Loss)		(Depreciation)			(Out) of Level 3		at 12/31/2008
Total Return Bond	$	—	$	3,831,565		$	33,260	$	—	$	(1,899,164	)	$	—	$	1,965,661
High Yield Bond		9,239,839		(475,186	)		70,202		31,632		(4,085,238	)		—		4,781,249
Balanced		—		1,489,781			47,616		—		(599,613	)		—		937,784

B. Repurchase Agreements:

Each Series, along with other affiliated entities of the investment advisor, may enter into repurchase agreements with financial institutions deemed to be creditworthy by the Series’ investment advisor, subject to the seller’s agreement to repurchase and the Series agreement to resell such securities at a mutually agreed upon price. Securities purchased subject to repurchase agreements are segregated at the custodian and, pursuant to the terms of the repurchase agreements, must have an aggregate market value greater than or equal to 102% for domestic securities and 105% for international securities of the repurchase price at all times. If the value of the underlying securities falls below the value of the repurchase price, the Series will require the seller to deposit additional collateral by the next business day. If the request for additional collateral is not met or the seller defaults on its repurchase obligation, the Series maintains the right to sell the underlying securities at market value and may claim any resulting loss against the seller. However, in the event of default or bankruptcy by the seller, realization and/or retention of the collateral may be subject to legal proceedings.

C. Foreign Currency Translation:

The accounting records of each Series are maintained in US dollars. The market values of foreign securities, currency holdings and other assets and liabilities denominated in a foreign currency are translated to US dollars based on the prevailing exchange rates each business day. Income, expenses, purchases, and sales of investment securities denominated in foreign currencies are translated at prevailing exchange rates when accrued or incurred.

None of the Series isolated realized gains and losses attributable to changes in exchange rates from gains and losses that arise from changes in the market value of investments. Such fluctuations are included with net realized and unrealized gains or losses on securities. Net realized gains and losses on foreign currency transactions represent net foreign exchange gains and losses on disposition of foreign currencies and foreign currency forward and spot contracts, and the difference between the amount of investment income receivable and foreign withholding taxes payable recorded on each Series’ books and the US dollar equivalent of amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities (other than investments in securities) and foreign currency forward and spot contracts, resulting from changes in the prevailing exchange rates.

D. Foreign Currency Forward, Spot, and Cross Currency Contracts:

Each Series, with the exception of the Money Market Series, may enter into foreign currency forward contracts, spot, and cross currency contracts in connection with settling planned purchases or sales of securities or to hedge the currency exposure associated with those Series that participate in such contracts. A foreign currency forward contract is an agreement between two parties to buy and sell a currency at a set price on a future date. A spot contract is also an agreement to buy and sell a currency, but will settle within a week or less from the date it is entered into. The market value of a foreign currency forward, spot, or cross currency contract fluctuates with changes in forward currency exchange rates. Foreign currency forward, spot, and cross currency contracts are marked to market daily and the change in value is recorded by the Series as an unrealized foreign exchange gain

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2. Significant Accounting Policies (continued)

or loss. When a foreign currency forward, spot, or cross currency contract is extinguished, through delivery or by entering into another offsetting foreign currency forward, spot, or cross currency contract, the Series records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value of the contract at the time it was extinguished. These contracts may involve market risk in excess of the unrealized gain or loss reflected in the Series’ Statement of Assets and Liabilities and Statement of Operations. In addition, the Series could be exposed to risk if the counterparties are unable to meet the terms of the contracts or if the value of the currency changes unfavorably to the US dollar.

As of December 31, 2008, the Inflation-Protected Securities Series, Core Bond Series, Total Return Bond Series, and Balanced Series each had outstanding foreign currency forward contracts as listed in Note 8.

E. Written Options:

Each Series, with the exception of the Money Market Series, may write or purchase options for the purpose of either hedging its exposure to the market fluctuations of the portfolio, or an individual security position. When a Series writes an option, an amount equal to the premium received by the Series is recorded as an asset and corresponding liability. The amount of the liability is adjusted daily to reflect the current market value of the written option and the change is recorded in a corresponding unrealized gain or loss account. These options are settled for cash and subject the Series to unknown risk of loss. The Series, however, are not subject to credit risk on written options, as the counterparty has already performed its obligation by paying the premium at the inception of the contract. When a written option expires on its stipulated expiration date, or when a closing transaction is entered into, the related liability is extinguished and the Series realizes a gain or loss contingent on whether the cost of the closing transaction exceeds the premium received when the option was written.

Transactions in options written for the year ended December 31, 2008 were as follows:


	Inflation - Protected
	Securities						Core Bond
	Number of						Number of
	Contracts			Premiums			Contracts			Premiums

Written call options outstanding at December 31, 2007		—		$	—			217		$	123,969
Call options written		59			50,057			55,600,328			3,044,749
Call options terminated in closing purchase transactions		(59	)		(50,057	)		(545	)		(379,398	)
Call options expired		—			—			—			—

Written call options outstanding at December 31, 2008		—		$	—			55,600,000		$	2,789,320


Written put options outstanding at December 31, 2007		—		$	—			—		$	—
Put options written		59			68,582			190,600,583			3,971,824
Put options terminated in closing purchase transactions		(59	)		(68,582	)		(135,000,583	)		(1,182,504	)
Put options expired		—			—			—			—

Written put options outstanding at December 31, 2008		—		$	—			55,600,000		$	2,789,320

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2. Significant Accounting Policies (continued)


	Total Return
	Bond						Balanced
	Number of						Number of
	Contracts			Premiums			Contracts			Premiums

Written call options outstanding at December 31, 2007		141		$	101,733			56		$	40,189
Call options written		994			679,758			274			185,853
Call options terminated in closing purchase transactions		(771	)		(482,057	)		(224	)		(140,032	)
Call options expired		—			—			—			—

Written call options outstanding at December 31, 2008		364		$	299,434			106		$	86,010


Written put options outstanding at December 31, 2007		118		$	96,535			43		$	35,254
Put options written		1,172			952,510			301			241,575
Put options terminated in closing purchase transactions		(794	)		(558,233	)		(222	)		(156,872	)
Put options expired		—			—			—			—

Written put options outstanding at December 31, 2008		496		$	490,812			122		$	119,957

F. Futures Contracts:

Each Series, with the exception of the Money Market Series, may enter into futures contracts for the purpose of hedging its existing portfolio securities, or securities that the Series intends to purchase, against fluctuations in market value caused by changes in prevailing market or interest rates. During the period the futures contract is open, changes in the value of the contract are recognized as unrealized gains or losses by “marking to market” on a daily basis to reflect the daily market value of the contract.

Variation margin payments are received or made by each Series each day, depending upon the daily fluctuations in the market value of the underlying instrument. Each Series recognizes an unrealized gain or loss equal to the daily variation margin. When the contract is closed, the Series records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the basis in the contract.

Should market conditions move unexpectedly, the Series may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the underlying hedged assets. These contracts may involve market risk in excess of the unrealized gains or losses reflected in the Series’ Statement of Assets and Liabilities.

Use of long futures contracts subjects the Series to risk of loss in excess of amounts shown on the Statement of Assets and Liabilities up to the notional value of the futures contracts. Use of short futures contracts subjects the Series to unlimited risk of loss. The Series may enter into futures contracts on exchanges or boards of trade. In that case, the exchange or board of trade acts as the counterparty to each futures transaction; therefore, the Series’ credit risk is limited to failure of the exchange or board of trade.

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2. Significant Accounting Policies (continued)

Open futures contracts as of December 31, 2008:


				Value as of		Net Unrealized
	Number of			December 31,		Appreciation/
Series	Contracts	Description	Expiration Date	2008		(Depreciation)

Inflation - Protected Securities	58 Long	US Long Bond Future	March 2009	$	8,006,719	$	62,526
	41 Long	US Treasury Note 2 Year Future	March 2009		8,940,563		25,655
	268 Short	US Treasury Note 10 Year Future	March 2009		33,701,000		(294,875	)

						$	(206,694	)

Core Bond	147 Long	Euro Bund Future	March 2009	$	25,509,475	$	391,247
	271 Long	Long Gilt Future	March 2009		48,107,647		3,194,239
	96 Long	US Long Bond Future	March 2009		13,252,500		581,635
	200 Long	US Treasury Note 5 Year Future	March 2009		23,810,938		(218,534	)
	428 Long	US Treasury Note 10 Year Future	March 2009		53,821,000		971,500
	101 Short	90 Day Euro Future	June 2009		24,964,675		(466,171	)
	101 Short	90 Day Euro Future	June 2010		24,810,650		(512,257	)
	1,040 Short	US Treasury Note 2 Year Future	March 2009		226,785,000		(2,196,129	)

						$	1,745,530

Total Return Bond	229 Long	90 Day Euro Future	March 2009	$	56,643,150	$	1,202,423
	82 Long	Euro Bund Future	March 2009		14,229,775		(19,989	)
	53 Long	US Long Bond Future	March 2009		7,316,484		699,691
	58 Long	US Treasury Note 2 Year Future	March 2009		12,647,625		182,989
	15 Long	US Treasury Note 10 Year Future	March 2009		1,886,250		(30,536	)
	69 Short	US Treasury Note 5 Year Future	March 2009		8,214,773		(242,123	)

						$	1,792,455

Balanced	5 Long	90 Day Euro Future	September 2009	$	1,234,313	$	34,600
	5 Long	90 Day Euro Future	June 2009		1,235,875		34,475
	74 Long	90 Day Euro Future	March 2009		18,303,900		412,516
	19 Long	Euro Bund Future	March 2009		3,297,143		(4,729	)
	72 Long	S&P 500 Emini Future	March 2009		3,240,360		108,941
	24 Long	US Long Bond Future	March 2009		3,313,125		315,025
	31 Long	US Treasury Note 2 Year Future	March 2009		6,759,938		98,157
	29 Long	US Treasury Note 10 Year Future	March 2009		3,646,750		91,916
	73 Short	US Treasury Note 5 Year Future	March 2009		8,690,992		(260,375	)

						$	830,526

Large Core	2 Long	NASDAQ 100 Future	March 2009	$	242,500	$	3,692
	5 Long	S&P 500 Future	March 2009		1,125,125		27,133

						$	30,825

Small Core	33 Long	Russell 2000 Future	March 2009	$	1,643,070	$	75,774

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NOTES TO FINANCIAL STATEMENTS (Continued)

2. Significant Accounting Policies (continued)

The Inflation-Protected Securities Series, Core Bond Series, Total Return Bond Series, Balanced Series, Large Core Series, and Small Core Series have segregated securities as collateral for their respective open futures contracts. The segregated securities are identified within each Series’ portfolio of investments. In addition, the Total Return Bond Series has segregated $1,979,276 of cash, and the Balanced Series has segregated $1,291,676 of cash as collateral for their respective open futures contracts.

