N-CSRS 1 d423196dncsrs.htm HIMCO VARIABLE INSURANCE TRUST HIMCO Variable Insurance Trust

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 811-22954

HIMCO VARIABLE INSURANCE TRUST

(Exact name of registrant as specified in charter)

One Hartford Plaza, Hartford, Connecticut 06155

(Address of principal executive offices) (Zip code)

Brenda J. Page

Hartford Investment Management Company

One Hartford Plaza

Hartford, Connecticut 06155

(Name and address of agent for service)

Registrant’s telephone number, including area code: (860) 297-6444

Date of fiscal year end: December 31

Date of reporting period: June 30, 2017

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.


Item 1. Reports to Stockholders.


LOGO

 


HIMCO VIT Index Fund

Table of Contents

 

This report is prepared for the general information of contract owners and qualified retirement plan participants. It is not an offer to buy or sell an annuity contract or qualified retirement plan, fund or any security. It should not be used in connection with any offer, except in conjunction with the appropriate product prospectus (which contains all pertinent product information including the applicable sales, administrative and other charges) and the current prospectus and/or summary prospectus of the Fund available for investment thereunder.


HIMCO VIT Index Fund

Schedule of Investments

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 99.1%  
      Automobiles & Components - 0.7%  
  10,467    

BorgWarner, Inc.

  $ 443,382  
  14,056    

Delphi Automotive plc

    1,232,008  
  205,214    

Ford Motor Co.

    2,296,345  
  72,053    

General Motors Co.

    2,516,811  
  13,211    

Goodyear Tire & Rubber Co. (The)

    461,857  
  9,184    

Harley-Davidson, Inc.

    496,120  
   

 

 

 
      7,446,523  
   

 

 

 
      Banks - 6.4%      
  522,168    

Bank of America Corp.

    12,667,796  
  42,572    

BB&T Corp.

    1,933,195  
  144,461    

Citigroup, Inc.

    9,661,552  
  26,578    

Citizens Financial Group, Inc.

    948,303  
  9,284    

Comerica, Inc.

    679,960  
  39,366    

Fifth Third Bancorp

    1,021,941  
  57,040    

Huntington Bancshares, Inc.

    771,181  
  186,413    

JPMorgan Chase & Co.

    17,038,148  
  57,512    

KeyCorp

    1,077,775  
  8,073    

M&T Bank Corp.

    1,307,422  
  18,068    

People’s United Financial, Inc.

    319,081  
  25,390    

PNC Financial Services Group, Inc. (The)

    3,170,449  
  63,071    

Regions Financial Corp.

    923,360  
  25,368    

SunTrust Banks, Inc.

    1,438,873  
  83,120    

US Bancorp

    4,315,590  
  235,985    

Wells Fargo & Co.

    13,075,929  
  10,632    

Zions Bancorp

    466,851  
   

 

 

 
      70,817,406  
   

 

 

 
      Capital Goods - 7.3%      
  31,355    

3M Co.

    6,527,797  
  2,314    

Acuity Brands, Inc.

    470,390  
  4,999    

Allegion plc

    405,519  
  12,074    

AMETEK, Inc.

    731,322  
  23,127    

Arconic, Inc.

    523,827  
  29,453    

Boeing Co. (The)

    5,824,331  
  30,913    

Caterpillar, Inc.

    3,321,911  
  8,108    

Cummins, Inc.

    1,315,280  
  15,440    

Deere & Co.

    1,908,230  
  8,168    

Dover Corp.

    655,237  
  23,469    

Eaton Corp. plc

    1,826,592  
  33,815    

Emerson Electric Co.

    2,016,050  
  15,177    

Fastenal Co.

    660,655  
  6,853    

Flowserve Corp.

    318,185  
  7,334    

Fluor Corp.

    335,751  
  15,821    

Fortive Corp.

    1,002,260  
  8,072    

Fortune Brands Home & Security, Inc.

    526,617  
  14,879    

General Dynamics Corp.

    2,947,530  
  456,939    

General Electric Co.

    12,341,922  
  39,999    

Honeywell International, Inc.

    5,331,467  
  16,313    

Illinois Tool Works, Inc.

    2,336,837  
  13,433    

Ingersoll-Rand plc

    1,227,642  
  6,319    

Jacobs Engineering Group, Inc.

    343,690  
  49,222    

Johnson Controls International plc

    2,134,266  
  4,086    

L3 Technologies, Inc.

    682,689  
  13,061    

Lockheed Martin Corp.

    3,625,864  
  16,787    

Masco Corp.

    641,431  
  9,160    

Northrop Grumman Corp.

    2,351,464  
  18,431    

PACCAR, Inc.

    1,217,183  
  6,988    

Parker-Hannifin Corp.

    1,116,822  
  8,797    

Pentair plc

    585,352  
  7,771    

Quanta Services, Inc.(2)

    255,821  
  15,272    

Raytheon Co.

    2,466,123  

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 99.1% - (continued)  
      Capital Goods - 7.3% - (continued)      
  6,760    

Rockwell Automation, Inc.

  $ 1,094,850  
  8,520    

Rockwell Collins, Inc.

    895,282  
  5,354    

Roper Technologies, Inc.

    1,239,612  
  3,041    

Snap-on, Inc.

    480,478  
  8,026    

Stanley Black & Decker, Inc.

    1,129,499  
  14,045    

Textron, Inc.

    661,519  
  2,566    

TransDigm Group, Inc.

    689,920  
  4,434    

United Rentals, Inc.(2)

    499,756  
  39,097    

United Technologies Corp.

    4,774,135  
  2,819    

WW Grainger, Inc.

    508,914  
  9,430    

Xylem, Inc.

    522,705  
   

 

 

 
      80,472,727  
   

 

 

 
      Commercial & Professional Services - 0.6%  
  4,531    

Cintas Corp.

    571,087  
  6,307    

Equifax, Inc.

    866,708  
  16,652    

IHS Markit Ltd.(2)

    733,354  
  17,623    

Nielsen Holdings plc

    681,305  
  12,062    

Republic Services, Inc.

    768,712  
  6,673    

Robert Half International, Inc.

    319,837  
  4,474    

Stericycle, Inc.(2)

    341,456  
  8,068    

Verisk Analytics, Inc.(2)

    680,697  
  21,326    

Waste Management, Inc.

    1,564,262  
   

 

 

 
      6,527,418  
   

 

 

 
      Consumer Durables & Apparel - 1.3%  
  14,751    

Coach, Inc.

    698,312  
  17,933    

DR Horton, Inc.

    619,944  
  6,020    

Garmin Ltd.

    307,201  
  19,107    

Hanesbrands, Inc.

    442,518  
  5,903    

Hasbro, Inc.

    658,244  
  6,942    

Leggett & Platt, Inc.

    364,663  
  10,661    

Lennar Corp., Class A

    568,445  
  17,974    

Mattel, Inc.

    386,980  
  8,177    

Michael Kors Holdings Ltd.(2)

    296,416  
  3,315    

Mohawk Industries, Inc.(2)

    801,202  
  25,348    

Newell Brands, Inc.

    1,359,160  
  69,533    

NIKE, Inc., Class B

    4,102,447  
  14,899    

PulteGroup, Inc.

    365,472  
  4,093    

PVH Corp.

    468,649  
  2,892    

Ralph Lauren Corp.

    213,430  
  9,690    

Under Armour, Inc., Class A(2)

    210,854  
  9,672    

Under Armour, Inc., Class C(2)

    194,988  
  16,809    

VF Corp.

    968,198  
  3,881    

Whirlpool Corp.

    743,677  
   

 

 

 
      13,770,800  
   

 

 

 
      Consumer Services - 1.8%  
  21,961    

Carnival Corp.

    1,439,983  
  1,504    

Chipotle Mexican Grill, Inc.(2)

    625,814  
  6,524    

Darden Restaurants, Inc.

    590,031  
  10,870    

H&R Block, Inc.

    335,992  
  10,751    

Hilton Worldwide Holdings, Inc.

    664,949  
  16,302    

Marriott International, Inc., Class A

    1,635,254  
  42,766    

McDonald’s Corp.

    6,550,040  
  8,802    

Royal Caribbean Cruises Ltd.

    961,442  
  75,981    

Starbucks Corp.

    4,430,452  
  5,475    

Wyndham Worldwide Corp.

    549,745  
  4,189    

Wynn Resorts Ltd.

    561,829  
  17,358    

Yum! Brands, Inc.

    1,280,326  
   

 

 

 
      19,625,857  
   

 

 

 
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  2  

 


HIMCO VIT Index Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 99.1% - (continued)  
      Diversified Financials - 5.2%  
  2,970    

Affiliated Managers Group, Inc.

  $ 492,604  
  39,393    

American Express Co.

    3,318,466  
  7,999    

Ameriprise Financial, Inc.

    1,018,193  
  54,562    

Bank of New York Mellon Corp. (The)

    2,783,753  
  99,665    

Berkshire Hathaway, Inc., Class B(2)

    16,880,261  
  6,361    

BlackRock, Inc.

    2,686,950  
  25,341    

Capital One Financial Corp.

    2,093,673  
  4,821    

CBOE Holdings, Inc.

    440,639  
  63,844    

Charles Schwab Corp. (The)

    2,742,738  
  17,828    

CME Group, Inc.

    2,232,779  
  19,948    

Discover Financial Services

    1,240,566  
  14,412    

E*TRADE Financial Corp.(2)

    548,088  
  17,966    

Franklin Resources, Inc.

    804,697  
  19,208    

Goldman Sachs Group, Inc. (The)

    4,262,255  
  31,065    

Intercontinental Exchange, Inc.

    2,047,805  
  21,347    

Invesco Ltd.

    751,201  
  16,991    

Leucadia National Corp.

    444,485  
  8,733    

Moody’s Corp.

    1,062,632  
  74,734    

Morgan Stanley

    3,330,147  
  5,980    

NASDAQ, Inc.

    427,510  
  14,951    

Navient Corp.

    248,934  
  11,323    

Northern Trust Corp.

    1,100,709  
  6,725    

Raymond James Financial, Inc.

    539,480  
  13,527    

S&P Global, Inc.

    1,974,807  
  18,556    

State Street Corp.

    1,665,030  
  40,414    

Synchrony Financial

    1,205,146  
  12,659    

T Rowe Price Group, Inc.

    939,424  
   

 

 

 
      57,282,972  
   

 

 

 
      Energy - 6.0%  
  29,401    

Anadarko Petroleum Corp.

    1,333,041  
  19,958    

Apache Corp.

    956,587  
  22,325    

Baker Hughes, Inc.

    1,216,936  
  24,426    

Cabot Oil & Gas Corp.

    612,604  
  40,022    

Chesapeake Energy Corp.(2)

    198,909  
  99,406    

Chevron Corp.

    10,371,028  
  4,990    

Cimarex Energy Co.

    469,110  
  7,774    

Concho Resources, Inc.(2)

    944,774  
  64,910    

ConocoPhillips

    2,853,444  
  27,583    

Devon Energy Corp.

    881,829  
  30,289    

EOG Resources, Inc.

    2,741,760  
  9,094    

EQT Corp.

    532,817  
  222,326    

Exxon Mobil Corp.

    17,948,378  
  45,536    

Halliburton Co.

    1,944,843  
  5,696    

Helmerich & Payne, Inc.

    309,521  
  14,179    

Hess Corp.

    622,033  
  100,736    

Kinder Morgan, Inc.

    1,930,102  
  44,598    

Marathon Oil Corp.

    528,486  
  27,218    

Marathon Petroleum Corp.

    1,424,318  
  8,510    

Murphy Oil Corp.

    218,111  
  19,940    

National Oilwell Varco, Inc.

    656,824  
  10,452    

Newfield Exploration Co.(2)

    297,464  
  23,883    

Noble Energy, Inc.

    675,889  
  40,117    

Occidental Petroleum Corp.

    2,401,805  
  19,925    

ONEOK, Inc.

    1,039,288  
  23,017    

Phillips 66

    1,903,276  
  8,925    

Pioneer Natural Resources Co.

    1,424,252  
  9,873    

Range Resources Corp.

    228,757  
  72,905    

Schlumberger Ltd.

    4,800,065  
  24,482    

TechnipFMC plc(2)

    665,910  
  7,930    

Tesoro Corp.

    742,248  

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 99.1% - (continued)  
      Energy - 6.0% - (continued)  
  20,518    

Transocean Ltd.(2)

  $ 168,863  
  23,466    

Valero Energy Corp.

    1,583,016  
  43,354    

Williams Cos., Inc. (The)

    1,312,759  
   

 

 

 
      65,939,047  
   

 

 

 
      Food & Staples Retailing - 1.9%  
  23,013    

Costco Wholesale Corp.

    3,680,469  
  53,455    

CVS Health Corp.

    4,300,989  
  47,884    

Kroger Co. (The)

    1,116,655  
  25,835    

Sysco Corp.

    1,300,276  
  77,502    

Wal-Mart Stores, Inc.

    5,865,351  
  44,806    

Walgreens Boots Allliance, Inc.

    3,508,758  
  16,767    

Whole Foods Market, Inc.

    706,058  
   

 

 

 
      20,478,556  
   

 

 

 
      Food, Beverage & Tobacco - 5.2%  
  101,352    

Altria Group, Inc.

    7,547,683  
  29,942    

Archer-Daniels-Midland Co.

    1,239,000  
  9,281    

Brown-Forman Corp., Class B

    451,057  
  10,061    

Campbell Soup Co.

    524,681  
  201,760    

Coca-Cola Co. (The)

    9,048,936  
  21,209    

Conagra Brands, Inc.

    758,434  
  8,996    

Constellation Brands, Inc., Class A

    1,742,795  
  9,645    

Dr Pepper Snapple Group, Inc.

    878,756  
  30,229    

General Mills, Inc.

    1,674,687  
  7,345    

Hershey Co. (The)

    788,633  
  14,153    

Hormel Foods Corp.

    482,759  
  6,109    

JM Smucker Co. (The)

    722,878  
  13,233    

Kellogg Co.

    919,164  
  31,305    

Kraft Heinz Co. (The)

    2,680,960  
  5,941    

McCormick & Co., Inc.

    579,307  
  9,689    

Molson Coors Brewing Co., Class B

    836,548  
  79,610    

Mondelez International, Inc., Class A

    3,438,356  
  21,153    

Monster Beverage Corp.(2)

    1,050,881  
  74,952    

PepsiCo, Inc.

    8,656,206  
  81,492    

Philip Morris International, Inc.

    9,571,235  
  43,418    

Reynolds American, Inc.

    2,823,907  
  15,121    

Tyson Foods, Inc., Class A

    947,028  
   

 

 

 
      57,363,891  
   

 

 

 
      Health Care Equipment & Services - 5.7%  
  91,048    

Abbott Laboratories

    4,425,843  
  17,404    

Aetna, Inc.

    2,642,449  
  3,962    

Align Technology, Inc.(2)

    594,775  
  8,707    

AmerisourceBergen Corp.

    823,073  
  13,904    

Anthem, Inc.

    2,615,760  
  25,592    

Baxter International, Inc.

    1,549,340  
  11,929    

Becton Dickinson and Co.

    2,327,467  
  71,851    

Boston Scientific Corp.(2)

    1,991,710  
  16,574    

Cardinal Health, Inc.

    1,291,446  
  9,039    

Centene Corp.(2)

    722,035  
  15,426    

Cerner Corp.(2)

    1,025,366  
  13,433    

Cigna Corp.

    2,248,550  
  2,563    

Cooper Cos., Inc. (The)

    613,633  
  3,800    

CR Bard, Inc.

    1,201,218  
  32,050    

Danaher Corp.

    2,704,700  
  8,168    

DaVita, Inc.(2)

    528,960  
  12,028    

DENTSPLY SIRONA, Inc.

    779,896  
  11,008    

Edwards Lifesciences Corp.(2)

    1,301,586  
  6,163    

Envision Healthcare Corp.(2)

    386,235  
  31,142    

Express Scripts Holding Co.(2)

    1,988,105  
  15,016    

HCA Healthcare, Inc.(2)

    1,309,395  
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  3  

 


HIMCO VIT Index Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 99.1% - (continued)  
      Health Care Equipment & Services - 5.7% - (continued)  
  4,162    

Henry Schein, Inc.(2)

  $ 761,729  
  14,692    

Hologic, Inc.(2)

    666,723  
  7,572    

Humana, Inc.

    1,821,975  
  4,624    

IDEXX Laboratories, Inc.(2)

    746,406  
  1,933    

Intuitive Surgical, Inc.(2)

    1,808,070  
  5,368    

Laboratory Corp. of America Holdings(2)

    827,424  
  11,066    

McKesson Corp.

    1,820,800  
  71,824    

Medtronic plc

    6,374,380  
  4,281    

Patterson Cos., Inc.

    200,993  
  7,179    

Quest Diagnostics, Inc.

    798,018  
  16,277    

Stryker Corp.

    2,258,922  
  50,563    

UnitedHealth Group, Inc.

    9,375,391  
  4,691    

Universal Health Services, Inc., Class B

    572,677  
  4,823    

Varian Medical Systems, Inc.(2)

    497,685  
  10,558    

Zimmer Biomet Holdings, Inc.

    1,355,647  
   

 

 

 
      62,958,382  
   

 

 

 
      Household & Personal Products - 1.9%  
  13,078    

Church & Dwight Co., Inc.

    678,487  
  6,758    

Clorox Co. (The)

    900,436  
  46,346    

Colgate-Palmolive Co.

    3,435,629  
  24,714    

Coty, Inc., Class A

    463,635  
  11,746    

Estee Lauder Cos., Inc. (The), Class A

    1,127,381  
  18,623    

Kimberly-Clark Corp.

    2,404,415  
  134,196    

Procter & Gamble Co. (The)

    11,695,181  
   

 

 

 
      20,705,164  
   

 

 

 
      Insurance - 2.8%  
  20,822    

Aflac, Inc.

    1,617,453  
  19,126    

Allstate Corp. (The)

    1,691,503  
  46,146    

American International Group, Inc.

    2,885,048  
  13,751    

Aon plc

    1,828,196  
  9,417    

Arthur J Gallagher & Co.

    539,123  
  2,875    

Assurant, Inc.

    298,109  
  24,499    

Chubb Ltd.

    3,561,665  
  7,863    

Cincinnati Financial Corp.

    569,674  
  2,155    

Everest Re Group Ltd.

    548,641  
  19,275    

Hartford Financial Services Group, Inc. (The)(3)

    1,013,287  
  11,768    

Lincoln National Corp.

    795,281  
  14,487    

Loews Corp.

    678,137  
  27,039    

Marsh & McLennan Cos., Inc.

    2,107,960  
  56,690    

MetLife, Inc.

    3,114,549  
  14,064    

Principal Financial Group, Inc.

    901,081  
  30,479    

Progressive Corp. (The)

    1,343,819  
  22,509    

Prudential Financial, Inc.

    2,434,123  
  5,708    

Torchmark Corp.

    436,662  
  14,661    

Travelers Cos., Inc. (The)

    1,855,056  
  11,974    

Unum Group

    558,348  
  6,668    

Willis Towers Watson PLC

    969,927  
  13,718    

XL Group Ltd.

    600,848  
   

 

 

 
      30,348,490  
   

 

 

 
      Materials - 2.8%  
  11,424    

Air Products & Chemicals, Inc.

    1,634,317  
  5,811    

Albemarle Corp.

    613,293  
  4,647    

Avery Dennison Corp.

    410,655  
  18,370    

Ball Corp.

    775,398  
  12,232    

CF Industries Holdings, Inc.

    342,007  
  58,974    

Dow Chemical Co. (The)

    3,719,490  
  7,651    

Eastman Chemical Co.

    642,608  

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 99.1% - (continued)  
      Materials - 2.8% - (continued)  
  13,697    

Ecolab, Inc.

  $ 1,818,277  
  45,492    

EI du Pont de Nemours & Co.

    3,671,659  
  7,031    

FMC Corp.

    513,615  
  69,840    

Freeport-McMoRan, Inc.(2)

    838,778  
  4,144    

International Flavors & Fragrances, Inc.

    559,440  
  21,664    

International Paper Co.

    1,226,399  
  17,331    

LyondellBasell Industries N.V., Class A

    1,462,563  
  3,286    

Martin Marietta Materials, Inc.

    731,398  
  23,024    

Monsanto Co.

    2,725,121  
  18,418    

Mosaic Co. (The)

    420,483  
  27,978    

Newmont Mining Corp.

    906,207  
  16,740    

Nucor Corp.

    968,744  
  13,442    

PPG Industries, Inc.

    1,478,082  
  14,999    

Praxair, Inc.

    1,988,117  
  10,274    

Sealed Air Corp.

    459,864  
  4,251    

Sherwin-Williams Co. (The)

    1,491,931  
  6,934    

Vulcan Materials Co.

    878,399  
  13,175    

WestRock Co.

    746,496  
   

 

 

 
      31,023,341  
   

 

 

 
      Media - 3.0%  
  19,327    

CBS Corp., Class B

    1,232,676  
  11,317    

Charter Communications, Inc., Class A(2)

    3,812,131  
  248,322    

Comcast Corp., Class A

    9,664,692  
  8,068    

Discovery Communications, Inc., Class A(2)

    208,396  
  11,062    

Discovery Communications, Inc., Class C(2)

    278,873  
  11,935    

DISH Network Corp., Class A(2)

    749,041  
  20,731    

Interpublic Group of Cos., Inc. (The)

    509,983  
  20,053    

News Corp., Class A

    274,726  
  6,285    

News Corp., Class B

    88,933  
  12,212    

Omnicom Group, Inc.

    1,012,375  
  5,032    

Scripps Networks Interactive, Inc., Class A

    343,736  
  40,692    

Time Warner, Inc.

    4,085,884  
  55,215    

Twenty-First Century Fox, Inc., Class A

    1,564,793  
  25,558    

Twenty-First Century Fox, Inc., Class B

    712,302  
  18,485    

Viacom, Inc., Class B

    620,541  
  76,329    

Walt Disney Co. (The)

    8,109,956  
   

 

 

 
      33,269,038  
   

 

 

 
      Pharmaceuticals, Biotechnology & Life Sciences - 8.6%  
  83,507    

AbbVie, Inc.

    6,055,093  
  16,911    

Agilent Technologies, Inc.

    1,002,991  
  11,782    

Alexion Pharmaceuticals, Inc.(2)

    1,433,516  
  17,623    

Allergan plc

    4,283,975  
  38,612    

Amgen, Inc.

    6,650,145  
  11,208    

Biogen, Inc.(2)

    3,041,403  
  86,440    

Bristol-Myers Squibb Co.

    4,816,437  
  40,969    

Celgene Corp.(2)

    5,320,644  
  50,947    

Eli Lilly & Co.

    4,192,938  
  68,563    

Gilead Sciences, Inc.

    4,852,889  
  7,661    

Illumina, Inc.(2)

    1,329,337  
  8,918    

Incyte Corp.(2)

    1,122,865  
  141,343    

Johnson & Johnson

    18,698,265  
  5,213    

Mallinckrodt plc(2)

    233,595  
  143,512    

Merck & Co., Inc.

    9,197,684  
  1,355    

Mettler-Toledo International, Inc.(2)

    797,472  
  24,185    

Mylan N.V.(2)

    938,862  
  5,774    

PerkinElmer, Inc.

    393,440  
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  4  

 


HIMCO VIT Index Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 99.1% - (continued)  
      Pharmaceuticals, Biotechnology & Life Sciences - 8.6% -
(continued)
 
  7,523    

Perrigo Co. plc

  $ 568,137  
  313,128    

Pfizer, Inc.

    10,517,969  
  3,998    

Regeneron Pharmaceuticals, Inc.(2)

    1,963,578  
  20,527    

Thermo Fisher Scientific, Inc.

    3,581,346  
  13,068    

Vertex Pharmaceuticals, Inc.(2)

    1,684,073  
  4,200    

Waters Corp.(2)

    772,128  
  25,752    

Zoetis, Inc.

    1,606,410  
   

 

 

 
      95,055,192  
   

 

 

 
      Real Estate - 2.9%  
  4,779    

Alexandria Real Estate Equities, Inc., REIT

    575,726  
  22,300    

American Tower Corp., REIT

    2,950,736  
  8,239    

Apartment Investment & Management Co., Class A, REIT

    354,030  
  7,230    

AvalonBay Communities, Inc., REIT

    1,389,389  
  8,073    

Boston Properties, Inc., REIT

    993,140  
  15,778    

CBRE Group, Inc., Class A, REIT(2)

    574,319  
  19,209    

Crown Castle International Corp., REIT

    1,924,358  
  8,383    

Digital Realty Trust, Inc., REIT

    946,860  
  4,088    

Equinix, Inc., REIT

    1,754,406  
  19,264    

Equity Residential, REIT

    1,268,149  
  3,442    

Essex Property Trust, Inc., REIT

    885,523  
  6,607    

Extra Space Storage, Inc., REIT

    515,346  
  3,790    

Federal Realty Investment Trust, REIT

    479,018  
  30,564    

GGP, Inc., REIT

    720,088  
  24,586    

HCP, Inc., REIT

    785,769  
  38,814    

Host Hotels & Resorts, Inc., REIT

    709,132  
  12,888    

Iron Mountain, Inc., REIT

    442,832  
  22,334    

Kimco Realty Corp., REIT

    409,829  
  6,249    

Macerich Co. (The), REIT

    362,817  
  5,959    

Mid-America Apartment Communities, Inc., REIT

    627,959  
  27,825    

Prologis, Inc., REIT

    1,631,658  
  7,845    

Public Storage, REIT

    1,635,918  
  14,327    

Realty Income Corp., REIT

    790,564  
  7,675    

Regency Centers Corp., REIT

    480,762  
  16,381    

Simon Property Group, Inc., REIT

    2,649,791  
  5,343    

SL Green Realty Corp., REIT

    565,289  
  14,030    

UDR, Inc., REIT

    546,749  
  18,620    

Ventas, Inc., REIT

    1,293,718  
  9,038    

Vornado Realty Trust, REIT

    848,668  
  19,212    

Welltower, Inc., REIT

    1,438,018  
  39,420    

Weyerhaeuser Co., REIT

    1,320,570  
   

 

 

 
      31,871,131  
   

 

 

 
      Retailing - 5.4%  
  3,875    

Advance Auto Parts, Inc.

    451,786  
  20,816    

Amazon.com, Inc.(2)

    20,149,888  
  3,454    

AutoNation, Inc.(2)

    145,621  
  1,477    

AutoZone, Inc.(2)

    842,569  
  7,616    

Bed Bath & Beyond, Inc.

    231,526  
  13,921    

Best Buy Co., Inc.

    798,091  
  9,718    

CarMax, Inc.(2)

    612,817  
  13,237    

Dollar General Corp.

    954,255  
  12,419    

Dollar Tree, Inc.(2)

    868,336  
  6,379    

Expedia, Inc.

    950,152  
  6,886    

Foot Locker, Inc.

    339,342  
  11,550    

Gap, Inc. (The)

    253,985  
  7,734    

Genuine Parts Co.

    717,406  
  62,730    

Home Depot, Inc. (The)

    9,622,782  

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 99.1% - (continued)  
      Retailing - 5.4% - (continued)  
  8,945    

Kohl’s Corp.

  $ 345,903  
  12,642    

L Brands, Inc.

    681,277  
  16,175    

LKQ Corp.(2)

    532,966  
  45,022    

Lowe’s Cos., Inc.

    3,490,556  
  15,977    

Macy’s, Inc.

    371,305  
  22,614    

Netflix, Inc.(2)

    3,378,758  
  5,837    

Nordstrom, Inc.

    279,184  
  4,775    

O’Reilly Automotive, Inc.(2)

    1,044,484  
  2,580    

Priceline Group, Inc. (The)(2)

    4,825,942  
  20,568    

Ross Stores, Inc.

    1,187,391  
  3,589    

Signet Jewelers Ltd.

    226,968  
  34,271    

Staples, Inc.

    345,109  
  28,948    

Target Corp.

    1,513,691  
  5,625    

Tiffany & Co.

    528,019  
  33,752    

TJX Cos., Inc. (The)

    2,435,882  
  6,746    

Tractor Supply Co.

    365,701  
  5,794    

TripAdvisor, Inc.(2)

    221,331  
  3,060    

Ulta Salon Cosmetics & Fragrance, Inc.(2)

    879,260  
   

 

 

 
      59,592,283  
   

 

 

 
      Semiconductors & Semiconductor Equipment - 3.4%  
  40,659    

Advanced Micro Devices, Inc.(2)

    507,424  
  19,257    

Analog Devices, Inc.

    1,498,195  
  56,385    

Applied Materials, Inc.

    2,329,264  
  21,059    

Broadcom Ltd.

    4,907,800  
  247,077    

Intel Corp.

    8,336,378  
  8,225    

KLA-Tencor Corp.

    752,670  
  8,464    

Lam Research Corp.

    1,197,064  
  12,036    

Microchip Technology, Inc.

    928,938  
  54,564    

Micron Technology, Inc.(2)

    1,629,281  
  31,219    

NVIDIA Corp.

    4,513,019  
  6,669    

Qorvo, Inc.(2)

    422,281  
  77,520    

QUALCOMM, Inc.

    4,280,654  
  9,682    

Skyworks Solutions, Inc.

    928,988  
  52,276    

Texas Instruments, Inc.

    4,021,593  
  13,015    

Xilinx, Inc.

    837,125  
   

 

 

 
      37,090,674  
   

 

 

 
      Software & Services - 13.2%  
  32,535    

Accenture plc, Class A

    4,023,929  
  36,381    

Activision Blizzard, Inc.

    2,094,454  
  25,956    

Adobe Systems, Inc.(2)

    3,671,217  
  9,071    

Akamai Technologies, Inc.(2)

    451,827  
  2,921    

Alliance Data Systems Corp.

    749,791  
  15,616    

Alphabet, Inc., Class A(2)

    14,517,883  
  15,656    

Alphabet, Inc., Class C(2)

    14,227,077  
  4,486    

ANSYS, Inc.(2)

    545,856  
  10,176    

Autodesk, Inc.(2)

    1,025,944  
  23,475    

Automatic Data Processing, Inc.

    2,405,248  
  16,442    

CA, Inc.

    566,756  
  7,931    

Citrix Systems, Inc.(2)

    631,149  
  30,904    

Cognizant Technology Solutions Corp., Class A

    2,052,026  
  7,623    

CSRA, Inc.

    242,030  
  14,857    

DXC Technology Co.

    1,139,829  
  52,814    

eBay, Inc.(2)

    1,844,265  
  16,267    

Electronic Arts, Inc.(2)

    1,719,747  
  124,023    

Facebook, Inc., Class A(2)

    18,724,993  
  17,345    

Fidelity National Information Services, Inc.

    1,481,263  
  11,143    

Fiserv, Inc.(2)

    1,363,235  
  4,745    

Gartner, Inc.(2)

    586,055  
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  5  

 


HIMCO VIT Index Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 99.1% - (continued)  
      Software & Services - 13.2% - (continued)  
  8,001    

Global Payments, Inc.

  $ 722,650  
  44,858    

International Business Machines Corp.

    6,900,506  
  12,771    

Intuit, Inc.

    1,696,117  
  49,216    

MasterCard, Inc., Class A

    5,977,283  
  405,089    

Microsoft Corp.

    27,922,785  
  157,603    

Oracle Corp.

    7,902,214  
  16,776    

Paychex, Inc.

    955,225  
  58,617    

PayPal Holdings, Inc.(2)

    3,145,974  
  9,328    

Red Hat, Inc.(2)

    893,156  
  35,084    

salesforce.com, Inc.(2)

    3,038,274  
  31,914    

Symantec Corp.

    901,571  
  7,887    

Synopsys, Inc.(2)

    575,199  
  8,690    

Total System Services, Inc.

    506,193  
  4,632    

VeriSign, Inc.(2)

    430,591  
  96,871    

Visa, Inc., Class A

    9,084,562  
  24,726    

Western Union Co. (The)

    471,030  
   

 

 

 
      145,187,904  
   

 

 

 
      Technology Hardware & Equipment - 5.5%  
  16,035    

Amphenol Corp., Class A

    1,183,704  
  273,566    

Apple, Inc.

    39,398,975  
  262,349    

Cisco Systems, Inc.

    8,211,524  
  48,284    

Corning, Inc.

    1,450,934  
  3,395    

F5 Networks, Inc.(2)

    431,369  
  7,160    

FLIR Systems, Inc.

    248,165  
  6,397    

Harris Corp.

    697,785  
  87,352    

Hewlett Packard Enterprise Co.

    1,449,170  
  88,323    

HP, Inc.

    1,543,886  
  20,048    

Juniper Networks, Inc.

    558,938  
  8,577    

Motorola Solutions, Inc.

    743,969  
  14,217    

NetApp, Inc.

    569,391  
  15,583    

Seagate Technology plc

    603,841  
  18,628    

TE Connectivity Ltd.

    1,465,651  
  15,281    

Western Digital Corp.

    1,353,896  
  11,201    

Xerox Corp.

    321,805  
   

 

 

 
      60,233,003  
   

 

 

 
      Telecommunication Services - 2.1%  
  322,581    

AT&T, Inc.

    12,170,981  
  28,796    

CenturyLink, Inc.

    687,648  
  15,359    

Level 3 Communications, Inc.(2)

    910,789  
  214,041    

Verizon Communications, Inc.

    9,559,071  
   

 

 

 
      23,328,489  
   

 

 

 
      Transportation - 2.3%  
  6,485    

Alaska Air Group, Inc.

    582,094  
  25,846    

American Airlines Group, Inc.

    1,300,571  
  7,392    

CH Robinson Worldwide, Inc.

    507,683  
  48,413    

CSX Corp.

    2,641,413  
  38,620    

Delta Air Lines, Inc.

    2,075,439  
  9,453    

Expeditors International of Washington, Inc.

    533,905  
  12,907    

FedEx Corp.

    2,805,078  
  4,501    

JB Hunt Transport Services, Inc.

    411,301  
  5,566    

Kansas City Southern

    582,482  
  15,205    

Norfolk Southern Corp.

    1,850,448  
  31,726    

Southwest Airlines Co.

    1,971,454  
  42,366    

Union Pacific Corp.

    4,614,081  
  14,785    

United Continental Holdings, Inc.(2)

    1,112,571  
  36,139    

United Parcel Service, Inc., Class B

    3,996,612  
   

 

 

 
      24,985,132  
   

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 99.1% - (continued)  
      Utilities - 3.1%  
  34,637    

AES Corp.

  $ 384,817  
  11,954    

Alliant Energy Corp.

    480,192  
  12,731    

Ameren Corp.

    696,004  
  25,800    

American Electric Power Co., Inc.

    1,792,326  
  9,350    

American Water Works Co., Inc.

    728,833  
  22,612    

CenterPoint Energy, Inc.

    619,117  
  14,715    

CMS Energy Corp.

    680,569  
  16,023    

Consolidated Edison, Inc.

    1,294,979  
  33,002    

Dominion Energy, Inc.

    2,528,943  
  9,412    

DTE Energy Co.

    995,696  
  36,722    

Duke Energy Corp.

    3,069,592  
  17,095    

Edison International

    1,336,658  
  9,416    

Entergy Corp.

    722,866  
  16,627    

Eversource Energy

    1,009,425  
  48,592    

Exelon Corp.

    1,752,713  
  23,283    

FirstEnergy Corp.

    678,932  
  24,564    

NextEra Energy, Inc.

    3,442,153  
  16,971    

NiSource, Inc.

    430,385  
  16,585    

NRG Energy, Inc.

    285,594  
  26,791    

PG&E Corp.

    1,778,119  
  5,853    

Pinnacle West Capital Corp.

    498,441  
  35,846    

PPL Corp.

    1,385,806  
  26,543    

Public Service Enterprise Group, Inc.

    1,141,614  
  7,499    

SCANA Corp.

    502,508  
  13,161    

Sempra Energy

    1,483,903  
  52,186    

Southern Co. (The)

    2,498,666  
  16,558    

WEC Energy Group, Inc.

    1,016,330  
  26,642    

Xcel Energy, Inc.

    1,222,335  
   

 

 

 
      34,457,516  
   

 

 

 
 

Total Common Stocks
(cost $554,544,219)

    1,089,830,936  
   

 

 

 
 

Total Long-Term Investments
(cost $554,544,219)

    1,089,830,936  
   

 

 

 
SHORT-TERM INVESTMENTS - 0.9%  
      Repurchase Agreements - 0.9%  
 

RBC Capital Markets LLC TriParty Repurchase Agreement (dated 06/30/2017, repurchase price $9,951,879, collateralized by GNMA 3.50% - 4.00%, 2043 - 2047, U.S. Treasury Notes 1.50% - 2.38%, 2017 - 2024, U.S. Treasury Inflation Index Note 0.38% , 2025, value of $10,123,187)

 
$     9,951,000    

1.06%, 07/03/2017

    9,951,000  
   

 

 

 
 

Total Short-Term Investments
(cost $9,951,000)

    9,951,000  
   

 

 

 
 

Total Investments
(cost $564,495,219)(4)

    100.0    $ 1,099,781,936  
 

Other Assets and Liabilities

         (333,023
   

 

 

    

 

 

 
 

Net Assets

    100.0    $     1,099,448,913  
   

 

 

    

 

 

 
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  6  

 


HIMCO VIT Index Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

 

Note: Percentage of investments as shown is the ratio of the total market value to total net assets.

 

     The Fund may refer to any one or more of the industry classifications used by one or more widely recognized market indices, ratings group indices and/or as defined by Fund management. Industry classifications may not be identical across all security types.

 

     Equity industry classifications used in this report are the Global Industry Classification Standard (GICS®), which was developed by and is the exclusive property and service mark of MSCI, Inc. and S&P.

 

     For Fund compliance purposes, the Fund may not use the same classification system shown in this report as these classifications are used for reporting ease.

 

(1)  See Significant Accounting Policies of accompanying Notes to Financial Statements regarding valuation of securities.

 

(2)  Non-income producing.

 

(3)  Affiliated company as defined under Sections 2(a)(2) and 2(a)(3) of the Investment Company Act of 1940. Hartford Investment Management Company, the Fund’s adviser, is a wholly-owned subsidiary of The Hartford Financial Services Group, Inc. A summary of transactions for the six-month period ended June 30, 2017 is as follows:

 

Company

   Beginning
Value At
January 1, 2017
     Purchase
Cost
     Sales
Proceeds
     Realized
Gain (Loss)
     Unrealized
Gain (Loss)
     Ending
Value At
June 30, 2017
     Dividend
Income
 

Hartford Financial Services Group, Inc. (The)

   $     984,497      $     —      $     (68,886)      $     12,372      $     85,304      $     1,013,287      $     9,268  

 

(4)  At June 30, 2017, the cost of securities for federal income tax purposes was $595,633,196, and the aggregate gross unrealized appreciation and depreciation based on that cost were:

 

Unrealized Appreciation

   $ 518,510,625  

Unrealized Depreciation

     (14,361,885
  

 

 

 

Net Unrealized Appreciation

   $     504,148,740  
  

 

 

 

Futures Contracts Outstanding at June 30, 2017

 

Description

   Number of
Contracts
     Expiration
Date
     Aggregate Cost      Notional Value      Unrealized
Appreciation/
(Depreciation)
 

Long position contracts:

              

S&P 500 (E-Mini)

     88        09/15/2017      $     10,700,546      $     10,651,976      $     (48,570)  

 

     Cash of $560,000 was pledged as initial margin deposit and collateral for the daily variation margin on open futures contracts at June 30, 2017.

 

GLOSSARY: (abbreviations used in preceding Schedule of Investments)
Index Abbreviations:

MSCI

   Morgan Stanley Capital International

S&P

   Standard & Poor’s
Other Abbreviations:

ETF

   Exchange Traded Fund

GNMA

   Government National Mortgage Association

REIT

   Real Estate Investment Trust
Counterparty Abbreviations:

RBC

   RBC Dominion Securities

 

The accompanying Notes are an integral part of these financial statements.

 

 

  7  

 


HIMCO VIT Index Fund

Schedule of Investments – (concluded)

June 30, 2017 (Unaudited)

 

 

 

Diversification by Sector

as of June 30, 2017

 

Sector    Percentage of
Net Assets
 

Equity Securities

  

Consumer Discretionary

     12.2

Consumer Staples

     9.0  

Energy

     6.0  

Financials

     14.4  

Health Care

     14.3  

Industrials

     10.2  

Information Technology

     22.1  

Materials

     2.8  

Real Estate

     2.9  

Telecommunication Services

     2.1  

Utilities

     3.1  
  

 

 

 

Total

     99.1
  

 

 

 

Short-Term Investments

     0.9  

Other assets and liabilities

      
  

 

 

 

Total

     100.0
  

 

 

 

A sector may be comprised of several industries. For Fund compliance purposes, the Fund may not use the same classification system and these sector classifications are used for reporting ease.

Investment Valuation Hierarchy Level Summary at June 30, 2017

 

Description

   Total     Level 1(1)     Level 2(1)      Level 3(1)  

Assets:

         

Common Stocks(2)

   $ 1,089,830,936     $ 1,089,830,936     $      $                         —  

Short-Term Investments

     9,951,000             9,951,000         
  

 

 

   

 

 

   

 

 

    

 

 

 

Total

   $     1,099,781,936     $     1,089,830,936     $             9,951,000      $  
  

 

 

   

 

 

   

 

 

    

 

 

 

Liabilities:

         

Futures(3)

   $ (48,570   $ (48,570   $      $  
  

 

 

   

 

 

   

 

 

    

 

 

 

Total

   $ (48,570   $ (48,570   $      $  
  

 

 

   

 

 

   

 

 

    

 

 

 

 

(1)  For the six-month period ended June 30, 2017, there were no transfers between any levels.

 

(2)  Refer to the Schedule of Investments for further industry breakout.

 

(3)  Derivative instruments (excluding purchased and written options, if applicable) are valued at the unrealized appreciation/depreciation on the investments.

 

Note: For purposes of reporting transfers between different hierarchy levels, both transfers in and out of each level, as applicable, are shown as if they occurred at the beginning of the period.

 

The accompanying Notes are an integral part of these financial statements.

 

 

  8  

 


HIMCO VIT Index Fund

Statement of Assets and Liabilities

June 30, 2017 (Unaudited)

 

 

 

Assets:

  

Investments in unaffiliated securities, at market value (cost $563,709,281)

   $     1,098,768,649  

Investments in affiliated securities, at market value (cost $785,938)

     1,013,287  

Cash(1)

     567,095  

Receivables:

  

Fund shares sold

     532,832  

Dividends and interest

     1,091,374  

Variation margin on futures contracts

     4,077  

Other assets

     8,771  
  

 

 

 

Total assets

     1,101,986,085  
  

 

 

 

Liabilities:

  

Payables:

  

Investment securities purchased

     461,833  

Fund shares redeemed

     1,603,783  

Investment management fees

     224,970  

Distribution fees

     81,374  

Accrued expenses

     165,212  
  

 

 

 

Total liabilities

     2,537,172  
  

 

 

 

Net assets

   $ 1,099,448,913  
  

 

 

 

Summary of Net Assets:

  

Capital stock and paid-in-capital

   $ 471,716,230  

Undistributed net investment income

     27,525,653  

Accumulated net realized gain

     64,968,883  

Unrealized appreciation of investments

     535,238,147  
  

 

 

 

Net assets

   $ 1,099,448,913  
  

 

 

 

Class IA:  Net asset value per share

   $ 45.39  
  

 

 

 

                 Shares Outstanding

     15,629,003  
  

 

 

 

                 Net Assets

   $ 709,478,437  
  

 

 

 

Class IB:   Net asset value per share

   $ 44.80  
  

 

 

 

                 Shares Outstanding

     8,705,072  
  

 

 

 

                 Net Assets

   $ 389,970,476  
  

 

 

 

 

(1)  Cash of $560,000 was pledged as initial margin deposit and collateral for the daily variation margin on open futures contracts at June 30, 2017.

 

The accompanying Notes are an integral part of these financial statements.

 

 

  9  

 


HIMCO VIT Index Fund

Statement of Operations

For the Six-Month Period Ended June 30, 2017 (Unaudited)

 

 

 

Investment Income:

  

Dividends from unaffiliated securities

   $ 11,153,169  

Dividends from affiliated securities

     9,268  

Interest

     23,238  
  

 

 

 

Total investment income, net

     11,185,675  
  

 

 

 

Expenses:

  

Investment management fees

     1,631,550  

Transfer agent fees

     7,522  

Distribution fees - Class IB

     488,667  

Custodian fees

     10,608  

Accounting service fees

     153,447  

Trustees fees

     63,141  

Audit fees

     33,310  

Printing fees

     42,257  

Legal fees

     73,598  

Insurance fees

     32,395  

Other expenses

     31,358  
  

 

 

 

Total expenses (before waivers)

     2,567,853  
  

 

 

 

Total waivers

     (284,110
  

 

 

 

Total expenses

     2,283,743  
  

 

 

 

Net Investment Income

     8,901,932  
  

 

 

 

Net Realized Gain on Investments and Other Financial Instruments:

  

Net realized gain on investments in unaffiliated securities

     31,617,168  

Net realized gain on investments in affiliated securities

     12,372  

Net realized gain on futures

     616,109  
  

 

 

 

Net Realized Gain on Investments and Other Financial Instruments

     32,245,649  
  

 

 

 

Net Changes in Unrealized Appreciation (Depreciation) of Investments and Other Financial Instruments:

  

Net unrealized appreciation of investments

     53,995,391  

Net unrealized depreciation of futures contracts

     (31,106
  

 

 

 

Net Changes in Unrealized Appreciation of Investments and Other Financial Instruments

     53,964,285  
  

 

 

 

Net Realized and Unrealized Gain on Investments and Other Financial Instruments

     86,209,934  
  

 

 

 

Net Increase in Net Assets Resulting from Operations

   $     95,111,866  
  

 

 

 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  10  

 


HIMCO VIT Index Fund

Statements of Changes in Net Assets

 

 

 

     For the
Six-Month
Period Ended
June 30, 2017
(Unaudited)
    For the
Year Ended
December 31,
2016
 

Operations:

    

Net investment income

   $ 8,901,932     $ 19,187,983  

Net realized gain on investments and other financial instruments

     32,245,649       67,798,334  

Net unrealized appreciation (depreciation) of investments and other financial instruments

     53,964,285       24,458,604  
  

 

 

   

 

 

 

Net Increase in Net Assets Resulting from Operations

     95,111,866       111,444,921  
  

 

 

   

 

 

 

Distributions to Shareholders:

    

From net investment income

    

Class IA

           (13,966,007

Class IB

           (8,249,355
  

 

 

   

 

 

 

Total distributions from net investment income

           (22,215,362
  

 

 

   

 

 

 

From net realized gain on investments

    

Class IA

           (46,415,619

Class IB

           (27,416,493
  

 

 

   

 

 

 

Total distributions from net realized gain on investments

           (73,832,112
  

 

 

   

 

 

 

Total distributions

           (96,047,474
  

 

 

   

 

 

 

Capital Share Transactions:

    

Class IA

    

Sold

     12,520,978       21,673,449  

Issued on reinvestment of distributions

           60,381,626  

Redeemed

     (41,410,754     (96,689,732
  

 

 

   

 

 

 

Total capital share transactions

     (28,889,776     (14,634,657
  

 

 

   

 

 

 

Class IB

    

Sold

     17,331,559       20,176,793  

Issued on reinvestment of distributions

           35,665,848  

Redeemed

     (42,730,824     (93,903,225
  

 

 

   

 

 

 

Total capital share transactions

     (25,399,265     (38,060,584
  

 

 

   

 

 

 

Net decrease from capital share transactions

     (54,289,041     (52,695,241
  

 

 

   

 

 

 

Net Increase (Decrease) in Net Assets

     40,822,825       (37,297,794
  

 

 

   

 

 

 

Net Assets:

    

Beginning of period

     1,058,626,088       1,095,923,882  
  

 

 

   

 

 

 

End of period

   $     1,099,448,913     $     1,058,626,088  
  

 

 

   

 

 

 

Undistributed net investment income

   $ 27,525,653     $ 18,623,721  
  

 

 

   

 

 

 

Shares:

    

Class IA

    

Sold

     283,920       529,762  

Issued on reinvestment of distributions

           1,499,047  

Redeemed

     (939,863     (2,384,897
  

 

 

   

 

 

 

Total share activity

     (655,943     (356,088
  

 

 

   

 

 

 

Class IB

    

Sold

     401,900       504,675  

Issued on reinvestment of distributions

           895,227  

Redeemed

     (979,575     (2,344,051
  

 

 

   

 

 

 

Total share activity

     (577,675     (944,149
  

 

 

   

 

 

 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  11  

 


HIMCO VIT Index Fund

Notes to Financial Statements

June 30, 2017 (Unaudited)

 

 

 

1. Organization:

HIMCO Variable Insurance Trust (the “Trust”) is an open-end registered management investment company. The Trust is organized under the laws of the State of Delaware and is registered with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940, as amended (“1940 Act”).

HIMCO VIT Index Fund (the “Fund”) serves as an underlying investment option for certain variable annuity and variable life insurance separate accounts of Hartford Life Insurance Company (“Hartford Life”) and its affiliates and certain qualified retirement plans. The Fund may also serve as an underlying investment option for certain variable annuity and variable life separate accounts of other insurance companies. Owners of variable annuity contracts and policyholders of variable life insurance contracts may choose the funds permitted in the variable insurance contract prospectus. In addition, participants in certain qualified retirement plans may choose the Fund if permitted by their plans.

The Fund is a series of the Trust. The Fund is the successor of a series of Hartford Series Fund, Inc. (the “Hartford Index HLS Fund”). The reorganization of the Hartford Index HLS Fund with and into the Fund occurred on October 20, 2014. All information regarding and references to periods prior to October 20, 2014 relate to the Hartford Index HLS Fund. The Fund is a diversified open-end management investment company and applies specialized accounting and reporting under Accounting Standards Codification Topic 946, Financial Services – Investment Companies. The Fund is authorized to issue an unlimited number of shares for each class.

The Fund is divided into Class IA and Class IB shares. Each class is offered at the per share net asset value (“NAV”) without a sales charge and is subject to the same expenses, except that the Class IB shares are subject to distribution and service fees charged pursuant to a distribution plan (the “Distribution Plan”) approved by the Board of Trustees in accordance with Rule 12b-1 under the 1940 Act and the requirements of the applicable market conduct rules of the Financial Industry Regulatory Authority concerning asset-based sales charges.

 

2. Significant Accounting Policies:

The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements, which are in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”). The preparation of financial statements in accordance with U.S. GAAP may require 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 resulting from operations during the reporting period. Actual results could differ from those estimates.

 

  a) Determination of Net Asset Value – The NAV of each class of the Fund’s shares is determined as of the close of regular trading on the New York Stock Exchange (the “Exchange”) (normally 4:00 p.m. Eastern Time) (the “NYSE Close”) on each day that the Exchange is open (“Valuation Date”). If the Exchange is closed due to weather or other extraordinary circumstances on a day it would typically be open for business, the Fund will treat such day as a typical business day and accept purchase and redemption orders and calculate the Fund’s NAV as of 4:00 p.m. Eastern Time. The NAV for each class of shares is determined by dividing the value of the Fund’s net assets attributable to a class of shares by the number of shares outstanding for that class. For any day where, due to technical or other issues, trading is halted before the scheduled close of the Exchange, and not as part of a trading halt that is effected on a market-wide basis, the Fund may elect to continue to treat the Valuation Date as occurring at the time of the schedule close of the Exchange. Information that becomes known to the Fund after the NAV has been calculated on a particular day will not generally be used to retroactively adjust the NAV determined earlier that day.

 

  b)

Investment Valuation and Fair Value Measurements – For purposes of calculating the NAV, portfolio securities and other assets held in the Fund’s portfolio for which market prices are readily available are valued at market value. Market value is generally determined on the basis of last reported sales prices or official close price. If no sales were reported, market value is based on prices obtained from independent pricing services, a quotation reporting system or established market makers. If market prices are not readily available or are deemed unreliable, the Fund will use the fair value of the security or other instrument as determined in good faith under policies and procedures established by and under the supervision of the Board of Trustees. Market prices are considered not readily available where there is an absence of

 

 

  12  

 


HIMCO VIT Index Fund

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

  current or reliable market-based data (e.g., trade information or broker quotes), including where events occur after the close of the relevant market, but prior to the NYSE Close that materially affect the values of the Fund’s portfolio holdings or assets. In addition, market prices are considered not readily available when, due to extraordinary circumstances, the exchanges or markets on which the securities or other instruments trade do not open for trading for the entire day and no other market prices are available. Securities and other instruments that are primarily traded on foreign markets may trade on days that are not business days of the Fund. The value of the foreign securities or other instruments in which the Fund invests may change on days when a shareholder will not be able to purchase or redeem shares of the Fund. Fair value pricing is subjective in nature and the use of fair value pricing by the Fund may cause the NAV of its shares to differ significantly from the NAV that would have been calculated using market prices at the close of the exchange on which a portfolio holding is primarily traded. There can be no assurance that the Fund could obtain the fair value assigned to an investment if the Fund were to sell the investment at approximately the time at which the Fund determines its NAV.

Fixed income securities, including those with a remaining maturity of less than sixty (60 days), and non-exchange traded derivatives held by the Fund are valued in accordance with procedures established by the Board of Trustees. Such investments are normally valued on the basis of quotes obtained from independent pricing services or brokers and dealers. Prices obtained from independent pricing services use information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Senior floating rate interests generally trade in over-the-counter (“OTC”) markets and are priced through an independent pricing service utilizing independent market quotations from loan dealers or financial institutions. Generally, the Fund may use fair valuation in regard to fixed income positions when the Fund holds defaulted or distressed investments or investments in a company in which a reorganization is pending. If pricing services do not provide a price for short term investments maturing in 60 days or less, such investments are generally valued at amortized cost if their original term to maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if the original term exceeded 60 days.

Exchange traded futures, options and options on futures are valued in accordance with procedures established by the Board of Trustees. Such instruments are normally valued on the basis of quotes obtained from independent pricing services. Prices obtained from independent pricing services use most recent settlement prices and/or bid and ask prices for futures; and last sale prices and bid and ask prices for options and options on futures. If pricing services are not able to provide prices for futures, such instruments will generally be valued at the most recent trade price as of the NYSE Close. If pricing services are not able to provide prices for options and options on futures, such instruments will generally be valued on the basis of quotes obtained from brokers, dealers or market makers. If the option is out of the money, within 30 days of expiration and no bid price is available, the option may be valued at zero. If such instruments do not trade on an exchange, values may be supplied by an independent pricing service using a formula or other objective method that may take into consideration the style, direction, expiration, strike price, notional value and volatility or other adjustments.

U.S. GAAP defines fair value as the price that the fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The U.S. GAAP fair value measurement standards require disclosure of a fair value hierarchy for each major category of assets and liabilities. Various inputs are used in determining the fair value of the Fund’s investments. These inputs are summarized into three broad hierarchy levels. This hierarchy is based on whether the valuation inputs are observable or unobservable. The determination of which category within the fair value hierarchy is appropriate for any given instrument is based on the lowest level of input that is significant to the fair value measurement. These levels are:

 

    Level 1 – Inputs using (unadjusted) quoted prices in active markets or exchanges for identical assets and liabilities. Level 1 may include exchange traded instruments, such as domestic equities, some foreign equities, options, futures, investment companies, exchange traded funds, rights and warrants.

 

   

Level 2 – Observable inputs other than Level 1 prices, which may include, but are not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities or other market corroborated inputs. Level 2 may include debt investments that are traded less frequently than exchange traded instruments and are valued using independent pricing services; foreign equities, which are principally traded

 

 

  13  

 


HIMCO VIT Index Fund

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

  on certain foreign markets and are adjusted daily pursuant to a fair value pricing service in order to reflect an adjustment for the factors occurring after the close of certain foreign markets but before the NYSE Close; senior floating rate interests, which are valued using an aggregate of dealer bids; short-term investments, which are valued at amortized cost; and swaps, which are valued based upon the terms of each swap contract.

 

    Level 3 – Significant unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available. Level 3 may include financial instruments whose values are determined using indicative market quotes or require significant management judgment or estimation. These unobservable valuation inputs may include estimates for current yields, maturity/duration, prepayment speed, and indicative market quotes for comparable investments along with other assumptions relating to credit quality, collateral value, complexity of the investment structure, general market conditions and liquidity. This category may include investments where trading has been halted or there are certain restrictions on trading. While these investments are priced using unobservable inputs, the valuation of these investments reflects the best available data and management believes the prices are a reasonable representation of exit price.

The procedures adopted by the Board of Trustees define how investments are to be valued, including the formation and activities of a Valuation Committee. The Valuation Committee has the overall responsibility for implementing the procedures adopted by the Board of Trustees, including the responsibility for determining the fair value of the Fund’s investments. The Valuation Committee is also responsible for determining in good faith the fair value of an investment when the value cannot be obtained from primary pricing services or alternative sources or if the valuation of an investment, as provided by the primary pricing service or alternative source, is believed not to reflect the investment’s fair value as of the Valuation Date.

The Valuation Committee is comprised of the Trust’s Chief Executive Officer, Treasurer, Chief Operating Officer, and Chief Legal Officer, or their designees, and other personnel of the investment manager subject to prior approval by the Board of Trustees. In addition, the Trust’s Chief Compliance Officer (“CCO”) shall designate a member of the compliance group to attend Valuation Committee meetings as a non-voting resource, to monitor for and provide guidance with respect to compliance with these procedures and to keep the Trust’s CCO regularly informed of pricing and Valuation Committee proceedings. Two members of the Valuation Committee or their designees, representing different departments, shall constitute a quorum for purposes of permitting the Committee to take action. The Valuation Committee will consider all relevant factors in determining an investment’s fair value, and may seek the advice of the Fund’s adviser, knowledgeable brokers, and legal counsel in making such determination.

At each quarterly meeting of the Board of Trustees, the Valuation Committee provides a written report that includes details of all fair-valued investments to the extent any are fair-valued, including the reason for the fair valuation, and an indication, when possible, of the accuracy of the valuation by disclosing the next available reliable public price quotation or the disposition price of such investments (the “look-back” review). The Board of Trustees then must consider for ratification all of the fair value determinations made during the previous quarter.

Valuation levels are not necessarily indicative of the risk associated with investing in such investments. Individual investments within any of the above mentioned asset classes may be assigned a different hierarchical level than those presented above, as individual circumstances dictate.

For additional information, refer to the Investment Valuation Hierarchy Level Summary included in the Schedule of Investments.

 

  c) Investment Transactions and Investment Income – Investment transactions are recorded as of the trade date (the date the order to buy or sell is executed) for financial reporting purposes. Investments purchased or sold on a when-issued or delayed-delivery basis may be settled a month or more after the trade date. Realized gains and losses are determined on the basis of identified cost.

Dividend income from domestic securities is recorded on the ex-dividend date. Interest income, including amortization of premium, accretion of discounts and additional principal received in-kind in lieu of cash, is accrued on a daily basis.

 

  d) Joint Trading Account The Fund may invest cash balances into a joint trading account that may be invested in one or more repurchase agreements.

 

 

  14  

 


HIMCO VIT Index Fund

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

 

  e) Fund Share Valuation and Dividend Distributions to Shareholders – Orders for the Fund’s shares are executed in accordance with the investment instructions of the contract holders and plan participants. Each class of shares offered by the Fund has equal rights as to assets and voting privileges (except that shareholders of a class have exclusive voting rights regarding any matter relating solely to that class of shares). Income and non-class specific expenses are allocated daily to each class on the basis of the relative net assets of the class. Realized and unrealized gains and losses are allocated daily based on the relative net assets of each class of shares of the Fund.

Orders for the purchase of the Fund’s shares received prior to the close of the Exchange on any day the Exchange is open for business are priced at the NAV determined as of the close of the Exchange. Orders received after the close of the Exchange, or on a day on which the Exchange and/or the Fund is not open for business, are priced at the next determined NAV.

Dividends are declared pursuant to a policy adopted by the Board of Trustees based upon the investment performance of the Fund. The policy of the Fund is to pay dividends from net investment income and to make distributions of realized gains, if any, at least once per year.

Distributions from net investment income, realized capital gains and capital are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP with respect to character and timing. These differences may include, but are not limited to, losses deferred due to wash sale adjustments, foreign currency gains and losses, adjustments related to Passive Foreign Investment Companies (“PFICs”), Real Estate Investment Trusts (“REITs”), Regulated Investment Companies (“RICs”), certain derivatives and partnerships. Permanent book and federal income tax basis differences relating to shareholder distributions will result in reclassifications to certain of the Fund’s capital accounts (see Federal Income Taxes: Reclassification of Capital Accounts note).

 

3. Securities and Other Investments:

 

  a) Repurchase Agreements and Reverse Repurchase Agreements – A repurchase agreement is an agreement by which a counterparty agrees to sell an investment and agrees to repurchase the investment sold from the buyer, the Fund, at a mutually agreed upon time and price. A reverse repurchase agreement is an agreement by which the Fund agrees to sell an investment and agrees to repurchase the investment sold from the buyer, the counterparty, at a mutually agreed upon time and price. During the period of the repurchase agreement, the counterparty will deposit cash and or securities in a third party custodial account to serve as collateral. At the time the Fund enters into a repurchase agreement, the value of the underlying collateral, including accrued interest, will be equal to or exceed the value of the repurchase agreement. Repurchase agreements expose the Fund to counterparty risk – that is, the risk that the counterparty will not fulfill its obligations. To minimize counterparty risk, the investments that serve to collateralize the repurchase agreement are held by the Fund’s custodian in book entry or physical form in the custodial account of the Fund or in a third party custodial account. Repurchase agreements are valued at cost plus accrued interest, which approximates fair value. Repurchase agreements have master netting arrangements which allow the Fund to offset amounts owed to a counterparty with amounts owed by the counterparty, including any collateral. Upon an event of default under a master repurchase agreement, the non-defaulting party may close out all transactions traded under such agreement and net amounts owed under each transaction to one net amount payable by one party to the other. Absent an event of default, the master repurchase agreement does not result in an offset of reported amounts of assets and liabilities in the Statement of Assets and Liabilities across transactions between the Fund and the applicable counterparty. The Fund, as shown on the Schedule of Investments, had outstanding repurchase agreements and related collateral as of June 30, 2017.

 

  b)

Investments Purchased on a When-Issued or Delayed-Delivery Basis – Delivery and payment for investments that have been purchased by the Fund on a forward commitment, or when-issued or delayed-delivery basis, take place beyond the customary settlement period. The Fund may dispose of or renegotiate a delayed-delivery transaction after it is entered into, and may sell delayed-delivery investments before they are delivered, which may result in a realized gain or loss. During this period, such investments are subject to market fluctuations, and the Fund identifies investments segregated in its records with a value at least equal to the amount of the commitment. When-issued and delayed delivery investments and forward commitments involve the risk that the investment the Fund buys will lose value prior to its delivery. There are also risks that the investment will never be issued or that the other party to the transaction will not

 

 

  15  

 


HIMCO VIT Index Fund

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

  meet its obligation. If this occurs, the Fund loses both the investment opportunity for the assets it set aside to pay for the investment and any gain in the investment’s price. The Fund did not hold when-issued or delayed-delivery investments as of June 30, 2017.

 

4. Financial Derivative Instruments:

The following disclosures contain information on how and why the Fund uses derivative instruments, the credit-risk-related contingent features in certain derivative instruments, and how derivative instruments affect the Fund’s financial position and results of operations. The location and fair value amounts of these instruments in the Statement of Assets and Liabilities and the realized gains and losses and changes in unrealized gains and losses in the Statement of Operations, each categorized by type of derivative contract, are included in the following Additional Derivative Instrument Information footnote. The derivative instruments outstanding as of year-end are disclosed in the notes to the Schedule of Investments, if applicable. The amounts of realized gains and losses and changes in unrealized appreciation and depreciation on derivative instruments during the year are disclosed in the Statement of Operations.

 

  a) Futures Contracts – The Fund may enter into futures contracts. A futures contract is an agreement between two parties to buy or sell an asset at a set price on a future date. The Fund uses futures contracts to manage or obtain exposure to the investment markets, commodities, or movements in interest rates and currency values. The primary risks associated with the use of futures contracts are the imperfect correlation between the change in market value of the investments held by the Fund and the prices of futures contracts and the possibility of an illiquid market. Upon entering into a futures contract, the Fund is required to deposit with a futures commission merchant (“FCM”) an amount of cash or U.S. Government or Agency Obligations in accordance with the initial margin requirements of the broker or exchange. Futures contracts are marked to market daily at the most recent settlement price reported by an exchange on which, over time, they are traded most extensively, and an appropriate payable or receivable for the change in value (“variation margin”) is recorded by the Fund. Gains or losses are recognized but not considered realized until the contracts expire or are closed. Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed in the Statement of Assets and Liabilities; however, the Fund seeks to reduce this risk through the use of an FCM. The Fund, as shown on the Schedule of Investments, had outstanding futures contracts as of June 30, 2017.

Additional Derivative Instrument Information:

Fair Value of Derivative Instruments in the Statement of Assets and Liabilities as of June 30, 2017:

 

     Risk Exposure Category  
     Interest Rate
Contracts
     Foreign
Exchange
Contracts
     Credit
Contracts
     Equity
Contracts
     Commodity
Contracts
     Other
Contracts
     Total  

Liabilities:

                    

Unrealized depreciation on futures(1)

   $     —      $     —      $     —      $     48,570      $     —      $     —      $     48,570  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $      $      $      $ 48,570      $      $      $ 48,570  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (1)  Includes cumulative appreciation/depreciation on financial futures contracts as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.

The volume of derivatives that is presented in the Schedule of Investments is consistent with the derivative activity during the six-month period ended June 30, 2017.

 

 

  16  

 


HIMCO VIT Index Fund

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

The Effect of Derivative Instruments in the Statement of Operations for the six-month period ended June 30, 2017:

 

     Risk Exposure Category  
     Interest Rate
Contracts
     Foreign
Exchange
Contracts
     Credit
Contracts
     Equity
Contracts
    Commodity
Contracts
     Other
Contracts
     Total  

Realized Gain on Derivatives Recognized as a Result of Operations:

 

     

Net realized gain on futures

   $     —      $     —      $     —      $     616,109     $     —      $     —      $     616,109  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total

   $      $      $      $ 616,109     $      $      $ 616,109  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Net Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized as a Result of Operations:

 

     

Net change in unrealized depreciation of futures

   $      $      $      $ (31,106   $      $      $ (31,106
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total

   $      $      $      $ (31,106   $      $      $ (31,106
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

  b) Balance Sheet Offsetting Information – Set forth below are tables which disclose both gross information and net information about instruments and transactions eligible for offset in the financial statements, and instruments and transactions that are subject to a master netting arrangement, as well as amounts related to margin, reflected as financial collateral (including cash collateral), held at clearing brokers, counterparties and the Fund’s custodian. The master netting arrangements allow the clearing brokers to net any collateral held in or on behalf of the Fund, or liabilities or payment obligations of the clearing brokers to the Fund, against any liabilities or payment obligations of the Fund to the clearing brokers. The Fund is required to deposit financial collateral (including cash collateral) at the Fund’s custodian on behalf of clearing brokers and counterparties to continually meet the original and maintenance requirements established by the clearing brokers and counterparties. Such requirements are specific to the respective clearing broker or counterparty. Certain master netting arrangements may not be enforceable in a bankruptcy.

The following tables present the Fund’s derivative assets and liabilities, presented on a gross basis as no amounts are netted within the Statement of Assets and Liabilities, by counterparty net of amounts available for offset under a master netting agreement or similar agreement (“MNA”) and net of the related collateral received/pledged by the Fund as of June 30, 2017:

 

Derivative Financial Instruments:

   Assets      Liabilities  

Futures contracts

   $     —      $     48,570  
  

 

 

    

 

 

 

Total gross amount of derivative assets and liabilities in the Statement of Assets and Liabilities

            48,570  
  

 

 

    

 

 

 

Derivatives not subject to a MNA

            48,570  
  

 

 

    

 

 

 

Total gross amount of derivative assets and liabilities subject to MNA or similar agreements

   $      $  
  

 

 

    

 

 

 

 

5. Principal Risks:

The market values of equity securities, such as common stocks and preferred stocks, or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. The market value of equity securities may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Equity securities and equity related investments generally have greater market price volatility than fixed income securities.

The Fund may be exposed to counterparty risk, or the risk that an institution or other entity with which the Fund has unsettled or open transactions will default.

 

 

  17  

 


HIMCO VIT Index Fund

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

 

6. Federal Income Taxes:

 

  a) Federal Income Taxes – For federal income tax purposes, the Fund intends to continue to qualify as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (“IRC”), by distributing substantially all of its taxable net investment income and net realized capital gains to its shareholders and otherwise complying with the requirements of the IRC. The Fund distributed substantially all of its income and capital gains in prior years, if applicable, and intends to distribute substantially all of its income and capital gains prior to the next fiscal year-end. Accordingly, no provision for federal income or excise taxes has been made in the accompanying financial statements. Distributions from short-term capital gains are treated as ordinary income distributions for federal income tax purposes.

 

  b) Net Investment Income (Loss), Net Realized Gains (Losses) and Distributions – Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes primarily because of losses deferred due to wash sale adjustments, adjustments related to REITs, certain derivatives and corporate actions. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains (losses) were recorded by the Fund.

 

  c) Distributions and Components of Distributable Earnings – The tax character of distributions paid by the Fund for the periods indicated is as follows (as adjusted for dividends payable, if applicable):

 

     For the Year Ended
December 31, 2016
     For the Year Ended
December 31, 2015
 

Ordinary Income

   $     22,579,859      $     4,413,528  

Long-Term Capital Gains(1)

     73,467,615        13,266,673  

 

  (1)  The Fund designates these distributions as capital gain dividends per IRC Sec. 852(b) (3) (C).

As of December 31, 2016, the Fund’s components of distributable earnings (deficit) on a tax basis were as follows:

 

     Amount  

Undistributed Ordinary Income

   $ 19,068,465  

Undistributed Long-Term Capital Gain

     62,292,559  

Unrealized Appreciation (Depreciation)(1)

     451,259,793  
  

 

 

 

Total Accumulated Earnings (Deficit)

   $     532,620,817  
  

 

 

 

 

  (1)  Differences between book-basis and tax-basis unrealized appreciation (depreciation) may be attributable to the losses deferred due to wash sale adjustments, adjustments related to REITs, certain derivatives and corporate actions.

 

  d) Reclassification of Capital Accounts – The Fund may record reclassifications in its capital accounts. These reclassifications have no impact on the total net assets of the Fund. The reclassifications are a result of permanent differences between U.S. GAAP and tax accounting for such items as REITs and corporate actions. Adjustments are made to reflect the impact these items have on current and future distributions to shareholders. Therefore, the source of the Fund’s distributions may be shown in the accompanying Statements of Changes in Net Assets as from undistributed net investment income, from accumulated net realized gains on investments or from capital depending on the type of book and tax differences that exist. For the fiscal year ended December 31, 2016, the Fund recorded reclassifications to increase (decrease) the accounts listed below:

 

     Amount  

Paid In Capital

   $  

Undistributed Net Investment Income

         (860,783

Accumulated Net Realized Gain

     860,783  

 

 

  18  

 


HIMCO VIT Index Fund

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

 

  e) Capital Loss Carryforward – Under U.S. tax law, the Fund is permitted to carry forward capital losses for an unlimited period. Additionally, capital loss carryforwards retain their character as either short-term or long-term capital losses rather than being considered all short-term as permitted under prior regulation.

The Fund had no capital loss carryforwards for U.S. federal income tax purposes as of December 31, 2016.

 

  f) Accounting for Uncertainty in Income Taxes – In accordance with U.S. GAAP, the Fund analyzes all open tax years, as defined by the statute of limitations, for all major jurisdictions. Generally, tax authorities can examine all tax returns filed for the last three years. The Fund does not have an examination in progress.

The Fund has reviewed all open tax years and major jurisdictions and concluded that these financial reporting rules had no effect on the Fund’s financial position or results of operations. There is no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on the tax return for the fiscal year ended December 31, 2016. The Fund is also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

 

7. Fees and Expenses:

 

  a) Investment Management Agreement – Hartford Investment Management Company (“Hartford Investment Management”) serves as the Fund’s investment manager pursuant to an Investment Management Agreement with the Trust. Hartford Investment Management is a wholly owned subsidiary of The Hartford Financial Services Group, Inc. (“The Hartford”). The investment manager provides day-to-day investment management services to the Fund and has overall investment supervisory responsibility for the Fund. In addition, the investment manager provides administrative personnel, services, equipment, facilities and office space for operation of the Fund.

The schedule below reflects the rates of compensation as a percentage of the Fund’s average daily net assets paid to the investment manager for investment management services rendered as of June 30, 2017; the rates are accrued daily and paid monthly.

 

Average Daily Net Assets

   Annual Fee  

On first $2 billion

     0.30%  

On next $3 billion

     0.20%  

On next $5 billion

     0.18%  

Over $10 billion

     0.17%  

 

  b) Accounting Services Agreement State Street Bank and Trust Company (“State Street Bank”) provides the Fund with accounting services pursuant to a fund accounting agreement by and between the Trust, on behalf of the Fund, and State Street Bank. The amount paid for accounting services can be found in the Statement of Operations. These fees are accrued daily and paid monthly.

 

  c) Operating Expenses – Allocable expenses incurred by the Trust are allocated to the Fund and allocated to classes within the Fund in proportion to the average daily net assets of the Fund and each class, except where allocation of certain expenses is more fairly made directly to the Fund or to specific classes within the Fund.

Hartford Investment Management has contractually agreed to reimburse expenses (exclusive of taxes, interest expense, brokerage commissions, acquired fund fees and expenses and extraordinary expenses) to the extent necessary to maintain total annual operating expenses of the Fund as follows; 0.33% for Class IA and 0.58% for Class IB. This contractual arrangement will remain in effect until April 30, 2018 and shall renew automatically for one-year terms, unless the investment manager provides written notice of termination prior to the start of the next term or upon approval of the Board of Trustees of the Fund.

 

  d)

Distribution Plan for Class IB Shares – HIMCO Distribution Services Company, a wholly owned subsidiary of The Hartford, serves as the principal underwriter and distributor of the Fund. The Trust, on behalf of the Fund, has adopted a Distribution Plan pursuant to Rule 12b-1 of the 1940 Act for Class IB shares to compensate the distributor, from assets

 

 

  19  

 


HIMCO VIT Index Fund

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

  attributable to the services rendered and expenses borne in connection with activities primarily intended to result in the sale of the Class IB shares, subject to the review and approval of the Board of Trustees.

The Distribution Plan provides that the Fund may pay annually up to 0.25% of the average daily net assets of the Fund attributable to its Class IB shares for activities primarily intended to result in the sale of Class IB shares. The Board of Trustees has the authority to suspend or reduce these payments at any point in time. Under the terms of the Distribution Plan and the principal underwriting agreement, the Fund is authorized to make payments monthly to the distributor that may be used to pay or reimburse entities, including insurance company affiliates of Hartford Investment Management, providing distribution and shareholder servicing with respect to the Class IB shares for such entities’ fees or expenses incurred or paid in that regard. The distribution fee paid during the period can be found in the Statement of Operations. These fees are accrued daily and paid monthly or at such other intervals as the Board of Trustees may determine.

 

  e) Transfer Agent Fees – State Street Bank provides transfer agent services to the Fund. The transfer agent is reimbursed for out-of-pocket expenses and other costs associated with the services it provides to the Fund, including costs invoiced by sub-contractors. Hartford Investment Management and its affiliates may pay, out of their own assets, compensation to third-party administrators for recordkeeping and other administrative services. The amount paid for transfer agent services can be found in the Statement of Operations. These fees are accrued daily and paid monthly.

