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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-9477
ING Variable Insurance Trust
(Exact name of registrant as specified in charter)
7337 E. Doubletree Ranch Rd., Scottsdale, AZ |
85258 | |
(Address of principal executive offices) | (Zip code) |
The Corporation Trust Company, 1209 Orange Street, Wilmington, DE 19801
(Name and address of agent for service)
Registrants telephone number, including area code: 1-800-992-0180
Date of fiscal year end: December 31
Date of reporting period: January 1, 2013 to June 30, 2013
Item 1. Reports to Stockholders.
The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1):
Semi-Annual Report
June 30, 2013
ING GET U.S. Core Portfolio
n | Series 13 |
n | Series 14 |
This report is submitted for general information to shareholders of the ING Funds. It is not authorized for distribution to prospective shareholders unless accompanied or preceded by a prospectus which includes details regarding the funds investment objectives, risks, charges, expenses and other information. This information should be read carefully.
MUTUAL FUNDS |
|
1 | ||||
2 | ||||
8 | ||||
9 | ||||
10 | ||||
11 | ||||
12 | ||||
13 | ||||
21 | ||||
24 | ||||
25 |
PROXY VOTING INFORMATION
A description of the policies and procedures that the Series use to determine how to vote proxies related to portfolio securities is available: (1) without charge, upon request, by calling Shareholder Services toll-free at (800) 992-0180; (2) on the ING Funds website at www.inginvestment.com; and (3) on the U.S. Securities and Exchange Commissions (SECs) website at www.sec.gov. Information regarding how the Series voted proxies related to portfolio securities during the most recent 12-month period ended June 30 is available without charge on the ING Funds website at www.inginvestment.com and on the SECs website at www.sec.gov.
QUARTERLY PORTFOLIO HOLDINGS
The Series file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Series Forms N-Q are available on the SECs website at www.sec.gov. The Series Forms N-Q may be reviewed and copied at the SECs Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. The Series Forms N-Q, as well as a complete portfolio of investments, are available without charge upon request from the Series by calling Shareholder Services toll-free at (800) 992-0180.
Dear Shareholder,
Several years ago, the ING Retirement Center conducted a survey to find out what Americans thought of our private retirement system, i.e., employer-sponsored retirement savings plans. Most people thought individuals should take responsibility for their own retirement security but felt that employers should provide more education about retirement investing as well as more investment choices. Many people also admitted that even though they knew approximately how much money they needed to fund their retirements, they were not saving enough to reach their goals.
On the surface there seems to be a misalignment of actions and self-interest: the clear recognition that you need to save more and the acknowledgment that youre not doing it. Yet, we believe there is an economic reality underpinning the surface perception; many people probably are saving as much as they can. As a nation, if we want to increase retirement saving, wed better do something to help the economy deliver more discretionary income to more people.
For savers, then, the relevant question may not be, How do I save more? It may instead be, How do I make my savings accomplish more? Thats where the investment industry can help, by providing advice and information to help you make decisions, and by offering investment products that seek to enhance the potential for reaching your goals. Accumulating wealth is not about windfalls or short-term opportunities its a long-term endeavor that requires careful planning and steadfast execution to succeed.
Dont worry about missing a gain today or enduring a loss tomorrow. Hew to the course you and your financial advisor have plotted; discuss prospective changes thoroughly with your financial advisor before taking action; and make changes to your portfolio only if they enhance the potential for achieving your goals.
Thank you for your continued confidence in ING Funds. It is our privilege to serve you, and we look forward to serving your investment needs in the future.
Sincerely,
Shaun Mathews
President and Chief Executive Officer
ING Funds
July 7, 2013
The views expressed in the Presidents Letter reflect those of the President as of the date of the letter. Any such views are subject to change at any time based upon market or other conditions and ING Funds disclaims any responsibility to update such views. These views may not be relied on as investment advice and because investment decisions for an ING Fund are based on numerous factors, may not be relied on as an indication of investment intent on behalf of any ING Fund. Reference to specific company securities should not be construed as recommendations or investment advice.
International investing poses special risks including currency fluctuation, economic and political risks not found in
investments that are solely domestic.
1
MARKET PERSPECTIVE: SIX MONTHS ENDED JUNE 30, 2013
2
BENCHMARK DESCRIPTIONS
Index | Description | |
Barclays High Yield Bond 2% Issuer Constrained Composite Index |
An unmanaged index that includes all fixed-income securities having a maximum quality rating of Ba1, a minimum amount outstanding of $150 million, and at least one year to maturity. | |
Barclays U.S. Aggregate Bond Index | An unmanaged index of publicly issued investment grade U.S. Government, mortgage-backed, asset-backed and corporate debt securities. | |
Barclays Long Term U.S. Treasury Index | The Index includes all publicly issued, U.S. Treasury securities that have a remaining maturity of 10 or more years, are rated investment grade, and have $250 million or more of outstanding face value. | |
MSCI Europe ex UK® Index | A free float-adjusted market capitalization index that is designed to measure developed market equity performance in Europe, excluding the UK. | |
MSCI Japan® Index | A free float-adjusted market capitalization index that is designed to measure developed market equity performance in Japan. | |
MSCI UK® Index | A free float-adjusted market capitalization index that is designed to measure developed market equity performance in the UK. | |
MSCI World IndexSM | An unmanaged index that measures the performance of over 1,400 securities listed on exchanges in the U.S., Europe, Canada, Australia, New Zealand and the Far East. | |
S&P 500® Index | An unmanaged index that measures the performance of securities of approximately 500 large-capitalization companies whose securities are traded on major U.S. stock markets. | |
S&P/Case-Shiller 20-City Composite Home Price Index |
A composite index of the home price index for the top 20 Metropolitan Statistical Areas in the United States. The index is published monthly by Standard & Poors. |
3
ING GET U.S. CORE PORTFOLIO | INVESTMENT STRATEGY AND PRINCIPAL RISKS |
What is the Investment Strategy During the Guarantee Period?
ING GET U.S. Core Portfolio Series 13 and 14 (Series) invest at least 80% of their net assets in equities and fixed-income securities issued by U.S. companies or the U.S. government or its agencies. The Series do not implement an investment strategy in a conventional sense. Rather, the Series asset allocation strategy seeks to optimize the exposure of the Series to the equity component (Equity Component) while protecting Series assets. Assets allocated to the Equity Component may be reduced or eliminated in order to conserve assets at a level equal to or above the present value of the guarantee (Guarantee). The Series allocate their assets among the following asset classes:
During the Guarantee Period, the Series assets are allocated between the:
| Equity Component, consisting of common stocks included in the S&P 500® Index, futures contracts on the S&P 500® Index, and when the Equity Components market value is $5 million or less, investments in exchange traded funds (ETFs) that can reasonably be expected to have at least a 95% correlation ratio with the S&P 500® Index, in S&P 500® Index futures, or in a combination of S&P 500® Index futures and ETFs, subject to any limitation on the Series investments in such securities; and the |
| Fixed component (Fixed Component) consisting primarily of short- to intermediate-duration U.S. government securities. |
The Series asset allocation strategy is implemented by allocating assets appropriately to the Equity Component and to the Fixed Component to optimize exposure to the Equity Component while controlling the risk that an insurance company may be required to make payment under the Guarantee. Consequently, there can be no assurance as to the percentage of assets, if any, allocated to the Equity Component, even when the equity market is doing well, or to any investment returns generated by the Series.
How does the Series Asset Allocation work?
ING Investment Management Co. LLC (IIM or Sub-Adviser), the Sub-Adviser to the Series, uses a proprietary computer model to determine on a daily basis the percentage of assets allocated to the Equity Component and to the Fixed Component. The model evaluates a number of factors, including the then current market value of the Series, the then prevailing level of interest rates, equity market volatility, the Series total annual expenses, insurance company separate account expenses, and the maturity date (Maturity Date). The model determines the initial allocation between the Equity Component and the Fixed Component on the first day of the Guarantee Period and provides direction for any reallocations on a daily basis thereafter. Generally, as the value of the Equity Component rises, more assets are allocated to the Equity Component; as the value of the Equity Component declines, more assets are allocated to the Fixed Component. The amount directed to the Equity Component is always restricted so that even if it were to experience a material decline in value on a given day and before being redirected to the Fixed Component, the remaining assets would still be sufficient to meet the Guarantee. At the commencement of the Guarantee Period, the Series defined a material decline in value as a decline in the value of the Equity Component of at least 20% but no more than 30%. If a Series defined the material decline at 20%, fewer assets will likely be allocated to the Equity Component than if the material decline was defined at 30%. The allocation to the Equity Component or the Fixed Component may be zero under certain circumstances. Currently, 100% of the Series assets are allocated to the Fixed Component. It is not expected that any portion of the Series assets will be allocated to the Equity Component at any time before the Maturity Date.
Equity Component: IIM manages the Equity Component by overweighting those stocks in the S&P 500® Index that it believes will outperform the S&P 500® Index and underweighting (or avoiding altogether) those stocks it believes will underperform the S&P 500® Index (Enhanced Index Strategy). Stocks IIM believes are likely to match the performance of the S&P 500® Index are invested in proportion to their representation in the S&P 500® Index. To determine which stocks to weight more or less heavily, IIM uses internally developed quantitative computer models to evaluate various criteria, such as the financial strength of each company and its potential for strong, sustained earnings growth. IIM expects that there will be a close correlation between the performance of the Equity Component and that of the S&P 500® Index in both rising and falling markets.
4
INVESTMENT STRATEGY AND PRINCIPAL RISKS | ING GET U.S. CORE PORTFOLIO |
Under normal market conditions, up to 20% of the Equity Components net assets may be invested in futures contracts for hedging purposes or to maintain liquidity to meet shareholder redemptions and minimize trading costs. Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of a financial instrument or a specific stock market index for a specified price on a designated date. During the Guarantee Period, the Series may only invest in futures contracts on the S&P 500® Index and futures contracts on U.S. Treasury securities.