G. Swap Agreements:

Each Series, with the exception of the Money Market Series, may engage in various swap transactions including interest rate, currency exchange rate, equity index, credit default and total return swap agreements, for hedging purposes, or as alternatives to direct investments.

An interest rate swap involves a Series and another party, and each agrees to exchange interest earned with respect to a notional amount of principal. An interest rate swap typically involves the exchange of a fixed rate payment for a floating rate payment. A currency rate swap involves two parties who agree to sell each other a foreign currency and commit to exchanging the principal amount at a specified future date. An equity index swap represents an exchange of cash flow streams, one typically based on a reference interest rate; the other on the performance of a stock or stock market index. A credit default swap involves the payment of a premium by a buyer for protection against a specified credit risk or event, such as default. Should a default occur, the protection seller can either accept delivery of the defaulted security or pay the buyer a cash settlement. If a Series is a protection buyer and no event occurs, the Series may receive or recover nothing. If a series is a protection seller it will receive premium payments (if there is no event) and generally receives an upfront payment as well. A Series will only enter into credit default swaps with parties that meet certain levels of creditworthiness as assessed by the subadvisor. In a total return swap, one party receives interest payments on a referenced asset or index plus any capital gains or losses over the payment period, while the other receives a specified cash flow based on the same notional amount.

Swaps can expose a Series to credit or market risk due to unfavorable changes in interest rates or a change in value of underlying securities or indices. In addition, there is a possibility that there will not be a liquid market for the agreements, or that a counterparty may default on its obligation.

Premiums paid or received by a Series are recorded as unrealized appreciation/ (depreciation) in the Statement of Operations. Contracts are marked to market daily based on valuations supplied by a dealer or broker. Changes in value, including accruals of periodic amounts of interest to be paid or received on swaps, are reported as unrealized appreciation/(depreciation). A realized gain or loss is recorded upon payment or receipt of a periodic payment or termination of the swap agreements. Notional principal amounts are used to express the extent of involvement in these transactions, but the amounts potentially subject to credit risk are much smaller.

From time to time, a Series will receive short term, highly liquid investments as collateral pledged for various swap agreements from brokers.

At the year ended December 31, 2008, the Core Bond Series entered into interest rate swaps.

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NOTES TO FINANCIAL STATEMENTS (Continued)

2. Significant Accounting Policies (continued)

Outstanding swap agreements as of December 31, 2008:

Core Bond Series:

Interest Rate Swaps:

Payments made by

Payments Received

Swap Counterparty

the Series

by the Series

Termination Date

Notional Amount

Value

Citigroup Global Markets

3 month LIBOR

5.18% semi-annual

09/20/10

100,000,000

7,583,869

Citigroup Global Markets

3 month LIBOR

5.27% semi-annual

08/06/12

74,800,000

9,914,231

Citigroup Global Markets

3 month LIBOR

5.53% semi-annual

06/05/17

17,800,000

4,192,394

Citigroup Global Markets

3 month LIBOR

4.50% semi-annual

10/16/18

49,200,000

8,363,036

Citigroup Global Markets

4.04% semi-annual

3 month LIBOR

09/02/13

44,200,000

(4,235,547

)

Citigroup Global Markets

5.64% semi-annual

3 month LIBOR

07/05/17

38,000,000

(9,957,607

)

Citigroup Global Markets

5.31% semi-annual

3 month LIBOR

10/16/17

133,900,000

(29,955,762

)

Deutsche Bank AG

3 month LIBOR

2.81% semi-annual

10/30/10

50,000,000

1,030,654

Deutsche Bank AG

3 month LIBOR

4.28% semi-annual

07/01/13

43,000,000

4,526,406

Deutsche Bank AG

3 month LIBOR

4.28% semi-annual

07/07/13

24,900,000

2,610,025

Deutsche Bank AG

3 month LIBOR

4.56% semi-annual

10/16/18

24,000,000

4,216,966

Deutsche Bank AG

3.62% semi-annual

3 month LIBOR

09/26/10

113,500,000

(5,199,739

)

Deutsche Bank AG

4.31% semi-annual

3 month LIBOR

01/17/18

28,800,000

(4,491,549

)

Goldman Sachs Capital Markets, LP

3 month LIBOR

5.50% semi-annual

07/12/12

220,000,000

30,345,187

Goldman Sachs Capital Markets, LP

3 month LIBOR

4.31% semi-annual

06/11/13

33,000,000

3,127,632

Goldman Sachs Capital Markets, LP

3 month LIBOR

4.27% semi-annual

07/07/13

13,000,000

1,361,103

Goldman Sachs Capital Markets, LP

3 month LIBOR

4.89% semi-annual

06/16/18

40,000,000

8,039,949

Goldman Sachs Capital Markets, LP

3 month LIBOR

2.99% semi-annual

12/10/18

29,600,000

1,141,289

Goldman Sachs Capital Markets, LP

4.08% semi-annual

3 month LIBOR

08/22/13

26,900,000

(2,651,321

)

Goldman Sachs Capital Markets, LP

3.78% semi-annual

3 month LIBOR

09/11/13

32,700,000

(2,729,091

)

Goldman Sachs Capital Markets, LP

4.56% semi-annual

3 month LIBOR

01/04/18

53,600,000

(9,574,865

)

17,657,260

LIBOR — London Interbank Offered Rate.

H. Short Sales:

Each Series, with the exception of the Money Market Series, may sell securities short. A short sale is a transaction in which a Series sells securities it does not own, but has borrowed, in anticipation of a decline in the market price of the securities. The Series is obligated to replace the borrowed securities at the market price at the time of replacement. The Series’ obligation to replace the securities borrowed in connection with a short sale will be fully secured by collateral deposited with the custodian. In addition, the Series will consider the short sale to

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NOTES TO FINANCIAL STATEMENTS (Continued)

2. Significant Accounting Policies (continued)

be a borrowing by the Series that is subject to the asset coverage requirements of the Investment Company Act of 1940, as amended. Short sales by the Series involve certain risks and special considerations. Possible losses from short sales differ from losses that could be incurred from a purchase of a security because losses from short sales may be unlimited, whereas losses from purchases cannot exceed the total amount invested.

I. Dollar Rolls:

Each Series, with the exception of the Money Market Series, may enter into dollar rolls (principally using TBA’s) in which the Series sells mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase similar, but not identical, securities at an agreed-upon price on a fixed date. The Series accounts for such dollar rolls as purchases and sales and receive compensation as consideration for entering into the commitment to repurchase. The Series maintains liquid securities having a value not less than the repurchase price (including accrued interest) for such dollar rolls. The market value of the securities that the Series is required to purchase may decline below the agreed upon repurchase price of those securities.

The Core Bond Series, Total Return Bond Series and Balanced Series had TBA dollar rolls outstanding as of December 31, 2008, which are included in receivable for securities sold and payable for securities purchased on the Statement of Assets and Liabilities.

J. Loan Participations/Assignments:

Each Series, with the exception of the Money Market Series, may purchase participations/assignments in commercial loans. Such indebtedness may be secured or unsecured. These investments may include standby financing commitments, including revolving credit facilities that obligate the Series to supply additional cash to the borrowers on demand. Loan participations/assignments involve risks of insolvency of the lending banks or other financial intermediaries. As such, the Series assumes the credit risks associated with the corporate borrowers and may assume the credit risks associated with the interposed banks or other financial intermediaries. The Series may be contractually obligated to receive approval from the agent banks and/or borrowers prior to the sale of these investments. Loan participations typically represent direct participation in loans to corporate borrowers, and generally are offered by banks or other financial institutions or lending syndicates. The Series may participate in such syndications, or can buy a portion of the loans, becoming part lenders. Loans are often administered by agent banks acting as agents for all holders. The agent banks administer the terms of the loans, as specified in the loan agreements. In addition, the agent banks are normally responsible for the collection of principal and interest payments from the corporate borrowers and the apportionment of these payments to the credit of all institutions that are parties to the loan agreements. Unless, under the terms of the loans or other indebtedness, a Series has direct recourse against the corporate borrowers, the Series may have to rely on the agent banks or other financial intermediaries to apply appropriate credit remedies against corporate borrowers.


	•	Unfunded Commitments:

At December 31, 2008, High Yield Bond Series had the following unfunded loan commitments which could be extended at the option of the borrower:


			Unrealized
			Appreciation/
Security Description	Amount		(Depreciation)

Community Health Systems, Inc.	$	26,598	$	85
HRP Myrtle Beach		11,317		—

K. Commission Recapture:

The subadvisors of certain Series, to the extent consistent with the best execution and usual commission rate policies and practices, have elected to place security transactions of the Series with broker/dealers with which

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2. Significant Accounting Policies (continued)

other Funds or Series advised by TAM have established a Commission Recapture Program. A Commission Recapture Program is any arrangement under which a broker/dealer applies a portion of the commissions received by such broker/dealer from security transactions to a Series. In no event will commissions paid by the Series be used to pay expenses that would otherwise be borne by any other Funds or Series advised by TAM or by any other party.

Recaptured commissions during the year ended December 31, 2008 are included in net realized gains on the Statement of Operations and are summarized as follows:


Series	Commissions

Large Value	$	246,146
Large Growth		142,490
Growth		86,183
Mid Value		131,901
Mid Growth		43,025
Small Value		161,154
Small Core		64,959
Small Growth		100,114
International Equity		77,683

L. Federal Income Taxes:

It is the Series’ policy to comply with the applicable provisions of the Internal Revenue Code. Therefore, no federal income tax provision is required.

Each Series may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Each Series will accrue such taxes and recoveries as applicable, based upon their current interpretation of tax rules and regulations that exist in the markets in which they invest.

M. Security Transactions and Investment Income:

Security transactions are accounted for on a trade date basis (the date the order to buy or sell is executed). Dividend income less foreign taxes withheld, if any, is recorded on the ex-dividend date. Interest income is recorded on the accrual basis and includes amortization of premiums and accretion of discounts on investments. Realized gains and losses from securities transactions are recorded on the identified cost basis.