 

  f) Trustee Fees – The Board of Trustees is responsible for oversight of the Fund. The Board of Trustees elects officers who are responsible for the day to day operations of the Fund. The Board of Trustees oversees the investment manager and the other principal service providers of the Fund. The Board of Trustees currently holds four regularly scheduled meetings throughout each year. In addition, the Board of Trustees may hold special meetings at other times either in person or by telephone. The Trustee fees paid during the period can be found in the Statement of Operations.

 

8. Investment Transactions:

For the six-month period ended June 30, 2017, the aggregate cost of purchases and proceeds from sales of investment securities (excluding short-term investments) was as follows:

 

     Amount  

Cost of Purchases

   $     25,349,311  

Sales Proceeds

     74,078,453  

 

9. Pending Legal Proceedings:

On June 2, 2011, a complaint was filed against Hartford Investment Management Company in the United States District Court of Connecticut (Deutsche Bank Trust Company Americas v. Aetna, Inc., ING Investment Trust Co., Milan E. Chilla, Hartford Investment Management Co., and UBS AG (D. Conn.)). In a similar action, plaintiffs filed a complaint listing The Hartford Index HLS Fund, which was merged into HIMCO VIT Index Fund in October, 2014, as members of the defendant class (The Official Committee of Unsecured Creditors of Tribune Company v. Fitzsimons, et al. (Bankr. D. Del.)). The complaints relate to the bankruptcy of the Tribune Company, which was a public company that repurchased its shares in a leveraged buyout in 2007, but entered bankruptcy a year later. The plaintiffs in each case allege that the repurchase of shares acted as a fraudulent transfer. The plaintiffs in each case seek to recover from each class member the amount of consideration received in the buyout. The Hartford Index HLS Fund held 23,987 shares and received $815,558 in the buyout. The Hartford Index HLS Fund is listed as a member of the defendant shareholder class in an exhibit to the Complaint. Each action was transferred to the United States District Court for the Southern District of New York. In September 2013, the court dismissed the Deutsche Bank Trust Company Americas action, and this dismissal was affirmed in March 2016 by the United States Court of Appeals for the Second Circuit. The plaintiff in the Deutsche Bank Trust Company Americas action has filed a petition for writ of certiorari, which is pending before the U.S. Supreme Court. In The Official Committee of Unsecured Creditors of Tribune Company action, the court in January 2017 granted the motion to dismiss filed in 2014 by the shareholder defendants. As a result, the shareholder defendants, including The Hartford Index HLS Fund, have all now been dismissed from the case. Because other non-shareholder defendants remain in the lawsuit, the dismissal order is not immediately appealable by the plaintiff, but an eventual appeal is expected. The Hartford, on behalf of the Fund, intends to continue to vigorously defend these actions.

 

 

  20  

 


HIMCO VIT Index Fund

Notes to Financial Statements – (concluded)

June 30, 2017 (Unaudited)

 

 

 

 

10. Recent Accounting Pronouncements:

In October 2016, the SEC adopted amendments to rules under the 1940 Act (“final rules”) intended to modernize the reporting and disclosure of information by registered investment companies. The final rules amend Regulation S-X and require investment companies to provide standardized, enhanced derivatives disclosures in fund financial statements in a format designed for individual investors. The amendments to Regulation S-X also update the disclosures for other investments in and advances to affiliates and amend the rules regarding the general form and content of fund financial statements. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the amendments and their impact, if any, on the Fund’s financial statements.

 

11. Indemnifications:

Under the Trust’s organizational documents, the Trust shall indemnify its officers and trustees to the full extent required or permitted under The Delaware Statutory Trust Act and the federal securities laws. In addition, the Trust, on behalf of the Fund, may enter into contracts that contain a variety of indemnifications. The Trust’s maximum exposure under these arrangements is unknown. However, as of the date of these financial statements the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

 

12. Subsequent Event:

Management has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the Financial Statements were issued. Based on this evaluation, no adjustments to, or disclosures in, the Financial Statements were necessary as of June 30, 2017.

 

 

  21  

 


HIMCO VIT Index Fund

Financial Highlights

 

 

 

    — Selected Per-Share Data(1)     — Ratios and Supplemental Data —  

Class

  Net Asset
Value at,
Beginning
of Period
    Net
Investment
Income
(Loss)
    Net
Realized
and
Unrealized
Gain (Loss)
on
Investments
    Total from
Investment
Operations
    Distributions
from Net
Investment
Income
    Distributions
from
Realized
Gain on
Investments
    Total
Distributions
    Net
Asset
Value
End of
Period
    Total
Return(2)
    Net
Assets at
End of
Period
(000s)
    Ratio of
Expenses
to
Average
Net
Assets
Before
Adjust-
ments(3)
    Ratio of
Expenses
to
Average
Net
Assets
After
Adjust-
ments(3)
    Ratio of
Net
Investment
Income
(Loss) to
Average
Net Assets
 
HIMCO VIT Index Fund                    

For the Six-Month Period Ended June 30, 2017 (Unaudited)

 

                 

IA

  $   41.58     $   0.38     $ 3.43     $   3.81     $     $     $     $ 45.39       9.19 %(4)    $   709,478         0.38 %(5)        0.33 %(5)        1.73 %(5) 

IB

    41.09       0.32       3.39       3.71                         44.80       9.03 (4)      389,970       0.63 (5)      0.58 (5)      1.48 (5) 

For the Year Ended December 31, 2016

 

                 

IA

  $ 40.92     $ 0.79     $ 3.82     $ 4.61     $   (0.91   $   (3.04   $   (3.95   $   41.58         11.59   $ 677,208       0.38     0.33     1.93

IB

    40.57       0.68       3.79       4.47       (0.91     (3.04     (3.95     41.09       11.34       381,418       0.63       0.58       1.68  

For the Year Ended December 31, 2015

 

                 

IA

  $ 41.11     $ 0.79     $   (0.34   $ 0.45     $ (0.15   $ (0.49   $ (0.64   $ 40.92       1.06   $ 680,974       0.42     0.33     1.92

IB

    40.86       0.69       (0.34     0.35       (0.15     (0.49     (0.64     40.57       0.82       414,950       0.67       0.58       1.67  

For the Year Ended December 31, 2014

 

                 

IA

  $ 38.54     $ 0.69     $ 4.23     $ 4.92     $ (0.58   $ (1.77   $ (2.35   $ 41.11       13.33   $ 760,768       0.33     0.33     1.74

IB

    38.35       0.59       4.19       4.78       (0.50     (1.77     (2.27     40.86       13.01       467,467       0.58       0.58       1.49  

For the Year Ended December 31, 2013(6)

 

                 

IA

  $ 29.69     $ 0.62     $ 8.85     $ 9.47     $ (0.62   $     $ (0.62   $ 38.54       31.95   $ 763,868       0.33     0.33     1.79

IB

    29.56       0.53       8.80       9.33       (0.54           (0.54     38.35       31.61       413,119       0.58       0.58       1.54  

For the Year Ended December 31, 2012(6)(7)

 

                 

IA

  $ 26.20     $ 0.61     $ 3.48     $ 4.09     $ (0.60   $     $ (0.60   $ 29.69       15.63   $ 691,786       0.33     0.33     1.98

IB

    26.09       0.49       3.51       4.00       (0.53           (0.53     29.56       15.34       307,129       0.58       0.58       1.75  

 

(1)  Information presented relates to a share outstanding throughout the indicated period. Net investment income (loss) per share amounts are calculated based on average shares outstanding unless otherwise noted.
(2)  The figures do not include sales charges or other fees which may be applied at the variable life insurance, variable annuity or qualified retirement plan product level. Any such additional sales charges or other fees would lower the Fund’s performance.
(3)  Adjustments include waivers and reimbursements, if applicable.
(4)  Not annualized.
(5)  Annualized.
(6)  Financial highlights for the fiscal years ended December 31, 2013 and December 31, 2012 were audited by the Predecessor Fund’s auditor.
(7)  Net investment income (loss) per share amounts have been calculated using the SEC method.

 

     Portfolio Turnover
Rate for
All Share Classes
 

For the Six Months Ended June 30, 2017 (Unaudited)

     2

For the Year Ended December 31, 2016

     12  

For the Year Ended December 31, 2015

     8  

For the Year Ended December 31, 2014

     3  

For the Year Ended December 31, 2013(1)

     3  

For the Year Ended December 31, 2012(1)

     7  

 

(1)  Financial highlights for the fiscal years ended December 31, 2013 and December 31, 2012 were audited by the Predecessor Fund’s auditor.

 

 

  22  

 


HIMCO VIT Index Fund

 

 

 

HOW TO OBTAIN A COPY OF THE FUND’S PROXY VOTING POLICIES AND VOTING RECORDS (UNAUDITED)

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities and information about how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 are available (1) without charge, upon request, by calling 1-800-862-6668 and (2) on the SEC’s website at http://www.sec.gov. Additionally, a complete list of holdings is available on the Fund’s website at www.HVITFunds.com.

QUARTERLY PORTFOLIO HOLDINGS INFORMATION (UNAUDITED)

The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available (1) without charge, upon request, by calling 1-800-862-6668 and (2) on the SEC’s website at http://www.sec.gov. The Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

 

 

  23  

 


HIMCO VIT Index Fund

Expense Example (Unaudited)

 

 

 

Your Fund’s Expenses

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including investment management fees, distribution and/or service (12b-1) fees, if any, and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period of January 1, 2017 through June 30, 2017.

Actual Expenses

The first set of rows of the table below provides information about actual account values and actual expenses. You may use the information in this row, 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 line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or fees which may be applied at the variable life insurance, variable annuity, or qualified retirement plan product level. Therefore, the second set of rows of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would be higher.

 

      Beginning
Account Value
1/1/17
     Ending
Account Value
6/30/17
     Expenses Paid
During Period
1/1/17 - 6/30/17(1)
     Net Annualized
Expense Ratio(2)
 

Actual

           

Class IA

   $ 1,000      $ 1,091.90      $ 1.71        0.33

Class IB

   $ 1,000      $ 1,090.30      $ 3.01        0.58

Hypothetical

           

Class IA

   $ 1,000      $ 1,023.16      $ 1.66        0.33

Class IB

   $ 1,000      $ 1,021.92      $ 2.91        0.58

 

(1)  Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period.
(2)  Net annualized expense ratio is reflective of any applicable contractual fee waivers and/or expense reimbursements or voluntary fee waivers. Details regarding fee waivers can be found in Fees and Expenses of the accompanying Notes to Financial Statements.

 

 

  24  

 


THIS PRIVACY POLICY IS NOT PART OF THIS REPORT

Privacy Policy and Practices of The Hartford Financial Services Group, Inc. and its Affiliates

(herein called “we, our and us”)

This Privacy Policy applies to our United States Operations

We value your trust. We are committed to the responsible:

a) management;

b) use; and

c) protection;

of Personal Information.

This notice describes how we collect, disclose, and protect Personal Information.

We collect Personal Information to:

a) service your Transactions with us; and

b) support our business functions.

We may obtain Personal Information from:

a) You;

b) your Transactions with us; and

c) third parties such as a consumer-reporting agency.

Based on the type of product or service You apply for or get from us, Personal Information such as:

a) your name;

b) your address;

c) your income;

d) your payment; or

e) your credit history;

may be gathered from sources such as applications, Transactions, and consumer reports.

To serve You and service our business, we may share certain Personal Information. We will share Personal Information, only as allowed by law, with affiliates such as:

a) our insurance companies;

b) our employee agents;

c) our brokerage firms; and

d) our administrators.

As allowed by law, we may share Personal Financial Information with our affiliates to:

a) market our products; or

b) market our services;

to You without providing You with an option to prevent these disclosures.

We may also share Personal Information, only as allowed by law, with unaffiliated third parties including:

a) independent agents;

b) brokerage firms;

c) insurance companies;

d) administrators; and

e) service providers;

who help us serve You and service our business.

When allowed by law, we may share certain Personal Financial Information with other unaffiliated third parties who assist us by performing services or functions such as:

a) taking surveys;

b) marketing our products or services; or

c) offering financial products or services under a joint agreement between us and one or more financial institutions.

We, and third parties we partner with, may track some of the pages You visit through the use of:

a) cookies;

b) pixel tagging; or

c) other technologies;

and currently do not process or comply with any web browser’s “do not track” signal or similar mechanism that indicates a request to disable online tracking of individual users who visit our websites or use our services.

For more information, our Online Privacy Policy, which governs information we collect on our website and our affiliate websites, which is available at Online Privacy Policy.

We will not sell or share your Personal Financial Information with anyone for purposes unrelated to our business functions without offering You the opportunity to:

a) “opt-out;” or

b) “opt-in;”

as required by law.

We only disclose Personal Health Information with:

a) your proper written authorization; or

b) as otherwise allowed or required by law.

Our employees have access to Personal Information in the course of doing their jobs, such as:

a) underwriting policies;

b) paying claims;

c) developing new products; or

d) advising customers of our products and services.

We use manual and electronic security procedures to maintain:

a) the confidentiality; and

b) the integrity of;

Personal Information that we have. We use these procedures to guard against unauthorized access.

 


 

 

Some techniques we use to protect Personal Information include:

a) secured files;

b) user authentication;

c) encryption;

d) firewall technology; and

e) the use of detection software.

We are responsible for and must:

a) identify information to be protected;

b) provide an adequate level of protection for that data;

c) grant access to protected data only to those people who must use it in the performance of their job-related duties.

Employees who violate our privacy policies and procedures may be subject to discipline, which may include ending their employment with us.

We will continue to follow our Privacy Policy regarding Personal Information even when a business relationship no longer exists between us.

As used in this Privacy Notice:

Application means your request for our product or service.

Personal Financial Information means financial information such as:

a) credit history;

b) income;

c) financial benefits; or

d) policy or claim information.

Personal Financial Information may include Social Security Numbers, Driver’s license numbers, or other government-issued identification numbers, or credit, debit card, or bank account numbers.

Personal Health Information means health information such as:

a) your medical records; or

b) information about your illness, disability or injury.

Personal Information means information that identifies You personally and is not otherwise available to the public. It includes:

a) Personal Financial Information; and

b) Personal Health Information.

Transaction means your business dealings with us, such as:

a) your Application;

b) your request for us to pay a claim; and

c) your request for us to take an action on your account.

You means an individual who has given us Personal Information in conjunction with:

a) asking about;

b) applying for; or

c) obtaining;

a financial product or service from us if the product or service is used mainly for personal, family, or household purposes.

 

This Customer Privacy Notice is being provided on behalf of The Hartford Financial Services Group, Inc. and its affiliates, to the extent required by the Gramm-Leach-Bliley Act and implementing regulations.

1stAGChoice, Inc.; Access CoverageCorp, Inc.; Access CoverageCorp Technologies, Inc.; American Maturity Life Insurance Company; Archway 60 R, LLC; Business Management Group, Inc.; DMS R, LLC; First State Insurance Company; Fountain Investors I LLC; Fountain Investors II LLC; Fountain Investors III LLC; Fountain Investors IV LLC; FP R, LLC (Delaware); FTC Resolution Company LLC; Hart Re Group L.L.C.; Hartford Accident and Indemnity Company; Hartford Administrative Services Company; Hartford Casualty General Agency, Inc.; Hartford Casualty Insurance Company; Hartford Financial Services, LLC; Hartford Fire General Agency, Inc.; Hartford Fire Insurance Company; Hartford Funds Distributors, LLC; Hartford Funds Management Company, LLC; Hartford Funds Management Group, Inc.; Hartford Group Benefits Holding Company; Hartford Holdings, Inc.; Hartford HLS Series Fund II, Inc.; Hartford Insurance Company of Illinois; Hartford Insurance Company of the Midwest; Hartford Insurance Company of the Southeast; Hartford Integrated Technologies, Inc.; Hartford International Life Reassurance Corporation; Hartford Investment Management Company; Hartford Life and Accident Insurance Company; Hartford Life and Annuity Insurance Company; Hartford Life Insurance Company; Hartford Life, Inc.; Hartford Life International Holding Company; Hartford Life Private Placement, LLC; Hartford Lloyd’s Corporation; Hartford Lloyd’s Insurance Company; Hartford of Texas General Agency, Inc.; Hartford Residual Market, L.C.C.; Hartford Securities Distribution Company, Inc.; Hartford Series Fund, Inc.; Hartford Specialty Insurance Services of Texas, LLC; Hartford Strategic Investments, LLC; Hartford Underwriters General Agency, Inc.; Hartford Underwriters Insurance Company; Hartford-Comprehensive Employee Benefit Service Company; HDC R, LLC .; Heritage Holdings, Inc.; HIMCO Distribution Services Company; HIMCO Variable Insurance Trust; HLA LLC; HL Investment Advisors, LLC; Horizon Management Group, LLC; HRA Brokerage Services, Inc.; Lanidex Class B, LLC; ; Lanidex R, LLC (Delaware); Lattice Strategies LLC; Maxum Casualty Insurance Company; Maxum Indemnity Company; Maxum Specialty Services Corporation; MPC Resolution Company LLC; New England Insurance Company; New England Reinsurance Corporation; Northern Homelands Company; Nutmeg Insurance Agency, Inc.; Nutmeg Insurance Company; Pacific Insurance Company, Limited; Property and Casualty Insurance Company of Hartford; Sentinel Insurance Company, Ltd.; Trumbull Flood Management, L.L.C.; Trumbull Insurance Company; Twin City Fire Insurance Company.

Revised March 2017


LOGO

 

This report is prepared for the general information of contract owners and qualified retirement plan participants. It is not an offer to buy or sell an annuity contract or qualified retirement plan, fund or any security. It should not be used in connection with any offer, except in conjunction with the appropriate product prospectus (which contains all pertinent product information including the applicable sales, administrative and other charges) and the current prospectus and/or summary prospectus of the Fund available for investment thereunder.

The information cannot be used or relied upon for the purpose of avoiding IRS penalties. These materials are not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, you should consult your own tax or legal counsel for advice.

You should carefully consider investment objectives, risks, and charges and expenses of the HIMCO VIT Index Fund before investing. This and other information can be found in the Fund’s prospectus or summary prospectus, which can be obtained from your investment representative or from www.hvitfunds.com. Please read them carefully before investing.

Hartford Investment Management is an SEC-registered investment adviser. SEC registration does not imply a certain level of skill or training; nor does it imply that the SEC has sponsored, recommended, or otherwise approved of Hartford Investment Management.

Distributor: HIMCO Distribution Services Company, member FINRA, SIPC, a broker-dealer affiliated with Hartford Investment Management. Not FDIC Insured – No Bank Guarantee – May Lose Value


LOGO


HIMCO VIT Portfolio Diversifier Fund

Table of Contents

 

This report is prepared for the general information of contract owners and qualified retirement plan participants. It is not an offer to buy or sell an annuity contract or qualified retirement plan, fund or any security. It should not be used in connection with any offer, except in conjunction with the appropriate product prospectus (which contains all pertinent product information including the applicable sales, administrative and other charges) and the current prospectus and/or summary prospectus of the Fund available for investment thereunder.

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 25.0%  
      Automobiles & Components - 0.2%  
  702    

BorgWarner, Inc.

  $ 29,737  
  943    

Delphi Automotive plc

    82,654  
  13,773    

Ford Motor Co.

    154,120  
  4,836    

General Motors Co.

    168,921  
  887    

Goodyear Tire & Rubber Co. (The)

    31,010  
  616    

Harley-Davidson, Inc.

    33,276  
   

 

 

 
      499,718  
   

 

 

 
      Banks - 1.6%      
  35,046    

Bank of America Corp.

    850,216  
  2,857    

BB&T Corp.

    129,736  
  9,696    

Citigroup, Inc.

    648,468  
  1,784    

Citizens Financial Group, Inc.

    63,653  
  623    

Comerica, Inc.

    45,629  
  2,642    

Fifth Third Bancorp

    68,586  
  3,828    

Huntington Bancshares, Inc.

    51,755  
  12,511    

JPMorgan Chase & Co.

    1,143,505  
  3,860    

KeyCorp

    72,336  
  542    

M&T Bank Corp.

    87,777  
  1,213    

People’s United Financial, Inc.

    21,422  
  1,704    

PNC Financial Services Group, Inc. (The)

    212,778  
  4,233    

Regions Financial Corp.

    61,971  
  1,703    

SunTrust Banks, Inc.

    96,594  
  5,579    

US Bancorp

    289,662  
  15,838    

Wells Fargo & Co.

    877,584  
  714    

Zions Bancorp

    31,352  
   

 

 

 
      4,753,024  
   

 

 

 
      Capital Goods - 1.8%  
  2,104    

3M Co.

    438,032  
  155    

Acuity Brands, Inc.

    31,508  
  335    

Allegion plc

    27,175  
  810    

AMETEK, Inc.

    49,062  
  1,552    

Arconic, Inc.

    35,153  
  1,977    

Boeing Co. (The)

    390,952  
  2,075    

Caterpillar, Inc.

    222,979  
  544    

Cummins, Inc.

    88,248  
  1,036    

Deere & Co.

    128,039  
  548    

Dover Corp.

    43,960  
  1,575    

Eaton Corp. plc

    122,582  
  2,270    

Emerson Electric Co.

    135,337  
  1,019    

Fastenal Co.

    44,357  
  458    

Flowserve Corp.

    21,265  
  492    

Fluor Corp.

    22,524  
  1,062    

Fortive Corp.

    67,278  
  542    

Fortune Brands Home & Security, Inc.

    35,360  
  999    

General Dynamics Corp.

    197,902  
  30,668    

General Electric Co.

    828,343  
  2,685    

Honeywell International, Inc.

    357,884  
  1,095    

Illinois Tool Works, Inc.

    156,859  
  902    

Ingersoll-Rand plc

    82,434  
  425    

Jacobs Engineering Group, Inc.

    23,116  
  3,304    

Johnson Controls International plc

    143,261  
  274    

L3 Technologies, Inc.

    45,780  
  877    

Lockheed Martin Corp.

    243,464  
  1,125    

Masco Corp.

    42,986  
  615    

Northrop Grumman Corp.

    157,877  
  1,237    

PACCAR, Inc.

    81,691  
  469    

Parker-Hannifin Corp.

    74,955  
  590    

Pentair plc

    39,259  
  522    

Quanta Services, Inc.(2)

    17,184  

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 25.0% - (continued)  
      Capital Goods - 1.8% - (continued)  
  1,025    

Raytheon Co.

  $ 165,517  
  454    

Rockwell Automation, Inc.

    73,530  
  572    

Rockwell Collins, Inc.

    60,106  
  359    

Roper Technologies, Inc.

    83,119  
  204    

Snap-on, Inc.

    32,232  
  539    

Stanley Black & Decker, Inc.

    75,853  
  943    

Textron, Inc.

    44,415  
  172    

TransDigm Group, Inc.

    46,246  
  298    

United Rentals, Inc.(2)

    33,588  
  2,624    

United Technologies Corp.

    320,417  
  189    

WW Grainger, Inc.

    34,120  
  633    

Xylem, Inc.

    35,087  
   

 

 

 
      5,401,036  
   

 

 

 
      Commercial & Professional Services - 0.1%  
  304    

Cintas Corp.

    38,316  
  423    

Equifax, Inc.

    58,129  
  1,118    

IHS Markit Ltd.(2)

    49,237  
  1,183    

Nielsen Holdings plc

    45,735  
  810    

Republic Services, Inc.

    51,621  
  449    

Robert Half International, Inc.

    21,520  
  299    

Stericycle, Inc.(2)

    22,820  
  541    

Verisk Analytics, Inc.(2)

    45,644  
  1,431    

Waste Management, Inc.

    104,964  
   

 

 

 
      437,986  
   

 

 

 
      Consumer Durables & Apparel - 0.3%  
  990    

Coach, Inc.

    46,867  
  1,204    

DR Horton, Inc.

    41,622  
  404    

Garmin Ltd.

    20,616  
  1,282    

Hanesbrands, Inc.

    29,691  
  396    

Hasbro, Inc.

    44,158  
  466    

Leggett & Platt, Inc.

    24,479  
  716    

Lennar Corp., Class A

    38,177  
  1,203    

Mattel, Inc.

    25,901  
  549    

Michael Kors Holdings Ltd.(2)

    19,901  
  222    

Mohawk Industries, Inc.(2)

    53,655  
  1,701    

Newell Brands, Inc.

    91,208  
  4,667    

NIKE, Inc., Class B

    275,353  
  1,000    

PulteGroup, Inc.

    24,530  
  275    

PVH Corp.

    31,487  
  194    

Ralph Lauren Corp.

    14,317  
  650    

Under Armour, Inc., Class A(2)

    14,144  
  648    

Under Armour, Inc., Class C(2)

    13,064  
  1,128    

VF Corp.

    64,973  
  260    

Whirlpool Corp.

    49,821  
   

 

 

 
      923,964  
   

 

 

 
      Consumer Services - 0.5%  
  1,474    

Carnival Corp.

    96,650  
  101    

Chipotle Mexican Grill, Inc.(2)

    42,026  
  438    

Darden Restaurants, Inc.

    39,613  
  727    

H&R Block, Inc.

    22,472  
  722    

Hilton Worldwide Holdings, Inc.

    44,656  
  1,094    

Marriott International, Inc., Class A

    109,739  
  2,870    

McDonald’s Corp.

    439,569  
  591    

Royal Caribbean Cruises Ltd.

    64,555  
  5,100    

Starbucks Corp.

    297,381  
  367    

Wyndham Worldwide Corp.

    36,850  
  281    

Wynn Resorts Ltd.

    37,688  
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  2  

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 25.0% - (continued)  
      Consumer Services - 0.5% - (continued)  
  1,165    

Yum! Brands, Inc.

  $ 85,930  
   

 

 

 
      1,317,129  
   

 

 

 
      Diversified Financials - 1.3%  
  199    

Affiliated Managers Group, Inc.

    33,006  
  2,644    

American Express Co.

    222,731  
  537    

Ameriprise Financial, Inc.

    68,355  
  3,662    

Bank of New York Mellon Corp. (The)

    186,835  
  6,689    

Berkshire Hathaway, Inc., Class B(2)

    1,132,916  
  427    

BlackRock, Inc.

    180,369  
  1,701    

Capital One Financial Corp.

    140,537  
  324    

CBOE Holdings, Inc.

    29,614  
  4,285    

Charles Schwab Corp. (The)

    184,084  
  1,197    

CME Group, Inc.

    149,912  
  1,339    

Discover Financial Services

    83,272  
  965    

E*TRADE Financial Corp.(2)

    36,699  
  1,206    

Franklin Resources, Inc.

    54,017  
  1,289    

Goldman Sachs Group, Inc. (The)

    286,029  
  2,085    

Intercontinental Exchange, Inc.

    137,443  
  1,433    

Invesco Ltd.

    50,427  
  1,137    

Leucadia National Corp.

    29,744  
  586    

Moody’s Corp.

    71,304  
  5,016    

Morgan Stanley

    223,513  
  401    

NASDAQ, Inc.

    28,667  
  1,003    

Navient Corp.

    16,700  
  760    

Northern Trust Corp.

    73,880  
  451    

Raymond James Financial, Inc.

    36,179  
  908    

S&P Global, Inc.

    132,559  
  1,245    

State Street Corp.

    111,714  
  2,712    

Synchrony Financial

    80,872  
  850    

T Rowe Price Group, Inc.

    63,078  
   

 

 

 
      3,844,456  
   

 

 

 
      Energy - 1.5%      
  1,973    

Anadarko Petroleum Corp.

    89,456  
  1,339    

Apache Corp.

    64,178  
  1,498    

Baker Hughes, Inc.

    81,656  
  1,639    

Cabot Oil & Gas Corp.

    41,106  
  2,675    

Chesapeake Energy Corp.(2)

    13,295  
  6,672    

Chevron Corp.

    696,090  
  334    

Cimarex Energy Co.

    31,399  
  522    

Concho Resources, Inc.(2)

    63,439  
  4,357    

ConocoPhillips

    191,534  
  1,851    

Devon Energy Corp.

    59,176  
  2,033    

EOG Resources, Inc.

    184,027  
  609    

EQT Corp.

    35,681  
  14,922    

Exxon Mobil Corp.

    1,204,653  
  3,056    

Halliburton Co.

    130,522  
  381    

Helmerich & Payne, Inc.

    20,703  
  952    

Hess Corp.

    41,764  
  6,761    

Kinder Morgan, Inc.

    129,541  
  2,993    

Marathon Oil Corp.

    35,467  
  1,827    

Marathon Petroleum Corp.

    95,607  
  571    

Murphy Oil Corp.

    14,635  
  1,338    

National Oilwell Varco, Inc.

    44,074  
  698    

Newfield Exploration Co.(2)

    19,865  
  1,603    

Noble Energy, Inc.

    45,365  
  2,693    

Occidental Petroleum Corp.

    161,230  
  1,337    

ONEOK, Inc.

    69,738  
  1,545    

Phillips 66

    127,756  
  599    

Pioneer Natural Resources Co.

    95,588  

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 25.0% - (continued)  
      Energy - 1.5% - (continued)      
  663    

Range Resources Corp.

  $ 15,362  
  4,893    

Schlumberger Ltd.

    322,155  
  1,643    

TechnipFMC plc(2)

    44,690  
  531    

Tesoro Corp.

    49,702  
  1,386    

Transocean Ltd.(2)

    11,407  
  1,575    

Valero Energy Corp.

    106,249  
  2,910    

Williams Cos., Inc. (The)

    88,115  
   

 

 

 
      4,425,225  
   

 

 

 
      Food & Staples Retailing - 0.5%  
  1,545    

Costco Wholesale Corp.

    247,092  
  3,588    

CVS Health Corp.

    288,691  
  3,214    

Kroger Co. (The)

    74,950  
  1,734    

Sysco Corp.

    87,272  
  5,202    

Wal-Mart Stores, Inc.

    393,687  
  3,007    

Walgreens Boots Allliance, Inc.

    235,478  
  1,125    

Whole Foods Market, Inc.

    47,374  
   

 

 

 
      1,374,544  
   

 

 

 
      Food, Beverage & Tobacco - 1.3%  
  6,802    

Altria Group, Inc.

    506,545  
  2,010    

Archer-Daniels-Midland Co.

    83,174  
  621    

Brown-Forman Corp., Class B

    30,181  
  675    

Campbell Soup Co.

    35,201  
  13,541    

Coca-Cola Co. (The)

    607,314  
  1,423    

Conagra Brands, Inc.

    50,886  
  604    

Constellation Brands, Inc., Class A

    117,013  
  647    

Dr Pepper Snapple Group, Inc.

    58,948  
  2,029    

General Mills, Inc.

    112,407  
  493    

Hershey Co. (The)

    52,933  
  950    

Hormel Foods Corp.

    32,405  
  410    

JM Smucker Co. (The)

    48,515  
  888    

Kellogg Co.

    61,680  
  2,101    

Kraft Heinz Co. (The)

    179,930  
  399    

McCormick & Co., Inc.

    38,907  
  650    

Molson Coors Brewing Co., Class B

    56,121  
  5,343    

Mondelez International, Inc., Class A

    230,764  
  1,420    

Monster Beverage Corp.(2)

    70,546  
  5,031    

PepsiCo, Inc.

    581,030  
  5,469    

Philip Morris International, Inc.

    642,334  
  2,914    

Reynolds American, Inc.

    189,527  
  1,015    

Tyson Foods, Inc., Class A

    63,569  
   

 

 

 
      3,849,930  
   

 

 

 
      Health Care Equipment & Services - 1.4%  
  6,111    

Abbott Laboratories

    297,056  
  1,168    

Aetna, Inc.

    177,337  
  266    

Align Technology, Inc.(2)

    39,932  
  584    

AmerisourceBergen Corp.

    55,205  
  933    

Anthem, Inc.

    175,525  
  1,718    

Baxter International, Inc.

    104,008  
  801    

Becton Dickinson and Co.

    156,283  
  4,822    

Boston Scientific Corp.(2)

    133,666  
  1,112    

Cardinal Health, Inc.

    86,647  
  607    

Centene Corp.(2)

    48,487  
  1,035    

Cerner Corp.(2)

    68,796  
  902    

Cigna Corp.

    150,986  
  172    

Cooper Cos., Inc. (The)

    41,180  
  255    

CR Bard, Inc.

    80,608  
  2,151    

Danaher Corp.

    181,523  
  547    

DaVita, Inc.(2)

    35,424  
  807    

DENTSPLY SIRONA, Inc.

    52,326  
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  3  

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 25.0% - (continued)  
      Health Care Equipment & Services - 1.4% - (continued)  
  739    

Edwards Lifesciences Corp.(2)

  $ 87,379  
  413    

Envision Healthcare Corp.(2)

    25,883  
  2,090    

Express Scripts Holding Co.(2)

    133,426  
  1,008    

HCA Healthcare, Inc.(2)

    87,898  
  279    

Henry Schein, Inc.(2)

    51,063  
  986    

Hologic, Inc.(2)

    44,745  
  508    

Humana, Inc.

    122,235  
  310    

IDEXX Laboratories, Inc.(2)

    50,040  
  130    

Intuitive Surgical, Inc.(2)

    121,598  
  360    

Laboratory Corp. of America Holdings(2)

    55,490  
  743    

McKesson Corp.

    122,253  
  4,821    

Medtronic plc

    427,864  
  287    

Patterson Cos., Inc.

    13,475  
  482    

Quest Diagnostics, Inc.

    53,579  
  1,092    

Stryker Corp.

    151,548  
  3,394    

UnitedHealth Group, Inc.

    629,315  
  315    

Universal Health Services, Inc., Class B

    38,455  
  324    

Varian Medical Systems, Inc.(2)

    33,433  
  709    

Zimmer Biomet Holdings, Inc.

    91,036  
   

 

 

 
      4,225,704  
   

 

 

 
      Household & Personal Products - 0.5%  
  878    

Church & Dwight Co., Inc.

    45,551  
  454    

Clorox Co. (The)

    60,491  
  3,111    

Colgate-Palmolive Co.

    230,618  
  1,659    

Coty, Inc., Class A

    31,123  
  788    

Estee Lauder Cos., Inc. (The), Class A

    75,632  
  1,250    

Kimberly-Clark Corp.

    161,388  
  9,007    

Procter & Gamble Co. (The)

    784,960  
   

 

 

 
      1,389,763  
   

 

 

 
      Insurance - 0.7%  
  1,398    

Aflac, Inc.

    108,597  
  1,284    

Allstate Corp. (The)

    113,557  
  3,097    

American International Group, Inc.

    193,624  
  923    

Aon plc

    122,713  
  632    

Arthur J Gallagher & Co.

    36,182  
  193    

Assurant, Inc.

    20,012  
  1,644    

Chubb Ltd.

    239,005  
  528    

Cincinnati Financial Corp.

    38,254  
  145    

Everest Re Group Ltd.

    36,916  
  1,294    

Hartford Financial Services Group, Inc. (The)(3)

    68,026  
  791    

Lincoln National Corp.

    53,456  
  972    

Loews Corp.

    45,499  
  1,815    

Marsh & McLennan Cos., Inc.

    141,497  
  3,805    

MetLife, Inc.

    209,047  
  944    

Principal Financial Group, Inc.

    60,482  
  2,046    

Progressive Corp. (The)

    90,208  
  1,511    

Prudential Financial, Inc.

    163,400  
  383    

Torchmark Corp.

    29,299  
  984    

Travelers Cos., Inc. (The)

    124,505  
  805    

Unum Group

    37,537  
  448    

Willis Towers Watson PLC

    65,166  
  921    

XL Group Ltd.

    40,340  
   

 

 

 
      2,037,322  
   

 

 

 
      Materials - 0.7%  
  767    

Air Products & Chemicals, Inc.

    109,727  
  390    

Albemarle Corp.

    41,161  
  312    

Avery Dennison Corp.

    27,571  
  1,233    

Ball Corp.

    52,045  

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 25.0% - (continued)  
      Materials - 0.7% - (continued)  
  819    

CF Industries Holdings, Inc.

  $ 22,899  
  3,958    

Dow Chemical Co. (The)

    249,631  
  514    

Eastman Chemical Co.

    43,171  
  919    

Ecolab, Inc.

    121,997  
  3,053    

EI du Pont de Nemours & Co.

    246,408  
  472    

FMC Corp.

    34,480  
  4,687    

Freeport-McMoRan, Inc.(2)

    56,291  
  278    

International Flavors & Fragrances, Inc.

    37,530  
  1,454    

International Paper Co.

    82,311  
  1,163    

LyondellBasell Industries N.V., Class A

    98,146  
  221    

Martin Marietta Materials, Inc.

    49,190  
  1,545    

Monsanto Co.

    182,866  
  1,236    

Mosaic Co. (The)

    28,218  
  1,878    

Newmont Mining Corp.

    60,828  
  1,124    

Nucor Corp.

    65,046  
  902    

PPG Industries, Inc.

    99,184  
  1,007    

Praxair, Inc.

    133,478  
  690    

Sealed Air Corp.

    30,884  
  285    

Sherwin-Williams Co. (The)

    100,024  
  465    

Vulcan Materials Co.

    58,906  
  884    

WestRock Co.

    50,087  
   

 

 

 
      2,082,079  
   

 

 

 
      Media - 0.8%  
  1,297    

CBS Corp., Class B

    82,722  
  760    

Charter Communications, Inc., Class A(2)

    256,006  
  16,666    

Comcast Corp., Class A

    648,641  
  542    

Discovery Communications, Inc., Class A(2)

    14,000  
  742    

Discovery Communications, Inc., Class C(2)

    18,706  
  801    

DISH Network Corp., Class A(2)

    50,271  
  1,391    

Interpublic Group of Cos., Inc. (The)

    34,218  
  1,341    

News Corp., Class A

    18,372  
  421    

News Corp., Class B

    5,957  
  820    

Omnicom Group, Inc.

    67,978  
  338    

Scripps Networks Interactive, Inc., Class A

    23,089  
  2,731    

Time Warner, Inc.

    274,220  
  3,706    

Twenty-First Century Fox, Inc., Class A

    105,028  
  1,715    

Twenty-First Century Fox, Inc., Class B

    47,797  
  1,241    

Viacom, Inc., Class B

    41,660  
  5,123    

Walt Disney Co. (The)

    544,319  
   

 

 

 
      2,232,984  
   

 

 

 
      Pharmaceuticals, Biotechnology & Life Sciences - 2.2%  
  5,605    

AbbVie, Inc.

    406,418  
  1,135    

Agilent Technologies, Inc.

    67,317  
  791    

Alexion Pharmaceuticals, Inc.(2)

    96,241  
  1,183    

Allergan plc

    287,575  
  2,591    

Amgen, Inc.

    446,248  
  752    

Biogen, Inc.(2)

    204,063  
  5,801    

Bristol-Myers Squibb Co.

    323,232  
  2,750    

Celgene Corp.(2)

    357,142  
  3,419    

Eli Lilly & Co.

    281,384  
  4,602    

Gilead Sciences, Inc.

    325,730  
  514    

Illumina, Inc.(2)

    89,189  
  599    

Incyte Corp.(2)

    75,420  
  9,486    

Johnson & Johnson

    1,254,903  
  349    

Mallinckrodt plc(2)

    15,639  
  9,632    

Merck & Co., Inc.

    617,315  
  91    

Mettler-Toledo International, Inc.(2)

    53,557  
  1,623    

Mylan N.V.(2)

    63,005  
  388    

PerkinElmer, Inc.

    26,438  
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  4  

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 25.0% - (continued)  
      Pharmaceuticals, Biotechnology & Life Sciences - 2.2% -
(continued)
 
  504    

Perrigo Co. plc

  $ 38,062  
  21,016    

Pfizer, Inc.

    705,927  
  268    

Regeneron Pharmaceuticals, Inc.(2)

    131,625  
  1,378    

Thermo Fisher Scientific, Inc.

    240,420  
  877    

Vertex Pharmaceuticals, Inc.(2)

    113,019  
  282    

Waters Corp.(2)

    51,843  
  1,728    

Zoetis, Inc.

    107,793  
   

 

 

 
      6,379,505  
   

 

 

 
      Real Estate - 0.7%  
  321    

Alexandria Real Estate Equities, Inc., REIT

    38,671  
  1,497    

American Tower Corp., REIT

    198,083  
  551    

Apartment Investment & Management Co., Class A, REIT

    23,677  
  485    

AvalonBay Communities, Inc., REIT

    93,202  
  542    

Boston Properties, Inc., REIT

    66,677  
  1,059    

CBRE Group, Inc., Class A, REIT(2)

    38,548  
  1,289    

Crown Castle International Corp., REIT

    129,132  
  563    

Digital Realty Trust, Inc., REIT

    63,591  
  274    

Equinix, Inc., REIT

    117,590  
  1,293    

Equity Residential, REIT

    85,118  
  231    

Essex Property Trust, Inc., REIT

    59,429  
  442    

Extra Space Storage, Inc., REIT

    34,476  
  254    

Federal Realty Investment Trust, REIT

    32,103  
  2,051    

GGP, Inc., REIT

    48,322  
  1,650    

HCP, Inc., REIT

    52,734  
  2,605    

Host Hotels & Resorts, Inc., REIT

    47,593  
  865    

Iron Mountain, Inc., REIT

    29,721  
  1,495    

Kimco Realty Corp., REIT

    27,433  
  419    

Macerich Co. (The), REIT

    24,327  
  400    

Mid-America Apartment Communities, Inc., REIT

    42,152  
  1,868    

Prologis, Inc., REIT

    109,540  
  526    

Public Storage, REIT

    109,687  
  962    

Realty Income Corp., REIT

    53,083  
  515    

Regency Centers Corp., REIT

    32,260  
  1,099    

Simon Property Group, Inc., REIT

    177,774  
  359    

SL Green Realty Corp., REIT

    37,982  
  942    

UDR, Inc., REIT

    36,710  
  1,250    

Ventas, Inc., REIT

    86,850  
  607    

Vornado Realty Trust, REIT

    56,997  
  1,289    

Welltower, Inc., REIT

    96,482  
  2,646    

Weyerhaeuser Co., REIT

    88,641  
   

 

 

 
      2,138,585  
   

 

 

 
      Retailing - 1.4%  
  260    

Advance Auto Parts, Inc.

    30,313  
  1,397    

Amazon.com, Inc.(2)

    1,352,296  
  232    

AutoNation, Inc.(2)

    9,781  
  99    

AutoZone, Inc.(2)

    56,476  
  511    

Bed Bath & Beyond, Inc.

    15,534  
  934    

Best Buy Co., Inc.

    53,546  
  652    

CarMax, Inc.(2)

    41,115  
  888    

Dollar General Corp.

    64,016  
  834    

Dollar Tree, Inc.(2)

    58,313  
  428    

Expedia, Inc.

    63,751  
  462    

Foot Locker, Inc.

    22,767  
  775    

Gap, Inc. (The)

    17,042  
  519    

Genuine Parts Co.

    48,143  
  4,210    

Home Depot, Inc. (The)

    645,814  

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 25.0% - (continued)  
      Retailing - 1.4% - (continued)  
  600    

Kohl’s Corp.

  $ 23,202  
  849    

L Brands, Inc.

    45,753  
  1,086    

LKQ Corp.(2)

    35,784  
  3,022    

Lowe’s Cos., Inc.

    234,296  
  1,068    

Macy’s, Inc.

    24,820  
  1,518    

Netflix, Inc.(2)

    226,804  
  392    

Nordstrom, Inc.

    18,749  
  320    

O’Reilly Automotive, Inc.(2)

    69,997  
  173    

Priceline Group, Inc. (The)(2)

    323,600  
  1,380    

Ross Stores, Inc.

    79,667  
  241    

Signet Jewelers Ltd.

    15,241  
  2,300    

Staples, Inc.

    23,161  
  1,943    

Target Corp.

    101,600  
  378    

Tiffany & Co.

    35,483  
  2,265    

TJX Cos., Inc. (The)

    163,465  
  453    

Tractor Supply Co.

    24,557  
  389    

TripAdvisor, Inc.(2)

    14,860  
  205    

Ulta Salon Cosmetics & Fragrance, Inc.(2)

    58,905  
   

 

 

 
      3,998,851  
   

 

 

 
      Semiconductors & Semiconductor Equipment - 0.9%  
  2,729    

Advanced Micro Devices, Inc.(2)

    34,058  
  1,292    

Analog Devices, Inc.

    100,518  
  3,784    

Applied Materials, Inc.

    156,317  
  1,413    

Broadcom Ltd.

    329,300  
  16,583    

Intel Corp.

    559,510  
  552    

KLA-Tencor Corp.

    50,514  
  568    

Lam Research Corp.

    80,332  
  808    

Microchip Technology, Inc.

    62,361  
  3,662    

Micron Technology, Inc.(2)

    109,347  
  2,095    

NVIDIA Corp.

    302,853  
  448    

Qorvo, Inc.(2)

    28,367  
  5,203    

QUALCOMM, Inc.

    287,310  
  650    

Skyworks Solutions, Inc.

    62,368  
  3,509    

Texas Instruments, Inc.

    269,947  
  874    

Xilinx, Inc.

    56,216  
   

 

 

 
      2,489,318  
   

 

 

 
      Software & Services - 3.3%  
  2,184    

Accenture plc, Class A

    270,117  
  2,442    

Activision Blizzard, Inc.

    140,586  
  1,742    

Adobe Systems, Inc.(2)

    246,388  
  608    

Akamai Technologies, Inc.(2)

    30,284  
  196    

Alliance Data Systems Corp.

    50,311  
  1,048    

Alphabet, Inc., Class A(2)

    974,305  
  1,051    

Alphabet, Inc., Class C(2)

    955,075  
  301    

ANSYS, Inc.(2)

    36,626  
  683    

Autodesk, Inc.(2)

    68,860  
  1,576    

Automatic Data Processing, Inc.

    161,477  
  1,101    

CA, Inc.

    37,951  
  532    

Citrix Systems, Inc.(2)

    42,337  
  2,074    

Cognizant Technology Solutions Corp., Class A

    137,714  
  510    

CSRA, Inc.

    16,193  
  997    

DXC Technology Co.

    76,490  
  3,545    

eBay, Inc.(2)

    123,791  
  1,092    

Electronic Arts, Inc.(2)

    115,446  
  8,324    

Facebook, Inc., Class A(2)

    1,256,758  
  1,164    

Fidelity National Information Services, Inc.

    99,406  
  748    

Fiserv, Inc.(2)

    91,510  
  318    

Gartner, Inc.(2)

    39,276  
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  5  

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 25.0% - (continued)  
      Software & Services - 3.3% - (continued)  
  537    

Global Payments, Inc.

  $ 48,502  
  3,011    

International Business Machines Corp.

    463,182  
  857    

Intuit, Inc.

    113,818  
  3,303    

MasterCard, Inc., Class A

    401,149  
  27,188    

Microsoft Corp.

    1,874,069  
  10,578    

Oracle Corp.

    530,381  
  1,126    

Paychex, Inc.

    64,114  
  3,934    

PayPal Holdings, Inc.(2)

    211,138  
  626    

Red Hat, Inc.(2)

    59,939  
  2,355    

salesforce.com, Inc.(2)

    203,943  
  2,142    

Symantec Corp.

    60,511  
  529    

Synopsys, Inc.(2)

    38,580  
  583    

Total System Services, Inc.

    33,960  
  311    

VeriSign, Inc.(2)

    28,911  
  6,502    

Visa, Inc., Class A

    609,758  
  1,660    

Western Union Co. (The)

    31,623  
   

 

 

 
      9,744,479  
   

 

 

 
      Technology Hardware & Equipment - 1.4%  
  1,076    

Amphenol Corp., Class A

    79,430  
  18,361    

Apple, Inc.

    2,644,351  
  17,608    

Cisco Systems, Inc.

    551,130  
  3,241    

Corning, Inc.

    97,392  
  228    

F5 Networks, Inc.(2)

    28,970  
  479    

FLIR Systems, Inc.

    16,602  
  429    

Harris Corp.

    46,795  
  5,863    

Hewlett Packard Enterprise Co.

    97,267  
  5,928    

HP, Inc.

    103,621  
  1,346    

Juniper Networks, Inc.

    37,527  
  576    

Motorola Solutions, Inc.

    49,962  
  952    

NetApp, Inc.

    38,128  
  1,046    

Seagate Technology plc

    40,533  
  1,250    

TE Connectivity Ltd.

    98,350  
  1,026    

Western Digital Corp.

    90,904  
  749    

Xerox Corp.

    21,519  
   

 

 

 
      4,042,481  
   

 

 

 
      Telecommunication Services - 0.5%  
  21,650    

AT&T, Inc.

    816,854  
  1,933    

CenturyLink, Inc.

    46,160  
  1,031    

Level 3 Communications, Inc.(2)

    61,138  
  14,366    

Verizon Communications, Inc.

    641,586  
   

 

 

 
      1,565,738  
   

 

 

 
      Transportation - 0.6%  
  434    

Alaska Air Group, Inc.

    38,956  
  1,735    

American Airlines Group, Inc.

    87,305  
  496    

CH Robinson Worldwide, Inc.

    34,065  
  3,249    

CSX Corp.

    177,266  
  2,592    

Delta Air Lines, Inc.

    139,294  
  633    

Expeditors International of Washington, Inc.

    35,752  
  866    

FedEx Corp.

    188,208  
  302    

JB Hunt Transport Services, Inc.

    27,597  
  374    

Kansas City Southern

    39,139  
  1,020    

Norfolk Southern Corp.

    124,134  
  2,129    

Southwest Airlines Co.

    132,296  
  2,843    

Union Pacific Corp.

    309,631  
  992    

United Continental Holdings, Inc.(2)

    74,648  
  2,426    

United Parcel Service, Inc., Class B

    268,291  
   

 

 

 
      1,676,582  
   

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
COMMON STOCKS - 25.0% - (continued)  
      Utilities - 0.8%  
  2,325    

AES Corp.

  $ 25,831  
  800    

Alliant Energy Corp.

    32,136  
  854    

Ameren Corp.

    46,688  
  1,732    

American Electric Power Co., Inc.

    120,322  
  628    

American Water Works Co., Inc.

    48,953  
  1,518    

CenterPoint Energy, Inc.

    41,563  
  988    

CMS Energy Corp.

    45,695  
  1,075    

Consolidated Edison, Inc.

    86,882  
  2,215    

Dominion Energy, Inc.

    169,736  
  632    

DTE Energy Co.

    66,859  
  2,465    

Duke Energy Corp.

    206,049  
  1,147    

Edison International

    89,684  
  632    

Entergy Corp.

    48,519  
  1,116    

Eversource Energy

    67,752  
  3,261    

Exelon Corp.

    117,624  
  1,563    

FirstEnergy Corp.

    45,577  
  1,649    

NextEra Energy, Inc.

    231,074  
  1,136    

NiSource, Inc.

    28,809  
  1,110    

NRG Energy, Inc.

    19,114  
  1,798    

PG&E Corp.

    119,333  
  393    

Pinnacle West Capital Corp.

    33,468  
  2,406    

PPL Corp.

    93,016  
  1,781    

Public Service Enterprise Group, Inc.

    76,601  
  502    

SCANA Corp.

    33,639  
  883    

Sempra Energy

    99,558  
  3,503    

Southern Co. (The)

    167,724  
  1,111    

WEC Energy Group, Inc.

    68,193  
  1,788    

Xcel Energy, Inc.

    82,033  
   

 

 

 
      2,312,432  
   

 

 

 
 

Total Common Stocks
(cost $55,353,482)

    73,142,835  
   

 

 

 
EXCHANGE-TRADED FUND - 0.2%  
      Diversified Financial Services - 0.2%  
  3,070    

Vanguard S&P 500 ETF
(cost $688,002)

    681,724  
   

 

 

 
 

Total Exchange-Traded Funds
(cost $688,002)

    681,724  
   

 

 

 
ASSET & COMMERCIAL MORTGAGE BACKED
SECURITIES - 0.4%
 
 

Banc of America Commercial Mortgage Trust,

 
 

Series 2007-5, Class A4

 
$     4,660    

5.49%, 02/10/2051

    4,666  
 

Bear Stearns Commercial Mortgage Securities Trust,

 
 

Series 2007-PW18, Class A4

 
  17,668    

5.70%, 06/11/2050

    17,753  
 

Chase Issuance Trust,

 
 

Series 2013-A1, Class A1

 
      100,000    

1.30%, 02/18/2020

    99,903  
 

Citibank Credit Card Issuance Trust,

 
 

Series 2007-A8, Class A8,

 
  100,000    

5.65%, 09/20/2019

    100,883  
 

Citigroup Commercial Mortgage Trust

 
 

Series 2008-C7, Class A4

 
  11,924    

6.39%, 12/10/2049(4)

    11,945  
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  6  

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
ASSET & COMMERCIAL MORTGAGE BACKED
SECURITIES - 0.4% - (continued)
 
 

Citigroup Commercial Mortgage Trust - (continued)

 
 

Series 2014-GC23, Class A4

 
$     50,000    

3.62%, 07/10/2047

  $ 52,045  
 

Citigroup/Deutsche Bank Commercial Mortgage Trust,

 
 

Series 2007-CD5, Class A4

 
  2,318    

5.89%, 11/15/2044(4)

    2,320  
 

COMM Mortgage Trust

 
 

Series 2013-CR9, Class A4,

 
  35,000    

4.37%, 07/10/2045(4)

    37,904  
 

Series 2014-UBS5, Class A4

 
  45,000    

3.84%, 09/10/2047

    47,235  
 

Series 2014-UBS6, Class A5

 
  50,000    

3.64%, 12/10/2047

    51,671  
 

Series 2015-LC23, Class A4

 
  35,000    

3.77%, 10/10/2048

    36,615  
 

Commercial Mortgage Pass-Through Certificates,
Series 2012-CR2, Class A4

 
  30,000    

3.15%, 08/15/2045

    30,829  
 

Commercial Mortgage Trust

 
 

Series 2007-GG11, Class A4

 
  1,698    

5.74%, 12/10/2049

    1,696  
 

Series 2013-LC6, Class A4

 
  15,000    

2.94%, 01/10/2046

    15,161  
 

CSAIL Commercial Mortgage Trust,
Series 2015-C4, Class A4

 
  35,000    

3.81%, 11/15/2048

    36,579  
 

GS Mortgage Securities Corp. II,
Series 2013-GC10, Class A5

 
  10,000    

2.94%, 02/10/2046

    10,142  
 

GS Mortgage Securities Trust

 
 

Series 2012-GC6, Class A3

 
  19,925    

3.48%, 01/10/2045

    20,786  
 

Series 2012-GCJ7, Class A4

 
  49,095    

3.38%, 05/10/2045

    51,044  
 

Series 2013-GC12, Class A4

 
  40,000    

3.14%, 06/10/2046

    40,848  
 

Series 2013-GC14, Class A5

 
  35,000    

4.24%, 08/10/2046

    37,791  
 

Series 2013-GC16, Class A4

 
  40,000    

4.27%, 11/10/2046

    43,233  
 

Series 2014-GC18, Class A4

 
  40,000    

4.07%, 01/10/2047

    42,644  
 

Series 2015-GS1, Class A3

 
  30,000    

3.73%, 11/10/2048

    31,344  
 

JP Morgan Chase Commercial Mortgage Securities Trust,
Series 2011-C5, Class A3

 
  8,422    

4.17%, 08/15/2046

    8,967  
 

JPMBB Commercial Mortgage Securities Trust,
Series 2014-C22, Class A4

 
  40,000    

3.80%, 09/15/2047

    41,863  
 

LB-UBS Commercial Mortgage Trust,
Series 2007-C7, Class A3

 
  9,379    

5.87%, 09/15/2045(4)

    9,438  
 

ML-CFC Commercial Mortgage Trust,
Series 2007-9, Class A4

 
  18,717    

5.70%, 09/12/2049

    18,731  

Shares or Principal Amount

 

Market Value(1)

 
ASSET & COMMERCIAL MORTGAGE BACKED
SECURITIES - 0.4% - (continued)
 
 

Morgan Stanley Bank of America Merrill Lynch Trust

 
 

Series 2014-C15, Class A4

 
$     40,000    

4.05%, 04/15/2047

  $ 42,668  
 

Series 2014-C16, Class A5

 
  50,000    

3.89%, 06/15/2047

    52,891  
 

Series 2015-C22, Class A4

 
  30,000    

3.31%, 04/15/2048

    30,562  
 

Series 2015-C27, Class A4

 
  30,000    

3.75%, 12/15/2047

    31,412  
 

Morgan Stanley Capital I Trust,
Series 2007-IQ16, Class A4

 
  7,455    

5.81%, 12/12/2049

    7,477  
 

Wachovia Bank Commercial Mortgage Trust,
Series 2007-C34, Class A3

 
  2,505    

5.68%, 05/15/2046

    2,503  
 

WF-RBS Commercial Mortgage Trust,
Series 2012-C10, Class A3

 
  40,000    

2.88%, 12/15/2045

    40,328  
   

 

 

 
 

Total Asset & Commercial Mortgage Backed Securities
(cost $1,124,706)

    1,111,877  
   

 

 

 
CORPORATE BONDS - 14.3%      
      Advertising - 0.0%  
 

Omnicom Group, Inc.

 
  40,000    

3.63%, 05/01/2022

    41,750  
   

 

 

 
      Aerospace/Defense - 0.3%  
 

Boeing Co. (The)

 
      230,000    

4.88%, 02/15/2020

    247,579  
  35,000    

6.13%, 02/15/2033

    45,799  
 

General Dynamics Corp.

 
  15,000    

3.88%, 07/15/2021

    15,954  
 

Lockheed Martin Corp.

 
  140,000    

4.25%, 11/15/2019

    147,427  
  75,000    

4.85%, 09/15/2041

    84,932  
 

Northrop Grumman Corp.

 
  40,000    

4.75%, 06/01/2043

    45,067  
  20,000    

5.05%, 08/01/2019

    21,252  
 

Raytheon Co.

 
  95,000    

3.13%, 10/15/2020

    98,427  
 

United Technologies Corp.

 
  65,000    

4.50%, 04/15/2020

    69,503  
  100,000    

4.50%, 06/01/2042

    109,195  
   

 

 

 
      885,135  
   

 

 

 
      Agriculture - 0.2%  
 

Altria Group, Inc.

 
  300,000    

4.75%, 05/05/2021

    327,212  
 

Archer-Daniels-Midland Co.

 
  33,000    

4.02%, 04/16/2043

    34,260  
 

Philip Morris International, Inc.

 
  105,000    

4.50%, 03/26/2020

    112,002  
  75,000    

4.50%, 03/20/2042

    79,780  
 

Reynolds American, Inc.

 
  90,000    

4.45%, 06/12/2025

    96,422  
   

 

 

 
      649,676  
   

 

 

 
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  7  

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
CORPORATE BONDS - 14.3% - (continued)      
      Auto Manufacturers - 0.3%  
 

Daimler Finance North America LLC

 
$ 18,000    

8.50%, 01/18/2031

  $ 27,048  
 

Ford Motor Co.

 
      175,000    

7.45%, 07/16/2031

    221,259  
 

General Motors Co.

 
  100,000    

3.50%, 10/02/2018

    101,756  
  120,000    

6.25%, 10/02/2043

    133,290  
 

Toyota Motor Credit Corp. MTN

 
  70,000    

2.00%, 10/24/2018

    70,380  
  190,000    

3.40%, 09/15/2021

    198,552  
   

 

 

 
      752,285  
   

 

 

 
      Beverages - 0.4%  
 

Anheuser-Busch InBev Finance, Inc.

 
  395,000    

3.65%, 02/01/2026

    406,957  
 

Anheuser-Busch InBev Worldwide, Inc.

 

  110,000    

3.75%, 07/15/2042

    106,464  
  125,000    

5.38%, 01/15/2020

    135,347  
 

Coca-Cola Co. (The)

 
  210,000    

3.15%, 11/15/2020

    218,192  
 

Diageo Capital plc

 
  25,000    

3.88%, 04/29/2043

    25,035  
 

Molson Coors Brewing Co.

 
  65,000    

4.20%, 07/15/2046

    64,101  
 

PepsiCo, Inc.

 

  60,000    

3.13%, 11/01/2020

    62,147  
  85,000    

5.50%, 01/15/2040

    105,970  
   

 

 

 
      1,124,213  
   

 

 

 
      Biotechnology - 0.2%      
 

Amgen, Inc.

 

  105,000    

3.88%, 11/15/2021

    110,675  
  25,000    

4.40%, 05/01/2045

    25,679  
  68,000    

4.66%, 06/15/2051

    72,022  
 

Celgene Corp.

 
  160,000    

3.25%, 08/15/2022

    164,483  
 

Gilead Sciences, Inc.

 

  230,000    

3.70%, 04/01/2024

    239,105  
  20,000    

4.40%, 12/01/2021

    21,576  
  45,000    

4.80%, 04/01/2044

    49,037  
   

 

 

 
      682,577  
   

 

 

 
      Chemicals - 0.3%      
 

Dow Chemical Co. (The)

 

  200,000    

4.13%, 11/15/2021

    212,472  
  50,000    

4.38%, 11/15/2042

    51,643  
 

Eastman Chemical Co.

 
  68,000    

3.80%, 03/15/2025

    69,978  
 

Ecolab, Inc.

 
  45,000    

4.35%, 12/08/2021

    48,936  
 

EI du Pont de Nemours & Co.

 
  20,000    

5.60%, 12/15/2036

    23,868  
 

LYB International Finance BV

 

  130,000    

4.00%, 07/15/2023

    137,733  
  30,000    

4.88%, 03/15/2044

    31,768  
 

Monsanto Co.

 
  80,000    

4.40%, 07/15/2044

    81,365  
 

Potash Corp. of Saskatchewan, Inc.

 
  35,000    

6.50%, 05/15/2019

    37,661  
 

PPG Industries, Inc.

 
  20,000    

3.60%, 11/15/2020

    20,850  

Shares or Principal Amount

 

Market Value(1)

 
CORPORATE BONDS - 14.3% - (continued)      
      Chemicals - 0.3% - (continued)      
 

Praxair, Inc.

 
$ 55,000    

2.45%, 02/15/2022

  $ 55,330  
   

 

 

 
      771,604  
   

 

 

 
      Commercial Banks - 3.1%  
 

Bank of America Corp.

 
      250,000    

3.30%, 01/11/2023

    254,925  
  445,000    

5.00%, 05/13/2021

    485,552  
  115,000    

5.88%, 02/07/2042

    144,115  
 

Bank of New York Mellon Corp. (The)

 
  150,000    

3.55%, 09/23/2021

    156,666  
 

Bank of Nova Scotia

 
  95,000    

4.38%, 01/13/2021

    101,505  
 

Barclays PLC

 
  270,000    

2.88%, 06/08/2020

    272,674  
 

BB&T Corp.

 
  130,000    

5.25%, 11/01/2019

    138,951  
 

Capital One Financial Corp.

 
  140,000    

4.75%, 07/15/2021

    151,048  
 

Citigroup, Inc.

 
  210,000    

2.65%, 10/26/2020

    212,009  
  275,000    

6.63%, 06/15/2032

    343,799  
 

Cooperatieve Rabobank UA

 
  195,000    

4.50%, 01/11/2021

    209,583  
  65,000    

5.25%, 05/24/2041

    79,356  
 

Credit Suisse

 
  650,000    

5.30%, 08/13/2019

    694,271  
 

Deutsche Bank AG

 
  70,000    

3.70%, 05/30/2024

    69,986  
 

Fifth Third Bancorp

 
  100,000    

3.50%, 03/15/2022

    103,286  
 

Goldman Sachs Group, Inc. (The)

 
  525,000    

3.85%, 07/08/2024

    544,905  
  89,000    

6.25%, 02/01/2041

    116,260  
 

HSBC Holdings plc

 
  650,000    

5.10%, 04/05/2021

    706,682  
 

HSBC USA, Inc.

 
  110,000    

3.50%, 06/23/2024

    113,324  
 

JPMorgan Chase & Co.

 
  455,000    

4.95%, 03/25/2020

    487,978  
  220,000    

5.50%, 10/15/2040

    268,576  
  155,000    

6.30%, 04/23/2019

    166,822  
 

Landwirtschaftliche Rentenbank

 
  160,000    

1.88%, 09/17/2018

    160,804  
 

Morgan Stanley

 
  90,000    

4.30%, 01/27/2045

    93,071  
  655,000    

5.50%, 07/28/2021

    726,300  
 

PNC Financial Services Group, Inc. (The)

 
  170,000    

3.30%, 03/08/2022

    176,237  
  150,000    

5.13%, 02/08/2020

    161,357  
 

Royal Bank of Canada

 
  60,000    

4.65%, 01/27/2026

    64,307  
 

State Street Corp.

 
  80,000    

4.38%, 03/07/2021

    85,731  
 

Sumitomo Mitsui Financial Group, Inc.

 
  300,000    

2.93%, 03/09/2021

    304,768  
 

Toronto-Dominion Bank (The)

 
  300,000    

2.25%, 11/05/2019

    302,225  
 

US Bancorp

 
  180,000    

4.13%, 05/24/2021

    192,509  
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  8  

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
CORPORATE BONDS - 14.3% - (continued)      
      Commercial Banks - 3.1% - (continued)  
 

Wells Fargo & Co.

 
$     200,000    

3.50%, 03/08/2022

  $ 207,772  
  270,000    

4.60%, 04/01/2021

    291,047  
  180,000    

5.61%, 01/15/2044

    214,052  
 

Westpac Banking Corp.

 
  250,000    

4.88%, 11/19/2019

    266,223  
   

 

 

 
      9,068,676  
   

 

 

 
      Commercial Services - 0.0%  
 

Princeton University

 
  75,000    

4.95%, 03/01/2019

    79,028  
   

 

 

 
      Construction Materials - 0.0%  
 

Johnson Controls International plc

 
  100,000    

5.00%, 03/30/2020

    106,811  
   

 

 

 
      Diversified Financial Services - 0.4%  
 

American Express Co.

 
  148,000    

2.65%, 12/02/2022

    148,170  
 

BlackRock, Inc.

 
  105,000    

5.00%, 12/10/2019

    112,741  
 

GE Capital International Funding Co.

 
  468,000    

2.34%, 11/15/2020

    471,742  
 

General Electric Capital Corp.

 
  100,000    

5.88%, 01/14/2038

    129,412  
 

HSBC Finance Corp.

 
  80,000    

6.68%, 01/15/2021

    90,157  
 

National Rural Utilities Cooperative Finance Corp.

 
  110,000    

3.05%, 02/15/2022

    112,730  
   

 

 

 
      1,064,952  
   

 

 

 
      Electric - 0.9%  
 

Alabama Power Co.

 
  107,000    

6.00%, 03/01/2039

    136,138  
 

Berkshire Hathaway Energy Co.

 
  135,000    

6.13%, 04/01/2036

    173,436  
 

CenterPoint Energy Houston Electric LLC

 
  15,000    

3.55%, 08/01/2042

    14,660  
 

CMS Energy Corp.

 
  60,000    

5.05%, 03/15/2022

    65,997  
 

Commonwealth Edison Co.

 
  40,000    

3.80%, 10/01/2042

    39,971  
 

Consolidated Edison Co. of New York, Inc.

 
  80,000    

3.95%, 03/01/2043

    80,902  
  40,000    

6.65%, 04/01/2019

    43,178  
 

Dominion Energy, Inc.

 
  140,000    

4.45%, 03/15/2021

    149,737  
 

Series C

 
  75,000    

4.90%, 08/01/2041

    81,957  
 

Duke Energy Carolinas LLC

 
  90,000    

4.00%, 09/30/2042

    92,855  
  30,000    

5.30%, 02/15/2040

    36,876  
 

Entergy Louisiana LLC

 
  100,000    

4.05%, 09/01/2023

    107,046  
 

Exelon Generation Co. LLC

 
  75,000    

4.00%, 10/01/2020

    78,252  
  135,000    

6.25%, 10/01/2039

    147,305  
 

Florida Power & Light Co.

 
  85,000    

5.69%, 03/01/2040

    109,892  
 

Georgia Power Co.

 
  100,000    

2.85%, 05/15/2022

    100,495  

Shares or Principal Amount

 

Market Value(1)

 
CORPORATE BONDS - 14.3% - (continued)      
      Electric - 0.9% - (continued)  
 

Indiana Michigan Power Co.

 
$ 25,000    

6.05%, 03/15/2037

  $ 30,990  
 

Kentucky Utilities Co.

 
  70,000    

5.13%, 11/01/2040

    83,909  
 

Nevada Power Co., Series R

 
  55,000    

6.75%, 07/01/2037

    74,245  
 

NiSource Finance Corp.

 
  40,000    

5.25%, 02/15/2043

    46,096  
 

Northern States Power Co.

 
  80,000    

3.40%, 08/15/2042

    75,868  
 

Ohio Power Co., Series M

 
  75,000    

5.38%, 10/01/2021

    83,500  
 

Oncor Electric Delivery Co. LLC

 
  95,000    

7.00%, 09/01/2022

    114,362  
 

Pacific Gas & Electric Co.

 
  135,000    

6.05%, 03/01/2034

    174,202  
 

Progress Energy, Inc.

 
  140,000    

3.15%, 04/01/2022

    142,919  
  130,000    

4.40%, 01/15/2021

    138,100  
 

PSEG Power LLC

 
  25,000    

5.13%, 04/15/2020

    26,759  
 

Public Service Electric & Gas Co.

 
  65,000    

3.95%, 05/01/2042

    67,347  
 

South Carolina Electric & Gas Co.

 
  40,000    

6.05%, 01/15/2038

    48,609  
 

Southern California Edison Co.

 
  75,000    

4.50%, 09/01/2040

    83,165  
 

Xcel Energy, Inc.

 
  65,000    

4.70%, 05/15/2020

    68,810  
   

 

 

 
      2,717,578  
   

 

 

 
      Electrical Components & Equipment - 0.0%  
 

Emerson Electric Co.

 
  70,000    

4.88%, 10/15/2019

    74,567  
   

 

 

 
      Electronics - 0.1%  
 

Honeywell International, Inc.

 
  80,000    

4.25%, 03/01/2021

    85,849  
  20,000    

5.70%, 03/15/2037

    25,683  
 

Thermo Fisher Scientific, Inc.

 
  150,000    

4.15%, 02/01/2024

    159,970  
   

 

 

 
      271,502  
   

 

 

 
      Environmental Control - 0.1%  
 

Republic Services, Inc.

 
  95,000    

5.00%, 03/01/2020

    102,031  
 

Waste Management, Inc.

 
      105,000    

4.75%, 06/30/2020

    113,046  
   

 

 

 
      215,077  
   

 

 

 
      Food - 0.3%  
 

General Mills, Inc.

 
  80,000    

5.65%, 02/15/2019

    84,729  
 

JM Smucker Co. (The)

 
  70,000    

3.50%, 03/15/2025

    71,942  
 

Kellogg Co.

 
  45,000    

4.00%, 12/15/2020

    47,533  
 

Kraft Foods Group, Inc.

 
  183,000    

5.38%, 02/10/2020

    197,234  
 

Kraft Heinz Foods Co.

 
  100,000    

5.00%, 06/04/2042

    105,568  
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  9  

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
CORPORATE BONDS - 14.3% - (continued)      
      Food - 0.3% - (continued)  
 

Kroger Co. (The)

 
$ 70,000    

6.80%, 12/15/2018

  $ 74,675  
  40,000    

7.50%, 04/01/2031

    53,042  
 

Tyson Foods, Inc.

 
  50,000    

3.95%, 08/15/2024

    52,321  
 

Unilever Capital Corp.

 
  50,000    

5.90%, 11/15/2032

    65,161  
   

 

 

 
      752,205  
   

 

 

 
      Forest Products&Paper - 0.1%  
 

Georgia-Pacific LLC

 
  10,000    

7.75%, 11/15/2029

    13,863  
 

International Paper Co.

 
      200,000    

3.80%, 01/15/2026

    205,551  
   

 

 

 
      219,414  
   

 

 

 
      Gas - 0.0%  
 

Atmos Energy Corp.

 
  8,000    

5.50%, 06/15/2041

    9,777  
 

Sempra Energy

 
  65,000    

6.00%, 10/15/2039

    82,274  
   

 

 

 
      92,051  
   

 

 

 
      Healthcare-Products - 0.3%  
 

Abbott Laboratories

 
  100,000    

2.90%, 11/30/2021

    101,117  
  70,000    

2.95%, 03/15/2025

    68,320  
  100,000    

4.75%, 11/30/2036

    108,846  
 

Becton Dickinson and Co.

 
  35,000    

4.69%, 12/15/2044

    36,045  
 

Boston Scientific Corp.

 
  70,000    

6.00%, 01/15/2020

    76,185  
 

Covidien International Finance S.A.

 
  45,000    

3.20%, 06/15/2022

    46,527  
 

Medtronic, Inc.

 
  225,000    

3.50%, 03/15/2025

    234,059  
 

Zimmer Biomet Holdings, Inc.

 
  60,000    

3.55%, 04/01/2025

    60,605  
   

 

 

 
      731,704  
   

 

 

 
      Healthcare-Services - 0.2%  
 

Anthem, Inc.

 
  90,000    

4.65%, 01/15/2043

    96,996  
 

Cigna Corp.

 
  50,000    

4.00%, 02/15/2022

    52,851  
  10,000    

5.38%, 02/15/2042

    12,024  
 

Quest Diagnostics, Inc.

 
  110,000    

4.70%, 04/01/2021

    117,696  
 

UnitedHealth Group, Inc.

 
  125,000    

6.88%, 02/15/2038

    177,550  
   

 

 

 
      457,117  
   

 

 

 
      Household Products - 0.1%  
 

Colgate-Palmolive Co.

 
  90,000    

2.30%, 05/03/2022

    90,795  
 

Procter & Gamble Co. (The)

 
  57,000    

5.55%, 03/05/2037

    76,387  
   

 

 

 
      167,182  
   

 

 

 
      Household Products/Wares - 0.0%  
 

Kimberly-Clark Corp.

 
  12,000    

5.30%, 03/01/2041

    14,792  
   

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
CORPORATE BONDS - 14.3% - (continued)      
      Insurance - 0.5%  
 

Allstate Corp. (The)

 
$ 45,000    

5.55%, 05/09/2035

  $ 55,054  
 

American International Group, Inc.

 
  110,000    

4.50%, 07/16/2044

    111,857  
 

Aon Corp.

 
  20,000    

5.00%, 09/30/2020

    21,537  
 

Aon plc

 
  60,000    

4.75%, 05/15/2045

    64,920  
 

Berkshire Hathaway, Inc.

 
  75,000    

4.50%, 02/11/2043

    82,415  
 

Chubb INA Holdings, Inc.

 
  165,000    

2.70%, 03/13/2023

    165,136  
  75,000    

2.88%, 11/03/2022

    76,296  
 

Lincoln National Corp.

 
  60,000    

4.00%, 09/01/2023

    63,212  
 

Marsh & McLennan Cos., Inc.

 
  35,000    

4.80%, 07/15/2021

    38,051  
 

MetLife, Inc.

 
  25,000    

4.88%, 11/13/2043

    28,259  
  90,000    

5.70%, 06/15/2035

    110,938  
  120,000    

7.72%, 02/15/2019

    131,073  
 

Principal Financial Group, Inc.

 
  70,000    

3.30%, 09/15/2022

    71,942  
 

Prudential Financial, Inc.

 
      145,000    

5.38%, 06/21/2020

    158,405  
  65,000    

5.80%, 11/16/2041

    80,927  
 

Travelers Cos., Inc. (The)

 
  70,000    

4.60%, 08/01/2043

    78,075  
   

 

 

 
      1,338,097  
   

 

 

 
      Iron/Steel - 0.0%  
 

Vale Overseas Ltd.

 
  90,000    

6.88%, 11/10/2039

    96,525  
   

 

 

 
      IT Services - 0.4%  
 

Apple, Inc.

 
  425,000    

2.40%, 05/03/2023

    421,655  
  110,000    

3.45%, 02/09/2045

    103,363  
 

Dell International LLC / EMC Corp.

 
  240,000    

5.45%, 06/15/2023(5)

    260,441  
 

Hewlett Packard Enterprise Co.