If the Equity Components market value is $5 million or less, in order to replicate an investment in stocks listed in the S&P 500® Index, IIM may invest the entire amount of the Equity Components assets in S&P 500® Index futures, in ETFs, or in a combination of S&P 500® Index futures and ETFs, subject to any limitation on the Series investment in such securities (subject to the rules, regulations and exemptive orders imposed by the Investment Company Act of 1940, as amended 1940 Act). ETFs are passively managed investment companies traded on a securities exchange whose goal is to track or replicate a desired index. IIM will not employ an Enhanced Index Strategy when it invests in S&P 500® Index futures and ETFs.
Fixed Component: IIM seeks to select investments for the Fixed Component with financial characteristics that will, at any point in time, closely resemble those of a portfolio of zero coupon bonds which mature within three months of the Maturity Date. Generally, at least 55% of the Fixed Component will consist of securities issued or guaranteed by the U.S. government, its agencies or instrumentalities, including Separate Trading of Registered Interest and Principal of Securities (STRIPS). Although the Series invest in securities insured or guaranteed by the U.S. government, the Series shares are not themselves issued or guaranteed by the U.S. government. STRIPS are created by the Federal Reserve Bank by separating the interest and principal components of an outstanding U.S. Treasury or agency bond and selling them as individual securities. The Fixed Component may also consist of mortgage-backed securities (including commercial mortgage-backed securities) which are rated AAA or Aaa at the time of purchase by Standard & Poors (S&P®) or Moodys Investors Service, Inc. (Moodys®), respectively, and corporate obligations which are rated at the time of purchase A- or higher by S&P® and/or Aa3 or higher by Moodys®. The Fixed Component may also include U.S. Treasury futures and money market instruments. The Series may also invest in other investment companies to the extent permitted under the 1940 Act.
What are the Principal Guarantee Period Risks?
Asset Allocation: If, at the inception of, or any time during, the Guarantee Period interest rates are low, the Series assets may be largely invested in the Fixed Component in order to decrease the likelihood that an insurance company would be required to make any payment under the Guarantee. The effect of low interest rates on the Series would likely be more pronounced at the inception of the Guarantee Period, as the initial allocation of assets would include more fixed-income securities. In addition, if during the Guarantee Period the equity markets experienced a material decline, the Series assets may become largely invested in the Fixed Component. In fact, because the value of the Equity Component declined by a significant amount earlier in the Guarantee Period, a complete reallocation to the Fixed Component has occurred. Currently, 100% of the assets are allocated to the Fixed Component and the Series will not reallocate any assets into the Equity Component prior to the Maturity Date. Use of the Fixed Component reduces the Series ability to participate as fully in upward equity market movements, and therefore represents some loss of opportunity, or opportunity cost, compared to a portfolio that is fully invested in equities.
Active Asset Allocation May Underperform Static Strategies: An active asset allocation strategy may underperform a more static strategy due to the impact of transaction costs. The asset allocation process results in transaction costs from the purchase and sale of securities. Volatile periods in the market may increase these costs. High transaction costs may have an adverse effect on the performance of the Series.
Opportunity Costs: There are substantial opportunity costs associated with an investment in the Series. The Series may allocate a substantial portion, and under certain circumstances all, of the Series assets to the Fixed Component in order to conserve Series assets to a level equal to or above the present value of the Guarantee. Initially, if interest rates are low, the allocation to the Fixed Component may be over 70% of the Series assets. If the market value of
5
ING GET U.S. CORE PORTFOLIO | INVESTMENT STRATEGY AND PRINCIPAL RISKS |
the Equity Component rises, the percentage of the Series assets allocated to the Equity Component generally will also rise. However, the relative volatility of these two Components as well as the past performance of the Series will affect these allocations. For example, if the Series incurs early losses, the Series may allocate 100% of the Series assets to the Fixed Component for the entire Guarantee Period, irrespective of the subsequent upward movements in the equity markets and/or the Equity Component.
The extent to which the Series participates in upward movements in the Equity Component during the Guarantee Period will depend on the performance of the Series, the performance and volatility of the Fixed and Equity Components, interest rates, expenses of the Series and the separate account under the variable annuity contract, and other factors. The Series might capture a material portion, very little or none of any Equity Component increase.
It is possible that on the Maturity Date, a contract holder or participant could receive only the guaranteed amount even though the equity markets, as well as the Equity Component, has had significant positive performance during the Guarantee Period.
The opportunity cost of not allocating assets to the Equity Component will be particularly high if early in the Guarantee Period: (a) the Series net asset value (NAV) decreases, or (b) the value of the Equity Component declines. In either case, all or substantially all of the Series assets could be allocated to the Fixed Component for the remainder of the Guarantee Period.
Company: The price of a given companys stock could decline or underperform for many reasons including, among others, poor management, financial problems, or business challenges. If a company declares bankruptcy or becomes insolvent, its stock could become worthless.
Credit: Prices of bonds and other debt securities can fall if the issuers actual or perceived financial health deteriorates, whether because of broad economic or issuer-specific reasons. In severe cases, the issuer could be late in paying interest or principal, or could fail to pay altogether.
Interest Rate: With bonds and other fixed rate debt securities, a rise in interest rates generally causes values to fall; conversely, values generally rise as interest rates fall. The higher the credit quality of the security, and the longer its maturity or duration, the more sensitive it is likely to be to interest rate risk.
Investment Model: The Sub-Advisers proprietary model may not adequately allow for existing or unforeseen market factors or the interplay between such factors. The proprietary models used by a Sub-Adviser to evaluate securities or securities markets are based on the Sub-Advisers understanding of the interplay of market factors and do not assure successful investment. The markets, or the price of individual securities, may be affected by factors not foreseen in developing the models.
Liquidity: If a security is illiquid, the adviser or Sub-Adviser might be unable to sell the security at a time when the Series Sub-Adviser might wish to sell, and the security could have the effect of decreasing the overall level of the Series liquidity. Further, the lack of an established secondary market may make it more difficult to value illiquid securities, which could vary from the amount a Series could realize upon disposition. A Series may make investments that become less liquid in response to market developments or adverse investor perception. A Series could lose money if it cannot sell a security at the time and price that would be most beneficial to the Series.
Other Investment Companies: The main risk of investing in other investment companies, including exchange-traded funds, is the risk that the value of the securities underlying an investment company might decrease. Because a Series may invest in other investment companies, you will pay a proportionate share of the expenses of that other investment company (including management fees, administration fees and custodial fees) in addition to the expenses of the Series. Other investment companies include exchange-traded funds (ETFs) and Holding Company Depositary Receipts (HOLDRs), among others. ETFs are exchange-traded investment companies that are, in many cases, designed to provide investment results corresponding to an equity index. The main risk of investing in other investment companies is that the value of the underlying securities held by the investment company might decrease. The value of the underlying securities can fluctuate in response to activities of individual companies or in response to general market and/or economic conditions. Additional risks of investments in ETFs include: (i) the market price of an ETFs shares may trade at a discount to its net asset value; (ii) an active trading market for an ETFs shares may not develop or be maintained; or (iii) trading may be halted if the listing exchanges officials deem such action
6
INVESTMENT STRATEGY AND PRINCIPAL RISKS | ING GET U.S. CORE PORTFOLIO |
appropriate, the shares are delisted from the exchange, or the activation of market-wide circuit breakers (which are tied to large decreases in stock prices) halts trading generally. Because HOLDRs concentrate in the stock of a particular industry, trends in that industry may have a dramatic impact on their value.
U.S. Government Securities and Obligations: U.S. government securities are obligations of, or guaranteed by, the U.S. government, its agencies or government-sponsored enterprises. U.S. government securities are subject to market and interest rate risk, and may be subject to varying degrees of credit risk. Some U.S. government securities are backed by the full faith and credit of the U.S. government and are guaranteed as to both principal and interest by the U.S. Treasury. These include direct obligations of the U.S. Treasury such as U.S. Treasury notes, bills and bonds, as well as indirect obligations including certain securities of the Government National Mortgage Association, the Small Business Administration and the Farmers Home Administration, among others. Other U.S. government securities are not direct obligations of the U.S. Treasury, but rather are backed by the ability to borrow directly from the U.S. Treasury, including certain securities of the Federal Financing Bank, the Federal Home Loan Bank and the U.S. Postal Service. Still other agencies and instrumentalities are supported solely by the credit of the agency or instrumentality itself and are neither guaranteed nor insured by the U.S. government. These include securities issued by the Federal Home Loan Bank and the Federal Farm Credit Bank, among others. Consequently, the investor must look principally to the agency issuing or guaranteeing the obligation for ultimate repayment. No assurance can be given that the U.S. government would provide financial support to such agencies if it is not obligated to do so by law. U.S. government securities may be subject to varying degrees of credit risk and all U.S. government securities may be subject to price declines due to changing interest rates. Securities directly supported by the full faith and credit of the U.S. government have less credit risk. The discussion below includes risks that are not described in the Series summary but which, nevertheless, are a risk to the Series.
Counterparty: The entity with whom a Series conducts Series-related business (such as trading or securities lending), or that underwrites, distributes or guarantees investments or agreements that the Series owns or is otherwise exposed to, may refuse or may become unable to honor its obligations under the terms of a transaction or agreement. As a result, that Series may sustain losses and be less likely to achieve its investment objective. These risks may be greater when engaging in over-the-counter transactions.
Futures Contracts: The Series may invest in futures contracts, which provide for the future sale by one party and purchase by another party of a specified amount of a financial instrument or a specific stock market index for a specified price on a designated date. The Series uses futures for hedging purposes or to temporarily increase or limit exposure to a particular asset class. The main risk with futures contracts is that they can amplify a gain or loss, potentially earning or losing substantially more money than the actual investment made in the futures contract.