Purchases of TBA, when-issued or delayed delivery securities may be settled a month or more after the trade date. Interest income is not accrued until settlement date.

All of the net investment income and realized and unrealized gains and losses from security transactions are determined on each valuation day and allocated pro rata among the investors in a Series at the time of such determination.

N. Operating Expenses:

Each Series accounts separately for its assets, liabilities and operations. Expenses directly attributable to a Series are charged to that Series, while expenses attributable to all Series are allocated among all Series based on their relative net assets, or another methodology that is appropriate based on the circumstances.

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2. Significant Accounting Policies (continued)

O. Restricted and Illiquid Securities:

Each Series is permitted to invest in securities that are subject to legal or contractual restrictions on resale or are illiquid. Restricted securities generally may be resold in transactions exempt from registration. A security may be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at the current valuation may be difficult.

As of December 31, 2008, the Series had no investments in restricted securities other than 144A issues.

The following is the value and percentage of net assets of illiquid securities as of December 31, 2008:


Series	Amount		Percentage

Core Bond	$	1,709,911		0.10	%
Total Return Bond		148,375		0.05
High Yield Bond		11,294,923		2.57
Balanced		399,707		0.24
Small Value		7,177,213		4.58
International Equity		10,137,319		0.92

P. Other:

Q. Recent Accounting Pronouncements:

The Series adopted FASB Staff Position FAS 133-1 and FIN 45-4, “Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45 “the Amendment” on January 1, 2008. The Amendment requires enhanced disclosures regarding a Series’ credit derivatives holdings, including credit default swaps, credit spread options and hybrid financial instruments containing embedded credit derivatives. Management assessed and determined that there is no impact of the Amendment on the Series’ Financial Statements.

In addition, FASB issued Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities. The standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. Management is currently in the process of determining the impact on the Series’ Financial Statements.

R. Recent Events:

Lehman Brothers Holdings, Inc (“Lehman”) filed for bankruptcy on September 15, 2008. The Core Bond Series still has a payable balance to Lehman resulting from the settled TBA securities in the amount of $372,616.

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3. Fees and Transactions with Affiliates

Transamerica Financial Life Insurance Company (“TFLIC”), a wholly-owned subsidiary of AEGON USA, LLC (“AEGON USA”), is an affiliate of Transamerica Asset Management, Inc. (the “Advisor” or “TAM”). TAM is directly owned by Western Reserve Life Assurance Co. of Ohio (77%) (“Western Reserve”) and AUSA Holding Company (23%) (“AUSA”), both of which are indirect, wholly owned subsidiaries of AEGON NV. AUSA is wholly owned by AEGON USA, a financial services holding company whose primary emphasis is on life and health insurance, and annuity and investment products. AEGON USA is owned by AEGON US Holding Corporation, which is owned by Transamerica Corporation (DE). Transamerica Corporation (DE) is owned by The AEGON Trust, which is owned by AEGON International B.V., which is owned by AEGON NV, a Netherlands corporation, and a publicly traded international insurance group. TFLIC has sub-accounts which invest in the corresponding Series as follows:


	Investment
TFLIC Sub-account	in Series

Money Market		5.28	%
High Quality Bond		13.93
Inflation-Protected Securities		13.96
Core Bond		8.00
High Yield Bond		5.21
Balanced		34.39
Large Value		19.18
Large Core		39.24
Large Growth		18.03
Growth		27.60
Mid Value		3.96
Mid Growth		1.71
Small Value		1.77
Small Core		30.85
Small Growth		1.73
International Equity		11.78

The Advisor manages the assets of each Series of the Series Portfolio pursuant to the Investment Advisory Agreement with the Series Portfolio. Subject to such further policies as the Board of Trustees may determine, the Advisor provides general investment advice to each Series. For its services, the Advisor receives fees from each Series, accrued daily and payable monthly, at an annual rate equal to the percentages specified in the table below of the corresponding Series’ average daily net assets. The Advisor is currently waiving a portion of its investment advisory fees for certain Series.

For each Series, the Advisor has entered into Investment Subadvisory Agreements with the Subadvisors listed in the following table. It is the responsibility of each Subadvisor to make the day-to-day investment decisions of the Series and to place the purchase and sales orders for securities transactions of such Series, subject in all cases to

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3. Fees and Transactions with Affiliates (continued)

the general supervision of the Advisor. Payment of fees to the Subadvisors is the responsibility of the Advisor, and is not an additional expense of a Series.


		Advisory
Series	Series Subadvisor	Fee (%)

Money Market	GE Asset Management, Inc.		0.25
High Quality Bond	Merganser Capital Management, LP		0.35
Inflation-Protected Securities	BlackRock Financial Management, Inc.		0.35	(1)
Core Bond	BlackRock Financial Management, Inc.		0.35
Total Return Bond	Western Asset Management Company		0.35	(1)
	Western Asset Management Company, Ltd.
High Yield Bond	Eaton Vance Management		0.55
Balanced	Goldman, Sachs Asset Management, LP		0.45	(1)
	Western Asset Management Company Western Asset Management Company, Ltd.
Large Value	AllianceBernstein, LP (a)		0.45	(1)
	TCW Investment Management Company (a)
Value	Hotchkis and Wiley Capital Management, LLC		0.50	(1)
Large Core	Aronson+Johnson+Ortiz, LP		0.60
	Blackrock Financial Management, Inc.
Large Growth	Marsico Capital Management, LLC		0.62
	OFI Institutional Asset Management, Inc. Wellington Management Company, LLP
Growth	Turner Investment Partners, Inc.		0.77	(1)
Mid Value	Cramer, Rosenthal, McGlynn, LLC		0.67
	LSV Asset Management RiverSource Investments, LLC
Mid Growth	Columbus Circle Investors		0.72	(1)
Small Value	Mesirow Financial Investment Management, Inc.		0.82	(1)
	OFI Institutional Asset Management, Inc.
Small Core	Fort Washington Investment Advisors, Inc. (b)		0.80	(1)
	INVESCO Institutional (NA), Inc. RS Investment Management Co., LLC Wellington Management Company, LLP
Small Growth	Perimeter Capital Partners LLC		0.87	(1)
International Equity	LSV Asset Management (c)		0.75
	Wellington Management Company, LLP (c)


(1)		For the year ended December 31, 2008, the Advisor voluntarily waived a portion of its fee.

(a)		Effective January 2, 2009, Aronson+Johnson+Ortiz, LP replaced AllianceBernstein, LP and TCW Investment Management Company.

(b)		Effective July 7, 2008, Fort Washington Advisors, Inc. replaced Mazama Capital Management.

(c)		Effective January 2, 2009, Thornburg Investment Management, Inc. replaced LSV Asset Management and Wellington Management Company, LLP.

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NOTES TO FINANCIAL STATEMENTS (Continued)

3. Fees and Transactions with Affiliates (continued)

For the year ended December 31, 2008, the Advisor has voluntarily undertaken to waive fees to the extent the expenses of a Series exceed the following expense caps (as a proportion of average daily net assets):


Series		Expense Cap

Money Market		30 basis points (b.p.)
High Quality Bond		40 b.p.
Inflation-Protected Securities		40 b.p.
Core Bond		40 b.p.
Total Return Bond		40 b.p.
High Yield Bond		60 b.p.
Balanced		50 b.p.
Large Value		50 b.p.
Value		55 b.p.
Large Core		65 b.p.
Large Growth		65 b.p.
Growth		80 b.p.
Mid Value		70 b.p.
Mid Growth		75 b.p.
Small Value		85 b.p.
Small Core		85 b.p.
Small Growth		90 b.p.
International Equity		90 b.p.

Certain trustees and officers of the Series Portfolio and of the funds that invest in the Series Portfolio are also directors, officers or employees of the Advisor or its affiliates. None of the non-independent trustees so affiliated receive compensation for services as trustees of the Series Portfolio or the funds that invest in the Series Portfolio. Similarly, none of the Series Portfolio officers receive compensation from the Series Portfolio. Aggregate remuneration earned by non-affiliated trustees of the Series Portfolio from the Series Portfolio for the year ended December 31, 2008 amounted to $288,526.

Each eligible non-affiliated trustee may elect participation in a non-qualified deferred compensation plan (“the Plan”). Under the Plan, such trustees may defer payment of all or a portion of their total fees earned as a Series trustee. Each trustee who is a participant in the Plan may elect that the earnings, gains or losses credited to his/her deferred fee amounts be determined based on a deemed investment in investment options in Transamerica Partners Institutional Funds Group, Transamerica Institutional Asset Allocation Funds, Class A shares of any series of Transamerica Funds and/or funds of Transamerica Investors, Inc.

4. Securities Lending

Each Series may lend its securities to certain member firms of the New York Stock Exchange. The loans are collateralized at all times with cash or securities with a market value at least 102% for domestic securities and 105% for international securities of the market value of the securities on loan. Any deficiencies or excess of collateral must be delivered or transferred by the member firms no later than the close of business on the next business day. As with other extensions of credit, the Series may bear the risk of delay in recovery or even loss of rights in the collateral should the borrower of the securities fail financially.

During the term of the loan, a Series receives payments from borrowers equivalent to the dividends, interest, and any other distributions that would have been earned on securities lent while simultaneously seeking to earn income on the investment of cash collateral in accordance with investment guidelines contained in the Securities Lending Agreement. For loans secured by cash, each Series retains the interest on cash collateral investments

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TRANSAMERICA PARTNERS PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (Continued)

4. Securities Lending (continued)

but is required to pay the borrower a rebate for the use of the cash collateral. For loans secured by collateral other than cash, the borrower pays a securities loan fee to the lending agent.

Any compensation (net of related expenses) received by a Series for lending its securities, as described above, is reported on its respective Statement of Operations. This includes interest income on short-term investments purchased with cash collateral received.

At December 31, 2008, the Series loaned securities having market values as follows:


	Market		Cash Collateral
Series	Value		Received

High Quality Bond	$	10,150,124	$	10,391,435
Core Bond		2,373,406		2,425,000
Total Return Bond		451,439		464,950
Balanced		1,848,193		1,911,215
Value		2,502,900		2,594,000
Large Core		3,863,195		4,004,157
Large Growth		36,400,935		38,010,546
Growth		4,903,126		5,037,923
Mid Value		13,252,905		14,077,125
Mid Growth		14,710,581		15,114,459
Small Value		6,868,859		7,266,311
Small Core		28,000,187		29,536,670
Small Growth		16,141,569		17,132,330

Each Series has invested the cash collateral received from securities loaned in the State Street Navigator Securities Lending Trust-Prime Portfolio (the “Prime Portfolio”). The Prime Portfolio is a money market mutual fund registered under the 1940 Act, and was yielding 2.14% at December 31, 2008.