 
  170,000    

4.40%, 10/15/2022

    180,222  
 

HP, Inc.

 
  45,000    

4.30%, 06/01/2021

    47,827  
 

International Business Machines Corp.

 
  105,000    

5.60%, 11/30/2039

    129,745  
   

 

 

 
      1,143,253  
   

 

 

 
      Machinery-Construction & Mining - 0.1%  
 

Caterpillar, Inc.

 
  40,000    

3.80%, 08/15/2042

    40,157  
  185,000    

3.90%, 05/27/2021

    196,535  
   

 

 

 
      236,692  
   

 

 

 
      Machinery-Diversified - 0.0%  
 

Deere & Co.

 
  55,000    

3.90%, 06/09/2042

    57,413  
   

 

 

 
      Media - 0.5%  
 

21st Century Fox America, Inc.

 
  131,000    

6.40%, 12/15/2035

    166,015  
 

CBS Corp.

 
  90,000    

3.70%, 08/15/2024

    92,352  
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  10  

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
CORPORATE BONDS - 14.3% - (continued)      
      Media - 0.5% - (continued)  
 

Charter Communications Operating LLC / Charter Communications Operating Capital

 
$ 140,000    

4.91%, 07/23/2025

  $ 151,245  
 

Comcast Corp.

 
      150,000    

4.65%, 07/15/2042

    164,464  
  105,000    

5.15%, 03/01/2020

    113,772  
  90,000    

7.05%, 03/15/2033

    123,013  
 

Discovery Communications LLC

 
  30,000    

4.88%, 04/01/2043

    28,009  
 

Time Warner Cable LLC

 
  245,000    

4.00%, 09/01/2021

    256,100  
  40,000    

4.50%, 09/15/2042

    38,060  
  65,000    

6.75%, 07/01/2018

    68,004  
 

Time Warner, Inc.

 
  140,000    

3.80%, 02/15/2027

    140,946  
  60,000    

4.85%, 07/15/2045

    61,781  
 

Viacom, Inc.

 
  98,000    

4.38%, 03/15/2043

    87,112  
 

Walt Disney Co. (The)

 
  60,000    

2.55%, 02/15/2022

    60,558  
  55,000    

4.13%, 12/01/2041

    57,631  
   

 

 

 
      1,609,062  
   

 

 

 
      Mining - 0.1%  
 

Barrick Gold Corp.

 
  45,000    

5.25%, 04/01/2042

    51,201  
 

BHP Billiton Finance USA Ltd.

 
  63,000    

2.88%, 02/24/2022

    64,281  
  15,000    

4.13%, 02/24/2042

    15,358  
 

Newmont Mining Corp.

 
  50,000    

6.25%, 10/01/2039

    61,365  
 

Rio Tinto Finance USA Ltd.

 
  50,000    

5.20%, 11/02/2040

    59,119  
 

Southern Copper Corp.

 
  55,000    

6.75%, 04/16/2040

    63,348  
   

 

 

 
      314,672  
   

 

 

 
      Miscellaneous Manufacturer - 0.2%  
 

3M Co.

 
  50,000    

5.70%, 03/15/2037

    63,907  
 

Eaton Corp.

 
  115,000    

2.75%, 11/02/2022

    115,627  
 

General Electric Co.

 
  67,000    

4.13%, 10/09/2042

    70,511  
 

Illinois Tool Works, Inc.

 
  35,000    

3.90%, 09/01/2042

    36,346  
 

Newell Brands, Inc.

 
  150,000    

4.20%, 04/01/2026

    159,268  
   

 

 

 
      445,659  
   

 

 

 
      Multi-National - 0.8%  
 

Asian Development Bank

 
  100,000    

1.75%, 09/11/2018

    100,399  
  90,000    

2.00%, 01/22/2025

    87,836  
 

European Bank for Reconstruction & Development

 
  150,000    

1.75%, 11/26/2019

    150,311  
 

European Investment Bank

 
  850,000    

2.88%, 09/15/2020

    877,566  
 

Inter-American Development Bank

 
  570,000    

3.88%, 02/14/2020

    601,046  

Shares or Principal Amount

 

Market Value(1)

 
CORPORATE BONDS - 14.3% - (continued)      
      Multi-National - 0.8% - (continued)  
 

International Bank for Reconstruction & Development

 
$     512,000    

7.63%, 01/19/2023

  $ 656,190  
   

 

 

 
      2,473,348  
   

 

 

 
      Office/Business Equipment - 0.0%  
 

Xerox Corp.

 
  10,000    

4.07%, 03/17/2022(5)

    10,256  
   

 

 

 
      Oil&Gas - 1.0%  
 

Anadarko Petroleum Corp.

 
  60,000    

6.20%, 03/15/2040

    68,514  
 

Apache Corp.

 
  85,000    

5.10%, 09/01/2040

    86,839  
 

BP Capital Markets plc

 
  280,000    

3.25%, 05/06/2022

    288,032  
 

Canadian Natural Resources Ltd.

 
  40,000    

6.50%, 02/15/2037

    47,498  
 

Chevron Corp.

 
  125,000    

2.36%, 12/05/2022

    124,422  
  150,000    

2.43%, 06/24/2020

    151,878  
 

ConocoPhillips

 
  108,000    

6.50%, 02/01/2039

    141,805  
 

Devon Financing Co. LLC

 
  65,000    

7.88%, 09/30/2031

    84,349  
 

Exxon Mobil Corp.

 
  55,000    

2.71%, 03/06/2025

    54,611  
  40,000    

3.57%, 03/06/2045

    38,476  
 

Hess Corp.

 
  28,000    

5.60%, 02/15/2041

    27,526  
 

Kerr-McGee Corp.

 
  60,000    

6.95%, 07/01/2024

    70,367  
 

Marathon Oil Corp.

 
  15,000    

6.60%, 10/01/2037

    16,553  
 

Marathon Petroleum Corp.

 
  35,000    

5.00%, 09/15/2054

    32,025  
  15,000    

5.13%, 03/01/2021

    16,259  
 

Nexen Energy ULC

 
  50,000    

7.50%, 07/30/2039

    72,218  
 

Noble Energy, Inc.

 
  60,000    

6.00%, 03/01/2041

    67,139  
 

Occidental Petroleum Corp.

 
  40,000    

4.10%, 02/01/2021

    42,609  
  35,000    

4.40%, 04/15/2046

    36,381  
 

Petroleos Mexicanos

 
  100,000    

4.88%, 01/24/2022

    103,021  
  195,000    

6.50%, 06/02/2041

    193,635  
 

Phillips 66

 
  35,000    

4.30%, 04/01/2022

    37,504  
  45,000    

4.88%, 11/15/2044

    48,236  
 

Shell International Finance BV

 
  140,000    

3.63%, 08/21/2042

    130,967  
  170,000    

4.30%, 09/22/2019

    178,971  
 

Statoil ASA

 
  35,000    

5.10%, 08/17/2040

    40,346  
  255,000    

5.25%, 04/15/2019

    269,987  
 

Suncor Energy, Inc.

 
  60,000    

6.50%, 06/15/2038

    76,832  
 

Total Capital S.A.

 
  95,000    

4.25%, 12/15/2021

    102,121  
 

Valero Energy Corp.

 
  140,000    

6.13%, 02/01/2020

    153,487  
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  11  

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
CORPORATE BONDS - 14.3% - (continued)      
      Office/Business Equipment - 0.0% - (continued)  
 

Valero Energy Corp. - (continued)

 
$ 40,000    

7.50%, 04/15/2032

  $ 51,322  
   

 

 

 
      2,853,930  
   

 

 

 
      Oil&Gas Services - 0.0%  
 

Baker Hughes, Inc.

 
  46,000    

5.13%, 09/15/2040

    52,557  
 

National Oilwell Varco, Inc.

 
  50,000    

2.60%, 12/01/2022

    48,345  
  15,000    

3.95%, 12/01/2042

    12,375  
   

 

 

 
      113,277  
   

 

 

 
      Pharmaceuticals - 0.7%  
 

AbbVie, Inc.

 
      420,000    

2.90%, 11/06/2022

    423,951  
 

Allergan Funding SCS

 
  200,000    

3.85%, 06/15/2024

    208,638  
 

Allergan Funding SCS

 
  7,000    

4.75%, 03/15/2045

    7,556  
 

AstraZeneca plc

 
  60,000    

6.45%, 09/15/2037

    80,802  
 

Baxalta, Inc.

 
  100,000    

4.00%, 06/23/2025

    104,301  
 

Bristol-Myers Squibb Co.

 
  25,000    

3.25%, 08/01/2042

    22,599  
 

Cardinal Health, Inc.

 
  105,000    

3.50%, 11/15/2024

    107,266  
 

Express Scripts Holding Co.

 
  165,000    

4.50%, 02/25/2026

    174,868  
 

GlaxoSmithKline Capital, Inc.

 
  40,000    

2.80%, 03/18/2023

    40,608  
  47,000    

6.38%, 05/15/2038

    64,529  
 

Johnson & Johnson

 
  100,000    

5.95%, 08/15/2037

    134,528  
 

McKesson Corp.

 
  70,000    

3.80%, 03/15/2024

    72,860  
  50,000    

4.75%, 03/01/2021

    53,635  
 

Merck & Co., Inc.

 
  75,000    

3.60%, 09/15/2042

    73,275  
 

Mylan N.V.

 
  60,000    

3.95%, 06/15/2026

    60,794  
 

Novartis Capital Corp.

 
  145,000    

2.40%, 09/21/2022

    145,619  
 

Pfizer, Inc.

 
  140,000    

3.00%, 12/15/2026

    140,391  
 

Sanofi

 
  20,000    

4.00%, 03/29/2021

    21,272  
 

Teva Pharmaceutical Finance IV BV

 
  28,000    

3.65%, 11/10/2021

    28,914  
 

Teva Pharmaceutical Finance Netherlands III BV

 
  160,000    

3.15%, 10/01/2026

    151,948  
 

Wyeth LLC

 
  40,000    

5.95%, 04/01/2037

    51,709  
   

 

 

 
      2,170,063  
   

 

 

 
      Pipelines - 0.4%  
 

Energy Transfer Partners L.P.

 
  100,000    

6.50%, 02/01/2042

    111,704  
  64,000    

9.00%, 04/15/2019

    71,173  
 

Enterprise Products Operating LLC

 
  100,000    

4.45%, 02/15/2043

    99,378  

Shares or Principal Amount

 

Market Value(1)

 
CORPORATE BONDS - 14.3% - (continued)      
      Pipelines - 0.4% - (continued)  
 

Enterprise Products Operating LLC - (continued)

 
$ 40,000    

4.85%, 03/15/2044

  $ 42,402  
 

Kinder Morgan Energy Partners L.P.

 
  55,000    

4.70%, 11/01/2042

    51,925  
  102,000    

6.38%, 03/01/2041

    115,014  
 

MPLX L.P.

 
  100,000    

4.13%, 03/01/2027

    100,341  
 

ONEOK Partners L.P.

 
  40,000    

6.65%, 10/01/2036

    48,139  
 

Plains All American Pipeline L.P. / PAA Finance Corp.

 
  65,000    

6.65%, 01/15/2037

    73,044  
 

TransCanada PipeLines Ltd.

 
  195,000    

3.75%, 10/16/2023

    204,587  
  55,000    

3.80%, 10/01/2020

    57,728  
 

Transcontinental Gas Pipe Line Co. LLC

 
  20,000    

4.45%, 08/01/2042

    19,807  
 

Williams Partners L.P.

 
  125,000    

4.13%, 11/15/2020

    130,662  
  40,000    

6.30%, 04/15/2040

    46,356  
   

 

 

 
      1,172,260  
   

 

 

 
      Real Estate Investment Trusts - 0.1%  
 

Boston Properties L.P.

 
      100,000    

5.88%, 10/15/2019

    107,222  
 

ERP Operating L.P.

 
  40,000    

4.50%, 07/01/2044

    42,636  
 

Welltower, Inc.

 
  40,000    

3.75%, 03/15/2023

    41,505  
  55,000    

5.25%, 01/15/2022

    60,383  
 

Weyerhaeuser Co.

 
  40,000    

7.38%, 03/15/2032

    55,076  
   

 

 

 
      306,822  
   

 

 

 
      Retail - 0.5%  
 

CVS Health Corp.

 
  340,000    

4.00%, 12/05/2023

    359,146  
 

Home Depot, Inc. (The)

 
  160,000    

2.70%, 04/01/2023

    162,331  
  85,000    

5.88%, 12/16/2036

    110,726  
 

McDonald’s Corp.

 
  100,000    

2.75%, 12/09/2020

    101,813  
  84,000    

3.70%, 02/15/2042

    78,568  
 

Target Corp.

 
  140,000    

2.30%, 06/26/2019

    141,727  
  119,000    

2.50%, 04/15/2026

    112,907  
 

Wal-Mart Stores, Inc.

 
  50,000    

3.25%, 10/25/2020

    52,071  
  50,000    

4.25%, 04/15/2021

    54,042  
  121,000    

5.63%, 04/15/2041

    157,124  
 

Walgreen Co.

 
  110,000    

3.10%, 09/15/2022

    112,208  
 

Walgreens Boots Alliance, Inc.

 
  40,000    

4.80%, 11/18/2044

    42,566  
   

 

 

 
      1,485,229  
   

 

 

 
      Semiconductors - 0.2%  
 

Broadcom Corp./Broadcom Cayman Finance Ltd.

 
  110,000    

3.88%, 01/15/2027(5)

    112,959  
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  12  

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
CORPORATE BONDS - 14.3% - (continued)      
      Semiconductors - 0.2% - (continued)  
 

Intel Corp.

 
$     330,000    

2.70%, 12/15/2022

  $ 334,220  
 

QUALCOMM, Inc.

 
  85,000    

3.45%, 05/20/2025

    87,367  
 

Texas Instruments, Inc.

 
  80,000    

1.65%, 08/03/2019

    80,056  
   

 

 

 
      614,602  
   

 

 

 
      Software - 0.4%  
 

Microsoft Corp.

 
  225,000    

3.13%, 11/03/2025

    229,576  
  180,000    

3.30%, 02/06/2027

    185,413  
  70,000    

4.00%, 02/12/2055

    70,884  
  85,000    

5.20%, 06/01/2039

    103,291  
 

Oracle Corp.

 
  210,000    

2.65%, 07/15/2026

    201,509  
  55,000    

4.13%, 05/15/2045

    56,545  
  40,000    

5.38%, 07/15/2040

    48,648  
 

Visa, Inc.

 
  250,000    

3.15%, 12/14/2025

    253,817  
   

 

 

 
      1,149,683  
   

 

 

 
      Telecommunications - 0.8%  
 

America Movil S.A.B. de C.V.

 
  60,000    

6.13%, 11/15/2037

    72,354  
 

AT&T Mobility LLC

 
  25,000    

7.13%, 12/15/2031

    31,933  
 

AT&T, Inc.

 
  250,000    

3.60%, 02/17/2023

    255,865  
  222,000    

4.55%, 03/09/2049

    209,785  
  55,000    

5.00%, 03/01/2021

    59,469  
  120,000    

5.15%, 03/15/2042

    122,543  
  14,000    

5.35%, 09/01/2040

    14,824  
 

British Telecommunications plc

 
  43,000    

9.13%, 12/15/2030

    65,381  
 

Cisco Systems, Inc.

 
  120,000    

4.45%, 01/15/2020

    127,841  
  60,000    

5.50%, 01/15/2040

    74,825  
 

Deutsche Telekom International Finance BV

 
  37,000    

8.75%, 06/15/2030

    54,874  
 

Orange S.A.

 
  80,000    

5.38%, 07/08/2019

    85,137  
  25,000    

5.38%, 01/13/2042

    29,240  
 

Qwest Corp.

 
  11,000    

6.88%, 09/15/2033

    10,824  
 

Rogers Communications, Inc.

 
  30,000    

4.50%, 03/15/2043

    31,002  
  50,000    

6.80%, 08/15/2018

    52,745  
 

Telefonica Emisiones SAU

 
  100,000    

5.46%, 02/16/2021

    109,993  
 

Verizon Communications, Inc.

 
  143,000    

2.95%, 03/15/2022(5)

    143,993  
  276,000    

5.01%, 08/21/2054

    271,616  
  240,000    

5.15%, 09/15/2023

    266,589  
 

Vodafone Group plc

 
  95,000    

5.45%, 06/10/2019

    101,118  
  50,000    

6.15%, 02/27/2037

    60,607  
   

 

 

 
      2,252,558  
   

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
CORPORATE BONDS - 14.3% - (continued)      
      Transportation - 0.3%  
 

Burlington Northern Santa Fe LLC

 
$ 47,000    

4.38%, 09/01/2042

  $ 50,486  
  45,000    

4.45%, 03/15/2043

    48,886  
      170,000    

4.70%, 10/01/2019

    180,733  
 

Canadian National Railway Co.

 
  40,000    

2.85%, 12/15/2021

    40,874  
 

Canadian Pacific Railway Co.

 
  60,000    

4.45%, 03/15/2023

    64,732  
  8,000    

7.13%, 10/15/2031

    10,914  
 

CSX Corp.

 
  85,000    

3.70%, 10/30/2020

    88,819  
  105,000    

4.25%, 06/01/2021

    111,947  
 

FedEx Corp.

 
  70,000    

4.10%, 02/01/2045

    68,674  
 

Norfolk Southern Corp.

 
  70,000    

4.84%, 10/01/2041

    78,665  
 

Union Pacific Corp.

 
  67,000    

3.80%, 10/01/2051

    65,607  
  60,000    

4.00%, 02/01/2021

    63,591  
 

United Parcel Service, Inc.

 
  110,000    

3.13%, 01/15/2021

    114,231  
   

 

 

 
      988,159  
   

 

 

 
 

Total Corporate Bonds
(cost $41,095,596)

    41,771,456  
   

 

 

 
FOREIGN GOVERNMENT OBLIGATIONS - 1.1%      
      Canada - 0.2%  
 

Hydro-Quebec

 
  70,000    

8.40%, 01/15/2022

    86,563  
 

Province of British Columbia

 
  105,000    

2.65%, 09/22/2021

    107,720  
 

Province of Manitoba

 
  85,000    

2.10%, 09/06/2022

    84,158  
 

Province of Ontario

 
  285,000    

4.40%, 04/14/2020

    303,954  
 

Province of Quebec

 
  70,000    

7.50%, 09/15/2029

    99,903  
   

 

 

 
      682,298  
   

 

 

 
      Colombia - 0.1%  
 

Colombia Government International Bond

 
  240,000    

8.13%, 05/21/2024

    305,760  
   

 

 

 
      Germany - 0.4%  
 

KFW

 
  420,000    

2.13%, 01/17/2023

    419,432  
  561,000    

4.00%, 01/27/2020

    593,543  
   

 

 

 
      1,012,975  
   

 

 

 
      Hungary - 0.1%  
 

Hungary Government International Bond

 
  100,000    

5.38%, 03/25/2024

    112,572  
   

 

 

 
      Italy - 0.0%  
 

Italy Government International Bond

 
  45,000    

5.38%, 06/15/2033

    50,941  
   

 

 

 
      Mexico - 0.1%  
 

Mexico Government International Bond

 
  70,000    

3.63%, 03/15/2022

    72,590  
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  13  

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
FOREIGN GOVERNMENT OBLIGATIONS - 1.1% - (continued)  
      Mexico - 0.1% - (continued)  
 

Mexico Government International Bond - (continued)

 
$     252,000    

6.05%, 01/11/2040

  $ 297,058  
   

 

 

 
      369,648  
   

 

 

 
      Panama - 0.0%  
 

Panama Government International Bond

 
  50,000    

6.70%, 01/26/2036

    64,375  
   

 

 

 
      Peru - 0.0%  
 

Peruvian Government International Bond

 
  75,000    

5.63%, 11/18/2050

    90,862  
   

 

 

 
      Philippines - 0.1%  
 

Philippine Government International Bond

 
  120,000    

4.00%, 01/15/2021

    127,902  
  100,000    

6.38%, 10/23/2034

    134,238  
   

 

 

 
      262,140  
   

 

 

 
      Poland - 0.1%  
 

Poland Government International Bond

 
  140,000    

5.00%, 03/23/2022

    155,400  
   

 

 

 
      Uruguay - 0.0%  
 

Uruguay Government International Bond

 
  45,000    

5.10%, 06/18/2050

    45,810  
   

 

 

 
 

Total Foreign Government Obligations
(cost $3,095,622)

    3,152,781  
   

 

 

 
MUNICIPAL BONDS - 0.3%  
      Airport Revenues - 0.0%  
 

County of Clark Department of Aviation

 
  5,000    

6.82%, 07/01/2045

    7,252  
   

 

 

 
      General Obligations - 0.1%  
 

California State GO,

 
  105,000    

7.60%, 11/01/2040

    163,444  
 

Connecticut State, GO

 
  45,000    

5.85%, 03/15/2032

    53,655  
 

Massachusetts State, GO

 
  15,000    

5.46%, 12/01/2039

    18,921  
 

Mississippi State, GO

 
  25,000    

5.25%, 11/01/2034

    29,823  
 

New York, NY, GO

 
  15,000    

5.85%, 06/01/2040

    19,694  
 

Texas State, GO

 
  30,000    

5.52%, 04/01/2039

    39,286  
   

 

 

 
      324,823  
   

 

 

 
      Higher Education (Universities, Dorms, etc.) - 0.0%  
 

University of California Build America Bonds Rev.,

 
  50,000    

5.77%, 05/15/2043

    64,048  
 

University of Texas System

 
  25,000    

4.79%, 08/15/2046

    29,509  
   

 

 

 
      93,557  
   

 

 

 
      Miscellaneous - 0.0%  
 

New Jersey State Economic Development Authority Lease Rev.

 
  15,000    

7.43%, 02/15/2029

    18,436  
   

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
MUNICIPAL BONDS - 0.3% - (continued)  
      Tax Allocation - 0.0%  
 

New York State Dormitory Authority

 
$ 20,000    

5.60%, 03/15/2040

  $ 25,046  
   

 

 

 
      Transportation - 0.1%  
 

Bay Area Toll Authority

 
  30,000    

6.26%, 04/01/2049

    42,699  
 

Metropolitan Transportation Authority

 
  20,000    

5.87%, 11/15/2039

    25,007  
  25,000    

6.55%, 11/15/2031

    32,549  
  15,000    

6.65%, 11/15/2039

    20,477  
 

New Jersey State Turnpike Authority

 
  45,000    

7.10%, 01/01/2041

    66,040  
  15,000    

7.41%, 01/01/2040

    22,661  
 

Port Authority of New York & New Jersey

 
  50,000    

4.93%, 10/01/2051

    58,773  
   

 

 

 
      268,206  
   

 

 

 
      Utilities - Electric - 0.1%  
 

American Municipal Power Inc.

 
  45,000    

6.05%, 02/15/2043

    55,504  
 

Municipal Electric Authority of Georgia

 
  40,000    

6.64%, 04/01/2057

    49,043  
   

 

 

 
      104,547  
   

 

 

 
      Utilities - Water and Sewer - 0.0%  
 

New York City Water & Sewer System

 
  45,000    

5.88%, 06/15/2044

    61,981  
   

 

 

 
 

Total Municipal Bonds
(cost $825,755)

    903,848  
   

 

 

 
U.S. GOVERNMENT AGENCIES - 15.8%  
      FHLB - 0.3%  
  650,000    

1.38%, 11/15/2019

    648,002  
  60,000    

5.50%, 07/15/2036

    81,210  
   

 

 

 
      729,212  
   

 

 

 
      FHLMC - 4.5%  
  10,000    

2.41%, 03/25/2023

    10,058  
  10,000    

2.45%, 08/25/2023

    10,049  
  68,885    

2.50%, 07/01/2027

    69,762  
  47,245    

2.50%, 09/01/2027

    47,843  
  77,127    

2.50%, 10/01/2027

    78,093  
      178,871    

2.50%, 04/01/2028

    181,080  
  219,098    

2.50%, 06/01/2028

    221,797  
  65,661    

2.50%, 01/01/2029

    66,471  
  289,999    

2.50%, 12/01/2031

    292,249  
  111,452    

2.50%, 12/01/2042

    107,553  
  10,000    

2.53%, 05/25/2026

    9,802  
  10,000    

2.57%, 07/25/2026

    9,822  
  10,000    

2.65%, 08/25/2026

    9,859  
  15,000    

2.67%, 12/25/2024

    15,076  
  10,000    

2.67%, 03/25/2026

    9,929  
  10,000    

2.75%, 01/25/2026

    10,000  
  15,000    

2.79%, 01/25/2022

    15,405  
  15,000    

2.81%, 01/25/2025

    15,191  
  10,000    

3.00%, 12/25/2025

    10,196  
  20,741    

3.00%, 12/01/2025

    21,316  
  144,035    

3.00%, 11/01/2026

    148,028  
  16,016    

3.00%, 03/01/2027

    16,460  
  53,442    

3.00%, 04/01/2027

    54,924  
  79,974    

3.00%, 09/01/2027

    82,191  
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  14  

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
U.S. GOVERNMENT AGENCIES - 15.8% - (continued)  
      FHLMC - 4.5% - (continued)  
$ 310,514    

3.00%, 10/01/2028

  $ 319,122  
  291,091    

3.00%, 12/01/2031

    299,197  
  63,763    

3.00%, 10/01/2042

    64,000  
  157,084    

3.00%, 10/01/2042

    157,658  
  98,720    

3.00%, 11/01/2042

    99,088  
  102,057    

3.00%, 12/01/2042

    102,462  
  46,435    

3.00%, 01/01/2043

    46,613  
  141,143    

3.00%, 01/01/2043

    141,835  
  52,496    

3.00%, 02/01/2043

    52,693  
  216,313    

3.00%, 02/01/2043

    217,126  
  132,344    

3.00%, 02/01/2043

    132,720  
  28,166    

3.00%, 05/01/2043

    28,278  
  73,718    

3.00%, 05/01/2043

    74,012  
  762,053    

3.00%, 08/01/2045

    760,898  
  288,427    

3.00%, 09/01/2046

    287,991  
  588,700    

3.00%, 12/01/2046

    587,808  
      491,129    

3.00%, 01/01/2047

    490,385  
  10,000    

3.01%, 07/25/2025

    10,234  
  15,000    

3.02%, 01/25/2025

    15,394  
  10,000    

3.06%, 11/25/2023(4)

    10,344  
  15,000    

3.06%, 12/25/2024

    15,456  
  10,000    

3.12%, 09/25/2026(4)

    10,223  
  10,000    

3.15%, 11/25/2025

    10,327  
  15,000    

3.22%, 03/25/2027(4)

    15,440  
  10,000    

3.30%, 10/25/2026

    10,358  
  15,000    

3.33%, 05/25/2025(4)

    15,700  
  15,000    

3.33%, 08/25/2025(4)

    15,698  
  10,000    

3.35%, 11/25/2026

    10,396  
  10,000    

3.41%, 12/25/2026

    10,484  
  15,000    

3.43%, 01/25/2027(4)

    15,746  
  61,118    

3.50%, 04/01/2026

    63,830  
  56,489    

3.50%, 08/01/2026

    58,871  
  184,952    

3.50%, 10/01/2026

    192,751  
  78,046    

3.50%, 10/01/2026

    81,337  
  258,951    

3.50%, 07/01/2029

    270,298  
  22,522    

3.50%, 10/01/2040

    23,245  
  33,487    

3.50%, 10/01/2041

    34,547  
  120,272    

3.50%, 11/01/2041

    124,082  
  70,552    

3.50%, 02/01/2042

    72,797  
  24,743    

3.50%, 03/01/2042

    25,531  
  68,233    

3.50%, 04/01/2042

    70,401  
  67,020    

3.50%, 04/01/2042

    69,155  
  119,267    

3.50%, 09/01/2042

    123,066  
  59,612    

3.50%, 09/01/2042

    61,509  
  176,934    

3.50%, 11/01/2042

    182,570  
  70,536    

3.50%, 01/01/2043

    72,695  
  186,032    

3.50%, 12/01/2043

    191,833  
  436,535    

3.50%, 09/01/2044

    449,969  
  1,312,838    

3.50%, 08/01/2046

    1,349,768  
  680,000    

3.75%, 03/27/2019

    707,431  
  17,993    

4.00%, 06/01/2024

    18,852  
  48,240    

4.00%, 07/01/2026

    50,657  
  47,595    

4.00%, 10/01/2040

    50,256  
  87,850    

4.00%, 10/01/2040

    92,755  
  65,126    

4.00%, 10/01/2040

    68,770  
  10,686    

4.00%, 12/01/2040

    11,284  
  54,145    

4.00%, 12/01/2040

    57,169  
  14,501    

4.00%, 02/01/2041

    15,312  
  92,031    

4.00%, 02/01/2041

    97,183  
  14,006    

4.00%, 04/01/2041

    14,789  
  85,881    

4.00%, 01/01/2042

    90,690  

Shares or Principal Amount

 

Market Value(1)

 
U.S. GOVERNMENT AGENCIES - 15.8% - (continued)  
      FHLMC - 4.5% - (continued)  
$ 148,912    

4.00%, 02/01/2042

  $ 157,253  
      248,434    

4.00%, 11/01/2043

    263,037  
  247,276    

4.00%, 05/01/2044

    260,260  
  152,315    

4.00%, 07/01/2044

    160,312  
  240,817    

4.00%, 12/01/2046

    253,461  
  1,682    

4.50%, 05/01/2018

    1,719  
  12,441    

4.50%, 11/01/2024

    13,227  
  37,967    

4.50%, 09/01/2031

    40,872  
  120,530    

4.50%, 10/01/2039

    130,066  
  19,500    

4.50%, 05/01/2040

    20,967  
  55,100    

4.50%, 10/01/2040

    59,235  
  106,830    

4.50%, 06/01/2041

    114,855  
  109,374    

4.50%, 09/01/2041

    117,512  
  33,059    

5.00%, 05/01/2023

    34,712  
  63,919    

5.00%, 03/01/2027

    69,391  
  45,849    

5.00%, 11/01/2033

    50,244  
  23,208    

5.00%, 02/01/2038

    25,385  
  5,136    

5.00%, 04/01/2039

    5,607  
  380,975    

5.00%, 08/01/2041

    418,860  
  61,136    

5.00%, 08/01/2041

    66,405  
  170,420    

5.50%, 05/01/2036

    190,467  
  12,744    

5.50%, 05/01/2038

    14,179  
  36,256    

5.50%, 05/01/2038

    40,360  
  40,250    

5.50%, 08/01/2038

    44,826  
  25,025    

6.00%, 06/01/2036

    28,373  
  24,012    

6.00%, 04/01/2037

    27,129  
  13,477    

6.00%, 10/01/2037

    15,178  
  150,000    

6.25%, 07/15/2032

    213,231  
   

 

 

 
      13,171,366  
   

 

 

 
      FNMA - 6.8%  
  900,000    

1.75%, 06/20/2019

    905,909  
  5,000    

2.29%, 06/25/2026

    4,784  
  10,000    

2.37%, 07/25/2026(4)

    9,610  
  5,000    

2.49%, 05/25/2026

    4,860  
  10,000    

2.50%, 10/25/2026(4)

    9,648  
  160,434    

2.50%, 03/01/2027

    162,346  
  74,500    

2.50%, 07/01/2027

    75,384  
  171,533    

2.50%, 12/01/2027

    173,574  
  93,878    

2.50%, 02/01/2028

    94,962  
  258,529    

2.50%, 04/01/2028

    261,506  
  241,489    

2.50%, 07/01/2028

    244,272  
  582,840    

2.50%, 10/01/2031

    586,678  
  129,936    

2.50%, 01/01/2043

    125,898  
  10,000    

2.53%, 09/25/2026(4)

    9,742  
  15,000    

2.53%, 09/25/2024

    14,880  
  10,000    

2.58%, 03/25/2026

    9,818  
  15,000    

2.59%, 12/25/2024

    14,903  
  10,000    

2.70%, 02/25/2026

    9,924  
  10,000    

2.72%, 10/25/2024

    10,034  
  10,000    

2.80%, 06/25/2025(4)

    10,010  
  10,000    

2.90%, 01/25/2025(4)

    10,153  
  10,000    

2.94%, 01/25/2026(4)

    10,122  
  39,028    

3.00%, 12/01/2025

    40,162  
  35,652    

3.00%, 12/01/2026

    36,617  
  76,073    

3.00%, 03/01/2027

    78,294  
  87,720    

3.00%, 04/01/2027

    90,279  
  250,615    

3.00%, 07/01/2027

    257,925  
  50,710    

3.00%, 08/01/2027

    52,131  
  169,252    

3.00%, 02/01/2030

    173,834  
  440,422    

3.00%, 02/01/2032

    452,365  
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  15  

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
U.S. GOVERNMENT AGENCIES - 15.8% - (continued)  
      FNMA - 6.8% - (continued)  
$ 37,380    

3.00%, 04/01/2042

  $ 37,561  
  37,501    

3.00%, 09/01/2042

    37,548  
  73,951    

3.00%, 11/01/2042

    74,264  
  122,858    

3.00%, 11/01/2042

    123,379  
  167,114    

3.00%, 12/01/2042

    168,308  
  193,851    

3.00%, 01/01/2043

    194,662  
  108,089    

3.00%, 02/01/2043

    108,714  
  268,434    

3.00%, 02/01/2043

    269,558  
  157,741    

3.00%, 04/01/2043

    158,867  
  350,956    

3.00%, 04/01/2043

    353,891  
  93,724    

3.00%, 04/01/2043

    94,121  
  64,197    

3.00%, 07/01/2043

    64,452  
  114,071    

3.00%, 10/01/2043

    114,524  
  200,825    

3.00%, 11/01/2043

    200,696  
  936,647    

3.00%, 03/01/2046

    936,044  
  550,063    

3.00%, 10/01/2046

    550,011  
  111,970    

3.00%, 11/01/2046

    111,968  
      1,060,417    

3.00%, 11/01/2046

    1,059,734  
  413,545    

3.00%, 12/01/2046

    413,279  
  390,667    

3.00%, 01/01/2047

    390,416  
  7,976    

3.50%, 09/01/2025

    8,303  
  85,747    

3.50%, 10/01/2028

    89,527  
  160,663    

3.50%, 07/01/2029

    167,278  
  244,824    

3.50%, 01/01/2041

    252,818  
  48,248    

3.50%, 02/01/2041

    49,824  
  49,682    

3.50%, 04/01/2041

    51,316  
  65,214    

3.50%, 11/01/2041

    67,441  
  81,599    

3.50%, 01/01/2042

    84,198  
  32,058    

3.50%, 03/01/2042

    33,078  
  76,629    

3.50%, 05/01/2042

    79,067  
  100,567    

3.50%, 06/01/2042

    103,860  
  87,390    

3.50%, 07/01/2042

    90,144  
  234,304    

3.50%, 07/01/2042

    241,771  
  64,793    

3.50%, 08/01/2042

    66,852  
  87,326    

3.50%, 08/01/2042

    90,069  
  75,964    

3.50%, 08/01/2042

    78,356  
  319,673    

3.50%, 09/01/2042

    329,874  
  49,760    

3.50%, 09/01/2042

    51,307  
  96,107    

3.50%, 09/01/2042

    99,124  
  68,538    

3.50%, 01/01/2043

    70,624  
  205,644    

3.50%, 05/01/2043

    212,033  
  95,579    

3.50%, 08/01/2043

    98,701  
  96,744    

3.50%, 08/01/2043

    99,834  
  142,224    

3.50%, 08/01/2043

    146,858  
  80,935    

3.50%, 08/01/2044

    83,176  
  31,306    

3.50%, 10/01/2044

    32,173  
  80,353    

3.50%, 01/01/2045

    82,578  
  124,543    

3.50%, 02/01/2045

    127,993  
  669,514    

3.50%, 11/01/2045

    689,360  
  625,287    

3.50%, 07/01/2046

    642,607  
  198,355    

3.50%, 01/01/2047

    203,850  
  103,572    

4.00%, 05/01/2020

    107,221  
  28,372    

4.00%, 04/01/2025

    29,859  
  39,606    

4.00%, 09/01/2025

    41,680  
  48,483    

4.00%, 08/01/2026

    50,190  
  108,022    

4.00%, 08/01/2040

    114,074  
  19,790    

4.00%, 08/01/2040

    20,903  
  164,303    

4.00%, 09/01/2040

    173,393  
  7,878    

4.00%, 10/01/2040

    8,317  
  344,962    

4.00%, 12/01/2040

    364,075  
  132,120    

4.00%, 02/01/2041

    139,451  

Shares or Principal Amount

 

Market Value(1)

 
U.S. GOVERNMENT AGENCIES - 15.8% - (continued)  
      FNMA - 6.8% - (continued)  
$ 36,216    

4.00%, 04/01/2041

  $ 38,089  
  18,013    

4.00%, 07/01/2041

    19,096  
  44,121    

4.00%, 09/01/2041

    46,551  
  352,647    

4.00%, 12/01/2041

    373,509  
  141,702    

4.00%, 01/01/2042

    149,450  
  488,288    

4.00%, 11/01/2043

    516,966  
  28,413    

4.00%, 01/01/2044

    29,883  
  252,444    

4.00%, 01/01/2044

    266,413  
  26,397    

4.00%, 05/01/2044

    27,762  
  171,336    

4.00%, 12/01/2044

    180,197  
  17,915    

4.50%, 05/01/2025

    18,818  
  51,643    

4.50%, 04/01/2026

    54,539  
  10,128    

4.50%, 04/01/2029

    10,888  
  77,514    

4.50%, 06/01/2030

    83,304  
  14,731    

4.50%, 08/01/2038

    15,842  
  50,516    

4.50%, 01/01/2039

    54,181  
  34,640    

4.50%, 02/01/2039

    37,243  
  97,853    

4.50%, 04/01/2039

    105,197  
  32,014    

4.50%, 11/01/2039

    34,337  
  56,793    

4.50%, 02/01/2040

    61,296  
  112,780    

4.50%, 09/01/2040

    122,031  
  107,179    

4.50%, 10/01/2040

    115,705  
  77,395    

4.50%, 04/01/2041

    83,027  
  20,703    

4.50%, 04/01/2041

    22,392  
  93,155    

4.50%, 04/01/2041

    100,398  
  111,662    

4.50%, 07/01/2041

    120,817  
  178,388    

4.50%, 01/01/2044

    191,698  
  38,067    

5.00%, 02/01/2022

    38,982  
  31,383    

5.00%, 05/01/2028

    34,260  
  200,263    

5.00%, 05/01/2035

    219,854  
  169,605    

5.00%, 08/01/2035

    186,359  
  84,369    

5.00%, 03/01/2037

    92,104  
  1,515    

5.00%, 05/01/2037

    1,653  
  31,515    

5.00%, 02/01/2039

    34,421  
  45,912    

5.00%, 04/01/2039

    50,121  
  26,560    

5.00%, 01/01/2040

    29,045  
  253,728    

5.00%, 01/01/2041

    277,249  
  237,408    

5.50%, 10/01/2035

    264,337  
  26,096    

5.50%, 05/01/2037

    29,122  
  8,212    

5.50%, 01/01/2038

    9,137  
  13,371    

5.50%, 02/01/2038

    14,900  
      101,744    

5.50%, 02/01/2038

    113,908  
  52,207    

5.50%, 06/01/2038

    58,024  
  20,676    

5.50%, 07/01/2038

    22,989  
  19,442    

5.50%, 08/01/2038

    21,553  
  60,755    

5.50%, 09/01/2038

    67,472  
  17,687    

5.50%, 05/01/2040

    19,697  
  130,000    

5.63%, 07/15/2037

    178,472  
  30,531    

6.00%, 04/01/2036

    34,498  
  50,537    

6.00%, 07/01/2037

    57,262  
  76,081    

6.00%, 07/01/2037

    86,354  
  29,395    

6.50%, 06/01/2039

    33,144  
  53,000    

6.63%, 11/15/2030

    75,772  
   

 

 

 
      19,906,096  
   

 

 

 
      GNMA - 4.1%  
  23,221    

2.50%, 10/15/2027

    23,633  
  70,393    

2.50%, 01/15/2043

    68,839  
  148,325    

2.50%, 03/20/2047

    144,798  
  47,446    

3.00%, 04/15/2027

    49,057  
  94,781    

3.00%, 03/20/2028

    97,974  
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  16  

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

 

Market Value(1)

 
U.S. GOVERNMENT AGENCIES - 15.8% - (continued)  
      GNMA - 4.1% - (continued)  
$ 40,751    

3.00%, 06/20/2042

  $ 41,320  
  175,181    

3.00%, 08/20/2042

    177,628  
  178,661    

3.00%, 09/20/2042

    181,157  
  105,335    

3.00%, 11/15/2042

    106,845  
  135,776    

3.00%, 12/20/2042

    137,673  
  100,014    

3.00%, 05/15/2043

    101,439  
  224,309    

3.00%, 06/20/2043

    227,442  
  207,434    

3.00%, 07/20/2043

    210,332  
  232,576    

3.00%, 10/20/2045

    235,166  
  668,077    

3.00%, 09/20/2046

    675,517  
  486,000    

3.00%, 11/20/2046

    491,413  
  978,898    

3.00%, 12/20/2046

    989,800  
  8,815    

3.50%, 09/15/2025

    9,210  
  30,444    

3.50%, 09/20/2040

    31,567  
  36,468    

3.50%, 12/15/2040

    37,805  
  14,333    

3.50%, 02/15/2041

    14,858  
  13,350    

3.50%, 12/20/2041

    13,874  
  71,582    

3.50%, 01/20/2042

    74,414  
  30,390    

3.50%, 02/20/2042

    31,601  
  18,712    

3.50%, 03/15/2042

    19,405  
  131,404    

3.50%, 04/20/2042

    136,683  
  162,662    

3.50%, 05/20/2042

    169,196  
  8,904    

3.50%, 06/15/2042

    9,230  
  57,527    

3.50%, 06/15/2042

    59,752  
  91,966    

3.50%, 06/20/2042

    95,745  
  109,959    

3.50%, 08/20/2042

    114,376  
  140,720    

3.50%, 04/20/2043

    146,373  
  173,733    

3.50%, 07/20/2043

    180,713  
  101,637    

3.50%, 08/15/2043

    105,878  
  288,115    

3.50%, 09/20/2043

    299,691  
  858,389    

3.50%, 04/20/2045

    890,039  
      1,242,713    

3.50%, 11/20/2046

    1,288,534  
  688,218    

3.50%, 01/20/2047

    713,594  
  14,881    

4.00%, 08/15/2026

    15,596  
  223,910    

4.00%, 08/15/2039

    235,714  
  28,763    

4.00%, 07/20/2040

    30,504  
  17,792    

4.00%, 08/15/2040

    18,780  
  18,733    

4.00%, 10/20/2040

    19,895  
  115,860    

4.00%, 12/15/2040

    122,708  
  36,360    

4.00%, 06/15/2041

    38,374  
  29,914    

4.00%, 09/15/2041

    32,140  
  13,407    

4.00%, 12/20/2041

    14,190  
  27,265    

4.00%, 01/20/2042

    28,851  
  16,880    

4.00%, 03/20/2042

    17,855  
  63,444    

4.00%, 05/20/2042

    67,092  
  45,508    

4.00%, 06/15/2042

    47,961  
  248,354    

4.00%, 06/20/2044

    261,547  
  200,816    

4.00%, 09/20/2044

    211,483  
  221,587    

4.00%, 11/20/2044

    233,359  
  424,325    

4.00%, 11/20/2045

    446,866  
  247,774    

4.00%, 03/20/2047

    260,986  
  67,354    

4.50%, 05/15/2039

    73,495  
  221,322    

4.50%, 09/15/2039

    242,132  
  20,123    

4.50%, 04/15/2040

    21,578  
  6,598    

4.50%, 05/20/2040

    7,089  
  8,230    

4.50%, 06/15/2040

    8,822  
  50,444    

4.50%, 06/20/2040

    54,202  
  142,742    

4.50%, 09/20/2040

    153,431  
  95,699    

4.50%, 10/15/2040

    103,140  
  30,201    

4.50%, 10/20/2040

    32,562  
  65,541    

4.50%, 03/20/2041

    70,429  

Shares or Principal Amount

 

Market Value(1)

 
U.S. GOVERNMENT AGENCIES - 15.8% - (continued)  
      GNMA - 4.1% - (continued)  
$ 13,833    

4.50%, 04/15/2041

  $ 15,002  
  42,182    

4.50%, 06/20/2041

    45,326  
  92,939    

5.00%, 11/20/2035

    102,312  
  43,803    

5.00%, 09/15/2039

    48,105  
  75,120    

5.00%, 02/15/2040

    82,886  
  104,509    

5.00%, 09/20/2040

    114,822  
  64,595    

5.00%, 02/20/2041

    71,002  
  54,482    

5.00%, 03/20/2041

    60,156  
  58,544    

5.00%, 08/20/2041

    64,276  
  16,409    

5.00%, 12/20/2041

    18,256  
  15,764    

5.50%, 05/20/2038

    17,370  
  38,781    

5.50%, 07/15/2038

    43,185  
  36,785    

5.50%, 08/20/2041

    40,735  
  77,496    

6.00%, 02/15/2036

    87,363  
  19,376    

6.00%, 08/20/2041

    21,748  
   

 

 

 
      12,105,896  
   

 

 

 
      Tennessee Valley Authority - 0.1%  
  213,000    

6.75%, 11/01/2025

    279,100  
   

 

 

 
 

Total U.S. Government Agencies
(cost $46,287,715)

    46,191,670  
   

 

 

 
U.S. GOVERNMENT SECURITIES - 17.6%  
      U.S. Treasury Securities - 17.6%  
      U.S. Treasury Bonds - 2.5%  
      1,160,000    

2.50%, 02/15/2045

    1,082,561  
  3,660,000    

2.50%, 02/15/2046

    3,406,658  
  276,000    

3.13%, 11/15/2041

    292,258  
  2,180,000    

3.13%, 02/15/2043

    2,303,135  
  100,000    

3.50%, 02/15/2039

    112,981  
   

 

 

 
      7,197,593  
   

 

 

 
      U.S. Treasury Notes - 15.1%  
  5,500,000    

1.00%, 11/30/2018

    5,473,358  
  3,300,000    

1.13%, 02/28/2021

    3,232,970  
  4,000,000    

1.25%, 11/30/2018

    3,994,688  
  1,000,000    

1.38%, 03/31/2020

    996,289  
  6,920,000    

1.63%, 06/30/2019

    6,950,815  
  2,650,000    

1.63%, 05/15/2026

    2,512,325  
  6,838,000    

1.75%, 05/15/2022

    6,800,603  
  2,750,000    

2.00%, 02/15/2025

    2,712,295  
  3,800,000    

2.00%, 11/15/2026

    3,705,296  
  315,000    

2.13%, 05/15/2025

    313,019  
  2,410,000    

2.75%, 11/15/2023

    2,508,661  
  2,825,000    

2.75%, 02/15/2024

    2,939,325  
  2,215,000    

3.13%, 05/15/2021

    2,330,421  
   

 

 

 
          44,470,065  
   

 

 

 
 

Total U.S. Government Securities
(cost $51,952,130)

    51,667,658  
   

 

 

 
 

Total Long-Term investments - Excluding Purchased Options
(cost $200,423,008)

    218,623,849  
   

 

 

 
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  17  

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

Shares or Principal Amount

       

Market Value(1)

 
SHORT-TERM INVESTMENTS - 12.9%            
      Repurchase Agreements - 0.3%        
 

RBC Capital Markets LLC TriParty Repurchase Agreement (dated 06/30/2017, repurchase price $779,069, collateralized by FNMA 6.00%, 2036, GNMA 3.50% - 4.00%, 2043 - 2047, U.S. Treasury Bill 0.00% , 2017, value of $792,459)

 

 
  779,000    

1.06%, 07/03/2017

    $ 779,000  
     

 

 

 
      U.S. Government Agencies - 12.6%        
      FHLB - 4.4%            
  10,000,000    

0.87%, 08/23/2017(6)

      9,985,550  
  3,000,000    

1.05%, 08/23/2017(6)

      2,995,665  
     

 

 

 
        12,981,215  
     

 

 

 
      FHLMC - 4.4%  
  3,000,000    

1.01%, 10/05/2017(6)

      2,991,696  
      4,043,000    

1.03%, 08/11/2017(6)

      4,038,532  
  6,000,000    

1.08%, 11/03/2017(6)

      5,978,064  
     

 

 

 
        13,008,292  
     

 

 

 

Shares or Principal Amount

       

Market Value(1)

 
SHORT-TERM INVESTMENTS - 12.9% - (continued)  
      FNMA - 3.8%  
      6,000,000    

0.80%, 07/05/2017(6)

    $ 5,999,664  
  5,000,000    

0.92%, 09/07/2017(6)

      4,990,560  
     

 

 

 
        10,990,224  
     

 

 

 
        36,979,731  
     

 

 

 
 

Total Short-Term investments
(cost $37,761,069)

      37,758,731  
     

 

 

 
 

Total Investments Excluding Purchased Options
(cost $238,184,077)

    87.6   $ 256,382,580  
 

Total Purchased Options
(cost $39,981,719)

    7.1     20,798,665  
   

 

 

   

 

 

 
 

Total Investments
(cost $278,165,796)(7)

    94.7   $ 277,181,245  
 

Other Assets and Liabilities

    5.3     15,395,708  
   

 

 

   

 

 

 
 

Total Net Assets

    100.0   $ 292,576,953  
   

 

 

   

 

 

 
 

 

Note: Percentage of investments as shown is the ratio of the total market value to total net assets.

 

     The Fund may refer to any one or more of the industry classifications used by one or more widely recognized market indices, ratings group indices and/or as defined by Fund management. Industry classifications may not be identical across all security types.

 

     Equity industry classifications used in this report are the Global Industry Classification Standard (GICS®), which was developed by and is the exclusive property and service mark of MSCI, Inc. and S&P.

 

     For Fund compliance purposes, the Fund may not use the same classification system shown in this report as these classifications are used for reporting ease.

 

(1)  See Significant Accounting Policies of accompanying Notes to Financial Statements regarding valuation of securities.

 

(2)  Non-income producing.

 

(3)  Affiliated company as defined under Sections 2(a)(2) and 2(a)(3) of the Investment Company Act of 1940. Hartford Investment Management Company, the Fund’s adviser, is a wholly-owned subsidiary of The Hartford Financial Services Group, Inc. A summary of transactions for the six-month period ended June 30, 2017 is as follows:

 

Company

   Beginning
Value At
January 1, 2017
     Purchase
Cost
     Sales
Proceeds
     Realized
Gain (Loss)
     Unrealized
Gain (Loss)
     Ending
Value At
June 30, 2017
     Dividend
Income
 

Hartford Financial Services Group, Inc. (The)

   $     81,100      $     —      $     (19,853)      $     3,217      $     3,562      $     68,026      $     639  

 

(4) Variable rate securities; the rate reported is the coupon rate in effect at June 30, 2017.

 

(5) Securities issued within terms of a private placement memorandum, exempt from registration under Rule 144A under the Securities Act of 1933, as amended, and may be sold only to qualified institutional buyers. Unless otherwise indicated, these holdings are determined to be liquid. At June 30, 2017, the aggregate value of these securities was $527,649, which represents 0.2% of total net assets.

 

(6) The interest rate disclosed for these securities represents the effective yield on the date of the acquisition.

 

The accompanying Notes are an integral part of these financial statements.

 

 

  18  

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments – (continued)

June 30, 2017 (Unaudited)

 

 

 

 

(7) At June 30, 2017, the cost of securities for federal income tax purposes was $278,749,581, and the aggregate gross unrealized appreciation and depreciation based on that cost were:

 

Unrealized Appreciation

   $     21,078,493  

Unrealized Depreciation

     (22,646,829
  

 

 

 

Net Unrealized Depreciation

   $ (1,568,336
  

 

 

 

Futures Contracts Outstanding at June 30, 2017

 

Description

   Number of
Contracts
    Expiration
Date
     Aggregate
Cost
    Notional Value      Unrealized
Appreciation/
(Depreciation)
 

Short position contracts:

            

S&P 500 (E-Mini)

     (433     09/15/2017        (52,597,718     $    (52,412,478)        $    185,240  

        Cash of $3,700,000 was pledged as initial margin deposit and collateral for the daily variation margin on open futures contracts at June 30, 2017.

OTC Option Contracts Outstanding at June 30, 2017

 

Description

  Counterparty     Risk
Exposure
Category
    Exercise
Price
    Expiration
Date
    Number of
Contracts
    Market
Value
    Premiums
Received/Paid by
Fund(1)
    Unrealized
Appreciation
Depreciation
 

Purchased option contracts:

               

Put option contracts

               

S&P 500 Index Option

    BCLY       EQ       2,098       11/02/21       31,706     $ 6,932,961     $ 13,320,087     $ (6,387,126

S&P 500 Index Option

    CSI       EQ       2,098       11/02/21       31,705       6,932,743       13,290,419       (6,357,676

S&P 500 Index Option

    JPM       EQ       2,098       11/02/21       31,706       6,932,961       13,371,213       (6,438,252
         

 

 

   

 

 

   

 

 

   

 

 

 

Total put option contracts

 

          95,117     $ 20,798,665     $ 39,981,719     $ (19,183,054
         

 

 

   

 

 

   

 

 

   

 

 

 

Total purchased option contracts

 

        95,117     $     20,798,665     $     39,981,719     $     (19,183,054
         

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)  For purchased options, premiums are paid by the Fund, for written options, premiums are received.

 

   The brokers deposited securities valued at $14,119,762 and cash of $7,040,000 with the custodian to serve as collateral for the options purchased by the Fund. The collateral is maintained in a segregated account at the custodian on behalf of the Fund. Since the brokers retain legal title to the securities, the securities are not considered assets of the Fund and are not included in the Statement of Assets and Liabilities.

 

GLOSSARY: (abbreviations used in preceding Schedule of Investments)
Index Abbreviations:

MSCI

   Morgan Stanley Capital International

S&P

   Standard & Poor’s
Other Abbreviations:

EQ

   Equity

ETF

   Exchange Traded Fund

FHLB

   Federal Home Loan Bank

FHLMC

   Federal Home Loan Mortgage Corp.

FNMA

   Federal National Mortgage Association

GNMA

   Government National Mortgage Association

MTN

   Medium Term Note

REIT

   Real Estate Investment Trust
Municipal Abbreviations:

DA

   Development Authority

GO

   General Obligation
Counterparty Abbreviations:

BCLY

   Barclays Bank PLC

CSI

   Credit Suisse International

JPM

   JP Morgan Chase & Co.

RBC

   RBC Dominion Securities
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  19  

 


HIMCO VIT Portfolio Diversifier Fund

Schedule of Investments – (concluded)

June 30, 2017 (Unaudited)

 

 

 

Credit Exposure

as of June 30, 2017

 

Credit Rating*    Percentage of
Net Assets
 

AAA/Aaa

     20.7

AA/Aa

     17.0  

A

     6.3  

BBB/Baa

     5.4  

Not Rated

     0.1  

Non-Debt Securities and Other Short-Term Instruments

     45.2  

Other assets and liabilities

     5.3  
  

 

 

 

Total

     100.0
  

 

 

 

 

* Credit exposure is the long-term credit ratings for the Fund’s holdings, as of the date noted, as provided by Standard and Poor’s Corporation (“S&P”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch. Inc. (“Fitch”) and typically range from AAA/Aaa (highest) to C/D (lowest). Presentation of S&P, Moody’s and Fitch credit ratings in this report have been selected for informational purposes for shareholders, as well as the Fund’s consideration of industry practice. If S&P, Moody’s and Fitch assign different ratings, the median rating is used. If only two agencies assign ratings, the lower rating is used. Fixed income securities that are not rated by either agency are listed as “Not Rated.” Ratings do not apply to the Fund itself or to the Fund’s shares. Ratings may change.

Investment Valuation Hierarchy Level Summary at June 30, 2017

 

Description

   Total      Level 1(1)      Level 2(1)      Level 3(1)  

Assets:

           

Common Stocks(2)

   $ 73,142,835      $ 73,142,835      $      $  

Exchange-Traded Funds

     681,724        681,724                

Asset & Commercial Mortgage Backed Securities

     1,111,877               1,111,877         

Corporate Bonds

     41,771,456               41,771,456         

Foreign Government Obligations

     3,152,781               3,061,919        90,862  

Municipal Bonds

     903,848               903,848         

U.S. Government Agencies

     46,191,670               46,191,670         

U.S. Government Securities

     51,667,658               51,667,658         

Short-Term Investments

     37,758,731               37,758,731         

Put Options Purchased

     20,798,665               20,798,665         
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $     277,181,245      $     73,824,559      $     203,265,824      $     90,862  
  

 

 

    

 

 

    

 

 

    

 

 

 

Futures(3)

   $ 185,240      $ 185,240      $      $  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 185,240      $ 185,240      $      $  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) For the six-month period ended June 30, 2017, investments valued at $2,405,370 were transferred from Leve1 1 to Level 2 due to a U.S. Treasury security that no longer represented the most recent issue and is exclusively traded in the secondary market. For the same time period investments valued at $40,500 were transferred from Level 3 to Level 2 due to a security that was previously valued using significant unobservable inputs but is now valued using observable inputs.

 

(2)  Refer to the Schedule of Investments for further industry breakout.

 

(3)  Derivative instruments (excluding purchased and written options, if applicable) are valued at the unrealized appreciation/depreciation on the investments.

 

Note: For purposes of reporting transfers between different hierarchy levels, both transfers in and out of each level, as applicable, are shown as if they occurred at the beginning of the period.

 

     Level 3 investments held by the Fund at the beginning and/or end of the period in relation to net assets were not significant and accordingly, a reconciliation of Level 3 assets for the six-month period ended June 30, 2017 is not presented.

 

     None of the unobservable inputs for Level 3 assets, individually or collectively, had a material impact on the Fund.

 

The accompanying Notes are an integral part of these financial statements.

 

 

  20  

 


HIMCO VIT Portfolio Diversifier Fund

Statement of Assets and Liabilities

June 30, 2017 (Unaudited)

 

 

 

Assets:

 

Investments in unaffiliated securities, at market value (cost $278,112,207)

   $     277,113,219  

Investments in affiliated securities, at market value (cost $53,589)

     68,026  

Cash(1)

     14,716,452  

Receivables:

 

Investment securities sold

     766,687  

Dividends and interest

     939,177  

Other assets

     2,764  
  

 

 

 

Total assets

     293,606,325  
  

 

 

 

Liabilities:

 

Payables:

 

Investment securities purchased

     715,809  

Fund shares redeemed

     67,646  

Investment management fees

     110,570  

Variation margin on futures contracts

     19,485  

Distribution fees

     60,519  

Trustees fees

     184  

Accrued expenses

     55,159  
  

 

 

 

Total liabilities

     1,029,372  
  

 

 

 

Net assets

   $ 292,576,953  
  

 

 

 

Summary of Net Assets:

 

Capital stock and paid-in-capital

   $ 400,309,821  

Undistributed net investment income

     4,393,578  

Accumulated net realized loss

         (111,327,135

Unrealized depreciation of investments

     (799,311
  

 

 

 

Net assets

   $ 292,576,953  
  

 

 

 

Class IB:   Net asset value per share

   $ 7.18  
  

 

 

 

                 Shares Outstanding

     40,745,262  
  

 

 

 

                 Net Assets

   $     292,576,953  
  

 

 

 

 

(1)  Cash of $3,700,000 was pledged as initial margin deposit and collateral for the daily variation margin on open futures contracts at June 30, 2017.

 

The accompanying Notes are an integral part of these financial statements.

 

 

  21  

 


HIMCO VIT Portfolio Diversifier Fund

Statement of Operations

For the Six-Month Period Ended June 30, 2017 (Unaudited)

 

 

 

Investment Income:

 

Dividends from unaffiliated securities

   $ 786,635  

Dividends from affiliated securities

     639  

Interest

     1,953,461  

Other Income

     205  
  

 

 

 

Total investment income, net

     2,740,940  
  

 

 

 

Expenses:

 

Investment management fees

     895,848  

Transfer agent fees

     2,415  

Distribution fees - Class IB

     373,270  

Custodian fees

     17,166  

Accounting service fees

     105,456  

Trustees fees

     18,933  

Audit fees

     15,896  

Printing fees

     14,510  

Legal fees

     21,334  

Insurance fees

     10,210  

Other expenses

     9,421  
  

 

 

 

Total expenses (before waivers)

     1,484,459  
  

 

 

 

Total waivers

     (209,864
  

 

 

 

Total expenses, net

     1,274,595  
  

 

 

 

Net Investment Income

     1,466,345  
  

 

 

 

Net Realized Gain (Loss) on Investments and Other Financial Instruments:

 

Net realized gain on investments in unaffiliated securities

     6,946,983  

Net realized gain on investments in affiliated securities

     3,217  

Net realized loss on futures

     (5,255,646
  

 

 

 

Net Realized Gain on Investments and Other Financial Instruments

     1,694,554  
  

 

 

 

Net Changes in Unrealized Appreciation (Depreciation) of Investments and Other Financial Instruments:

 

Net unrealized appreciation of investments

     851,678  

Net unrealized depreciation of purchased options

     (10,824,381

Net unrealized appreciation of futures contracts

     321,118  
  

 

 

 

Net Changes in Unrealized Depreciation of Investments and Other Financial Instruments

     (9,651,585
  

 

 

 

Net Realized and Unrealized Loss on Investments and Other Financial Instruments

     (7,957,031
  

 

 

 

Net Decrease in Net Assets Resulting from Operations

   $     (6,490,686
  

 

 

 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  22  

 


HIMCO VIT Portfolio Diversifier Fund

Statements of Changes in Net Assets

 

 

 

     For the
Six-Month
Period Ended
June 30,
2017
(Unaudited)
    For the
Year Ended
December 31,
2016
 

Operations:

 

Net investment income

   $ 1,466,345     $ 2,537,220  

Net realized gain on investments and other financial instruments

     1,694,554       (18,732,372

Net unrealized appreciation (depreciation) of investments and other financial instruments

     (9,651,585     2,238,371  
  

 

 

   

 

 

 

Net Decrease in Net Assets Resulting from Operations

     (6,490,686     (13,956,781
  

 

 

   

 

 

 

Distributions to Shareholders:

 

From net investment income

 

Capital Share Transactions:

 

Class IB

 

Sold

     14,390,317       54,100,898  

Redeemed

     (27,872,269     (72,733,609
  

 

 

   

 

 

 

Total capital share transactions

     (13,481,952     (18,632,711
  

 

 

   

 

 

 

Net decrease from capital share transactions

     (13,481,952     (18,632,711
  

 

 

   

 

 

 

Net Decrease in Net Assets

     (19,972,638     (32,589,492
  

 

 

   

 

 

 

Net Assets:

 

Beginning of period

     312,549,591       345,139,083  
  

 

 

   

 

 

 

End of period

   $     292,576,953     $     312,549,591  
  

 

 

   

 

 

 

Undistributed net investment income

   $ 4,393,578     $ 2,927,233  
  

 

 

   

 

 

 

Shares:

 

Class IB

 

Sold

     1,991,417       7,156,098  

Redeemed

     (3,853,465     (9,439,893
  

 

 

   

 

 

 

Total share activity

     (1,862,048     (2,283,795
  

 

 

   

 

 

 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  23  

 


HIMCO VIT Portfolio Diversifier Fund

Notes to Financial Statements

June 30, 2017 (Unaudited)

 

 

 

1. Organization:

HIMCO Variable Insurance Trust (the “Trust”) is an open-end registered management investment company. The Trust is organized under the laws of the State of Delaware and is registered with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940, as amended (“1940 Act”).

HIMCO VIT Portfolio Diversifier Fund (the “Fund”) serves as an underlying investment option for certain variable annuity separate accounts of Hartford Life Insurance Company (“Hartford Life”) and its affiliates and Forethought Life Insurance Company (“Forethought”). The Fund’s shares are available only to separate accounts of Hartford Life and its affiliates and Forethought who have elected a guaranteed benefit rider subject to an allocation requiring investment in the Fund.

The Fund is a series of the Trust. The Fund is the successor of a series of Hartford Series Fund, Inc. (the “Hartford Portfolio Diversifier HLS Fund”). The reorganization of the Hartford Portfolio Diversifier HLS Fund with and into the Fund occurred on October 20, 2014. All information regarding and references to periods prior to October 20, 2014 relate to the Hartford Portfolio Diversifier HLS Fund. The Fund is a diversified open-end management investment company and applies specialized accounting and reporting under Accounting Standards Codification Topic 946, Financial Services – Investment Companies. The Fund is authorized to issue an unlimited number of shares.

Class IB shares of the Fund are offered at the per share net asset value (“NAV”) without a sales charge and are subject to distribution and service fees charged pursuant to a distribution plan (the “Distribution Plan”) approved by the Board of Trustees in accordance with Rule 12b-1 under the 1940 Act and the requirements of the applicable market conduct rules of the Financial Industry Regulatory Authority concerning asset-based sales charges.

 

2. Significant Accounting Policies:

The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements, which are in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”). The preparation of financial statements in accordance with U.S. GAAP may require 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 resulting from operations during the reporting period. Actual results could differ from those estimates.

 

  a) Determination of Net Asset Value – The NAV per share is determined for the Fund’s shares as of the close of regular trading on the New York Stock Exchange (the “Exchange”) (normally 4:00 p.m. Eastern Time) (the “NYSE Close”) on each day that the Exchange is open (“Valuation Date”). If the Exchange is closed due to weather or other extraordinary circumstances on a day it would typically be open for business, the Fund will treat such day as a typical business day and accept purchase and redemption orders and calculate the Fund’s NAV as of 4:00 p.m. Eastern Time. The NAV for each share is determined by dividing the value of the Fund’s net assets by the number of shares outstanding. For any day where, due to technical or other issues, trading is halted before the scheduled close of the Exchange, and not as part of a trading halt that is effected on a market-wide basis, the Fund may elect to continue to treat the Valuation Date as occurring at the time of the schedule close of the Exchange. Information that becomes known to the Fund after the NAV has been calculated on a particular day will not generally be used to retroactively adjust the NAV determined earlier that day.

 

  b)

Investment Valuation and Fair Value Measurements – For purposes of calculating the NAV, portfolio securities and other assets held in the Fund’s portfolio for which market prices are readily available are valued at market value. Market value is generally determined on the basis of last reported sales prices or official close price. If no sales were reported, market value is based on prices obtained from independent pricing services, a quotation reporting system or established market makers. If market prices are not readily available or are deemed unreliable, the Fund will use the fair value of the security or other instrument as determined in good faith under policies and procedures established by and under the supervision of the Board of Trustees. Market prices are considered not readily available where there is an absence of current or reliable market-based data (e.g., trade information or broker quotes), including where events occur after the close of the relevant market, but prior to the NYSE Close that materially affect the values of the Fund’s portfolio holdings or assets. In addition, market prices are considered not readily available when, due to extraordinary circumstances, the exchanges or markets on which the securities or other instruments trade do not open for trading for

 

 

  24  

 


HIMCO VIT Portfolio Diversifier Fund

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

  the entire day and no other market prices are available. Securities and other instruments that are primarily traded on foreign markets may trade on days that are not business days of the Fund. The value of the foreign securities or other instruments in which the Fund invests may change on days when a shareholder will not be able to purchase or redeem shares of the Fund. Fair value pricing is subjective in nature and the use of fair value pricing by the Fund may cause the NAV of its shares to differ significantly from the NAV that would have been calculated using market prices at the close of the exchange on which a portfolio holding is primarily traded. There can be no assurance that the Fund could obtain the fair value assigned to an investment if the Fund were to sell the investment at approximately the time at which the Fund determines its NAV.

Fixed income securities, including those with a remaining maturity of less than sixty (60 days), and non-exchange traded derivatives held by the Fund are valued in accordance with procedures established by the Board of Trustees. Such investments are normally valued on the basis of quotes obtained from independent pricing services or brokers and dealers. Prices obtained from independent pricing services use information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Senior floating rate interests generally trade in over-the-counter (“OTC”) markets and are priced through an independent pricing service utilizing independent market quotations from loan dealers or financial institutions. Generally, the Fund may use fair valuation in regard to fixed income positions when the Fund holds defaulted or distressed investments or investments in a company in which a reorganization is pending. If pricing services do not provide a price for short term investments maturing in 60 days or less, such investments are generally valued at amortized cost if their original term to maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if the original term exceeded 60 days.

Exchange traded futures, options and options on futures are valued in accordance with procedures established by the Board of Trustees. Such instruments are normally valued on the basis of quotes obtained from independent pricing services. Prices obtained from independent pricing services use most recent settlement prices and/or bid and ask prices for futures; and last sale prices and bid and ask prices for options and options on futures. If pricing services are not able to provide prices for futures, such instruments will generally be valued at the most recent trade price as of the NYSE Close. If pricing services are not able to provide prices for options and options on futures, such instruments will generally be valued on the basis of quotes obtained from brokers, dealers or market makers. If the option is out of the money, within 30 days of expiration and no bid price is available, the option may be valued at zero. If such instruments do not trade on an exchange, values may be supplied by an independent pricing service using a formula or other objective method that may take into consideration the style, direction, expiration, strike price, notional value and volatility or other adjustments.

Investments in registered open-end investment companies are valued at the respective NAV of each such investment on the Valuation Date. Such open-end funds may use fair value pricing as disclosed in their prospectuses.

Financial instruments for which prices are not available from an independent pricing service may be valued using market quotations obtained from one or more dealers that make markets in the respective financial instrument in accordance with procedures established by the Board of Trustees.

U.S. GAAP defines fair value as the price that the fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The U.S. GAAP fair value measurement standards require disclosure of a fair value hierarchy for each major category of assets and liabilities. Various inputs are used in determining the fair value of the Fund’s investments. These inputs are summarized into three broad hierarchy levels. This hierarchy is based on whether the valuation inputs are observable or unobservable. The determination of which category within the fair value hierarchy is appropriate for any given instrument is based on the lowest level of input that is significant to the fair value measurement. These levels are:

 

    Level 1 – Inputs using (unadjusted) quoted prices in active markets or exchanges for identical assets and liabilities. Level 1 may include exchange traded instruments, such as domestic equities, some foreign equities, options, futures, investment companies, exchange traded funds, rights and warrants.

 

   

Level 2 – Observable inputs other than Level 1 prices, which may include, but are not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities or other market corroborated inputs. Level 2 may include debt investments that are traded less frequently than exchange

 

 

  25  

 


HIMCO VIT Portfolio Diversifier Fund

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

  traded instruments and are valued using independent pricing services; foreign equities, which are principally traded on certain foreign markets and are adjusted daily pursuant to a fair value pricing service in order to reflect an adjustment for the factors occurring after the close of certain foreign markets but before the NYSE Close; senior floating rate interests, which are valued using an aggregate of dealer bids; short-term investments, which are valued at amortized cost; and swaps, which are valued based upon the terms of each swap contract.

 

    Level 3 – Significant unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available. Level 3 may include financial instruments whose values are determined using indicative market quotes or require significant management judgment or estimation. These unobservable valuation inputs may include estimates for current yields, maturity/duration, prepayment speed, and indicative market quotes for comparable investments along with other assumptions relating to credit quality, collateral value, complexity of the investment structure, general market conditions and liquidity. This category may include investments where trading has been halted or there are certain restrictions on trading. While these investments are priced using unobservable inputs, the valuation of these investments reflects the best available data and management believes the prices are a reasonable representation of exit price.

The procedures adopted by the Board of Trustees define how investments are to be valued, including the formation and activities of a Valuation Committee. The Valuation Committee has the overall responsibility for implementing the procedures adopted by the Board of Trustees, including the responsibility for determining the fair value of the Fund’s investments. The Valuation Committee is also responsible for determining in good faith the fair value of an investment when the value cannot be obtained from primary pricing services or alternative sources or if the valuation of an investment, as provided by the primary pricing service or alternative source, is believed not to reflect the investment’s fair value as of the Valuation Date.

The Valuation Committee is comprised of the Trust’s Chief Executive Officer, Treasurer, Chief Operating Officer, and Chief Legal Officer, or their designees, and other personnel of the investment manager subject to prior approval by the Board of Trustees. In addition, the Trust’s Chief Compliance Officer (“CCO”) shall designate a member of the compliance group to attend Valuation Committee meetings as a non-voting resource, to monitor for and provide guidance with respect to compliance with these procedures and to keep the Trust’s CCO regularly informed of pricing and Valuation Committee proceedings. Two members of the Valuation Committee or their designees, representing different departments, shall constitute a quorum for purposes of permitting the Committee to take action. The Valuation Committee will consider all relevant factors in determining an investment’s fair value, and may seek the advice of the Fund’s adviser, knowledgeable brokers, and legal counsel in making such determination.

At each quarterly meeting of the Board of Trustees, the Valuation Committee provides a written report that includes details of all fair-valued investments to the extent any are fair-valued, including the reason for the fair valuation, and an indication, when possible, of the accuracy of the valuation by disclosing the next available reliable public price quotation or the disposition price of such investments (the “look-back” review). The Board of Trustees then must consider for ratification all of the fair value determinations made during the previous quarter.

Valuation levels are not necessarily indicative of the risk associated with investing in such investments. Individual investments within any of the above mentioned asset classes may be assigned a different hierarchical level than those presented above, as individual circumstances dictate.

For additional information, refer to the Investment Valuation Hierarchy Level Summary included in the Schedule of Investments.

 

  c) Investment Transactions and Investment Income – Investment transactions are recorded as of the trade date (the date the order to buy or sell is executed) for financial reporting purposes. Investments purchased or sold on a when-issued or delayed-delivery basis may be settled a month or more after the trade date. Realized gains and losses are determined on the basis of identified cost.

Dividend income from domestic securities is recorded on the ex-dividend date. Interest income, including amortization of premium, accretion of discounts and additional principal received in-kind in lieu of cash, is accrued on a daily basis. Paydown gains and losses on mortgage related and other asset backed securities are included in interest income in the Statement of Operations, as applicable.

 

 

  26  

 


HIMCO VIT Portfolio Diversifier Fund

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

 

  d) Joint Trading Account The Fund may invest cash balances into a joint trading account that may be invested in one or more repurchase agreements.

 

  e) Fund Share Valuation and Dividend Distributions to Shareholders – Orders for the Fund’s shares are executed in accordance with the investment instructions of the contract holders and plan participants.

Orders for the purchase of the Fund’s shares received prior to the close of the Exchange on any day the Exchange is open for business are priced at the NAV determined as of the close of the Exchange. Orders received after the close of the Exchange, or on a day on which the Exchange and/or the Fund is not open for business, are priced at the next determined NAV.

Dividends are declared pursuant to a policy adopted by the Board of Trustees based upon the investment performance of the Fund. The policy of the Fund is to pay dividends from net investment income and to make distributions of realized gains, if any, at least once per year.

Distributions from net investment income, realized capital gains and capital are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP with respect to character and timing. These differences may include, but are not limited to, losses deferred due to wash sale adjustments, foreign currency gains and losses, adjustments related to Passive Foreign Investment Companies (“PFICs”), Real Estate Investment Trusts (“REITs”), Regulated Investment Companies (“RICs”), certain derivatives and partnerships. Permanent book and federal income tax basis differences relating to shareholder distributions will result in reclassifications to certain of the Fund’s capital accounts (see Federal Income Taxes: Reclassification of Capital Accounts note).