Risks of Using Derivatives: Certain securities in which the Series may invest, including futures contracts, are derivative instruments. In general terms, a derivative instrument is a financial contract whose value is derived, at least in part, from the performance of an underlying asset, interest rate, or index. If the issuer of a derivative does not pay the amount owed on the contract when due, the Series can lose money on the investment. The underlying investment on which the derivative is based, and the derivative itself, might not perform in the manner the Sub-Adviser expected, which could cause the Series share price to decline. Markets underlying securities may move in a direction not anticipated by the Sub-Adviser, which may result in the Series realizing a lower return than expected on an investment. Some derivatives are also subject to the risk that counterparties will not perform their duties.
7
SHAREHOLDER EXPENSE EXAMPLES (UNAUDITED)
As a shareholder of a Series, you incur two types of costs: (1) transaction costs, including redemption fees and exchange fees (if applicable); and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Series expenses. These Examples are intended to help you understand your ongoing costs (in dollars) of investing in a Series and to compare these costs with the ongoing costs of investing in other mutual funds.
The Examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from January 1, 2013 to June 30, 2013, unless otherwise indicated. The Series expenses are shown without the imposition of any charges which are, or may be, imposed under your variable annuity contract, variable life insurance policy, qualified pension or retirement plan. Expenses would have been higher if such charges were included.
Actual Expenses
The left section of the table shown below, Actual Series Return, provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled Expenses Paid During the Period to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The right section of the table shown below, Hypothetical (5% return before expenses), provides information about hypothetical account values and hypothetical expenses based on a Series actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not a Series actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in a Series and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, redemption fees or exchange fees. Therefore, the hypothetical lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different mutual funds. In addition, if these transactional costs were included, your costs would have been higher.
Actual Series Return | Hypothetical (5% return before expenses) | |||||||||||||||||||||||||||||||
Beginning Value |
Ending |
Annualized Expense Ratio |
Expenses Paid |
Beginning Value |
Ending |
Annualized Expense Ratio |
Expenses Paid |
|||||||||||||||||||||||||
Series 13 |
$ | 1,000.00 | $ | 998.20 | 0.90 | % | $ | 4.46 | $ | 1,000.00 | $ | 1,020.33 | 0.90 | % | $ | 4.51 | ||||||||||||||||
Series 14 |
$ | 1,000.00 | $ | 997.70 | 0.90 | % | $ | 4.46 | $ | 1,000.00 | $ | 1,020.33 | 0.90 | % | $ | 4.51 |
* | Expenses are equal to the respective annualized expense ratio of each Series multiplied by the average account value over the period, multiplied by 181/365 to reflect the most recent fiscal half-year. |
8
STATEMENTS OF ASSETS AND LIABILITIES AS OF JUNE 30, 2013 (UNAUDITED)
ING GET U.S. Core Portfolio |
||||||||
Series 13 |
Series 14 |
|||||||
ASSETS: |
||||||||
Investments in securities at fair value* |
$ | 12,411,813 | $ | 30,942,737 | ||||
Short-term investments at fair value** |
1,899,278 | 186,000 | ||||||
|
|
|
|
|||||
Total investments at fair value |
14,311,091 | 31,128,737 | ||||||
|
|
|
|
|||||
Cash |
| 692 | ||||||
Receivables: |
||||||||
Dividends |
5 | | ||||||
Interest |
| 6,157 | ||||||
Prepaid expenses |
135 | 296 | ||||||
Reimbursement due from manager |
1,015 | 2,940 | ||||||
|
|
|
|
|||||
Total assets |
14,312,246 | 31,138,822 | ||||||
|
|
|
|
|||||
LIABILITIES: |
||||||||
Payable for fund shares redeemed |
903 | 2,455 | ||||||
Payable for investment management fees |
7,118 | 15,438 | ||||||
Payable for administrative fees |
652 | 1,415 | ||||||
Payable for distribution and shareholder service fees |
2,966 | 6,433 | ||||||
Payable to custodian due to bank overdraft |
56,055 | | ||||||
Payable for trustee fees |
76 | 163 | ||||||
Other accrued expenses and liabilities |
9,080 | 23,663 | ||||||
|
|
|
|
|||||
Total liabilities |
76,850 | 49,567 | ||||||
|
|
|
|
|||||
NET ASSETS |
$ | 14,235,396 | $ | 31,089,255 | ||||
|
|
|
|
|||||
NET ASSETS WERE COMPRISED OF: |
||||||||
Paid-in capital |
$ | 16,383,379 | $ | 32,807,174 | ||||
Undistributed net investment income |
110,112 | 356,884 | ||||||
Accumulated net realized loss |
(2,826,338 | ) | (2,776,025 | ) | ||||
Net unrealized appreciation |
568,243 | 701,222 | ||||||
|
|
|
|
|||||
NET ASSETS |
$ | 14,235,396 | $ | 31,089,255 | ||||
|
|
|
|
|||||
|
||||||||
* Cost of investments in securities |
$ | 11,833,073 | $ | 30,241,515 | ||||
** Cost of short-term investments |
$ | 1,909,775 | $ | 186,000 | ||||
Net assets |
$ | 14,235,396 | $ | 31,089,255 | ||||
Shares authorized |
unlimited | unlimited | ||||||
Par value |
$ | 0.001 | $ | 0.001 | ||||
Shares outstanding |
1,526,767 | 3,238,112 | ||||||
Net asset value and redemption price per share |
$ | 9.32 | $ | 9.60 |
See Accompanying Notes to Financial Statements
9
STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2013 (UNAUDITED)
ING GET U.S. Core Portfolio |
||||||||
Series 13 |
Series 14 |
|||||||
INVESTMENT INCOME: |
||||||||
Dividends |
$ | 45 | $ | | ||||
Interest |
178,603 | 504,528 | ||||||
|
|
|
|
|||||
Total investment income |
178,648 | 504,528 | ||||||
|
|
|
|
|||||
EXPENSES: |
||||||||
Investment management fees |
45,103 | 97,371 | ||||||
Distribution and shareholder service fees |
18,793 | 40,571 | ||||||
Transfer agent fees |
18 | 23 | ||||||
Administrative service fees |
4,134 | 8,925 | ||||||
Shareholder reporting expense |
1,696 | 3,280 | ||||||
Registration fees |
143 | 311 | ||||||
Professional fees |
8,083 | 18,448 | ||||||
Custody and accounting expense |
826 | 2,262 | ||||||
Trustee fees |
227 | 491 | ||||||
Miscellaneous expense |
657 | 1,264 | ||||||
Interest expense |
24 | 33 | ||||||
|
|
|
|
|||||
Total expenses |
79,704 | 172,979 | ||||||
Net waived and reimbursed fees |
(11,965 | ) | (26,736 | ) | ||||
|
|
|
|
|||||
Net expenses |
67,739 | 146,243 | ||||||
|
|
|
|
|||||
Net investment income |
110,909 | 358,285 | ||||||
|
|
|
|
|||||
REALIZED AND UNREALIZED GAIN (LOSS): |
||||||||
Net realized gain (loss) on: |
||||||||
Investments |
107,663 | 203,540 | ||||||
|
|
|
|
|||||
Net realized gain |
107,663 | 203,540 | ||||||
|
|
|
|
|||||
Net change in unrealized appreciation (depreciation) on: |
||||||||
Investments |
(241,033 | ) | (623,509 | ) | ||||
|
|
|
|
|||||
Net change in unrealized appreciation (depreciation) |
(241,033 | ) | (623,509 | ) | ||||
|
|
|
|
|||||
Net realized and unrealized loss |
(133,370 | ) | (419,969 | ) | ||||
|
|
|
|
|||||
Decrease in net assets resulting from operations |
$ | (22,461 | ) | $ | (61,684 | ) | ||
|
|
|
|
See Accompanying Notes to Financial Statements
10
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
ING GET U.S. Core Portfolio |
ING GET U.S. Core Portfolio |
|||||||||||||||
Six Months |
Year Ended |
Six Months |
Year Ended |
|||||||||||||
FROM OPERATIONS: |
||||||||||||||||
Net investment income |
$ | 110,909 | $ | 309,695 | $ | 358,285 | $ | 913,322 | ||||||||
Net realized gain |
107,663 | 183,097 | 203,540 | 476,151 | ||||||||||||
Net change in unrealized (depreciation) |
(241,033 | ) | (546,173 | ) | (623,509 | ) | (1,465,515 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Decrease in net assets resulting from operations |
(22,461 | ) | (53,381 | ) | (61,684 | ) | (76,042 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
FROM DISTRIBUTIONS TO SHAREHOLDERS: |
||||||||||||||||
Net investment income |
(308,916 | ) | (383,655 | ) | (913,651 | ) | (1,102,718 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total distributions |
(308,916 | ) | (383,655 | ) | (913,651 | ) | (1,102,718 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
FROM CAPITAL SHARE TRANSACTIONS: |
||||||||||||||||
Reinvestment of distributions |
308,916 | 383,655 | 913,651 | 1,102,718 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
308,916 | 383,655 | 913,651 | 1,102,718 | |||||||||||||
Cost of shares redeemed |
(1,923,850 | ) | (3,596,441 | ) | (3,333,190 | ) | (9,457,742 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net decrease in net assets resulting from capital share transactions |
(1,614,934 | ) | (3,212,786 | ) | (2,419,539 | ) | (8,355,024 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net decrease in net assets |
(1,946,311 | ) | (3,649,822 | ) | (3,394,874 | ) | (9,533,784 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
NET ASSETS: |
||||||||||||||||
Beginning of year or period |
16,181,707 | 19,831,529 | 34,484,129 | 44,017,913 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
End of year or period |
$ | 14,235,396 | $ | 16,181,707 | $ | 31,089,255 | $ | 34,484,129 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Undistributed net investment income at end of year or period |
$ | 110,112 | $ | 308,119 | $ | 356,884 | $ | 912,250 | ||||||||
|
|
|
|
|
|
|
|
See Accompanying Notes to Financial Statements
11
FINANCIAL HIGHLIGHTS (UNAUDITED)
Selected data for a share of beneficial interest outstanding throughout each year or period.