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NOTES TO FINANCIAL STATEMENTS (Continued)

5. Purchases and Sales of Investments

The aggregate cost of investments purchased and proceeds from sales or maturities (excluding short-term securities) for the year ended December 31, 2008 were as follows:


		Cost of		Proceeds
Series		Purchases		From Sales

High Quality Bond	US Government Obligations	$	265,461,609	$	424,502,801
	Other		65,687,135		270,094,287
Inflation-Protected Securities	US Government Obligations		895,104,702		655,409,561
	Other		30,628,376		18,273,789
Core Bond	US Government Obligations		11,754,948,922		11,731,336,077
	Other		430,031,032		534,113,169
Total Return Bond	US Government Obligations		1,658,608,625		1,724,398,227
	Other		63,409,391		39,368,077
High Yield Bond	Other		376,622,102		270,534,164
Balanced	US Government Obligations		276,257,375		315,227,648
	Other		122,909,354		169,304,103
Large Value	Other		610,929,355		1,064,031,234
Value	Other		107,722,502		121,580,028
Large Core	Other		462,306,069		880,455,642
Large Growth	Other		1,761,403,359		2,169,615,694
Growth	Other		638,929,057		682,207,459
Mid Value	Other		607,834,376		562,547,192
Mid Growth	Other		551,691,253		505,497,534
Small Value	Other		266,317,772		238,569,461
Small Core	Other		666,585,521		935,742,981
Small Growth	Other		369,584,011		298,724,510
International Equity	Other		3,204,946,661		3,145,861,823

6. Legal and Regulatory Matters

On January 15, 2009 the Transamerica Partners Large Value Portfolio and Transamerica Partners Inflation-Protected Securities Portfolio (the “Funds””) were formally dismissed as defendants in an adversary proceeding instituted on December 12, 2003 by Enron Corp. (“Enron””)in the United States Bankruptcy Court for the Southern District of New York. Enron had sought to avoid and recover from all defendants, including the Funds, sums that Enron alleged it had transferred to defendants for the purpose of prepaying certain commercial paper issued by Enron (the “Notes”) and held by the defendants prior to the filing by Enron for bankruptcy protection under Chapter 11 of Title 11 of the Bankruptcy Code (the “Bankruptcy Code”). Enron claimed that the defendants were liable for these transfers as preferential transfers or as fraudulent transfers under the Bankruptcy Code. The sale by the Inflation-Protected Securities Portfolio of approximately $2.4 million of the Notes on or about October 30, 2001 and the sale by the Large Value Portfolio of approximately $10.3 million of the Notes on or about October 30, 2001 were in dispute. On September 21, 2008, the case brought against the Funds was settled during mediation with the Enron Creditors Recovery Corporation. The settlement has been approved by the Court and the Funds have been dismissed with prejudice from the adversary proceeding.

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TRANSAMERICA PARTNERS PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (Continued)

6. Legal and Regulatory Matters (continued)

The amounts related to the settlement are listed below and are reflected in the Series’ Statement of Operations.


	Amount

Inflation-Protected Securities	$	326,977
Large Value		1,402,977

7. Concentrations and Indemnifications

Some Series may have elements of risk not typically associated with investments in the United States of America due to concentrated investments in a limited number of countries or regions, which may vary throughout the year. Such concentrations may subject the Series to additional risks resulting from political or economic conditions in such countries or regions and the possible imposition of adverse governmental laws or currency exchange restrictions could cause the securities and their markets to be less liquid and their prices more volatile than those of comparable US securities.

As December 31, 2008, the Value Series and Mid Value Series invested approximately 13.36% and 10.38% respectively, of their portfolios in issuers outside the United States.

As of December 31, 2008, substantially all of the International Equity Series’ net assets consist of securities of issuers that are domiciled in foreign countries. Changes in currency exchange rates will affect the value of, and investment income from, such securities.

As of December 31, 2008, the International Equity Series invested approximately 10.93%, 19.55% and 21.43%, respectively, of its portfolio in issuers in France, Japan and United Kingdom, respectively.

The ability of the issuers of debt, asset-backed and mortgage-backed securities to meet their obligations may be affected by the economic and political developments in a specific industry or region. The value of asset-backed and mortgage-backed securities can be significantly affected by changes in interest rates or rapid principal payments including prepayments.

Credit risk is measured by the loss a Series would record if its counter-parties failed to perform pursuant to the terms of their obligations to the Series. Since certain Series enters into various types of debt obligations including private placements, swap agreements, forward currency contracts, spot contracts, forward commitments and over-the-counter options, credit exposure exists with counterparties.

In the normal course of business, the Series Portfolio enters into contracts that contain a variety of representations and warranties which provide general indemnifications. The Series Portfolio’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Series Portfolio that have not yet occurred. However, based on experience, the Series Portfolio expects the risk of loss to be remote.

8. Foreign Currency Forward, Spot and Cross Currency Contracts

At December 31, 2008, the Inflation-Protected Securities Series, Core Bond Series, Total Return Bond Series and Balanced Series had entered into foreign currency forward, spot and cross currency contracts which contractually obligate each portfolio to deliver/receive currency at specified future dates.

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TRANSAMERICA PARTNERS PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (Continued)

8. Foreign Currency Forward, Spot and Cross Currency Contracts (continued)

The open contracts were as follows:


									Net Unrealized
	Foreign		In Exchange		Settlement		Value		Appreciation/
	Currency		For		Date		at 12/31/08		(Depreciation)

Inflation-Protected Securities
Purchases Contracts:
British Pound Sterling		22,700	$	32,753		01/02/09	$	32,637	$	(116	)
Canadian Dollar		18,803		15,352		01/02/09		15,231		(121	)
Euro		14,988		21,199		01/02/09		20,834		(365	)

Total									$	(602	)


Core Bond
Purchase Contracts:
British Pound Sterling		3,466,656	$	5,001,865		01/02/09	$	4,984,185	$	(17,680	)
Euro		1,394,703		1,972,738		01/02/09		1,938,707		(34,031	)

Total									$	(51,711	)

Sale Contracts:
British Pound Sterling		2,737,000	$	4,074,038		01/21/09	$	3,933,356	$	140,682
British Pound Sterling		1,059,500		1,566,174		01/21/09		1,522,613		43,561
British Pound Sterling		966,000		1,419,392		01/21/09		1,388,243		31,149
British Pound Sterling		1,110,000		1,665,146		01/21/09		1,595,186		69,960
Euro		3,968,000		5,039,400		01/21/09		5,511,746		(472,346	)
Euro		1,815,000		2,320,601		01/21/09		2,521,123		(200,522	)
Japenese Yen		584,925,000		5,847,730		01/21/09		6,454,532		(606,802	)
Mexican Peso		232,870,000		18,157,505		01/21/09		16,720,631		1,436,874
Mexican Peso		21,950,000		1,630,976		01/21/09		1,576,063		54,913

Total									$	497,469


Total Return Bond
Purchase Contracts:
British Pound Sterling		1,000,000	$	1,471,400		02/03/09	$	1,436,581	$	(34,819	)

Sale Contracts:
British Pound Sterling		999,000	$	1,689,269		02/03/09	$	1,435,144	$	254,125
Euro		1,074,448		1,426,093		02/03/09		1,491,586		(65,493	)

Total									$	188,632


Balanced
Purchase Contracts:
British Pound Sterling		560,000	$	823,984		02/03/09	$	804,485	$	(19,499	)

Sale Contracts:
British Pound Sterling		555,000	$	938,483		02/03/09	$	797,302	$	141,181
Euro		298,380		396,033		02/03/09		414,221		(18,188	)

Total									$	122,993

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NOTES TO FINANCIAL STATEMENTS (Continued)

9. Financial Highlights


	Ratios to Average Net Assets
							Net Investment
For the				Net Expenses			Income (Loss)						Net Assets,
Year	Net			(Net of			(Net of			Portfolio			End of		Total
Ended	Expenses			Reimbursements)			Reimbursements)			Turnover			Year		Return


Money Market
12/31/2008		0.27	%		0.27	%		2.43	%		N/A		$	1,325,801,749		2.44	%
12/31/2007		0.28			0.28			5.01			N/A			1,050,796,105		5.17
12/31/2006		0.28			0.28			4.77			N/A			925,940,609		4.86
12/31/2005		0.28			0.28			2.97			N/A			765,777,258		3.00
12/31/2004		0.28			0.28			1.17			N/A			809,352,385		1.17

High Quality Bond
12/31/2008		0.38			0.38			4.24			64	%		421,231,503		0.55
12/31/2007		0.38			0.38			4.38			56			833,291,239		5.34
12/31/2006		0.38			0.38			4.03			55			817,623,186		4.38
12/31/2005		0.39			0.39			3.25			58			788,399,166		1.95
12/31/2004		0.38			0.38			2.96			48			690,594,378		1.48

Inflation-Protected Securities
12/31/2008		0.39			0.39			4.99			154			389,197,874		(2.14	)
12/31/2007		0.42			0.40			5.26			340			149,013,396		10.16
12/31/2006		0.41			0.40			4.50			525			150,681,168		3.48
12/31/2005		0.40			0.40			3.45			756			261,106,523		1.34
12/31/2004		0.42			0.40			2.48			554			256,502,651		1.59

Core Bond
12/31/2008		0.38			0.38			5.12			530	(a)		1,667,312,685		(1.83	)
12/31/2007		0.38			0.38			4.81			503	(a)		2,248,879,516		6.67
12/31/2006		0.38			0.38			4.50			487	(a)		2,077,821,449		4.17
12/31/2005		0.39			0.39			3.99			1,003	(a)		2,052,893,035		2.38
12/31/2004		0.39			0.39			3.62			885	(a)		1,655,367,885		4.65