 

3. Securities and Other Investments:

 

  a) Repurchase Agreements and Reverse Repurchase Agreements – A repurchase agreement is an agreement by which a counterparty agrees to sell an investment and agrees to repurchase the investment sold from the buyer, the Fund, at a mutually agreed upon time and price. A reverse repurchase agreement is an agreement by which the Fund agrees to sell an investment and agrees to repurchase the investment sold from the buyer, the counterparty, at a mutually agreed upon time and price. During the period of the repurchase agreement, the counterparty will deposit cash and or securities in a third party custodial account to serve as collateral. At the time the Fund enters into a repurchase agreement, the value of the underlying collateral, including accrued interest, will be equal to or exceed the value of the repurchase agreement. Repurchase agreements expose the Fund to counterparty risk – that is, the risk that the counterparty will not fulfill its obligations. To minimize counterparty risk, the investments that serve to collateralize the repurchase agreement are held by the Fund’s custodian in book entry or physical form in the custodial account of the Fund or in a third party custodial account. Repurchase agreements are valued at cost plus accrued interest, which approximates fair value. Repurchase agreements have master netting arrangements which allow the Fund to offset amounts owed to a counterparty with amounts owed by the counterparty, including any collateral. Upon an event of default under a master repurchase agreement, the non-defaulting party may close out all transactions traded under such agreement and net amounts owed under each transaction to one net amount payable by one party to the other. Absent an event of default, the master repurchase agreement does not result in an offset of reported amounts of assets and liabilities in the Statement of Assets and Liabilities across transactions between the Fund and the applicable counterparty. The Fund, as shown on the Schedule of Investments, had outstanding repurchase agreements and related collateral as of June 30, 2017.

 

  b)

Illiquid and Restricted Investments – The Fund is permitted to invest in illiquid investments in an amount up to 15% of its net assets. Illiquid investments are those that may not be sold or disposed of in the ordinary course of business within seven days at approximately the price used for such investments in determination of the Fund’s NAV. The Fund may not be able to sell illiquid investments when the investment manager considers it desirable to do so or may have to sell such investments at a price that is lower than the price that could be obtained if the investments were more liquid. A sale of illiquid investments may require more time and may result in higher dealer discounts and other selling expenses than does the sale of those that are liquid. Illiquid investments also may be more difficult to value due to the lack of reliable market quotations for such investments, and investments in them may have an adverse impact on the Fund’s NAV. The Fund may invest in certain restricted investments. Restricted investments may be sold in private placement transactions between issuers and their purchasers and may be neither listed on an exchange nor traded in other established markets.

 

 

  27  

 


HIMCO VIT Portfolio Diversifier Fund

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

  The Fund may also purchase investments that may have restrictions on transfer or resale (including Rule 144A securities and Regulation S securities). These securities may either be determined to be liquid or illiquid pursuant to policies and guidelines established by the Board of Trustees. The Fund did not hold illiquid and/or restricted investments as of June 30, 2017.

 

  c) Investments Purchased on a When-Issued or Delayed-Delivery Basis – Delivery and payment for investments that have been purchased by the Fund on a forward commitment, or when-issued or delayed-delivery basis, take place beyond the customary settlement period. The Fund may dispose of or renegotiate a delayed-delivery transaction after it is entered into, and may sell delayed-delivery investments before they are delivered, which may result in a realized gain or loss. During this period, such investments are subject to market fluctuations, and the Fund identifies investments segregated in its records with a value at least equal to the amount of the commitment. When-issued and delayed delivery investments and forward commitments involve the risk that the investment the Fund buys will lose value prior to its delivery. There are also risks that the investment will never be issued or that the other party to the transaction will not meet its obligation. If this occurs, the Fund loses both the investment opportunity for the assets it set aside to pay for the investment and any gain in the investment’s price. The Fund did not hold when-issued or delayed-delivery investments as of June 30, 2017.

 

  d) Mortgage Related and Other Asset Backed Securities – The Fund may invest in mortgage related and other asset backed securities. These securities include mortgage pass-through securities, collateralized mortgage obligations, commercial mortgage backed securities, stripped mortgage backed securities, asset backed securities, collateralized debt obligations and other securities that directly or indirectly represent a participation in, or are secured by and payable from, mortgage loans on real property. Mortgage related securities are created from pools of residential or commercial mortgage loans, including mortgage loans made by savings and loan institutions, mortgage bankers, commercial banks and others. Asset backed securities are created from many types of assets, including auto loans, credit card receivables, home equity loans, and student loans. These securities provide a monthly payment that consists of both interest and principal payments. Interest payments may be determined by fixed or adjustable rates. The rate of pre-payments on underlying mortgages will affect the price and volatility of a mortgage related security, and may have the effect of shortening or extending the effective duration of the security relative to what was anticipated at the time of purchase. The timely payment of principal and interest of certain mortgage related securities is guaranteed by the full faith and credit of the United States Government. Mortgage related and other asset backed securities created and guaranteed by non-governmental issuers, including government-sponsored corporations, may be supported by various forms of insurance or guarantees, but there can be no assurance that the private insurers or guarantors can meet their obligations under the insurance policies or guarantee arrangements. The Fund, as shown on the Schedule of Investments, had mortgage related and other asset backed securities as of June 30, 2017.

 

4. Financial Derivative Instruments:

The following disclosures contain information on how and why the Fund uses derivative instruments, the credit-risk-related contingent features in certain derivative instruments, and how derivative instruments affect the Fund’s financial position and results of operations. The location and fair value amounts of these instruments in the Statement of Assets and Liabilities and the realized gains and losses and changes in unrealized gains and losses in the Statement of Operations, each categorized by type of derivative contract, are included in the following Additional Derivative Instrument Information footnote. The derivative instruments outstanding as of year-end are disclosed in the notes to the Schedule of Investments, if applicable. The amounts of realized gains and losses and changes in unrealized appreciation and depreciation on derivative instruments during the year are disclosed in the Statement of Operations.

 

  a)

Futures Contracts – The Fund may enter into futures contracts. A futures contract is an agreement between two parties to buy or sell an asset at a set price on a future date. The Fund uses futures contracts to manage or obtain exposure to the investment markets, commodities, or movements in interest rates and currency values. The primary risks associated with the use of futures contracts are the imperfect correlation between the change in market value of the investments held by the Fund and the prices of futures contracts and the possibility of an illiquid market. Upon entering into a futures contract, the Fund is required to deposit with a futures commission merchant (“FCM”) an amount of cash or U.S. Government or Agency Obligations in accordance with the initial margin requirements of the broker or exchange.

 

 

  28  

 


HIMCO VIT Portfolio Diversifier Fund

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

  Futures contracts are marked to market daily at the most recent settlement price reported by an exchange on which, over time, they are traded most extensively, and an appropriate payable or receivable for the change in value (“variation margin”) is recorded by the Fund. Gains or losses are recognized but not considered realized until the contracts expire or are closed. Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed in the Statement of Assets and Liabilities; however, the Fund seeks to reduce this risk through the use of an FCM. The Fund, as shown on the Schedule of Investments, had outstanding futures contracts as of June 30, 2017.

 

  b) Options Contracts – An option contract is a contract sold by one party to another party that offers the buyer the right, but not the obligation, to buy (call) or sell (put) an investment or other financial asset at an agreed-upon price during a specific period of time or on a specific date. Option contracts are either privately negotiated in the OTC market (“OTC options”) or executed in a registered exchange (“exchange traded options). The Fund may write (sell) covered call and put options on futures, swaps (“swaptions”), securities, commodities or currencies. “Covered” means that so long as the Fund is obligated as the writer of an option, it will own either the underlying investments or currency or an option to purchase the same underlying investments or currency having an expiration date of the covered option and an exercise price equal to or less than the exercise price of the covered option, or will pledge cash or other liquid investments having a value equal to or greater than the fluctuating market value of the option investment or currency. Writing put options increases the Fund’s exposure to the underlying instrument. Writing call options decreases the Fund’s exposure to the underlying instrument. Premiums received from writing options that expire are treated as realized gains. Premiums received from writing options that are exercised or closed are added to the proceeds or offset amounts paid on the underlying futures, swap, investment or currency transaction to determine the realized gain or loss. The Fund as a writer of an option has no control over whether the underlying instrument may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the instrument underlying the written option. There is the risk the Fund may not be able to enter into a closing transaction because of an illiquid market. The Fund may also purchase put and call options. Purchasing call options increases the Fund’s exposure to the underlying instrument. Purchasing put options decreases the Fund’s exposure to the underlying instrument. The Fund pays a premium, which is included on the Fund’s Statement of Assets and Liabilities as an investment and is subsequently marked to market to reflect the current value of the option. Premiums paid for purchasing options that expire are treated as realized losses. Certain options may be purchased with premiums to be determined on a future date. The premiums for these options are based upon implied volatility parameters at specified terms. The risk associated with purchasing put and call options is generally limited to the premium paid. Premiums paid for purchasing options that are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying investment transaction to determine the realized gain or loss. Entering into over-the-counter options also exposes the Fund to counterparty risk. Counterparty risk is the possibility that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreements. The Fund, as shown on the Schedule of Investments, had outstanding purchased options as of June 30, 2017. The Fund did not hold written options contracts as of June 30, 2017.

Additional Derivative Instrument Information:

Fair Value of Derivative Instruments in the Statement of Assets and Liabilities as of June 30, 2017:

 

     Risk Exposure Category  
     Interest Rate
Contracts
     Foreign
Exchange
Contracts
     Credit
Contracts
     Equity
Contracts
     Commodity
Contracts
     Other
Contracts
     Total  

Assets:

 

Investments in unaffiliated securities, at market value (purchased options)

   $     —      $     —      $     —      $     20,798,665      $     —      $     —      $     20,798,665  

Unrealized appreciation on futures(1)

                          185,240                      185,240  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $      $      $      $ 20,983,905      $      $      $ 20,983,905  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (1)  Includes cumulative appreciation/depreciation on financial futures contracts as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.

The volume of derivatives that is presented in the Schedule of Investments is consistent with the derivative activity during the six-month period ended June 30, 2017.

 

 

  29  

 


HIMCO VIT Portfolio Diversifier Fund

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

The Effect of Derivative Instruments in the Statement of Operations for the six-month period ended June 30, 2017:

 

     Risk Exposure Category  
     Interest Rate
Contracts
     Foreign
Exchange
Contracts
     Credit
Contracts
     Equity
Contracts
    Commodity
Contracts
     Other
Contracts
     Total  

Realized Loss on Derivatives Recognized as a Result of Operations:

 

Net realized loss on futures

   $     —      $     —      $     —      $     (5,255,646   $     —      $     —      $     (5,255,646
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total

   $      $      $      $ (5,255,646   $      $      $ (5,255,646
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Net Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized as a Result of Operations:

 

Net change in unrealized depreciation of investments in purchased options

   $      $      $      $ (10,824,381   $      $      $ (10,824,381

Net change in unrealized appreciation of futures

                          321,118                     321,118  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total

   $      $      $      $     (10,503,263   $      $      $     (10,503,263
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

  c) Balance Sheet Offsetting Information – Set forth below are tables which disclose both gross information and net information about instruments and transactions eligible for offset in the financial statements, and instruments and transactions that are subject to a master netting arrangement, as well as amounts related to margin, reflected as financial collateral (including cash collateral), held at clearing brokers, counterparties and the Fund’s custodian. The master netting arrangements allow the clearing brokers to net any collateral held in or on behalf of the Fund, or liabilities or payment obligations of the clearing brokers to the Fund, against any liabilities or payment obligations of the Fund to the clearing brokers. The Fund is required to deposit financial collateral (including cash collateral) at the Fund’s custodian on behalf of clearing brokers and counterparties to continually meet the original and maintenance requirements established by the clearing brokers and counterparties. Such requirements are specific to the respective clearing broker or counterparty. Certain master netting arrangements may not be enforceable in a bankruptcy.

The following tables present the Fund’s derivative assets and liabilities, presented on a gross basis as no amounts are netted within the Statement of Assets and Liabilities, by counterparty net of amounts available for offset under a master netting agreement or similar agreement (“MNA”) and net of the related collateral received/pledged by the Fund as of June 30, 2017:

 

     Assets     Liabilities  

Derivative Financial Instruments:

    

Futures contracts

   $ 185,240     $  

Purchased options

     20,798,665        
  

 

 

   

 

 

 

Total gross amount of derivative assets and liabilities in the Statement of Assets and Liabilities

     20,983,905        
  

 

 

   

 

 

 

Derivatives not subject to a MNA

     (185,240      
  

 

 

   

 

 

 

Total gross amount of derivative assets and liabilities subject to MNA or similar agreements

   $     20,798,665     $     —  
  

 

 

   

 

 

 

 

     Gross Amount
of Assets
     Financial
Instruments and
Derivatives
Available for
Offset
     Non-cash
Collateral
Received*
    Cash Collateral
Received*
    Net
Amount of
Assets
 

Counterparty

 

Barclays Bank PLC

   $ 6,932,961      $      $ (6,932,961   $     $  

Credit Suisse International

     6,932,743                     (6,932,743      

JP Morgan Chase & Co.

     6,932,961               (6,932,961            
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total subject to a master netting or similar arrangement

   $     20,798,665      $     —      $     (13,865,922   $     (6,932,743   $     —  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

 

  * In some instances, the actual collateral received and/or pledged may be more than the amount shown.

 

 

  30  

 


HIMCO VIT Portfolio Diversifier Fund

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

 

5. Principal Risks:

The market values of equity securities, such as common stocks and preferred stocks, or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. The market value of equity securities may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Equity securities and equity related investments generally have greater market price volatility than fixed income securities.

Credit risk depends largely on the perceived financial health of bond issuers. In general, the credit rating is inversely related to the credit risk of the issuer. Higher rated bonds generally are deemed to have less credit risk, while lower or unrated bonds are deemed to have higher risk of default. The share price, yield and total return of a fund that holds securities with higher credit risk may be more volatile than those of a fund that holds bonds with lower credit risk. Similar to credit risk, the Fund may be exposed to counterparty risk, or the risk that an institution or other entity with which the Fund has unsettled or open transactions will default.

The Fund’s investments expose the Fund to various risks including, but not limited to, interest rate, prepayment, extension and equity risks. Interest rate risk is the risk that fixed income securities will decline in value because of changes in interest rates. As nominal interest rates rise, the values of certain fixed income securities held by the Fund are likely to decrease. A nominal interest rate can be described as the sum of a real interest rate and an expected inflation rate. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations. Duration is useful primarily as a measure of the sensitivity of a fixed income security’s market price to interest rate (i.e., yield) movements. Rising interest rates may cause prepayments to occur at a slower than expected rate, thereby effectively lengthening the maturity of the security and making the security more sensitive to interest rate changes. Prepayment and extension risk are major risks of mortgage backed securities and certain asset backed securities. For certain asset backed securities, the actual maturity may be less than the stated maturity shown in the Schedule of Investments, if applicable. As a result, the timing of income recognition relating to these securities may vary based upon the actual maturity.

 

6. Federal Income Taxes:

 

  a) Federal Income Taxes – For federal income tax purposes, the Fund intends to continue to qualify as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (“IRC”), by distributing substantially all of its taxable net investment income and net realized capital gains to its shareholders and otherwise complying with the requirements of the IRC. The Fund distributed substantially all of its income and capital gains in prior years, if applicable, and intends to distribute substantially all of its income and capital gains prior to the next fiscal year-end. Accordingly, no provision for federal income or excise taxes has been made in the accompanying financial statements. Distributions from short-term capital gains are treated as ordinary income distributions for federal income tax purposes.

 

  b) Net Investment Income (Loss), Net Realized Gains (Losses) and Distributions – Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes primarily because of losses deferred due to wash sale adjustments, paydown gain/loss, adjustments related to certain corporate actions, REITS, RICs and certain derivatives. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains (losses) were recorded by the Fund.

 

  c) Distributions and Components of Distributable Earnings – The tax character of distributions paid by the Fund for the periods indicated is as follows (as adjusted for dividends payable, if applicable):

 

     For the Year Ended
December 31, 2016
     For the Year Ended
December 31, 2015
 

Ordinary Income

   $     —      $     3,190,703  

 

 

  31  

 


HIMCO VIT Portfolio Diversifier Fund

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

As of December 31, 2016, the Fund’s components of distributable earnings (deficit) on a tax basis were as follows:

 

     Amount  

Undistributed Ordinary Income

   $ 2,927,233  

Undistributed Long-Term Capital Gain

      

Accumulated Capital and Other Losses

     (91,489,524

Unrealized Appreciation (Depreciation)(1)

     (12,679,891
  

 

 

 

Total Accumulated Earnings (Deficit)

   $     (101,242,182
  

 

 

 

 

  (1) Differences between book-basis and tax-basis unrealized appreciation (depreciation) may be attributable to the losses deferred due to wash sale adjustments, adjustments related to REITs, RICs, certain derivatives and corporate actions.

 

  d) Reclassification of Capital Accounts – The Fund may record reclassifications in its capital accounts. These reclassifications have no impact on the total net assets of the Fund. The reclassifications are a result of permanent differences between U.S. GAAP and tax accounting for such items as paydown gain/loss and certain distributions from REITs after gain/loss. Adjustments are made to reflect the impact these items have on current and future distributions to shareholders. Therefore, the source of the Fund’s distributions may be shown in the accompanying Statements of Changes in Net Assets as from undistributed net investment income, from accumulated net realized gains on investments or from capital depending on the type of book and tax differences that exist. For the fiscal year ended December 31, 2016, the Fund recorded reclassifications to increase (decrease) the accounts listed below:

 

     Amount  

Paid In Capital

   $ (6,601

Undistributed Net Investment Income

     370,473  

Accumulated Net Realized Loss

         (363,872

 

  e) Capital Loss Carryforward – Under U.S. tax law, the Fund is permitted to carry forward capital losses for an unlimited period. Additionally, capital loss carryforwards retain their character as either short-term or long-term capital losses rather than being considered all short-term as permitted under prior regulation.

At December 31, 2016 (tax-year-end), the Fund had capital loss carryforwards for U.S. federal income tax purposes as follows:

Capital loss carryforwards with no expiration:

 

     Amount  

Short-Term Capital Loss Carryforward

   $ 20,086,492  

Long-Term Capital Loss Carryforward

     71,403,032  
  

 

 

 

Total

   $     91,489,524  
  

 

 

 

 

  f) Accounting for Uncertainty in Income Taxes – In accordance with U.S. GAAP, the Fund analyzes all open tax years, as defined by the statute of limitations, for all major jurisdictions. Generally, tax authorities can examine all tax returns filed for the last three years. The Fund does not have an examination in progress.

The Fund has reviewed all open tax years and major jurisdictions and concluded that these financial reporting rules had no effect on the Fund’s financial position or results of operations. There is no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on the tax return for the fiscal year ended December 31, 2016. The Fund is also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

 

7. Fees and Expenses:

 

  a)

Investment Management Agreement – Hartford Investment Management Company (“Hartford Investment Management”) serves as the Fund’s investment manager pursuant to an Investment Management Agreement with the Trust. Hartford

 

 

  32  

 


HIMCO VIT Portfolio Diversifier Fund

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

  Investment Management is a wholly owned subsidiary of The Hartford Financial Services Group, Inc. (“The Hartford”). The investment manager provides day-to-day investment management services to the Fund and has overall investment supervisory responsibility for the Fund. In addition, the investment manager provides administrative personnel, services, equipment, facilities and office space for operation of the Fund.

The schedule below reflects the rates of compensation as a percentage of the Fund’s average daily net assets paid to the investment manager for investment management services rendered as of June 30, 2017; the rates are accrued daily and paid monthly.

 

Average Daily Net Assets

   Annual Fee  

On first $500 million

     0.60%  

On next $500 million

     0.55%  

On next $4 billion

     0.50%  

On next $5 billion

     0.48%  

Over $10 billion

     0.47%  

 

  b) Accounting Services Agreement – State Street Bank and Trust Company (“State Street Bank”) provides the Fund with accounting services pursuant to a fund accounting agreement by and between the Trust, on behalf of the Fund, and State Street Bank. The amount paid for accounting services can be found in the Statement of Operations. These fees are accrued daily and paid monthly.

 

  c) Operating Expenses – Allocable expenses incurred by the Trust are allocated to the Fund in proportion to the average daily net assets of the Fund, except where allocation of certain expenses is more fairly made directly to the Fund.

Hartford Investment Management has contractually agreed to reimburse expenses (exclusive of taxes, interest expense, brokerage commissions, acquired fund fees and expenses and extraordinary expenses) to the extent necessary to maintain total annual operating expenses for the Class IB shares of the Fund at the annual rate of 0.85% of average daily net assets. This contractual arrangement will remain in effect until April 30, 2018 and shall renew automatically for one-year terms, unless the investment manager provides written notice of termination prior to the start of the next term or upon approval of the Board of Trustees of the Fund.

 

  d) Distribution Plan for Class IB Shares – HIMCO Distribution Services Company, a wholly owned subsidiary of The Hartford, serves as the principal underwriter and distributor of the Fund. The Trust, on behalf of the Fund, has adopted a Distribution Plan pursuant to Rule 12b-1 of the 1940 Act for Class IB shares to compensate the distributor, from assets attributable to the services rendered and expenses borne in connection with activities primarily intended to result in the sale of the Class IB shares, subject to the review and approval of the Board of Trustees.

The Distribution Plan provides that the Fund may pay annually up to 0.25% of the average daily net assets of the Fund attributable to its Class IB shares for activities primarily intended to result in the sale of Class IB shares. The Board of Trustees has the authority to suspend or reduce these payments at any point in time. Under the terms of the Distribution Plan and the principal underwriting agreement, the Fund is authorized to make payments monthly to the distributor that may be used to pay or reimburse entities, including insurance company affiliates of Hartford Investment Management, providing distribution and shareholder servicing with respect to the Class IB shares for such entities’ fees or expenses incurred or paid in that regard. The distribution fee paid during the period can be found in the Statement of Operations. These fees are accrued daily and paid monthly or at such other intervals as the Board of Trustees may determine.

 

  e) Transfer Agent Fees – State Street Bank provides transfer agent services to the Fund. The transfer agent is reimbursed for out-of-pocket expenses and other costs associated with the services it provides to the Fund, including costs invoiced by sub-contractors. Hartford Investment Management and its affiliates may pay, out of their own assets, compensation to third-party administrators for recordkeeping and other administrative services. The amount paid for transfer agent services can be found in the Statement of Operations. These fees are accrued daily and paid monthly.

 

  f)

Trustee Fees – The Board of Trustees is responsible for oversight of the Fund. The Board of Trustees elects officers who are responsible for the day to day operations of the Fund. The Board of Trustees oversees the investment manager and the other principal service providers of the Fund. The Board of Trustees currently holds four regularly scheduled

 

 

  33  

 


HIMCO VIT Portfolio Diversifier Fund

Notes to Financial Statements – (concluded)

June 30, 2017 (Unaudited)

 

 

 

  meetings throughout each year. In addition, the Board of Trustees may hold special meetings at other times either in person or by telephone. The Trustee fees paid during the period can be found in the Statement of Operations.

 

8. Investment Transactions:

For the six-month period ended June 30, 2017, the aggregate cost of purchases and proceeds from sales of investment securities (excluding short-term investments) was as follows:

 

     Excluding
Government
Obligations
     U.S. Government
Obligations
     Total  

Cost of Purchases

   $     10,155,482      $     18,575,831      $     28,731,313  

Sales Proceeds

     34,206,832        27,633,743        61,840,575  

 

9. Recent Accounting Pronouncements:

In October 2016, the SEC adopted amendments to rules under the 1940 Act (“final rules”) intended to modernize the reporting and disclosure of information by registered investment companies. The final rules amend Regulation S-X and require investment companies to provide standardized, enhanced derivatives disclosures in fund financial statements in a format designed for individual investors. The amendments to Regulation S-X also update the disclosures for other investments in and advances to affiliates and amend the rules regarding the general form and content of fund financial statements. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the amendments and their impact, if any, on the Fund’s financial statements.

 

10. Indemnifications:

Under the Trust’s organizational documents, the Trust shall indemnify its officers and trustees to the full extent required or permitted under The Delaware Statutory Trust Act and the federal securities laws. In addition, the Trust, on behalf of the Fund, may enter into contracts that contain a variety of indemnifications. The Trust’s maximum exposure under these arrangements is unknown. However, as of the date of these financial statements the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

 

11. Subsequent Event:

Management has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the Financial Statements were issued. Based on this evaluation, no adjustments to, or disclosures in, the Financial Statements were necessary as of June 30, 2017.

 

 

  34  

 


HIMCO VIT Portfolio Diversifier Fund

Financial Highlights

 

 

 

    — Selected Per-Share Data(1)     — Ratios and Supplemental Data —  

Class

  Net Asset
Value at,
Beginning
of Period
    Net
Investment
Income
(Loss)
    Net
Realized
and
Unrealized
Gain (Loss)
on
Investments
    Total from
Investment
Operations
    Distributions
from Net
Investment
Income
    Total
Distributions
    Net
Asset
Value
End of
Period
    Total
Return(2)
    Net
Assets at
End of
Period
(000s)
    Ratio of
Expenses
to
Average
Net
Assets
Before
Adjust-
ments(3)
    Ratio of
Expenses
to
Average
Net
Assets
After
Adjust-
ments(3)
    Ratio of
Net
Investment
Income
(Loss) to
Average
Net Assets
 
HIMCO VIT Portfolio Diversifier Fund  

For the Six-Month Period Ended June 30, 2017 (Unaudited)

 

IB

  $   7.34     $   0.04     $   (0.20   $   (0.16   $     $   —     $   7.18       (2.18 )%(4)    $   292,577       0.99 %(5)      0.85 %(5)      0.98 %(5) 

For the Year Ended December 31, 2016

 

IB

  $ 7.69     $ 0.06     $ (0.41   $ (0.35   $     $     $ 7.34       (4.55 )%    $ 312,550       0.97     0.85     0.78

For the Year Ended December 31, 2015

 

IB

  $ 7.91     $ 0.06     $ (0.21   $ (0.15   $   (0.07   $   (0.07   $ 7.69       (1.89 )%    $ 345,139       1.02     0.85     0.71

For the Year Ended December 31, 2014

 

IB

  $ 8.13     $ 0.05     $ (0.21   $ (0.16   $ (0.06   $ (0.06   $ 7.91       (2.03 )%    $ 417,007       0.90     0.85     0.59

For the Year Ended December 31, 2013(6)

 

IB

  $ 9.38     $ 0.03     $ (1.25   $ (1.22   $ (0.03   $ (0.03   $ 8.13       (12.96 )%    $ 443,121       0.89     0.85     0.29

For the Year Ended December 31, 2012(6)(7)

 

IB

  $   10.18     $ 0.02     $ (0.79   $ (0.77   $ (0.03   $   (0.03   $ 9.38       (7.58 )%    $ 295,762       0.91     0.85     0.27

 

(1) Information presented relates to a share outstanding throughout the indicated period. Net investment income (loss) per share amounts are calculated based on average shares outstanding unless otherwise noted.
(2)  The figures do not include sales charges or other fees which may be applied at the variable life insurance, variable annuity or qualified retirement plan product level. Any such additional sales charges or other fees would lower the Fund’s performance.
(3)  Adjustments include waivers and reimbursements, if applicable.
(4)  Not annualized.
(5) Annualized.
(6)  Financial highlights for the fiscal years ended December 31, 2013 and December 31, 2012 were audited by the Predecessor Fund’s auditor.
(7)  Net investment income (loss) per share amounts have been calculated using the SEC method.

 

     Portfolio Turnover
Rate
 

For the Six Months Ended June 30, 2017 (Unaudited)

     11

For the Year Ended December 31, 2016

     52  

For the Year Ended December 31, 2015

     34  

For the Year Ended December 31, 2014

     33  

For the Year Ended December 31, 2013(1)

     31  

For the Year Ended December 31, 2012(1)

     61  

 

(1)  Financial highlights for the fiscal years ended December 31, 2013 and December 31, 2012 were audited by the Predecessor Fund’s auditor.

 

 

  35  

 


HIMCO VIT Portfolio Diversifier Fund

 

 

 

HOW TO OBTAIN A COPY OF THE FUND’S PROXY VOTING POLICIES AND VOTING RECORDS (UNAUDITED)

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities and information about how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 are available (1) without charge, upon request, by calling 1-800-862-6668 and (2) on the SEC’s website at http://www.sec.gov. Additionally, a complete list of holdings is available on the Fund’s website at www.HVITFunds.com.

QUARTERLY PORTFOLIO HOLDINGS INFORMATION (UNAUDITED)

The Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available (1) without charge, upon request, by calling 1-800-862-6668 and (2) on the SEC’s website at http://www.sec.gov. The Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

 

 

  36  

 


HIMCO VIT Portfolio Diversifier Fund

Expense Example (Unaudited)

 

 

 

Your Fund’s Expenses

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including investment management fees, distribution and/or service (12b-1) fees, if any, and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period of January 1, 2017 through June 30, 2017.

Actual Expenses

The first set of rows of the table below provides information about actual account values and actual expenses. You may use the information in this row, 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 line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or fees which may be applied at the variable life insurance, variable annuity, or qualified retirement plan product level. Therefore, the second set of rows of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would be higher.

 

      Beginning
Account Value
1/1/17
     Ending
Account Value
6/30/17
     Expenses Paid
During Period
1/1/17 - 6/30/17(1)
     Net Annualized
Expense Ratio(2)
 

Actual

 

Class IB

   $ 1,000      $ 978.20      $ 4.17        0.85

Hypothetical

 

Class IB

   $ 1,000      $ 1,020.58      $ 4.26        0.85

 

(1)  Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period.
(2)  Net annualized expense ratio is reflective of any applicable contractual fee waivers and/or expense reimbursements or voluntary fee waivers. Details regarding fee waivers can be found in Fees and Expenses of the accompanying Notes to Financial Statements.

 

 

  37  

 


THIS PRIVACY POLICY IS NOT PART OF THIS REPORT

Privacy Policy and Practices of The Hartford Financial Services Group, Inc. and its Affiliates

(herein called “we, our and us”)

This Privacy Policy applies to our United States Operations

We value your trust. We are committed to the responsible:

a) management;

b) use; and

c) protection;

of Personal Information.

This notice describes how we collect, disclose, and protect

Personal Information.

We collect Personal Information to:

a) service your Transactions with us; and

b) support our business functions.

We may obtain Personal Information from:

a) You;

b) your Transactions with us; and

c) third parties such as a consumer-reporting agency.

Based on the type of product or service You apply for or get from us, Personal Information such as:

a) your name;

b) your address;

c) your income;

d) your payment; or

e) your credit history;

may be gathered from sources such as applications,

Transactions, and consumer reports.

To serve You and service our business, we may share certain Personal Information. We will share Personal Information, only as allowed by law, with affiliates such as:

a) our insurance companies;

b) our employee agents;

c) our brokerage firms; and

d) our administrators.

As allowed by law, we may share Personal Financial Information with our affiliates to:

a) market our products; or

b) market our services;

to You without providing You with an option to prevent these disclosures.

We may also share Personal Information, only as allowed

by law, with unaffiliated third parties including:

a) independent agents;

b) brokerage firms;

c) insurance companies;

d) administrators; and

e) service providers;

who help us serve You and service our business.

When allowed by law, we may share certain Personal

Financial Information with other unaffiliated third parties

who assist us by performing services or functions such as:

a) taking surveys;

b) marketing our products or services; or

c) offering financial products or services under a joint

agreement between us and one or more financial institutions.

We, and third parties we partner with, may track some

of the pages You visit through the use of:

a) cookies;

b) pixel tagging; or

c) other technologies;

and currently do not process or comply with any web

browser’s “do not track” signal or similar mechanism that

indicates a request to disable online tracking of individual

users who visit our websites or use our services.

For more information, our Online Privacy Policy, which governs information we collect on our website and our affiliate websites, which is available at

Online Privacy Policy.

We will not sell or share your Personal Financial

Information with anyone for purposes unrelated to our

business functions without offering You the opportunity to:

a) “opt-out;” or

b) “opt-in;”

as required by law.

We only disclose Personal Health Information with:

a) your proper written authorization; or

b) as otherwise allowed or required by law.

Our employees have access to Personal Information in

the course of doing their jobs, such as:

a) underwriting policies;

b) paying claims;

c) developing new products; or

d) advising customers of our products and services.

We use manual and electronic security procedures to maintain:

a) the confidentiality; and

b) the integrity of;

Personal Information that we have. We use these procedures to guard against unauthorized access.

 


 

 

Some techniques we use to protect Personal Information

include:

a) secured files;

b) user authentication;

c) encryption;

d) firewall technology; and

e) the use of detection software.

We are responsible for and must:

a) identify information to be protected;

b) provide an adequate level of protection for that data;

c) grant access to protected data only to those people who must use it in the performance of their job-related duties.

Employees who violate our privacy policies and procedures may be subject to discipline, which may include ending their employment with us.

We will continue to follow our Privacy Policy regarding Personal Information even when a business relationship no longer exists between us.

As used in this Privacy Notice:

Application means your request for our product or service.

Personal Financial Information means financial information such as:

a) credit history;

b) income;

c) financial benefits; or

d) policy or claim information.

Personal Financial Information may include Social

Security Numbers, Driver’s license numbers, or other

government-issued identification numbers, or credit,

debit card, or bank account numbers.

Personal Health Information means health information

such as:

a) your medical records; or

b) information about your illness, disability or injury.

Personal Information means information that identifies

You personally and is not otherwise available to the public.

It includes:

a) Personal Financial Information; and

b) Personal Health Information.

Transaction means your business dealings with us,

such as:

a) your Application;

b) your request for us to pay a claim; and

c) your request for us to take an action on your account.

You means an individual who has given us Personal

Information in conjunction with:

a) asking about;

b) applying for; or

c) obtaining;

a financial product or service from us if the product or service is used mainly for personal, family, or household purposes.

 

This Customer Privacy Notice is being provided on behalf of The Hartford Financial Services Group, Inc. and its affiliates, to the extent required by the Gramm-Leach-Bliley Act and implementing regulations.

1stAGChoice, Inc.; Access CoverageCorp, Inc.; Access CoverageCorp Technologies, Inc.; American Maturity Life Insurance Company; Archway 60 R, LLC; Business Management Group, Inc.; DMS R, LLC; First State Insurance Company; Fountain Investors I LLC; Fountain Investors II LLC; Fountain Investors III LLC; Fountain Investors IV LLC; FP R, LLC (Delaware); FTC Resolution Company LLC; Hart Re Group L.L.C.; Hartford Accident and Indemnity Company; Hartford Administrative Services Company; Hartford Casualty General Agency, Inc.; Hartford Casualty Insurance Company; Hartford Financial Services, LLC; Hartford Fire General Agency, Inc.; Hartford Fire Insurance Company; Hartford Funds Distributors, LLC; Hartford Funds Management Company, LLC; Hartford Funds Management Group, Inc.; Hartford Group Benefits Holding Company; Hartford Holdings, Inc.; Hartford HLS Series Fund II, Inc.; Hartford Insurance Company of Illinois; Hartford Insurance Company of the Midwest; Hartford Insurance Company of the Southeast; Hartford Integrated Technologies, Inc.; Hartford International Life Reassurance Corporation; Hartford Investment Management Company; Hartford Life and Accident Insurance Company; Hartford Life and Annuity Insurance Company; Hartford Life Insurance Company; Hartford Life, Inc.; Hartford Life International Holding Company; Hartford Life Private Placement, LLC; Hartford Lloyd’s Corporation; Hartford Lloyd’s Insurance Company; Hartford of Texas General Agency, Inc.; Hartford Residual Market, L.C.C.; Hartford Securities Distribution Company, Inc.; Hartford Series Fund, Inc.; Hartford Specialty Insurance Services of Texas, LLC; Hartford Strategic Investments, LLC; Hartford Underwriters General Agency, Inc.; Hartford Underwriters Insurance Company; Hartford-Comprehensive Employee Benefit Service Company; HDC R, LLC .; Heritage Holdings, Inc.; HIMCO Distribution Services Company; HIMCO Variable Insurance Trust; HLA LLC; HL Investment Advisors, LLC; Horizon Management Group, LLC; HRA Brokerage Services, Inc.; Lanidex Class B, LLC; ; Lanidex R, LLC (Delaware); Lattice Strategies LLC; Maxum Casualty Insurance Company; Maxum Indemnity Company; Maxum Specialty Services Corporation; MPC Resolution Company LLC; New England Insurance Company; New England Reinsurance Corporation; Northern Homelands Company; Nutmeg Insurance Agency, Inc.; Nutmeg Insurance Company; Pacific Insurance Company, Limited; Property and Casualty Insurance Company of Hartford; Sentinel Insurance Company, Ltd.; Trumbull Flood Management, L.L.C.; Trumbull Insurance Company; Twin City Fire Insurance Company.

Revised March 2017


LOGO

 

This report is prepared for the general information of contract owners and qualified retirement plan participants. It is not an offer to buy or sell an annuity contract or qualified retirement plan, fund or any security. It should not be used in connection with any offer, except in conjunction with the appropriate product prospectus (which contains all pertinent product information including the applicable sales, administrative and other charges) and the current prospectus and/or summary prospectus of the Fund available for investment thereunder.

The information cannot be used or relied upon for the purpose of avoiding IRS penalties. These materials are not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, you should consult your own tax or legal counsel for advice.

You should carefully consider investment objectives, risks, and charges and expenses of the HIMCO VIT Portfolio Diversifier Fund before investing. This and other information can be found in the Fund’s prospectus or summary prospectus, which can be obtained from your investment representative or from www.hvitfunds.com. Please read them carefully before investing.

Hartford Investment Management is an SEC-registered investment adviser. SEC registration does not imply a certain level of skill or training; nor does it imply that the SEC has sponsored, recommended, or otherwise approved of Hartford Investment Management.

Distributor: HIMCO Distribution Services Company, member FINRA, SIPC, a broker-dealer affiliated with Hartford Investment Management. Not FDIC Insured – No Bank Guarantee – May Lose Value


LOGO

 


HIMCO Variable Insurance Trust

Table of Contents

 

HIMCO Variable Insurance Trust Financial Statements:

  

Schedules of Investments as of June 30, 2017 (Unaudited):

  

HIMCO VIT American Funds Asset Allocation Fund

     2  

HIMCO VIT American Funds Blue Chip Income and Growth Fund

     2  

HIMCO VIT American Funds Bond Fund

     3  

HIMCO VIT American Funds Global Bond Fund

     3  

HIMCO VIT American Funds Global Growth and Income Fund

     4  

HIMCO VIT American Funds Global Growth Fund

     4  

HIMCO VIT American Funds Global Small Capitalization Fund

     5  

HIMCO VIT American Funds Growth Fund

     5  

HIMCO VIT American Funds Growth-Income Fund

     6  

HIMCO VIT American Funds International Fund

     6  

HIMCO VIT American Funds New World Fund

     7  

Statements of Assets and Liabilities as of June 30, 2017 (Unaudited)

     8  

Statements of Operations for the Six-Month Period Ended June 30, 2017 (Unaudited)

     10  

Statements of Changes in Net Assets for the Six-Month Period Ended June 30, 2017 (Unaudited) and Year Ended December 31, 2016

     12  

Notes to Financial Statements (Unaudited)

     16  

Financial Highlights (Unaudited)

     25  

How to Obtain a Copy of the Funds’ Proxy Voting Policies and Voting Records (Unaudited)

     30  

Quarterly Portfolio Holdings Information (Unaudited)

     30  

Expense Example (Unaudited)

     31  

This report is prepared for the general information of contract owners and is not an offer to buy or sell an annuity contract, fund or any security. It should not be used in connection with any offer, except in conjunction with the appropriate product prospectus (which contains all pertinent product information including the applicable sales, administrative and other charges) and the current prospectus and/or summary prospectus of the Funds available for investment thereunder.


HIMCO VIT American Funds Asset Allocation Fund

Schedule of Investments

June 30, 2017 (Unaudited)

 

 

HIMCO VIT American Funds Blue Chip Income and Growth Fund

Schedule of Investments

June 30, 2017 (Unaudited)

 

 

 

Shares

       

Market Value(1)

 
INVESTMENT COMPANIES - 100.1%  
  1,636,976    

American Funds Insurance Series - Asset Allocation Fund Class 1

    $ 36,586,424  
     

 

 

 
 

Total Investment Companies
(cost $34,671,369)

    $ 36,586,424  
     

 

 

 
 

Total Investments
(cost $34,671,369)(2)

    100.1   $ 36,586,424  
 

Other Assets and Liabilities

    (0.1 )%      (22,097
   

 

 

   

 

 

 
 

Total Net Assets

    100.0   $     36,564,327  
   

 

 

   

 

 

 

 

Note: Percentage of investments as shown is the ratio of the total market value to total net assets.

 

(1)  See Significant Accounting Policies of accompanying Notes to Financial Statements regarding valuation of securities.

 

(2)  At June 30, 2017, the cost of securities for federal income tax purposes was $34,671,369, and the aggregate gross unrealized appreciation and depreciation based on that cost were:

 

Unrealized Appreciation

   $ 1,915,055  

Unrealized Depreciation

      
  

 

 

 

Net Unrealized Appreciation

   $     1,915,055  
  

 

 

 

At June 30, 2017, the investment valuation hierarchy levels were:

 

Assets:

  

Investments in Securities - Level 1

   $     36,586,424  
  

 

 

 

Total

   $ 36,586,424  
  

 

 

 

Shares

       

Market Value(1)

 
INVESTMENT COMPANIES - 100.1%  
  2,621,743    

American Funds Insurance Series - Blue Chip Income and Growth Fund Class 1

    $     36,022,742  
     

 

 

 
 

Total Investment Companies
(cost $33,651,087)

    $ 36,022,742  
     

 

 

 
 

Total Investments
(cost $33,651,087)(2)

    100.1   $ 36,022,742  
 

Other Assets and Liabilities

    (0.1 )%      (22,830
   

 

 

   

 

 

 
 

Total Net Assets

    100.0   $ 35,999,912  
   

 

 

   

 

 

 

 

Note: Percentage of investments as shown is the ratio of the total market value to total net assets.

 

(1)  See Significant Accounting Policies of accompanying Notes to Financial Statements regarding valuation of securities.

 

(2)  At June 30, 2017, the cost of securities for federal income tax purposes was $33,658,790, and the aggregate gross unrealized appreciation and depreciation based on that cost were:

 

Unrealized Appreciation

   $ 2,363,952  

Unrealized Depreciation

      
  

 

 

 

Net Unrealized Appreciation

   $     2,363,952  
  

 

 

 

At June 30, 2017, the investment valuation hierarchy levels were:

 

Assets:

  

Investments in Securities - Level 1

   $ 36,022,742  
  

 

 

 

Total

   $     36,022,742  
  

 

 

 
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  2  

 


HIMCO VIT American Funds Bond Fund

Schedule of Investments

June 30, 2017 (Unaudited)

 

 

HIMCO VIT American Funds Global Bond Fund

Schedule of Investments

June 30, 2017 (Unaudited)

 

 

 

Shares

             

Market Value(1)

 
INVESTMENT COMPANIES - 100.1%  
  12,263,650    

American Funds Insurance Series - Bond Fund Class 1

    $     133,183,240  
     

 

 

 
 

Total Investment Companies
(cost $133,933,016)

    $ 133,183,240  
     

 

 

 
 

Total Investments
(cost $133,933,016)(2)

    100.1   $ 133,183,240  
 

Other Assets and Liabilities

    (0.1 )%      (71,908
   

 

 

   

 

 

 
 

Total Net Assets

    100.0   $ 133,111,332  
   

 

 

   

 

 

 

 

Note: Percentage of investments as shown is the ratio of the total market value to total net assets.

 

(1)  See Significant Accounting Policies of accompanying Notes to Financial Statements regarding valuation of securities.

 

(2)  At June 30, 2017, the cost of securities for federal income tax purposes was $134,795,776, and the aggregate gross unrealized appreciation and depreciation based on that cost were:

 

Unrealized Appreciation

   $  

Unrealized Depreciation

     (1,612,536
  

 

 

 

Net Unrealized Depreciation

   $     (1,612,536
  

 

 

 

At June 30, 2017, the investment valuation hierarchy levels were:

 

Assets:

  

Investments in Securities - Level 1

   $ 133,183,240  
  

 

 

 

Total

   $     133,183,240  
  

 

 

 

Shares

             

Market Value(1)

 
INVESTMENT COMPANIES - 100.1%  
  923,474    

American Funds Insurance Series - Global Bond Fund Class 1

    $     10,823,111  
     

 

 

 
 

Total Investment Companies
(cost $11,027,314)

    $ 10,823,111  
     

 

 

 
 

Total Investments
(cost $11,027,314)(2)

    100.1   $ 10,823,111  
 

Other Assets and Liabilities

    (0.1 )%      (9,824
   

 

 

   

 

 

 
 

Total Net Assets

    100.0   $ 10,813,287  
   

 

 

   

 

 

 

 

Note: Percentage of investments as shown is the ratio of the total market value to total net assets.

 

(1)  See Significant Accounting Policies of accompanying Notes to Financial Statements regarding valuation of securities.

 

(2)  At June 30, 2017, the cost of securities for federal income tax purposes was $11,247,182, and the aggregate gross unrealized appreciation and depreciation based on that cost were:

 

Unrealized Appreciation

   $  

Unrealized Depreciation

     (424,071
  

 

 

 

Net Unrealized Depreciation

   $     (424,071
  

 

 

 

At June 30, 2017, the investment valuation hierarchy levels were:

 

Assets:

  

Investments in Securities - Level 1

   $ 10,823,111  
  

 

 

 

Total

   $     10,823,111  
  

 

 

 
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  3  

 


HIMCO VIT American Funds Global Growth and Income Fund

Schedule of Investments

June 30, 2017 (Unaudited)

 

 

HIMCO VIT American Funds Global Growth Fund

Schedule of Investments

June 30, 2017 (Unaudited)

 

 

 

Shares

             

Market Value(1)

 
INVESTMENT COMPANIES - 100.1%  
  2,259,967    

American Funds Insurance Series - Global Growth and Income Fund Class 1

    $ 33,108,524  
     

 

 

 
 

Total Investment Companies
(cost $24,074,344)

    $ 33,108,524  
     

 

 

 
 

Total Investments
(cost $24,074,344)(2)

    100.1   $ 33,108,524  
 

Other Assets and Liabilities

    (0.1 )%      (21,341
   

 

 

   

 

 

 
 

Total Net Assets

    100.0   $     33,087,183  
   

 

 

   

 

 

 

 

Note: Percentage of investments as shown is the ratio of the total market value to total net assets.

 

(1)  See Significant Accounting Policies of accompanying Notes to Financial Statements regarding valuation of securities.

 

(2)  At June 30, 2017, the cost of securities for federal income tax purposes was $25,023,305, and the aggregate gross unrealized appreciation and depreciation based on that cost were:

 

Unrealized Appreciation

   $ 8,085,219  

Unrealized Depreciation

      
  

 

 

 

Net Unrealized Appreciation

   $     8,085,219  
  

 

 

 

At June 30, 2017, the investment valuation hierarchy levels were:

 

Assets:

  

Investments in Securities - Level 1

   $ 33,108,524  
  

 

 

 

Total

   $     33,108,524  
  

 

 

 

Shares

             

Market Value(1)

 
INVESTMENT COMPANIES - 100.1%  
  659,003    

American Funds Insurance Series - Global Growth Fund Class 1

    $ 18,247,787  
     

 

 

 
 

Total Investment Companies
(cost $16,577,370)

    $ 18,247,787  
     

 

 

 
 

Total Investments
(cost $16,577,370)(2)

    100.1   $ 18,247,787  
 

Other Assets and Liabilities

    (0.1 )%      (13,161
   

 

 

   

 

 

 
 

Total Net Assets

    100.0   $     18,234,626  
   

 

 

   

 

 

 

 

Note: Percentage of investments as shown is the ratio of the total market value to total net assets.

 

(1)  See Significant Accounting Policies of accompanying Notes to Financial Statements regarding valuation of securities.

 

(2)  At June 30, 2017, the cost of securities for federal income tax purposes was $16,620,301, and the aggregate gross unrealized appreciation and depreciation based on that cost were:

 

Unrealized Appreciation

   $ 1,627,486  

Unrealized Depreciation

      
  

 

 

 

Net Unrealized Appreciation

   $     1,627,486  
  

 

 

 

At June 30, 2017, the investment valuation hierarchy levels were:

 

Assets:

  

Investments in Securities - Level 1

   $ 18,247,787  
  

 

 

 

Total

   $     18,247,787  
  

 

 

 
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  4  

 


HIMCO VIT American Funds Global Small Capitalization Fund

Schedule of Investments

June 30, 2017 (Unaudited)

 

 

HIMCO VIT American Funds Growth Fund

Schedule of Investments

June 30, 2017 (Unaudited)

 

 

 

Shares

       

Market Value(1)

 
INVESTMENT COMPANIES - 100.1%  
  1,603,015    

American Funds Insurance Series - Global Small Capitalization Fund Class 1

    $ 36,452,571  
     

 

 

 
 

Total Investment Companies
(cost $34,566,936)

    $ 36,452,571  
     

 

 

 
 

Total Investments
(cost $34,566,936)(2)

    100.1   $ 36,452,571  
 

Other Assets and Liabilities

    (0.1 )%      (24,312
   

 

 

   

 

 

 
 

Total Net Assets

    100.0   $     36,428,259  
   

 

 

   

 

 

 

 

Note: Percentage of investments as shown is the ratio of the total market value to total net assets.

 

(1)  See Significant Accounting Policies of accompanying Notes to Financial Statements regarding valuation of securities.

 

(2)  At June 30, 2017, the cost of securities for federal income tax purposes was $34,607,735, and the aggregate gross unrealized appreciation and depreciation based on that cost were:

 

Unrealized Appreciation

   $ 1,844,836  

Unrealized Depreciation

      
  

 

 

 

Net Unrealized Appreciation

   $     1,844,836  
  

 

 

 

At June 30, 2017, the investment valuation hierarchy levels were:

 

Assets:

  

Investments in Securities - Level 1

   $ 36,452,571  
  

 

 

 

Total

   $     36,452,571  
  

 

 

 

Shares

       

Market Value(1)

 
INVESTMENT COMPANIES - 100.1%  
  3,259,037    

American Funds Insurance Series - Growth Fund Class 1

    $ 228,393,328  
     

 

 

 
 

Total Investment Companies
(cost $205,592,196)

    $ 228,393,328  
     

 

 

 
 

Total Investments
(cost $205,592,196)(2)

    100.1   $ 228,393,328  
 

Other Assets and Liabilities

    (0.1 )%      (119,547
   

 

 

   

 

 

 
 

Total Net Assets

    100.0   $     228,273,781  
   

 

 

   

 

 

 

 

Note: Percentage of investments as shown is the ratio of the total market value to total net assets.

 

(1)  See Significant Accounting Policies of accompanying Notes to Financial Statements regarding valuation of securities.

 

(2)  At June 30, 2017, the cost of securities for federal income tax purposes was $211,209,040, and the aggregate gross unrealized appreciation and depreciation based on that cost were:

 

Unrealized Appreciation

   $ 17,184,288  

Unrealized Depreciation

      
  

 

 

 

Net Unrealized Appreciation

   $     17,184,288  
  

 

 

 

At June 30, 2017, the investment valuation hierarchy levels were:

 

Assets:

  

Investments in Securities - Level 1

   $ 228,393,328  
  

 

 

 

Total

   $     228,393,328  
  

 

 

 
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  5  

 


HIMCO VIT American Funds Growth-Income Fund

Schedule of Investments

June 30, 2017 (Unaudited)

 

 

HIMCO VIT American Funds International Fund

Schedule of Investments

June 30, 2017 (Unaudited)

 

 

 

Shares

       

Market Value(1)

 
INVESTMENT COMPANIES - 100.1%  
  2,886,783    

American Funds Insurance Series - Growth-Income Fund Class 1

    $ 131,550,720  
     

 

 

 
 

Total Investment Companies
(cost $120,947,189)

    $ 131,550,720  
     

 

 

 
 

Total Investments
(cost $120,947,189)(2)

    100.1   $ 131,550,720  
 

Other Assets and Liabilities

    (0.1 )%      (68,338
   

 

 

   

 

 

 
 

Total Net Assets

    100.0   $     131,482,382  
   

 

 

   

 

 

 

 

Note: Percentage of investments as shown is the ratio of the total market value to total net assets.

 

(1)  See Significant Accounting Policies of accompanying Notes to Financial Statements regarding valuation of securities.

 

(2)  At June 30, 2017, the cost of securities for federal income tax purposes was $124,157,672, and the aggregate gross unrealized appreciation and depreciation based on that cost were:

 

Unrealized Appreciation

   $ 7,393,048  

Unrealized Depreciation

      
  

 

 

 

Net Unrealized Appreciation

   $     7,393,048  
  

 

 

 

At June 30, 2017, the investment valuation hierarchy levels were:

 

Assets:

  

Investments in Securities - Level 1

   $ 131,550,720  
  

 

 

 

Total

   $     131,550,720  
  

 

 

 

Shares

       

Market Value(1)

 
INVESTMENT COMPANIES - 100.1%  
  6,968,878    

American Funds Insurance Series - International Fund Class 1

    $ 137,077,829  
     

 

 

 
 

Total Investment Companies
(cost $121,986,380)

    $ 137,077,829  
     

 

 

 
 

Total Investments
(cost $121,986,380)(2)

    100.1   $ 137,077,829  
 

Other Assets and Liabilities

    (0.1 )%      (77,827
   

 

 

   

 

 

 
 

Total Net Assets

    100.0   $     137,000,002  
   

 

 

   

 

 

 

 

Note:     Percentage of investments as shown is the ratio of the total market value to total net assets.

 

(1)      See Significant Accounting Policies of accompanying Notes to Financial Statements regarding valuation of securities.

 

(2)      At June 30, 2017, the cost of securities for federal income tax purposes was $124,729,922, and the aggregate gross unrealized appreciation and depreciation based on that cost were:

 

Unrealized Appreciation

   $ 12,347,907  

Unrealized Depreciation

      
  

 

 

 

Net Unrealized Appreciation

   $     12,347,907  
  

 

 

 

At June 30, 2017, the investment valuation hierarchy levels were:

 

Assets:

  

Investments in Securities - Level 1

   $ 137,077,829  
  

 

 

 

Total

   $     137,077,829  
  

 

 

 
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  6  

 


HIMCO VIT American Funds New World Fund

Schedule of Investments

June 30, 2017 (Unaudited)

 

 

 

Shares

       

Market Value(1)

 
INVESTMENT COMPANIES - 100.1%  
  876,091    

American Funds Insurance Series - New World Fund Class 1

    $ 19,764,619  
     

 

 

 
 

Total Investment Companies
(cost $19,082,262)

    $ 19,764,619  
     

 

 

 
 

Total Investments
(cost $19,082,262)(2)

    100.1   $ 19,764,619  
 

Other Assets and Liabilities

    (0.1 )%      (14,216
   

 

 

   

 

 

 
 

Total Net Assets

    100.0   $     19,750,403  
   

 

 

   

 

 

 

 

Note: Percentage of investments as shown is the ratio of the total market value to total net assets.

 

(1)  See Significant Accounting Policies of accompanying Notes to Financial Statements regarding valuation of securities.

 

(2)  At June 30, 2017, the cost of securities for federal income tax purposes was $19,572,475, and the aggregate gross unrealized appreciation and depreciation based on that cost were:

 

Unrealized Appreciation

   $ 192,144  

Unrealized Depreciation

      
  

 

 

 

Net Unrealized Appreciation

   $     192,144  
  

 

 

 

At June 30, 2017, the investment valuation hierarchy levels were:

 

Assets:

  

Investments in Securities - Level 1

   $ 19,764,619  
  

 

 

 

Total

   $     19,764,619  
  

 

 

 
 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  7  

 


HIMCO Variable Insurance Trust

Statements of Assets and Liabilities

June 30, 2017 (Unaudited)

 

 

 

     HIMCO VIT
American
Funds Asset
Allocation
Fund
     HIMCO VIT
American
Funds Blue
Chip Income
and Growth
Fund
     HIMCO VIT
American
Funds Bond
Fund
 

Assets:

        

Investments in underlying funds, at market value

   $     36,586,424      $     36,022,742      $     133,183,240  

Receivables:

        

Investment securities sold

     1,686        5,952        659,128  

Other assets

     348        316        1,238  
  

 

 

    

 

 

    

 

 

 

Total assets

     36,588,458        36,029,010        133,843,606  
  

 

 

    

 

 

    

 

 

 

Liabilities:

        

Payables:

        

Fund shares redeemed

     1,686        5,952        659,128  

Investment management fees

     5,743        5,889        24,075  

Distribution fees

     7,581        7,443        27,555  

Trustees fees

     3               87  

Accrued expenses

     9,118        9,814        21,429  
  

 

 

    

 

 

    

 

 

 

Total liabilities

     24,131        29,098        732,274  
  

 

 

    

 

 

    

 

 

 

Net assets

   $ 36,564,327      $ 35,999,912      $ 133,111,332  
  

 

 

    

 

 

    

 

 

 

Summary of Net Assets:

        

Capital stock and paid-in-capital

   $ 29,072,228      $ 24,834,051      $ 130,219,608  

Undistributed net investment income

     521,956        1,102,067        3,920,618  

Accumulated net realized gain (loss)

     5,055,088        7,692,139        (279,118

Unrealized appreciation (depreciation)

     1,915,055        2,371,655        (749,776
  

 

 

    

 

 

    

 

 

 

Net assets

   $ 36,564,327      $ 35,999,912      $ 133,111,332  
  

 

 

    

 

 

    

 

 

 

Class IB:   Net asset value per share

   $ 8.61      $ 9.99      $ 9.45  
  

 

 

    

 

 

    

 

 

 

                 Shares Outstanding

     4,245,694        3,604,028        14,090,964  
  

 

 

    

 

 

    

 

 

 

                 Net Assets

   $ 36,564,327      $ 35,999,912      $ 133,111,332  
  

 

 

    

 

 

    

 

 

 

Cost of investments in underlying fund

   $ 34,671,369      $ 33,651,087      $ 133,933,016  
  

 

 

    

 

 

    

 

 

 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  8  

 


HIMCO Variable Insurance Trust

Statements of Assets and Liabilities (concluded)

June 30, 2017 (Unaudited)

 

 

 

HIMCO VIT
American
Funds Global
Bond Fund
    HIMCO VIT
American
Funds Global
Growth and
Income Fund
    HIMCO VIT
American
Funds Global
Growth Fund
    HIMCO VIT
American
Funds Global
Small
Capitalization
Fund
    HIMCO VIT
American
Funds Growth
Fund
    HIMCO VIT
American
Funds
Growth-
Income Fund
    HIMCO VIT
American
Funds
International
Fund
    HIMCO VIT
American
Funds New
World Fund
 
             
$     10,823,111     $     33,108,524     $     18,247,787     $     36,452,571     $     228,393,328     $     131,550,720     $     137,077,829     $     19,764,619  
             
  5,875       624       3,043       232,625       612,267       466,961       385,086       9,701  
  94       298       146       326       2,008       1,170       1,206       165  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  10,829,080       33,109,446       18,250,976       36,685,522       229,007,603       132,018,851       137,464,121       19,774,485  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
             
             
  5,875       624       3,043       232,625       612,267       466,961       385,086       9,701  
  332       4,673       2,076       6,114       41,311       22,883       24,457       2,229  
  2,242       6,888       3,804       7,616       47,913       27,302       28,577       4,107  
        23             1                          
  7,344       10,055       7,427       10,907       32,331       19,323       25,999       8,045  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  15,793       22,263       16,350       257,263       733,822       536,469       464,119       24,082  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
$ 10,813,287     $ 33,087,183     $ 18,234,626     $ 36,428,259     $ 228,273,781     $ 131,482,382     $ 137,000,002     $ 19,750,403  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
             
$ 11,475,037     $ 20,231,230     $ 13,779,798     $ 26,536,552     $ 137,301,721     $ 82,855,341     $ 105,841,564     $ 20,397,868  
  65,417       504,150       120,473       109,531       1,323,815       2,351,916       1,547,757       59,110  
  (522,964     3,317,623       2,663,938       7,896,541       66,847,113       35,671,594       14,519,232       (1,388,932
  (204,203     9,034,180       1,670,417       1,885,635       22,801,132       10,603,531       15,091,449       682,357  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
$ 10,813,287     $ 33,087,183     $ 18,234,626     $ 36,428,259     $ 228,273,781     $ 131,482,382     $ 137,000,002     $ 19,750,403  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
$ 8.96     $ 6.86     $ 7.51     $ 7.03     $ 7.57     $ 8.46     $ 7.92     $ 6.08  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  1,207,320       4,821,827       2,426,707       5,178,231       30,139,740       15,543,355       17,307,310       3,247,317  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
$ 10,813,287     $ 33,087,183     $ 18,234,626     $ 36,428,259     $ 228,273,781     $ 131,482,382     $ 137,000,002     $ 19,750,403  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
$ 11,027,314     $ 24,074,344     $ 16,577,370     $ 34,566,936     $ 205,592,196     $ 120,947,189     $ 121,986,380     $ 19,082,262  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  9  

 


HIMCO Variable Insurance Trust

Statements of Operations

For the Six-Month Period Ended June 30, 2017 (Unaudited)

 

 

 

     HIMCO VIT
American
Funds Asset
Allocation
Fund
    HIMCO VIT
American
Funds Blue
Chip Income
and Growth
Fund
    HIMCO VIT
American
Funds Bond
Fund
 

Investment Income:

      

Dividends from underlying fund

   $ 139,416     $ 291,987     $ 2,186,025  
  

 

 

   

 

 

   

 

 

 

Total investment income

     139,416       291,987       2,186,025  
  

 

 

   

 

 

   

 

 

 

Expenses:

      

Investment management fees

     124,617       138,815       334,580  

Transfer agent fees

     833       822       1,401  

Distribution fees - Class IB

     47,930       46,272       167,290  

Accounting service fees

     5,353       5,165       14,786  

Trustee fees

     2,413       2,250       8,423  

Audit fees

     7,859       7,805       10,448  

Printing fees

     2,683       3,066       7,166  

Legal fees

     2,736       2,590       9,485  

Insurance fees

     1,283       1,167       4,576  

Other expenses

     1,441       1,433       1,626  
  

 

 

   

 

 

   

 

 

 

Total expenses (before waivers)

     197,148       209,385       559,781  
  

 

 

   

 

 

   

 

 

 

Total waivers

     (87,869     (102,035     (191,743
  

 

 

   

 

 

   

 

 

 

Total expenses, net

     109,279       107,350       368,038  
  

 

 

   

 

 

   

 

 

 

Net Investment Income (Loss)

     30,137       184,637       1,817,987  
  

 

 

   

 

 

   

 

 

 

Net Realized Gain (Loss) on Investments:

      

Capital gain distribution received from underlying fund

     1,632,268       1,178,104       507,254  

Net realized gain (loss) on investments in underlying funds

     922,722       1,192,614       (562,370
  

 

 

   

 

 

   

 

 

 

Net Realized Gain on Investments

     2,554,990       2,370,718       (55,116
  

 

 

   

 

 

   

 

 

 

Net Changes in Unrealized Appreciation (Depreciation) of Investments:

      

Net unrealized appreciation (depreciation) of investments in underlying fund

     416,718       (536,687     1,351,491  
  

 

 

   

 

 

   

 

 

 

Net Realized and Unrealized Gain (Loss) on Investments

     2,971,708       1,834,031       1,296,375  
  

 

 

   

 

 

   

 

 

 

Net Increase in Net Assets Resulting from Operations

   $     3,001,845     $     2,018,668     $     3,114,362  
  

 

 

   

 

 

   

 

 

 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  10  

 


HIMCO Variable Insurance Trust

Statements of Operations (concluded)

For the Six-Month Period Ended June 30, 2017 (Unaudited)

 

 

 

HIMCO VIT
American
Funds Global
Bond Fund
    HIMCO VIT
American
Funds Global
Growth and
Income Fund
    HIMCO VIT
American
Funds Global
Growth Fund
    HIMCO VIT
American
Funds Global
Small
Capitalization
Fund
    HIMCO VIT
American
Funds Growth
Fund
    HIMCO VIT
American
Funds
Growth-
Income Fund
    HIMCO VIT
American
Funds
International
Fund
    HIMCO VIT
American
Funds New
World Fund
 
             
$ 65,135     $ 107,829     $ 21,942     $ 154,400     $ 918,314     $ 471,873     $ 522,643     $ 33,518  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  65,135       107,829       21,942       154,400       918,314       471,873       522,643       33,518  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
             
  39,825       129,397       84,874       145,525       857,584       462,754       578,527       105,658  
  663       792       695       814       1,947       1,386       1,397       711  
  13,275       40,436       21,219       45,476       285,861       165,269       170,155       24,013  
  2,533       4,666       3,049       5,039       23,816       14,512       14,701       3,322  
  648       2,020       997       2,242       13,927       8,118       8,331       1,154  
  7,443       7,919       7,508       8,015       12,599       10,209       10,505       7,573  
  2,178       2,654       2,399       3,459       12,498       5,737       11,549       3,135  
  737       2,270       1,137       2,543       15,879       9,251       9,462       1,317  
  344       1,100       536       1,204       7,419       4,320       4,453       614  
  1,386       1,432       1,397       1,437       1,789       1,609       1,618       1,403  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  69,032       192,686       123,811       215,754       1,233,319       683,165       810,698       148,900  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  (38,234     (103,726     (74,584     (110,249     (615,859     (326,184     (436,357     (93,190

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  30,798       88,960       49,227       105,505       617,460       356,981       374,341       55,710  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  34,337       18,869       (27,285     48,895       300,854       114,892       148,302       (22,192

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
             
  931       579,581       540,154             21,381,464       8,339,126       1,540,056        
  (61,451     1,242,390       219,580       53,754       10,938,053       4,889,856       2,670,835       (228,723

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  (60,520     1,821,971       759,734       53,754       32,319,517       13,228,982       4,210,891       (228,723

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
             
  527,429       2,592,633       2,126,689       4,203,929       (806,982     (1,094,789     18,697,182       2,804,860  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  466,909       4,414,604       2,886,423       4,257,683       31,512,535       12,134,193       22,908,073       2,576,137  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
$     501,246     $     4,433,473     $     2,859,138     $     4,306,578     $     31,813,389     $     12,249,085     $     23,056,375     $     2,553,945  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  11  

 


HIMCO Variable Insurance Trust

Statements of Changes in Net Assets

 

 

 

     HIMCO VIT American Funds
Asset Allocation Fund
    HIMCO VIT American Funds
Blue Chip Income and Growth Fund
 
     For the
Six-Month
Period Ended
June 30, 2017
(Unaudited)
    For the
Year Ended
December 31,
2016
    For the
Six-Month
Period Ended
June 30, 2017
(Unaudited)
    For the
Year Ended
December 31,
2016
 

Operations:

        

Net investment income (loss)

   $ 30,137     $ 491,821     $ 184,637     $ 917,430  

Net realized gain (loss) on investments

     2,554,990       2,500,099       2,370,718       5,329,289  

Net unrealized appreciation (depreciation) of investments

     416,718       471,223       (536,687     108,356  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Increase (Decrease) in Net Assets Resulting from Operations

     3,001,845       3,463,143       2,018,668       6,355,075  
  

 

 

   

 

 

   

 

 

   

 

 

 

Distributions to Shareholders:

        

From net investment income

        

Class IB

           (1,013,091           (899,736

From net realized gain on investments

        

Class IB

           (6,577,960           (8,179,373
  

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

           (7,591,051           (9,079,109
  

 

 

   

 

 

   

 

 

   

 

 

 

Capital Share Transactions:

        

Class IB

        

Sold

     1,119,362       2,407,590       544,286       3,895,906  

Issued on reinvestment of distributions

           7,591,051             9,079,109  

Redeemed

     (7,057,295     (10,463,729     (4,036,979     (9,650,580
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from capital share transactions

     (5,937,933     (465,088     (3,492,693     3,324,435  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Increase (Decrease) in Net Assets

     (2,936,088     (4,592,996     (1,474,025     600,401  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Assets:

        

Beginning of period

     39,500,415       44,093,411       37,473,937       36,873,536  
  

 

 

   

 

 

   

 

 

   

 

 

 

End of period

   $     36,564,327     $     39,500,415     $     35,999,912     $     37,473,937  
  

 

 

   

 

 

   

 

 

   

 

 

 

Undistributed net investment income

   $ 521,956     $ 491,819     $ 1,102,067     $ 917,430  
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares:

        

Class IB

        

Sold

     133,258       281,473       55,874       362,953  

Issued on reinvestment of distributions

           965,783             995,516  

Redeemed

     (840,267     (1,222,357     (410,486     (951,358
  

 

 

   

 

 

   

 

 

   

 

 

 

Total share activity

     (707,009     24,899       (354,612     407,111  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  12  

 


HIMCO Variable Insurance Trust

Statements of Changes in Net Assets (continued)

 

 

 

HIMCO VIT American Funds
Bond Fund
    HIMCO VIT American Funds
Global Bond Fund
    HIMCO VIT American Funds
Global Growth and Income Fund
    HIMCO VIT American Funds
Global Growth Fund
 
For the
Six-Month
Period Ended
June 30, 2017
(Unaudited)
    For the
Year Ended
December 31,
2016
    For the
Six-Month
Period Ended
June 30, 2017
(Unaudited)
    For the
Year Ended
December 31,
2016
    For the
Six-Month
Period Ended
June 30, 2017
(Unaudited)
    For the
Year Ended
December 31,
2016
    For the
Six-Month
Period Ended
June 30, 2017
(Unaudited)
    For the
Year Ended
December 31,
2016
 
             
$ 1,817,987     $ 2,102,636     $ 34,337     $ 31,081     $ 18,869     $ 485,284     $ (27,285   $ 147,759  
  (55,116     2,397       (60,520     (162,063     1,821,971       3,036,099       759,734       2,285,113  
  1,351,491       2,071,693       527,429       345,022       2,592,633       (1,263,416     2,126,689       (2,436,159

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  3,114,362       4,176,726       501,246       214,040       4,433,473       2,257,967       2,859,138       (3,287

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
             
             
        (4,871,873           (169,483           (665,667           (314,071
             
        (1,344,209                       (4,556,731           (2,791,775

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
        (6,216,082           (169,483           (5,222,398           (3,105,846

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
             
             
  7,012,965       10,784,893       1,111,869       2,616,991       141,573       439,412       1,111,886       1,146,915  
        6,216,082             169,483             5,222,398             3,105,846  
  (12,770,601     (30,890,662     (1,111,514     (3,078,042     (3,620,398     (8,905,562     (1,377,777     (4,501,163

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  (5,757,636     (13,889,687     355       (291,568     (3,478,825     (3,243,752     (265,891     (248,402

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  (2,643,274     (15,929,043     501,601       (247,011     954,648       (6,208,183     2,593,247       (3,357,535

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
             
  135,754,606       151,683,649       10,311,686       10,558,697       32,132,535       38,340,718       15,641,379       18,998,914  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
$     133,111,332     $     135,754,606     $     10,813,287     $     10,311,686     $     33,087,183     $     32,132,535     $     18,234,626     $     15,641,379  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
$ 3,920,618     $ 2,102,631     $ 65,417     $ 31,080     $ 504,150     $ 485,281     $ 120,473     $ 147,758  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
             
             
  752,532       1,134,890       127,615       291,034       22,323       69,783       157,313       162,704  
        652,950             18,442             868,951             474,175  
  (1,369,016     (3,223,939     (126,758     (349,266     (565,730     (1,420,127     (195,792     (637,207

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  (616,484     (1,436,099     857       (39,790     (543,407     (481,393     (38,479     (328

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  13  

 


HIMCO Variable Insurance Trust

Statements of Changes in Net Assets (continued)

 

 

 

     HIMCO VIT American Funds
Global Small Capitalization Fund
    HIMCO VIT American Funds
Growth Fund
 
     For the
Six-Month
Period Ended
June 30, 2017
(Unaudited)
    For the
Year Ended
December 31,
2016
    For the
Six-Month
Period Ended
June 30, 2017
(Unaudited)
    For the
Year Ended
December 31,
2016
 

Operations:

        

Net investment income (loss)

   $ 48,895     $ 60,637     $ 300,854     $ 1,022,969  

Net realized gain (loss) on investments

     53,754       8,131,856       32,319,517       43,069,946  

Net unrealized appreciation (depreciation) of investments

     4,203,929       (7,572,548     (806,982     (23,789,767
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Increase (Decrease) in Net Assets Resulting from Operations

     4,306,578       619,945       31,813,389       20,303,148  
  

 

 

   

 

 

   

 

 

   

 

 

 

Distributions to Shareholders:

        

From net investment income

        

Class IB

           (160,017           (748,434

From net realized gain on investments

        

Class IB

           (7,330,124           (92,964,012
  

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions

           (7,490,141           (93,712,446
  

 

 

   

 

 

   

 

 

   

 

 

 

Capital Share Transactions:

        

Class IB

        

Sold

     673,144       2,369,229       1,403,612       4,156,939  

Issued on reinvestment of distributions

           7,490,141             93,712,446  

Redeemed

     (4,132,927     (9,144,876     (30,210,761     (56,278,674
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from capital share transactions

     (3,459,783     714,494       (28,807,149     41,590,711  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Increase (Decrease) in Net Assets

     846,795       (6,155,702     3,006,240       (31,818,587
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Assets:

        

Beginning of period

     35,581,464       41,737,166       225,267,541       257,086,128  
  

 

 

   

 

 

   

 

 

   

 

 

 

End of period

   $     36,428,259     $     35,581,464     $     228,273,781     $     225,267,541  
  

 

 

   

 

 

   

 

 

   

 

 

 

Undistributed net investment income

   $ 109,531     $ 60,636     $ 1,323,815     $ 1,022,961  
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares:

        

Class IB

        

Sold

     99,513       341,446       191,048       453,446  

Issued on reinvestment of distributions

           1,172,166             14,551,622  

Redeemed

     (611,541     (1,353,152     (4,210,370     (6,998,542
  

 

 

   

 

 

   

 

 

   

 

 

 

Total share activity

     (512,028     160,460       (4,019,322     8,006,526  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  14  

 


HIMCO Variable Insurance Trust

Statements of Changes in Net Assets (concluded)

 

 

 

HIMCO VIT American Funds
Growth-Income Fund
    HIMCO VIT American Funds
International Fund
    HIMCO VIT American Funds
New World Fund
 
For the
Six-Month
Period Ended
June 30, 2017
(Unaudited)
    For the
Year Ended
December 31,
2016
    For the
Six-Month
Period Ended
June 30, 2017
(Unaudited)
    For the
Year Ended
December 31,
2016
    For the
Six-Month
Period Ended
June 30, 2017
(Unaudited)
    For the
Year Ended
December 31,
2016
 
         
$ 114,892     $ 2,237,028     $ 148,302     $ 1,399,466     $ (22,192   $ 81,306  
  13,228,982       26,215,232       4,210,891       12,521,810       (228,723     (946,938
  (1,094,789     (13,955,688     18,697,182       (9,028,302     2,804,860       1,766,630  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  12,249,085       14,496,572       23,056,375       4,892,974       2,553,945       900,998  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
         
         
        (2,142,064           (1,915,253           (402,896
         
        (39,353,428           (15,464,176           (796,215

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
        (41,495,492           (17,379,429           (1,199,111

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
         
         
  1,914,366       3,246,275       2,985,929       8,845,165       864,711       1,098,215  
        41,495,492             17,379,429             1,199,111  
  (14,776,315     (32,328,123     (19,738,509     (32,294,458     (2,241,286     (4,718,145

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  (12,861,949     12,413,644       (16,752,580     (6,069,864     (1,376,575     (2,420,819

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  (612,864     (14,585,276     6,303,795       (18,556,319     1,177,370       (2,718,932

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
         
  132,095,246       146,680,522       130,696,207       149,252,526       18,573,033       21,291,965  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
$     131,482,382     $     132,095,246     $     137,000,002     $     130,696,207     $     19,750,403     $     18,573,033  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
$ 2,351,916     $ 2,237,024     $ 1,547,757     $ 1,399,455     $ 59,110     $ 81,302  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
         
         
  230,670       356,388       424,988       1,274,593       146,177       201,679  
        5,540,119             2,522,414             218,020  
  (1,804,197     (3,661,440     (2,664,861     (4,612,014     (388,583     (882,871

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  (1,573,527     2,235,067       (2,239,873     (815,007     (242,406     (463,172

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

The accompanying Notes are an integral part of these financial statements.