Income (loss) from investment operations |
Less distributions | Ratios to average net assets | Supplemental data |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of year or period |
Net investment income (loss) | Net realized and unrealized gain (loss) |
Total from investment operations | From net investment income | From net realized gains | From return of capital | Total distributions | Payment by affiliate | Net asset value, end of year or period |
Total Return(1) | Expenses before reductions/ additions(2)(3)(4) |
Expenses net of fee waivers and/or recoupments if any(2)(3)(4) |
Expense net of all reductions/ additions(2)(3)(4) |
Net investment income (loss)(2)(4) | Net assets, end of year or period | Portfolio turnover rate | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year or period ended |
($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | (%) | (%) | (%) | (%) | (%) | ($000s) | (%) | |||||||||||||||||||||||||||||||||||||||||||||||||||
ING GET U.S. Core Portfolio Series 13 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
06-30-13 |
9.54 | 0.07 | | (0.09 | ) | (0.02 | ) | 0.20 | | | 0.20 | | 9.32 | (0.18 | ) | 1.06 | 0.90 | 0.90 | 1.48 | 14,235 | | |||||||||||||||||||||||||||||||||||||||||||||||
12-31-12 |
9.77 | 0.17 | | (0.20 | ) | (0.03 | ) | 0.20 | | | 0.20 | | 9.54 | (0.26 | ) | 1.10 | 1.00 | 1.00 | 1.71 | 16,182 | | |||||||||||||||||||||||||||||||||||||||||||||||
12-31-11 |
9.81 | 0.16 | | 0.02 | 0.18 | 0.22 | | | 0.22 | | 9.77 | 1.81 | 1.09 | 1.00 | 1.00 | 1.68 | 19,832 | | ||||||||||||||||||||||||||||||||||||||||||||||||||
12-31-10 |
9.44 | 0.17 | | 0.45 | 0.62 | 0.25 | | | 0.25 | | 9.81 | 6.59 | 1.02 | 1.00 | | 1.00 | | 1.77 | | 26,204 | | |||||||||||||||||||||||||||||||||||||||||||||||
12-31-09 |
10.00 | 0.19 | | (0.41 | ) | (0.22 | ) | 0.34 | | | 0.34 | | 9.44 | (2.06 | ) | 1.03 | 1.00 | | 1.00 | | 2.00 | | 30,902 | 13 | ||||||||||||||||||||||||||||||||||||||||||||
12-31-08 |
10.60 | 0.21 | | (0.00 | )* | 0.21 | 0.20 | 0.61 | | 0.81 | | 10.00 | 2.33 | 1.05 | 1.00 | | 1.00 | | 2.14 | | 43,240 | 386 | ||||||||||||||||||||||||||||||||||||||||||||||
ING GET U.S. Core Portfolio Series 14 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
06-30-13 |
9.91 | 0.11 | | (0.13 | ) | (0.02 | ) | 0.29 | | | 0.29 | | 9.60 | (0.23 | ) | 1.07 | 0.90 | 0.90 | 2.21 | 31,089 | 11 | |||||||||||||||||||||||||||||||||||||||||||||||
12-31-12 |
10.21 | 0.23 | | (0.25 | ) | (0.02 | ) | 0.28 | | | 0.28 | | 9.91 | (0.18 | ) | 1.09 | 1.00 | 1.00 | 2.32 | 34,484 | | |||||||||||||||||||||||||||||||||||||||||||||||
12-31-11 |
10.20 | 0.23 | | 0.09 | 0.32 | 0.31 | | | 0.31 | | 10.21 | 3.21 | 1.06 | 1.00 | 1.00 | 2.25 | 44,018 | | ||||||||||||||||||||||||||||||||||||||||||||||||||
12-31-10 |
9.93 | 0.25 | | 0.42 | 0.67 | 0.40 | | | 0.40 | | 10.20 | 6.88 | 1.03 | 1.00 | 1.00 | 2.48 | 54,548 | | ||||||||||||||||||||||||||||||||||||||||||||||||||
12-31-09 |
10.46 | 0.29 | | (0.39 | ) | (0.10 | ) | 0.43 | | | 0.43 | | 9.93 | (0.83 | ) | 1.03 | 1.00 | 1.00 | 2.85 | 66,874 | 12 | |||||||||||||||||||||||||||||||||||||||||||||||
12-31-08 |
10.41 | 0.31 | | (0.01 | ) | 0.30 | 0.19 | 0.06 | | 0.25 | | 10.46 | 3.04 | 1.02 | 1.00 | 1.00 | 3.05 | 107,043 | 293 |
(1) | Total return is calculated assuming reinvestment of all dividends, capital gain distributions and return of capital distributions, if any, at net asset value and does not reflect the effect of insurance contract charges. Total return for periods less than one year is not annualized. |
(2) | Annualized for periods less than one year. |
(3) | Expense ratios do not include fees and expenses charged under the variable annuity contract or variable life insurance policy. |
(4) | Expense ratios reflect operating expenses of a Portfolio. Expenses before reductions/additions do not reflect amounts reimbursed by an Investment Adviser and/or Distributor or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by a Portfolio during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by an Investment Adviser and/or Distributor but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions/additions represent the net expenses paid by a Portfolio. Net investment income (loss) is net of all such additions or reductions. |
· | Calculated using average number of shares outstanding throughout the period. |
* | Amount is less than $0.005 or 0.005% or more than $(0.005) or (0.005)%. |
| Impact of waiving the advisory fee for the ING Institutional Prime Money Market Fund holding has less than 0.005% impact on the expense ratio and net investment income or loss ratio. |
See Accompanying Notes to Financial Statements
12
NOTES TO FINANCIAL STATEMENTS AS OF JUNE 30, 2013 (UNAUDITED)
NOTE 1 ORGANIZATION
ING Variable Insurance Trust (the Trust) was organized as a Delaware statutory trust on July 15, 1999 and is registered with the SEC under the Investment Company Act of 1940, as amended (1940 Act or Act) as a diversified open-end management investment company. There are two separate investment Series which comprise the Trust. The two Series are as follows: ING GET U.S. Core Portfolio Series 13 (Series 13) and ING GET U.S. Core Portfolio Series 14 (Series 14) (each, a Series and collectively, Series).
During the Guarantee Period, each Series seeks to achieve maximum total return and minimal exposure of the Series assets to a market value loss by participating, to the extent possible, in favorable equity market performance.
If during the Guarantee Period the equity markets experience a major decline, the Series assets may become largely or entirely invested in the Fixed Component. Use of the Fixed Component reduces the Series ability to participate as fully in upward equity market movements, and therefore represents some loss of opportunity, or opportunity cost, compared to a portfolio that is more heavily invested in equities. The insurance companies offering these Series currently are ING Life Insurance & Annuity Company (ILIAC) and ING USA Annuity and Life Insurance Company (ING USA). The insurance companies offering these Series guarantee Contract holders and Participants that on the Maturity Date they will receive no less than the value of their separate account investment directed to the Series as of the last day of the Offering Period, adjusted for certain charges. The value of dividends and distributions made by the Series throughout the Guarantee Period is included in determining whether, for purposes of the Guarantee, the value of a shareholders investment on the Maturity Date is no less than the value of their investment as of the last day of the Offering Period. Amounts withdrawn prior to the Maturity Date do not get the benefit of the Guarantee. The following information is related to the Series:
Offering |
Guarantee |
Maturity |
||||||||||
Series 13* |
06/22/06 12/20/06 | 12/21/06 12/19/13 | 12/19/13 | |||||||||
Series 14* |
12/21/06 06/20/07 | 06/21/07 06/19/14 | 06/19/14 |
* | Closed to new investors. |
Shares of the Series are offered to insurance company separate accounts that fund both annuity and life insurance contracts and certain tax-qualified retirement plans. At June 30, 2013 separate accounts of ILIAC and ING USA and their affiliates held all the shares outstanding of the Series.
ING Investments, LLC serves as the investment adviser (ING Investments or the Investment Adviser) to the Series. ING Investment Management Co. LLC serves as the sub-adviser (IIM or the Sub-Adviser) to the Series. ING Funds Services, LLC serves as the administrator (IFS or the Administrator) for the Series. ING Investments Distributor, LLC (IID or the Distributor) serves as the principal underwriter to the Series.
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are consistently followed by the Series in the preparation of their financial statements, and such policies are in conformity with U.S. generally accepted accounting principles (GAAP) for investment companies.
A. Security Valuation. All investments in securities are recorded at their estimated fair value, as described below. Investments in equity securities traded on a national securities exchange are valued at the official closing price when available or, for certain markets the last reported sale price. Securities reported by NASDAQ are valued at the NASDAQ official closing prices. Securities traded on an exchange or NASDAQ for which there has been no sale and securities traded in the over-the-counter-market are valued at the mean between the last reported bid and ask prices. All investments quoted in foreign currencies are valued daily in U.S. dollars on the basis of the foreign currency exchange rates prevailing at that time. Debt securities with more than 60 days to maturity are valued using matrix pricing methods determined by an independent pricing service which takes into consideration such factors as yields, maturities, liquidity, ratings and traded prices in similar or identical securities. Investments of sufficient credit quality maturing in 60 days or less are valued at amortized cost which approximates fair value.