Total Return Bond
12/31/2008		0.40			0.40			5.01			407	(a)		300,413,000		(8.43	)
12/31/2007		0.41			0.40			5.05			521	(a)		390,287,496		3.81
12/31/2006		0.50			0.40			4.74			470	(a)		120,636,427		4.96
12/31/2005(1)		0.55	*		0.40	*		4.08	*		327	(a)		70,072,859		2.35

High Yield Bond
12/31/2008		0.58			0.58			9.57			54			439,863,454		(28.90	)
12/31/2007		0.58			0.58			7.97			96			538,727,018		2.02
12/31/2006		0.59			0.59			7.86			93			502,330,056		11.99
12/31/2005		0.60			0.60			7.74			68			416,027,255		3.34
12/31/2004		0.60			0.60			8.06			80			351,772,536		10.32

196

TRANSAMERICA PARTNERS PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (Continued)

9. Financial Highlights (continued)


	Ratios to Average Net Assets
							Net Investment
For the				Net Expenses			Income (Loss)						Net Assets,
Year	Net			(Net of			(Net of			Portfolio			End of		Total
Ended	Expenses			Reimbursements)			Reimbursements)			Turnover			Year		Return


Balanced
12/31/2008		0.53	%		0.50	%		3.45	%		154	(a)%	$	168,930,110		(26.71	)%
12/31/2007		0.52			0.50			2.87			226	(a)		318,635,183		1.79
12/31/2006		0.53			0.50			2.72			224	(a)		381,648,801		11.74
12/31/2005		0.54			0.50			2.25			367	(a)		410,747,655		5.59
12/31/2004		0.52			0.50			2.21			338	(a)		419,726,689		8.31

Large Value (formerly, Value & Income)
12/31/2008		0.48			0.48			2.53			26			1,450,970,147		(42.94	)
12/31/2007		0.48			0.48			1.68			30			3,165,024,775		(1.75	)
12/31/2006		0.48			0.48			1.47			31			3,538,943,726		20.68
12/31/2005		0.48			0.48			1.38			89			3,018,060,297		6.88
12/31/2004		0.48			0.48			1.79			44			2,705,463,322		12.91

Value
12/31/2008		0.56			0.55			2.46			101			60,703,564		(46.62	)
12/31/2007		0.56			0.55			1.51			57			141,565,926		(11.06	)
12/31/2006		0.71			0.55			1.42			74			101,282,906		15.44
12/31/2005(1)		1.18	*		0.55	*		1.78	*		21			35,138,512		9.47

Large Core (formerly, Growth & Income)
12/31/2008		0.65			0.65			1.31			99			281,773,981		(36.65	)
12/31/2007		0.64			0.64			1.08			101			903,261,821		2.11
12/31/2006		0.63			0.63			1.11			73			1,159,020,245		11.77
12/31/2005		0.64			0.64			0.96			79			1,178,758,869		7.12
12/31/2004		0.64			0.64			1.22			184			1,135,948,434		10.79

Large Growth (formerly, Equity Growth)
12/31/2008		0.65			0.65			0.92			102			1,130,782,753		(39.87	)
12/31/2007		0.65			0.65			0.61			129			2,444,760,853		12.25
12/31/2006		0.64			0.64			0.43			84			2,526,917,456		4.12
12/31/2005		0.65			0.65			0.34			76			2,587,382,061		7.18
12/31/2004		0.65			0.65			0.68			129			2,290,559,947		7.75

Growth (formerly, Aggressive Equity)
12/31/2008		0.81			0.80			0.02			212			182,527,808		(51.00	)
12/31/2007		0.81			0.80			(0.16	)		134			427,372,994		28.50
12/31/2006		0.81			0.80			(0.17	)		147			382,667,908		6.46
12/31/2005		0.81			0.80			(0.14	)		187			382,129,060		8.20
12/31/2004		0.95			0.94			(0.48	)		252			397,726,867		12.14

Mid Value (formerly, Mid-Cap Value)
12/31/2008		0.70			0.70			1.69			68			630,249,484		(37.73	)
12/31/2007		0.70			0.70			1.37			69			998,177,210		2.62
12/31/2006		0.71			0.70			1.17			80			936,974,205		18.33
12/31/2005		0.72			0.70			1.28			112			641,531,538		9.77
12/31/2004		0.71			0.70			0.79			147			414,710,679		25.47

197

TRANSAMERICA PARTNERS PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (Continued)

9. Financial Highlights (continued)


	Ratios to Average Net Assets
							Net Investment
For the				Net Expenses			Income (Loss)						Net Assets,
Year	Net			(Net of			(Net of			Portfolio			End of		Total
Ended	Expenses			Reimbursements)			Reimbursements)			Turnover			Year		Return


Mid Growth (formerly, Mid-Cap Growth)
12/31/2008		0.75	%		0.75	%		(0.02	)%		158	%	$	228,965,903		(41.55	)%
12/31/2007		0.75			0.75			(0.23	)		152			337,188,904		30.42
12/31/2006		0.75			0.75			(0.31	)		151			309,909,061		2.17
12/31/2005		0.76			0.75			(0.38	)		142			282,950,442		13.42
12/31/2004		0.79			0.75			(0.29	)		223			210,100,872		15.38

Small Value (formerly, Small-Cap Value)
12/31/2008		0.87			0.85			1.94			117			156,628,183		(26.63	)
12/31/2007		0.87			0.85			1.36			94			185,136,605		(7.74	)
12/31/2006		0.87			0.85			0.27			105			236,316,718		9.64
12/31/2005		0.88			0.85			0.10			143			218,749,221		(4.70	)
12/31/2004		0.89			0.85			0.31			42			172,735,949		21.75

Small Core (formerly, Special Equity)
12/31/2008		0.85			0.85			0.94			106			389,662,463		(36.06	)
12/31/2007		0.84			0.84			0.58			97			950,197,463		(4.49	)
12/31/2006		0.85			0.85			0.29			86			1,211,556,459		11.77
12/31/2005		0.85			0.85			0.09			92			1,296,671,909		10.53
12/31/2004		0.84			0.84			0.15			103			1,227,530,742		12.63

Small Growth (formerly, Small-Cap Growth)
12/31/2008		0.93			0.90			(0.18	)		146			152,512,859		(37.87	)
12/31/2007		0.92			0.90			(0.42	)		144			166,817,321		8.64
12/30/2006		1.04			0.90			(0.29	)		173			155,003,004		8.71
12/31/2005		0.98			0.90			(0.41	)		183			132,903,534		0.55
12/31/2004		0.97			0.90			(0.51	)		84			108,429,152		11.94

International Equity
12/31/2008		0.84			0.84			2.78			174			1,100,059,644		(49.94	)
12/31/2007		0.87			0.87			2.25			110			2,264,061,514		11.69
12/31/2006		0.87			0.87			1.78			81			2,101,152,473		27.31
12/31/2005		0.88			0.88			2.03			94			1,721,786,149		11.20
12/31/2004		0.87			0.87			1.85			171			1,401,617,944		19.66


(a)		Portfolio turnover calculation includes effect of buying and selling TBA securities used in dollar roll transactions. Refer to Note 2I.

*		Annualized.

(1)		Commencement of Operations, May 6, 2005.

198

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees and Owners of Beneficial Interests of the Transamerica Partners Portfolios:

In our opinion, the accompanying statements of assets and liabilities, including the portfolios of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Money Market Portfolio, High Quality Bond Portfolio, Inflation-Protected Securities Portfolio, Core Bond Portfolio, Total Return Bond Portfolio, High Yield Bond Portfolio, Balanced Portfolio, Large Value Portfolio, Value Portfolio, Large Core Portfolio, Large Growth Portfolio, Growth Portfolio, Mid Value Portfolio, Mid Growth Portfolio, Small Value Portfolio, Small Core Portfolio, Small Growth Portfolio and International Equity Portfolio (constituting the Transamerica Partners Portfolios, hereafter referred to as the “Portfolios”) at December 31, 2008, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Portfolios’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2008 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

New York, New York

February 25, 2009

199

TRANSAMERICA PARTNERS PORTFOLIOS
SUB-ADVISORY AGREEMENT — INITIAL REVIEW AND APPROVAL

December 31, 2008
(Unaudited)

At a special meeting of the Board of Trustees (the “Board”) of Transamerica Partners Portfolios (the “Portfolio Trust”) held on December 18, 2008, the Board reviewed and considered proposed new investment sub-advisory agreements between Transamerica Asset Management, Inc. (“TAM”) and the following sub-advisors, and series of the Portfolio Trust (the “Portfolios”): Thornburg Investment Management, Inc. for Transamerica Partners International Equity Portfolio and Aronson+Johnson+Ortiz, LP for Transamerica Partners Large Value Portfolio (each of the foregoing sub-advisors is referred to as a “Sub-Advisor” and collectively the Sub-Advisors).

Following their review and consideration, the Trustees determined that the new investment sub-advisory agreements (the “Sub-Advisory Agreements”) would enable investors in the Portfolios to obtain high quality services at a cost that is appropriate, fair, and in the best interests of investors. The Board also approved the Sub-Advisory Agreements with the Sub-Advisors with respect to the Portfolios for a two-year period following a presentation by TAM. In reaching their decision, the Trustees requested and obtained from TAM and the Sub-Advisors such information as they deemed reasonably necessary to evaluate the Sub-Advisory Agreements, including information about fees and performance of comparable funds managed by the Sub-Advisors. The Trustees also carefully considered information they had previously received from TAM as part of their regular oversight of the Portfolios, as well as comparative fee, expense, and performance information prepared by Lipper Inc. (“Lipper”), an independent provider of mutual fund performance and fee and expense information, and profitability data prepared by management. In considering the proposed Sub-Advisory Agreements, the Trustees evaluated a number of considerations that they believed, in light of the legal advice furnished to them by independent legal counsel and their own business judgment, to be relevant.

The Board members evaluated all information available to them on a Portfolio-by-Portfolio basis, and their determinations were made separately in respect of each Portfolio. They based their decisions on the following considerations, among others, although they did not identify any consideration or particular information that was controlling of their decisions:

Approval of New Sub-Advisory Agreement for Transamerica Partners International Equity Portfolio.