 

 

  15  

 


HIMCO Variable Insurance Trust

Notes to Financial Statements

June 30, 2017 (Unaudited)

 

 

 

1. Organization:

HIMCO Variable Insurance Trust (the “Trust”) is an open-end registered management investment company. The Trust is organized under the laws of the State of Delaware and is registered with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940, as amended (“1940 Act”).

The financial statements and the accompanying notes relate to the following funds: HIMCO VIT American Funds Asset Allocation Fund (“Asset Allocation Fund”), HIMCO VIT American Funds Blue Chip Income and Growth Fund (“Blue Chip Income and Growth Fund”), HIMCO VIT American Funds Bond Fund (“Bond Fund”), HIMCO VIT American Funds Global Bond Fund (“Global Bond Fund”), HIMCO VIT American Funds Global Growth and Income Fund (“Global Growth and Income Fund”), HIMCO VIT American Funds Global Growth Fund (“Global Growth Fund”), HIMCO VIT American Funds Global Small Capitalization Fund (“Global Small Capitalization Fund”), HIMCO VIT American Funds Growth Fund (“Growth Fund”), HIMCO VIT American Funds Growth-Income Fund (“Growth-Income Fund”), HIMCO VIT American Funds International Fund (“International Fund”) and HIMCO VIT American Funds New World Fund (“New World Fund”) (each a “Fund” or collectively the “Funds”). The Funds are each a series of the Trust. Each Fund is the successor of a series of Hartford Series Fund, Inc. (collectively referred to as the “American Funds HLS Funds”). The reorganization of the American Funds HLS with and into the respective Funds occurred on October 20, 2014. All information regarding and references to periods prior to October 20, 2014 relate to the respective American Funds HLS Funds.

Each Fund is a diversified open-end management investment company, except for the HIMCO VIT American Funds Global Bond Fund, which is non-diversified. Each Fund is authorized to issue an unlimited number of shares. The Funds are investment companies and apply specialized accounting and reporting under Accounting Standards Codification Topic 946, Financial Services Investment Companies. The Funds serve as underlying investment options for certain variable annuity and variable life insurance separate accounts of Hartford Life Insurance Company (“Hartford Life”) and its affiliates.

The Funds operate in the manner of “feeder funds”, investing all of their assets in shares of corresponding mutual funds (the “Master Funds”). Each Master Fund is offered by American Funds Insurance Series® and is a registered open-end investment company. The Funds and their related Master Funds are listed below:

 

Fund

  

Master Fund

Asset Allocation Fund

   Asset Allocation Fund Class 1

Blue Chip Income and Growth Fund

   Blue Chip Income and Growth Fund Class 1

Bond Fund

   Bond Fund Class 1

Global Bond Fund

   Global Bond Fund Class 1

Global Growth and Income Fund

   Global Growth and Income Fund Class 1

Global Growth Fund

   Global Growth Fund Class 1

Global Small Capitalization Fund

   Global Small Capitalization Fund Class 1

Growth Fund

   Growth Fund Class 1

Growth-Income Fund

   Growth-Income Fund Class 1

International Fund

   International Fund Class 1

New World Fund

   New World Fund Class 1

The financial statements of the Master Funds, including the Summary Investment Portfolios, are provided separately and should be read in conjunction with the Funds’ financial statements.

Class IB shares of the Funds are offered at the per share net asset value (“NAV”) without a sales charge and are subject to distribution and service fees charged pursuant to a distribution plan (the “Distribution Plan”) approved by the Board of Trustees in accordance with Rule 12b-1 under the 1940 Act and the requirements of the applicable market conduct rules of the Financial Industry Regulatory Authority concerning asset-based sales charges.

 

2. Significant Accounting Policies:

The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements, which are in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”). The

 

 

  16  

 


HIMCO Variable Insurance Trust

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

preparation of financial statements in accordance with U.S. GAAP may require 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 resulting from operations during the reporting period. Actual results could differ from those estimates.

 

  a) Determination of Net Asset Value – The NAV per share of each Fund is determined as of the close of regular trading on the New York Stock Exchange (the “Exchange”) (normally 4:00 p.m. Eastern Time) (the “NYSE Close”) on each day that the Exchange is open (the “Valuation Date”). If the Exchange is closed due to weather or other extraordinary circumstances on a day it would typically be open for business, the Funds will treat such day as a typical business day and accept purchase and redemption orders and calculate the Funds’ NAV as of 4:00 p.m. Eastern Time. The NAV for each share is determined by dividing the value of a Fund’s net assets by the number of shares outstanding. For any day where, due to technical or other issues, trading is halted before the scheduled close of the Exchange, and not as part of a trading halt that is effected on a market-wide basis, the Fund may elect to continue to treat the Valuation Date as occurring at the time of the schedule close of the Exchange. Information that becomes known to the Funds after the NAV has been calculated on a particular day will not generally be used to retroactively adjust the NAV determined earlier that day.

 

  b) Investment Valuation – The Funds do not buy investment securities directly. Instead, each Fund invests all of its assets in a separate mutual fund, which has the same investment objective and strategies as the Fund. Each Master Fund is a series of American Funds Insurance Series®. Investments in Class 1 shares of the Master Funds are valued at the respective NAV of each Master Fund as determined as of the NYSE Close on the Valuation Date. If market prices are not readily available or are deemed unreliable, a Fund will use the fair value of the security or other instrument as determined in good faith under policies and procedures established by and under the supervision of the Board of Trustees. The Prospectuses, Statements of Additional Information and Shareholder Reports by the Master Funds explain the valuation methods used for the Master Funds, including the circumstances under which the Master Funds may use fair value pricing and the effects of doing so. Such Prospectuses, Statements of Additional Information and Shareholder Reports are available on the SEC EDGAR database on its internet site at http://www.sec.gov.

U.S. GAAP defines fair value as the price that a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The U.S. GAAP fair value measurement standards require disclosure of a fair value hierarchy for each major category of assets and liabilities. Various inputs are used in determining the fair value of each Fund’s investments. These inputs are summarized into three broad hierarchy levels. This hierarchy is based on whether the valuation inputs are observable or unobservable. The determination of which category within the fair value hierarchy is appropriate for any given instrument is based on the lowest level of input that is significant to the fair value measurement. These levels are:

 

    Level 1 – Inputs using (unadjusted) quoted prices in active markets or exchanges for identical assets and liabilities.
    Level 2 – Observable inputs other than Level 1 prices, which may include, but are not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities or other market corroborated inputs.
    Level 3 – Significant unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available. Level 3 may include financial instruments whose values are determined using indicative market quotes or require significant management judgment or estimation.

The procedures adopted by the Board of Trustees define how investments are to be valued, including the formation and activities of a Valuation Committee. The Valuation Committee has the overall responsibility for implementing the procedures adopted by the Board of Trustees, including the responsibility for determining the fair value of the Funds’ investments. The Valuation Committee is also responsible for determining in good faith the fair value of an investment when the value cannot be obtained from primary pricing services or alternative sources or if the valuation of an investment, as provided by the primary pricing service or alternative source, is believed not to reflect the investment’s fair value as of the Valuation Date.

 

 

  17  

 


HIMCO Variable Insurance Trust

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

The Valuation Committee is comprised of the Trust’s Chief Executive Officer, Treasurer, Chief Operating Officer, and Chief Legal Officer, or their designees, and other personnel of the investment manager subject to prior approval by the Board of Trustees. In addition, the Trust’s Chief Compliance Officer (“CCO”) shall designate a member of the compliance group to attend Valuation Committee meetings as a non-voting resource, to monitor for and provide guidance with respect to compliance with these procedures and to keep the Trust’s CCO regularly informed of pricing and Valuation Committee proceedings. Two members of the Valuation Committee or their designees, representing different departments, shall constitute a quorum for purposes of permitting the Committee to take action. The Valuation Committee will consider all relevant factors in determining an investment’s fair value, and may seek the advice of the Funds’ adviser, knowledgeable brokers, and legal counsel in making such determination.

At each quarterly meeting of the Board of Trustees, the Valuation Committee provides a written report that includes details of all fair-valued investments to the extent any are fair-valued, including the reason for the fair valuation, and an indication, when possible, of the accuracy of the valuation by disclosing the next available reliable public price quotation or the disposition price of such investments (the “look-back” review). The Board of Trustees then must consider for ratification all of the fair value determinations made during the previous quarter.

Valuation levels are not necessarily indicative of the risk associated with investing in such investments.

For additional information, refer to the Investment Valuation Hierarchy Level Summary included in the Schedule of Investments for each Fund.

For purposes of reporting transfers between different hierarchy levels, both transfers in and out of each level, as applicable, are shown as if they occurred at the beginning of the period. During the six-month period ended June 30, 2017, there were no transfers between different hierarchy levels.

 

  c) Investment Transactions and Investment Income – Investment transactions are recorded as of the trade date (the date the order to buy or sell is executed) for financial reporting purposes. Realized gains and losses are determined on the basis of identified cost.

Income and capital gain distributions from the Master Funds are recorded on the ex-dividend date.

 

  d) Fund Share Valuation and Dividend Distributions to Shareholders – Orders for the Funds’ shares are executed in accordance with the investment instructions of the contract holders. Orders for the purchase of a Fund’s shares received by an insurance company prior to the close of the Exchange on any day the Exchange is open for business are priced at the NAV determined as of the close of the Exchange. Orders received by an insurance company after the close of the Exchange, or on a day on which the Exchange and/or the Fund is not open for business, are priced at the next determined NAV.

Dividends are declared pursuant to a policy adopted by the Board of Trustees based upon the investment performance of the Funds. The policy of all the Funds is to pay dividends from net investment income and to make distributions of realized gains, if any, at least once per year.

Distributions from net investment income, realized capital gains and capital are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP with respect to character and timing. These differences may include, but are not limited to, losses deferred due to wash sale adjustments and short-term capital gain adjustments. Permanent book and federal income tax basis differences relating to shareholder distributions will result in reclassifications to certain of the Funds’ capital accounts (see Federal Income Taxes: Reclassification of Capital Accounts note).

 

3. Principal Risks:

The Funds are exposed to the risks of the Master Funds in direct proportion to the amount of assets each Fund allocates to each Master Fund. The market values of the Master Funds may decline due to general market conditions which are not specifically related to a particular fund, such as real or perceived adverse economic conditions or adverse investor sentiment generally.

 

 

  18  

 


HIMCO Variable Insurance Trust

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

 

4. Federal Income Taxes:

 

  a) Federal Income Taxes – For federal income tax purposes, the Funds intend to continue to qualify as Regulated Investment Companies (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (“IRC”) by distributing substantially all of their taxable net investment income and net realized capital gains to their shareholders and otherwise complying with the requirements of the IRC. The Funds distributed substantially all of their income and capital gains in the prior years, if applicable, and each Fund intends to distribute substantially all of its income and capital gains prior to the next fiscal year end. Accordingly, no provision for federal income or excise taxes has been made in the accompanying financial statements. Distributions from short-term capital gains are treated as ordinary income distributions for federal income tax purposes.

 

  b) Net Investment Income (Loss), Net Realized Gains (Losses) and Distributions – Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes primarily because of losses deferred due to wash sale adjustments and short-term capital gain distribution adjustments. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the net investment income (loss) or net realized gains (losses) were recorded by a Fund.

 

  c) Distributions and Components of Distributable Earnings The tax character of distributions paid by the Funds for the periods indicated is as follows (as adjusted for dividends payable, if applicable):

 

     For the Year Ended
December 31, 2016
    For the Year Ended
December 31, 2015
 
     Ordinary
Income
    Long-Term
Capital
Gains(1)
    Ordinary
Income
    Long-Term
Capital
Gains(1)
 

Asset Allocation Fund

   $     (1,013,091   $ (6,577,960   $ (721,372   $ (758,343

Blue Chip Income and Growth Fund

     (899,736     (8,179,373         (1,263,856     (708,750

Bond Fund

     (4,871,873     (1,344,209     (3,092,400     (414,404

Global Bond Fund

     (169,483           (168,861     (1,369

Global Growth and Income Fund

     (665,667     (4,556,731     (1,501,497     (668,984

Global Growth Fund

     (314,071     (2,791,775     (165,242     (168,621

Global Small Capitalization Fund

     (160,017     (7,330,124           (544,795

Growth Fund

     (748,434     (92,964,012     (2,530,703     (6,406,141

Growth-Income Fund

     (2,142,064     (39,353,428     (1,666,340         (3,952,087

International Fund

     (1,915,253         (15,464,176     (2,004,068     (1,164,587

New World Fund

     (402,897     (796,214     (261,451     (8,094

 

  (1) The Funds designate these distributions as capital gain dividends per IRC Sec. 852(b) (3) (C).

 

 

  19  

 


HIMCO Variable Insurance Trust

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

As of December 31, 2016, the components of distributable earnings (deficit) on a tax basis were as follows:

 

     Undistributed
Ordinary
Income
     Undistributed
Long-Term
Capital Gain
     Accumulated
Capital(1)
    Unrealized
Appreciation
(Depreciation)(2)
    Total
Accumulated
Earnings
(Deficit)
 

Asset Allocation Fund

   $ 491,819      $ 2,500,098      $     $ 1,498,337     $ 4,490,254  

Blue Chip Income and Growth Fund

     917,430        5,329,124              2,900,639       9,147,193  

Bond Fund

         2,102,631        233,729              (2,558,998     (222,638

Global Bond Fund

     31,080               (296,561     (897,515         (1,162,996

Global Growth and Income Fund

     485,281        2,444,613              5,492,586       8,422,480  

Global Growth Fund

     147,758        1,944,018              (496,086     1,595,690  

Global Small Capitalization Fund

     60,636        7,872,633              (2,348,140     5,585,129  

Growth Fund

     1,022,961            40,141,913              17,993,797       59,158,671  

Growth-Income Fund

     2,237,024        25,652,357              8,488,575       36,377,956  

International Fund

     1,399,455        12,905,587              (6,202,979     8,102,063  

New World Fund

     81,302                   (760,202         (2,522,510     (3,201,410

 

  (1)  The Funds had capital loss carryforwards that are identified in the Capital Loss Carryforward note that follows.
  (2)  The differences between book-basis and tax-basis unrealized appreciation (depreciation) are attributable primarily to the tax deferral of wash sale losses.

 

  (d) Reclassification of Capital AccountsThe Funds may record reclassifications in their capital accounts. These reclassifications have no impact on the total net assets of the Funds. The reclassifications are a result of permanent differences between U.S. GAAP and tax accounting. Adjustments are made to reflect the impact these items have on current and future distributions to shareholders. Therefore, the source of a Fund’s distributable income may be shown in the accompanying Statements of Assets and Liabilities as from net investment income, from net realized gains on investments or from capital depending on the type of book and tax differences that exist. For the fiscal year ended December 31, 2016, the Funds recorded the following reclassifications to increase (decrease) the accounts listed below.

 

     Paid in
Capital
     Undistributed Net
Investment
Income (Loss)
    Accumulated
Net Realized
Gain (Loss)
 

Global Growth Fund

   $ 1      $      —     $ (1

New World Fund

         —        (1          1  

 

  e) Capital Loss Carryforward – Under U.S. tax law, the Funds are permitted to carry forward capital losses for an unlimited period. Additionally, capital loss carryforwards retain their character as either short-term or long-term capital losses rather than being considered all short-term as permitted under prior regulation.

At December 31, 2016 (tax-year-end), the following Funds had long-term capital loss carryforwards with no expiration for U.S. federal income tax purposes as follows:

 

     Amount  

Global Bond Fund

   $ 296,561  

New World Fund

     760,202  

 

  f) Accounting for Uncertainty in Income Taxes – In accordance with U.S. GAAP, the Funds analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions. Generally, tax authorities can examine all tax returns filed for the last three years. The Funds do not have an examination in progress.

The Funds have reviewed all open tax years and major jurisdictions and concluded that these financial reporting rules have no effect on the Funds’ financial positions or results of operations. There is no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on the tax returns for the fiscal year ended December 31, 2016. The Funds are also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

 

 

  20  

 


HIMCO Variable Insurance Trust

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

 

5. Fees and Expenses:

 

  a) Investment Management Agreement – Hartford Investment Management Company (“Hartford Investment Management”) serves as the Funds’ investment manager pursuant to an Investment Management Agreement with the Trust. Hartford Investment Management is a wholly owned subsidiary of The Hartford Financial Services Group, Inc. (“The Hartford”). The investment manager provides day-to-day investment management services to the Funds and has overall investment supervisory responsibility for each Fund. In addition, the investment manager provides administrative personnel, services, equipment, facilities and office space for operation of the Funds.

The schedule below reflects the rates of compensation as a percentage of each Fund’s average daily net assets paid to the investment manager for investment management services rendered during the six-month period ended June 30, 2017. The rates are accrued daily and paid monthly:

 

Fund

   Annual Rate*  

Asset Allocation Fund

     0.65

Blue Chip Income and Growth Fund

     0.75

Bond Fund

     0.50

Global Bond Fund

     0.75

Global Growth and Income Fund

     0.80

Global Growth Fund

     1.00

Global Small Capitalization Fund

     0.80

Growth Fund

     0.75

Growth-Income Fund

     0.70

International Fund

     0.85

New World Fund

     1.10

 

  * Hartford Investment Management has contractually agreed with the Trust, on behalf of each Fund, to waive a portion of its management fee to the extent necessary to maintain its net management fee at 0.25% of average daily net assets per annum, for as long as the Fund is part of a master-feeder fund structure. The Board of Trustees may change or eliminate this waiver if the fund structure changes.

 

  b) Accounting Services Agreement – State Street Bank and Trust Company (“State Street Bank”) provides the Funds with accounting services pursuant to a fund accounting agreement by and between the Trust, on behalf of the Funds, and State Street Bank. The amount paid for accounting services can be found in the Statements of Operations. These fees are accrued daily and paid monthly.

 

  c) Operating Expenses – Allocable expenses incurred by the Trust are allocated to each Fund in proportion to the average daily net assets of each Fund, except where allocation of certain expenses is more fairly made directly to the Fund. Hartford Investment Management has contractually agreed to reimburse expenses (exclusive of taxes, interest expense, brokerage commissions, acquired fund fees and expenses and extraordinary expenses) to the extent necessary to maintain total annual operating expenses for the Class IB shares of each Fund as follows:

 

Fund

   Annual Rate  

Asset Allocation Fund

     0.86

Blue Chip Income and Growth Fund

     0.99

Bond Fund

     0.93

Global Bond Fund

     1.15

Global Growth and Income Fund

     1.18

Global Growth Fund

     1.14

Global Small Capitalization Fund

     1.32

Growth Fund

     0.89

Growth-Income Fund

     0.83

International Fund

     1.09

New World Fund

     1.36

 

 

  21  

 


HIMCO Variable Insurance Trust

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

This contractual arrangement will remain in effect until April 30, 2018, and shall renew automatically for one-year terms unless the investment manager provides written notice of termination prior to the start of the next term or upon approval of the Board of Trustees of the Funds.

 

  d) Distribution Plan for Class IB Shares – HIMCO Distribution Services Company, a wholly owned subsidiary of The Hartford, serves as the Funds’ principal underwriter and distributor. The Trust, on behalf of the Funds, has adopted a Distribution Plan pursuant to Rule 12b-1 of the 1940 Act for Class IB shares to compensate the distributor, from assets attributable to the services rendered and expenses borne in connection with activities primarily intended to result in the sale of the Class IB shares, subject to the review and approval of the Board of Trustees.

The Distribution Plan provides that each Fund may pay annually up to 0.25% of the average daily net assets of each Fund attributable to its Class IB shares for activities primarily intended to result in the sale of Class IB shares. The Board of Trustees has the authority to suspend or reduce these payments at any point in time. Under the terms of the Distribution Plan and the principal underwriting agreement, each Fund is authorized to make payments monthly to the distributor that may be used to pay or reimburse entities, including insurance company affiliates of Hartford Investment Management, providing distribution and shareholder servicing with respect to the Class IB shares for such entities’ fees or expenses incurred or paid in that regard. The distribution fee paid during the period can be found in the Statement of Operations. These fees are accrued daily and paid monthly or at such other intervals as the Board of Trustees may determine.

 

  e) Transfer Agent Fees – State Street Bank provides transfer agent services to the Funds. The transfer agent is reimbursed for out-of-pocket expenses and other costs associated with the services it provides to the Funds, including costs invoiced by sub-contractors. Hartford Investment Management and its affiliates may pay, out of their own assets, compensation to third-party administrators for recordkeeping and other administrative services. The amount paid for transfer agent services can be found in the Statements of Operations. These fees are accrued daily and paid monthly.

 

  f) Trustee Fees – The Board of Trustees is responsible for oversight of the Funds. The Board of Trustees elects officers who are responsible for the day to day operations of the Funds. The Board of Trustees oversees the investment manager and the other principal service providers of the Funds. The Board of Trustees currently holds four regularly scheduled meetings throughout each year. In addition, the Board of Trustees may hold special meetings at other times either in person or by telephone. The Trustee fees paid during the period can be found in the Statements of Operations.

 

6. Investment Transactions:

For the six-month period ended June 30, 2017, the aggregate cost of purchases and sales of investments in Master Funds (excluding short-term investments) was as follows:

 

     Cost of Purchases      Sales Proceeds  

Asset Allocation Fund

   $ 2,616,906      $ 6,906,168  

Blue Chip Income and Growth Fund

     1,981,845        4,124,832  

Bond Fund

     9,507,501        12,958,559  

Global Bond Fund

     1,088,846        1,063,659  

Global Growth and Income Fund

     785,104        3,676,745  

Global Growth Fund

     1,564,443        1,327,834  

Global Small Capitalization Fund

     764,472        4,186,717  

Growth Fund

         22,930,789            30,073,186  

Growth-Income Fund

     10,332,056        14,760,680  

International Fund

     4,767,896        19,843,606  

New World Fund

     855,819        2,265,255  

 

7. Recent Accounting Pronouncements:

In October 2016, the SEC adopted amendments to rules under the 1940 Act (“final rules”) intended to modernize the reporting and disclosure of information by registered investment companies. The final rules amend Regulation S-X and

 

 

  22  

 


HIMCO Variable Insurance Trust

Notes to Financial Statements – (continued)

June 30, 2017 (Unaudited)

 

 

 

require investment companies to provide standardized, enhanced derivatives disclosures in fund financial statements in a format designed for individual investors. The amendments to Regulation S-X also update the disclosures for other investments in and advances to affiliates and amend the rules regarding the general form and content of fund financial statements. The compliance date for the amendments to Regulation S-X is August 1, 2017. Management is currently evaluating the amendments and their impact, if any, on the Funds’ financial statements.

 

8. Plan of Liquidation:

At meetings held on June 1, 2017 and June 19, 2017, the Board approved (i) a Plan of Liquidation for each of the Funds (each, a “Feeder Fund” and, collectively, the “Feeder Funds”) and (ii) submission of an Agreement and Plan of Substitution for each Feeder Fund by Hartford Life and Hartford Life and Annuity Insurance Company (collectively, the “Insurance Companies”), who sponsor the variable life insurance policies and variable annuity contracts (collectively, the “Contracts”) for which the Feeder Funds serve as investment vehicles, to the holders of such Contracts (the “Contract Holders”). The Board determined that each Feeder Fund should be liquidated and dissolved contingent upon receiving Contract Holder approval of the applicable Agreement and Plan of Substitution.

Agreement and Plan of Substitution. If Contract Holders approve the Agreement and Plan of Substitution for a Feeder Fund, the Feeder Fund will be liquidated on or about the close of business on November 10, 2017 (the “Liquidation Date”), pursuant to the Plan of Liquidation approved by the Board on behalf of the Feeder Fund. Each Feeder Fund invests in Class 1 shares of a corresponding Master Fund. The Agreement and Plan of Substitution provides that on or about November 10, 2017, the Insurance Companies will redeem shares of the Feeder Fund in complete liquidation of the Feeder Fund. The Insurance Companies will then purchase Class 4 shares of each Master Fund with the cash proceeds from the redemption (each such transaction, a “Substitution”). Each Substitution will take place at relative net asset value with no change in the dollar amount of any Contract Holder’s beneficial investment in the Feeder Fund. The Master Funds are the same funds as those in which the Feeder Funds currently invest. Each Substitution is not expected to increase a Contract Holder’s fees or charges paid under the Contracts. In addition, the net portfolio expense ratio of each Master Fund is expected to be lower than that of the corresponding Feeder Fund immediately following the Substitution. If the Agreement and Plan of Substitution is approved, each Contract Holder’s beneficial interest in shares of each Feeder Fund would be replaced with shares of the corresponding Master Fund as indicated below:

 

Name of Feeder Fund

  

Name of Master Fund

HIMCO VIT American Funds Asset Allocation Fund

Class IB Shares

   American Funds Insurance Series – Asset Allocation Fund Class 4 Shares

HIMCO VIT American Funds Blue Chip Income and

Growth Fund Class IB Shares

   American Funds Insurance Series – Blue Chip Income and Growth Fund Class 4 Shares

HIMCO VIT American Funds Bond Fund Class IB Shares

   American Funds Insurance Series – Bond Fund Class 4 Shares

HIMCO VIT American Funds Global Bond Fund

Class IB Shares

   American Funds Insurance Series – Global Bond Fund Class 4 Shares

HIMCO VIT American Funds Global Growth Fund

Class IB Shares

  

American Funds Insurance Series – Global Growth Fund

Class 4 Shares

HIMCO VIT American Funds Global Growth and

Income Fund Class IB Shares

   American Funds Insurance Series – Global Growth and Income Fund Class 4 Shares

HIMCO VIT American Funds Global Small Capitalization

Fund Class IB Shares

   American Funds Insurance Series – Global Small Capitalization Fund Class 4 Shares

HIMCO VIT American Funds Growth Fund

Class IB Shares

  

American Funds Insurance Series – Growth Fund

Class 4 Shares

HIMCO VIT American Funds Growth-Income Fund

Class IB Shares

   American Funds Insurance Series – Growth-Income Fund Class 4 Shares

HIMCO VIT American Funds International Fund

Class IB Shares

  

American Funds Insurance Series – International Fund

Class 4 Shares

HIMCO VIT American Funds New World Fund

Class IB Shares

  

American Funds Insurance Series – New World Fund

Class 4 Shares

 

 

  23  

 


HIMCO Variable Insurance Trust

Notes to Financial Statements – (concluded)

June 30, 2017 (Unaudited)

 

 

 

More information about the Agreement and Plan of Substitution and the Master Funds will be provided in proxy materials that are expected to be mailed in August 2017. If Contract Holders do not approve the Agreement and Plan of Substitution for a Feeder Fund, the Feeder Fund will not be liquidated and the Board will consider what, if any, steps to take. Apart from the proxy materials, no further notification regarding the liquidation of the Feeder Funds will be sent, unless circumstances change from those described above.

Transfer Rights. At any time prior to the Liquidation Date, Contract Holders may transfer their beneficial interests in a Feeder Fund to any of the other investment options offered under their respective Contracts, subject to the terms of the relevant Contract prospectuses and Contracts, and no transfer fees or other charges will be imposed. Following a Substitution, Contract Holders who had any beneficial interest automatically transferred from investing in a Feeder Fund to investing in the corresponding Master Fund may transfer such interests among any of the investment options available under their respective Contracts in accordance with the terms of the Contracts, also free of any transfer fees or other charges. Any such transfer will not be counted as one of the free transfers permitted per calendar year under the Contracts, provided that the transfer occurs prior to, or within 90 days after, the date of the Substitution. Please note, however, that if you have elected an optional living and/or death benefit rider in your Contract, any transfers may be subject to investment restrictions. Please see your Contract prospectus and your Contract for more information about the investment options available for your optional living and/or death benefit rider, if applicable. In addition, Contract Holders’ transfer rights are subject to any market timing/short-term trading provisions described in their respective Contract prospectuses or their Contracts. The Insurance Companies will issue supplements to the prospectuses for its affected Contracts advising Contract Holders of their rights to transfer under their respective Contracts.

 

9. Indemnifications:

Under the Trust’s organizational documents, the Trust shall indemnify its officers and trustees to the full extent required or permitted under The Delaware Statutory Trust Act and the federal securities laws. In addition, the Trust, on behalf of the Funds, may enter into contracts that contain a variety of indemnifications. The Trust’s maximum exposure under these arrangements is unknown. However, as of the date of these financial statements, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

 

10. Subsequent Event:

Management has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the Financial Statements were issued. Based on this evaluation, no adjustments to, or disclosures in, the Financial Statements were necessary as of June 30, 2017.

 

 

  24  

 


HIMCO Variable Insurance Trust

Financial Highlights

 

 

 

    — Selected Per-Share Data(1)     — Ratios and Supplemental Data —  

Class

  Net Asset
Value at,
Beginning
of Period
    Net
Investment
Income
(Loss)
    Net
Realized
and
Unrealized
Gain (Loss)
on
Investments
    Total from
Investment
Operations
    Distributions
from Net
Investment
Income
    Distributions
from
Realized
Gain on
Investments
    Total
Distributions
    Net
Asset
Value
End of
Period
    Total
Return(2)
    Net
Assets at
End of
Period
(000s)
    Ratio of
Expenses
to
Average
Net
Assets
Before
Adjust-
ments(3)
    Ratio of
Expenses
to
Average
Net
Assets
After
Adjust-
ments(3)
    Ratio of
Net
Investment
Income
(Loss) to
Average
Net Assets(3)
 
HIMCO VIT American Funds Asset Allocation Fund  

For the Six-Month Period Ended June 30, 2017 (Unaudited)

 

IB

  $ 7.98     $ 0.01     $ 0.62     $ 0.63     $     $     $     $ 8.61       7.89 %(4)    $ 36,564       1.03 %(5)      0.57 %(5)      0.16 %(5) 

For the Year Ended December 31, 2016

 

IB

  $ 8.95     $ 0.10     $ 0.68     $ 0.78     $ (0.23   $ (1.52   $ (1.75   $ 7.98       9.11   $ 39,500       1.01     0.57     1.20

For the Year Ended December 31, 2015

 

IB

  $ 9.12     $ 0.18     $ (0.08   $ 0.10     $ (0.13   $ (0.14   $ (0.27   $ 8.95       1.12   $ 44,093       1.01     0.56     1.99

For the Year Ended December 31, 2014

 

IB

  $ 12.63     $ 0.12     $ 0.44     $ 0.56     $ (0.18   $ (3.89   $ (4.07   $ 9.12       5.05   $ 54,855       0.99     0.55     1.09

For the Year Ended December 31, 2013(6)

 

IB

  $ 11.04     $ 0.12     $ 2.39     $ 2.51     $ (0.17   $ (0.75   $ (0.92   $ 12.63       23.40   $ 62,961       0.95     0.55     0.97

For the Year Ended December 31, 2012(6)(7)

 

IB

  $ 9.70     $ 0.19     $ 1.34     $ 1.53     $ (0.17   $ (0.02   $ (0.19   $ 11.04       15.80   $ 64,616       0.95     0.55     1.56
HIMCO VIT American Funds Blue Chip Income and Growth Fund  

For the Six-Month Period Ended June 30, 2017 (Unaudited)

 

IB

  $ 9.47     $ 0.05     $ 0.47     $ 0.52     $     $     $     $ 9.99       5.49 %(4)    $ 36,000       1.13 %(5)      0.58 %(5)      1.00 %(5) 

For the Year Ended December 31, 2016

 

IB

  $ 10.38     $ 0.25     $ 1.56     $ 1.81     $ (0.27   $ (2.45   $ (2.72   $ 9.47       18.46   $ 37,474       1.12     0.58     2.44

For the Year Ended December 31, 2015

 

IB

  $   11.25     $   0.23     $   (0.58   $   (0.35   $   (0.33   $   (0.19   $   (0.52   $   10.38       (3.30 )%    $ 36,874       1.13     0.57     2.07

For the Year Ended December 31, 2014

 

IB

  $ 12.31     $ 0.34     $ 1.38     $ 1.72     $ (0.20   $ (2.58   $ (2.78   $ 11.25       15.02   $ 47,550       1.10     0.57     2.83

For the Year Ended December 31, 2013(6)

 

IB

  $ 10.11     $ 0.17     $ 3.02     $ 3.19     $ (0.18   $ (0.81   $ (0.99   $ 12.31       32.55   $ 43,502       1.07     0.57     1.51

For the Year Ended December 31, 2012(6)(7)

 

IB

  $ 9.07     $ 0.15     $ 1.07     $ 1.22     $ (0.12   $ (0.06   $ (0.18   $ 10.11       13.53   $ 39,920       1.07     0.57     1.67
HIMCO VIT American Funds Bond Fund  

For the Six-Month Period Ended June 30, 2017 (Unaudited)

 

IB

  $ 9.23     $ 0.13     $ 0.09     $ 0.22     $     $     $     $ 9.45       2.38 %(4)    $   133,111       0.84 %(5)      0.55 %(5)      2.72 %(5) 

For the Year Ended December 31, 2016

 

IB

  $ 9.40     $ 0.14     $ 0.12     $ 0.26     $ (0.34   $ (0.09   $ (0.43   $ 9.23       2.66   $ 135,755       0.83     0.55     1.45

For the Year Ended December 31, 2015

 

IB

  $ 9.60     $ 0.27     $ (0.28   $ (0.01   $ (0.17   $ (0.02   $ (0.19   $ 9.40       (0.06 )%    $ 151,684       0.84     0.54     2.81

For the Year Ended December 31, 2014

 

IB

  $ 9.75     $ 0.14     $ 0.34     $ 0.48     $ (0.17   $ (0.46   $ (0.63   $ 9.60       4.98   $ 189,076       0.81     0.54     1.42

For the Year Ended December 31, 2013(6)

 

IB

  $ 10.52     $ 0.17     $ (0.42   $ (0.25   $ (0.22   $ (0.30   $ (0.52   $ 9.75       (2.37 )%    $ 236,846       0.79     0.54     1.67

For the Year Ended December 31, 2012(6)(7)

 

IB

  $ 10.52     $ 0.23     $ 0.29     $ 0.52     $ (0.29   $ (0.23   $ (0.52   $ 10.52       5.01   $ 199,008       0.79     0.54     2.13

 

See Portfolio Turnover information at the conclusion of Financial Highlights

 

 

  25  

 


HIMCO Variable Insurance Trust

Financial Highlights – (continued)

 

 

 

    — Selected Per-Share Data(1)     — Ratios and Supplemental Data —  

Class

  Net Asset
Value at,
Beginning
of Period
    Net
Investment
Income
(Loss)
    Net
Realized
and
Unrealized
Gain (Loss)
on
Investments
    Total from
Investment
Operations
    Distributions
from Net
Investment
Income
    Distributions
from
Realized
Gain on
Investments
    Total
Distributions
    Net
Asset
Value
End of
Period
    Total
Return(2)
    Net
Assets at
End of
Period
(000s)
    Ratio of
Expenses
to
Average
Net
Assets
Before
Adjust-
ments(3)
    Ratio of
Expenses
to
Average
Net
Assets
After
Adjust-
ments(3)
    Ratio of
Net
Investment
Income
(Loss) to
Average
Net Assets(3)
 
HIMCO VIT American Funds Global Bond Fund                  

For the Six-Month Period Ended June 30, 2017 (Unaudited)

 

               

IB

  $ 8.55     $ 0.03     $ 0.38     $ 0.41     $     $     $     $ 8.96       4.80 %(4)    $ 10,813       1.30 %(5)      0.58 %(5)      0.65 %(5) 

For the Year Ended December 31, 2016

 

                 

IB

  $ 8.47     $ 0.02     $ 0.19     $ 0.21     $ (0.13   $     $ (0.13   $ 8.55       2.40   $ 10,312       1.25     0.58     0.28

For the Year Ended December 31, 2015

 

                 

IB

  $ 8.98     $ 0.11     $ (0.50   $ (0.39   $ (0.12   $ (8)    $ (0.12   $ 8.47       (4.39 )%    $ 10,559       1.25     0.58     1.29

For the Year Ended December 31, 2014

 

                 

IB

  $ 9.66     $ 0.10     $ 0.05     $ 0.15     $ (0.01   $ (0.82   $ (0.83   $ 8.98       1.17   $ 15,042       1.22     0.63     1.01

For the Year Ended December 31, 2013(6)

 

                 

IB

  $   11.10     $   (0.06   $   (0.29   $   (0.35   $   (0.37   $   (0.72   $   (1.09   $ 9.66       (3.03 )%    $   17,007       1.09     0.59     (0.59 )% 

For the Year Ended December 31, 2012(6)(7)

 

                 

IB

  $ 11.02     $ 0.24     $ 0.38     $ 0.62     $ (0.31   $ (0.23   $ (0.54   $   11.10       5.83   $ 38,193       1.07     0.57     1.69
HIMCO VIT American Funds Global Growth and Income Fund                  

For the Six-Month Period Ended June 30, 2017 (Unaudited)

 

               

IB

  $ 5.99     $ (8)    $ 0.87     $ 0.87     $     $     $     $ 6.86       14.52 %(4)    $ 33,087       1.19 %(5)      0.55 %(5)      0.12 %(5) 

For the Year Ended December 31, 2016

 

                 

IB

  $ 6.56     $ 0.09     $ 0.37     $ 0.46     $ (0.13   $ (0.90   $ (1.03   $ 5.99       7.02   $ 32,133       1.18     0.54     1.40

For the Year Ended December 31, 2015

 

                 

IB

  $ 7.01     $ 0.10     $ (0.20   $ (0.10   $ (0.24   $ (0.11   $ (0.35   $ 6.56       (1.64 )%    $ 38,341       1.17     0.55     1.49

For the Year Ended December 31, 2014

 

                 

IB

  $ 11.24     $ 0.29     $ 0.32     $ 0.61     $ (0.37   $ (4.47   $ (4.84   $ 7.01       5.36   $ 48,147       1.15     0.57     3.04

For the Year Ended December 31, 2013(6)

 

                 

IB

  $ 9.58     $ 0.24     $ 1.84     $ 2.08     $ (0.26   $ (0.16   $ (0.42   $ 11.24       22.16   $ 52,712       1.11     0.56     2.28

For the Year Ended December 31, 2012(6)(7)

 

                 

IB

  $ 8.38     $ 0.23     $ 1.20     $ 1.43     $ (0.23   $     $ (0.23   $ 9.58       17.30   $ 74,927       1.10     0.55     2.05
HIMCO VIT American Funds Global Growth Fund                  

For the Six-Month Period Ended June 30, 2017 (Unaudited)

 

               

IB

  $ 6.34     $ (0.01   $ 1.18     $ 1.17     $     $     $     $ 7.51       18.45 %(4)    $ 18,235       1.46 %(5)      0.58 %(5)      (0.32 )%(5) 

For the Year Ended December 31, 2016

 

                 

IB

  $ 7.71     $ 0.06     $ (0.01   $ 0.05     $ (0.14   $ (1.28   $ (1.42   $ 6.34       0.15   $ 15,641       1.44     0.59     0.87

For the Year Ended December 31, 2015

 

                 

IB

  $ 7.35     $ 0.12     $ 0.36     $ 0.48     $ (0.06   $ (0.06   $ (0.12   $ 7.71       6.60   $ 18,999       1.43     0.59     1.51

For the Year Ended December 31, 2014

 

                 

IB

  $ 12.56     $ 0.08     $ 0.07     $ 0.15     $ (0.12   $ (5.24   $ (5.36   $ 7.35       1.97   $ 20,704       1.42     0.60     0.75

For the Year Ended December 31, 2013(6)

 

                 

IB

  $ 10.45     $ 0.08     $ 2.83     $ 2.91     $ (0.06   $ (0.74   $ (0.80   $ 12.56       28.77   $ 24,509       1.34     0.59     0.71

For the Year Ended December 31, 2012(6)(7)

 

                 

IB

  $ 8.74     $ 0.06     $ 1.86     $ 1.92     $ (0.10   $ (0.11   $ (0.21   $ 10.45       22.19   $ 29,055       1.33     0.58     0.48

 

See Portfolio Turnover information at the conclusion of Financial Highlights

 

 

  26  

 


HIMCO Variable Insurance Trust

Financial Highlights – (continued)

 

 

 

    — Selected Per-Share Data(1)     — Ratios and Supplemental Data —  

Class

  Net Asset
Value at,
Beginning
of Period
    Net
Investment
Income
(Loss)
    Net
Realized
and
Unrealized
Gain (Loss)
on
Investments
    Total from
Investment
Operations
    Distributions
from Net
Investment
Income
    Distributions
from
Realized
Gain on
Investments
    Total
Distributions
    Net
Asset
Value
End of
Period
    Total
Return(2)
    Net
Assets at
End of
Period
(000s)
    Ratio of
Expenses
to
Average
Net
Assets
Before
Adjust-
ments(3)
    Ratio of
Expenses
to
Average
Net
Assets
After
Adjust-
ments(3)
    Ratio of
Net
Investment
Income
(Loss) to
Average
Net Assets(3)
 
HIMCO VIT American Funds Global Small Capitalization Fund                  

For the Six-Month Period Ended June 30, 2017 (Unaudited)

 

               

IB

  $ 6.25     $ 0.01     $ 0.77     $ 0.78     $     $     $     $ 7.03       12.48 %(4)    $ 36,428       1.19 %(5)      0.58 %(5)      0.27 %(5) 

For the Year Ended December 31, 2016

 

                 

IB

  $ 7.55     $ 0.01     $ 0.15     $ 0.16     $ (0.03   $ (1.43   $ (1.46   $ 6.25       1.67   $ 35,581       1.17     0.59     0.16

For the Year Ended December 31, 2015

 

                 

IB

  $ 7.64     $ 0.03     $   (0.02   $ 0.01     $     $ (0.10   $ (0.10   $ 7.55       (0.03 )%    $ 41,737       1.17     0.58     0.34

For the Year Ended December 31, 2014

 

                 

IB

  $ 9.47     $ (0.02   $ 0.16     $ 0.14     $ (0.03   $ (1.94   $ (1.97   $ 7.64       1.75   $ 50,478       1.15     0.57     (0.26 )% 

For the Year Ended December 31, 2013(6)

 

                 

IB

  $ 8.29     $ 0.03     $ 2.18     $ 2.21     $ (0.09   $ (0.94   $ (1.03   $ 9.47       27.89   $ 61,224       1.13     0.58     0.30

For the Year Ended December 31, 2012(6)(7)

 

                 

IB

  $ 7.83     $ 0.10     $ 1.23     $ 1.33     $ (0.10   $ (0.77   $ (0.87   $ 8.29       17.85   $ 53,881       1.11     0.56     0.99
HIMCO VIT American Funds Growth Fund                  

For the Six-Month Period Ended June 30, 2017 (Unaudited)

 

               

IB

  $ 6.59     $ 0.01     $ 0.97     $ 0.98     $     $     $     $ 7.57       14.87 %(4)    $ 228,274       1.08 %(5)      0.54 %(5)      0.26 %(5) 

For the Year Ended December 31, 2016

 

               

IB

  $ 9.83     $ 0.04     $ 0.76     $ 0.80     $ (0.03   $ (4.01   $ (4.04   $ 6.59       9.10   $ 225,268       1.07     0.54     0.43

For the Year Ended December 31, 2015

 

               

IB

  $ 9.53     $ 0.03     $ 0.59     $ 0.62     $ (0.09   $ (0.23   $ (0.32   $ 9.83       6.50   $ 257,086       1.09     0.54     0.26

For the Year Ended December 31, 2014

 

               

IB

  $   13.09     $   0.10     $ 0.70     $   0.80     $   (0.10   $   (4.26   $   (4.36   $ 9.53       8.21   $ 299,254       1.06     0.54     0.85

For the Year Ended December 31, 2013(6)

 

               

IB

  $ 10.45     $ 0.07     $ 3.00     $ 3.07     $ (0.06   $ (0.37   $ (0.43   $   13.09       29.78   $   351,018       1.04     0.54     0.60

For the Year Ended December 31, 2012(6)(7)

 

               

IB

  $ 8.95     $ 0.05     $ 1.51     $ 1.56     $ (0.03   $ (0.03   $ (0.06   $ 10.45       17.56   $ 333,889       1.04     0.54     0.50
HIMCO VIT American Funds Growth-Income Fund                  

For the Six-Month Period Ended June 30, 2017 (Unaudited)

 

               

IB

  $ 7.72     $ 0.01     $ 0.73     $ 0.74     $     $     $     $ 8.46       9.59 %(4)    $ 131,482       1.03 %(5)      0.54 %(5)      0.17 %(5) 

For the Year Ended December 31, 2016

 

               

IB

  $ 9.86     $ 0.14     $ 0.87     $ 1.01     $ (0.16   $ (2.99   $ (3.15   $ 7.72       11.21   $ 132,095       1.03     0.54     1.62

For the Year Ended December 31, 2015

 

               

IB

  $ 10.09     $ 0.13     $ (8)    $ 0.13     $ (0.11   $ (0.25   $ (0.36   $ 9.86       1.19   $ 146,681       1.04     0.54     1.32

For the Year Ended December 31, 2014

 

               

IB

  $ 13.26     $ 0.11     $ 1.03     $ 1.14     $ (0.15   $ (4.16   $ (4.31   $ 10.09       10.30   $ 171,832       1.01     0.54     0.90

For the Year Ended December 31, 2013(6)

 

               

IB

  $ 10.20     $ 0.11     $ 3.23     $ 3.34     $ (0.14   $ (0.14   $ (0.28   $ 13.26       33.14   $ 197,689       0.99     0.54     0.97

For the Year Ended December 31, 2012(6)(7)

 

               

IB

  $ 8.81     $ 0.13     $ 1.38     $ 1.51     $ (0.12   $     $ (0.12   $ 10.20       17.16   $ 183,220       0.99     0.54     1.29

 

See Portfolio Turnover information at the conclusion of Financial Highlights

 

 

  27  

 


HIMCO Variable Insurance Trust

Financial Highlights – (continued)

 

 

 

    — Selected Per-Share Data(1)     — Ratios and Supplemental Data —  

Class

  Net Asset
Value at,
Beginning
of Period
    Net
Investment
Income
(Loss)
    Net
Realized
and
Unrealized
Gain (Loss)
on
Investments
    Total from
Investment
Operations
    Distributions
from Net
Investment
Income
    Distributions
from
Realized
Gain on
Investments
    Total
Distributions
    Net
Asset
Value
End of
Period
    Total
Return(2)
    Net
Assets at
End of
Period
(000s)
    Ratio of
Expenses
to
Average
Net
Assets
Before
Adjust-
ments(3)
    Ratio of
Expenses
to
Average
Net
Assets
After
Adjust-
ments(3)
    Ratio of
Net
Investment
Income
(Loss) to
Average
Net Assets(3)
 
HIMCO VIT American Funds International Fund                  

For the Six-Month Period Ended June 30, 2017 (Unaudited)

 

               

IB

  $ 6.69     $ 0.01     $ 1.22     $ 1.23     $     $     $     $ 7.92       18.39 %(4)    $ 137,000       1.19 %(5)      0.55 %(5)      0.22 %(5) 

For the Year Ended December 31, 2016

 

               

IB

  $ 7.33     $ 0.07     $ 0.20     $ 0.27     $ (0.10   $ (0.81   $ (0.91   $ 6.69       3.27   $ 130,696       1.18     0.55     0.99

For the Year Ended December 31, 2015

 

               

IB

  $ 7.85     $ 0.09     $   (0.45   $   (0.36   $   (0.10   $   (0.06   $   (0.16   $ 7.33       (4.83 )%    $ 149,253       1.20     0.55     1.12

For the Year Ended December 31, 2014

 

               

IB

  $   10.27     $ 0.09     $ (0.36   $ (0.27   $ (0.12   $ (2.03   $ (2.15   $ 7.85       (2.88 )%    $   180,339       1.17     0.55     0.98

For the Year Ended December 31, 2013(6)

 

               

IB

  $ 8.73     $ 0.09     $ 1.74     $ 1.83     $ (0.11   $ (0.18   $ (0.29   $   10.27       21.23   $ 226,400       1.15     0.55     0.99

For the Year Ended December 31, 2012(6)(7)

 

               

IB

  $ 7.54     $ 0.10     $ 1.22     $ 1.32     $ (0.13   $     $ (0.13   $ 8.73       17.58   $ 225,298       1.14     0.54     1.15
HIMCO VIT American Funds New World Fund                  

For the Six-Month Period Ended June 30, 2017 (Unaudited)

 

               

IB

  $ 5.32     $   (0.01   $ 0.77     $ 0.76     $     $     $     $ 6.08       14.29 %(4)    $ 19,750       1.55 %(5)      0.58 %(5)      (0.23 )%(5) 

For the Year Ended December 31, 2016

 

               

IB

  $ 5.39     $ 0.02     $ 0.26     $ 0.28     $ (0.12   $ (0.23   $ (0.35   $ 5.32       4.89   $ 18,573       1.52     0.57     0.41

For the Year Ended December 31, 2015

 

               

IB

  $ 5.65     $ 0.09     $ (0.29   $ (0.20   $ (0.06   $ (8)    $ (0.06   $ 5.39       (3.52 )%    $ 21,292       1.51     0.58     1.61

For the Year Ended December 31, 2014

 

               

IB

  $ 9.17     $ 0.05     $ (0.54   $ (0.49   $ (0.10   $ (2.93   $ (3.03   $ 5.65       (8.17 )%    $ 27,138       1.49     0.59     0.59

For the Year Ended December 31, 2013(6)

 

               

IB

  $ 9.46     $ 0.07     $ 0.89     $ 0.96     $ (0.08   $ (1.17   $ (1.25   $ 9.17       11.06   $ 34,304       1.43     0.58     0.77

For the Year Ended December 31, 2012(6)(7)

 

               

IB

  $ 8.66     $ 0.07     $ 1.38     $ 1.45     $ (0.15   $ (0.50   $ (0.65   $ 9.46       17.47   $ 51,697       1.41     0.56     0.61

 

(1)  Information presented relates to a share outstanding throughout the indicated period. Net investment income (loss) per share amounts are calculated based on average shares outstanding unless otherwise noted.
(2)  The figures do not include sales charges or other fees which may be applied at the variable life insurance, variable annuity or qualified retirement plan product level. Any such additional sales charges or other fees would lower the Fund’s performance.
(3)  Adjustments include waivers and reimbursements, if applicable. Ratios do not include expenses of the Master Funds.
(4)  Not annualized.
(5)  Annualized.
(6)  Financial highlights for the fiscal years ended December 31, 2013 and December 31, 2012 were audited by the Predecessor Funds’ auditor.
(7)  Net investment income (loss) per share amounts have been calculated using the SEC method.
(8)  Per share amount is less than $0.005.

 

See Portfolio Turnover information at the conclusion of Financial Highlights

 

 

  28  

 


HIMCO Variable Insurance Trust

Financial Highlights – (concluded)

 

 

 

 

     Portfolio Turnover Rate  
     For the Six
Months Ended
June 30, 2017

(Unaudited)
    For the Year
Ended
December 31,
2016
    For the Year
Ended
December 31,
2015
    For the Year
Ended
December 31,
2014
    For the Year
Ended
December 31,
2013(1)
    For the Year
Ended
December 31,
2012(1)
 

HIMCO VIT American Funds Asset Allocation Fund

     7     9     16     11     29     14

HIMCO VIT American Funds Blue Chip Income and Growth Fund

     5       19       18       15       16       23  

HIMCO VIT American Funds Bond Fund

     7       9       9       6       15       15  

HIMCO VIT American Funds Global Bond Fund

     10       22       5       12       10       8  

HIMCO VIT American Funds Global Growth and Income Fund

     2       3       3       7       4       5  

HIMCO VIT American Funds Global Growth Fund

     8       15       18       15       7       4  

HIMCO VIT American Funds Global Small Capitalization Fund

     2       24       16       5       11       4  

HIMCO VIT American Funds Growth Fund

     10       12       22       8       3       4  

HIMCO VIT American Funds Growth-Income Fund

     8       15       19       8       6       9  

HIMCO VIT American Funds International Fund

     4       16       14       6       4       7  

HIMCO VIT American Funds New World Fund

     4       6       11       16       6       8  

 

(1)  Financial highlights for the fiscal years ended December 31, 2013 and December 31, 2012 were audited by the Predecessor Funds’ auditor.

 

 

  29  

 


HIMCO Variable Insurance Trust

 

 

 

HOW TO OBTAIN A COPY OF THE FUNDS’ PROXY VOTING POLICIES AND VOTING RECORDS (UNAUDITED)

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities and information about how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 are available (1) without charge, upon request, by calling 1-800-862-6668 and (2) on the SEC’s website at http://www.sec.gov.

QUARTERLY PORTFOLIO HOLDINGS INFORMATION (UNAUDITED)

The Funds file complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available (1) without charge, upon request, by calling 1-800-862-6668 and (2) on the SEC’s website at http://www.sec.gov. The Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

 

 

  30  

 


HIMCO Variable Insurance Trust

Expense Example (Unaudited)

 

 

 

Your Fund’s Expenses

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs and (2) ongoing costs, including investment management fees, distribution and/or service (12b-1) fees, if any, and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period of January 1, 2017 through June 30, 2017.

Actual Expenses

The first set of rows of the table below provides information about actual account values and actual expenses. You may use the information in this row, 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 line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or fees which may be applied at the variable life insurance, variable annuity, or qualified retirement plan product level. Therefore, the second set of rows of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would be higher.

 

Fund Name    Beginning
Account Value
1/1/17
     Ending
Account Value
6/30/17
     Expenses Paid
During Period
1/1/17 - 6/30/17(1)
     Net Annualized
Expense Ratio(2)
 

HIMCO VIT American Funds Asset Allocation Fund

 

Actual

           

Class IB

   $ 1,000.00      $ 1,078.90      $ 4.43        0.86

Hypothetical

           

Class IB

   $ 1,000.00      $ 1,020.53      $ 4.31        0.86

HIMCO VIT American Funds Blue Chip Income and Growth Fund

 

Actual

           

Class IB

   $ 1,000.00      $ 1,054.90      $ 5.04        0.99

Hypothetical

           

Class IB

   $ 1,000.00      $ 1,019.89      $ 4.96        0.99

HIMCO VIT American Funds Bond Fund

 

Actual

           

Class IB

   $ 1,000.00      $ 1,023.80      $ 4.67        0.93

Hypothetical

           

Class IB

   $ 1,000.00      $ 1,020.18      $ 4.66        0.93

HIMCO VIT American Funds Global Bond Fund

 

Actual

           

Class IB

   $ 1,000.00      $ 1,048.00      $ 5.84        1.15

Hypothetical

           

Class IB

   $ 1,000.00      $ 1,019.09      $ 5.76        1.15

 

 

  31  

 


HIMCO Variable Insurance Trust

Expense Example (Unaudited) – (concluded)

 

 

 

Fund Name    Beginning
Account Value
1/1/17
     Ending
Account Value
6/30/17
     Expenses Paid
During Period
1/1/17 - 6/30/17(1)
     Net Annualized
Expense Ratio(2)
 

HIMCO VIT American Funds Global Growth and Income Fund

 

Actual

           

Class IB

   $ 1,000.00      $ 1,145.20      $ 6.28        1.18

Hypothetical

           

Class IB

   $ 1,000.00      $ 1,018.94      $ 5.91        1.18

HIMCO VIT American Funds Global Growth Fund

 

Actual

           

Class IB

   $ 1,000.00      $ 1,184.50      $ 6.17        1.14

Hypothetical

           

Class IB

   $ 1,000.00      $ 1,019.14      $ 5.71        1.14

HIMCO VIT American Funds Global Small Capitalization Fund

 

Actual

           

Class IB

   $ 1,000.00      $ 1,124.80      $ 6.95        1.32

Hypothetical

           

Class IB

   $ 1,000.00      $ 1,018.25      $ 6.61        1.32

HIMCO VIT American Funds Growth Fund

 

Actual

           

Class IB

   $ 1,000.00      $ 1,148.70      $ 4.74        0.89

Hypothetical

           

Class IB

   $ 1,000.00      $ 1,020.38      $ 4.46        0.89

HIMCO VIT American Funds Growth-Income Fund

 

Actual

           

Class IB

   $ 1,000.00      $ 1,095.90      $ 4.31        0.83

Hypothetical

           

Class IB

   $ 1,000.00      $ 1,020.68      $ 4.16        0.83

HIMCO VIT American Funds International Fund

 

Actual

           

Class IB

   $ 1,000.00      $ 1,183.90      $ 5.90        1.09

Hypothetical

           

Class IB

   $ 1,000.00      $ 1,019.39      $ 5.46        1.09

HIMCO VIT American Funds New World Fund

 

Actual

           

Class IB

   $ 1,000.00      $ 1,142.90      $ 7.23        1.36

Hypothetical

           

Class IB

   $ 1,000.00      $ 1,018.05      $ 6.81        1.36

 

(1)  Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 181, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period.
(2)  Net annualized expense ratio is reflective of any applicable contractual fee waivers and/or expense reimbursements or voluntary fee waivers. Details regarding fee waivers can be found in Fees and Expenses of the accompanying Notes to Financial Statements.

 

 

  32  

 


THIS PRIVACY POLICY IS NOT PART OF THIS REPORT

Privacy Policy and Practices of The Hartford Financial Services Group, Inc. and its Affiliates

(herein called “we, our and us”)

This Privacy Policy applies to our United States Operations

We value your trust. We are committed to the responsible:

a) management;

b) use; and

c) protection;

of Personal Information.

This notice describes how we collect, disclose, and protect Personal Information.

We collect Personal Information to:

a) service your Transactions with us; and

b) support our business functions.

We may obtain Personal Information from:

a) You;

b) your Transactions with us; and

c) third parties such as a consumer-reporting agency.

Based on the type of product or service You apply for or get from us, Personal Information such as:

a) your name;

b) your address;

c) your income;

d) your payment; or

e) your credit history;

may be gathered from sources such as applications, Transactions, and consumer reports.

To serve You and service our business, we may share certain Personal Information. We will share Personal Information, only as allowed by law, with affiliates such as:

a) our insurance companies;

b) our employee agents;

c) our brokerage firms; and

d) our administrators.

As allowed by law, we may share Personal Financial Information with our affiliates to:

a) market our products; or

b) market our services;

to You without providing You with an option to prevent these disclosures.

We may also share Personal Information, only as allowed by law, with unaffiliated third parties including:

a) independent agents;

b) brokerage firms;

c) insurance companies;

d) administrators; and

e) service providers;

who help us serve You and service our business.

When allowed by law, we may share certain Personal Financial Information with other unaffiliated third parties who assist us by performing services or functions such as:

a) taking surveys;

b) marketing our products or services; or

c) offering financial products or services under a joint agreement between us and one or more financial institutions.

We, and third parties we partner with, may track some of the pages You visit through the use of:

a) cookies;

b) pixel tagging; or

c) other technologies;

and currently do not process or comply with any web browser’s “do not track” signal or similar mechanism that indicates a request to disable online tracking of individual users who visit our websites or use our services.

For more information, our Online Privacy Policy, which governs information we collect on our website and our affiliate websites, which is available at Online Privacy Policy.

We will not sell or share your Personal Financial Information with anyone for purposes unrelated to our business functions without offering You the opportunity to:

a) “opt-out;” or

b) “opt-in;”

as required by law.

We only disclose Personal Health Information with:

a) your proper written authorization; or

b) as otherwise allowed or required by law.

Our employees have access to Personal Information in the course of doing their jobs, such as:

a) underwriting policies;

b) paying claims;

c) developing new products; or

d) advising customers of our products and services.

We use manual and electronic security procedures to maintain:

a) the confidentiality; and

b) the integrity of;

Personal Information that we have. We use these procedures to guard against unauthorized access.

 


 

 

Some techniques we use to protect Personal Information include:

a) secured files;

b) user authentication;

c) encryption;

d) firewall technology; and

e) the use of detection software.

We are responsible for and must:

a) identify information to be protected;

b) provide an adequate level of protection for that data;

c) grant access to protected data only to those people who must use it in the performance of their job-related duties.

Employees who violate our privacy policies and procedures may be subject to discipline, which may include ending their employment with us.

We will continue to follow our Privacy Policy regarding Personal Information even when a business relationship no longer exists between us.

As used in this Privacy Notice:

Application means your request for our product or service.

Personal Financial Information means financial information such as:

a) credit history;

b) income;

c) financial benefits; or

d) policy or claim information.

Personal Financial Information may include Social Security Numbers, Driver’s license numbers, or other government-issued identification numbers, or credit, debit card, or bank account numbers.

Personal Health Information means health information such as:

a) your medical records; or

b) information about your illness, disability or injury.

Personal Information means information that identifies You personally and is not otherwise available to the public. It includes:

a) Personal Financial Information; and

b) Personal Health Information.

Transaction means your business dealings with us, such as:

a) your Application;

b) your request for us to pay a claim; and

c) your request for us to take an action on your account.

You means an individual who has given us Personal Information in conjunction with:

a) asking about;

b) applying for; or

c) obtaining;

a financial product or service from us if the product or service is used mainly for personal, family, or household purposes.

 

This Customer Privacy Notice is being provided on behalf of The Hartford Financial Services Group, Inc. and its affiliates, to the extent required by the Gramm-Leach-Bliley Act and implementing regulations.

1stAGChoice, Inc.; Access CoverageCorp, Inc.; Access CoverageCorp Technologies, Inc.; American Maturity Life Insurance Company; Archway 60 R, LLC; Business Management Group, Inc.; DMS R, LLC; First State Insurance Company; Fountain Investors I LLC; Fountain Investors II LLC; Fountain Investors III LLC; Fountain Investors IV LLC; FP R, LLC (Delaware); FTC Resolution Company LLC; Hart Re Group L.L.C.; Hartford Accident and Indemnity Company; Hartford Administrative Services Company; Hartford Casualty General Agency, Inc.; Hartford Casualty Insurance Company; Hartford Financial Services, LLC; Hartford Fire General Agency, Inc.; Hartford Fire Insurance Company; Hartford Funds Distributors, LLC; Hartford Funds Management Company, LLC; Hartford Funds Management Group, Inc.; Hartford Group Benefits Holding Company; Hartford Holdings, Inc.; Hartford HLS Series Fund II, Inc.; Hartford Insurance Company of Illinois; Hartford Insurance Company of the Midwest; Hartford Insurance Company of the Southeast; Hartford Integrated Technologies, Inc.; Hartford International Life Reassurance Corporation; Hartford Investment Management Company; Hartford Life and Accident Insurance Company; Hartford Life and Annuity Insurance Company; Hartford Life Insurance Company; Hartford Life, Inc.; Hartford Life International Holding Company; Hartford Life Private Placement, LLC; Hartford Lloyd’s Corporation; Hartford Lloyd’s Insurance Company; Hartford of Texas General Agency, Inc.; Hartford Residual Market, L.C.C.; Hartford Securities Distribution Company, Inc.; Hartford Series Fund, Inc.; Hartford Specialty Insurance Services of Texas, LLC; Hartford Strategic Investments, LLC; Hartford Underwriters General Agency, Inc.; Hartford Underwriters Insurance Company; Hartford-Comprehensive Employee Benefit Service Company; HDC R, LLC .; Heritage Holdings, Inc.; HIMCO Distribution Services Company; HIMCO Variable Insurance Trust; HLA LLC; HL Investment Advisors, LLC; Horizon Management Group, LLC; HRA Brokerage Services, Inc.; Lanidex Class B, LLC; ; Lanidex R, LLC (Delaware); Lattice Strategies LLC; Maxum Casualty Insurance Company; Maxum Indemnity Company; Maxum Specialty Services Corporation; MPC Resolution Company LLC; New England Insurance Company; New England Reinsurance Corporation; Northern Homelands Company; Nutmeg Insurance Agency, Inc.; Nutmeg Insurance Company; Pacific Insurance Company, Limited; Property and Casualty Insurance Company of Hartford; Sentinel Insurance Company, Ltd.; Trumbull Flood Management, L.L.C.; Trumbull Insurance Company; Twin City Fire Insurance Company.

Revised March 2017


LOGO

 

This report is prepared for the general information of contract owners and is not an offer to buy or sell an annuity contract, fund or any security. It should not be used in connection with any offer, except in conjunction with the appropriate product prospectus (which contains all pertinent product information including the applicable sales, administrative and other charges) and the current prospectus and/or summary prospectus of the Fund available for investment thereunder.

The information cannot be used or relied upon for the purpose of avoiding IRS penalties. These materials are not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, you should consult your own tax or legal counsel for advice.

You should carefully consider investment objectives, risks, and charges and expenses of HIMCO Variable Insurance Trust Funds before investing. This and other information can be found in the Fund’s prospectus or summary prospectus, which can be obtained from your investment representative or from www.hvitfunds.com. Please read them carefully before investing.

Hartford Investment Management is an SEC-registered investment adviser. SEC registration does not imply a certain level of skill or training; nor does it imply that the SEC has sponsored, recommended, or otherwise approved of Hartford Investment Management.

Distributor: HIMCO Distribution Services Company, member FINRA, SIPC, a broker-dealer affiliated with Hartford Investment Management. Not FDIC Insured – No Bank Guarantee – May Lose Value


 

LOGO


American Funds Insurance Series, from Capital Group, is the underlying investment vehicle for many variable annuities and insurance products. For more than 85 years, Capital has invested with a long-term focus based on thorough research and attention to risk.

 

 

Investing for short periods makes losses more likely. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility, as more fully described in the prospectus. These risks may be heightened in connection with investments in developing countries. Investing in small-capitalization stocks can involve greater risk than is customarily associated with investing in stocks of larger, more established companies. The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. High-yield bonds are subject to greater fluctuations in value and risk of loss of income and principal than investment-grade bonds. Bond ratings, which typically range from AAA/Aaa (highest) to D (lowest), are assigned by credit rating agencies such as Standard & Poor’s, Moody’s and/or Fitch as an indication of an issuer’s creditworthiness. Futures contracts may not provide an effective hedge of the underlying securities because changes in the prices of futures contracts may not track those of the securities they are intended to hedge. In addition, the managed risk strategy may not effectively protect the funds from market declines and will limit the funds’ participation in market gains. The use of the managed risk strategy could cause the funds’ returns to lag those of the applicable underlying funds in certain rising market conditions. Refer to the funds’ prospectuses and the Risk Factors section of this report for more information on these and other risks associated with investing in the funds.


Contents
1   Letter to investors
4   Fund reviews
  Investment portfolios
45   Global Growth Fund
48   Global Small Capitalization Fund
52   Growth Fund
55   International Fund
59   New World Fund®
63   Blue Chip Income and Growth Fund
66   Global Growth and Income Fund
69   Growth-Income Fund
72   International Growth and Income Fund
75   Capital Income Builder®
79   Asset Allocation Fund
84   Global Balanced Fund
89   Bond Fund
95   Global Bond Fund
101   High-Income Bond Fund
106   Mortgage Fund
110   Ultra-Short Bond Fund
111   U.S. Government/AAA-Rated Securities Fund
115   Managed Risk Growth Fund
116   Managed Risk International Fund
117   Managed Risk Blue Chip Income and Growth Fund
118   Managed Risk Growth-Income Fund
119   Managed Risk Asset Allocation Fund
120   Financial statements

Fellow investors:

Global stocks rallied for the six months ended June 30, 2017, with the MSCI ACWI (All Country World Index)1 gaining 11.48%. Against a backdrop of supportive global monetary policy, strong corporate earnings and improving economic data in the U.S., Europe and Japan helped to diminish investors’ concerns about increasing populism and geopolitical uncertainty.

The MSCI USA Index1 advanced 9.53%, and several market indexes hit a series of new highs in anticipation of the Trump administration reducing regulations and delivering tax reforms. While the U.S. economy continued to grow, there were some signs of moderation in the form of tepid consumer activity and hiring. The U.S. Federal Reserve increased short-term interest rates by a quarter percentage point in both March and June. These rate hikes can be considered steps toward “normalization” after central banks pursued accommodative monetary policies focused on healing stresses in the global financial system caused by the 2008 financial crisis.

European markets also rose, despite heightened political uncertainty ahead of pivotal elections in the U.K. and France that served as referenda on the future of Europe. The MSCI Europe Index climbed 15.36%, reversing last year’s weakness, with Spain (23.81%), France (17.05%), Germany (15.32%) and the U.K.

(10.00%) all registering double-digit gains. Elsewhere among developed markets, Japanese equities rose 9.92%,

See page 2 for footnotes.

    

    

buoyed by the country’s longest streak of economic expansion in more than a decade.

Emerging markets enjoyed some of the best results with the MSCI EM (Emerging Markets) Index1 up 18.43%. Gains were solid across Asia as Chinese equities advanced 24.86%, outweighing concerns about the nation’s debt load. Chinese industrial production remained robust, as the government introduced policies to cool the housing market and confront the country’s high debt. Indian equities soared 20.53%, despite the currency demonetization initiative announced by Prime Minister Modi in November as part of his efforts to curtail corruption. Russian stocks slipped 14.18% as oil prices fell, and OPEC and Russia considered extending cuts in oil production to speed up rebalancing of global inventories.

In bond markets, U.S. investment-grade and high-yield corporates advanced 3.80% and 4.92%, respectively, as demand remained healthy despite tightening monetary policy. Bloomberg Barclays Global Aggregate Index2, a measure of global investment-grade bonds (rated BBB/Baa and above), rose 4.41%, while the Bloomberg Barclays U.S. Aggregate Index2 (which measures U.S. investment-grade bonds) improved to 2.27%. The 10-year Treasury yield, which stood at 2.45% on December 31, 2016, declined marginally to 2.31%. U.S. dollar-denominated emerging markets bonds, as measured by the J.P. Morgan EMBI (Emerging Markets Bond Index) Global3,

 

 

   American Funds Insurance Series    1


climbed 6.20% as their higher yields were popular in the current interest rate environment.

The U.S. dollar depreciated against most currencies. Gainers included the euro (8.13%), Japanese yen (3.80%) and Singapore dollar (4.93%).

AFIS funds recorded positive returns during the period; those funds with exposure to growth stocks and companies outside the U.S. enjoyed the strongest returns.

Looking ahead

In today’s uncertain political environment, the underlying economic reality is generally positive. The U.S. is likely to continue growing at a moderate pace, even as some countries experience sluggish growth and low inflation. While China is currently growing, its development has relied on infrastructure spending, and investments in fixed assets may be approaching a point of diminishing returns. Geopolitical challenges plague many parts of the world. The European landscape continues to evolve following parliamentary elections in the U.K. and the presidential victory of Emmanuel Macron in France. The conflict in Syria and mounting tensions in the Middle East bear watching as well. Against this backdrop, markets may be more volatile going forward, which is not a negative per se. Volatility often creates opportunities for long-term investors. So, we believe that investors should keep to their long-term plans and not panic.

Valuations are richer in the U.S. than in other parts of the world, but this is normal given that U.S. indexes comprise a greater proportion of innovative technology companies (which tend to have higher multiples) and a lesser proportion of financial companies (which tend to have lower multiples). Our goal is to see through uncertainties and focus on the fundamental outlook for each business that we evaluate. Our investment approach – based on extensive research, a long-term outlook and close attention to valuation – has served investors well over time.

We have confidence that this time-tested and robust approach will continue to serve our investors well in the long run. We thank you for your support and look forward to reporting to you again in six months’ time.

Sincerely,

 

LOGO

Donald D. O’Neal

Vice Chairman of the Board

 

LOGO

Alan N. Berro

President

August 14, 2017

 

 

All market indexes referenced in this report are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index.

1Country returns are based on MSCI indexes, which reflect reinvestment of distributions and dividends net of withholding taxes, except for the MSCI USA Index, which reflects dividends gross of withholding taxes. Source: MSCI.

2Bloomberg Barclays source: Bloomberg Index Services Ltd.

3This report, and any product, index or fund referred to herein, is not sponsored, endorsed or promoted in any way by J.P. Morgan or any of its affiliates who provide no warranties whatsoever, express or implied, and shall have no liability to any prospective investor, in connection with this report. J.P. Morgan disclaimer: http://www.jpmorgan.com/pages/jpmorgan/ib/girg.

 

2    American Funds Insurance Series

  


Summary investment portfolios

 

 

Summary investment portfolios are designed to streamline this report and help investors better focus on the funds’ principal holdings. Ultra-Short Bond Fund, Managed Risk Growth Fund, Managed Risk International Fund, Managed Risk Blue Chip Income and Growth Fund, Managed Risk Growth-Income Fund and Managed Risk Asset Allocation Fund show a complete listing of portfolio holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings for each fund in the series.

Unless otherwise indicated, American Funds Insurance Series investment results are for Class 2 shares (Class P2 shares for managed risk funds). Class 1A shares began operations on January 6, 2017. Class 2 shares began operations on April 30, 1997. Class 3 shares began operations on January 16, 2004. Class 4 shares began operations on December 14, 2012. Results encompassing periods prior to those dates assume a hypothetical investment in Class 1 shares and include the deduction of additional annual expenses (0.25% for Class 1A shares, 0.25% for Class 2 shares, 0.18% for Class 3 shares and 0.50% for Class 4 shares).

The variable annuities and life insurance contracts that use the series funds contain certain fees and expenses not reflected in this report. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The series investment adviser waived a portion of its management fees for all existing funds from September 1, 2004, through December 31, 2008, for U.S. Government/AAA-Rated Securities Fund from July 1, 2010, through December 31, 2010, and for Blue Chip Income and Growth Fund from February 1, 2014, through January 31, 2015. For the managed risk funds, the investment adviser is currently waiving a portion of its management fee equal to 0.05% of the funds’ net assets and is currently reimbursing a portion of other expenses for all funds except Managed Risk Asset Allocation Fund. The waivers and reimbursements will be in effect through at least May 1, 2018, unless modified or terminated by the series board. After that time, the investment adviser may elect to extend, modify or terminate the reimbursements. The waivers may only be modified or terminated with the approval of the series board. Applicable fund results shown reflect the waivers and reimbursements, without which results would have been lower. See the Financial Highlights tables in this report for details.

The Managed Risk Growth Fund pursues its objective by investing in shares of American Funds Insurance Series – Growth Fund.SM The Managed Risk International Fund pursues its objective by investing in shares of American Funds Insurance Series – International Fund.SM The Managed Risk Blue Chip Income and Growth Fund pursues its objective by investing in shares of American Funds Insurance Series – Blue Chip Income and Growth Fund.SM The Managed Risk Growth-Income Fund pursues its objective by investing in shares of American Funds Insurance Series – Growth-Income Fund.SM The Managed Risk Asset Allocation Fund pursues its objective by investing in shares of American Funds Insurance Series – Asset Allocation Fund.SM The funds seek to manage portfolio volatility and provide downside protection, primarily through the use of exchange-traded futures contracts. The benefit of the funds’ managed risk strategy should be most apparent during periods of high volatility and in down markets. In steady or rising markets, the funds’ results can be expected to lag those of the underlying fund.

Individual funds are listed in this report according to their risk potential, with managed risk funds listed last.

 

American Funds Insurance Series   3


Global Growth Fund

 

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Global Growth Fund rose 18.57% for the six months ended June 30, 2017, compared with a 11.48% increase for the MSCI ACWI (All Country World Index).1

Global stocks rose amid strong corporate earnings and improving economic data in the U.S., Europe and Japan. Several key market indexes hit a series of new highs. U.S. equity markets surged in anticipation of lower regulation and tax cuts. Information technology stocks led markets higher, as the share price of U.S. tech giants Apple and Alphabet advanced. European stocks climbed higher despite the U.K’s pivotal vote to leave the European Union. Markets cheered Emmanuel Macron’s victory in the French presidential election as the centrist leader pledged to keep France in the European Union. Emerging markets also enjoyed strong returns, supported by technology companies reporting strong earnings.