Securities for which valuations are not readily available from an independent pricing service may be valued by brokers which use prices provided by market makers or estimates of fair market value obtained from yield data relating to investments or securities with similar characteristics. U.S. government obligations are valued by using market quotations or independent pricing
13
NOTES TO FINANCIAL STATEMENTS AS OF JUNE 30, 2013 (UNAUDITED) (CONTINUED)
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (continued)
services that use prices provided by market-makers or estimates of market values obtained from yield data relating to instruments or securities with similar characteristics. Investments in open-end mutual funds are valued at net asset value (NAV).
Securities and assets for which market quotations are not readily available (which may include certain restricted securities which are subject to limitations as to their sale) are valued at their fair values, as defined by the 1940 Act, and as determined in good faith by or under the supervision of the Series Board of Trustees (the Board), in accordance with methods that are specifically authorized by the Board. Securities traded on exchanges, including foreign exchanges, which close earlier than the time that a Series calculates its NAV may also be valued at their fair values as defined by the 1940 Act, and as determined in good faith by or under the supervision of the Board, in accordance with methods that are specifically authorized by the Board. All such fair valuations are made in accordance with valuation procedures of the Series (the Valuation Procedures) which have been approved by the Board. The valuation techniques applied in any specific instance are set forth in the Valuation Procedures and may vary from case to case. With respect to a restricted security, for example, consideration is generally given to the cost of the investment, the market value of any unrestricted securities of the same class at the time of valuation, the potential expiration of restrictions on the security, the existence of any registration rights, the costs to the Series related to registration of the security, as well as factors relevant to the issuer itself. Consideration may also be given to the price and extent of any public trading in similar securities of the issuer or comparable companies securities. The value of a foreign security traded on an exchange outside the United States is generally based on the price of a foreign security on the principal foreign exchange where it trades as of the time the Series determines its NAV or if the foreign exchange closes prior to the time the Series determines its NAV, the most recent closing price of the foreign security on its principal exchange. Trading in certain non-U.S. securities may not take place on all days on which the New York Stock Exchange (NYSE) is open. Further, trading takes place in various foreign markets on days on which the NYSE is not open. Consequently, the calculation of the Series NAV may not take place contemporaneously with the determination of the prices of securities held by a Series
in foreign securities markets. Further, the value of the Series assets may be significantly affected by foreign trading on days when a shareholder cannot purchase or redeem shares of the Series. In calculating the Series NAV, foreign securities in foreign currency are converted to U.S. dollar equivalents. If an event occurs after the time at which the market for foreign securities held by the Series closes but before the time that the Series NAV is calculated, such event may cause the closing price on the foreign exchange to not represent a readily available reliable market value quotation for such securities at the time the Series determines its NAV. In such a case, the Series will use the fair value of such securities as determined under the Series valuation procedures. Events after the close of trading on a foreign market that could require the Series to fair value some or all of its foreign securities include, among others, securities trading in the U.S. and other markets, corporate announcements, natural and other disasters, and political and other events. Among other elements of analysis in the determination of a securitys fair value, the Board has authorized the use of one or more independent research services to assist with such determinations. An independent research service may use statistical analyses and quantitative models to help determine fair value as of the time a Series calculates its NAV. There can be no assurance that such models accurately reflect the behavior of the applicable markets or the effect of the behavior of such markets on the fair value of securities, or that such markets will continue to behave in a fashion that is consistent with such models. Unlike the closing price of a security on an exchange, fair value determinations employ elements of judgment. Consequently, the fair value assigned to a security may not represent the actual value that a Series could obtain if it were to sell the security at the time of the close of the NYSE. Pursuant to procedures adopted by the Board, a Series is not obligated to use the fair valuations suggested by any research service, and valuation recommendations provided by such research services may be overridden if other events have occurred or if other fair valuations are determined in good faith to be more accurate. Unless an event is such that it causes a Series to determine that the closing prices for one or more securities do not represent readily available reliable market value quotations at the time a Series determines its NAV, events that occur between the time of the close of the foreign market on which they are traded and the close of regular trading on the NYSE will not be reflected in a Series NAV.
14
NOTES TO FINANCIAL STATEMENTS AS OF JUNE 30, 2013 (UNAUDITED) (CONTINUED)
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (continued)
Fair value is defined as the price that the Series would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. Each investment asset or liability of the Series is assigned a level at measurement date based on the significance and source of the inputs to its valuation. Quoted prices in active markets for identical securities are classified as Level 1, inputs other than quoted prices for an asset or liability that are observable are classified as Level 2 and unobservable inputs, including the Investment Advisers or Sub-Advisers judgment about the assumptions that a market participant would use in pricing an asset or liability are classified as Level 3. The inputs used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. Short-term securities of sufficient credit quality which are valued at amortized cost, which approximates fair value, are generally considered to be Level 2 securities under applicable accounting rules. A table summarizing each Series investments under these levels of classification is included following the Portfolios of Investments.
The Board has adopted methods for valuing securities and other assets in circumstances where market quotes are not readily available, and has delegated the responsibility for applying the valuation methods to the Pricing Committee as established by the funds Administrator. The Pricing Committee considers all facts it deems relevant that are reasonably available, through either public information or information available to the Investment Adviser or Sub-Adviser, when determining the fair value of the security. In the event that a security or asset cannot be valued pursuant to one of the valuation methods established by the Board, the fair value of the security or asset will be determined in good faith by the Pricing Committee. When a Series uses these fair valuation methods that use significant unobservable inputs to determine its NAV, securities will be priced by a method that the Pricing Committee believes accurately reflects fair value and are categorized as Level 3 of the fair value hierarchy. The methodologies used for valuing securities are not necessarily an indication of the risks of investing in those securities valued in good faith at fair value nor can it be assured a Series can obtain the fair value assigned to a security if they were to sell the security.
To assess the continuing appropriateness of security valuations, the Pricing Committee may compare prior day prices, prices on comparable securities, and traded prices to the prior or current day prices and the Pricing Committee challenges those prices exceeding certain tolerance levels with the third party pricing service or broker source. For those securities valued in good faith at fair value, the Pricing Committee reviews and affirms the reasonableness of the valuation on a regular basis after considering all relevant information that is reasonably available.
For fair valuations using significant unobservable inputs, U.S. GAAP requires a reconciliation of the beginning to ending balances for reported fair values that presents changes attributable to total realized and unrealized gains or losses, purchases and sales, and transfers in or out of the Level 3 category during the period. The end of period timing recognition is used for the transfers between Levels of a Series assets and liabilities. A reconciliation of Level 3 investments is presented only when a Series had a significant amount of Level 3 investments at the end of the period in relation to net assets.
For the six months ended June 30, 2013, there have been no significant changes to the fair valuation methodologies.
B. Security Transactions and Revenue Recognition. Security transactions are recorded on the trade date. Realized gains or losses on sales of investments are calculated on the identified cost basis. Interest income is recorded on the accrual basis. Premium amortization and discount accretion are determined using the effective yield method. Dividend income is recorded on the ex-dividend date.
C. Foreign Currency Translation. The books and records of the Series are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:
(1) | Market value of investment securities, other assets and liabilities at the exchange rates prevailing at the end of the day. |
(2) | Purchases and sales of investment securities, income and expenses at the rates of exchange prevailing on the respective dates of such transactions. |
Although the net assets and the market values are presented at the foreign exchange rates at the end of the day, the Series do not isolate the portion of the
15
NOTES TO FINANCIAL STATEMENTS AS OF JUNE 30, 2013 (UNAUDITED) (CONTINUED)
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (continued)
results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gains or losses from investments. For securities which are subject to foreign withholding tax upon disposition, liabilities are recorded on the Statements of Assets and Liabilities for the estimated tax withholding based on the securities current market value. Upon disposition, realized gains or losses on such securities are recorded net of foreign withholding tax.
Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Series books and the U.S. dollar equivalent of the 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 at fiscal year end, resulting from changes in the exchange rate. Foreign security and currency transactions may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, revaluation of currencies and future adverse political and economic developments which could cause securities and their markets to be less liquid and prices more volatile than those of comparable U.S. companies and U.S. government securities.
D. Distributions to Shareholders. Dividends from net investment income and net realized gains, if any, are declared and paid annually by the Series. Distributions are determined annually in accordance with federal tax principles, which may differ from U.S. generally accepted accounting principles for investment companies. The Series may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. Distributions are recorded on the ex-dividend date. The characteristics of income and gains are determined in accordance with income tax regulations, which may differ from U.S. GAAP for investment companies.
E. Federal Income Taxes. It is the Series policy to comply with subchapter M of the Internal Revenue Code and related excise tax provisions applicable to
regulated investment companies and to distribute substantially all of their net investment income and any net realized capital gains to their shareholders. Therefore, no federal income tax provision is required. Management has considered the sustainability of the Series tax positions taken on federal income tax returns for all open tax years in making this determination. No capital gain distributions shall be made until any capital loss carryforwards have been fully utilized or expired.
F. Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
G. Repurchase Agreements. Each Series may invest in repurchase agreements only with government securities dealers recognized by the Board of Governors of the Federal Reserve System. Under such agreements, the seller of the security agrees to repurchase it at a mutually agreed upon time and price. The resale price is in excess of the purchase price and reflects agreed upon interest rate for the period of time the agreement is outstanding. The period of the repurchase agreements is generally short, from possibly overnight to one week (although it may extend over a number of months), while the underlying securities generally have longer maturities. A Series will receive, as collateral, securities acceptable to it whose market value is equal to at least 100% of the carrying amount of the repurchase agreements, plus accrued interest, being invested by that Series. The underlying collateral is valued daily on a mark to market basis to assure that the value, including accrued interest is at least equal to the repurchase price. There would be potential loss to a Series in the event that Series is delayed or disposition prevented from exercising its right to dispose of the collateral, and it might incur disposition costs in liquidating the collateral.