As noted above, during the six-month period ended December 31, 2008, TAM appointed a new Sub-Advisor, with the approval of the Board, for Transamerica Partners International Equity Portfolio. At a special meeting held on December 18, 2008, the Board considered (i) the termination of Wellington Management Company, LLP (“Wellington”) and LSV Asset Management (“LSV”) as Sub-Advisors to the Portfolio and (ii) the appointment of Thornburg Investment Management, Inc. (“Thornburg”) as replacement Sub-Advisor. The Board authorized TAM to terminate the Sub-Advisory Agreements with Wellington and LSV. The Board also approved the Sub-Advisory Agreement with Thornburg with respect to the Portfolio for an initial two-year period (the “Thornburg Sub-Advisory Agreement”) following a presentation by TAM. Discussed below are some of the material factors considered by the Board.

TAM reviewed with the Board its search process and criteria for a replacement Sub-Advisor, including its desire to engage a Sub-Advisor with a proactive sell discipline. The Board considered information with respect to Thornburg and whether the Thornburg Sub-Advisory Agreement was in the best interests of the Portfolio, the Transamerica Partners Funds Group and Transamerica Partners Funds Group II investing in the Portfolio, and the Portfolio’s other investors. As part of their deliberations, the Board took into account the nature and quality of the anticipated services to be provided by Thornburg and reviewed and discussed information regarding Thornburg’s fees. The Board compared Thornburg’s relative value composite performance to that of Transamerica Partners International Equity’s composite performance calculated gross of fees and the MSCI ACWI ex-US Index and MSCI World ex-US Equity Index. The Board noted that Thornburg’s composite performance exceeded that of Transamerica Partners International Equity’s composite performance and the MSCI ACWI ex-US Index and MSCI World ex-US Equity Index over the past 1-, 2- and 3-year periods ended September 30, 2008.

200

TRANSAMERICA PARTNERS PORTFOLIOS
SUB-ADVISORY AGREEMENT — INITIAL REVIEW AND APPROVAL (Continued)

December 31, 2008
(Unaudited)

The Board reviewed the qualifications, backgrounds and responsibilities of the senior personnel of Thornburg and the portfolio management team that would be primarily responsible for the day-to-day management of the Portfolio. The Board noted that TAM, and not the Portfolio, will pay the sub-advisory fee to Thornburg. The Board considered that at current asset levels the sub-advisory fee paid under the Sub-Advisory Agreement with Thornburg was higher than the sub-advisory fee paid to Wellington and LSV. The Board also recognized, however, that the Thornburg Sub-Advisory Agreement would offer breakpoints and with the combining of assets from the Transamerica Thornburg International Value, a series of Transamerica Funds, would result in lower fees overall paid by TAM to Thornburg. The Board also took into account Management’s statements that the relationship with Thornburg in the Transamerica Thornburg International Value Fund was going well and that there were no compliance or other issues to report.

Based upon its review and the representations made to it and after consideration of the above factors, and such other factors and information as it deemed relevant, the Board, including the independent members of the Board appearing in person, unanimously approved the Thornburg Sub-Advisory Agreement.

No single factor reviewed by the Board was identified as the principal factor in determining whether to approve the Thornburg Sub-Advisory Agreement, and each Board member likely attributed different weight to the various factors.

Approval of New Sub-Advisory Agreement for Transamerica Partners Large Value Portfolio.

As noted above, during the six-month period ended December 31, 2008, TAM appointed a new Sub-Advisor, with the approval of the Board, for Transamerica Partners Large Value Portfolio. At a special meeting held on December 18, 2008, the Board considered considered (i) Management’s proposal to terminate AllianceBernstein L.P, (“AllianceBernstein”) and TCW Investment Management Company (“TCW”) as Sub-Advisors to the Portfolio and (ii) the appointment of Aronson+Johnson+Ortiz, LP (“AJO”) as replacement Sub-Advisor. The Board authorized TAM to terminate the Sub-Advisory Agreements with AllianceBernstein and TCW. The Board also approved the Sub-Advisory Agreement with AJO with respect to the Portfolio for an initial two-year period (the “AJO Sub-Advisory Agreement”) following a presentation by TAM. Discussed below are some of the material factors considered by the Board.

TAM reviewed with the Board its search process and criteria for a replacement Sub-Advisor, including its desire to engage a Sub-Advisor able to mitigate market volatility while providing an upside potential at the same time. The Board considered information with respect to AJO and whether the AJO Sub-Advisory Agreement was in the best interests of the Portfolio, the Transamerica Partners Funds Group and Transamerica Partners Funds Group II investing in the Portfolio, and the Portfolio’s other investors. As part of their deliberations, the Board took into account the nature and quality of the anticipated services to be provided by AJO and reviewed and discussed information regarding AJO’s fees. The Board compared AJO’s large cap-absolute value composite performance to that of AllianceBernstein and TCW’s large value composite, Transamerica Partners Portfolios Large Value performance and the Russell 1000^{^®} Value Index. The Board noted that AJO’s composite performance exceeded that of AllianceBernstein and TCW’s large value composite and the Russell 1000 Value Index over the past 1-, 2,- and 3-year periods ended September 30, 2008.

The Board reviewed the qualifications, backgrounds and responsibilities of the senior personnel of AJO and the portfolio management team that would be primarily responsible for the day-to-day management of the Portfolio. The Board noted that TAM, and not the Portfolio, will pay the sub-advisory fee to AJO. The Board considered that at current asset levels the sub-advisory fee paid under the Sub-Advisory Agreements with AllianceBernstein and TCW was higher than the sub-advisory fee to be paid to AJO by TAM. The Board recognized that the AJO Sub-Advisory Agreement would offer breakpoints and with the combining of assets from the Transamerica Partners Large Core Portfolio, a series of the Portfolio Trust, would result in lower fees overall paid by TAM to AJO. The

201

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT OF THE TRUST
(Unaudited)

BOARD MEMBERS AND OFFICERS

The Trust is governed by a Board of Trustees. Subject to the supervision of the Board of Trustees, the assets of each portfolio are managed by the investment advisor and sub-advisors, and the respective portfolio managers. The Board of Trustees is responsible for managing the business and affairs of the Trust and oversees the operation of the Trust by its officers. It also reviews the management of the portfolios’ assets by the investment advisor and sub-advisors. The Trust’s portfolios are among the funds advised and sponsored by Transamerica Asset Management, Inc. (“TAM”) (collectively, the “Transamerica Asset Management Group”). The Transamerica Asset Management Group (“TAMG”) consists of Transamerica Funds, Transamerica Series Trust (“TST”), Transamerica Investors, Inc. (“TII”), Transamerica Income Shares, Inc. (“TIS”), Transamerica Partners Funds Group (“TPFG”), Transamerica Partners Funds Group II (“TPFG II”), Transamerica Partners Portfolios (“TPP”), and Transamerica Asset Allocation Variable Funds (“TAAVF”) and consists of 176 portfolios.

The mailing address of each Board Member and Officer is c/o Secretary of the Funds, 570 Carillon Parkway, St. Petersburg, Florida 33716. Information about Trustees (also referred to as “Board Members”) and Officers of the Trust is as follows:

203

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT OF THE TRUST (Continued)
(Unaudited)


				Number of
		Term of		Funds in
		Office and		Complex
	Position(s)	Length of		Overseen
	Held with	Time	Principal Occupation(s) During	by Board
Name	Trust	Served*	Past 5 Years	Members	Other Directorships
INTERESTED BOARD MEMBER**
John K. Carter (DOB: 1961)	Chairman, Board Member, President, and Chief Executive Officer	Since 2007	Chairman and Board Member (2008–present), President (2007–present), Chief Executive Officer (2006–present), Vice President, Secretary and Chief Compliance Officer (2003–2006), TII; Chairman, Board Member, President and Chief Executive Officer, TPP, TPFG, TPFG II and TAAVF (2007–present); Chairman (2007–present), Board Member (2006–present), President and Chief Executive Officer (2006–present), Senior Vice President (1999–2006), Chief Compliance Officer, General Counsel and Secretary (1999–2006), Transamerica Funds and TST; Chairman (2007–present), Board Member (2006–present), President and Chief Executive Officer (2006–present), Senior Vice President (2002–2006), General Counsel, Secretary and Chief Compliance Officer (2002–2006), TIS; President and Chief Executive Officer (2006– present), Senior Vice President (1999–2006), Director (2000–present), General Counsel and Secretary (2000–2006), Chief Compliance Officer (2004–2006), TAM; President and Chief Executive Officer (2006–present), Senior Vice President (1999–2006), Director (2001–present), General Counsel and Secretary (2001–2006), Transamerica Fund Services, Inc. (“TFS”); Vice President, AFSG Securities Corporation (2001–present); Senior Vice President, General Counsel and Secretary, Transamerica Index Funds, Inc. (“TIF”) (2002–2004); Director (2008–present) and Vice President, Transamerica Investment Services, Inc. (“TISI”) (2003–2005) and Transamerica Investment Management, LLC (“TIM”) (2001–2005).	176	N/A


*	Each Board Member shall hold office until: 1) his or her successor is elected and qualified or 2) he or she resigns, retires or his or her term as a Board Member is terminated in accordance with the by-laws.

**	May be deemed an “interested person” (as that term is defined in the 1940 Act) of the Trust because of his employment with TAM or an affiliate of TAM.

204

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT OF THE TRUST (Continued)
(Unaudited)


				Number of
		Term of		Funds in
		Office and		Complex
	Position(s)	Length of		Overseen
	Held with	Time	Principal Occupation(s) During	by Board
Name	Trust	Served*	Past 5 Years	Members	Other Directorships
INDEPENDENT BOARD MEMBERS***
Sandra N. Bane (DOB: 1952)	Board Member	Since 2008	Retired, KPMG (1999–present); and Board Member, TII (2003–present), Transamerica Funds, TST, TIS, TPP, TPFG, TPFG II and TAAVF (2008–present).	176	Big 5 Sporting Goods (2002–present); AGL Resources, Inc. (energy services holding company) (2008–present)
Leo J. Hill (DOB: 1956)	Lead Independent Board Member	Since 2007	Principal, Advisor Network Solutions, LLC (business consulting) (2006–present); Board Member, TST (2001–present); Board Member, Transamerica Funds and TIS (2002–present); Board Member, TPP, TPFG, TPFG II and TAAVF (2007–present); TII (2008–present); Owner and President, Prestige Automotive Group (2001–2005); President, L. J. Hill & Company (1999–present); Market President, Nations Bank of Sun Coast Florida (1998–1999); President and Chief Executive Officer, Barnett Banks of Treasure Coast Florida (1994–1998); Executive Vice President and Senior Credit Officer, Barnett Banks of Jacksonville, Florida (1991–1994); and Senior Vice President and Senior Loan Administration Officer, Wachovia Bank of Georgia (1976–1991).	176	N/A
Neal M. Jewell (DOB: 1935)	Board Member	Since 1993	Retired (2004–present); Board Member, TPP, TPFG, TPFG II and TAAVF (1993–present); Board Member, Transamerica Funds, TST and TIS (2007–present); Board Member, TII (2008–present); and Independent Trustee, EAI Select Managers Equity Fund (a mutual fund) (1996–2004).	176	N/A


*	Each Board Member shall hold office until: 1) his or her successor is elected and qualified or 2) he or she resigns, retires or his or her term as a Board Member is terminated in accordance with the by-laws.