Larger-than-index investments and strong stock selection in information technology and consumer discretionary contributed most to the fund’s returns. An eclectic mix of stocks boosted the fund’s returns. Nintendo shares rose to an eight-year high on optimism that more third-party developers would create games for the company’s new flagship console. Consumer discretionary company Amazon advanced and posted a double-digit return as the company expanded its product offerings through Prime. Mortgage lender Indiabulls Housing Finance rose, benefitting from India’s affordable housing initiative.

The fund’s exposure to companies in the energy sector detracted from returns. Seven Generations and Schlumberger slipped and hindered returns as oil prices declined on concerns of oversupply.

Stocks of companies domiciled in the U.S. and Japan were additive to results on a relative basis, while stocks of companies based in Denmark and Korea hindered relative returns.

While political uncertainties may result in volatility, the fund’s portfolio managers are optimistic long-term investments can be found among companies with innovative products and services that are changing the way people live around the world.

 

Percent of net assets

 

Country diversification

The Americas

  

United States

     40.6

Other

     1.4  
  

 

 

 
       42.0  
  

 

 

 

Europe

  

United Kingdom

     7.1  

France

     6.8  

Switzerland

     3.5  

Netherlands

     3.5  

Spain

     1.7  

Germany

     1.7  

Russian Federation

     1.2  

Finland

     1.2  

Denmark

     1.0  

Europe (continued)

  

Italy

     1.0

Sweden

     1.0  

Other

     .6  
  

 

 

 
       30.3  
  

 

 

 

Asia/Pacific Basin

  

Japan

     7.5  

China

     5.1  

Taiwan

     4.0  

Hong Kong

     2.7  

India

     1.8  

South Korea

     1.3  

Other

     1.4  
  

 

 

 
       23.8  
  

 

 

 

Other regions

  

South Africa

     1.1
  

 

 

 

Short-term securities & other assets less liabilities

     2.8  
  

 

 

 

Total

     100.0
  

 

 

 
 
 

 

4   American Funds Insurance Series


Global Growth Fund

 

Percent of net assets

 

Largest individual

equity securities

Amazon

     4.92

TSMC

     3.44  

Alphabet

     3.33  

Nintendo

     2.96  

ASML Holding

     2.94  

Facebook

     2.32

British American Tobacco

     2.26  

Regeneron Pharmaceuticals

     2.05  

AIA Group

     1.92  

Alibaba Group

     1.88  
 
 

  

 

Average annual

total returns based on

a $1,000 investment

For periods ended June 30, 2017

      6 months   1 year   5 years   10 years   Lifetime
(since April 30, 1997)
  Expense
ratio

Class 1

   18.75%   23.89%   13.95%   7.04%   9.81%     .56%

Class 1A

   18.66      23.64      13.68      6.77      9.54      .812

Class 2

   18.57      23.54      13.66      6.77      9.54        .81   

Class 4

   18.44      23.25      13.47      6.54      9.29      1.06   

Investment results assume all distributions are reinvested and respect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. Expense ratios are as of the fund’s prospectus dated May 1, 2017. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: MSCI. The MSCI index result reflects dividends net of withholding taxes and reinvestment of distributions.

2Based on estimated amounts for the current fiscal year.

 

Percent of net assets

 

Where the fund’s

assets were

invested as of

June 30, 2017

LOGO

 

 

American Funds Insurance Series   5


Global Small Capitalization Fund

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Global Small Capitalization Fund increased 12.71% for the six months ended June 30, 2017, leading its benchmark, the MSCI All Country World Small Cap Index,1 which gained 10.36%.

Global stocks rose amid strong corporate earnings and improving economic data in the U.S., Europe and Japan. Several key market indexes hit a series of new highs. U.S. equity markets surged in anticipation of lower regulation and tax cuts. European stocks climbed higher despite the U.K’s pivotal vote to leave the European Union. Markets cheered Emmanuel Macron’s victory in the French presidential election as the centrist leader pledged to keep France in the European Union. Emerging markets also enjoyed strong returns, buoyed by technology companies reporting strong earnings.

Consumer discretionary holdings aided returns, with zooplus reporting revenue growth. The company was among the top contributors to returns. Information technology company Sunny Optical rallied on optimism the smartphone market is improving as shipments of smartphone camera lenses grew at a robust pace and was also among the top contributors to results.

Energy stocks were the biggest detractors from returns, as the price of oil declined due to concerns of oversupply. Among the top detractors were investments in Laredo Petroleum, SM Energy and Carrizo.

While investments in U.S. companies were additive to relative returns, larger-than-index investments in U.K. domiciled companies detracted from relative results.

While political uncertainties may result in volatility, the fund’s portfolio managers are optimistic that our investment process can help identify companies outside the U.S. with innovative products and services that are changing the way people live around the globe.

 

Percent of net assets

 

Country diversification

The Americas

  

United States

     40.4

Canada

     2.3  

Other

     1.8  
  

 

 

 
       44.5  
  

 

 

 

Asia/Pacific Basin

  

Japan

     6.3  

China

     5.2  

India

     4.0  

Hong Kong

     3.2  

Thailand

     2.2  

Asia/Pacific Basin (continued)

 

Taiwan

     2.1

Philippines

     1.9  

Indonesia

     1.0  

Other

     1.5  
  

 

 

 
       27.4  
  

 

 

 

Europe

  

United Kingdom

     11.2  

Germany

     3.5  

Other

     6.6  
  

 

 

 
     21.3  
  

 

 

 

Short-term securities & other assets less liabilities

     6.8
  

 

 

 

Total

     100.0
  

 

 

 
  
 
 

Percent of net assets

 

Largest individual

equity securities

Qorvo

     2.80

Insulet

     1.65  

GW Pharmaceuticals

     1.62  

China Biologic Products

     1.41  

Domino’s Pizza

     1.27  

zooplus

     1.23

Kotak Mahindra Bank

     1.20  

athenahealth

     1.19  

Hilton Grand Vacations

     1.00  

Kite Pharma

     .99  
 
 

 

6   American Funds Insurance Series


Global Small Capitalization Fund

 

Average annual

total returns based on

a $1,000 investment

For periods ended June 30, 2017

      6 months      1 year      5 years      10 years   Lifetime
(since April 30, 1998)
 

Expense

ratio

Class 1

   12.82%      20.09%      11.22%      3.15%   9.42%     .74%

Class 1A

   12.77         19.88         10.96         2.90      9.16        .992  

Class 2

   12.71         19.85         10.95         2.90      9.16        .99   

Class 4

   12.57         19.52         10.69         2.65      8.88      1.24   

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. Expense ratios are as of the fund’s prospectus dated May 1, 2017. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: MSCI. The MSCI index result reflects dividends net of withholding taxes and reinvestment of distributions.

2Based on estimated amounts for the current fiscal year.

 

Percent of net assets

 

Where the fund’s

assets were

invested as of

June 30, 2017

 

LOGO

 

 

American Funds Insurance Series   7


Growth Fund

 

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Growth Fund gained 15.00% for the six months ended June 30, 2017, compared with a 9.34% increase in its benchmark index, Standard & Poor’s 500 Composite Index.1

U.S. stocks rose to new highs led by strong corporate earnings and improving economic sentiment. Positive economic data on employment and industrial production bolstered optimism in the economy. Information technology stocks advanced, led by tech giants such as Alphabet and Apple, amid growing optimism over consumer demand. Defensive sectors also rose, led by health care and consumer staples.

Larger-than-index investments and strong stock selection in consumer discretionary and information technology boosted the fund’s returns. Among the fund’s top contributors to returns (posting double-digit gains) were consumer discretionary companies Amazon and Tesla and information technology companies Facebook and Broadcom.

Exposure to the energy sector detracted from fund results as the price of crude oil declined, despite OPEC’s decision to extend production cuts into 2018. Energy exploration and production companies Noble Energy and EOG Resources, as well as oil-field services company Schlumberger, detracted from returns.

The fund’s portfolio managers are keeping a close watch on the U.S. economy, which continues to show modest economic growth. Portfolio managers continue to favor well-managed, growth-oriented companies that are capable of generating free cash flow in myriad economic environments and remain optimistic that our global research will help us identify attractive long-term investment opportunities.

 

Percent of net assets

 

Largest individual

equity securities

Amazon

     5.72

Facebook

     5.34  

Alphabet

     3.43  

Microsoft

     3.41  

Broadcom

     3.03  

UnitedHealth Group

     2.76

Apple

     2.35  

Tesla

     2.31  

Home Depot

     1.94  

ASML

     1.91  
 
 

 

8   American Funds Insurance Series


Growth Fund

 

Average annual total returns based on a $1,000 investment

For periods ended June 30, 2017

      6 months   1 year   5 years   10 years   Lifetime
(since February 8, 1984)
  Expense
ratio

Class 1

   15.15%   25.04%   15.95%   7.55%   12.66%   .35%

Class 1A

   15.07      24.80      15.67      7.28      12.38      .602  

Class 2

   15.00      24.74      15.66      7.28      12.36      .60   

Class 3

   15.05      24.82      15.75      7.35      12.46      .53   

Class 4

   14.86      24.42      15.41      7.03      12.11      .85   

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. Expense ratios are as of the fund’s prospectus dated May 1, 2017. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: S&P Dow Jones Indices LLC.

2Based on estimated amounts for the current fiscal year.

 

Percent of net assets

 

Where the fund’s

assets were

invested as of

June 30, 2017

 

 

LOGO

 

 

American Funds Insurance Series   9


International Fund

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

International Fund gained 18.55% for the six months ended June 30, 2017. Its benchmark, the MSCI ACWI (All Country World Index) ex USA,1 rose 14.10%.

It was a challenging start to the year as rising populism, the U.K. vote to depart the EU by March 2019, and pivotal elections in Europe dominated investor concerns. By the end of the period, global markets advanced amid strong corporate earnings and improving economic data in the U.S., Europe and Japan. Global markets were led by the information technology sector, as technology companies reported strong earnings.

Investments in the information technology sector contributed most to returns. The fund took advantage of the rally in the information technology sector, helped by investments in Tencent and Alibaba Group. Strong Chinese consumption contributed to revenue growth for both companies. Investments in the financials sector were also among the top contributors to the fund’s returns. HDFC Bank surged after the company reported a more than 18% increase in fourth-quarter profits as the bank continued to gain market share from state-owned banks. Investments in the energy sector hindered the fund’s returns. Tullow was among the top detractors to returns, as the company’s share price declined on write-downs due to the weakness in crude oil prices.

The fund’s portfolio managers strive to maintain a balanced approach and look for companies that have the potential to thrive in today’s uncertain political environment. That is why we take a multilayered approach to research, and invest in different geographies, industries and ultimately companies that can control their own destiny through efficiencies or innovative products.

 

Percent of net assets

 

Country diversification

Asia/Pacific Basin

  

Japan

     11.6

Hong Kong

     9.3  

China

     9.1  

India

     7.8  

South Korea

     6.5  

Australia

     1.8  

Thailand

     1.2  

Philippines

     1.1  
  

 

 

 
     48.4  
  

 

 

 

Europe

  

United Kingdom

     11.8  

France

     7.3  

Switzerland

     4.3  

Europe (continued)

  

Netherlands

     3.5

Germany

     2.3  

Spain

     2.3  

Italy

     1.7  

Denmark

     1.0  

Belgium

     1.0  

Other

     1.5  
  

 

 

 
     36.7  
  

 

 

 

The Americas

  

Canada

     2.0  

Brazil

     1.0  

United States

     .6  
  

 

 

 
     3.6  
  

 

 

 

Other regions

  

Israel

     1.4

South Africa

     .9  
  

 

 

 
     2.3  
  

 

 

 

Short-term securities & other assets less liabilities

     9.0  
  

 

 

 

Total

     100.0
  

 

 

 
 
 

Percent of net assets

 

Largest individual

equity securities

Tencent

     3.43

AIA Group

     3.34  

HDFC Bank

     3.33  

Samsung Electronics

     3.26  

Alibaba Group

     2.96  

Airbus Group

     2.40

Altice

     2.36  

Novartis

     1.86  

Kering

     1.67  

UniCredit

     1.65  
 
 

 

10   American Funds Insurance Series


International Fund

 

Average annual total

returns based on

a $1,000 investment

For periods ended June 30, 2017

      6 months      1 year      5 years      10 years  

Lifetime

(since May 1, 1990)

 

Expense

ratio

Class 1

   18.71%      24.54%      9.67%      3.17%   8.28%   .54%

Class 1A

   18.58         24.25         9.40         2.91      8.01      .792  

Class 2

   18.55         24.20         9.40         2.91      8.00      .79   

Class 3

   18.64         24.32         9.48         2.98      8.09      .72    

Class 4

   18.48         23.94         9.16         2.67      7.75      1.04     

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. Expense ratios are as of the fund’s prospectus dated May 1, 2017. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: MSCI. The MSCI index result reflects dividends net of withholding taxes and reinvestment of distributions.

2Based on estimated amounts for the current fiscal year.

 

Percent of net assets

 

Where the fund’s

assets were

invested as of

June 30, 2017

LOGO

 

 

American Funds Insurance Series   11


New World Fund®

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

New World Fund gained 14.48% for the six months ended June 30, 2017. Its benchmark indexes, the MSCI ACWI (All Country World Index) and the MSCI Emerging Markets Index,1 rose 11.48% and 18.43%, respectively.

It was a challenging start to the year as rising populism, the U.K.’s vote to depart the EU by March 2019, and pivotal elections in Europe dominated investor concerns. By the end of the period, global markets advanced amid strong corporate earnings and improving economic data in the U.S., Europe and Japan. Global markets were led by the information technology sector, as technology companies reported strong earnings.

Investments in India were the most additive to the fund’s returns, with Reliance Industries and HDFC Bank among the top contributors to results. Reliance Industries rose as the company launched India’s largest fourth-generation, mobile-telecom network and reported strong earnings from its refining and petrochemical businesses. HDFC Bank also surged after the company reported a more than 18% increase in fourth-quarter profits as the bank continued to gain market share from state-owned banks. Russian food retailer Lenta was a key detractor hurt by lower profits amid sluggish consumer demand. Reliance Communications also detracted from the fund’s returns as the company reported fourth-quarter losses.

While political and economic uncertainty remains, the fund’s portfolio managers continue to carefully monitor the portfolio while also looking for idiosyncratic investment opportunities when stock prices are favorable.

 

Percent of net assets

 

Country diversification

Asia/Pacific Basin

  

India

     11.2

China

     9.6  

Japan

     7.3  

Taiwan

     4.3  

Indonesia

     2.1  

Australia

     1.8  

South Korea

     1.6  

Hong Kong

     1.3  

Thailand

     1.1  

Other

     .2  
  

 

 

 
     40.5  
  

 

 

 

The Americas

  

United States

     19.2

Brazil

     6.8  

Mexico

     4.7  

Argentina

     2.1  

Other

     .6  
  

 

 

 
     33.4  
  

 

 

 

Europe

  

United Kingdom

     7.5  

Russian Federation

     3.4  

France

     2.6  

Switzerland

     1.5  

Other

     2.5  
  

 

 

 
     17.5  
  

 

 

 

Other regions

  

South Africa

     1.6

Other

     .8  
  

 

 

 
     2.4  
  

 

 

 

Short-term securities & other assets less liabilities

     6.2  
  

 

 

 

Total

     100.0
  

 

 

 
 
 

Percent of net assets

 

Largest individual

equity securities

Reliance Industries

     4.41

British American Tobacco

     3.12  

TSMC

     2.93  

Murata Manufacturing

     2.81  

Alphabet

     2.51  

IEnova

     2.29

HDFC Bank

     2.12  

Facebook

     1.91  

SoftBank

     1.67  

Samsung Electronics

     1.62  
 
 

 

12   American Funds Insurance Series


New World Fund

 

Average annual

total returns based on

a $1,000 investment

For periods ended June 30, 2017

      6 months      1 year      5 years      10 years   Lifetime
(since June 17, 1999)
 

Expense

ratio

Class 1

   14.59%      18.19%      6.42%      3.73%   8.31%     .78%

Class 1A

   14.49         17.93         6.16         3.48      8.04      1.032  

Class 2

   14.48         17.85         6.14         3.48      8.04      1.03   

Class 4

   14.32         17.59         5.91         3.23      7.78      1.28   

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. Expense ratios are as of the fund’s prospectus dated May 1, 2017. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: MSCI. Results for MSCI indexes reflect dividends net of withholding taxes and reinvestment of distributions.

2Based on estimated amounts for the current fiscal year.

 

Percent of net assets

 

Where the fund’s

assets were

invested as of

June 30, 2017

LOGO

 

 

American Funds Insurance Series   13


Blue Chip Income and Growth Fund

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Blue Chip Income and Growth Fund gained 5.76% for the six months ended June 30, 2017, trailing its benchmark index, Standard & Poor’s 500 Composite Index,1 which rose 9.34%.

U.S. stocks rose to new highs led by strong corporate earnings and improving economic sentiment. Positive economic data on employment and industrial production bolstered optimism in the economy. Information technology stocks advanced, led by tech giants such as Alphabet and Apple, amid growing optimism over consumer demand. Defensive sectors also rose, led by health care and consumer staples.

Investments in industrials and consumer staples boosted the fund’s returns. Among the fund’s top contributors to returns (posting double-digit gains) was industrials company CSX as the company appointed a new CEO and took cost-cutting measures to spur a turnaround. Consumer staples company Philip Morris International was also among the fund’s top contributors as the company climbed to record highs.

Investments in the energy sector hindered returns as the price of oil declined amid concerns of oversupply. Energy exploration and production companies Halliburton and Canadian Natural Resources hindered returns.

Given the fund’s focus on investing in dividend-paying stocks, lower-than-index investments and stock selection in information technology were a drag on relative returns. On a country basis, lower-than-index investments in U.S. domiciled companies also detracted from the fund’s relative returns.

The fund’s portfolio managers are keeping a close watch on the U.S. economy, which continues to show modest economic growth. Portfolio managers continue to favor well-managed, high-quality companies that are capable of generating positive cash flow in myriad economic environments and remain optimistic that our global research will help us identify attractive long-term investment opportunities.

 

Percent of net assets

 

Largest individual

equity securities

AbbVie

     5.52

Amgen

     4.59  

Verizon Communications

     4.43  

JPMorgan Chase

     4.00  

Wells Fargo

     3.40  

Prudential Financial

     3.22

Apple

     3.22  

Altria

     3.15  

Intel

     2.84  

Texas Instruments

     2.28  
 
 

 

14   American Funds Insurance Series


Blue Chip Income and Growth Fund

 

Average annual

total returns based on

a $1,000 investment

For periods ended June 30, 2017

      6 months   1 year   5 years   10 years   Lifetime
(since July 5, 2001)
  Expense
ratio

Class 1

   5.82%   14.53%   14.71%   6.50%   6.38%   .41%

Class 1A

   5.74      14.30      14.43      6.24      6.12      .662  

Class 2

   5.76      14.24      14.43      6.24      6.12      .66   

Class 4

   5.52      13.88      14.26      6.03      5.89      .91   

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008, and from February 1, 2014, through January 31, 2015. Applicable fund results shown reflect the waiver, without which they would have been lower. Expense ratios are as of the fund’s prospectus dated May 1, 2017. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: S&P Dow Jones Indices LLC.

2Based on estimated amounts for the current fiscal year.

 

 

Percent of net assets

 

Where the fund’s

assets were

invested as of

June 30, 2017

 

LOGO

 

 

American Funds Insurance Series  

15


Global Growth and Income Fund

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Global Growth and Income Fund gained 14.70% for the six months ended June 30, 2017, in line with the MSCI ACWI (All Country World Index),1 which rose 11.48%.

Global stocks rallied amid strong corporate earnings and improving economic data in the U.S., Europe and Japan. Several key market indexes hit a series of new highs, despite political uncertainty. U.S. equity markets surged in anticipation of lower regulation and tax cuts, led by information technology stocks. European stocks also climbed higher despite the U.K’s pivotal vote to leave the European Union. Markets cheered Emmanuel Macron’s victory in the French presidential election as the centrist leader pledged to keep France in the European Union. Emerging markets enjoyed strong returns as well, buoyed by strong earnings growth of technology companies.

Several sectors, led by information technology, made positive contributions to the fund’s returns. The fund’s holdings in Nintendo, Broadcom and TSMC were among the top contributors to results. Nintendo shares soared to an eight-year high on optimism that more third-party developers would create games for the company’s new flagship console. Semiconductor manufacturer TSMC rose, fueled by higher demand for smartphone microchips and optimism over demand for Apple’s next iPhone. Semiconductor manufacturer Broadcom also rose as the company’s second-quarter earnings topped analyst estimates.

Exposure to the energy sector was a drag on the fund’s returns. Among the fund’s top detractors to returns were Helmerich & Payne, BP and Royal Dutch Shell, which slid as oil prices declined on concerns of oversupply.

The fund’s cash position enables portfolio managers to better navigate a challenging environment by focusing on opportunities when stock prices are favorable. The fund’s portfolio managers are also optimistic they can uncover promising long-term investment opportunities, and companies with sustainable dividends and income.

 

Percent of net assets

 

Country diversification

The Americas

  

United States

     35.4

Mexico

     3.5  

Canada

     2.3  

Brazil

     1.6  

Argentina

     .3  
  

 

 

 
       43.1  
  

 

 

 

Europe

  

United Kingdom

     12.5  

Switzerland

     4.9  

France

     4.2  

Germany

     3.9  

Denmark

     1.2  

Europe (continued)

  

Ireland

     1.2

Other

     2.1  
  

 

 

 
       30.0  
  

 

 

 

Asia/Pacific Basin

  

Japan

     8.2  

Taiwan

     5.0  

India

     2.7  

China

     2.0  

Australia

     1.2  

Other

     2.7  
  

 

 

 
     21.8  
  

 

 

 

Short-term securities & other assets less liabilities

     5.1
  

 

 

 

Total

     100.0
  

 

 

 
 
 

Percent of net assets

 

Largest individual

equity securities

Nintendo

     4.81

British American Tobacco

     4.03  

TSMC

     3.36  

Microsoft

     3.23  

Nestlé

     2.51  

UnitedHealth Group

     2.44

Broadcom

     2.26  

Airbus Group SE

     1.98  

IEnova

     1.73  

Murata Manufacturing

     1.44  
 
 

 

16   American Funds Insurance Series


Global Growth and Income Fund

 

Average annual

total returns based on

a $1,000 investment

For periods ended June 30, 2017

      6 months      1 year      5 years      10 years   Lifetime
(since May 1, 2006)
  Expense
ratio

Class 1

   14.88%      21.35%      12.12%      5.61%   6.72%     .63%

Class 1A

   14.87         21.20         11.87         5.36      6.46      .882

Class 2

   14.70         21.02         11.85         5.34      6.45      .88

Class 4

   14.58         20.71         11.61         5.10      6.20      1.13   

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from May 1, 2006, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. Expense ratios are as of the fund’s prospectus dated May 1, 2017. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source MSCI. The MSCI index result reflects dividends net of withholding taxes and reinvestment of distributions.

2Based on estimated amounts for the current fiscal year.

 

Percent of net assets

 

Where the fund’s

assets were

invested as of

June 30, 2017

LOGO

 

 

American Funds Insurance Series   17


Growth-Income Fund

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Growth-Income Fund gained 9.77% for the six months ended June 30, 2017. Standard & Poor’s 500 Composite Index,1 a market capitalization-weighted index based on the results of approximately 500 widely held common stocks, rose 9.34%.

U.S. stocks rose to new highs led by strong corporate earnings and improving economic sentiment, as well as the anticipation of fewer regulations and more tax cuts. Positive economic data on employment and industrial production bolstered optimism in the economy. Information technology stocks advanced, led by tech giants such as Alphabet and Apple, amid growing optimism over consumer demand. Defensive sectors also rose, led by health care and consumer staples.

Regarding the fund, stock selection and an overweight position in consumer discretionary contributed most to the fund’s returns. Among the fund’s top contributors to results (posting double-digit gains) was consumer discretionary company Amazon. An increase in revenue from Amazon Web Services contributed to the company’s strong first-quarter earnings.

The fund’s weakest sector on an absolute basis was energy, impacted by persistent oversupply concerns that continued to drive oil prices lower. Investments in the telecommunication services sector also hindered returns and Verizon Communications was among the top detractors as the company reported first-quarter earnings that missed analyst expectations.

The portfolio managers exercise some caution when considering the potential impact on the U.S. economy and markets that could result from the new administration’s lack of success so far in various reforms. Should uncertainty eventually result in increased volatility, the fund’s healthy cash position can give portfolio managers an opportunity to invest in companies with more favorable valuations for the long term. The portfolio managers remain confident in our robust research process and its ability to identify attractive investments.

 

Percent of net assets

 

Largest individual

equity securities

Amazon

     3.64

Microsoft

     2.24  

Alphabet

     2.21  

Netflix

     1.97  

AbbVie

     1.94  

Amgen

     1.74

Verizon Communications

     1.71  

Texas Instruments

     1.63  

Broadcom

     1.53  

JPMorgan Chase

     1.46  
 
 

 

18   American Funds Insurance Series


Growth-Income Fund

 

Average annual

total returns based on

a $1,000 investment

For periods ended June 30, 2017

      6 months      1 year      5 years      10 years   Lifetime
(since February 8, 1984)
 

Expense

ratio

Class 1

   9.90%      19.02%      15.01%      6.72%   11.27%   .29%

Class 1A

   9.85         18.82         14.74         6.46      10.99      .542  

Class 2

   9.77         18.70         14.72         6.45      10.96      .54   

Class 3

   9.83         18.82         14.80         6.53      11.07      .47   

Class 4

   9.64         18.43         14.47         6.20      10.72      .79   

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. Expense ratios are as of the fund’s prospectus dated May 1, 2017. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: S&P Dow Jones Indices LLC.

2Based on estimated amounts for the current fiscal year.

 

Percent of net assets

 

Where the fund’s

assets were

invested as of

June 30, 2017

 

LOGO

 

 

American Funds Insurance Series   19


International Growth and Income Fund

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

International Growth and Income Fund rose 15.48% for the six months ended June 30, 2017, while the MSCI ACWI (All Country World Index) ex USA1 gained 14.10%.

Strong corporate earnings and improving economic data in the U.S., Europe and Japan, with a backdrop of supportive global monetary policy, helped to diminish investors’ concerns about increasing populism and geopolitical uncertainty. Information technology stocks led U.S. markets higher, as the share price of U.S. tech giants Apple and Alphabet advanced. European stocks also climbed higher despite the U.K’s pivotal vote to leave the European Union. Markets cheered Emmanuel Macron’s victory in the French presidential election as the centrist leader pledged to keep France in the European Union. Emerging markets enjoyed strong returns buoyed by strong earnings from technology companies.

The top contributor to the fund’s results was the financials sector. HDFC Bank surged after the company reported a more than 18% increase in fourth-quarter profits as the bank continued to gain market share from state-owned banks. HDFC Bank was among the top contributors to the fund’s returns. On the downside, investments in the energy sector detracted from returns as the price of crude oil slipped on concerns of oversupply. Among stock investments, Teva Pharmaceutical dragged down results as the company missed first-quarter revenue expectations.

By region, holdings in the U.S., India and Hong Kong contributed to relative returns, and holdings in China, Israel and Sweden were a drag on relative returns.

As geopolitics weigh on investor sentiment, the fund’s portfolio managers are optimistic that our global research and the fund’s flexible mandate can help us identify attractive investment opportunities.

 

Percent of net assets

 

Country diversification

Europe

  

United Kingdom

     21.0

France

     6.9  

Switzerland

     4.9  

Spain

     3.9  

Germany

     2.4  

Portugal

     2.0  

Netherlands

     1.8  

Italy

     1.8  

Denmark

     1.6  

Other

     3.4  
  

 

 

 
     49.7  
  

 

 

 

Asia/Pacific Basin

  

Hong Kong

     7.4  

Japan

     4.7  

Asia/Pacific Basin (continued)

 

South Korea

     3.9

China

     3.8  

India

     3.5  

Taiwan

     2.9  

Thailand

     1.9  

Australia

     1.2  

Other

     .4  
  

 

 

 
     29.7  
  

 

 

 

The Americas

  

United States

     2.6  

Brazil

     1.6  

Canada

     1.3  

Other

     .8  
  

 

 

 
     6.3  
  

 

 

 

Other regions

  

Israel

     2.1

Other

     .6  
  

 

 

 
     2.7  
  

 

 

 

Short-term securities & other assets less liabilities

     11.6  
  

 

 

 

Total

     100.0
  

 

 

 
 
 

Percent of net assets

 

Largest individual

equity securities

HDFC Bank

     3.52

Royal Dutch Shell

     3.37  

Imperial Brands

     2.39  

TSMC

     2.32  

Cheung Kong Property Holdings

     2.18  

Samsung Electronics

     2.06

Novartis

     2.06  

Shanghai International Airport Co., Ltd., Class A

     2.05  

Capita PLC

     2.00  

Teva Pharmaceutical Industries Ltd. (ADR)

     1.88  
 
 

 

20   American Funds Insurance Series


International Growth and Income Fund

 

Average annual

total returns based on

a $1,000 investment

For periods ended June 30, 2017

      6 months      1 year      5 years   Lifetime
(since November 18, 2008)
 

Expense

ratio

Class 1

   15.54%      16.13%      7.19%   9.97%     .68%

Class 1A

   15.53         15.98         6.95      9.71        .932  

Class 2

   15.48         15.89         6.93      9.70        .93   

Class 4

   15.29         15.52         6.74      9.46      1.18   

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from November 18, 2008, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. Expense ratios are as of the fund’s prospectus dated May 1, 2017. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: MSCI. The MSCI index result reflects dividends net of withholding taxes and reinvestment of distributions.

2Based on estimated amounts for the current fiscal year.

 

Percent of net assets

 

Where the fund’s

assets were

invested as of

June 30, 2017

LOGO

 

 

American Funds Insurance Series   21


Capital Income Builder®

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Capital Income Builder, a mix of stocks and bonds, rose 8.15% for the six months ended June 30, 2017. During the same period, the MSCI ACWI (All Country World Index)1 rose 11.48%. The Bloomberg Barclays U.S. Aggregate Index2 gained 2.27%. The index blend of 70%/30% MSCI ACWI/Bloomberg Barclays U.S. Aggregate Index3 rose 8.65%. The Lipper Global Equity Income Funds Average4 a measure of similar funds, increased 8.92%.

Global stocks rose amid strong corporate earnings and improving economic data in the U.S., Europe and Japan. Several key market indexes hit a series of new highs. U.S. equity markets surged in anticipation of lower regulation and tax cuts. Information technology stocks led markets higher. European stocks climbed higher despite the U.K’s pivotal vote to leave the European Union. Markets cheered Emmanuel Macron’s victory in the French presidential election as the centrist leader pledged to keep France in the European Union.

In the equity portfolio, the top contributor to the fund’s returns was the consumer staples sector due in part to good stock selection. Consumer staples company Philip Morris International was among the top contributors to returns, as the company reached record highs and registered double-digit gains. The fund’s fixed income holdings also rose on an absolute basis, contributing to the fund’s objective of generating a stream of income for its investors.

Given the fund’s focus on investing in stocks that pay dividends, we did not hold non-yielding information technology stocks that were strong in the first half. This hindered relative returns. Investments in the energy sector were also a detractor as the price of oil declined due to concerns of oversupply. Energy exploration and production company Helmerich & Payne and oil transportation company Inter Pipeline detracted from the fund’s returns.

The fund’s portfolio managers are keeping a close watch on the U.S. economy, which continues to show modest economic growth. Portfolio managers continue to maintain an overweight position in defensive sectors such as consumer staples, telecommunication services and utilities. They continue to search for companies dedicated to both paying dividends and increasing them over time to meet the fund’s objectives of providing above-average and growing income.

 

Percent of net assets

 

Country diversification

The Americas

  

United States

     51.4

Canada

     2.3  
  

 

 

 
       53.7  
  

 

 

 

Europe

  

United Kingdom

     15.3  

France

     3.3  

Switzerland

     2.8  

Sweden

     2.5  

Finland

     2.2  

Italy

     1.9  

Other

     3.5  
  

 

 

 
       31.5  
  

 

 

 

Asia/Pacific Basin

  

Hong Kong

     2.1

Singapore

     1.9  

Australia

     1.8  

Taiwan

     1.6  

Other

     1.9  
  

 

 

 
       9.3  
  

 

 

 

Other regions

  

United Arab Emirates

     .2
  

 

 

 

Short-term securities & other assets less liabilities

     5.3  
  

 

 

 

Total

     100.0
  

 

 

 
 
 

 

22   American Funds Insurance Series


Capital Income Builder

 

Average annual

total returns based on

a $1,000 investment

For periods ended June 30, 2017

        6 months      1 year   Lifetime
(since May 1, 2014)
  Expense
ratio

Class 1

     8.27%      6.94%   3.51%     .54%

Class 1A

     8.12         6.65      3.24        .805  

Class 2

     8.15         6.73      3.44        .80   

Class 4

     7.92         6.43      2.99      1.04   

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. Expense ratios are as of the fund’s prospectus dated May 1, 2017. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: MSCI. The MSCI index result reflects dividends net of withholding taxes and reinvestment of distributions.

2Source: Bloomberg Index Services Ltd.

3Data sources: MSCI and Bloomberg Index Services Ltd. The 70%/30% MSCI ACWI/Bloomberg Barclays U.S. Aggregate Index blends the MSCI ACWI (All Country World Index) with the Bloomberg Barclays U.S. Aggregate Index by weighting their total returns at 70% and 30%, respectively. Its result assumes the blend is rebalanced monthly.

4Source: Thomson Reuters Lipper.

5Based on estimated amounts for the current fiscal year.

 

Percent of net assets

 

Where the fund’s

assets were

invested as of

June 30, 2017

 

LOGO

 

 

American Funds Insurance Series   23


Asset Allocation Fund

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Asset Allocation Fund, which is a mix of stocks and bonds, rose 8.17% for the six months ended June 30, 2017. Standard & Poor’s 500 Composite Index,1 the benchmark for the fund’s equity holdings, gained 9.34% over the same period, while the Bloomberg Barclays U.S. Aggregate Index,2 which measures investment-grade U.S. bonds (rated BBB/Baa and above), rose 2.27%. A blend of the two indexes, the 60%/40% S&P 500/Bloomberg Barclays U.S. Aggregate Index,3 advanced 6.48%.

U.S. stocks rose to new highs led by strong corporate earnings and improving economic sentiment. Positive economic data on employment and industrial production bolstered optimism in the economy. Information technology stocks advanced, led by tech giants such as Alphabet, Facebook and Apple, amid growing optimism over consumer demand. Defensive sectors also rose, led by health care and consumer staples. Bonds also advanced, led by U.S. long credit.

Investments in the information technology and consumer staples sectors boosted the fund’s returns. Consumer staples company Philip Morris International climbed to record highs and was the top contributor to results. Holdings in the energy sector detracted the most from the fund’s returns as oil prices slumped. Noble Energy and Weatherford International slid amid investor concerns about a glut of crude oil.

The fund’s relatively defensive interest rate exposure compared to its fixed income benchmark was additive to results. Federal agency mortgage-backed securities also accounted for gains.

The fund’s portfolio managers are keeping a close watch on the U.S. economy, which continues to show modest economic growth. They continue to favor well-managed companies that are capable of generating positive cash flow and dividend income for investors in myriad economic environments. The fund’s cash position allows portfolio managers to remain flexible and better navigate uncertainty by focusing on opportunities when stock prices are favorable.

 

 

Percent of net assets

 

Largest individual

equity securities

Microsoft

     3.15

TSMC

     2.55  

Philip Morris International

     2.38  

Comcast

     2.02  

UnitedHealth Group

     1.91  

JPMorgan Chase

     1.70

Lockheed Martin

     1.67  

Johnson & Johnson

     1.60  

Chubb

     1.51  

DuPont

     1.50  
 
 

 

24   American Funds Insurance Series


Asset Allocation Fund

 

Average annual

total returns based on

a $1,000 investment

For periods ended June 30, 2017

      6 months      1 year      5 years      10 years   Lifetime
(since August 1,1989)
  Expense
ratio

Class 1

   8.28%      13.41%      11.27%      6.26%   8.57%     .29%

Class 1A

   8.23         13.21         11.01         6.00      8.30      .544

Class 2

   8.17         13.16         10.99         5.99      8.29      .54

Class 3

   8.20         13.25         11.08         6.07      8.37      .47

Class 4

   8.02         12.89         10.82         5.77      8.05      .79

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. Expense ratios are as of the fund’s prospectus dated May 1, 2017. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: S&P Dow Jones Indices LLC.

2Source: Bloomberg Index Services Ltd.

3Data sources: S&P Dow Jones Indices LLC and Bloomberg Index Services Ltd. The 60%/40% S&P 500/Bloomberg Barclays U.S. Aggregate Index blends the S&P 500 with the Bloomberg Barclays U.S. Aggregate Index by weighting their total returns at 60% and 40%, respectively. Its result assumes the blend is rebalanced monthly.

4Based on estimated amounts for the current fiscal year.

 

Percent of net assets

 

Where the fund’s

assets were

invested as of

June 30, 2017

LOGO

 

 

American Funds Insurance Series   25


Global Balanced Fund

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Global Balanced Fund rose 11.12% for the six months ended June 30, 2017. The MSCI ACWI (All Country World Index),1 which measures global stocks, gained 11.48%, while the Bloomberg Barclays Global Aggregate Index,2 a measure of investment-grade bonds (rated BBB/Baa and above), increased 4.41%. The 60%/40% MSCI ACWI/ Bloomberg Barclays Global Aggregate Index3 rose 8.61%.

Several key market indexes hit a series of new highs as the U.S. continued to demonstrate slow and steady economic expansion. The Federal Reserve raised the benchmark federal funds rate by a quarter percentage point twice this year, reassuring investors of persistent U.S. economic strength.

Overseas, European stocks rose despite political turmoil ahead of pivotal elections in the U.K. and France that served as referendums on the future of Europe. Markets cheered Emmanuel Macron’s victory as the centrist leader pledged to keep France in the European Union. Emerging markets also enjoyed some of the best results with solid gains across Asia.

Strong selection and larger-than-index investments in consumer staples were beneficial and contributed the most to the fund’s returns. Consumer staples company British American Tobacco was among the fund’s top contributors to returns (posting double-digit gains). British American Tobacco rose as the company’s vaping business gained market share in Europe. The company expected that a weak pound would have a positive impact on the company’s profits repatriated to the U.K. Consumer staples company Philip Morris International also boosted the fund’s results, as the company’s shares reached record highs.

Larger-than-index investments in the energy sector were a detractor, hurt by concerns of an oversupply of crude oil that drove oil prices lower. Energy exploration and production companies LUKOIL PJSC and ConocoPhillips, oil-field services company Schlumberger and energy delivery company Enbridge were among the top detractors.

In fixed income, above-benchmark investments in Mexican debt and lower-than-index investments in euro-denominated debt contributed to relative returns. Exposure to select currencies, such as the Polish zloty, was also additive to relative results.

The fund’s portfolio managers exercise caution amid geopolitical uncertainty and continue to stay the course of focusing on global research and bottom-up analysis. As valuations for many companies are up, security selection is particularly important at this point in the market cycle. Portfolio managers continue to monitor changes in consumer behavior, the democratization of technology and e-commerce that present opportunities in the consumer staples sector for long-term investors.

 
    Percent of net assets         Percent of net assets

Largest sectors

  Information technology   12.5%     Largest fixed income     U.S. Treasury    8.5%

in common stock                      

  Consumer staples   7.9        holdings (by issuer)   Japanese Government    2.7   

holdings

  Industrials   7.4          Polish Government    1.4   
 

Financials

  6.6          Mexican Government    1.2   
  Health care   5.7          Spanish Government    .8   

 

26

  American Funds Insurance Series


Global Balanced Fund

 

Percent of net assets

 

Currency

diversification

     

Equity securities

 

Bonds &
notes

  Forward
currency
contracts
  Short-term
securities &
other assets
less liabilities
  Total

U.S. dollars

       32.9 %       16.7 %       (.1 )%       6.0 %       55.5 %

Euros

       7.6       3.2       1.6       -       12.4

British pounds

       6.9         .9       (.8 )       -         7.0

Japanese yen

       3.4       2.7         .8       -         6.9

Swiss franc

       2.4       -       -       -         2.4

Swedish kronor

       1.5       -       .5       -         2.0

Hong Kong dollars

       1.7       -       -       -         1.7

New Taiwan dollars

       1.6       -       -       -         1.6

Polish zloty

       -       1.4       (.1 )       -         1.3

Indian rupees

         .6         .7       (.3 )       -         1.0

Other currencies

       4.2       5.6       (1.6 )       -         8.2
                    

 

 

 
                       100.0 %
                    

 

 

 
 

Percent of net assets

 

Largest individual

equity securities

Nintendo

     2.29

British American Tobacco

     1.98  

Microsoft

     1.81  

Humana

     1.73  

ASML Holding

     1.61  

TSMC

     1.57

JPMorgan Chase

     1.35  

Merck

     1.29  

Boeing

     1.26  

Philip Morris International

     1.22  
 
 

      

 

Average annual

total returns based on

a $1,000 investment

For periods ended June 30, 2017           
      6 months     1 year     5 years     Lifetime
(since May 2, 2011)
    Expense
ratio
 

Class 1

     11.19%       12.47%       7.36%       5.67%         .72%  

Class 1A

     11.19          12.33          7.12          5.43          .974  

Class 2

     11.12          12.22          7.11          5.42          .97    

Class 4

     11.00          12.01          7.07          5.34          1.24     

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. Expense ratios are as of the fund’s prospectus dated May 1, 2017. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: MSCI. The MSCI index result reflects dividends net of withholding taxes and reinvestment of distributions.

2Source: Bloomberg Index Services Ltd.

3Data sources: MSCI and Bloomberg Index Services Ltd. The 60%/40% MSCI ACWI/Bloomberg Barclays Global Aggregate Index blends the MSCI ACWI (All Country World Index) with the Bloomberg Barclays Global Aggregate Index by weighting their cumulative total returns at 60% and 40%, respectively. Its result assumes the blend is rebalanced monthly.

4Based on estimated amounts for the current fiscal year.

 

Percent of net assets

 

Where the fund’s

assets were

invested as of

June 30, 2017

LOGO

 

 

American Funds Insurance Series   27


Bond Fund

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Bond Fund gained 2.51% for the six months ended June 30, 2017, outpacing its benchmark, the Bloomberg Barclays U.S. Aggregate Index1 which rose 2.27%.

U.S. bond markets generated modest returns amid political uncertainty and a mixed global economy. The Federal Reserve raised the benchmark federal funds rate by a quarter percentage point twice this year, reassuring investors of persistent U.S. economic strength. The yield on the benchmark 10-year Treasury note fell 14 basis points to end the six-month period at 2.31%.

The fund had a modestly overweight duration relative to the benchmark, which generally helped returns as yields marginally declined. The fund also benefited from sector allocation, with U.S. high-yield securities contributing most to the fund.

On the whole, the U.S. economy appears to be in good shape and is expected to grow at a moderate pace. As U.S. interest rates increase, investors have the opportunity of reinvesting at higher yields. The fund’s portfolio managers expect continued investor demand for flight-to-safety assets and higher yields. Given uncertainty over how the Federal Reserve will reduce assets on its balance sheet, portfolio managers may experience periods of volatility in the months ahead. Nonetheless, they will continue to search the bond market for promising investment opportunities.

 

Percent of net assets

 

Largest holdings

(by issuer)

U.S. Treasury

     21.2

Freddie Mac

     10.8  

Fannie Mae

     10.5  

Ginnie Mae

     5.4  

Mexican Government

     2.2  

Japanese Government

     1.5

Portuguese Government

     1.4  

State of Illinois

     1.1  

Pemex

     .9  

Enbridge Energy Partners, LP

     .9  
 
 

 

28   American Funds Insurance Series


Bond Fund

 

Average annual

total returns based on

a $1,000 investment

For periods ended June 30, 2017

      6 months   1 year   5 years   10 years   Lifetime
(since January 2, 1996)
  Expense
ratio

Class 1

   2.62%   .32%   2.45%   3.28%   4.80%   .38%

Class 1A

   2.52      .10      2.20      3.03      4.54      .632  

Class 2

   2.51      .06      2.19      3.02      4.54      .63   

Class 4

   2.29       -.18        1.96      2.78      4.28      .88   

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. Expense ratios are as of the fund’s prospectus dated May 1, 2017. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: Bloomberg Index Services Ltd.

2Based on estimated amounts for the current fiscal year.

 

Percent of net assets

 

Where the fund’s

assets were

invested as of

June 30, 2017

 

LOGO

 

 

American Funds Insurance Series   29


Global Bond Fund

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Global Bond Fund rose 4.94% for the six months ended June 30, 2017, while the Bloomberg Barclays Global Aggregate Index1 rose 4.41%.

Global bond markets rose as a mixed global economy and political turmoil contributed to investor demand for perceived flight-to-safety assets and high quality credit. Although there was much optimism at the beginning of the year about U.S. fiscal policy designed to spur growth, uncertainty about fiscal expansion contributed to a weaker U.S. dollar. The Federal Reserve raised the benchmark federal funds rate by a quarter percentage point twice this year, reassuring investors of persistent U.S. economic strength. Global central banks kept monetary policy steady to remain flexible amid economic uncertainty. The yield on the benchmark 10-year Treasury note fell 14 basis points to end the period at 2.31%. Meanwhile, 10-year U.K. bonds traded at lower yields.

Low exposure to euro-denominated debt and Japanese debt combined with above-benchmark investments in Mexican debt contributed to relative returns. Exposure to select currencies, such as the Polish zloty and Hungarian forint, were also additive to relative results.

The fund’s portfolio managers maintain a cautious approach to investing in global bond markets, and believe that our global research can help identify attractive long-term investments around the world. Having the flexibility to diversify and adjust exposure by country, sector and currency continues to serve as a hallmark of the fund’s approach to global investing.

 

 

Percent of net assets

 

Currency weighting (after hedging) by country

 

United States2

       48.6 %

Japan

       16.1

Euro zone3

       11.4

United Kingdom

       3.6

Poland

       2.8

Norway

       2.1

Sweden

       2.0

Colombia

       1.3

Mexico

       1.1

India

       1.1

Turkey

       1.1

Denmark

       .9

Malaysia

       .9

Chile

       .8

Hungary

       .5

Thailand

       .4

Egypt

       .3

Argentina

       .2

Canada

       .2

Israel

       .2

Philippines

       .1

Other

       4.3
    

 

 

 

Total

       100.0 %
    

 

 

 

Non-U.S. government bonds by country

 

Euro zone3:

    

Germany

     3.5  

Portugal

     2.4    

Spain

     1.0    

Italy

     .8    

Other

     2.5       10.2
  

 

 

   

Japan

       9.1  

Poland

       4.5  

Mexico

       3.6  

India

       2.5  

Malaysia

       2.1  

Norway

       1.7  

Australia

       1.7  

United Kingdom

       1.6  

Colombia

       1.2  

Other

       9.3  
    

 

 

 

Total

       47.5
    

 

 

 
 

 

 

Percent of net assets

 

Largest holdings

(by issuer)

U.S. Treasury

     15.7

Japanese Government

     9.1  

Polish Government

     4.5  

Mexican Government

     3.6  

German Government

     3.3  

Indian Government

     2.4

Portuguese Government

     2.4  

Malaysian Government

     2.1  

Norwegian Government

     1.7  

Australian Government

     1.7  
 
 

 

30   American Funds Insurance Series


Global Bond Fund

 

Average annual

total returns based on a $1,000 investment

For periods ended June 30, 2017

      6 months      1 year      5 years      10 years   Lifetime
(since October 4, 2006)
  Expense
ratio

Class 1

   5.09%      .14%      1.32%      4.06%     4.21%   .57%

Class 1A

   5.08         .01         1.09        3.82      3.96   .824

Class 2

   4.94         -.17          1.06        3.80       3.945   .82

Class 4

   4.88         -.37          .90        3.59      3.73   1.07  

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from October 4, 2006, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. Expense ratios are as of the fund’s prospectus dated May 1, 2017. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: Bloomberg Index Services Ltd.

2Includes U.S. dollar-denominated debt of other countries, totaling 13.9%.

3Countries using the euro as a common currency; those represented in the fund’s portfolio are Belgium, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Slovenia and Spain.

4Based on estimated amounts for the current fiscal year.

5Global Bond Fund Class 2 shares were first sold on November 6, 2006. Results prior to that date are hypothetical based on Class 1 share results adjusted for estimated additional annual expenses of 0.25%.

 

Percent of net assets

 

Where the fund’s

assets were

invested as of

June 30, 217

LOGO

 

 

American Funds Insurance Series   31


High-Income Bond Fund

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

High-Income Bond Fund gained 4.43% for the six months ended June 30, 2017. The fund’s benchmark, the Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Capped Index,1 increased 4.92%.

Renewed investor expectations of more rapid economic growth led to higher interest rates as the Federal Reserve increased the benchmark federal funds rate in March and June of this year by a quarter percentage point each time. U.S. bond markets rose for the six-month period, led by U.S. long credit. The yield on the benchmark 10-year Treasury note fell 14 basis points to end the period at 2.31%, and the spread between U.S. corporate bonds and Treasuries declined by a modest 14 basis points.

The fund’s allocation to high-yield debt and exposure to short interest duration, or the fund’s relatively low sensitivity to interest rates compared with the benchmark, were additive to results. High-yield bond investments in the energy sector, however, detracted from returns as oil prices declined due to concerns of oversupply.

The fund’s portfolio managers believe current fundamentals support a constructive high-yield market environment. While we are monitoring the Federal Reserve’s tightening monetary policy, maturities in the high-yield market have tended to be shorter than some other markets, which should help dampen the effect of rising rates.

 

 

Percent of net assets

 

Largest holdings

(by issuer)

VRX

     2.8

Altice

     1.9  

Cheniere Energy

     1.8  

First Quantum Minerals

     1.7  

Tenet Healthcare

     1.5  

Sprint Nextel

     1.4

Chesapeake Energy

     1.4  

AES

     1.3  

Cliffs Natural Resources

     1.3  

CCO Holdings LLC and CCO Holdings Capital

     1.3  
 
 

 

32   American Funds Insurance Series


High-Income Bond Fund

 

Average annual

total returns based on

a $1,000 investment

For periods ended June 30, 2017

      6 months   1 year   5 years   10 years   Lifetime
(since February 8, 1984)
  Expense
ratio

Class 1

   4.60%   13.18%   5.79%   5.63%   8.94%   .49%

Class 1A

   4.60      13.03      5.56      5.38      8.67      .742  

Class 2

   4.43      13.00      5.54      5.37      8.61      .74   

Class 3

   4.46      12.94      5.59      5.44      8.74      .67   

Class 4

   4.29      12.63      5.37      5.15      8.41      .99   

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. Expense ratios are as of the fund’s prospectus dated May 1, 2017. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: Bloomberg Index Services Ltd.

2Based on estimated amounts for the current fiscal year.

 

Percent of net assets

 

Where the fund’s

assets were

invested as of

June 30, 2017

 

LOGO

 

 

American Funds Insurance Series  

33


Mortgage Fund

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Mortgage Fund gained 1.37% for the six months ended June 30, 2017, while the Bloomberg Barclays U.S. Mortgage-Backed Securities Index1 rose 1.35%.

The Federal Reserve increased the benchmark federal funds overnight lending rate in March and June of this year by a quarter percentage point each time. Long maturity U.S. Treasury yields modestly declined, pushing their prices higher. The housing market continued to function smoothly as home sales rose modestly and home prices increased about 5% on a year-over-year basis.

The fund’s investments in the agency mortgage-backed securities sector, inflation linked treasury bonds and securitized debt were additive to relative returns. As the yield curve flattened, the fund’s curve positioning detracted from relative returns.

The fund’s portfolio managers seek to identify high-quality mortgage-backed securities based on our bottom-up approach to investing. In the current environment, demand for fiight-to-safety assets and the fund’s low correlation to equities should help investors navigate macroeconomic and geopolitical uncertainty and remain well diversified.

 

 

Percent of net assets

 

Breakdown of

mortgage-backed

obligations

30-year pass-throughs:

       

Ginnie Mae

     14.1     

Fannie Mae

     6.8       

Freddie Mac

     27.9          48.8
  

 

 

      

Other

          13.2  
       

 

 

 

Total

          62.0
       

 

 

 
 

 

34   American Funds Insurance Series


Mortgage Fund

 

Average annual

total returns based on

a $1,000 investment

For periods ended June 30, 2017

      6 months   1 year   5 years   Lifetime
(since May 2, 2011)
  Expense
ratio

Class 1

   1.51%   1.12%   2.17%   2.83%   .46%

Class 1A

   1.41        .89      1.92      2.58      .712  

Class 2

   1.37        .85      1.91      2.58      .71   

Class 4

   1.25        .62      1.78      2.41      .96   

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. Expense ratios are as of the fund’s prospectus dated May 1, 2017. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: Bloomberg Index Services Ltd.

2Based on estimated amounts for the current fiscal year.

 

Percent of net assets

 

Where the fund’s

assets were

invested as of

June 30, 2017

 

LOGO

 

 

American Funds Insurance Series   35


Ultra-Short Bond Fund

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Ultra-Short Bond Fund gained 0.09% for the six months ended June 30, 2017, while the Bloomberg Barclays Short-Term Government/Corporate Index1 gained 0.43%.

The fund’s returns were higher than in 2016 as yields on three-month Treasury bills were up approximately 50 basis points since the end of last year. Short-term interest rates still remain near historically low levels.

The Federal Reserve raised the benchmark federal funds rate by a quarter percentage point twice this year, reassuring investors of persistent U.S. economic strength. Given these increases in interest rates, the fund’s portfolio managers believe the fund has the potential to provide current income.

 

 

36   American Funds Insurance Series


Ultra-Short Bond Fund

 

Average annual total returns based on a $1,000 investment

For periods ended June 30, 2017

      6 months   1 year      5 years      10 years   Lifetime
(since February 8, 1984)
  Expense
ratio

Class 1

      .27%      .36%         –.09%         .36%      3.53%     .35%

Class 1A

   .26   .23      –.31      .12   3.28   .602

Class 2

   .09   –.00        –.36      .09   3.24   .60 

Class 3

   .18   .09      –.29      .16   3.35   .53 

Class 4

   –.00     –.18        –.45      –.08    3.04   .85 

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. Expense ratios are as of the fund’s prospectus dated May 1, 2017. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1 Source: Bloomberg Index Services Ltd.

2 Based on estimated amounts for the current fiscal year.

 

Percent of net assets

 

Where the fund’s assets were invested as of June 30, 2017

Commercial paper

     68.9

Federal agency discount notes

     24.8  

Bonds & notes of governments & government agencies outside the U.S.

     3.2  

U.S. Treasury bills

     3.2  

Other assets less liabilities

     (.1
  

 

 

 

Total

     100.0
  

 

 

 
 

 

American Funds Insurance Series   37


U.S. Government/AAA-Rated Securities Fund

 

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

U.S. Government/AAA-Rated Securities Fund gained 1.76% for the six months ended June 30, 2017, while the Bloomberg Barclays U.S. Government/Mortgage-Backed Securities Index1 rose 1.64%.

The Federal Reserve increased the benchmark federal funds rate by a quarter percentage point twice this year – moves that lend credence to the case for continued domestic growth and economic stability. U.S. government debt rose modestly. The yield on the benchmark 10-year Treasury note declined by 14 basis points over the six months to end the period at 2.31%.

Some of the major themes driving the markets in the first half of 2017 were concerns about global economic growth, geopolitical events such as elections in Europe, and recent weak consumer price inflation in the U.S.

During the period, the fund’s duration contributed to relative returns. The fund also benefited from sector allocation, with U.S. agency securities contributing to relative returns. As the yield curve flattened, yield curve positioning detracted from relative returns.

The fund strives to meet its objective of providing a high level of current income consistent with the preservation of capital. The fund’s portfolio managers have positioned the fund with the expectation that rate hikes over the next two to three years will be at a slower pace than is currently priced into the market. They believe this can lead to a steepening yield curve and higher inflation expectations.

 

Percent of net assets

 

Breakdown of mortgage-backed obligations

30-year pass-throughs:

       

Freddie Mac

     10.5     

Fannie Mae

     13.2       

Ginnie Mac

       8.1          31.8
  

 

 

      

Other

          4.2  
       

 

 

 

Total

          36.0
       

 

 

 
 

 

38

  American Funds Insurance Series


U.S. Government/AAA-Rated Securities Fund

 

Average annual

total returns based on

a $1,000 investment

For periods ended June 30, 2017

      6 months      1 year      5 years      10 years   Lifetime
(since December 2, 1985)
 

Expense

ratio

Class 1

   1.87%        -.67%      1.63%      3.96%   5.96%     .36%

Class 1A

   1.86           -.80         1.40         3.72      5.70         .612  

Class 2

   1.76           -.93         1.36         3.70      5.66        .61   

Class 3

   1.83           -.86         1.43         3.78      5.77        .54   

Class 4

   1.62          -1.24         1.21         3.49      5.45        .86   

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008, and from July 1, 2010, through December 31, 2010. Applicable fund results shown reflect the waiver, without which they would have been lower. Expense ratios are as of the fund’s prospectus dated May 1, 2017. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: Bloomberg Index Services Ltd.

2Based on estimated amounts for the current fiscal year.

 

Percent of net assets

 

Where the fund’s

assets were

invested as of

June 30, 2017

 

LOGO

 

 

American Funds Insurance Series   39


Managed Risk Growth Fund

 

    

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Managed Risk Growth Fund gained 13.91% for the six months ended June 30, 2017. Standard & Poor’s 500 Managed Risk Index – Moderate Aggressive1 rose 7.89%. Standard & Poor’s 500 Composite Index,2 a market capitalization-weighted index based on the results of approximately 500 widely held common stocks, gained 9.34%.

The fund pursues its objective by investing in shares of American Funds Insurance Series – Growth FundSM while seeking to manage portfolio volatility and provide downside protection, primarily through the use of exchange-traded futures contracts. The benefit of the fund’s managed risk strategy should be most apparent during periods of high volatility and in down markets. In steady or rising markets, the fund’s results can be expected to lag those of the underlying fund.

While the underlying fund’s larger-than-index investments and strong stock selection in consumer discretionary and information technology added to returns, energy stocks detracted from the fund’s results.

 

  

 

Average annual total returns based on a $1,000 investment

For periods ended June 30, 2017

      6 months   1 year   Lifetime
(since May 1, 2013)
  Gross expense
ratio
  Net expense
ratio

Class P1

   14.10%   20.64%   8.32%   .87%   .71%

Class P2

   13.91       20.24       7.96      1.12        .96   

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. Expense ratios, which are restated for Class P1 shares to reflect current fees, are as of the fund’s prospectus dated May 1, 2017. The investment adviser is currently waiving a portion of its management fee equal to 0.05% of the fund’s net assets. In addition, the investment adviser is currently reimbursing a portion of miscellaneous expenses. Investment results and net expense ratios shown reflect the waiver and reimbursement, without which the results would have been lower and the expenses would have been higher. This waiver and reimbursement will be in effect through at least May 1, 2018, unless modified or terminated by the fund’s board. The adviser may elect at its discretion to extend, modify or terminate the reimbursement at that time. The waiver may only be modified or terminated with the approval of the fund’s board. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: S&P Dow Jones Indices LLC. Standard & Poor’s Managed Risk Index Series is designed to simulate a dynamic protective portfolio that allocates between the underlying equity index and cash, based on realized volatilities of the underlying equity and bond indexes, while maintaining a fixed allocation to the underlying bond index. These indexes are generated and published under agreements between Standard & Poor’s Dow Jones Indices and Milliman Financial Risk Management LLC.

2Source: S&P Dow Jones Indices LLC.

Milliman Financial Risk Management LLC serves as the subadviser with respect to the management of the fund’s managed risk strategy.

 

 

40   American Funds Insurance Series


Managed Risk International Fund

 

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Managed Risk International Fund advanced 16.57% for the six months ended June 30, 2017, outpacing the Standard & Poor’s EPAC Ex. Korea LargeMidCap Managed Risk Index – Moderate Aggressive,1 which rose 11.59%. The MSCI ACWI (All Country World Index) ex USA2 rose 14.10%.

The fund pursues its objective by investing in shares of American Funds Insurance Series – International FundSM while seeking to manage portfolio volatility and provide downside protection, primarily through the use of exchange-traded futures contracts. The benefit of the fund’s managed risk strategy should be most apparent during periods of high volatility and in down markets. In steady or rising markets, the fund’s results can be expected to lag those of the underlying fund.

The underlying fund’s investments in the information technology sector contributed most to returns, while holdings in the energy sector hindered returns.

 

  

 

Average annual total returns based on a $1,000 investment

For periods ended June 30, 2017

      6 months   1 year   Lifetime
(since May 1, 2013)
  Gross expense
ratio
  Net expense
ratio

Class P1

   16.87%   17.80%   2.40%   1.05%     .89%

Class P2

   16.57       17.37       2.00      1.30      1.14   

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. Expense ratios, which are restated for Class P1 shares to reflect current fees, are as of the fund’s prospectus dated May 1, 2017. The investment adviser is currently waiving a portion of its management fee equal to 0.05% of the fund’s net assets. In addition, the investment adviser is currently reimbursing a portion of miscellaneous expenses. Investment results and net expense ratios shown reflect the waiver and reimbursement, without which the results would have been lower and the expenses would have been higher. This waiver and reimbursement will be in effect through at least May 1, 2018, unless modified or terminated by the fund’s board. The adviser may elect at its discretion to extend, modify or terminate the reimbursement at that time. The waiver may only be modified or terminated with the approval of the fund’s board. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: S&P Dow Jones Indices LLC. Standard & Poor’s Managed Risk Index Series is designed to simulate a dynamic protective portfolio that allocates between the underlying equity index and cash, based on realized volatilities of the underlying equity and bond indexes, while maintaining a fixed allocation to the underlying bond index. These indexes are generated and published under agreements between Standard & Poor’s Dow Jones Indices and Milliman Financial Risk Management LLC.

2Source: MSCI. The MSCI index result reflects reinvestment of distributions and dividends net of withholding taxes.

Milliman Financial Risk Management LLC serves as the subadviser with respect to the management of the fund’s managed risk strategy.

 

 

American Funds Insurance Series   41


Managed Risk Blue Chip Income and Growth Fund

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Managed Risk Blue Chip Income and Growth Fund gained 5.11% for the six months ended June 30, 2017, trailing Standard & Poor’s 500 Managed Risk Index – Moderate Aggressive,1 which rose 7.89%. Standard & Poor’s 500 Composite Index,2 a market capitalization-weighted index based on the results of approximately 500 widely held common stocks, gained 9.34%.

The fund pursues its objective by investing in shares of American Funds Insurance Series – Blue Chip Income and Growth FundSM while seeking to manage portfolio volatility and provide downside protection, primarily through the use of exchange-traded futures contracts. The benefit of the fund’s managed risk strategy should be most apparent during periods of high volatility and in down markets. In steady or rising markets, the fund’s results can be expected to lag those of the underlying fund.

The underlying fund’s investments in industrials and consumer discretionary boosted fund results on a relative basis, while investments in the information technology sector were a drag on relative returns.

 

 

  

 

Average annual total returns based on a $1,000 investment

For periods ended June 30, 2017

      6 months   1 year   Lifetime
(since May 1, 2013)
  Gross expense
ratio
  Net expense
ratio

Class P1

   5.37%   12.31%   7.60%   .92%   .76%

Class P2

   5.11       11.89       7.21     1.17       1.01    

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. Expense ratios, which are restated for Class P1 shares to reflect current fees, are as of the fund’s prospectus dated May 1, 2017. The investment adviser is currently waiving a portion of its management fee equal to 0.05% of the fund’s net assets. In addition, the investment adviser is currently reimbursing a portion of miscellaneous expenses. Investment results and net expense ratios shown reflect the waiver and reimbursement, without which the results would have been lower and the expenses would have been higher. This waiver and reimbursement will be in effect through at least May 1, 2018, unless modified or terminated by the fund’s board. The adviser may elect at its discretion to extend, modify or terminate the reimbursement at that time. The waiver may only be modified or terminated with the approval of the fund’s board. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: S&P Dow Jones Indices LLC. Standard & Poor’s Managed Risk Index Series is designed to simulate a dynamic protective portfolio that allocates between the underlying equity index and cash, based on realized volatilities of the underlying equity and bond indexes, while maintaining a fixed allocation to the underlying bond index. These indexes are generated and published under agreements between Standard & Poor’s Dow Jones Indices and Milliman Financial Risk Management LLC.

2Source: S&P Dow Jones Indices LLC.

Milliman Financial Risk Management LLC serves as the subadviser with respect to the management of the fund’s managed risk strategy.

 

 

42   American Funds Insurance Series


Managed Risk Growth-Income Fund

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Managed Risk Growth-Income Fund gained 9.10% for the six months ended June 30, 2017, outpacing the Standard & Poor’s 500 Managed Risk Index – Moderate Aggressive,1 which rose 7.89%. Standard & Poor’s 500 Composite Index,2 a market capitalization-weighted index based on the results of approximately 500 widely held common stocks, gained 9.34%.

The fund pursues its objective by investing in shares of American Funds Insurance Series – Growth-Income FundSM while seeking to manage portfolio volatility and provide downside protection, primarily through the use of exchange-traded futures contracts. The benefit of the fund’s managed risk strategy should be most apparent during periods of high volatility and in down markets. In steady or rising markets, the fund’s results can be expected to lag those of the underlying fund.

The underlying fund’s stock selection and overweight position in consumer discretionary added the most to returns. The fund’s weakest sector on an absolute basis was energy, impacted by a decline in oil prices on concerns of oversupply.

 

  

 

Average annual total returns based on a $1,000 investment

For periods ended June 30, 2017

      6 months   1 year   Lifetime
(since May 1, 2013)
  Gross expense
ratio
  Net expense
ratio

Class P1

   9.11%   15.96%   7.83%   .83%   .67%

Class P2

   9.10      15.77      7.50      1.08        .92   

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. Expense ratios, which are restated for Class P1 shares to reflect current fees, are as of the fund’s prospectus dated May 1, 2017. The investment adviser is currently waiving a portion of its management fee equal to 0.05% of the fund’s net assets. In addition, the investment adviser is currently reimbursing a portion of miscellaneous expenses. Investment results and net expense ratios shown reflect the waiver and reimbursement, without which the results would have been lower and the expenses would have been higher. This waiver and reimbursement will be in effect through at least May 1, 2018, unless modified or terminated by the fund’s board. The adviser may elect at its discretion to extend, modify or terminate the reimbursement at that time. The waiver may only be modified or terminated with the approval of the fund’s board. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: S&P Dow Jones Indices LLC. Standard & Poor’s Managed Risk Index Series is designed to simulate a dynamic protective portfolio that allocates between the underlying equity index and cash, based on realized volatilities of the underlying equity and bond indexes, while maintaining a fixed allocation to the underlying bond index. These indexes are generated and published under agreements between Standard & Poor’s Dow Jones Indices and Milliman Financial Risk Management LLC.

2Source: S&P Dow Jones Indices LLC.

Milliman Financial Risk Management LLC serves as the subadviser with respect to the management of the fund’s managed risk strategy.

 

 

American Funds Insurance Series   43


Managed Risk Asset Allocation Fund

 

 

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Unit prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com/afis. For information about your insurance contract and month-end results, go to the website of the company that issued your contract.

Managed Risk Asset Allocation Fund rose 7.43% for the six months ended June 30, 2017, beating the Standard & Poor’s 500 Managed Risk Index – Moderate,1 which rose 7.16%. Standard & Poor’s 500 Composite Index,2 a market capitalization-weighted index based on the results of approximately 500 widely held common stocks, gained 9.34%, while the Bloomberg Barclays U.S. Aggregate Index,3 which measures investment-grade U.S. bonds (rated BBB/Baa and above), rose 2.27%.

The fund pursues its objective by investing in shares of American Funds Insurance Series – Asset Allocation FundSM while seeking to manage portfolio volatility and provide downside protection, primarily through the use of exchange-traded futures contracts. The benefit of the fund’s managed risk strategy should be most apparent during periods of high volatility and in down markets. In steady or rising markets, the fund’s results can be expected to lag those of the underlying fund.

The underlying fund’s investments in the information technology sector contributed the most to absolute returns. Holdings in the energy sector hindered returns as oil prices slumped on concerns of oversupply.

 

  

 

Average annual total returns based on a $1,000 investment

For periods ended June 30, 2017

      6 months   1 year   Lifetime
(since September 28, 2012)
  Gross expense
ratio
  Net expense
ratio

Class P1

   7.53%   12.01%   8.11%   .70%   .65%

Class P2

   7.43      11.74      7.84      .95      .90   

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. Expense ratios are as of the fund’s prospectus dated May 1, 2017. The investment adviser is currently waiving a portion of its management fee equal to 0.05% of the fund’s net assets. Investment results and net expense ratios shown reflect the waiver, without which the results would have been lower and the expenses would have been higher. This waiver will be in effect through at least May 1, 2018, unless modified or terminated by the fund’s board. The waiver may only be modified or terminated with the approval of the fund’s board. See the Financial Highlights table in this report for details.

Any market index shown is unmanaged and, therefore, has no expenses. Investors cannot invest directly in an index.

1Source: S&P Dow Jones Indices LLC. Standard & Poor’s Managed Risk Index Series is designed to simulate a dynamic protective portfolio that allocates between the underlying equity index and cash, based on realized volatilities of the underlying equity and bond indexes, while maintaining a fixed allocation to the underlying bond index. These indexes are generated and published under agreements between Standard & Poor’s Dow Jones Indices and Milliman Financial Risk Management LLC.

2Source: S&P Dow Jones Indices LLC.

3Source: Bloomberg Index Services Ltd.

Milliman Financial Risk Management LLC serves as the subadviser with respect to the management of the fund’s managed risk strategy.

 

 

44   American Funds Insurance Series


Global Growth Fund

 

Summary investment portfolio June 30, 2017    unaudited

 

Common stocks 97.12%    Shares        Value
(000)
 
                    
Information   

Taiwan Semiconductor Manufacturing Co., Ltd.

     27,614,000        $ 189,267  
technology   

Taiwan Semiconductor Manufacturing Co., Ltd. (ADR)

     335,000          11,712  
29.76%   

Alphabet Inc., Class A1

     140,400          130,527  
  

Alphabet Inc., Class C1

     71,052          64,567  
  

Nintendo Co., Ltd.

     516,200          172,931  
  

ASML Holding NV

     675,542          88,036  
  

ASML Holding NV (New York registered)

     643,900          83,907  
  

Facebook, Inc., Class A1

     898,500          135,656  
  

Alibaba Group Holding Ltd. (ADR)1

     781,050          110,050  
  

Microsoft Corp.

     1,380,000          95,123  
  

Visa Inc., Class A

     998,800          93,668  
  

Murata Manufacturing Co., Ltd.

     608,000          92,274  
  

Broadcom Ltd.

     392,200          91,402  
  

Samsung Electronics Co., Ltd.

     18,520          38,476  
  

Samsung Electronics Co., Ltd., nonvoting preferred

     18,500          30,107  
  

Tencent Holdings Ltd.

     1,800,000          64,369  
  

AAC Technologies Holdings Inc.

     4,418,540          55,236  
  

Just Eat PLC1

     5,264,900          44,915  
  

Other securities

          148,947  
          

 

 

 
             1,741,170  
          

 

 

 
                          
Consumer   

Amazon.com, Inc.1

     297,100          287,593  
discretionary   

Ulta Beauty, Inc.1

     315,300          90,598  
19.00%   

Home Depot, Inc.

     513,000          78,694  
  

Peugeot SA

     3,878,800          77,373  
  

Priceline Group Inc.1

     39,000          72,950  
  

Industria de Diseño Textil, SA

     1,723,000          66,142  
  

McDonald’s Corp.

     293,000          44,876  
  

Naspers Ltd., Class N

     208,300          40,522  
  

Other securities

          352,875  
          

 

 

 
             1,111,623  
          

 

 

 
                          
Health care   

Regeneron Pharmaceuticals, Inc.1

     243,700          119,691  
13.90%   

UnitedHealth Group Inc.

     344,700          63,914  
  

Bayer AG

     421,600          54,509  
  

Boston Scientific Corp.1

     1,779,200          49,319  
  

Express Scripts Holding Co.1

     720,200          45,978  
  

AstraZeneca PLC

     686,500          45,914  
  

Sartorius AG, non-registered shares, nonvoting preferred

     444,000          42,841  
  

Straumann Holding AG

     71,500          40,675  
  

Eurofins Scientific SE, non-registered shares

     68,145          38,383  
  

Mettler-Toledo International Inc.1

     65,000          38,255  
  

Other securities

          273,900  
          

 

 

 
             813,379  
          

 

 

 
                          
Financials   

AIA Group Ltd.

     15,387,900          112,441  
9.74%   

JPMorgan Chase & Co.

     869,100          79,436  
  

Indiabulls Housing Finance Ltd.

     3,031,000          50,463  
  

Prudential PLC

     1,905,134          43,696  
  

MarketAxess Holdings Inc.

     188,000          37,807  
  

Other securities

          245,859  
          

 

 

 
             569,702  
          

 

 

 

 

American Funds Insurance Series  

45


Global Growth Fund

 

 

Common stocks (continued)    Shares       

Value

(000)

 
                    
Consumer staples   

British American Tobacco PLC

     1,938,000        $ 132,114  
7.61%   

Nestlé SA

     739,650          64,369  
  

Altria Group, Inc.

     650,000          48,405  
  

Pernod Ricard SA

     301,400          40,363  
  

Other securities

          159,630  
          

 

 

 
             444,881  
          

 

 

 
                          

Industrials

6.14%

  

Airbus SE, non-registered shares

     1,109,500          91,239  
  

KONE Oyj, Class B

     880,000          44,767  
  

Caterpillar Inc.

     399,000          42,877  
  

ASSA ABLOY AB, Class B

     1,677,000          36,846  
  

Other securities

          143,617  
          

 

 

 
             359,346  
          

 

 

 
                          

Energy

2.46%

  

Other securities

          144,098  
          

 

 

 
                          

Materials

2.06%

  

Sherwin-Williams Co.

     116,000          40,711  
  

Other securities

          79,594  
          

 

 

 
             120,305  
          

 

 

 
                          
Telecommunication   

SoftBank Group Corp.

     776,000          62,763  

services

1.46%

  

Other securities

          22,870  
          

 

 

 
             85,633  
          

 

 

 
                          
Miscellaneous   

Other common stocks in initial period of acquisition

          291,977  
          

 

 

 
4.99%   

Total common stocks (cost: $4,016,519,000)

          5,682,114  
          

 

 

 
Bonds, notes & other debt instruments 0.04%    Principal amount
(000)
          
                    
U.S. Treasury bonds & notes 0.04%                    

U.S. Treasury

  

Other securities

          1,999  
          

 

 

 
0.04%   

Total bonds, notes & other debt instruments (cost: $1,999,000)

          1,999  
          

 

 

 
Short-term securities 3.03%                
                    
  

Other securities

          177,358  
          

 

 

 
  

Total short-term securities (cost: $177,375,000)

          177,358  
          

 

 

 
  

Total investment securities 100.19% (cost: $4,195,893,000)

          5,861,471  
  

Other assets less liabilities (0.19)%

          (10,921
          

 

 

 
  

Net assets 100.00%

        $ 5,850,550  
          

 

 

 

 

46   American Funds Insurance Series


Global Growth Fund

 

This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.

“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio. “Other securities” includes securities which were valued under fair value procedures adopted by authority of the board of trustees. The total value of securities which were valued under fair value procedures was $41,497,000, which represented .71% of the net assets of the fund. “Other securities” also includes securities (with an aggregate value of $153,405,000, which represented 2.62% of the net assets of the fund) which were acquired in transactions exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933 and may be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers.