H. Indemnifications. In the normal course of business, the Trust may enter into contracts that provide certain indemnifications. The Trusts maximum exposure under these arrangements is dependent on future claims that may be made against the Series and, therefore, cannot be estimated; however, based on experience, management considers risk of loss from such claims remote.
16
NOTES TO FINANCIAL STATEMENTS AS OF JUNE 30, 2013 (UNAUDITED) (CONTINUED)
NOTE 3 INVESTMENT TRANSACTIONS
For the six months ended June 30, 2013, the cost of purchases and the proceeds from the sales of securities, excluding U.S. government and short-term securities, were as follows:
Purchases |
Sales |
|||||||
Series 13 |
$ | | $ | 1,830,230 |
U.S. government securities not included above were as follows:
Purchases |
Sales |
|||||||
Series 13 |
$ | | $ | 1,996,884 | ||||
Series 14 |
3,717,350 | 7,280,001 |
NOTE 4 INVESTMENT MANAGEMENT AND ADMINISTRATION FEES
Each Series has entered into an investment management agreement (Investment Management Agreement) with the Investment Adviser. The Investment Management Agreement compensates the Investment Adviser with a fee, computed daily and payable monthly, based on the average daily net assets of each Series. The fee for each Series was 0.25% during its Offering Period and is 0.60% during its Guarantee Period.
The Investment Adviser has engaged IIM, to serve as sub-adviser to each Series. IIM is responsible for managing the assets of each Series in accordance with its investment objective and policies, subject to such policies as the Board or the Investment Adviser may determine.
IFS acts as the administrator and provides certain administrative and shareholder services necessary for each Series operations and is responsible for the supervision of other service providers. For its services, IFS is entitled to receive from each Series a fee at an annual rate of 0.055% of average daily net assets.
NOTE 5 DISTRIBUTION FEES
The Series have adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act (the 12b-1 Plan), whereby IID is compensated by the Series for expenses incurred in the distribution of the Series shares (Distribution Fees). Pursuant to the 12b-1 Plan, the Distributor is entitled to a payment each month to compensate for expenses incurred in the distribution and promotion of the Series shares, including expenses incurred in printing prospectuses and reports used for sales purposes, expenses incurred in preparing and printing sales literature and other such distribution
related expenses, including distribution or shareholder servicing fees (Servicing Fees) paid to securities dealers who have executed a distribution agreement with the Distributor. Under the 12b-1 Plan, the Series pays the Distributor a Distribution Fee rate of 0.25% based on average daily net assets.
NOTE 6 OTHER TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
At June 30, 2013, the following indirect, wholly-owned subsidiaries of ING U.S., Inc. owned more than 5% of the following Series:
Subsidiary |
Series |
Percentage |
||||
ING Life Insurance and Annuity Company |
Series 13 |
56.02 | % | |||
Series 14 |
17.22 | |||||
ING USA Annuity and Life Insurance Company |
Series 13 |
42.93 | ||||
Series 14 |
69.86 | |||||
ReliaStar Life Insurance Company |
Series 14 |
12.92 |
Control is defined by the 1940 Act as the beneficial ownership, either directly or through one or more controlled companies, of more than 25% of the voting securities of a company. The 1940 Act defines affiliates as companies that are under common control. Therefore, because the Series have a common owner that owns over 25% of the outstanding securities of the Series, they may be deemed to be affiliates of each other. Investment activities of these shareholders could have a material impact on the Series.
The Trust has adopted a Deferred Compensation Plan (the Plan), which allows eligible non-affiliated trustees as described in the Plan to defer the receipt of all or a portion of the trustees fees payable. Amounts deferred are treated as though invested in various notional funds advised by ING Investments until distribution in accordance with the Plan.
NOTE 7 OTHER ACCRUED EXPENSES AND LIABILITIES
At June 30, 2013, each applicable Series had the following payables included in Other Accrued Expenses and Liabilities on the Statements of Assets and Liabilities that exceeded 5% of total liabilities.
Series |
Accrued Expenses |
Amount |
||||
Series 13 |
Professional |
$ | 7,147 | |||
Postage |
1,034 | |||||
Series 14 |
Custody |
2,291 | ||||
Professional |
18,231 | |||||
Postage |
3,066 |
17
NOTES TO FINANCIAL STATEMENTS AS OF JUNE 30, 2013 (UNAUDITED) (CONTINUED)
NOTE 8 EXPENSE LIMITATION AGREEMENT
ING Investments has entered into a written expense limitation agreement (Expense Limitation Agreement) with each Series whereby the Investment Adviser has agreed to limit expenses, excluding interest, taxes, brokerage commissions, extraordinary expenses, and acquired fund fees and expenses stemming from investments in other investment companies to 0.65% during the Offering Period and 0.90% during the Guarantee Period. Prior to January 1, 2013, the expense limit was 1.00% during the Guarantee Period.
The Investment Adviser may at a later date recoup from a Series for management fees waived and other expenses assumed by the Investment Adviser during the previous 36 months, but only if, after such recoupment, the Series expense ratio does not exceed the percentage described above. Waived and reimbursed fees net of any recoupment by the Investment Adviser of such waived and reimbursed fees, are reflected on
the accompanying Statements of Operations for each Series. Amounts payable by the Investment Adviser are reflected in the Statements of Assets and Liabilities for each Series.
As of June 30, 2013, the amounts of waived and reimbursed fees that are subject to possible recoupment by the Investment Adviser and the related expiration dates are as follows:
June 30, | ||||||||||||||||
Series |
2014 |
2015 |
2016 |
Total |
||||||||||||
Series 13 |
$ | 11,705 | $ | 22,953 | $ | 18,738 | $ | 53,396 | ||||||||
Series 14 |
$ | 22,498 | $ | 38,588 | $ | 40,496 | $ | 101,582 |
The Expense Limitation Agreement is contractual and shall renew automatically for one-year terms unless: (i) the Investment Adviser provides 90 days written notice of its termination; and (ii) such termination is approved by the Board; or (iii) the Investment Management Agreement has been terminated.
NOTE 9 CAPITAL SHARES
Transactions in capital shares and dollars were as follows:
Shares sold |
Shares issued in merger |
Reinvestment of distributions |
Shares redeemed |
Net increase (decrease) in shares outstanding |
Shares sold |
Proceeds from shares issued in merger |
Reinvestment of distributions |
Shares redeemed |
Net increase (decrease) |
|||||||||||||||||||||||||||||||
Year or period ended |
# | # | # | # | # | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||||||||||
Series 13 |
||||||||||||||||||||||||||||||||||||||||
6/30/2013 |
| | 33,110 | (202,349 | ) | (169,239 | ) | | | 308,916 | (1,923,850 | ) | (1,614,934 | ) | ||||||||||||||||||||||||||
12/31/2012 |
| | 40,131 | (373,080 | ) | (332,949 | ) | | | 383,655 | (3,596,441 | ) | (3,212,786 | ) | ||||||||||||||||||||||||||
Series 14 |
||||||||||||||||||||||||||||||||||||||||
6/30/2013 |
| | 95,073 | (337,584 | ) | (242,511 | ) | | | 913,651 | (3,333,190 | ) | (2,419,539 | ) | ||||||||||||||||||||||||||
12/31/2012 |
| | 111,161 | (943,151 | ) | (831,990 | ) | | | 1,102,718 | (9,457,742 | ) | (8,355,024 | ) |
18
NOTES TO FINANCIAL STATEMENTS AS OF JUNE 30, 2013 (UNAUDITED) (CONTINUED)
NOTE 11 FEDERAL INCOME TAXES
The amount of distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting principles for investment companies. These book/tax differences may be either temporary or permanent. Permanent differences are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences are not reclassified. Key differences include the treatment of short-term capital gains, foreign currency transactions, and wash sale deferrals. Distributions in excess of net investment income and/or net realized capital gains for tax purposes are reported as return of capital.
Dividends paid by the Series from net investment income and distributions of net realized short-term capital gains are, for federal income tax purposes, taxable as ordinary income to shareholders.
The tax composition of dividends and distributions to shareholders was as follows:
Six Months Ended June 30, 2013 |
Year Ended December 31, 2012 |
|||||||
Ordinary Income |
Ordinary Income |
|||||||
Series 13 |
$ | 308,916 | $ | 383,655 | ||||
Series 14 |
913,651 | 1,102,718 |
The tax-basis components of distributable earnings and the capital loss carryforwards which may be used to offset future realized capital gains for federal income tax purposes as of December 31, 2012 are detailed below. The Regulated Investment Company Modernization Act of 2010 (the Act) provides an unlimited carryforward period for newly generated capital losses. Under the Act, there may be a greater likelihood that all or a portion of the Series pre-enactment capital loss carryforwards may expire without being utilized due to the fact that post-enactment capital losses are required to be utilized before pre-enactment capital loss carryforwards.
Undistributed |
Unrealized |
Short-term |
Expiration |
|||||||||||||
Series 13 |
$ | 308,886 | $ | 809,276 | $ | (2,909,482 | ) | 2016 | ||||||||
(24,519 | ) | 2017 | ||||||||||||||
$ | (2,934,001 | ) | ||||||||||||||
|
|
|||||||||||||||
Series 14 |
913,561 | 1,324,731 | (2,979,565 | ) | 2016 |
The Series major tax jurisdictions are U.S. federal and Arizona. The earliest tax year that remains subject to examination by these jurisdictions is 2008.
As of June 30, 2013, no provision for income tax is required in the Series financial statements as a result of tax positions taken on federal and state income tax returns for open tax years. The Series federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state department of revenue.