***	Independent Board Member means a Board Member who is not an “interested person” (as that term is defined under the 1940 Act) of the Trust.

205

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT OF THE TRUST (Continued)
(Unaudited)


				Number of
		Term of		Funds in
		Office and		Complex
	Position(s)	Length of		Overseen
	Held with	Time	Principal Occupation(s) During	by Board
Name	Trust	Served*	Past 5 Years	Members	Other Directorships
Russell A. Kimball, Jr. (DOB: 1944)	Board Member	Since 2007	General Manager, Sheraton Sand Key Resort (1975–present); Board Member, TST (1986–present); Board Member, Transamerica Funds and TIS (2002–present); TPP, TPFG, TPFG II and TAAVF (2007–present); and Board Member, TII (2008–present).	176	N/A
Eugene M. Mannella (DOB: 1954)	Board Member	Since 1994	Chief Executive Officer, HedgeServ Corporation (hedge fund administration) (2008–present); Self-employed consultant (2006–present); President, ARAPAHO Partners LLC (limited purpose broker-dealer) (1998–2008); Board Member, TPP, TPFG, TPFG II and TAAVF (1994–present); Board Member, Transamerica Funds, TST and TIS (2007–present); Board Member, TII (2008–present); and President, International Fund Services (alternative asset administration) (1993–2005).	176	N/A
Norman R. Nielsen (DOB: 1939)	Board Member	Since 2007	Retired (2005–present); Director, Iowa Student Loan Service Corporation (2006–present); Board Member, Transamerica Funds, TST and TIS (2006–present); Board Member, TPP, TPFG, TPFG II and TAAVF (2007–present); Board Member, TII (2008–present); Director, League for Innovation in the Community Colleges (1985–2005); Director, Iowa Health Systems (1994–2003); Director, U.S. Bank (1987–2006); and President, Kirkwood Community College (1985–2005).	176	Buena Vista University Board of Trustees (2004–present)
Joyce G. Norden (DOB: 1939)	Board Member	Since 2002	Retired (2004–present); Board Member, TPFG, TPFG II and TAAVF (1993–present); Board Member, TPP (2002–present); Board Member, Transamerica Funds, TST and TIS (2007–present); Board Member, TII (2008–present); and Vice President, Institutional Advancement, Reconstructionist Rabbinical College (1996–2004).	176	Board of Governors, Reconstructionist Rabbinical College (2007–present)


*	Each Board Member shall hold office until: 1) his or her successor is elected and qualified or 2) he or she resigns, retires or his or her term as a Board Member is terminated in accordance with the by-laws.

206

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT OF THE TRUST (Continued)
(Unaudited)


				Number of
		Term of		Funds in
		Office and		Complex
	Position(s)	Length of		Overseen
	Held with	Time	Principal Occupation(s) During	by Board
Name	Trust	Served*	Past 5 Years	Members	Other Directorships
Patricia L. Sawyer (DOB: 1950)	Board Member	Since 1993	Retired (2007–present); President/ Founder, Smith & Sawyer LLC (management consulting) (1989–2007); Board Member, Transamerica Funds, TST and TIS (2007–present); Board Member, TII (2008–present); Board Member, TPP, TPFG, TPFG II and TAAVF (1993–present); Vice President, American Express (1987–1989); Vice President, The Equitable (1986–1987); and Strategy Consultant, Booz, Allen & Hamilton (1982–1986).	176	N/A
John W. Waechter (DOB: 1952)	Board Member	Since 2007	Attorney, Englander & Fischer, P.A. (2008–present); Retired (2004–2008); Board Member, TST and TIS (2004–present); Board Member, Transamerica Funds (2005–present); Board Member, TPP, TPFG, TPFG II and TAAVF (2007–present); Board Member, TII (2008–present); Executive Vice President, Chief Financial Officer and Chief Compliance Officer, William R. Hough & Co. (securities dealer) (1979–2004); and Treasurer, The Hough Group of Funds (1993–2004).	176	N/A


*	Each Board Member shall hold office until: 1) his or her successor is elected and qualified or 2) he or she resigns, retires or his or her term as a Board Member is terminated in accordance with the by-laws.

207

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT OF THE TRUST (Continued)
(Unaudited)

OFFICERS


		Term of
	Position(s)	Office and
	Held with	Length of	Principal Occupation(s) or Employment
Name	Trust	Time Served*	During Past 5 Years
John K. Carter (DOB: 1961)	Chairman, Board Member, President, and Chief Executive Officer	Since 2007	See the table above.
Dennis P. Gallagher (DOB: 1970)	Vice President, General Counsel and Secretary	Since 2007	Vice President, General Counsel and Secretary, TII, Transamerica Funds, TST and TIS (2006–present); Vice President, General Counsel and Secretary, TPP, TPFG, TPFG II and TAAVF (2007–present); Director, Senior Vice President, General Counsel and Secretary, TAM and TFS (2006–present); Assistant Vice President, Transamerica Capital, Inc. (2007–present); and Director, Deutsche Asset Management (1998–2006).
Joseph P. Carusone (DOB: 1965)	Vice President, Treasurer and Principal Financial Officer	Since 2001	Vice President, Treasurer and Principal Financial Officer, Transamerica Funds, TST, TIS and TII (2007–present); Vice President (2007–present), Treasurer and Principal Financial Officer (2001–present), TPP, TPFG, TPFG II and TAAVF; Senior Vice President, TAM and TFS (2007–present); Senior Vice President (2008–present), Vice President (2001–2008); Diversified Investment Advisors, Inc. (“DIA”); Director and President, Diversified Investors Securities Corp. (“DISC”) (2007–present); Director, Transamerica Financial Life Insurance Company (“TFLIC”) (2004–present); and Treasurer, Diversified Actuarial Services, Inc. (2002–present).
Christopher A. Staples (DOB: 1970)	Vice President and Chief Investment Officer	Since 2007	Vice President and Chief Investment Officer (2007–present); Vice President–Investment Administration (2005–2007), TII; Vice President and Chief Investment Officer (2007–present), Senior Vice President–Investment Management (2006–2007), Vice President–Investment Management (2005–2006), Transamerica Funds, TST and TIS; Vice President and Chief Investment Officer, TPP, TPFG, TPFG II and TAAVF (2007–present); Director (2005–present), Senior Vice President– Investment Management (2006–present) and Chief Investment Officer (2007–present), TAM; Director, TFS (2005–present); and Assistant Vice President, Raymond James & Associates (1999–2004).
Rick B. Resnik (DOB: 1967)	Vice President, Chief Compliance Officer and Conflicts of Interest Officer	Since 1998	Chief Compliance Officer, TPP, TPFG, TPFG II and TAAVF (1998–present); Chief Compliance Officer, Transamerica Funds, TST, TIS and TII (2008–present); Vice President and Conflicts of Interest Officer, TPP, TPFG, TPFG II, TAAVF, Transamerica Funds, TST, TIS and TII (2008–present); Senior Vice President and Chief Compliance Officer, TAM (2008–present); Senior Vice President, TFS (2008–present); Director (2000–present), Vice President and Chief Compliance Officer (1997–present), DISC; and Assistant Vice President, TFLIC (1999–present).

208

TRANSAMERICA PARTNERS PORTFOLIOS
MANAGEMENT OF THE TRUST (Continued)
(Unaudited)


		Term of
	Position(s)	Office and
	Held with	Length of	Principal Occupation(s) or Employment
Name	Trust	Time Served*	During Past 5 Years
Robert A. DeVault Jr. (DOB: 1965)	Assistant Treasurer	Since 2009	Assistant Treasurer, Transamerica Funds, TST, TII, TIS, TPP, TPFG, TPFG II and TAAVF (January 2009–present); and Assistant Vice President, (2007–present), Manager, Fund Administration (2002–2007), TFS.
Suzanne Valerio-Montemurro (DOB: 1964)	Assistant Treasurer	Since 2007	Assistant Treasurer, Transamerica Funds, TST, TIS, TII, TPP, TPFG, TPFG II and TAAVF (2007–present); and Vice President, DIA (1998–present).
Sarah L. Bertrand (DOB: 1967)	Assistant Secretary	Since 2009	Assistant Secretary, Transamerica Funds, TST, TIS, TII, TPP, TPFG, TPFG II and TAAVF (January 2009–present); Assistant Vice President and Manager, Legal Administration, TAM and TFS (2007–present); Assistant Secretary and Chief Compliance Officer, 40ï86 Series Trust and 40ï86 Strategic Income Fund (2000 - 2007); and Second Vice President and Assistant Secretary, Legal and Compliance, 40ï86 Capital Management, Inc. (1994–2007).
Timothy J. Bresnahan (DOB: 1968)	Assistant Secretary	Since 2009	Assistant Secretary, Transamerica Funds, TST, TIS, TII, TPP, TPFG, TPFG II and TAAVF (January 2009–present); Counsel, TAM (2008–present); Counsel (contract), Massachusetts Financial Services, Inc. (2007); Assistant Counsel, BISYS Fund Services Ohio, Inc. (2005–2007); and Associate, Greenberg Traurig, P.A. (2004–2005).
Richard E. Shield, Jr. (DOB: 1974)	Tax Officer	Since 2008	Tax Officer, Transamerica Funds, TST, TIS, TII, TPP, TPFG, TPFG II and TAAVF (2008–present); Tax Manager, Jeffrey P. McClanathan, CPA (2006–2007) and Gregory, Sharer & Stuart (2005–2006); Tax Senior, Kirkland, Russ, Murphy & Tapp, P.A. (2003– 2005); and Certified Public Accountant, Schultz, Chaipel & Co., LLP (1998–2003).


*		Elected and serves at the pleasure of the Board of the Trust.