Forward currency contracts

 

Contract amount                      

Unrealized

appreciation
at 6/30/2017
(000)

Purchases

(000)

  

Sales

(000)

             Counterparty    Settlement
date
          

USD5,243

   JPY581,294              Bank of America, N.A.    7/25/2017         $69

 

1 Security did not produce income during the last 12 months.

Key to abbreviations and symbol

ADR = American Depositary Receipts

JPY = Japanese yen

USD/$ = U.S. dollars

See Notes to Financial Statements

 

American Funds Insurance Series   47


Global Small Capitalization Fund

Summary investment portfolio June 30, 2017    unaudited

 

Common stocks 92.48%    Shares        Value
(000)
 
                    
Consumer   

Domino’s Pizza, Inc.

     242,300        $ 51,254  
discretionary   

zooplus AG, non-registered shares1

     250,671          49,817  
21.57%   

Hilton Grand Vacations Inc.1

     1,114,900          40,203  
  

GVC Holdings PLC

     4,048,748          39,892  
  

Cedar Fair, LP

     531,000          38,285  
  

Melco International Development Ltd.

     13,831,000          37,025  
  

Five Below, Inc.1

     684,000          33,769  
  

Tele Columbus AG1

     2,743,000          30,389  
  

Hostelworld Group PLC2

     5,720,000          25,852  
  

Vail Resorts, Inc.

     121,107          24,564  
  

AA PLC

     7,894,804          23,444  
  

Other securities

          475,713  
          

 

 

 
             870,207  
          

 

 

 
                          
Information   

Qorvo, Inc.1

     1,783,038          112,902  
technology   

VTech Holdings Ltd.

     2,189,000          34,682  
16.57%   

AAC Technologies Holdings Inc.

     2,563,061          32,041  
  

ZPG PLC

     6,660,920          31,388  
  

II-VI, Inc.1

     814,200          27,927  
  

Paycom Software, Inc.1

     374,985          25,653  
  

Hamamatsu Photonics KK

     785,753          24,102  
  

Lumentum Holdings Inc.1

     419,900          23,955  
  

Mellanox Technologies, Ltd.1

     553,000          23,945  
  

Topcon Corp.

     1,360,510          23,394  
  

Other securities

          308,651  
          

 

 

 
             668,640  
          

 

 

 
                          
Health care   

Insulet Corp.1

     1,298,633          66,633  
16.05%   

GW Pharmaceuticals PLC (ADR)1

     652,600          65,423  
  

China Biologic Products, Inc.1

     503,000          56,889  
  

athenahealth, Inc.1

     342,000          48,068  
  

Kite Pharma, Inc.1

     385,539          39,969  
  

Illumina, Inc.1

     230,200          39,944  
  

Integra LifeSciences Holdings Corp.1

     688,523          37,531  
  

NuVasive, Inc.1

     460,750          35,441  
  

iRhythm Technologies, Inc.1

     807,980          34,331  
  

Bluebird Bio, Inc.1

     267,765          28,129  
  

Ultragenyx Pharmaceutical Inc.1

     387,108          24,043  
  

Other securities

          170,898  
          

 

 

 
             647,299  
          

 

 

 
                          
Industrials   

International Container Terminal Services, Inc.

     20,180,000          39,112  
10.02%   

Other securities

          364,989  
          

 

 

 
             404,101  
          

 

 

 
                          
Financials   

Kotak Mahindra Bank Ltd.

     3,282,732          48,540  
8.40%   

Essent Group Ltd.1

     1,058,841          39,325  
  

Texas Capital Bancshares, Inc.1

     481,423          37,262  
  

Webster Financial Corp.

     553,000          28,878  
  

Avanza Bank Holding AB

     560,129          24,460  
  

Other securities

          160,380  
          

 

 

 
             338,845  
          

 

 

 
                          
Consumer staples   

COSMOS Pharmaceutical Corp.

     193,900          37,720  
3.65%   

Other securities

          109,464  
          

 

 

 
             147,184  
          

 

 

 

 

48   American Funds Insurance Series


Global Small Capitalization Fund

 

    

 

 

Common stocks    Shares        Value
(000)
 
                    
Materials   

Lundin Mining Corp.

     5,999,000        $ 34,094  
3.46%   

Other securities

          105,345  
          

 

 

 
             139,439  
          

 

 

 
                          
Real estate   

WHA Corp. PCL

     340,831,250          31,705  
2.75%   

MGM Growth Properties LLC REIT, Class A

     1,048,600          30,608  
  

Other securities

          48,469  
          

 

 

 
             110,782  
          

 

 

 
                          
Energy   

Other securities

          104,542  
          

 

 

 
2.59%           
                          
Utilities   

ENN Energy Holdings Ltd.

     4,991,400          30,112  
2.16%   

Other securities

          57,118  
          

 

 

 
             87,230  
          

 

 

 
                          
Telecommunication   

Other securities

          17,039  
          

 

 

 
services
0.42%
          
                          
Miscellaneous   

Other common stocks in initial period of acquisition

          195,276  
          

 

 

 
4.84%   

Total common stocks (cost: $3,037,636,000)

          3,730,584  
          

 

 

 
Rights & warrants 0.02%                
                    
Real estate   

Other securities

          227  
          

 

 

 
0.01%           
                          
Miscellaneous   

Other rights & warrants in initial period of acquisition

          424  
          

 

 

 
0.01%   

Total rights & warrants (cost: $431,000)

          651  
          

 

 

 
Bonds, notes & other debt instruments 0.69%    Principal amount
(000)
          
                    
Corporate bonds & notes 0.59%                    
Consumer   

Caesars Entertainment Operating Co. 10.00% 20183

   $ 25,950          24,004  
          

 

 

 
discretionary
0.59%
          
U.S. Treasury bonds & notes 0.10%                    
U.S. Treasury   

Other securities

          4,116  
          

 

 

 
0.10%   

Total bonds, notes & other debt instruments (cost: $25,619,000)

          28,120  
          

 

 

 
Short-term securities 6.87%                
                    
  

Bank of Montreal 1.15% due 8/15/2017

     30,000          29,952  
  

Fairway Finance Corp. 1.24% due 9/13/20174

     10,000          9,973  
  

Federal Home Loan Bank 1.03%-1.05% due 9/6/2017-10/3/2017

     52,700          52,572  
  

Nordea Bank AB 1.03% due 7/20/20174

     55,900          55,864  

 

American Funds Insurance Series   49


Global Small Capitalization Fund

 

Short-term securities (continued)

   Principal amount
(000)
       Value
(000)
 
                    
  

Statoil ASA 1.14% due 7/28/20174

     $25,000        $ 24,979  
  

Victory Receivables Corp. 1.22% due 7/21/20174

     30,000          29,975  
  

Other securities

          73,788  
          

 

 

 
  

Total short-term securities (cost: $277,117,000)

          277,103  
          

 

 

 
  

Total investment securities 100.06% (cost: $3,340,803,000)

          4,036,458  
  

Other assets less liabilities (0.06)%

          (2,599
          

 

 

 
  

Net assets 100.00%

        $ 4,033,859  
          

 

 

 

This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.

“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio. Some securities in “Other securities” (with an aggregate value of $11,697,000, an aggregate cost of $10,011,000, and which represented .29% of the net assets of the fund) were acquired from 5/1/2015 to 4/28/2017 through private placement transactions exempt from registration under the Securities Act of 1933, which may subject them to legal or contractual restrictions on resale. “Other securities“ also includes a security which was pledged as collateral. The total value of pledged collateral was $654,000, which represented .02% of the net assets of the fund.

Forward currency contracts

 

 

Contract amount

                    Unrealized
appreciation
(depreciation)
at 6/30/2017
(000)
 
Purchases
(000)
   Sales
(000)
     Counterparty    Settlement
date
        

USD3,971

   JPY437,000      UBS AG    7/12/2017         $    83  

USD44,059

   GBP34,000      HSBC Bank    7/13/2017         (244

USD15,876

   JPY1,765,175      JPMorgan Chase    7/28/2017         162  

USD10,245

   INR663,163      Citibank    7/31/2017         30  

USD15,586

   GBP12,190      Citibank    8/21/2017         (317
                

 

 

 
                 $ (286
                

 

 

 

Investments in affiliates

 

A company is an affiliate of the fund under the Investment Company Act of 1940 if the fund’s holdings in that company represent 5% or more of the outstanding voting shares. The value of the fund’s affiliated-company holdings is either shown in the summary investment portfolio or included in the value of “Other securities” under the respective industry sectors. Further details on such holdings and related transactions during the six months ended June 30, 2017, appear below.

 

      Beginning
shares
   Additions    Reductions    Ending
shares
   Net realized
gain (loss)
(000)
  Net unrealized
appreciation
(000)
   Dividend
income
(000)
   Value of
affiliates at
6/30/2017
(000)

    Hostelworld Group PLC

              5,720,000               5,720,000      $           –       $   2,585      $ 999      $ 25,852

    Time Technoplast Ltd.5

       11,888,000               11,888,000               5,933       107              

    Indochine Mining Ltd.1,5,6

       182,998               182,998               (8,032 )       8,032              

    Victoria Oil & Gas PLC1,5

       6,966,560               6,966,560               (1,438 )       3,759              
                        

 

 

     

 

 

      

 

 

      

 

 

 
                         $ (3,537)       $ 14,483      $ 999      $ 25,852
                        

 

 

     

 

 

      

 

 

      

 

 

 

 

50   American Funds Insurance Series


Global Small Capitalization Fund

 

    

 

1 Security did not produce income during the last 12 months.
2 Represents an affiliated company as defined under the Investment Company Act of 1940.
3 Scheduled interest and/or principal payment was not received.
4 Acquired in a transaction exempt from registration under Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $190,528,000, which represented 4.72% of the net assets of the fund.
5 Unaffiliated issuer at 6/30/2017.
6 Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities, including those in “Miscellaneous“ and “Other securities,“ was $56,540,000, which represented 1.40% of the net assets of the fund. This amount includes $43,269,000 related to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading.

Key to abbreviations and symbol

ADR = American Depositary Receipts

GBP = British pounds

INR = Indian rupees

JPY = Japanese yen

USD/$ = U.S. dollars

See Notes to Financial Statements

 

American Funds Insurance Series   51


Growth Fund

 

Summary investment portfolio June 30, 2017    unaudited

 

 

Common stocks 92.89%    Shares        Value
(000)
 
                    
Information   

Facebook, Inc., Class A1

     8,340,500        $ 1,259,249  
technology   

Alphabet Inc., Class C1

     613,000          557,052  
30.26%   

Alphabet Inc., Class A1

     271,500          252,408  
  

Microsoft Corp.

     11,676,000          804,827  
  

Broadcom Ltd.

     3,068,300          715,067  
  

Apple Inc.

     3,851,000          554,621  
  

ASML Holding NV (New York registered)

     2,251,504          293,393  
  

ASML Holding NV

     1,199,568          156,327  
  

Taiwan Semiconductor Manufacturing Co., Ltd.

     48,812,000          334,559  
  

Taiwan Semiconductor Manufacturing Co., Ltd. (ADR)

     3,225,392          112,760  
  

Visa Inc., Class A

     2,955,000          277,120  
  

Samsung Electronics Co., Ltd.

     89,330          185,585  
  

Intel Corp.

     4,926,000          166,203  
  

Alibaba Group Holding Ltd. (ADR)1

     1,143,000          161,049  
  

TE Connectivity Ltd.

     1,925,000          151,459  
  

Adobe Systems Inc.1

     1,000,000          141,440  
  

Other securities

          1,016,208  
          

 

 

 
             7,139,327  
          

 

 

 
                          
Consumer   

Amazon.com, Inc.1

     1,393,416          1,348,827  
discretionary   

Tesla, Inc.1

     1,506,200          544,657  
20.78%   

Home Depot, Inc.

     2,985,000          457,899  
  

Netflix, Inc.1

     2,746,000          410,280  
  

Comcast Corp., Class A

     10,390,000          404,379  
  

Ulta Beauty, Inc.1

     1,120,000          321,821  
  

Priceline Group Inc.1

     131,531          246,031  
  

Starbucks Corp.

     4,195,000          244,610  
  

Charter Communications, Inc., Class A1

     698,680          235,350  
  

Other securities

          688,079  
          

 

 

 
             4,901,933  
          

 

 

 
                          
Health care   

UnitedHealth Group Inc.

     3,517,500          652,215  
14.59%   

Regeneron Pharmaceuticals, Inc.1

     834,500          409,856  
  

Centene Corp.1

     4,031,052          322,000  
  

Intuitive Surgical, Inc.1

     313,500          293,239  
  

Humana Inc.

     993,200          238,984  
  

Vertex Pharmaceuticals Inc.1

     1,711,200          220,522  
  

Boston Scientific Corp.1

     7,845,000          217,463  
  

Thermo Fisher Scientific Inc.

     995,000          173,598  
  

Incyte Corp.1

     1,040,000          130,946  
  

Other securities

          784,045  
          

 

 

 
             3,442,868  
          

 

 

 
                          
Energy   

EOG Resources, Inc.

     2,402,400          217,465  
7.45%   

Schlumberger Ltd.

     2,900,000          190,936  
  

Concho Resources Inc.1

     1,550,000          188,372  
  

Noble Energy, Inc.

     5,663,000          160,263  
  

Suncor Energy Inc.

     4,402,090          128,621  
  

Other securities

          872,407  
          

 

 

 
             1,758,064  
          

 

 

 
                          
Financials   

JPMorgan Chase & Co.

     2,635,000          240,839  
7.34%   

Wells Fargo & Co.

     3,335,000          184,792  
  

Legal & General Group PLC

     40,158,246          135,102  
  

Other securities

          1,171,273  
          

 

 

 
             1,732,006  
          

 

 

 

 

52   American Funds Insurance Series


Growth Fund

 

    

 

Common stocks    Shares        Value
(000)
 
                    
Industrials   

Boeing Co.

     876,400        $ 173,308  
6.13%   

Fortive Corp.

     2,329,397          147,567  
  

TransDigm Group Inc.

     524,000          140,888  
  

MTU Aero Engines AG

     941,034          132,738  
  

Rockwell Collins, Inc.

     1,225,000          128,723  
  

Other securities

          723,031  
          

 

 

 
             1,446,255  
          

 

 

 
                          
Consumer staples   

Constellation Brands, Inc., Class A

     815,000          157,890  
2.32%   

Other securities

          389,821  
          

 

 

 
             547,711  
          

 

 

 
                          
Telecommunication   

Zayo Group Holdings, Inc.1

     6,245,000          192,970  
services   

Other securities

          26,491  
          

 

 

 
0.93%              219,461  
          

 

 

 
                          

Other

1.38%

  

Other securities

          324,938  
          

 

 

 
                          

Miscellaneous

1.71%

  

Other common stocks in initial period of acquisition

          402,317  
          

 

 

 
  

Total common stocks (cost: $14,405,033,000)

          21,914,880  
          

 

 

 
Convertible stocks 0.05%                
                    
Consumer   

Other securities

          12,276  
          

 

 

 

discretionary

0.05%

  

Total convertible stocks (cost: $10,650,000)

          12,276  
          

 

 

 
          
Short-term securities 7.21%    Principal amount
(000)
          
                    
  

Apple Inc. 0.89%-1.15% due 7/20/2017-9/19/20172

   $ 135,000          134,824  
  

Chariot Funding, LLC 0.95%-1.00% due 7/7/2017-7/14/20172

     150,000          149,954  
  

Federal Home Loan Bank 0.84%-1.03% due 7/5/2017-9/20/2017

     909,575          908,835  
  

Jupiter Securitization Co., LLC 0.95% due 7/3/20172

     20,000          19,998  
  

Other securities

          486,947  
          

 

 

 
  

Total short-term securities (cost: $1,700,520,000)

          1,700,558  
          

 

 

 
  

Total investment securities 100.15% (cost: $16,116,203,000)

          23,627,714  
  

Other assets less liabilities (0.15)%

          (35,001
          

 

 

 
  

Net assets 100.00%

        $ 23,592,713  
          

 

 

 

This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.

“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio. “Other securities” includes a security which was valued under fair value procedures adopted by authority of the board of trustees. The total value of the security which was valued under fair value procedures was $12,276,000, which represented .05% of the net assets of the fund. This security was acquired for $10,650,000 on 5/22/2015 through a private placement transaction exempt from registration under the Securities Act of 1933, which may subject it to legal or contractual restrictions on resale.

 

American Funds Insurance Series   53


Growth Fund

 

The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.

 

1 Security did not produce income during the last 12 months.
2 Acquired in a transaction exempt from registration under Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities, including those in “Other securities,” was $686,896,000, which represented 2.91% of the net assets of the fund.

Key to abbreviation

ADR = American Depositary Receipts

See Notes to Financial Statements

 

54   American Funds Insurance Series


International Fund   
Summary investment portfolio June 30, 2017    unaudited

 

 

Common stocks 90.29%    Shares       

Value

(000)

 
                    
Financials   

AIA Group Ltd.

     40,078,700        $ 292,860  
16.62%   

HDFC Bank Ltd.1

     10,149,569          261,259  
  

HDFC Bank Ltd. (ADR)

     352,300          30,639  
  

UniCredit SpA2

     7,776,692          145,223  
  

Prudential PLC

     5,142,265          117,944  
  

Kotak Mahindra Bank Ltd.

     6,186,048          91,469  
  

Barclays PLC

     34,317,708          90,623  
  

BNP Paribas SA

     1,002,776          72,224  
  

Credit Suisse Group AG

     4,172,789          60,314  
  

Other securities

          296,876  
          

 

 

 
             1,459,431  
          

 

 

 
                          
Information   

Tencent Holdings Ltd.

     8,410,399          300,762  
technology   

Samsung Electronics Co., Ltd.

     137,599          285,865  
13.61%   

Alibaba Group Holding Ltd. (ADR)2

     1,844,800          259,932  
  

ASML Holding NV

     693,834          90,420  
  

Nintendo Co., Ltd.

     188,239          63,062  
  

Other securities

          194,919  
          

 

 

 
             1,194,960  
          

 

 

 
                          
Consumer   

Altice NV, Class A2

     7,869,893          181,570  
discretionary   

Altice NV, Class B2

     1,118,127          25,803  
13.22%   

Kering SA

     431,324          146,904  
  

Galaxy Entertainment Group Ltd.

     18,326,000          111,259  
  

Hyundai Motor Co.

     653,354          91,081  
  

Naspers Ltd., Class N

     364,200          70,850  
  

Sony Corp.

     1,580,500          60,227  
  

Sands China Ltd.

     13,028,000          59,655  
  

Other securities

          413,431  
          

 

 

 
             1,160,780  
          

 

 

 
                          
Health care   

Novartis AG

     1,967,000          163,694  
9.59%   

Teva Pharmaceutical Industries Ltd. (ADR)

     3,660,300          121,595  
  

Grifols, SA, Class B, preferred nonvoting, non-registered shares

     3,304,730          69,828  
  

Grifols, SA, Class A, non-registered shares

     881,000          24,537  
  

Grifols, SA, Class B (ADR)

     793,690          16,771  
  

Takeda Pharmaceutical Co. Ltd.

     1,646,500          83,573  
  

UCB SA

     1,111,391          76,455  
  

Merck KGaA

     567,900          68,592  
  

Sysmex Corp.

     1,055,000          62,939  
  

Other securities

          153,565  
          

 

 

 
             841,549  
          

 

 

 
                          
Consumer staples   

Nestlé SA

     1,317,700          114,675  
8.28%   

AMOREPACIFIC Corp.

     385,274          102,367  
  

Pernod Ricard SA

     717,437          96,077  
  

Associated British Foods PLC

     2,250,488          86,058  
  

British American Tobacco PLC

     1,126,000          76,760  
  

Treasury Wine Estates Ltd.

     6,529,100          66,040  
  

Other securities

          185,182  
          

 

 

 
             727,159  
          

 

 

 
                          
Industrials   

Airbus SE, non-registered shares

     2,559,364          210,469  
8.08%   

Rolls-Royce Holdings PLC2

     8,468,900          98,280  
  

Other securities

          400,540  
          

 

 

 
             709,289  
          

 

 

 

 

American Funds Insurance Series   55


International Fund

 

Common stocks (continued)    Shares      Value
(000)
 
                  
Utilities   

Power Grid Corp. of India Ltd.

     35,497,206      $ 115,628  
5.86%   

DONG Energy AS

     1,873,324        84,568  
  

ENN Energy Holdings Ltd.

     13,136,000        79,246  
  

CK Infrastructure Holdings Ltd.

     7,942,000        66,731  
  

China Gas Holdings Ltd.

     31,610,000        63,807  
  

Other securities

        104,190  
        

 

 

 
           514,170  
        

 

 

 
                        
Materials   

Nitto Denko Corp.

     1,092,000        89,710  
5.29%   

Grasim Industries Ltd.

     3,031,988        58,264  
  

Other securities

        316,366  
        

 

 

 
           464,340  
        

 

 

 
                        
Energy   

Royal Dutch Shell PLC, Class B

     2,974,624        79,907  
3.80%   

Royal Dutch Shell PLC, Class A

     2,338,425        61,980  
  

Other securities

        191,776  
        

 

 

 
           333,663  
        

 

 

 
                        
Telecommunication   

Nippon Telegraph and Telephone Corp.

     2,715,000        128,176  
services   

SoftBank Group Corp.

     911,900        73,755  
3.02%   

Other securities

        63,242  
        

 

 

 
           265,173  
        

 

 

 
                        
Real estate   

Cheung Kong Property Holdings Ltd.

     12,918,528        101,181  
1.93%   

Other securities

        68,688  
        

 

 

 
           169,869  
        

 

 

 
                        
Miscellaneous   

Other common stocks in initial period of acquisition

        86,831  
        

 

 

 
0.99%   

Total common stocks (cost: $6,468,357,000)

        7,927,214  
        

 

 

 
Bonds, notes & other debt instruments 0.75%    Principal amount
(000)
        
                  
Corporate bonds & notes 0.45%                  
Other   

Other securities

        39,031  
        

 

 

 
0.45%   

Total corporate bonds & notes

        39,031  
        

 

 

 
U.S. Treasury bonds & notes 0.26%                  
U.S. Treasury   

Other securities

        22,819  
        

 

 

 
0.26%         
Bonds & notes of governments outside the U.S. 0.04%                  
  

Other securities

        3,838  
        

 

 

 
  

Total bonds, notes & other debt instruments (cost: $55,678,000)

        65,688  
        

 

 

 

 

56   American Funds Insurance Series


International Fund

 

 

Short-term securities 9.06%    Principal amount
(000)
     Value
(000)
 
                  
  Bank of Tokyo-Mitsubishi UFJ, Ltd. 1.03% due 7/12/2017    $ 55,000      $ 54,978  
  Federal Home Loan Bank 0.82%–1.07% due 7/7/2017–10/27/2017      408,200        407,665  
  Mizuho Bank, Ltd. 0.95%–1.19% due 7/3/2017–7/26/20173      105,200        105,145  
  Other securities         228,011  
       

 

 

 
  Total short-term securities (cost: $795,808,000)         795,799  
       

 

 

 
  Total investment securities 100.10% (cost: $7,319,843,000)         8,788,701  
  Other assets less liabilities (0.10)%         (9,083
       

 

 

 
  Net assets 100.00%       $ 8,779,618  
       

 

 

 

This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.

“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio.

 

American Funds Insurance Series   57


International Fund

 

Forward currency contracts

 

Contract amount                      

Unrealized

appreciation
at 6/30/2017
(000)

Purchases

(000)

  

Sales

(000)

             Counterparty    Settlement
date
          

USD26,925

   INR1,744,071              Bank of America, N.A.    7/31/2017         $59

The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.

 

1 Valued under fair value procedures adopted by authority of the board of trustees. The total value of the security was $261,259,000, which represented 2.98% of the net assets of the fund.
2 Security did not produce income during the last 12 months.
3 Acquired in a transaction exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities, including those in “Other securities,” was $340,257,000, which represented 3.88% of the net assets of the fund.

Key to abbreviations and symbol

ADR = American Depositary Receipts

INR = Indian rupees

USD/$ = U.S. dollars

See Notes to Financial Statements

 

58   American Funds Insurance Series


New World Fund

 

Summary investment portfolio June 30, 2017    unaudited

 

Common stocks 89.02%    Shares        Value
(000)
 
                    
Information   

Taiwan Semiconductor Manufacturing Co., Ltd.

     9,887,000        $ 67,766  
technology   

Taiwan Semiconductor Manufacturing Co., Ltd. (ADR)

     700,000          24,472  
24.07%   

Murata Manufacturing Co., Ltd.

     584,000          88,632  
  

Alphabet Inc., Class C1

     69,700          63,338  
  

Alphabet Inc., Class A1

     16,900          15,712  
  

Facebook, Inc., Class A1

     399,100          60,256  
  

Samsung Electronics Co., Ltd.

     18,500          38,434  
  

Samsung Electronics Co., Ltd., nonvoting preferred

     7,750          12,613  
  

Alibaba Group Holding Ltd. (ADR)1

     361,550          50,942  
  

Microsoft Corp.

     729,000          50,250  
  

Intel Corp.

     1,293,460          43,641  
  

United Microelectronics Corp.

     80,327,000          38,949  
  

Broadcom Ltd.

     159,750          37,230  
  

Baidu, Inc., Class A (ADR)1

     177,600          31,766  
  

Yandex NV, Class A1

     1,201,950          31,539  
  

TravelSky Technology Ltd., Class H

     7,580,456          22,331  
  

Other securities

          80,686  
          

 

 

 
             758,557  
          

 

 

 
                          
Consumer   

Matahari Department Store Tbk PT2

     38,552,200          40,941  
discretionary   

Domino’s Pizza, Inc.

     173,400          36,679  
10.99%   

Kroton Educacional SA, ordinary nominative

     7,721,000          34,656  
  

Naspers Ltd., Class N

     177,519          34,534  
  

Sony Corp.

     700,000          26,674  
  

Maruti Suzuki India Ltd.

     224,500          25,068  
  

MakeMyTrip Ltd., non-registered shares1

     733,931          24,623  
  

Starbucks Corp.

     380,000          22,158  
  

Other securities

          101,056  
          

 

 

 
             346,389  
          

 

 

 
                          
Financials   

HDFC Bank Ltd.2

     1,891,100          48,678  
10.66%   

HDFC Bank Ltd. (ADR)

     208,400          18,125  
  

BM&FBOVESPA SA - Bolsa de Valores, Mercadorias e Futuros, ordinary nominative

     7,928,300          47,265  
  

Grupo Financiero Galicia SA, Class B (ADR)

     935,951          39,909  
  

AIA Group Ltd.

     4,611,600          33,698  
  

Housing Development Finance Corp. Ltd.

     1,158,700          28,950  
  

Other securities

          119,565  
          

 

 

 
             336,190  
          

 

 

 
                          
Consumer staples   

British American Tobacco PLC

     1,440,000          98,165  
8.59%   

CP ALL PCL

     17,121,500          31,627  
  

Nestlé SA

     312,196          27,169  
  

Lenta Ltd. (GDR)1

     4,126,200          23,973  
  

Lenta Ltd. (GDR)1,3

     244,500          1,421  
  

Foshan Haitian Flavouring and Food Co. Ltd., Class A

     1,999,900          12,030  
  

Other securities

          76,381  
          

 

 

 
             270,766  
          

 

 

 
                          
Energy   

Reliance Industries Ltd.1

     6,506,589          138,915  
8.57%   

Other securities

          131,101  
          

 

 

 
             270,016  
          

 

 

 

 

American Funds Insurance Series   59


New World Fund

 

Common stocks (continued)    Shares        Value
(000)
 
                    
Industrials   

Airbus SE, non-registered shares

     612,229        $ 50,347  
6.26%   

Eicher Motors Ltd.1

     104,200          43,589  
  

Grupo Aeroportuario del Sureste, SA de CV, Series B

     1,315,200          27,749  
  

Other securities

          75,792  
          

 

 

 
             197,477  
          

 

 

 
                          
Health care   

Hypermarcas SA, ordinary nominative

     4,903,700          41,149  
4.95%   

CSL Ltd.

     269,500          28,591  
  

Other securities

          86,271  
          

 

 

 
             156,011  
          

 

 

 
                          
Materials   

Randgold Resources Ltd.

     529,600          46,939  
4.88%   

Vale SA, Class A, preferred nominative

     2,830,000          22,988  
  

Klabin SA, units

     4,487,400          21,984  
  

Other securities

          61,817  
          

 

 

 
             153,728  
          

 

 

 
                          
Utilities   

Infraestructura Energética Nova, SAB de CV

     13,547,613          72,222  
2.72%   

Other securities

          13,535  
          

 

 

 
             85,757  
          

 

 

 
                          
Telecommunication   

SoftBank Group Corp.

     650,000          52,572  
services   

Other securities

          8,558  
          

 

 

 
1.94%              61,130  
          

 

 

 
                          
Real estate   

American Tower Corp. REIT

     236,800          31,333  
1.17%   

Other securities

          5,471  
          

 

 

 
             36,804  
          

 

 

 
                          
Miscellaneous   

Other common stocks in initial period of acquisition

          133,078  
          

 

 

 
4.22%   

Total common stocks (cost: $2,336,213,000)

          2,805,903  
          

 

 

 
Rights & warrants 1.54%                
                    
Consumer staples   

Foshan Haitian Flavouring and Food Co., Ltd., Class A, warrants, expire 20182,3

     5,330,000          32,061  
1.34%   

Other securities

          10,052  
       

 

 

 
             42,113  
       

 

 

 
                          
Consumer   

Other securities

          6,248  
          

 

 

 
discretionary   

Total rights & warrants (cost: $40,814,000)

          48,361  
          

 

 

 
0.20%           
Bonds, notes & other debt instruments 3.20%    Principal amount
(000)
          
                    
Bonds & notes of governments & government agencies outside the U.S. 2.59%                    
  

Other securities

          81,623  
          

 

 

 
Corporate bonds & notes 0.56%                    
Other   

Other securities

          17,837  
          

 

 

 
0.56%   

Total corporate bonds & notes

          17,837  
          

 

 

 

 

60   American Funds Insurance Series


New World Fund

 

Bonds, notes & other debt instruments    Principal amount
(000)
       Value
(000)
 
                    
U.S. Treasury bonds & notes 0.05%                    
U.S. Treasury   

Other securities

        $ 1,499  
          

 

 

 
0.05%   

Total bonds, notes & other debt instruments (cost: $99,154,000)

          100,959  
          

 

 

 
Short-term securities 5.56%                
                    
  

Federal Home Loan Bank 0.83%-0.95% due 7/11/2017-8/23/2017

     $40,000          39,957  
  

Liberty Street Funding Corp. 1.22% due 7/5/20173

     24,300          24,296  
  

Nordea Bank AB 1.03% due 7/20/20173

     39,200          39,175  
  

Sumitomo Mitsui Banking Corp. 1.15% due 7/21/20173

     22,200          22,184  
  

Victory Receivables Corp. 1.20%-1.22% due 7/11/2017-7/21/20173

     37,700          37,672  
  

Other securities

          12,063  
          

 

 

 
  

Total short-term securities (cost: $175,358,000)

          175,347  
          

 

 

 
  

Total investment securities 99.32% (cost: $2,651,539,000)

          3,130,570  
  

Other assets less liabilities 0.68%

          21,335  
          

 

 

 
  

Net assets 100.00%

        $ 3,151,905  
          

 

 

 

This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.

“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio.

 

American Funds Insurance Series   61


New World Fund

 

    

 

Forward currency contracts

 

 

Contract amount

 

                    

Unrealized

appreciation

(depreciation)

at 6/30/2017
(000)

Purchases
(000)
    

Sales

(000)

     Counterparty      Settlement
date
      

USD526

     COP1,530,569      Citibank        7/10/2017        $  25

USD1,315

     ZAR16,955      Goldman Sachs        7/10/2017        21

USD1,397

     BRL4,600      JPMorgan Chase        7/10/2017        12

USD3,162

     INR204,401      JPMorgan Chase        7/10/2017        4

USD496

     TRY1,775      Bank of America, N.A.        7/10/2017        (7)

USD1,897

     MXN34,748      Bank of America, N.A.        7/10/2017        (14)

USD2,964

     ZAR38,500      Barclays Bank PLC        7/12/2017        28

USD1,265

     COP3,721,800      JPMorgan Chase        7/17/2017        47

USD900

     BRL3,000      JPMorgan Chase        7/21/2017        (1)

USD298

     EUR265      HSBC Bank        7/21/2017        (5)

USD3,967

     INR257,150      JPMorgan Chase        8/10/2017        11

USD685

     INR44,350      Citibank        8/10/2017        2

USD1,389

     JPY153,000      Bank of America, N.A.        8/17/2017        25

USD570

     JPY63,000      UBS AG        8/21/2017        8

USD595

     EUR530      HSBC Bank        8/23/2017        (12)
                   

 

                    $144
                   

 

The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.

 

1  Security did not produce income during the last 12 months.
2  Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities, including those in “Other securities,“ was $158,032,000, which represented 5.01% of the net assets of the fund. This amount includes $58,508,000 related to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading.
3  Acquired in a transaction exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $209,408,000, which represented 6.64% of the net assets of the fund.

Key to abbreviations and symbol

ADR = American Depositary Receipts

BRL = Brazilian reais

COP = Colombian pesos

EUR = Euros

GDR = Global Depositary Receipts

INR = Indian rupees

JPY = Japanese yen

MXN = Mexican pesos

TRY = Turkish lira

USD/$ = U.S. dollars

ZAR = South African rand

See Notes to Financial Statements

 

62   American Funds Insurance Series


Blue Chip Income and Growth Fund

 

Summary investment portfolio June 30, 2017    unaudited

 

Common stocks 96.55%    Shares       

Value

(000)

 
                    
Health care   

AbbVie Inc.

     6,761,500        $ 490,277  
16.68%   

Amgen Inc.

     2,366,500          407,582  
  

Teva Pharmaceutical Industries Ltd. (ADR)

     5,375,800          178,584  
  

Medtronic PLC

     1,460,000          129,575  
  

Abbott Laboratories

     1,576,100          76,614  
  

Bristol-Myers Squibb Co.

     1,125,000          62,685  
  

Other securities

          136,236  
          

 

 

 
             1,481,553  
          

 

 

 
                          
Financials   

JPMorgan Chase & Co.

     3,884,900          355,080  
14.50%   

Wells Fargo & Co.

     5,444,000          301,652  
  

Prudential Financial, Inc.

     2,649,000          286,463  
  

Citigroup Inc.

     2,531,000          169,273  
  

American International Group, Inc.

     1,506,300          94,174  
  

Other securities

          81,000  
          

 

 

 
             1,287,642  
          

 

 

 
                          
Information   

Apple Inc.

     1,983,180          285,618  
technology   

Intel Corp.

     7,487,200          252,618  
13.63%   

Texas Instruments Inc.

     2,630,000          202,326  
  

Oracle Corp.

     3,150,000          157,941  
  

Microsoft Corp.

     2,050,000          141,306  
  

Western Union Co.

     6,290,000          119,825  
  

Other securities

          50,764  
          

 

 

 
             1,210,398  
          

 

 

 
                          
Consumer staples   

Altria Group, Inc.

     3,754,000          279,560  
13.04%   

Kimberly-Clark Corp.

     1,395,800          180,212  
  

Kellogg Co.

     2,152,800          149,533  
  

Philip Morris International Inc.

     1,250,000          146,813  
  

Reynolds American Inc.

     1,607,000          104,519  
  

Mondelez International, Inc.

     1,580,000          68,240  
  

Kraft Heinz Co.

     776,666          66,514  
  

Other securities

          162,787  
          

 

 

 
             1,158,178  
          

 

 

 
                          
Industrials   

CSX Corp.

     3,641,500          198,680  
9.76%   

General Dynamics Corp.

     740,696          146,732  
  

Illinois Tool Works Inc.

     650,000          93,112  
  

Union Pacific Corp.

     750,000          81,683  
  

Rockwell Automation

     450,000          72,882  
  

Boeing Co.

     329,000          65,060  
  

General Electric Co.

     2,400,000          64,824  
  

Other securities

          143,711  
          

 

 

 
             866,684  
          

 

 

 
                          
Telecommunication   

Verizon Communications Inc.

     8,804,171          393,194  
services   

AT&T Inc.

     4,181,000          157,749  
7.54%   

CenturyLink, Inc.

     4,966,000          118,588  
          

 

 

 
             669,531  
          

 

 

 

 

American Funds Insurance Series   63


Blue Chip Income and Growth Fund

 

    

 

Common stocks (continued)    Shares       

Value

(000)

 
                    
Energy   

Canadian Natural Resources, Ltd.

     6,859,000        $ 197,814  
5.83%   

Exxon Mobil Corp.

     2,054,000          165,819  
  

Halliburton Co.

     2,419,700          103,345  
  

Other securities

          50,842  
          

 

 

 
             517,820  
          

 

 

 
                          
Consumer   

Amazon.com, Inc.1

     104,500          101,156  
discretionary   

Las Vegas Sands Corp.

     1,435,000          91,682  
4.81%   

McDonald’s Corp.

     500,000          76,580  
  

General Motors Co.

     2,000,000          69,860  
  

Other securities

          87,945  
          

 

 

 
             427,223  
          

 

 

 
                          
Materials   

Vale SA, Class A, preferred nominative (ADR)

     14,564,737          118,703  
3.73%   

Vale SA, ordinary nominative (ADR)

     460,500          4,029  
  

Freeport-McMoRan Inc.1

     6,840,000          82,148  
  

Other securities

          125,996  
          

 

 

 
             330,876  
          

 

 

 
                          
Utilities   

Exelon Corp.

     2,263,000          81,626  
1.67%   

Other securities

          66,357  
          

 

 

 
             147,983  
          

 

 

 
                          

Real estate

0.45%

  

Other securities

          40,072  
          

 

 

 
                          

Miscellaneous

4.91%

  

Other common stocks in initial period of acquisition

          435,631  
          

 

 

 
  

Total common stocks (cost: $6,803,622,000)

          8,573,591  
          

 

 

 
Short-term securities 3.24%    Principal amount
(000)
          
                    
  

ExxonMobil Corp. 1.14% due 9/11/2017

   $ 33,000          32,924  
  

Federal Home Loan Bank 0.91%–1.03% due 7/19/2017–9/5/2017

     135,000          134,856  
  

Jupiter Securitization Co., LLC 0.93% due 7/17/20172

     50,000          49,972  
  

Other securities

          70,180  
          

 

 

 
  

Total short-term securities (cost: $287,927,000)

          287,932  
          

 

 

 
  

Total investment securities 99.79% (cost: $7,091,549,000)

          8,861,523  
  

Other assets less liabilities 0.21%

          18,249  
          

 

 

 
  

Net assets 100.00%

        $ 8,879,772  
          

 

 

 

This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.

“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio.

 

64   American Funds Insurance Series  


Blue Chip Income and Growth Fund

 

    

 

 

1 Security did not produce income during the last 12 months.
2 Acquired in a transaction exempt from registration under Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities, including those in “Other securities,” was $112,653,000, which represented 1.27% of the net assets of the fund.

Key to abbreviation

ADR = American Depositary Receipts

See Notes to Financial Statements

 

American Funds Insurance Series   65


Global Growth and Income Fund

 

  
Summary investment portfolio June 30, 2017    unaudited

 

Common stocks 92.54%    Shares       

 

Value

(000)

 
                    
Information   

Nintendo Co., Ltd.

     278,000        $ 93,132  
technology   

Taiwan Semiconductor Manufacturing Co., Ltd.

     9,480,800          64,982  
22.19%   

Microsoft Corp.

     907,000          62,520  
  

Broadcom Ltd.

     188,000          43,813  
  

Murata Manufacturing Co., Ltd.

     183,000          27,773  
  

Facebook, Inc., Class A1

     140,300          21,183  
  

Apple Inc.

     138,000          19,875  
  

AAC Technologies Holdings Inc.

     1,503,500          18,795  
  

TE Connectivity Ltd.

     200,000          15,736  
  

Alibaba Group Holding Ltd. (ADR)1

     105,000          14,795  
  

Alphabet Inc., Class C1

     9,000          8,179  
  

Alphabet Inc., Class A1

     6,000          5,578  
  

Other securities

          33,060  
          

 

 

 
             429,421  
          

 

 

 
                          
Financials   

YES Bank Ltd.

     815,000          18,453  
10.78%   

Prudential PLC

     765,000          17,546  
  

Blackstone Group LP

     453,250          15,116  
  

First Republic Bank

     145,000          14,514  
  

CIT Group Inc.

     250,000          12,175  
  

Capital One Financial Corp.

     144,000          11,897  
  

Other securities

          118,856  
          

 

 

 
             208,557  
          

 

 

 
                          
Industrials   

Airbus SE, non-registered shares

     467,000          38,404  
9.93%   

Grupo Aeroportuario del Pacífico SAB de CV

     2,080,000          23,425  
  

Lockheed Martin Corp.

     82,300          22,847  
  

Boeing Co.

     113,000          22,346  
  

Deutsche Post AG

     523,000          19,605  
  

Flughafen Zürich AG

     69,000          16,939  
  

Ryanair Holdings PLC (ADR)1

     141,375          15,213  
  

Other securities

          33,256  
          

 

 

 
             192,035  
          

 

 

 
                          
Consumer staples   

British American Tobacco PLC

     1,144,000          77,987  
9.80%   

Nestlé SA

     558,700          48,622  
  

Costco Wholesale Corp.

     130,600          20,887  
  

Other securities

          42,166  
          

 

 

 
             189,662  
          

 

 

 
                          
Consumer   

Amazon.com, Inc.1

     20,000          19,360  
discretionary   

Home Depot, Inc.

     122,000          18,715  
8.82%   

Sony Corp.

     480,000          18,291  
  

ProSiebenSat.1 Media SE

     430,000          17,995  
  

Vivendi SA

     715,200          15,921  
  

Nitori Holdings Co., Ltd.

     105,000          14,040  
  

Other securities

          66,281  
          

 

 

 
             170,603  
          

 

 

 
                          
Energy   

Royal Dutch Shell PLC, Class B (ADR)

     347,000          18,887  
7.07%   

Royal Dutch Shell PLC, Class A (ADR)

     141,457          7,524  
  

BP PLC

     4,030,206          23,243  
  

Reliance Industries Ltd.1

     1,052,094          22,462  

 

66   American Funds Insurance Series


Global Growth and Income Fund

 

    

 

Common stocks    Shares       

Value

(000)

 
                    
  

Enbridge Inc.

     260,760        $ 10,381  
  

Enbridge Inc. (CAD denominated)

     239,029          9,522  
  

Other securities

          44,840  
          

 

 

 
             136,859  
          

 

 

 
                          
Health care   

UnitedHealth Group Inc.

     255,100          47,301  
6.99%   

Hypermarcas SA, ordinary nominative

     2,150,000          18,041  
  

Other securities

          69,904  
          

 

 

 
             135,246  
          

 

 

 
                          
Materials   

Randgold Resources Ltd.

     271,100          24,028  
4.23%   

James Hardie Industries PLC (CDI)

     850,000          13,393  
  

Other securities

          44,467  
          

 

 

 
             81,888  
          

 

 

 
                          
Real estate   

MGM Growth Properties LLC REIT, Class A

     943,856          27,551  
3.61%   

Gaming and Leisure Properties, Inc. REIT

     604,000          22,753  
  

Other securities

          19,600  
          

 

 

 
             69,904  
          

 

 

 
                          
Utilities   

Infraestructura Energética Nova, SAB de CV

     6,281,884          33,488  
3.50%   

DONG Energy AS

     491,552          22,190  
  

Other securities

          12,119  
          

 

 

 
             67,797  
          

 

 

 
                          
Telecommunication   

Vodafone Group PLC

     4,350,000          12,337  
services   

Other securities

          20,272  
          

 

 

 
1.69%              32,609  
          

 

 

 
                          
Miscellaneous   

Other common stocks in initial period of acquisition

          76,045  
          

 

 

 
3.93%   

Total common stocks (cost: $1,435,467,000)

          1,790,626  
          

 

 

 
Rights & warrants 0.01%                
                    
Miscellaneous   

Other rights & warrants in initial period of acquisition

          178  
          

 

 

 
0.01%   

Total rights & warrants (cost: $187,000)

          178  
          

 

 

 
Convertible bonds 0.35%    Principal amount
(000)
          
                    
Miscellaneous   

Other convertible bonds in initial period of acquisition

          6,821  
          

 

 

 
0.35%   

Total convertible bonds (cost: $6,003,000)

          6,821  
          

 

 

 
Bonds, notes & other debt instruments 1.98%                
                    
Corporate bonds & notes 1.90%                    
Telecommunication   

Sprint Corp. 7.25% 2021

   $ 33,000          36,754  
          

 

 

 
services           
1.90%           

 

American Funds Insurance Series   67


Global Growth and Income Fund

 

    

 

Bonds, notes & other debt instruments (continued)    Principal amount
(000)
      

Value

(000)

 
                    
U.S. Treasury bonds & notes 0.08%                    
U.S. Treasury   

Other securities

        $ 1,599  
          

 

 

 
0.08%   

Total bonds, notes & other debt instruments (cost: $32,553,000)

          38,353  
          

 

 

 
Short-term securities 3.59%                  
  

Bank of Tokyo-Mitsubishi UFJ, Ltd. 1.16% due 7/14/2017

     $47,800          47,778  
  

Nestlé Capital Corp. 1.14% due 9/12/20172

     15,500          15,463  
  

Other securities

          6,098  
          

 

 

 
  

Total short-term securities (cost: $69,341,000)

          69,339  
          

 

 

 
  

Total investment securities 98.47% (cost: $1,543,551,000)

          1,905,317  
  

Other assets less liabilities 1.53%

          29,699  
          

 

 

 
  

Net assets 100.00%

        $ 1,935,016  
          

 

 

 

This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio. “Miscellaneous” includes a security which was valued under fair value procedures adopted by authority of the board of trustees. The total value of the security which was valued under fair value procedures was $6,491,000, which represented .34% of the net assets of the fund. This entire amount relates to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading.

The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.

 

1  Security did not produce income during the last 12 months.
2 Acquired in a transaction exempt from registration under Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $15,463,000, which represented .80% of the net assets of the fund.

Key to abbreviations

ADR = American Depositary Receipts

CAD = Canadian dollars

CDI = CREST Depository Interest

See Notes to Financial Statements

 

68   American Funds Insurance Series


Growth-Income Fund

 

  
Summary investment portfolio June 30, 2017    unaudited

 

Common stocks 92.56%    Shares        Value (000)  
                    
Information   

Microsoft Corp.

     9,171,027        $ 632,159  
technology   

Alphabet Inc., Class A1

     373,700          347,421  
15.92%   

Alphabet Inc., Class C1

     303,884          276,149  
  

Texas Instruments Inc.

     5,992,659          461,015  
  

Broadcom Ltd.

     1,857,590          432,911  
  

Apple Inc.

     2,379,100          342,638  
  

Oracle Corp.

     5,921,000          296,879  
  

Intel Corp.

     7,904,600          266,701  
  

Accenture PLC, Class A

     1,654,500          204,629  
  

QUALCOMM Inc.

     3,218,175          177,708  
  

Other securities

          1,059,988  
          

 

 

 
             4,498,198  
          

 

 

 
                          
Consumer   

Amazon.com, Inc.1

     1,061,200          1,027,242  
discretionary   

Netflix, Inc.1

     3,716,277          555,249  
14.98%   

Comcast Corp., Class A

     6,032,600          234,789  
  

Twenty-First Century Fox, Inc., Class A

     6,891,000          195,291  
  

Home Depot, Inc.

     1,243,000          190,676  
  

Time Warner Inc.

     1,767,902          177,515  
  

Other securities

          1,850,600  
          

 

 

 
             4,231,362  
          

 

 

 
                          
Health care   

AbbVie Inc.

     7,549,600          547,422  
14.57%   

Amgen Inc.

     2,858,916          492,391  
  

Stryker Corp.

     2,203,757          305,837  
  

UnitedHealth Group Inc.

     1,513,596          280,651  
  

Medtronic PLC

     2,805,700          249,006  
  

Express Scripts Holding Co.1

     3,627,500          231,580  
  

Gilead Sciences, Inc.

     3,212,100          227,352  
  

Humana Inc.

     877,000          211,024  
  

Merck & Co., Inc.

     3,128,280          200,491  
  

Illumina, Inc.1

     1,100,300          190,924  
  

Other securities

          1,181,029  
          

 

 

 
             4,117,707  
          

 

 

 
                          
Financials   

JPMorgan Chase & Co.

     4,499,400          411,245  
11.34%   

Goldman Sachs Group, Inc.

     1,010,280          224,181  
  

Marsh & McLennan Companies, Inc.

     2,726,100          212,527  
  

Wells Fargo & Co.

     3,381,200          187,352  
  

Bank of New York Mellon Corp.

     3,486,500          177,881  
  

American International Group, Inc.

     2,716,489          169,835  
  

Aon PLC, Class A

     1,214,800          161,508  
  

Other securities

          1,658,137  
          

 

 

 
             3,202,666  
          

 

 

 
                          
Industrials   

CSX Corp.

     4,913,400          268,075  
8.11%   

Union Pacific Corp.

     2,186,433          238,124  
  

General Dynamics Corp.

     1,122,100          222,288  
  

Other securities

          1,564,302  
          

 

 

 
             2,292,789  
          

 

 

 
                          
Consumer staples   

Philip Morris International Inc.

     2,912,130          342,030  
7.27%   

Coca-Cola Co.

     5,964,900          267,526  
  

Procter & Gamble Co.

     1,887,992          164,539  
  

Other securities

          1,280,352  
          

 

 

 
             2,054,447  
          

 

 

 

 

American Funds Insurance Series   69


Growth-Income Fund

 

    

 

 

Common stocks (continued)   

Shares

      

Value

(000)

 
                    
Energy   

TOTAL SA

     4,688,868        $ 231,808  
5.94%   

EOG Resources, Inc.

     2,345,155          212,284  
  

Chevron Corp.

     1,716,900          179,124  
  

Other securities

          1,055,603  
          

 

 

 
             1,678,819  
          

 

 

 
                          
Materials   

Celanese Corp., Series A

     3,424,433          325,116  
4.68%   

Dow Chemical Co.

     3,554,100          224,157  
  

Monsanto Co.

     1,666,485          197,245  
  

Vale SA, Class A, preferred nominative (ADR)

     18,591,184          151,518  
  

Vale SA, Class A, preferred nominative

     4,440,000          36,065  
  

Other securities

          388,416  
          

 

 

 
             1,322,517  
          

 

 

 
                          
Real estate   

Other securities

          517,877  
          

 

 

 
1.83%           
                          
Telecommunication   

Verizon Communications Inc.

     10,842,400          484,221  
services   

Other securities

          22,544  
          

 

 

 
1.79%              506,765  
          

 

 

 
                          
Utilities   

Sempra Energy

     1,649,600          185,992  
0.85%   

Other securities

          53,804  
          

 

 

 
             239,796  
          

 

 

 
                          
Mutual funds   

Other securities

          132,822  
          

 

 

 
0.47%           
                          
Miscellaneous   

Other common stocks in initial period of acquisition

          1,358,818  
          

 

 

 
4.81%   

Total common stocks (cost: $19,495,854,000)

          26,154,583  
          

 

 

 
Convertible stocks 0.02%                
                    
Financials   

Other securities

          5,722  
          

 

 

 
0.02%   

Total convertible stocks (cost: $6,000,000)

          5,722  
          

 

 

 
Convertible bonds 0.33%    Principal amount
(000)
          
                    
Other   

Other securities

          93,133  
          

 

 

 
0.33%   

Total convertible bonds (cost: $71,028,000)

          93,133  
          

 

 

 
Bonds, notes & other debt instruments 0.20%                
                    
U.S. Treasury bonds & notes 0.20%                    
U.S. Treasury   

U.S. Treasury 1.625% 2026

   $ 59,900          56,801  
          

 

 

 
0.20%   

Total bonds, notes & other debt instruments (cost: $60,218,000)

          56,801  
          

 

 

 

 

70   American Funds Insurance Series


Growth-Income Fund

 

    

 

 

Short-term securities 6.85%    Principal amount
(000)
    

Value

(000)

 
                  
 

Apple Inc. 0.89% due 7/11/20172

   $ 50,000      $ 49,984  
 

Chariot Funding, LLC 0.95% due 7/7/20172

     50,000        49,988  
 

Coca-Cola Co. 1.09% due 8/2/20172

     50,000        49,950  
 

Federal Home Loan Bank 0.80%–1.04% due 7/5/2017–10/3/2017

     1,169,400        1,168,348  
 

Jupiter Securitization Co., LLC 1.17% due 7/27/20172

     50,000        49,954  
 

U.S. Treasury Bills 0.59%–0.91% due 7/6/2017–9/21/2017

     242,100        241,864  
 

Other securities

        325,405  
       

 

 

 
 

Total short-term securities (cost: $1,935,411,000)

        1,935,493  
       

 

 

 
 

Total investment securities 99.96% (cost: $21,568,511,000)

        28,245,732  
 

Other assets less liabilities 0.04%

        11,308  
       

 

 

 
 

Net assets 100.00%

      $ 28,257,040  
       

 

 

 

This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.

“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio. One security in “Other securities” (with a value of $5,722,000, an aggregate cost of $6,000,000, and which represented .02% of the net assets of the fund) was acquired on 6/28/2012 through private placement transactions exempt from registration under the Securities Act of 1933, which may subject it to legal or contractual restrictions on resale.

 

1  Security did not produce income during the last 12 months.
2  Acquired in a transaction exempt from registration under Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $500,083,000, which represented 1.77% of the net assets of the fund.

Key to abbreviation

ADR = American Depositary Receipts

See Notes to Financial Statements

 

American Funds Insurance Series   71


International Growth and Income Fund

 

  
Summary investment portfolio June 30, 2017    unaudited

 

Common stocks 85.41%    Shares       

 

Value
(000)

 
                    
Financials   

HDFC Bank Ltd.1

     1,884,593        $ 48,511  
18.04%   

Zurich Insurance Group AG

     83,900          24,420  
  

KB Financial Group Inc.

     356,500          17,978  
  

Banco Santander, SA

     2,571,524          17,011  
  

Prudential PLC

     738,000          16,927  
  

St. James’s Place PLC

     1,048,000          16,134  
  

AIA Group Ltd.

     1,833,000          13,394  
  

UniCredit SpA2

     674,400          12,594  
  

Sampo Oyj, Class A

     203,000          10,403  
  

Lloyds Banking Group PLC

     11,968,000          10,311  
  

BNP Paribas SA

     137,300          9,889  
  

Bank of Montreal

     76,927          5,649  
  

Other securities

          45,458  
          

 

 

 
             248,679  
          

 

 

 
                          
Consumer staples   

Imperial Brands PLC

     734,463          32,988  
10.42%   

Philip Morris International Inc.

     208,700          24,512  
  

Pernod Ricard SA

     128,650          17,228  
  

British American Tobacco PLC

     212,600          14,493  
  

CALBEE, Inc.

     284,400          11,164  
  

Other securities

          43,232  
          

 

 

 
             143,617  
          

 

 

 
                          
Industrials   

Shanghai International Airport Co., Ltd., Class A

     5,134,562          28,257  
10.40%   

Capita PLC

     3,066,000          27,614  
  

Airbus SE, non-registered shares

     163,000          13,404  
  

Abertis Infraestructuras, SA, Class A, non-registered shares

     721,507          13,366  
  

ASSA ABLOY AB, Class B

     585,700          12,868  
  

CK Hutchison Holdings Ltd.

     847,348          10,636  
  

Other securities

          37,151  
          

 

 

 
             143,296  
          

 

 

 
                          
Consumer   

HUGO BOSS AG

     207,500          14,528  
discretionary   

Toyota Motor Corp.

     226,000          11,841  
8.04%   

Ctrip.com International, Ltd. (ADR)2

     202,200          10,891  
  

Christian Dior SE1

     33,500          9,759  
  

Other securities

          63,860  
          

 

 

 
             110,879  
          

 

 

 
                          
Utilities   

EDP - Energias de Portugal, SA

     6,947,820          22,719  
7.70%   

DONG Energy AS

     497,000          22,436  
  

SSE PLC

     801,800          15,174  
  

Power Assets Holdings Ltd.

     1,313,000          11,596  
  

CK Infrastructure Holdings Ltd.

     1,282,000          10,772  
  

Other securities

          23,472  
          

 

 

 
             106,169  
          

 

 

 
                          
Information   

Taiwan Semiconductor Manufacturing Co., Ltd.

     4,668,000          31,995  
technology   

Samsung Electronics Co., Ltd.

     13,671          28,402  
7.48%   

Flex Ltd.2

     703,000          11,466  
  

Other securities

          31,277  
          

 

 

 
             103,140  
          

 

 

 

 

72   American Funds Insurance Series


International Growth and Income Fund

 

    

 

Common stocks    Shares       

Value

(000)

 
                    
Health care   

Novartis AG

     341,145        $ 28,390  
6.07%   

Teva Pharmaceutical Industries Ltd. (ADR)

     781,700          25,968  
  

Other securities

          29,248  
          

 

 

 
             83,606  
          

 

 

 
                          
Energy   

Royal Dutch Shell PLC, Class A

     1,753,707          46,482  
4.64%   

TOTAL SA

     208,000          10,283  
  

Other securities

          7,118  
          

 

 

 
             63,883  
          

 

 

 
                          
Real estate   

Cheung Kong Property Holdings Ltd.

     3,833,348          30,024  
4.41%   

Sun Hung Kai Properties Ltd.

     888,000          13,046  
  

Other securities

          17,772  
          

 

 

 
             60,842  
          

 

 

 
                          
Telecommunication   

BT Group PLC

     4,904,461          18,828  
services   

Nippon Telegraph and Telephone Corp.

     332,800          15,712  
2.75%   

Other securities

          3,327  
          

 

 

 
             37,867  
          

 

 

 
                          
Materials   

Rio Tinto PLC

     274,325          11,583  
2.69%   

Fortescue Metals Group Ltd.

     2,403,000          9,641  
  

Other securities

          15,822  
          

 

 

 
             37,046  
          

 

 

 
                          
Miscellaneous   

Other common stocks in initial period of acquisition

          38,208  
          

 

 

 
2.77%   

Total common stocks (cost: $1,081,498,000)

          1,177,232  
          

 

 

 
Bonds, notes & other debt instruments 2.96%   

Principal amount

(000)

          
                    
Corporate bonds & notes 1.47%                    
Health care   

Teva Pharmaceutical Finance Company BV 3.15%–4.10% 2026–2046

   $ 2,775          2,604  
0.54%   

Other securities

          4,823  
          

 

 

 
             7,427  
          

 

 

 
                          
Materials   

FMG Resources 9.75% 20223

     5,900          6,748  
          

 

 

 
0.49%           
                          
Energy   

Other securities

          6,066  
          

 

 

 
0.44%   

Total corporate bonds & notes

          20,241  
          

 

 

 
Bonds & notes of governments & government agencies outside the U.S. 1.46%                    
  

Other securities

          20,189  
          

 

 

 
U.S. Treasury bonds & notes 0.03%                    
U.S. Treasury   

Other securities

          419  
          

 

 

 
0.03%   

Total bonds, notes & other debt instruments (cost: $38,065,000)

          40,849  
          

 

 

 

 

American Funds Insurance Series   73


International Growth and Income Fund

 

    

 

Short-term securities 12.16%    Principal amount
(000)
      

Value

(000)

 
                    
  

Chariot Funding, LLC 1.18% due 7/18/20173

     $15,000        $ 14,991  
  

CPPIB Capital Inc. 1.14% due 7/18/20173

     32,200          32,182  
  

Fairway Finance Corp. 1.24% due 9/13/20173

     15,000          14,960  
  

Federal Home Loan Bank 1.00%–1.03% due 7/12/2017–8/23/2017

     45,200          45,167  
  

General Electric Co. 1.08% due 7/3/2017

     15,600          15,599  
  

Victory Receivables Corp. 1.06%–1.14% due 7/3/2017–7/11/20173

     30,000          29,990  
  

Other securities

          14,659  
          

 

 

 
  

Total short-term securities (cost: $167,548,000)

          167,548  
          

 

 

 
  

Total investment securities 100.53% (cost: $1,287,111,000)

          1,385,629  
  

Other assets less liabilities (0.53)%

          (7,261
          

 

 

 
  

Net assets 100.00%

        $ 1,378,368  
          

 

 

 

This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.

“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio.

The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.

 

1  Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities, including those in “Other securities,“ was $65,021,000, which represented 4.72% of the net assets of the fund. This amount includes $4,659,000 related to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading.
2  Security did not produce income during the last 12 months.
3  Acquired in a transaction exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $103,694,000, which represented 7.52% of the net assets of the fund.

Key to Abbreviation

ADR = American Depositary Receipts

See Notes to Financial Statements

 

74   American Funds Insurance Series


Capital Income Builder

 

  
Summary investment portfolio June 30, 2017    unaudited

 

Common stocks 72.88%    Shares       

 

Value
(000)

 
                    
Financials   

Sampo Oyj, Class A

     217,380        $ 11,140  
14.27%   

Swedbank AB, Class A

     211,087          5,144  
  

Lloyds Banking Group PLC

     5,949,400          5,126  
  

Zurich Insurance Group AG

     17,206          5,008  
  

Mercury General Corp.

     88,510          4,780  
  

KBC Groep NV

     57,447          4,357  
  

HSBC Holdings PLC (GBP denominated)

     437,200          4,053  
  

ABN AMRO Group NV, depository receipts

     141,555          3,753  
  

Other securities

          28,217  
          

 

 

 
             71,578  
          

 

 

 
                          
Consumer staples   

Philip Morris International Inc.

     190,235          22,342  
12.66%   

Coca-Cola Co.

     250,145          11,219  
  

Altria Group, Inc.

     149,110          11,104  
  

British American Tobacco PLC

     93,200          6,353  
  

Imperial Brands PLC

     123,800          5,561  
  

Diageo PLC

     168,400          4,976  
  

Other securities

          1,979  
          

 

 

 
             63,534  
          

 

 

 
                          
Telecommunication   

Vodafone Group PLC

     3,422,700          9,707  
services   

Singapore Telecommunications Ltd.

     2,861,700          8,086  
7.90%   

Verizon Communications Inc.

     151,851          6,782  
  

HKT Trust and HKT Ltd., units

     4,775,340          6,263  
  

Other securities

          8,792  
          

 

 

 
             39,630  
          

 

 

 
                          
Energy   

Royal Dutch Shell PLC, Class B

     279,360          7,504  
7.40%   

Royal Dutch Shell PLC, Class B (ADR)

     8,500          463  
  

Royal Dutch Shell PLC, Class A

     3,192          85  
  

Exxon Mobil Corp.

     92,600          7,476  
  

Enbridge Inc. (CAD denominated)

     174,970          6,970  
  

Helmerich & Payne, Inc.

     96,200          5,227  
  

Inter Pipeline Ltd.

     244,600          4,791  
  

Other securities

          4,585  
          

 

 

 
             37,101  
          

 

 

 
                          
Health care   

AstraZeneca PLC

     104,010          6,956  
6.03%   

AstraZeneca PLC (ADR)

     114,800          3,914  
  

Pfizer Inc.

     232,100          7,796  
  

Roche Holding AG, non-registered shares, nonvoting

     26,075          6,640  
  

Other securities

          4,933  
          

 

 

 
             30,239  
          

 

 

 
                          
Information   

Taiwan Semiconductor Manufacturing Co., Ltd.

     1,003,000          6,875  
technology   

Microsoft Corp.

     61,720          4,254  
4.94%   

Paychex, Inc.

     67,410          3,838  
  

Other securities

          9,790  
          

 

 

 
             24,757  
          

 

 

 
                          
Real estate   

Crown Castle International Corp. REIT

     83,300          8,345  
4.68%   

Iron Mountain Inc. REIT

     165,295          5,680  
  

Nexity SA, Class A, non-registered shares

     89,436          5,197  
  

Other securities

          4,262  
          

 

 

 
             23,484  
          

 

 

 

 

American Funds Insurance Series   75


Capital Income Builder

 

    

 

Common stocks (continued)    Shares       

Value

(000)

 
                    
Industrials   

Sydney Airport, units

     963,757        $ 5,252  
4.07%   

Boeing Co.

     20,200          3,994  
  

Airbus SE, non-registered shares

     45,592          3,749  
  

Other securities

          7,438  
          

 

 

 
             20,433  
          

 

 

 
                          
Utilities   

SSE PLC

     309,313          5,854  
3.97%   

CMS Energy Corp.

     79,100          3,658  
  

Other securities

          10,410  
          

 

 

 
             19,922  
          

 

 

 
                          
Consumer   

Greene King PLC

     549,600          4,821  
discretionary   

Las Vegas Sands Corp.

     71,400          4,562  
3.60%   

Other securities

          8,686  
          

 

 

 
             18,069  
          

 

 

 
                          
Materials   

Amcor Ltd.

     294,697          3,672  
1.23%   

Other securities

          2,506  
          

 

 

 
             6,178  
          

 

 

 
                          
Miscellaneous   

Other common stocks in initial period of acquisition

          10,684  
          

 

 

 
2.13%   

Total common stocks (cost: $346,870,000)

          365,609  
          

 

 

 
Convertible stocks 1.22%                
                    
Real estate   

American Tower Corp., Series B, 5.50% depository share, convertible preferred 2018

     50,600          6,134  
          

 

 

 
1.22%   

Total convertible stocks (cost: $5,305,000)

          6,134  
          

 

 

 
Bonds, notes & other debt instruments 20.55%    Principal amount
(000)
          
                    
Mortgage-backed obligations 7.49%                    
Federal agency   

Fannie Mae 4.00% 2036–20471

   $     5,869          6,208  
mortgage-backed   

Fannie Mae 4.00% 20471

     3,830          4,029  
obligations   

Freddie Mac 4.00% 20471

     13,957          14,701  
7.38%   

Freddie Mac 4.50% 20471

     6,924          7,419  
  

Freddie Mac 2.50%–4.00% 2032–20471

     777          802  
  

Other securities

          3,842  
          

 

 

 
             37,001  
          

 

 

 
                          
Other   

Other securities

          553  
          

 

 

 
0.11%   

Total mortgage-backed obligations

          37,554  
          

 

 

 
U.S. Treasury bonds & notes 7.47%                    
U.S. Treasury   

U.S. Treasury 8.00% 2021

     5,500          6,932  
6.85%   

U.S. Treasury 8.125% 2021

     8,200          10,267  
  

U.S. Treasury 1.875% 2022

     3,900          3,905  
  

U.S. Treasury 2.00% 2025

     9,400          9,242  
  

U.S. Treasury 2.00%–2.88% 2026–2045

     4,100          4,018  
          

 

 

 
             34,364  
          

 

 

 

 

76   American Funds Insurance Series


Capital Income Builder

 

    

 

 

Bonds, notes & other debt instruments    Principal amount
(000)
       Value
(000)
 
                    
U.S. Treasury   

U.S. Treasury Inflation-Protected Securities 0.38%-0.63% 2025-20262

   $ 3,089        $ 3,096  
          

 

 

 
inflation-protected   

Total U.S. Treasury bonds & notes

          37,460  
          

 

 

 
securities           
0.62%           
Corporate bonds & notes 4.57%                    
Financials   

Other securities

          7,592  
          

 

 

 
1.51%           
                          
Consumer staples   

Altria Group, Inc. 9.25% 2019

     200          230  
0.40%   

Other securities

          1,767  
          

 

 

 
             1,997  
          

 

 

 
                          
Telecommunication   

Verizon Communications Inc. 4.50%-4.60% 2020-2021

     600          643  
          

 

 

 
services           
0.13%           
                          
Other   

Other securities

          12,695  
          

 

 

 
2.53%   

Total corporate bonds & notes

          22,927  
          

 

 

 
Asset-backed obligations 1.02%                    
  

Other securities

          5,117  
          

 

 

 
  

Total bonds, notes & other debt instruments (cost: $103,148,000)

          103,058  
          

 

 

 
Short-term securities 5.06%                
                    
  

Total short-term securities (cost: $25,392,000)

          25,394  
          

 

 

 
  

Total investment securities 99.71% (cost: $480,715,000)

          500,195  
  

Other assets less liabilities 0.29%

          1,468  
          

 

 

 
  

Net assets 100.00%

        $ 501,663  
          

 

 

 

This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.

“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio. “Other securities” includes securities which were valued under fair value procedures adopted by authority of the board of trustees. The total value of securities which were valued under fair value procedures was $1,125,000, which represented .22% of the net assets of the fund. This amount includes $1,040,000 related to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading. “Other securities“ also includes securities (with an aggregate value of $484,000, which represented .10% of the net assets of the fund) which were acquired in transactions exempt from registration under Rule 144A of the Securities Act of 1933 and may be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers.

 

American Funds Insurance Series   77


Capital Income Builder

 

    

 

Forward currency contracts

 

 

Contract amount                           
Purchases
(000)
     Sales
(000)
       Counterparty      Settlement
date
       Unrealized
depreciation
at 6/30/2017
(000)
 
  USD257        NZD357        Bank of America, N.A.        7/21/2017          $(5)  

The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.

 

1  Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.
2  Index-linked bond whose principal amount moves with a government price index.

Key to abbreviations

ADR = American Depositary Receipts

CAD = Canadian dollars

GBP = British pounds

USD/$ = U.S. dollars

See Notes to Financial Statements

 

78   American Funds Insurance Series


Asset Allocation Fund

 

  
Summary investment portfolio June 30, 2017    unaudited

 

Common stocks 62.94%    Shares        Value
(000)
 
                    
Information   

Microsoft Corp.

     10,820,000        $ 745,823  
technology   

Taiwan Semiconductor Manufacturing Co., Ltd. (ADR)

     15,550,000          543,628  
18.29%   

Taiwan Semiconductor Manufacturing Co., Ltd.

     8,600,000          58,945  
  

ASML Holding NV (New York registered)

     2,502,100          326,049  
  

ASML Holding NV

     50,859          6,628  
  

VeriSign, Inc.1

     3,240,000          301,190  
  

Broadcom Ltd.

     1,245,000          290,147  
  

Facebook, Inc., Class A1

     1,722,000          259,987  
  

Intel Corp.

     6,000,000          202,440  
  

Apple Inc.

     1,132,850          163,153  
  

Western Digital Corp.

     1,800,000          159,480  
  

AAC Technologies Holdings Inc.

     12,661,500          158,280  
  

Alphabet Inc., Class C

     168,985          153,562  
  

Intuit Inc.

     1,133,200          150,500  
  

Symantec Corp.

     5,000,000          141,250  
  

Texas Instruments Inc.

     1,520,200          116,949  
  

Other securities

          546,100  
          

 

 

 
             4,324,111  
          

 

 

 
                          
Health care   

UnitedHealth Group Inc.

     2,431,000          450,756  
8.52%   

Johnson & Johnson

     2,850,000          377,026  
  

Humana Inc.

     1,310,000          315,212  
  

Express Scripts Holding Co.1

     3,550,000          226,632  
  

Merck & Co., Inc.

     2,170,300          139,095  
  

Other securities

          503,990  
          

 

 

 
             2,012,711  
          

 

 

 
                          
Consumer   

Comcast Corp., Class A

     12,246,000          476,614  
discretionary   

Newell Brands Inc.

     5,600,000          300,272  
7.96%   

Home Depot, Inc.

     1,600,000          245,440  
  

Amazon.com, Inc.1

     210,225          203,498  
  

VF Corp.

     2,730,000          157,248  
  

General Motors Co.

     3,500,000          122,255  
  

Other securities

          376,668  
          

 

 

 
             1,881,995  
          

 

 

 
                          
Financials   

JPMorgan Chase & Co.

     4,400,000          402,160  
7.68%   

Chubb Ltd.

     2,458,500          357,417  
  

First Republic Bank

     2,480,000          248,248  
  

Citigroup Inc.

     2,750,000          183,920  
  

Bank of America Corp.

     7,000,000          169,820  
  

Other securities

          454,362  
          

 

 

 
             1,815,927  
          

 

 

 
                          
Consumer staples   

Philip Morris International Inc.

     4,794,000          563,055  
5.18%   

Associated British Foods PLC

     4,600,000          175,904  
  

Nestlé SA

     908,230          79,041  
  

Nestlé SA (ADR)

     900,000          78,480  
  

Other securities

          327,673  
          

 

 

 
             1,224,153  
          

 

 

 
                          
Energy   

Noble Energy, Inc.

     9,000,000          254,700  
4.48%   

Weatherford International PLC1

     48,600,000          188,082  
  

Chevron Corp.

     1,279,750          133,516  
  

Other securities

          483,206  
          

 

 

 
             1,059,504  
          

 

 

 
                          

 

American Funds Insurance Series   79


Asset Allocation Fund

 

    

 

Common stocks (continued)    Shares        Value
(000)
 
                    
Industrials   

Lockheed Martin Corp.

     1,422,000        $ 394,761  
3.53%   

Boeing Co.

     1,551,800          306,869  
  

Other securities

          132,724  
          

 

 

 
             834,354  
          

 

 

 
                          
Materials   

E.I. du Pont de Nemours and Co.

     4,405,000          355,528  
3.39%   

LyondellBasell Industries NV

     2,200,000          185,658  
  

Other securities

          261,012  
          

 

 

 
             802,198  
          

 

 

 
                          
Real estate   

Other securities

          279,872  
          

 

 

 
1.19%           
                          
Telecommunication   

AT&T Inc.