NOTE 12 RESTRUCTURING PLAN
The Investment Adviser, Sub-Adviser, Administrator and Distributor are indirect, wholly-owned subsidiaries of ING U.S., Inc. (ING U.S.). ING U.S. is a U.S.-based financial institution whose subsidiaries operate in the retirement, investment, and insurance industries. ING U.S. is a majority-owned subsidiary of ING Groep N.V. (ING Groep), which is a global financial institution of Dutch origin, with operations in more than 40 countries.
In October 2009, ING Groep submitted a restructuring plan (the Restructuring Plan) to the European Commission in order to receive approval for state aid granted to ING Groep by the Kingdom of the Netherlands in November 2008 and March 2009. To receive approval for this state aid, ING Groep was required to divest its insurance and investment management businesses, including ING U.S., before the end of 2013. In November 2012, the Restructuring Plan was amended to permit ING Groep additional time to complete the divestment. Pursuant to the amended Restructuring Plan, ING Groep must divest at least 25% of ING U.S. by the end of 2013, more than 50% by the end of 2014, and the remaining interest by the end of 2016 (such divestment, the Separation Plan).
On November 9, 2012, ING U.S. filed a Registration Statement on Form S-1 (the Form S-1) with the U.S. Securities and Exchange Commission (SEC) to register an initial public offering of ING U.S. common stock (the IPO). On May 1, 2013, this Registration Statement including subsequent amendments became effective and the IPO was priced. The IPO closed on May 7, 2013. The overallotment option was exercised on May 28, 2013 and closed on May 31, 2013. ING Groep continues to own a majority of the common stock of ING U.S. ING Groep intends to sell its remaining controlling ownership interest in ING U.S. over time. While the base case for the remainder of the Separation Plan is the divestment of ING Groeps remaining interest in one or more broadly distributed offerings, all options remain open and it is possible that ING Groeps divestment of its remaining interest in ING U.S. may take place by means of a sale to a single buyer or group of buyers.
19
NOTES TO FINANCIAL STATEMENTS AS OF JUNE 30, 2013 (UNAUDITED) (CONTINUED)
NOTE 12 RESTRUCTURING PLAN (continued)
It is anticipated that one or more of the transactions contemplated by the Separation Plan would result in the automatic termination of the existing advisory and sub-advisory agreements under which the Adviser and sub-adviser provide services to the Series. In order to ensure that the existing investment advisory and sub-advisory services can continue uninterrupted, the Board approved new advisory and sub-advisory agreements for the Series in connection with the IPO. In addition, shareholders of the Series were asked to approve new investment advisory and sub-advisory agreements prompted by the IPO, as well as any future advisory and sub-advisory agreements prompted by the Separation Plan that are approved by the Board and whose terms are not materially different from the current agreements. Shareholders of the Series approved new advisory and sub-advisory agreements on April 22, 2013. This means that shareholders may not have another opportunity to vote on a new agreement with the Adviser or an affiliated sub-adviser even if they undergo a change of control, as long as no single person or group of persons acting together gains control (as defined in the 1940 Act) of ING U.S.
The Separation Plan, whether implemented through public offerings or other means, may be disruptive to the businesses of ING U.S. and its subsidiaries, including the Adviser and affiliated entities that provide services to the Series, and may cause, among other things, interruption of business operations or services, diversion of managements attention from day-to-day operations, reduced access to capital, and loss of key employees or customers. The completion of the Separation Plan is expected to result in the Advisers and affiliated entities loss of access to the resources of ING Groep, which could adversely affect their business. Since a portion of the shares of ING U.S., as a standalone entity, are publicly held, it is subject to the reporting requirements of the Securities Exchange Act of 1934 as well as other U.S. government and state regulations, and subject to the risk of changing regulation.
The Separation Plan may be implemented in phases. During the time that ING Groep retains a majority interest in ING U.S., circumstances affecting ING Groep, including restrictions or requirements imposed on ING Groep by European and other authorities, may also affect ING U.S. A failure to complete the Separation Plan could create uncertainty about the nature of the relationship between ING U.S. and ING Groep, and could adversely affect ING U.S. and the Adviser and its
affiliates. Currently, the Adviser and its affiliates do not anticipate that the Separation Plan will have a material adverse impact on their operations or the Portfolios and its operations.
Shareholder Proxy Proposals
At a meeting of the Board on January 10, 2013, the Board nominated 13 individuals (collectively, the Nominees) for election as Trustees of the Trust. The Nominees include Colleen D. Baldwin, John V. Boyer, Patricia W. Chadwick, Peter S. Drotch, J. Michael Earley, Patrick W. Kenny, Sheryl K. Pressler, Roger B. Vincent and Shaun P. Mathews, each of whom was a current member of the Board. In addition, the Board nominated Albert E. DePrince, Jr., Russell H. Jones, Martin J. Gavin, and Joseph E. Obermeyer, each of whom was not a member of the Board at the time, but who served as a director or trustee to other investment companies in the ING Funds complex. The Nominees were approved by shareholders on April 22, 2013. The election of the Nominees was effective on May 21, 2013. These nominations were, in part, the result of an effort on the part of the Board, another board in the ING Funds complex, and the Investment Adviser to the Portfolios to consolidate the membership of the boards so that the same members serve on each board in the ING Funds complex. The result is that all ING Funds are now governed by Boards that are comprised of the same individuals.
NOTE 13 SUBSEQUENT EVENTS
On July 22, 2013, the Series and the Investment Adviser received exemptive relief from the SEC which permits the Investment Adviser, with the approval of the Series Board but without obtaining shareholder approval, to enter into or materially amend a sub-advisory agreement with sub-advisers that are indirect or direct, wholly-owned subsidiaries of the Investment Adviser or of another company that, indirectly or directly wholly owns the Investment Adviser. Reliance on this exemptive relief was approved by shareholders of the Series. For more information, please consult the Supplement to your Prospectus dated August 7, 2013.
The Series have evaluated events occurring after the Statements of Assets and Liabilities date (subsequent events) to determine whether any subsequent events necessitated adjustment to or disclosure in the financial statements. Other than the above, no such subsequent events were identified.
20
ING GET U.S. CORE PORTFOLIO SERIES 13 |
AS OF JUNE 30, 2013 (UNAUDITED) |
Fair Value Measurements^
The following is a summary of the fair valuations according to the inputs used as of June 30, 2013 in valuing the assets and liabilities:
Quoted Prices in Active Markets for Identical Investments (Level 1) |
Significant Other (Level 2) |
Significant (Level 3) |
Fair Value at 6/30/2013 |
|||||||||||||
Asset Table |
||||||||||||||||
Investments, at fair value |
||||||||||||||||
Short-Term Investments |
$ | | $ | 1,899,278 | $ | | $ | 1,899,278 | ||||||||
U.S. Treasury Obligations |
| 699,818 | | 699,818 | ||||||||||||
U.S. Government Agency Obligations |
| 11,711,995 | | 11,711,995 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Investments, at fair value |
$ | | $ | 14,311,091 | $ | | $ | 14,311,091 | ||||||||
|
|
|
|
|
|
|
|
^ | See Note 2, Significant Accounting Policies in the Notes to Financial Statements for additional information. |
See Accompanying Notes to Financial Statements
21
ING GET U.S. CORE PORTFOLIO SERIES 14 | PORTFOLIO OF INVESTMENTS AS OF JUNE 30, 2013 (UNAUDITED) |
See Accompanying Notes to Financial Statements
22
ING GET U.S. CORE PORTFOLIO SERIES 14 | PORTFOLIO OF INVESTMENTS AS OF JUNE 30, 2013 (UNAUDITED) (CONTINUED) |
Fair Value Measurements^
The following is a summary of the fair valuations according to the inputs used as of June 30, 2013 in valuing the assets and liabilities:
Quoted Prices in Active Markets for Identical Investments (Level 1) |
Significant (Level 2) |
Significant (Level 3) |
Fair Value at 6/30/2013 |
|||||||||||||
Asset Table |
||||||||||||||||
Investments, at fair value |
||||||||||||||||
U.S. Treasury Obligations |
$ | | $ | 1,971,591 | $ | | $ | 1,971,591 | ||||||||
Short-Term Investments |
| 186,000 | | 186,000 | ||||||||||||
U.S. Government Agency Obligations |
| 20,991,117 | | 20,991,117 | ||||||||||||
Foreign Government Bonds |
| 7,980,029 | | 7,980,029 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Investments, at fair value |
$ | | $ | 31,128,737 | $ | | $ | 31,128,737 | ||||||||
|
|
|
|
|
|
|
|
^ | See Note 2, Significant Accounting Policies in the Notes to Financial Statements for additional information. |
See Accompanying Notes to Financial Statements
23
SHAREHOLDER MEETING INFORMATION (UNAUDITED)
A special meeting of shareholders of the ING Variable Insurance Trust Registrant was held April 22, 2013, at the offices of ING Funds, 7337 East Doubletree Ranch Road, Suite 100, Scottsdale, AZ 85258.