If an officer has held offices for different Funds for different periods of time, the earliest applicable date is shown.

209

Item 1: Report(s) to Shareholders. The Annual Report is attached.

Item 2: Code of Ethics.

(a)		Registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer, and any other officers who serve a similar function.

(b)		Registrant’s code of ethics is reasonably designed as described in this Form N-CSR.

(c)		During the period covered by the report, no amendments were made to the provisions of this code of ethics.

(d)		During the period covered by the report, Registrant did not grant any waivers, including implicit waivers, from the provisions of this code of ethics.

(e)		Not Applicable

(f)		Registrant has filed this code of ethics as an exhibit pursuant to Item 12(a)(1) of Form N-CSR.

Item 3: Audit Committee Financial Experts.

Registrant’s Board of Trustees has determined that Sandra N. Bane, John W. Waechter and Eugene M. Mannella are “audit committee financial experts,” as such term is defined in Item 3 of Form N-CSR. Ms. Bane, Mr. Waechter and Mr. Mannella are “independent” under the standards set forth in Item 3 of Form N-CSR. The designation of Ms. Bane, Mr. Waechter and Mr. Mannella as “audit committee financial experts” pursuant to Item 3 of Form N-CSR does not (i) impose upon them any duties, obligations, or liabilities that are greater than the duties, obligations and liabilities imposed upon them as a member of the Registrant’s audit committee or Board of Trustees in the absence of such designation; or (ii) affect the duties, obligations or liabilities of any other member of the Registrant’s audit committee or Board of Trustees.

Item 4: Principal Accountant Fees and Services.


		Fiscal Year Ended 12/31
		2008			2007
(a)	Audit Fees	$	15,690		$	15,690
(b)	Audit-related Fees⁽¹⁾	$	0		$	0
(c)	Tax Fees ⁽²⁾	$	0		$	0
(d)	All Other Fees	$	0		$	0
(e) (1)	Pre-approval policy ⁽³⁾ (see below)
(e) (2)	% of above that were pre-approved		100	%		100	%
(f)	If greater than 50%, disclose hours		N/A			N/A
(g)	Non-audit fees rendered to Adviser (or affiliate that provided services to Registrant)	$	52,000		$	671,630
(h)	Disclose whether the Audit Committee has considered whether the provisions of non-audit services rendered to the Adviser that were NOT pre-approved is compatible with maintaining the auditor’s independence.	Yes			Yes


⁽¹⁾		Audit-Related Fees represent assurance and related services provided that are reasonably related to the performance of the audit of the financial statements of the Registrant, specifically data verification and agreed-upon procedures related to asset securitizations and agreed-upon procedures engagements.

⁽²⁾		There were no tax fees billed by the principal accountant for 2008 or 2007.

⁽³⁾		The Audit Committee may delegate any portion of its authority, including the authority to grant pre-approvals of audit and permitted non-audit services, to one or more members or a subcommittee. Any decision of the subcommittee to grant pre-approvals shall be presented to the full Audit Committee at its next regularly scheduled meeting.

Item 5: Audit Committee of Listed Registrants.

The following individuals comprise the standing Audit Committee: Sandra N. Bane, Leo J. Hill, Neal M. Jewell, Russell A. Kimball, Jr., Eugene M. Mannella, Norman R. Nielsen, Joyce G. Norden, Patricia L. Sawyer and John W. Waechter.

Item 6: Schedule of Investments.

The schedules of investments are included in the annual report to shareholders filed under Item 1 of this Form N-CSR.

Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable.

Item 8: Portfolio Managers of Closed-End Management Investment Companies. Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not applicable.

Item 10: Submission of Matters to a Vote of Security Holders

The Registrant’s Nominating Committee’s provisions with respect to nominations of Trustees to its Board are as follows:

A candidate for nomination as Trustee submitted by a shareholder will not be deemed to be properly submitted to the Committee for the Committee’s consideration unless the following requirements have been met and procedures followed:

	1.		Each eligible shareholder or shareholder group may submit no more than one nominee each calendar year.

	2.		The nominee must satisfy all qualifications provided herein and in the Funds’ organizational documents, including qualification as a possible Independent Trustee if the nominee is to serve in that capacity.

	•		The nominee may not be the nominating shareholder, a member of the nominating shareholder group or a member of the immediate family of the nominating shareholder or any member of the nominating shareholder group.¹

	•		Neither the nominee nor any member of the nominee’s immediate family may be currently employed or employed within the year prior to the nomination by any nominating shareholder entity or entity in a nominating shareholder group.

	•		Neither the nominee nor any immediate family member of the nominee is permitted to have accepted directly or indirectly, during the year of the election for which the nominee’s name was submitted, during the immediately preceding calendar year, or during the year when the nominee’s name was submitted, any consulting, advisory, or other compensatory fee from the nominating shareholder or any member of a nominating shareholder group.

	•		The nominee may not be an executive officer, director or person fulfilling similar functions of the nominating shareholder or any member of the nominating shareholder group, or of an affiliate of the nominating shareholder or any such member of the nominating shareholder group.

	•		The nominee may not control the nominating shareholder or any member of the nominating shareholder group (or, in the case of a holder or member that is a fund, an interested person of such holder or member as defined by Section 2(a)(19) of the 1940 Act).

	•		A shareholder or shareholder group may not submit for consideration a nominee which has previously been considered by the Committee.

In order for the Committee to consider shareholder submissions, the following requirements must be satisfied regarding the shareholder or shareholder group submitting the proposed nominee:

	•		Any shareholder or shareholder group submitting a proposed nominee must beneficially own, either individually or in the aggregate, more than 5% of a Fund’s (or a series thereof) securities that are eligible to vote both at the time of submission of the nominee and at the time of the Board member election. Each of the securities used for purposes of calculating this ownership must have been held continuously for at least two years as of the date of the nomination. In addition, such securities must continue to be held through the date of the meeting.

			The nominating shareholder or shareholder group must also bear the economic risk of the investment.

	•		The nominating shareholder or shareholder group must also submit a certification which provides the number of shares which the person or group has (a) sole power to vote or direct the vote; (b) shared power to vote or direct the vote; (c) sole power to dispose or direct the disposition of such shares; and (d) shared power to dispose or direct the disposition of such shares. In addition the certification shall provide that the shares have been held continuously for at least two years.

Shareholders or shareholder groups submitting proposed nominees must substantiate compliance with the above requirements at the time of submitting their proposed nominee as part of their written submission to the attention of the Funds’ Secretary, who will provide all submissions to the Committee. This submission to the Funds must include:


¹		Terms such as “immediate family member” and “control” shall be interpreted in accordance with the federal securities laws.

	•		the shareholder’s contact information;

	•		the nominee’s contact information and the number of applicable Fund shares owned by the proposed nominee;

	•		all information regarding the nominee that would be required to be disclosed in solicitations of proxies for elections of directors required by Regulation 14A under the Securities Exchange Act of 1934;

			and

	•		a notarized letter executed by the nominee, stating his or her intention to serve as a nominee and be named in a Fund’s proxy statement, if so designated by the Committee and the Funds’ Board.

The Committee will consider all submissions meeting the applicable requirements stated herein that are received by December 31 of the most recently completed calendar year.

Item 11: Controls and Procedures.

	(a)		The Registrant’s principal executive officer and principal financial officer evaluated the Registrant’s disclosure controls and procedures within 90 days of this filing and have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are appropriately designed to ensure that information required to be disclosed by Registrant in the reports that it files on Form N-CSR (a) is accumulated and communicated to Registrant’s management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission.

	(b)		The Registrant’s principal executive officer and principal financial officer are aware of no change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12: Exhibits.

(a) (1)		Registrant’s code of ethics (that is the subject of the disclosure required by Item 2(a)) is attached.

(2)		Separate certifications for Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(a) under the 1940 Act, are attached.

(3)		Not applicable.

(b)		A certification for Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(b) under the 1940 Act, is attached. The certification furnished pursuant to this paragraph is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to liability of that section. Such certification is not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates it by reference.


Short Horizon
Money Market Fund	2.6	%
Fixed Income Funds	86.9
Domestic Equity Funds	8.3
International Equity Fund	2.2
Liabilities less other assets	(0.0	)*

	100.0	%

Intermediate Horizon
Money Market Fund	1.3	%
Fixed Income Funds	47.2
Domestic Equity Funds	39.2
International Equity Fund	12.3
Liabilities less other assets	(0.0	)*

	100.0	%

Intermediate/Long Horizon
Money Market Fund	1.4	%
Fixed Income Funds	27.0
Domestic Equity Funds	53.2
International Equity Fund	18.4
Liabilities less other assets	(0.0	)*

	100.0	%


Gross/Net unrealized depreciation (includes gross unrealized appreciation of $0)	$	(317,086,800	)


	Percent of Total
Country Composition	Investments at Value

Australia (AUS)		2.71	%
Austria (AST)		0.18
Belgium (BEL)		0.39
Bermuda (BER)		0.67
Brazil (BRA)		0.82
Canada (CDA)		7.77
Cayman Islands (CAY)		0.48
China (CHN)		0.65
Denmark (DEN)		1.33
Finland (FIN)		0.31
France (FRA)		10.93
Germany (GER)		8.28
Greece (GRC)		0.20
Hong Kong (HNG)		0.58
Ireland (IRE)		0.15
Israel (ISR)		1.22
Italy (ITA)		3.23
Japan (JPN)		19.55
Jersey, Channel Islands (JER)		0.33
New Zealand (NZE)		0.10
Norway (NOR)		0.63
Portugal (POR)		0.78
Singapore (SIN)		0.76
Spain (SPA)		3.44
Sweden (SWE)		1.90
Switzerland (SWI)		6.91
The Netherlands (NET)		3.20
United Kingdom (BRI)		21.43
United States (USA)		1.07

Total Percentage		100.00	%


	Transamerica Asset Allocation Variable Funds (Registrant)
	By:	/s/ John K. Carter
		John K. Carter
		Chief Executive Officer
		Date: March 9, 2009


Exhibit No.		Description of Exhibit

12(a)(1)		Code of Ethics for Principal Executive and Senior Financial Officers
12(a)(2)(i)		Section 302 N-CSR Certification of Principal Executive Officer
12(a)(2)(ii)		Section 302 N-CSR Certification of Principal Financial Officer
12(b)		Section 906 N-CSR Certification of Principal Executive Officer and Principal Financial Officer