Proposals:
3 | To approve a new investment advisory agreement for certain Portfolios with ING Investments prompted by the IPO, and to approve, under certain circumstances, any future advisory agreements prompted by Change of Control Events that occur as part of the Separation Plan. |
4 | To approve a new investment sub-advisory agreement between DSL or ING Investments, as applicable, and ING IM with respect to the certain Portfolios prompted by the IPO, and to approve, under certain circumstances, any future sub-advisory agreements prompted by Change of Control events that occur as part of the Separation Plan. |
5 | To elect 13 nominees to the Board. |
8 | To approve a modification to the current manager-of-managers policy to permit DSL or ING Investments, as applicable, subject to prior approval by the Board, to enter into and materially amend agreements with wholly owned sub-advisers without obtaining the approval of the Portfolios shareholders. |
Proposal |
Shares voted for |
Shares |
Shares |
Broker |
Total Shares Voted |
|||||||||||||||||||
ING GET U.S. Core Portfolio Series13 |
3 | * | 1,378,729.000 | 49,998.000 | 187,648.000 | 0.000 | 1,616,375.000 | |||||||||||||||||
4 | * | 1,261,700.000 | 49,998.000 | 304,677.000 | 0.000 | 1,616,375.000 | ||||||||||||||||||
8 | * | 1,362,862.000 | 49,998.000 | 203,515.000 | 0.000 | 1,616,375.000 |
* | Proposals Passed |
Proposal |
Shares voted |
Shares voted |
Shares |
Broker |
Total Shares |
|||||||||||||||||||
ING GET U.S. Core Portfolio Series14 |
3 | * | 2,395,946.000 | 736,459.000 | 263,849.000 | 0.000 | 3,396,254.000 | |||||||||||||||||
4 | * | 2,457,353.000 | 832,957.000 | 105,944.000 | 0.000 | 3,396,254.000 | ||||||||||||||||||
8 | * | 2,379,297.334 | 851,879.333 | 165,077.333 | 0.000 | 3,396,254.000 |
* | Proposals Passed |
Proposal |
For All |
Withhold All |
For all Except |
Broker |
Total Shares |
|||||||||||||||||
ING Variable Insurance Trust |
||||||||||||||||||||||
Colleen D. Baldwin |
5 | * | 6,170,025.000 | 942,678.000 | 0.000 | 0.000 | 7,112,703.000 | |||||||||||||||
John V. Boyer |
5 | * | 6,170,212.000 | 942,491.000 | 0.000 | 0.000 | 7,112,703.000 | |||||||||||||||
Patricia W. Chadwick |
5 | * | 6,308,549.000 | 804,154.000 | 0.000 | 0.000 | 7,112,703.000 | |||||||||||||||
Albert E. DePrince, Jr. |
5 | * | 6,308,736.000 | 803,967.000 | 0.000 | 0.000 | 7,112,703.000 | |||||||||||||||
Peter S. Drotch |
5 | * | 6,308,736.000 | 803,967.000 | 0.000 | 0.000 | 7,112,703.000 | |||||||||||||||
J. Michael Earley |
5 | * | 6,308,736.000 | 803,967.000 | 0.000 | 0.000 | 7,112,703.000 | |||||||||||||||
Martin J. Gavin |
5 | * | 6,308,549.000 | 804,154.000 | 0.000 | 0.000 | 7,112,703.000 | |||||||||||||||
Russell H. Jones |
5 | * | 6,308,736.000 | 803,967.000 | 0.000 | 0.000 | 7,112,703.000 | |||||||||||||||
Patrick W. Kenny |
5 | * | 6,308,549.000 | 804,154.000 | 0.000 | 0.000 | 7,112,703.000 | |||||||||||||||
Shaun P. Mathews |
5 | * | 6,308,736.000 | 803,967.000 | 0.000 | 0.000 | 7,112,703.000 | |||||||||||||||
Joseph E. Obermeyer |
5 | * | 6,308,549.000 | 804,154.000 | 0.000 | 0.000 | 7,112,703.000 | |||||||||||||||
Sheryl K. Pressler |
5 | * | 6,165,804.000 | 946,899.000 | 0.000 | 0.000 | 7,112,703.000 | |||||||||||||||
Roger B. Vincent |
5 | * | 6,308,549.000 | 804,154.000 | 0.000 | 0.000 | 7,112,703.000 |
* | Proposal Passed |
24
ADVISORY CONTRACT APPROVAL DISCUSSION (UNAUDITED)
25
ADVISORY CONTRACT APPROVAL DISCUSSION (UNAUDITED) (CONTINUED)
26
ADVISORY CONTRACT APPROVAL DISCUSSION (UNAUDITED) (CONTINUED)
27
ADVISORY CONTRACT APPROVAL DISCUSSION (UNAUDITED) (CONTINUED)
28
ADVISORY CONTRACT APPROVAL DISCUSSION (UNAUDITED) (CONTINUED)
29
Before investing, carefully consider the investment objectives, risks, charges and expenses of the variable universal life insurance policy or variable annuity contract and the underlying variable investment options. This and other information is contained in the prospectus for the variable universal life policy or variable annuity contract and the underlying variable investment options. Obtain these prospectuses from your agent/ registered representative and read them carefully before investing.
VPSAR-UGCORE | (0613-081613) |
ITEM 2. | CODE OF ETHICS. |
Not required for semi-annual filing.
ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
Not required for semi-annual filing.
ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
Not required for semi-annual filing.
ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not required for semi-annual filing.
ITEM 6. | SCHEDULE OF INVESTMENTS. |
Schedule is included as part of the report to shareholders filed under Item 1 of this Form.
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 Board has a Nominating Committee for the purpose of considering and presenting to the Board candidates it proposes for nomination to fill Independent Trustee vacancies on the Board. The Committee currently consists of all Independent Trustees of the Board (6 individuals). The Nominating Committee operates pursuant to a Charter approved by the Board. The primary purpose of the Nominating Committee is to consider and present to the Board the candidates it proposes for nomination to fill vacancies on the Board. In evaluating candidates, the Nominating Committee may consider a variety of factors, but it has not at this time set any specific minimum qualifications that must be met. Specific qualifications of candidates for Board membership will be based on the needs of the Board at the time of nomination.
The Nominating Committee is willing to consider nominations received from shareholders and shall assess shareholder nominees in the same manner as it reviews its own nominees. A shareholder nominee for director should be submitted in writing to the Funds Secretary. Any such shareholder nomination should include at a minimum the following information as to each individual proposed for nomination as trustee: such individuals written consent to be named in the proxy statement as a nominee (if nominated) and to serve as a trustee (if elected), and all information relating to such individual that is required to be disclosed in the solicitation of proxies for election of trustees, or is otherwise required, in each case under applicable federal securities laws, rules and regulations.
The Secretary shall submit all nominations received in a timely manner to the Nominating Committee. To be timely, any such submission must be delivered to the Funds Secretary not earlier than the 90th day prior to such meeting and not later than the close of business on the later of the 60th day prior to such meeting or the 10th day following the day on which public announcement of the date of the meeting is first made, by either disclosure in a press release or in a document publicly filed by the Fund with the Securities and Exchange Commission.
ITEM 11. | CONTROLS AND PROCEDURES. |
(a) | Based on our evaluation conducted within 90 days of the filing date, hereof, the design and operation of the registrants disclosure controls and procedures are effective to ensure that material information relating to the registrant is made known to the certifying officers by others within the appropriate entities, particularly during the period in which Forms N-CSR are being prepared, and the registrants disclosure controls and procedures allow timely preparation and review of the information for the registrants Form N-CSR and the officer certifications of such Form N-CSR. |
(b) | There were no significant changes in the registrants internal controls that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting. |
ITEM 12. | EXHIBITS. |
(a)(1) | The Code of Ethics is not required for the semi-annual filing. |
(a)(2) | A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2) is attached hereto as EX-99.CERT. |
(a)(3) | Not required for semi-annual filing. |
(b) | The officer certifications required by Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto as EX-99.906CERT |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): ING Variable Insurance Trust
By | /s/ Shaun P. Mathews | |
Shaun P. Mathews | ||
President and Chief Executive Officer | ||
Date: | September 4, 2013 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By | /s/ Shaun P. Mathews | |
Shaun P. Mathews | ||
President and Chief Executive Officer | ||
Date: | September 4, 2013 | |
By | /s/ Todd Modic | |
Todd Modic | ||
Senior Vice President and Chief Financial Officer | ||
Date: | September 4, 2013 |
EXHIBIT 99.CERT
CERTIFICATION
I, Shaun P. Mathews, certify that:
1. | I have reviewed this report on Form N-CSR of ING Variable Insurance Trust; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: September 4, 2013 | /s/ Shaun P. Mathews | |||||
Shaun P. Mathews | ||||||
President and Chief Executive Officer |
CERTIFICATION
I, Todd Modic, certify that:
1. | I have reviewed this report on Form N-CSR of ING Variable Insurance Trust; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: September 4, 2013 | /s/ Todd Modic | |||||
Todd Modic | ||||||
Senior Vice President and Chief Financial Officer |
EXHIBIT 99.906CERT
Certification
Pursuant to Section 906
of the
Sarbanes-Oxley Act of 2002
Name of Registrant: | ING Variable Insurance Trust | |
Date of Form N-CSR: | June 30, 2013 |
The undersigned, the principal executive officer of the above named registrant (the Fund), hereby certifies that, with respect to the Form N-CSR referred to above, to the best of his knowledge and belief, after reasonable inquiry:
1. such Form N-CSR fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. the information contained in such Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Fund.
A signed original of this written statement required by Section 906 has been provided to ING Variable Insurance Trust and will be retained by ING Variable Insurance Trust and furnished to the Securities and Exchange Commission or its staff upon request.
IN WITNESS WHEREOF, the undersigned has executed this Certification below, as of this 4th day of September, 2013.
/s/ Shaun P. Mathews |
Shaun P. Mathews |
President and Chief Executive Officer |
Certification
Pursuant to Section 906
of the
Sarbanes-Oxley Act of 2002
Name of Registrant: | ING Variable Insurance Trust | |
Date of Form N-CSR: | June 30, 2013 |
The undersigned, the principal financial officer of the above named registrant (the Fund), hereby certifies that, with respect to the Form N-CSR referred to above, to the best of his knowledge and belief, after reasonable inquiry:
1. such Form N-CSR fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. the information contained in such Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Fund.
A signed original of this written statement required by Section 906 has been provided to ING Variable Insurance Trust and will be retained by ING Variable Insurance Trust and furnished to the Securities and Exchange Commission or its staff upon request.
IN WITNESS WHEREOF, the undersigned has executed this Certification below, as of this 4th day of September, 2013.
/s/ Todd Modic |
Todd Modic |
Senior Vice President and |
Chief Financial Officer |
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