     3,700,800          139,631  
services   

Other securities

          90,487  
          

 

 

 
0.97%              230,118  
          

 

 

 
                          
Utilities   

Other securities

          76,630  
          

 

 

 
0.33%           
                          
Miscellaneous   

Other common stocks in initial period of acquisition

          335,415  
          

 

 

 
1.42%   

Total common stocks (cost: $10,593,691,000)

          14,876,988  
          

 

 

 
                          
Convertible stocks 0.04%                
                    
Industrials   

Other securities

          4,426  
          

 

 

 
0.02%           
                          
Miscellaneous   

Other convertible stocks in initial period of acquisition

          5,350  
          

 

 

 
0.02%   

Total convertible stocks (cost: $19,828,000)

          9,776  
          

 

 

 
Bonds, notes & other debt instruments 29.13%    Principal amount
(000)
          
                    
U.S. Treasury bonds & notes 12.55%                    
U.S. Treasury   

U.S. Treasury 1.50% 2019

     $   400,000          400,924  
10.27%   

U.S. Treasury 1.25% 20202

     328,117          326,102  
  

U.S. Treasury 1.625% 2020

     125,000          125,156  
  

U.S. Treasury 2.875% 2046

     147,158          148,198  
  

U.S. Treasury 3.00% 2047

     112,750          116,484  
  

U.S. Treasury 0.63%-4.75% 2018-2046

     1,312,407          1,312,155  
          

 

 

 
             2,429,019  
          

 

 

 
                          
U.S. Treasury   

U.S. Treasury Inflation-Protected Security 0.625% 20243

     213,965          217,193  
inflation-protected   

U.S. Treasury Inflation-Protected Security 1.375% 20443

     134,572          146,704  
securities   

U.S. Treasury Inflation-Protected Securities 0.13%-2.63% 2017-20463

     176,480          174,433  
          

 

 

 
2.28%              538,330  
          

 

 

 
  

Total U.S. Treasury bonds & notes

          2,967,349  
          

 

 

 

 

80   American Funds Insurance Series


Asset Allocation Fund

 

    

 

Bonds, notes & other debt instruments    Principal amount
(000)
       Value
(000)
 
                    
Corporate bonds & notes 9.69%                    
Energy   

Other securities

        $ 451,692  
          

 

 

 
1.91%           
                          
Financials   

ACE INA Holdings Inc. 2.30%-4.35% 2020-2045

     $     6,905          7,084  
1.50%   

JPMorgan Chase & Co. 2.55%-5.30% 2020-2049

     13,252          13,467  
  

Other securities

          334,443  
          

 

 

 
             354,994  
          

 

 

 
                          
Health care   

Johnson & Johnson 2.25%-3.75% 2022-2047

     11,785          12,009  
1.38%   

UnitedHealth Group Inc. 3.35% 2022

     4,355          4,549  
  

Other securities

          310,806  
          

 

 

 
             327,364  
          

 

 

 
                          
Consumer   

Comcast Corp. 1.63%-5.88% 2018-2036

     9,285          8,875  
discretionary   

Home Depot, Inc. 1.80%-4.25% 2020-2047

     13,665          13,890  
0.92%   

Newell Rubbermaid Inc. 2.60%-5.50% 2019-2046

     9,253          9,825  
  

Other securities

          185,214  
          

 

 

 
             217,804  
          

 

 

 
                          
Industrials   

Lockheed Martin Corp. 2.50%-3.55% 2020-2026

     15,050          15,474  
0.48%   

Other securities

          96,927  
          

 

 

 
             112,401  
          

 

 

 
                          
Consumer staples   

Philip Morris International Inc. 1.88%-4.25% 2020-2044

     13,445          13,608  
0.47%   

Other securities

          96,430  
          

 

 

 
             110,038  
          

 

 

 
                          
Information   

Apple Inc. 2.50%-3.35% 2022-2027

     3,695          3,739  
technology   

Broadcom Ltd. 2.38%-3.88% 2020-20274

     19,670          20,114  
0.43%   

Microsoft Corp. 2.40%-4.20% 2026-2037

     10,150          10,692  
  

Other securities

          67,529  
          

 

 

 
             102,074  
          

 

 

 
                          
Other   

Other securities

          614,941  
          

 

 

 
2.60%   

Total corporate bonds & notes

          2,291,308  
          

 

 

 
Mortgage-backed obligations 5.68%                    
Federal agency   

Fannie Mae 0%-7.50% 2021-20565,6,7

     582,350          606,624  
mortgage-backed   

Freddie Mac 1.69%-6.50% 2022-20505,6,7

     419,104          435,897  
obligations   

Other securities

          223,537  
          

 

 

 
5.36%              1,266,058  
          

 

 

 
                          
Other   

Other securities

          75,787  
          

 

 

 
0.32%   

Total mortgage-backed obligations

          1,341,845  
          

 

 

 

 

American Funds Insurance Series   81


Asset Allocation Fund

 

    

 

Bonds, notes & other debt instruments (continued)    Principal amount
(000)
       Value
(000)
 
                    
Federal agency bonds & notes 0.22%                    
  

Fannie Mae 1.88%-2.00% 2022-2026

     $      16,000        $ 15,378  
  

Federal Home Loan Bank 0.875% 2018

     17,140          17,071  
  

Freddie Mac 0.75% 2018

     18,768          18,702  
  

Other securities

          210  
          

 

 

 
  

Total federal agency bonds & notes

          51,361  
          

 

 

 
Other 0.99%                    
  

Other securities

          234,779  
          

 

 

 
  

Total bonds, notes & other debt instruments (cost: $6,822,677,000)

          6,886,642  
          

 

 

 
Short-term securities 9.92%                
                    
  

Apple Inc. 0.91%-0.92% due 7/18/2017-7/25/20174

     100,000          99,935  
  

Federal Home Loan Bank 0.64%-1.05% due 7/3/2017-10/10/2017

     1,551,500          1,550,290  
  

Johnson & Johnson 1.07%-1.12% due 8/31/2017-9/19/20174

     85,000          84,819  
  

Jupiter Securitization Co., LLC 1.17% due 7/27/20174

     50,000          49,954  
  

Microsoft Corp. 1.02% due 8/22/20174

     34,200          34,143  
  

U.S. Treasury Bills 0.59%-0.91% due 7/6/2017-8/24/2017

     368,700          368,423  
  

Other securities

          157,419  
          

 

 

 
  

Total short-term securities (cost: $2,344,887,000)

          2,344,983  
          

 

 

 
  

Total investment securities 102.03% (cost: $19,781,083,000)

          24,118,389  
  

Other assets less liabilities (2.03)%

          (479,072
          

 

 

 
  

Net assets 100.00%

        $ 23,639,317  
          

 

 

 

This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.

“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio. “Miscellaneous” and “Other securities” includes securities which were valued under fair value procedures adopted by authority of the board of trustees. The total value of securities which were valued under fair value procedures was $38,105,000, which represented .16% of the net assets of the fund. “Other securities” also includes loan participations and assignments, which may be subject to legal or contractual restrictions on resale. The total value of all such loans was $57,784,000, which represented .24% of the net assets of the fund. Some securities in “Other securities” (with an aggregate value of $27,635,000, an aggregate cost of $48,070,000, and which represented .12% of the net assets of the fund) were acquired from 3/10/2010 to 3/6/2017 through private placement transactions exempt from registration under the Securities Act of 1933, which may subject them to legal or contractual restrictions on resale.

Futures contracts

 

 

    Contracts    Type    Number of
contracts
     Expiration      Notional
amount8
(000)
    Value at
6/30/20179
(000)
   

Unrealized
appreciation
at 6/30/2017
(000)

10 Year U.S. Treasury Note Futures

   Short      200        September 2017      $ (20,000   $ (25,106     $145

2 Year U.S. Treasury Note Futures

   Short      883        October 2017        (176,600     (190,825     200
                 

 

                  $345
                 

 

 

82   American Funds Insurance Series


Asset Allocation Fund

 

    

 

Swap contracts

 

Interest rate swaps

 

    Receive      Pay      Expiration
date
       Notional
(000)
       Value at
6/30/2017
(000)
     Upfront
payments/
receipts
(000)
       Unrealized
(depreciation)
appreciation
at 6/30/2017
(000)
 

3-month USD-LIBOR

     1.875%        3/20/2019        $ 2,320,000          $     (511      $–            $    (511

1.32625%

     U.S. EFFR        4/5/2019          366,600          (396                 (396

3-month USD-LIBOR

     1.501%        6/8/2019          100,000          180                   180  

1.336%

     U.S. EFFR        6/8/2019          100,000          (142                 (142

1.6365%

     3-month USD-LIBOR        10/16/2019          124,000          (32                 (32

3-month USD-LIBOR

     3.402%        6/23/2044          18,000          (3,218                 (3,218

3-month USD-LIBOR

     2.945%        10/16/2044          28,000          (2,411                 (2,411
                      

 

 

        

 

 

 
                         $–            $(6,530
                      

 

 

        

 

 

 

The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.

 

1  Security did not produce income during the last 12 months.
2  A portion of this security was pledged as collateral. The total value of pledged collateral was $7,892,000, which represented .03% of the net assets of the fund.
3  Index-linked bond whose principal amount moves with a government price index.
4  Acquired in a transaction exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities, including those in “Other securities,” was $1,152,860,000, which represented 4.88% of the net assets of the fund.
5  Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.
6  Coupon rate may change periodically.
7  Purchased on a TBA basis.
8  Notional amount is calculated based on the number of contracts and notional contract size.
9  Value is calculated based on the notional amount and current market price.

Key to abbreviations and symbol

ADR = American Depositary Receipts

EFFR = Federal Funds Effective Rate

LIBOR = London Interbank Offered Rate

TBA = To-be-announced

USD/$ = U.S. dollars

See Notes to Financial Statements

 

American Funds Insurance Series   83


Global Balanced Fund   
Summary investment portfolio June 30, 2017    unaudited

 

Common stocks 62.81%    Shares        Value
(000)
 
                          
Information   

Nintendo Co., Ltd.

     19,800        $ 6,633  
technology   

Microsoft Corp.

     76,100          5,246  
12.53%   

ASML Holding NV

     35,689          4,651  
  

Taiwan Semiconductor Manufacturing Co., Ltd.

     664,000          4,551  
  

Alphabet Inc., Class C1

     2,155          1,958  
  

Keyence Corp.

     4,400          1,930  
  

Broadcom Ltd.

     7,850          1,830  
  

Amphenol Corp., Class A

     24,000          1,772  
  

Symantec Corp.

     62,565          1,768  
  

Samsung Electronics Co., Ltd.

     830          1,724  
  

Other securities

          4,231  
          

 

 

 
             36,294  
          

 

 

 
                          
Consumer staples   

British American Tobacco PLC

     84,150          5,736  
7.92%   

Philip Morris International Inc.

     30,200          3,547  
  

Nestlé SA

     33,200          2,889  
  

Reynolds American Inc.

     42,104          2,738  
  

Altria Group, Inc.

     31,000          2,309  
  

Other securities

          5,708  
          

 

 

 
             22,927  
          

 

 

 
                          
Industrials   

Boeing Co.

     18,500          3,658  
7.40%   

Flughafen Zürich AG

     12,235          3,004  
  

ASSA ABLOY AB, Class B

     118,000          2,593  
  

BAE Systems PLC

     280,000          2,310  
  

AB Volvo, Class B

     102,000          1,739  
  

Edenred SA

     65,000          1,695  
  

General Electric Co.

     54,000          1,459  
  

Other securities

          4,988  
          

 

 

 
             21,446  
          

 

 

 
                          
Financials   

JPMorgan Chase & Co.

     42,700          3,903  
6.64%   

HSBC Holdings PLC (GBP denominated)

     303,468          2,813  
  

BM&FBOVESPA SA - Bolsa de Valores, Mercadorias e Futuros, ordinary nominative

     376,000          2,241  
  

HDFC Bank Ltd. (ADR)

     21,605          1,879  
  

AIA Group Ltd.

     250,000          1,827  
  

BlackRock, Inc.

     4,000          1,689  
  

Other securities

          4,886  
          

 

 

 
             19,238  
          

 

 

 
                          
Health care   

Humana Inc.

     20,830          5,012  
5.74%   

Merck & Co., Inc.

     58,120          3,725  
  

Mettler-Toledo International Inc.1

     3,500          2,060  
  

Fisher & Paykel Healthcare Corp. Ltd.

     204,000          1,712  
  

Other securities

          4,103  
          

 

 

 
             16,612  
          

 

 

 
                          
Consumer   

Amazon.com, Inc.1

     3,600          3,485  
discretionary   

Home Depot, Inc.

     22,030          3,380  
4.76%   

Peugeot SA

     119,000          2,374  
  

Nokian Renkaat Oyj

     50,634          2,096  
  

Other securities

          2,439  
          

 

 

 
             13,774  
          

 

 

 

 

84   American Funds Insurance Series


Global Balanced Fund

 

    

 

 

Common stocks    Shares        Value
(000)
 
                          
Materials   

E.I. du Pont de Nemours and Co.

     37,500        $ 3,027  
4.75%   

Other securities

          10,721  
          

 

 

 
             13,748  
          

 

 

 
                          
Energy   

Royal Dutch Shell PLC, Class B

     100,000          2,686  
4.37%   

ConocoPhillips

     49,506          2,176  
  

Enbridge Inc. (CAD denominated)

     50,594          2,016  
  

LUKOIL Oil Co. PJSC (ADR)

     39,800          1,938  
  

Other securities

          3,832  
          

 

 

 
             12,648  
          

 

 

 
                          
Utilities   

Dominion Energy, Inc.

     28,500          2,184  
2.17%   

Enel Américas SA (ADR)

     197,000          1,857  
  

Other securities

          2,237  
          

 

 

 
             6,278  
          

 

 

 
                          
Real estate   

Equinix, Inc. REIT

     4,240          1,820  
1.18%   

Other securities

          1,610  
          

 

 

 
             3,430  
          

 

 

 
                          
Telecommunication   

Other securities

          1,804  
          

 

 

 

services

0.62%

          
                          
Miscellaneous   

Other common stocks in initial period of acquisition

          13,687  
          

 

 

 
4.73%   

Total common stocks (cost: $142,482,000)

          181,886  
          

 

 

 
Bonds, notes & other debt instruments 31.18%    Principal amount
(000)
          
                          
Bonds & notes of governments & government agencies outside the U.S. 14.54%                    
  

Japan 0.10%-2.30% 2018-20442

     ¥809,803          7,805  
  

Poland (Republic of) 3.25%-5.75% 2017-2025

     PLN13,590          3,979  
  

Russian Federation 7.00% 2023

     RUB135,000          2,209  
  

United Mexican States 4.00%-10.00% 2017-20402

     MXN53,729          3,089  
  

United Mexican States 4.60%-4.75% 2044-2046

     $        350          347  
  

Other securities

          24,667  
          

 

 

 
             42,096  
          

 

 

 
U.S. Treasury bonds & notes 8.53%                    
U.S. Treasury   

U.S. Treasury 0.75%-3.13% 2017-2046

     17,763          17,681  
          

 

 

 
6.10%           
                          
U.S. Treasury   

U.S. Treasury Inflation-Protected Securities 0.13%–2.38% 2021–20442

     6,983          7,032  
          

 

 

 
inflation-protected   

Total U.S. Treasury bonds & notes

          24,713  
          

 

 

 
securities           
2.43%           

 

American Funds Insurance Series   85


Global Balanced Fund

 

    

 

 

Bonds, notes & other debt instruments (continued)    Principal amount
(000)
       Value
(000)
 
                          
Corporate bonds & notes 6.86%                    
Financials   

HSBC Holdings PLC 3.375% 2024

         100        $ 120  
1.70%   

HSBC Holdings PLC 3.90%-4.30% 2026

     $    400          420  
  

JPMorgan Chase & Co. 2.55%-6.75% 2021-2049

     389          407  
  

Other securities

          3,987  
          

 

 

 
             4,934  
          

 

 

 
                          
Health care   

Humana Inc. 3.15% 2022

     100          102  
0.71%   

Other securities

          1,945  
          

 

 

 
             2,047  
          

 

 

 
                          
Consumer staples   

Philip Morris International Inc. 2.00%-4.25% 2020-2044

     195          198  
0.44%   

Reynolds American Inc. 4.00%-5.85% 2022-2045

     145          160  
  

Other securities

          900  
          

 

 

 
             1,258  
          

 

 

 
                          
Information   

Microsoft Corp. 2.40%-3.30% 2026-2027

     640          651  
technology   

Other securities

          338  
          

 

 

 
0.34%              989  
          

 

 

 
                          
Industrials   

General Electric Capital Corp. 3.15% 2022

     50          52  
0.25%   

Other securities

          671  
          

 

 

 
             723  
          

 

 

 
                          
Other   

Other securities

          9,903  
          

 

 

 
3.42%   

Total corporate bonds & notes

          19,854  
          

 

 

 
Mortgage-backed obligations 1.18%                    
Other   

Other securities

          3,413  
          

 

 

 
1.18%   

Total mortgage-backed obligations

          3,413  
          

 

 

 
Asset-backed obligations 0.07%                    
  

Other securities

          200  
          

 

 

 
  

Total bonds, notes & other debt instruments (cost: $90,647,000)

          90,276  
          

 

 

 
Short-term securities 5.18%  
                          
  

British Columbia (Province of) 0.92% due 7/17/2017

     3,000          2,998  
  

CPPIB Capital Inc. 1.16% due 7/18/20173

     3,000          2,998  
  

General Electric Co. 1.08% due 7/3/2017

     3,400          3,400  
  

Gotham Funding Corp. 1.20% due 7/14/20173

     2,000          1,999  
  

U.S. Treasury Bills 0.63% due 7/6/2017

     1,500          1,500  
  

Victory Receivables Corp. 1.20% due 7/17/20173

     2,100          2,099  
          

 

 

 
  

Total short-term securities (cost: $14,995,000)

          14,994  
          

 

 

 
  

Total investment securities 99.17% (cost: $248,124,000)

          287,156  
  

Other assets less liabilities 0.83%

          2,396  
          

 

 

 
  

Net assets 100.00%

        $ 289,552  
          

 

 

 

This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

 

86   American Funds Insurance Series


Global Balanced Fund

 

    

 

As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.

“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio. “Other securities” includes securities which were valued under fair value procedures adopted by authority of the board of trustees. The total value of securities which were valued under fair value procedures was $2,240,000, which represented .77% of the net assets of the fund. This amount includes $1,468,000 related to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading.

Forward currency contracts

 

 

Contract amount                        Unrealized
appreciation
(depreciation)
 
Purchases
(000)
     Sales
(000)
       Counterparty      Settlement
date
       at 6/30/2017
(000)
 
  USD1,114        JPY125,000        JPMorgan Chase        7/7/2017          $   2  
  USD310        PLN1,158        JPMorgan Chase        7/7/2017          (2
  SEK7,759        USD895        Citibank        7/10/2017          26  
  NOK6,100        USD721        Bank of America, N.A.        7/10/2017          9  
  USD561        INR36,300        JPMorgan Chase        7/10/2017          1  
  USD387        INR25,000        JPMorgan Chase        7/10/2017          4 
  GBP276        AUD475        UBS AG        7/10/2017          (5
  USD770        MXN14,100        Bank of America, N.A.        7/10/2017          (6
  GBP255        USD330        JPMorgan Chase        7/11/2017          2  
  USD294        THB10,000        Bank of America, N.A.        7/11/2017          (1
  USD170        ILS600        JPMorgan Chase        7/11/2017          (3
  JPY33,581        USD307        JPMorgan Chase        7/11/2017          (8
  SEK1,625        USD187        Barclays Bank PLC        7/12/2017          6  
  NOK2,443        USD288        Barclays Bank PLC        7/12/2017          5  
  EUR335        GBP290        HSBC Bank        7/12/2017          4  
  EUR344        GBP300        Goldman Sachs        7/13/2017          3  
  USD326        MXN6,000        Bank of America, N.A.        7/14/2017          (3
  JPY43,839        USD399        Bank of America, N.A.        7/18/2017          (9
  EUR361        USD403        Citibank        7/19/2017          10  
  USD739        AUD970        Citibank        7/19/2017          (6
  JPY72,628        USD665        JPMorgan Chase        7/19/2017          (19
  EUR719        USD803        UBS AG        7/20/2017          19  
  JPY31,929        USD288        Citibank        7/20/2017          (4
  USD2,206        GBP1,700        Barclays Bank PLC        7/20/2017          (10
  EUR982        USD1,094        Bank of America, N.A.        7/24/2017          29  
  EUR645        USD724        Citibank        7/24/2017          13  
  EUR266        USD297        Goldman Sachs        7/24/2017          8  
  EUR134        USD150        JPMorgan Chase        7/24/2017          4  
  USD220        ZAR2,900        UBS AG        7/24/2017          4 
  USD267        ZAR3,500        JPMorgan Chase        7/24/2017          4 
  USD648        MYR2,800        JPMorgan Chase        7/24/2017          (3
  JPY21,085        AUD250        UBS AG        7/24/2017          (4
  JPY22,275        USD200        Goldman Sachs        7/27/2017          (2
  USD207        AUD275        Bank of America, N.A.        7/27/2017          (4
  JPY40,289        USD362        Bank of America, N.A.        7/27/2017          (4
  USD358        AUD475        Bank of America, N.A.        7/27/2017          (7
  EUR357        USD400        Citibank        7/28/2017          8  
  USD298        MXN5,430        JPMorgan Chase        7/28/2017          1  
  JPY57,092        USD512        UBS AG        8/4/2017          (4
  USD256        JPY28,000        Bank of New York Mellon        8/9/2017          7  
  SEK1,270        USD147        Bank of America, N.A.        8/9/2017          4  
  USD614        CAD800        Goldman Sachs        8/10/2017          (4
  JPY22,250        USD202        HSBC Bank        8/14/2017          (4
  SEK1,613        USD186        UBS AG        8/21/2017          6  
  JPY23,305        USD211        HSBC Bank        8/21/2017          (3
  JPY36,271        USD327        HSBC Bank        8/23/2017          (4
                 

 

 

 
                    $ 48  
                 

 

 

 

 

American Funds Insurance Series   87


Global Balanced Fund

 

    

 

The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.

 

1  Security did not produce income during the last 12 months.
2  Index-linked bond whose principal amount moves with a government price index.
3  Acquired in a transaction exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities, including those in “Other securities,” was $12,075,000, which represented 4.17% of the net assets of the fund.
4  Amount less than one thousand.

Key to abbreviations and symbols

ADR = American Depositary Receipts

AUD = Australian dollars

CAD = Canadian dollars

EUR/ = Euros

GBP = British pounds

ILS = Israeli shekels

INR = Indian rupees

JPY/¥ = Japanese yen

MXN = Mexican pesos

MYR = Malaysian ringgits

NOK = Norwegian kroner

PLN = Polish zloty

RUB = Russian rubles

SEK = Swedish kronor

THB = Thai baht

USD/$ = U.S. dollars

ZAR = South African rand

See Notes to Financial Statements

 

88   American Funds Insurance Series


Bond Fund

 

  
Summary investment portfolio June 30, 2017    unaudited

 

 

Bonds, notes & other debt instruments 96.74%    Principal amount
(000)
      

Value

(000)

 
                    
Corporate bonds & notes 36.14%                    
Financials   

Bank of America Corp. 3.124% 2023

     $    42,500        $ 43,007  
8.57%   

Capital One Financial Corp. 2.50% 2020

     48,000          48,237  
  

Citigroup Inc. 2.15%-3.89% 2018-2028

     77,415          77,721  
  

Intesa Sanpaolo SpA 5.017% 20241

     51,415          52,223  
  

Morgan Stanley 2.50% 2021

     44,400          44,386  
  

US Bancorp. 2.00%-3.15% 2020-2027

     3,800          3,814  
  

Other securities

          630,256  
          

 

 

 
             899,644  
          

 

 

 
                          
Energy   

Other securities

          657,739  
          

 

 

 
6.26%           
                          
Health care   

Other securities

          520,526  
          

 

 

 
4.96%           
                          
Utilities   

Other securities

          444,402  
          

 

 

 
4.23%           
                          
Consumer   

Other securities

          383,633  
          

 

 

 
discretionary           
3.65%           
                          
Consumer staples   

Other securities

          284,721  
          

 

 

 
2.71%           
                          
Telecommunication   

Other securities

          172,408  
          

 

 

 

services

1.64%

          
                          
Real estate   

Other securities

          131,668  
          

 

 

 
1.25%           
                          
Industrials   

Other securities

          121,291  
          

 

 

 
1.15%           
                          
Information   

Apple Inc. 1.55%-3.35% 2021-2027

     16,442          16,225  
technology   

Other securities

          94,798  
          

 

 

 
1.06%              111,023  
          

 

 

 
                          
Materials   

Other securities

          69,005  
          

 

 

 
0.66%   

Total corporate bonds & notes

          3,796,060  
          

 

 

 
Mortgage-backed obligations 27.23%                    
Federal agency   

Fannie Mae 3.00% 20462

     77,742          77,700  
mortgage-backed   

Fannie Mae 4.00% 20462

     51,064          53,719  
obligations   

Fannie Mae 3.00% 20472,3

     43,330          43,198  
26.58%   

Fannie Mae 3.50% 20472,3

     46,740          47,995  
  

Fannie Mae 4.00% 20472,3

     385,400          404,391  
  

Fannie Mae 4.00% 20472,3

     120,500          126,657  
  

Fannie Mae 4.50% 20472,3

     190,000          203,790  

 

American Funds Insurance Series   89


Bond Fund

 

    

 

Bonds, notes & other debt instruments (continued)    Principal amount
(000)
      

Value

(000)

 
                    
Mortgage-backed obligations (continued)                    
Federal agency   

Fannie Mae 2.77%-9.31% 2023-20472,3,4

     $        124,544        $ 131,829  
mortgage-backed   

Freddie Mac 3.00% 20352

     54,447          55,516  
obligations   

Freddie Mac 3.50% 20452

     42,618          44,145  
(continued)   

Freddie Mac 3.50% 20462

     106,869          109,878  
  

Freddie Mac 3.00% 20472,3

     131,109          130,812  
  

Freddie Mac 3.50% 20472,3

     255,000          261,465  
  

Freddie Mac 3.50% 20472,3

     50,000          51,355  
  

Freddie Mac 4.00% 20472,3

     301,000          315,956  
  

Freddie Mac 4.00% 20472,3

     50,000          52,580  
  

Freddie Mac 0%-5.50% 2021-20472,3

     109,965          115,144  
  

Government National Mortgage Assn. 4.00% 20472,3

     315,681          332,180  
  

Government National Mortgage Assn. 4.00% 20472,3

     55,919          58,759  
  

Government National Mortgage Assn. 4.50% 20472

     50,760          54,049  
  

Government National Mortgage Assn. 4.50% 2040-20472

     113,500          120,753  
          

 

 

 
             2,791,871  
          

 

 

 
                          
Other   

Other securities

          68,205  
          

 

 

 
0.65%   

Total mortgage-backed obligations

          2,860,076  
          

 

 

 
U.S. Treasury bonds & notes 21.22%                    
U.S. Treasury   

U.S. Treasury 8.75% 2020

     40,000          48,706  
18.45%   

U.S. Treasury 1.375% 20215

     70,000          69,037  
  

U.S. Treasury 2.00% 2022

     222,750          223,262  
  

U.S. Treasury 2.125% 2022

     150,000          151,647  
  

U.S. Treasury 2.25% 2023

     115,000          116,145  
  

U.S. Treasury 2.125% 2024

     260,000          260,325  
  

U.S. Treasury 2.25% 2024

     80,000          80,759  
  

U.S. Treasury 2.25% 2027

     226,075          225,094  
  

U.S. Treasury 2.375% 2027

     281,212          283,102  
  

U.S. Treasury 3.00% 2047

     196,713          203,228  
  

U.S. Treasury 3.00% 2047

     106,625          110,215  
  

U.S. Treasury 0.75%-6.13% 2019-2046

     159,234          166,226  
          

 

 

 
             1,937,746  
          

 

 

 
                          
U.S. Treasury   

U.S. Treasury Inflation-Protected Security 0.375% 20256

     52,608          52,271  
inflation-protected   

U.S. Treasury Inflation-Protected Security 0.375% 20276

     79,415          78,066  
securities   

U.S. Treasury Inflation-Protected Security 0.875% 20476

     90,148          87,605  
2.77%   

U.S. Treasury Inflation-Protected Securities 1.00%-2.00% 2026-20466

     68,221          72,769  
          

 

 

 
             290,711  
          

 

 

 
  

Total U.S. Treasury bonds & notes

          2,228,457  
          

 

 

 
Bonds & notes of governments & government agencies outside the U.S. 6.66%                    
  

Japan, Series 19, 0.10% 20246

     ¥         5,339,655          49,482  
  

Japan, Series 20, 0.10% 20256

     11,261,250          104,458  
  

Portuguese Republic 5.125% 2024

     $              94,400          96,524  
  

Portuguese Republic 2.20%-4.13% 2022-2027

                   40,000          48,860  
  

United Mexican States, Series M, 6.50% 2021

     MXN3,132,700          172,114  
  

United Mexican States 3.60%-6.05% 2025-2047

     $              25,020          26,130  
  

United Mexican States 4.00%-5.75% 2026-20466

     MXN671,343          35,797  
  

Other securities

          165,840  
          

 

 

 
             699,205  
          

 

 

 
Asset-backed obligations 3.59%                    
  

Other securities

          376,981  
          

 

 

 

 

90   American Funds Insurance Series


Bond Fund

 

    

 

Bonds, notes & other debt instruments    Principal amount
(000)
       Value
(000)
 
                    
Municipals 1.78%                         
Illinois 1.14%   

G.O. Bonds, Pension Funding Series 2003, 4.95% 2023

     $          16,830        $ 16,913  
  

G.O. Bonds, Pension Funding Series 2003, 5.10% 20332

     81,515          76,389  
  

G.O. Bonds, Pension Funding Series 2013, 5.877% 2019

     400          414  
  

G.O. Bonds, Series 2013-B, 3.65% 2020

     1,000          984  
  

G.O. Bonds, Series 2013-B, 4.11% 2022

     750          710  
  

G.O. Bonds, Series 2013-B, 4.31% 2023

     2,125          1,991  
  

G.O. Bonds, Series 2013-B, 4.91% 2027

     1,450          1,339  
  

G.O. Bonds, Taxable Build America Bonds, Series 2010-3, 5.547% 2019

     335          344  
  

G.O. Bonds, Taxable Build America Bonds, Series 2010-1, 6.63% 2035

     13,780          14,156  
  

G.O. Bonds, Taxable Build America Bonds, Series 2010-2, 5.65% 2020

     250          258  
  

G.O. Bonds, Taxable Build America Bonds, Series 2010-2, 5.85% 2022

     2,000          2,037  
  

G.O. Bonds, Taxable Build America Bonds, Series 2010-2, 5.95% 2023

     2,950          2,986  
  

G.O. Bonds, Taxable Build America Bonds, Series 2010-2, 6.15% 2025

     750          751  
  

G.O. Bonds, Taxable Build America Bonds, Series 2010-3, 5.727% 2020

     400          414  
  

G.O. Bonds, Taxable Build America Bonds, Series 2010-5, 6.20% 2021

     375          387  
          

 

 

 
             120,073  
          

 

 

 
                          
Other 0.64%   

Other securities

          66,721  
          

 

 

 
  

Total municipals

          186,794  
          

 

 

 
Federal agency bonds & notes 0.12%                    
  

Fannie Mae 2.125% 2026

     12,410          12,135  
          

 

 

 
  

Total bonds, notes & other debt instruments (cost: $10,083,200,000)

          10,159,708  
          

 

 

 
Common stocks 0.02%    Shares           
                    
Other   

Other securities

          1,095  
          

 

 

 
0.01%           
                          
Miscellaneous   

Other common stocks in initial period of acquisition

          1,049  
          

 

 

 
0.01%   

Total common stocks (cost: $1,644,000)

          2,144  
          

 

 

 
Rights & warrants 0.00%                
                    
Utilities   

Other securities

          71  
          

 

 

 
0.00%   

Total rights & warrants (cost: $100,000)

          71  
          

 

 

 
Short-term securities 22.07%    Principal amount
(000)
          
                    
  

Apple Inc. 1.10%-1.18% due 8/7/2017-10/2/20171

     $        105,000          104,788  
  

Citibank, N.A. 1.29% due 9/29/2017

     100,000          100,002  
  

Federal Home Loan Bank 0.64%-1.05% due 7/5/2017-9/26/2017

     1,178,600          1,177,176  
  

Freddie Mac 0.83% due 8/7/2017

     50,000          49,959  
  

General Electric Co. 1.08% due 7/3/2017

     43,500          43,496  
  

Johnson & Johnson 1.07% due 8/31/20171

     94,300          94,120  
  

National Rural Utilities Cooperative Finance Corp. 1.15% due 8/2/2017

     59,200          59,136  

 

American Funds Insurance Series   91


Bond Fund

 

    

 

Short-term securities (continued)

   Principal amount
(000)
      

Value

(000)

 
                          
  

U.S. Bank, N.A. 1.21% due 10/24/2017-10/25/2017

     $175,000        $ 175,016  
  

U.S. Treasury Bills 0.59%-1.07% due 7/13/2017-12/21/2017

     447,000          445,424  
  

Other securities

          68,845  
          

 

 

 
  

Total short-term securities (cost: $2,317,806,000)

          2,317,962  
          

 

 

 
  

Total investment securities 118.83% (cost: $12,402,750,000)

          12,479,885  
  

Other assets less liabilities (18.83)%

          (1,977,186
          

 

 

 
  

Net assets 100.00%

        $ 10,502,699  
          

 

 

 

This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.

“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio. “Other securities” includes securities which were valued under fair value procedures adopted by authority of the board of trustees. The total value of securities which were valued under fair value procedures was $1,623,000, which represented .02% of the net assets of the fund. “Other securities“ also includes loan participations and assignments, which may be subject to legal or contractual restrictions on resale. The total value of all such loans was $26,163,000, which represented .25% of the net assets of the fund.

Futures contracts

 

 

Contracts    Type        Number of
contracts
       Expiration        Notional
amount7
(000)
     Value at
6/30/20178
(000)
     Unrealized
appreciation
(depreciation)
at 6/30/2017
(000)
 

10 Year Euro-Bund Futures

     Short          120          September 2017          $  (12,000      $  (22,186      $    345   

10 Year U.S. Treasury Note Futures

     Long          2,174          September 2017          217,400        272,905        (1,303)  

10 Year Ultra U.S. Treasury Note Futures

     Short          45          September 2017          (4,500      (6,066      19   

30 Year Ultra U.S. Treasury Bond Futures

     Short          51          September 2017          (5,100      (8,460      28   

5 Year U.S. Treasury Note Futures

     Long          4,995          October 2017          499,500        588,591        (3,244)  

2 Year U.S. Treasury Note Futures

     Short          3,200          October 2017          (640,000      (691,550      547   
                       

 

 

 
                          $(3,608)  
                       

 

 

 

Forward currency contracts

 

 

Contract amount       

Counterparty

    

Settlement
date

       Unrealized
(depreciation)
appreciation
 

Purchases

(000)

      

Sales

(000)

                 at 6/30/2017
(000)
 

 

 

 
  USD66,550          MXN1,220,000        Bank of America, N.A.        7/10/2017          $    (561)  
  USD65,409          MXN1,200,000        JPMorgan Chase        7/10/2017          (602)  
  USD65,343          MXN1,200,000        JPMorgan Chase        7/11/2017          (656)  
  USD31,168          JPY3,430,000        UBS AG        7/12/2017          656   
  USD13,134          JPY1,445,000        Bank of America, N.A.        7/12/2017          280   
  USD54,738          EUR48,800        Citibank        7/17/2017          (1,051)  
  USD65,574          JPY7,300,000        HSBC Bank        7/24/2017          599   
  USD44,244          JPY4,925,000        JPMorgan Chase        7/24/2017          408   
  USD13,837          MXN252,000        Barclays Bank PLC        7/24/2017           
  USD18,708          EUR16,750        Citibank        7/28/2017          (453)  
  USD56,861          AUD75,000        JPMorgan Chase        8/4/2017          (756)  
  USD5,364          EUR4,750        JPMorgan Chase        9/7/2017          (81)  

 

92   American Funds Insurance Series


Bond Fund

 

    

 

Contract amount       

Counterparty

    

Settlement
date

       Unrealized
(depreciation)
appreciation
 

Purchases

(000)

      

Sales

(000)

                 at 6/30/2017
(000)
 

 

 

 
  USD9,606          EUR8,500        JPMorgan Chase        9/7/2017                $ (138
  USD9,708          EUR8,600        JPMorgan Chase        9/7/2017          (151
                   

 

 

 
                            $ (2,497
                   

 

 

 

Swap contracts

 

Interest rate swaps    

 

    Receive   Pay      Expiration
date
       Notional
(000)
       Value at
6/30/2017
(000)
       Upfront
payments/
receipts
(000)
       Unrealized
(depreciation)
appreciation
at 6/30/2017
(000)
 

1.35375%

  U.S. EFFR        4/27/2019        $ 37,000        $ (28        $–                $ (28

1.669%

  3-month USD-LIBOR        10/28/2019          112,000          46                   46  

1.6915%

  3-month USD-LIBOR        6/3/2020          1,600          (2                 (2

1.7345%

  3-month USD-LIBOR        12/31/2020          120,000          (258                 (258

3-month USD-LIBOR

  1.975%        4/27/2022          15,000          (30                 (30

3-month USD-LIBOR

  2.1305%        7/17/2022          100,000          (859                 (859

1.9375%

  3-month USD-LIBOR        12/18/2022          150,000          (411                 (411

3-month USD-LIBOR

  2.701%        6/9/2024          60,000          (2,354                 (2,354

3-month USD-LIBOR

  2.6815%        9/24/2024          1,600          (61                 (61

3-month USD-LIBOR

  2.54%        10/3/2024          400          (11                 (11

6-month EURIBOR

  0.9852%        10/17/2024        25,000          (841                 (841

3-month USD-LIBOR

  2.342%        10/21/2024        $ 290          (4                 (4

3-month USD-LIBOR

  2.326%        10/22/2024          800          (11                 (11

3-month USD-LIBOR

  2.372%        10/24/2024          1,150          (19                 (19

3-month USD-LIBOR

  2.438%        11/19/2024          2,750          (59                 (59

3-month USD-LIBOR

  2.4585%        11/24/2024          23,000          (522                 (522

3-month USD-LIBOR

  2.4295%        11/25/2024          800          (17                 (17

3-month USD-LIBOR

  2.353%        12/8/2024          700          (11                 (11

3-month USD-LIBOR

  2.2845%        12/12/2024          330          (3                 (3

3-month USD-LIBOR

  1.8185%        1/20/2025          900          21                   21  

3-month USD-LIBOR

  1.9365%        1/22/2025          1,500          22                   22  

3-month USD-LIBOR

  2.192%        3/18/2025          1,850          (6                 (6

3-month USD-LIBOR

  2.0475%        3/23/2025          450          3                   3  

3-month USD-LIBOR

  2.3175%        5/8/2025          1,500          (18                 (18

3-month USD-LIBOR

  2.339%        5/13/2025          375          (5                 (5

3-month USD-LIBOR

  2.351%        5/15/2025          590          (8                 (8

3-month USD-LIBOR

  2.287%        5/20/2025          500          (5                 (5

3-month USD-LIBOR

  2.227%        5/28/2025          260          (1                 (1

3-month USD-LIBOR

  2.2125%        5/29/2025          465          (2                 (2

3-month USD-LIBOR

  2.451%        6/5/2025          650          (14                 (14

3-month USD-LIBOR

  2.46%        6/10/2025          2,536          (56                 (56

3-month USD-LIBOR

  2.455%        6/24/2025          235          (5                 (5

3-month USD-LIBOR

  2.428%        7/2/2025          2,000          (39                 (39

3-month USD-LIBOR

  2.397%        7/13/2025          900          (15                 (15

3-month USD-LIBOR

  2.535%        7/15/2025          800          (22                 (22

3-month USD-LIBOR

  2.4615%        7/22/2025          1,300          (28                 (28

3-month USD-LIBOR

  2.312%        7/29/2025          1,000          (11                 (11

3-month USD-LIBOR

  2.331%        7/30/2025          435          (5                 (5

3-month USD-LIBOR

  2.2135%        9/4/2025          5,000          (14                 (14

3-month USD-LIBOR

  2.228%        9/4/2025          12,000          (46                 (46

6-month JPY-LIBOR

  0.282%        2/2/2026        ¥   5,500,000          (290                 (290

 

American Funds Insurance Series   93


Bond Fund

 

    

 

Swap contracts (continued)

 

Interest rate swaps (continued)

 

    Receive   Pay      Expiration
date
       Notional
(000)
       Value at
6/30/2017
(000)
       Upfront
payments/
receipts
(000)
       Unrealized
(depreciation)
appreciation
at 6/30/2017
(000)
 

3-month USD-LIBOR

  1.6705%        3/4/2026        $ 248,000        $ 10,597          $–          $10,597  

6-month JPY-LIBOR

  0.0875%        3/10/2026        ¥ 11,100,000          1,107                   1,107  

3-month USD-LIBOR

  1.5925%        5/9/2026        $ 1,000          51                   51  

3-month USD-LIBOR

  1.595%        5/12/2026          8,500          430                   430  

3-month USD-LIBOR

  1.592%        5/12/2026          4,000          203                   203  

3.0865%

  3-month USD-LIBOR        8/18/2034          2,250          203                   203  

2.913%

  3-month USD-LIBOR        11/24/2034          10,000          655                   655  

2.844%

  3-month USD-LIBOR        6/11/2035          3,250          181                   181  

2.9535%

  3-month USD-LIBOR        6/30/2035          2,500          180                   180  

2.773%

  3-month USD-LIBOR        7/13/2035          500          23                   23  

2.589%

  3-month USD-LIBOR        9/4/2035          3,100          53                   53  

3-month USD-LIBOR

  3.0515%        11/14/2044          1,000          (108                 (108

3-month USD-LIBOR

  2.925%        12/3/2044          1,230          (101                 (101

3-month USD-LIBOR

  2.6695%        12/19/2044          200          (6                 (6

3-month USD-LIBOR

  2.5755%        3/5/2045          1,470          (15                 (15

2.377%

  3-month USD-LIBOR        4/29/2045          1,910          (59                 (59

3-month USD-LIBOR

  2.757%        5/8/2045          1,500          (72                 (72

6-month JPY-LIBOR

  0.58295%        3/23/2046        ¥ 2,000,000          1,173                   1,173  

0.64355%

  6-month JPY-LIBOR        4/27/2046          2,000,000          (884                 (884

3-month USD-LIBOR

  2.1155%        5/13/2046        $ 2,400          212                   212  
                     

 

 

      

 

 

 
                        $–          $  7,824  
                     

 

 

      

 

 

 

The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.

 

1  Acquired in a transaction exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities, including those in “Other securities,” was $1,375,344,000, which represented 13.10% of the net assets of the fund.
2  Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.
3  Purchased on a TBA basis.
4  Coupon rate may change periodically.
5  A portion of this security was pledged as collateral. The total value of pledged collateral was $28,506,000, which represented .27% of the net assets of the fund.
6  Index-linked bond whose principal amount moves with a government price index.
7  Notional amount is calculated based on the number of contracts and notional contract size.
8  Value is calculated based on the notional amount and current market price.

Key to abbreviations and symbols

AUD = Australian dollars

EFFR = Federal Funds Effective Rate

EUR/ = Euros

EURIBOR = Euro Interbank Offered Rate

G.O. = General Obligation

JPY/¥ = Japanese yen

LIBOR = London Interbank Offered Rate

MXN = Mexican pesos

USD/$ = U.S. dollars

TBA = To-be-announced

See Notes to Financial Statements

 

94   American Funds Insurance Series


Global Bond Fund

 

  
Summary investment portfolio June 30, 2017    unaudited

 

Bonds, notes & other debt instruments 87.58%    Principal amount
(000)
      

 

Value
(000)

 
                    

 

Euros

  

Belgium (Kingdom of), Series 77, 1.00% 2026

             12,900        $ 15,210  
12.89%   

French Republic O.A.T. 1.85% 20271

     8,756          12,413  
  

Germany (Federal Republic of) 0.10% 20261

     18,150          22,325  
  

Germany (Federal Republic of) 0.50% 2026

     13,000          15,087  
  

Germany (Federal Republic of) 2.50% 2046

     24,695          36,813  
  

Germany (Federal Republic of) 0.10%-6.25% 2023-20401

     3,423          5,560  
  

Hungary 3.88%-6.00% 2019-2020

     2,200          2,753  
  

Italy (Republic of) 1.45% 2022

     10,575          12,359  
  

Portuguese Government 2.875% 2026

     4,200          4,832  
  

Portuguese Republic 2.20% 2022

     10,300          12,305  
  

Portuguese Republic 4.125% 2027

     32,040          39,996  
  

Spain (Kingdom of) 1.30% 2026

     13,400          15,174  
  

Other securities

          114,201  
          

 

 

 
          

 

 

 

 

309,028

 

 

 

 

          

 

 

 
                          

 

Japanese yen

  

Japan, Series 326, 0.70% 2022

     ¥1,935,000          17,908  
9.13%   

Japan, Series 18, 0.10% 20241

     4,704,210          43,384  
  

Japan, Series 19, 0.10% 20241

     2,672,325          24,764  
  

Japan, Series 344, 0.10% 2026

     1,355,000          12,095  
  

Japan, Series 116, 2.20% 2030

     1,735,000          19,271  
  

Japan, Series 145, 1.70% 2033

     2,005,000          21,481  
  

Japan, Series 42, 1.70% 2044

     2,045,000          22,240  
  

Japan 0.10%-2.30% 2022-20351

     6,040,270          57,615  
          

 

 

 
          

 

 

 

 

218,758

 

 

 

 

          

 

 

 
                          

 

Polish zloty

  

Poland (Republic of), Series 1017, 5.25% 2017

     PLN54,472          14,873  
4.50%   

Poland (Republic of), Series 0420, 1.50% 2020

     124,425          33,073  
  

Poland (Republic of), Series 1021, 5.75% 2021

     50,980          15,611  
  

Poland (Republic of), Series 0922, 5.75% 2022

     46,600          14,430  
  

Poland (Republic of) 2.00%-5.25% 2020-2025

     106,690          29,851  
          

 

 

 
          

 

 

 

 

107,838

 

 

 

 

          

 

 

 
                          

 

Mexican pesos

  

United Mexican States, Series M, 6.50% 2021

     MXN793,300          43,585  
3.43%   

United Mexican States, Series M20, 10.00% 2024

     209,500          13,764  
  

United Mexican States 4.00%-10.00% 2017-20421

     435,052          24,797  
          

 

 

 
          

 

 

 

 

82,146

 

 

 

 

          

 

 

 
                          

 

Indian rupees

  

India (Republic of) 7.80% 2021

     INR1,087,600          17,504  
2.44%   

India (Republic of) 8.83% 2023

     1,284,200          21,947  
  

India (Republic of) 6.97%-7.88% 2023-2030

     1,173,470          18,929  
          

 

 

 
          

 

 

 

 

58,380

 

 

 

 

          

 

 

 
                          

 

Malaysian

  

Malaysia (Federation of) 3.58%-4.50% 2018-2030

     MYR216,165       

 

 

 

 

50,426

 

 

 

 

          

 

 

 

ringgits

2.10%

          
                          

 

British pounds

  

United Kingdom 3.25% 2044

     £        9,000          14,977  
1.76%   

United Kingdom 1.50%-3.50% 2023-2045

     16,630          24,011  
  

Other securities

          3,150  
          

 

 

 
          

 

 

 

 

42,138

 

 

 

 

          

 

 

 
                          

 

Norwegian kroner

  

Norway (Kingdom of) 3.75% 2021

     NKr305,750       

 

 

 

 

40,554

 

 

 

 

          

 

 

 
1.69%           

 

American Funds Insurance Series   95


Global Bond Fund

 

    

 

 

Bonds, notes & other debt instruments (continued)    Principal amount
(000)
       Value
(000)
 
                    

 

Australian dollars

  

Australia (Commonwealth of), Series 124, 5.75% 2021

     A$27,800        $ 24,290  
1.69%   

Australia (Commonwealth of), Series 128, 5.75% 2022

     13,650          12,267  
  

Australia (Commonwealth of), Series 138, 3.25% 2029

     4,250          3,433  
  

Other securities

          388  
          

 

 

 
          

 

 

 

 

40,378

 

 

 

 

          

 

 

 
                          

 

Colombian pesos

  

Colombia (Republic of), Series B, 7.00% 2022

     COP35,100,000          12,099  
1.22%   

Colombia (Republic of), Series B, 7.50% 2026

     41,451,000          14,599  
  

Colombia (Republic of), Series B, 6.00% 2028

     8,306,600          2,612  
          

 

 

 
          

 

 

 

 

29,310

 

 

 

 

          

 

 

 
                          

 

Danish kroner

  

Other securities

         

 

25,593

 

 

 

          

 

 

 
1.07%           
                          

 

Turkish lira

  

Turkey (Republic of) 9.20% 2021

     TRY47,700          12,995  
1.02%   

Turkey (Republic of) 10.50%-11.00% 2020-2022

     39,700          11,436  
          

 

 

 
          

 

 

 

 

24,431

 

 

 

 

          

 

 

 
                          

 

Israeli shekels

  

Israel (State of) 5.50% 2042

     ILS29,300          11,699  
0.82%   

Other securities

          8,055  
          

 

 

 
          

 

 

 

 

19,754

 

 

 

 

          

 

 

 
                          

 

Chilean pesos

  

Chile (Banco Central de) 4.50% 2021

     CLP12,705,000         

 

19,736

 

 

 

          

 

 

 
0.82%           
                          

 

Canadian dollars

  

Canada 2.25% 2025

     C$18,050         

 

14,534

 

 

 

          

 

 

 
0.61%           
                          

 

Hungarian forints

  

Hungary 2.00%-6.50% 2019-2025

     HUF3,145,600         

 

12,713

 

 

 

          

 

 

 
0.53%           
                          

 

U.S. dollars

  

Hungary 4.00%-6.25% 2019-2024

     $      8,070          8,684  
40.21%   

Turkey (Republic of) 6.25%-6.75% 2022-2040

     2,090          2,282  
  

U.S. Treasury 1.125% 20212

     43,160          42,282  
  

U.S. Treasury 2.25% 2025

     15,750          15,757  
  

U.S. Treasury 2.00% 2026

     55,335          53,973  
  

U.S. Treasury 2.25% 2046

     13,950          12,302  
  

U.S. Treasury 2.875% 2046

     15,925          16,038  
  

U.S. Treasury 3.00% 2047

     16,225          16,771  
  

U.S. Treasury 1.13%-3.00% 2019-2045

     74,590          74,673  
  

U.S. Treasury Inflation-Protected Security 0.125% 20221

     40,717          40,538  
  

U.S. Treasury Inflation-Protected Security 0.625% 20241

     32,720          33,214  
  

U.S. Treasury Inflation-Protected Security 1.00% 20461

     24,353          24,371  
  

U.S. Treasury Inflation-Protected Securities 0.13%-2.38% 2024-20451

     46,201          46,484  
  

United Mexican States 4.75% 2044

     3,200          3,211  
  

Other securities

          573,204  
          

 

 

 
          

 

 

 

 

963,784

 

 

 

 

          

 

 

 
                          

 

Other

  

Other securities

          39,430  
          

 

 

 
1.65%   

Total bonds, notes & other debt instruments (cost: $2,077,893,000)

       

 

 

 

 

2,098,931

 

 

 

 

       

 

 

 

 

96   American Funds Insurance Series


Global Bond Fund

 

    

 

Convertible stocks 0.04%    Shares        Value
(000)
 
                    

 

U.S. dollars

  

Other securities

        $

 

143

 

 

 

          

 

 

 
0.00%           
                          

 

Miscellaneous

  

Other convertible stocks in initial period of acquisition

          909  
          

 

 

 
0.04%   

Total convertible stocks (cost: $1,202,000)

       

 

 

 

 

1,052

 

 

 

 

          

 

 

 
Common stocks 0.04%                
                    

 

U.S. dollars

  

Other securities

          1,000  
          

 

 

 
0.04%   

Total common stocks (cost: $3,941,000)

       

 

 

 

 

1,000

 

 

 

 

          

 

 

 
Short-term securities 12.92%    Principal amount
(000)
          
                    
  

CPPIB Capital Inc. 1.16% due 7/18/20173

     $       20,000          19,989  
  

Federal Home Loan Bank 1.02%-1.08% due 8/23/2017-10/16/2017

     40,000          39,922  
  

Japanese Treasury Discount Bills (0.16)% due 5/21/2018

     ¥15,300,000          136,144  
  

John Deere Financial Inc. 1.05% due 7/6/20173

     $       25,000          24,995  
  

Liberty Street Funding Corp. 1.28% due 9/18/20173

     15,000          14,958  
  

Mizuho Bank, Ltd. 1.19% due 7/27/20173

     20,000          19,982  
  

Unilever Capital Corp. 1.10% due 7/24/20173

     29,800          29,778  
  

Other securities

          23,940  
          

 

 

 
  

Total short-term securities (cost: $309,095,000)

       

 

 

 

 

309,708

 

 

 

 

          

 

 

 
  

Total investment securities 100.58% (cost: $2,392,131,000)

          2,410,691  
  

Other assets less liabilities (0.58)%

          (14,015
          

 

 

 
  

Net assets 100.00%

       

 

$

 

 

2,396,676

 

 

 

 

          

 

 

 

This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.

“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio. “Miscellaneous” and “Other securities” includes securities which were valued under fair value procedures adopted by authority of the board of trustees. The total value of securities which were valued under fair value procedures was $2,143,000, which represented .09% of the net assets of the fund. “Other securities“ also includes loan participations and assignments, which may be subject to legal or contractual restrictions on resale. The total value of all such loans was $7,941,000, which represented .33% of the net assets of the fund. Some securities in “Other securities” (with an aggregate value of $4,289,000, an aggregate cost of $5,384,000, and which represented .18% of the net assets of the fund) were acquired from 3/10/2010 to 3/6/2017 through private placement transactions exempt from registration under the Securities Act of 1933, which may subject them to legal or contractual restrictions on resale.

Futures contracts

 

 

    Contracts   Type     Number of
contracts
    Expiration     Notional
amount4
(000)
    Value at
6/30/20175
(000)
    Unrealized
(depreciation)
appreciation
at 6/30/2017
(000)
 
    10 Year Ultra U.S. Treasury Note Futures     Long       89       September 2017     $ 8,900     $ 11,998       $ (32
    30 Year Ultra U.S. Treasury Bond Futures     Long       85       September 2017       8,500       14,099         192  
    10 Year U.S. Treasury Note Futures     Long       82       September 2017       8,200       10,294         (25
    5 Year U.S. Treasury Note Futures     Long       549       October 2017       54,900       64,692         (143
    90 Day Euro Dollar Futures     Short       220       March 2018       (55,000     (54,142       24  
             

 

 

 
              $ 16  
             

 

 

 

 

American Funds Insurance Series   97


Global Bond Fund

 

    

 

Forward currency contracts

 

 

Contract amount                        Unrealized
(depreciation)
appreciation
 
Purchases
(000)
       Sales
(000)
       Counterparty      Settlement
date
       at 6/30/2017
(000)
 
  USD4,775          PLN17,827        JPMorgan Chase        7/7/2017          $        (36
  SEK123,798          USD14,284        Citibank        7/10/2017          419  
  NOK93,000          USD10,999        Bank of America, N.A.        7/10/2017          143  
  USD16,422          MYR70,000        JPMorgan Chase        7/10/2017          123  
  USD20,237          INR1,308,300        JPMorgan Chase        7/10/2017          24  
  USD7,734          INR500,000        JPMorgan Chase        7/10/2017          9  
  USD12,581          MXN230,400        Bank of America, N.A.        7/10/2017          (93
  GBP5,907          AUD10,150        UBS AG        7/10/2017          (104
  USD15,633          MXN286,625        Goldman Sachs        7/10/2017          (134
  USD15,606          MXN286,625        Bank of America, N.A.        7/10/2017          (161
  JPY935,361          USD8,575        HSBC Bank        7/10/2017          (255
  EUR15,020          PLN63,358        UBS AG        7/11/2017          69  
  USD4,069          THB138,500        Bank of America, N.A.        7/11/2017          (8
  USD4,229          AUD5,600        JPMorgan Chase        7/11/2017          (74
  JPY391,780          USD3,584        JPMorgan Chase        7/11/2017          (99
  USD9,013          ILS31,900        JPMorgan Chase        7/11/2017          (136
  EUR17,250          USD18,995        UBS AG        7/12/2017          720  
  SEK60,114          USD6,908        Barclays Bank PLC        7/12/2017          232  
  EUR19,534          PLN82,342        HSBC Bank        7/12/2017          106  
  NOK46,831          USD5,513        Barclays Bank PLC        7/12/2017          97  
  EUR5,840          GBP5,090        Goldman Sachs        7/13/2017          42  
  USD2,024          BRL6,700        Citibank        7/14/2017          8  
  USD4,732          MXN87,000        Bank of America, N.A.        7/14/2017          (51
  USD6,220          MXN116,370        HSBC Bank        7/14/2017          (177
  USD4,823          INR310,000        JPMorgan Chase        7/17/2017          39  
  USD5,125          AUD6,800        Bank of America, N.A.        7/17/2017          (101
  JPY3,321,365          USD30,215        JPMorgan Chase        7/18/2017          (661
  JPY3,567,358          USD32,460        Bank of America, N.A.        7/18/2017          (717
  EUR5,283          USD5,900        Citibank        7/19/2017          141  
  JPY414,706          USD3,801        HSBC Bank        7/19/2017          (110
  USD12,768          AUD16,760        Citibank        7/19/2017          (111
  JPY726,285          USD6,655        JPMorgan Chase        7/19/2017          (193
  EUR5,244          USD5,857        UBS AG        7/20/2017          139  
  USD3,045          BRL10,100        HSBC Bank        7/20/2017          10  
  JPY351,002          USD3,164        Citibank        7/20/2017          (40
  GBP5,633          USD7,117        JPMorgan Chase        7/24/2017          226  
  EUR5,084          USD5,666        Goldman Sachs        7/24/2017          149  
  EUR18,255          NOK174,000        UBS AG        7/24/2017          25  
  USD6,827          ZAR89,650        JPMorgan Chase        7/24/2017          4  
  USD2,980          ZAR39,200        UBS AG        7/24/2017          (3
  EUR4,253          GBP3,750        HSBC Bank        7/24/2017          (24
  USD13,597          MYR58,750        JPMorgan Chase        7/24/2017          (74
  USD6,037          ILS21,303        Bank of America, N.A.        7/24/2017          (76
  USD7,728          AUD10,200        UBS AG        7/24/2017          (109
  JPY1,976,140          USD17,751        HSBC Bank        7/24/2017          (162
  EUR6,645          USD7,490        Bank of America, N.A.        7/25/2017          111  
  GBP5,792          EUR6,700        JPMorgan Chase        7/25/2017          (112
  JPY445,496          USD4,000        Goldman Sachs        7/27/2017          (34
  JPY835,989          USD7,521        Bank of America, N.A.        7/27/2017          (79
  USD5,808          AUD7,700        Bank of America, N.A.        7/27/2017          (108
  USD7,542          AUD10,000        Bank of America, N.A.        7/27/2017          (141
  JPY1,698,519          USD15,271        Citibank        7/27/2017          (151
  EUR5,439          USD6,100        Citibank        7/28/2017          122  
  SEK172,682          USD20,325        Goldman Sachs        8/3/2017          214  
  EUR14,702          USD16,481        JPMorgan Chase        8/4/2017          343  
  GBP25,426          EUR28,875        Bank of America, N.A.        8/4/2017          112  
  JPY1,655,674          USD14,857        UBS AG        8/4/2017          (113

 

98   American Funds Insurance Series


Global Bond Fund

 

    

 

Contract amount                        Unrealized
(depreciation)
appreciation
 
Purchases
(000)
       Sales
(000)
       Counterparty      Settlement
date
       at 6/30/2017
(000)
 
  NOK31,682          DKK24,600        Citibank        8/9/2017          $11  
  JPY392,473          USD3,596        Citibank        8/9/2017          (101
  NOK70,523          CHF8,000        Bank of America, N.A.        8/10/2017          89  
  USD5,959          NZD8,200        Citibank        8/10/2017          (45
  USD9,203          CAD12,000        Goldman Sachs        8/10/2017          (57
  JPY1,310,000          USD11,894        HSBC Bank        8/14/2017          (224
  USD11,444          CNH80,000        Citibank        8/14/2017          (314
  SEK30,059          USD3,464        Barclays Bank PLC        8/17/2017          114  
  JPY846,335          USD7,628        HSBC Bank        8/23/2017          (85
  USD138,524          JPY15,300,000        Citibank        5/21/2018          255  
              

 

 

 
                      $(1,177
                   

 

 

 

Swap contracts

 

Interest rate swaps

 

    Receive   Pay    Expiration
date
     Notional
(000)
     Value at
6/30/2017
(000)
    Upfront
payments/
receipts
(000)
     Unrealized
(depreciation)
appreciation
at 6/30/2017
(000)
 

U.S. EFFR

  1.299%      1/31/2018        $450,000      $     (14     $–      $ (14

1.707%

  3-month USD-LIBOR      3/16/2019        12,000        29              29  

1.6505%

  3-month USD-LIBOR      3/21/2019        85,000        122              123  

1.36%

  6-month NOK-NIBOR      12/19/2019        NKr250,000        128              128  

1.572%

  3-month USD-LIBOR      9/16/2020        $    10,000        (60            (60

6.775%

  28-day MXN-TIIE      6/20/2022        MXN280,000        (16            (16

6.73%

  28-day MXN-TIIE      6/20/2022        340,000        (56            (56

6-month HUF-BUBOR

  2.58%      3/31/2027        HUF2,540,000        (276            (276

3-month USD-LIBOR

  2.52611%      11/24/2045        $    17,400        6              6  

3-month USD-LIBOR

  2.535%      11/24/2045        1,100        (2            (2

3-month USD-LIBOR

  2.556%      11/27/2045        10,000        (60            (60

3-month USD-LIBOR

  2.354%      1/29/2046        6,000        221              221  

3-month USD-LIBOR

  2.116%      4/15/2046        2,250        198              198  

3-month USD-LIBOR

  1.909%      10/11/2046        5,750        771              771  

3-month USD-LIBOR

  2.699%      1/31/2047        2,800        (104            (104

3-month USD-LIBOR

  2.659%      2/8/2047        6,000        (170            (170

3-month USD-LIBOR

  2.696%      3/7/2047        4,500        (165            (165

6-month EURIBOR

  1.4162%      3/8/2047            4,400        150              150  

6-month EURIBOR

  1.4247%      4/28/2047        2,500        80              80  
            

 

 

    

 

 

 
               $–      $ 783  
            

 

 

    

 

 

 

The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.

 

1  Index-linked bond whose principal amount moves with a government price index.
2  A portion of this security was pledged as collateral. The total value of pledged collateral was $14,439,000, which represented .60% of the net assets of the fund.
3  Acquired in a transaction exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $283,746,000, which represented 11.84% of the net assets of the fund.
4  Notional amount is calculated based on the number of contracts and notional contract size.
5  Value is calculated based on the notional amount and current market price.

 

American Funds Insurance Series   99


Global Bond Fund

 

    

 

Key to abbreviations and symbols

AUD/A$ = Australian dollars

BRL = Brazilian reais

BUBOR = Budapest Interbank Offered Rate

CAD/C$ = Canadian dollars

CHF = Swiss francs

CLP = Chilean pesos

CNH = Chinese yuan renminbi

COP = Colombian pesos

DKK = Danish kroner

EFFR = Federal Funds Effective Rate

EUR/ = Euros

EURIBOR = Euro Interbank Offered Rate

GBP/£ = British pounds

HUF = Hungarian forints

ILS = Israeli shekels

INR = Indian rupees

INR = Indian rupees

JPY/¥ = Japanese yen

LIBOR = London Interbank Offered Rate

MXN = Mexican pesos

MYR = Malaysian ringgits

NIBOR = Norwegian Interbank Offered Rate

NOK/NKr = Norwegian kroner

NZD = New Zealand dollars

PLN = Polish zloty

SEK = Swedish kronor

THB = Thai baht

TIIE = Equilibrium Interbank Interest Rate

TRY = Turkish lira

USD/$ = U.S. dollars

ZAR = South African rand

 

 

See Notes to Financial Statements

 

100   American Funds Insurance Series


High-Income Bond Fund

 

Summary investment portfolio June 30, 2017    unaudited

 

Bonds, notes & other debt instruments 93.24%    Principal amount
(000)
      

 

Value
(000)

 
                    
Corporate bonds & notes 92.32%                    
Energy   

American Energy (Permian Basin) 7.125% 20201

     $  8,045        $ 6,677  
17.72%   

Blackstone CQP Holdco LP, 6.50% 20211,2

     24,675          24,811  
  

Cheniere Energy, Inc. 5.13%-7.00% 2024-20271

     2,810          2,941  
  

Chesapeake Energy Corp. 8.00% 20251

     7,550          7,503  
  

Chesapeake Energy Corp. 4.41%-8.00% 2019-20271,3

     14,253          14,042  
  

CONSOL Energy Inc. 5.875% 2022

     12,599          12,442  
  

NGL Energy Partners LP 6.875% 2021

     6,640          6,623  
  

Southwestern Energy Co. 4.10% 2022

     7,605          7,125  
  

Sunoco LP 6.25% 2021

     5,950          6,233  
  

Teekay Corp. 8.50% 2020

     11,168          10,233  
  

Weatherford International PLC 6.75% 2040

     7,980          6,903  
  

Weatherford International PLC 4.50%-9.88% 2021-20421

     13,125          12,038  
  

Other securities

          161,409  
          

 

 

 
             278,980  
          

 

 

 
                          
Health care   

Centene Corp. 4.75% 2022

     7,715          8,091  
13.08%   

Centene Corp. 4.75%-6.13% 2021-2025

     9,130          9,574  
  

Kinetic Concepts, Inc. 12.50% 20211

     7,813          8,829  
  

Molina Healthcare, Inc. 5.375% 2022

     9,615          10,228  
  

Rotech Healthcare Inc., Term Loan, (3-month USD-LIBOR + 11.00%) 13.00% 2020 (84.62% PIK)3,4,5,6,7

     6,351          6,222  
  

Tenet Healthcare Corp. 4.38%-7.00% 2021-20251

     11,832          11,934  
  

Tenet Healthcare Corp., First Lien 4.50%-6.00% 2020-2021

     11,515          12,114  
  

VPI Escrow Corp. 6.375% 20201

     9,690          9,436  
  

VPI Escrow Corp. 5.625% 20211

     1,175          1,066  
  

VPI Escrow Corp. 6.50%-7.50% 2021-20241

     6,615          6,756  
  

VRX Escrow Corp. 6.125% 20251

     18,995          16,146  
  

VRX Escrow Corp. 5.38%-7.25% 2020-20231

     10,960          9,947  
  

Other securities

          95,614  
          

 

 

 
             205,957  
          

 

 

 
                          
Consumer   

Cablevision Systems Corp. 6.75% 2021

     5,875          6,521  
discretionary   

Cablevision Systems Corp. 5.50%-7.75% 2018-20271

     1,575          1,662  
12.04%   

CCO Holdings LLC and CCO Holdings Capital Corp. 5.75% 20261

     10,620          11,390  
  

CCO Holdings LLC and CCO Holdings Capital Corp. 4.91%-5.88% 2024-20271

     8,625          9,082  
  

Clear Channel Worldwide Holdings, Inc. 7.625% 2020

     12,713          12,697  
  

iHeartCommunications, Inc. 9.00% 2019

     9,685          7,639  
  

Petsmart, Inc. 5.875% 20251

     7,365          7,135  
  

Petsmart, Inc. 7.13%-8.88% 2023-20251

     10,625          9,614  
  

Petsmart Inc., Term Loan B-2, (3-month USD-LIBOR + 3.00%) 4.22% 20223,4,5

     3,444          3,207  
  

Wynn Las Vegas, LLC and Wynn Capital Corp. 5.50% 20251

     6,525          6,880  
  

Wynn Macau, Ltd. 5.25% 20211

     7,275          7,475  
  

Other securities

          106,178  
          

 

 

 
             189,480  
          

 

 

 
                          
Materials   

ArcelorMittal 7.50% 2041

     9,555          10,582  
11.98%   

Cliffs Natural Resources Inc. 8.25% 20201

     7,865          8,612  
  

Cliffs Natural Resources Inc. 5.75% 20251

     11,950          11,323  
  

Cliffs Natural Resources Inc. 6.25% 2040

     825          627  
  

First Quantum Minerals Ltd. 7.00% 20211

     10,813          11,137  
  

First Quantum Minerals Ltd. 7.50% 20251

     11,625          11,422  
  

First Quantum Minerals Ltd. 7.25% 2022-20231

     3,575          3,629  
  

FMG Resources 9.75% 20221

     7,555          8,641  
  

Ryerson Inc. 11.00% 20221

     6,901          7,824  
  

Other securities

          114,730  
          

 

 

 
             188,527  
          

 

 

 

 

American Funds Insurance Series   101


High-Income Bond Fund

 

 

 

Bonds, notes & other debt instruments (continued)    Principal amount
(000)
      

 

Value
(000)

 
                    
Corporate bonds & notes (continued)                    

Telecommunication

services

11.33%

  

Altice NV 5.50%-7.50% 2022-20261

     $  4,385        $ 4,694  
  

Cequel Communications Holdings I, LLC and Cequel Capital Corp. 6.375% 20201

     5,267          5,386  
  

Frontier Communications Corp. 10.50% 2022

     6,780          6,483  
  

Frontier Communications Corp. 8.50%-11.00% 2020-2025

     12,912          12,786  
  

Ligado Networks, Term Loan, (3-month USD-LIBOR + 8.75%) 9.85% 2020
(100% PIK)3,4,5,7

     19,138          18,414  
  

Neptune Finco Corp. (Altice NV) 6.63%-10.13% 2023-20251

     4,450          5,022  
  

Numericable Group SA 6.00%-7.38% 2022-20261

     5,365          5,760  
  

SoftBank Group Corp. 4.50% 20201

     6,225          6,487  
  

Sprint Corp. 11.50% 2021

     5,355          6,881  
  

Sprint Corp. 6.875% 2028

     5,650          6,294  
  

Sprint Nextel Corp. 7.13%-7.88% 2021-2024

     8,320          9,421  
  

Wind Acquisition SA 7.375% 20211

     13,300          13,840  
  

Windstream Holdings, Inc. 7.75% 2021

     8,225          7,773  
  

Other securities

          69,087  
          

 

 

 
             178,328  
          

 

 

 
                          
Information   

BMC Software, Inc. 8.125% 20211

     8,390          8,728  
technology   

Gogo Inc. 12.50% 20221

     7,850          8,959  
7.69%   

Kronos Inc., Term Loan B, (3-month USD-LIBOR + 8.25%) 9.420% 20243,4,5

     7,870          8,172  
  

Solera Holdings, Inc. 10.50% 20241

     6,075          7,009  
  

Unisys Corp. 10.75% 20221

     7,325          8,057  
  

Other securities

          80,102  
          

 

 

 
             121,027  
          

 

 

 
                          
Industrials   

Associated Materials, LLC 9.00% 20241

     8,700          9,309  
7.08%   

Corporate Risk Holdings LLC 9.50% 20191

     12,782          13,613  
  

Corporate Risk Holdings LLC 13.50% 2020 (100% PIK)1,6,7

     1,307          1,399  
  

DAE Aviation Holdings, Inc. 10.00% 20231

     6,625          7,370  
  

Other securities

          79,785  
          

 

 

 
             111,476  
          

 

 

 
                          
Utilities   

AES Corp. 4.88%-8.00% 2020-20261

     19,325          20,979  
3.70%   

Other securities

          37,244  
          

 

 

 
             58,223  
          

 

 

 
                          
Financials   

CIT Group Inc. 3.875% 2019

     9,335          9,592  
3.54%   

Other securities

          46,101  
          

 

 

 
             55,693  
          

 

 

 
                          
Real estate   

Iron Mountain Inc. 5.75% 2024

     5,975          6,124  
2.10%   

Other securities

          26,965  
          

 

 

 
             33,089  
          

 

 

 
                          
Consumer staples   

Other securities

          31,758  
          

 

 

 
2.02%           
                          
Municipals   

Other securities

          594  
          

 

 

 
0.04%   

Total corporate bonds & notes

          1,453,132  
          

 

 

 

 

102   American Funds Insurance Series


High-Income Bond Fund

 

 

 

Bonds, notes & other debt instruments    Principal amount
(000)
      

 

Value
(000)

 
                    
Other bonds & notes 0.92%                    
  

U.S. Treasury 1.25% 20198

     $  10,000        $ 9,978  
  

Other securities

          4,489  
          

 

 

 
             14,467  
          

 

 

 
  

Total bonds, notes & other debt instruments (cost: $1,442,832,000)

          1,467,599  
          

 

 

 
Convertible bonds 0.37%                
                    
Consumer   

Other securities

          1,747  
          

 

 

 
discretionary           
0.11%           
                          
Miscellaneous   

Other convertible bonds in initial period of acquisition

          4,092  
          

 

 

 
0.26%   

Total convertible bonds (cost: $5,452,000)

          5,839  
          

 

 

 
Convertible stocks 1.07%    Shares           
                    
Telecommunication   

Frontier Communications Corp., Series A, convertible preferred

     10,000          294  
          

 

 

 
services           
0.02%           
                          
Other   

Other securities

          4,581  
          

 

 

 
0.29%           
                          
Miscellaneous   

Other convertible stocks in initial period of acquisition

          11,953  
          

 

 

 
0.76%   

Total convertible stocks (cost: $20,794,000)

          16,828  
          

 

 

 
Common stocks 0.80%                
                    
Information   

Corporate Risk Holdings I, Inc.6,9

     218,504          3,402  
technology   

Other securities

           
          

 

 

 
0.22%              3,402  
          

 

 

 
                          
Other   

Other securities

          7,219  
          

 

 

 
0.45%           
                          
Miscellaneous   

Other common stocks in initial period of acquisition

          1,986  
          

 

 

 
0.13%   

Total common stocks (cost: $38,036,000)

          12,607  
          

 

 

 
Rights & warrants 0.00%                
                    
Utilities   

Other securities

          46  
          

 

 

 
0.00%           
                          
Miscellaneous   

Other rights & warrants in initial period of acquisition

           
          

 

 

 
0.00%   

Total rights & warrants (cost: $65,000)

          46  
          

 

 

 

 

American Funds Insurance Series   103


High-Income Bond Fund

 

 

 

Short-term securities 3.95%    Principal amount
(000)
      

 

Value
(000)

 
                    
  

ExxonMobil Corp. 1.10% due 7/10/2017

     $  19,700        $ 19,694  
  

Federal Home Loan Bank 0.85% due 7/14/2017

     10,000          9,998  
  

General Electric Co. 1.08% due 7/3/2017

     32,400          32,398  
          

 

 

 
  

Total short-term securities (cost: $62,090,000)

          62,090  
          

 

 

 
  

Total investment securities 99.43% (cost: $1,569,269,000)

          1,565,009  
  

Other assets less liabilities 0.57%

          8,949  
          

 

 

 
  

Net assets 100.00%

        $ 1,573,958  
          

 

 

 

This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

As permitted by U.S. Securities and Exchange Commission regulations, “Miscellaneous” securities include holdings in their first year of acquisition that have not previously been publicly disclosed.

“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio.

Swap contracts

 

Interest rate swaps

 

    Receive    Pay   Expiration
date
     Notional
(000)
     Value at
6/30/2017
(000)
    Upfront
payments/
receipts
(000)
     Unrealized
appreciation
(depreciation)
at 6/30/2017
(000)
 

    3-month USD-LIBOR

   2.0745%     11/21/2026      $ 18,600        $267       $–        $267  

    3-month USD-LIBOR

   2.2825%     4/13/2027        10,700        (21       –          (21)  
               $–        $246  

Credit default swaps

    Centrally cleared credit default swaps on credit indices — buy protection

 

    Receive    Pay/
Payment frequency
  Expiration
date
     Notional
(000)
     Value at
6/30/2017
(000)
    Upfront
payments
(000)
    Unrealized
appreciation
at 6/30/2017
(000)
 

    CDX.NA.HY.28

   5.00%/Quarterly     6/20/2022      $ 62,600      $ (4,318   $ (4,467     $149  

The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.

 

1  Acquired in a transaction exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $758,939,000, which represented 48.22% of the net assets of the fund.
2  Acquired through a private placement transaction exempt from registration under the Securities Act of 1933. May be subject to legal or contractual restrictions on resale. Further details on these holdings appear on the next page.
3  Coupon rate may change periodically.
4  Loan participations and assignments; may be subject to legal or contractual restrictions on resale. The total value of all such loans, including those in “Other securities,” was $107,360,000, which represented 6.82% of the net assets of the fund.
5  Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.
6  Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities, including those in “Miscellaneous“ and “Other securities,“ was $32,053,000, which represented 2.04% of the net assets of the fund.
7  Payment in kind; the issuer has the option of paying additional securities in lieu of cash. Most recent payment was 100% cash unless otherwise noted.
8  A portion of this security was pledged as collateral. The total value of pledged collateral was $3,469,000, which represented .22% of the net assets of the fund.
9  Security did not produce income during the last 12 months.

 

104   American Funds Insurance Series


High-Income Bond Fund

 

 

 

    Private placement securities    Acquisition
date(s)
     Cost
(000)
     Value
(000)
     Percent
of net
assets
 

    Blackstone CQP Holdco LP, 6.50% 2021

     3/6/2017      $ 24,675      $ 24,811        1.58

    Other securities

     3/10/2010-8/22/2014        13,197        4,239        .26  
     

 

 

    

 

 

    

 

 

 

    Total private placement securities

      $ 37,872      $ 29,050        1.84
     

 

 

    

 

 

    

 

 

 

Key to abbreviations and symbol

LIBOR = London Interbank Offered Rate

USD/$ = U.S. dollars

See Notes to Financial Statements

 

American Funds Insurance Series   105


Mortgage Fund

 

Summary investment portfolio June 30, 2017    unaudited

 

Bonds, notes & other debt instruments 97.67%    Principal amount
(000)
      

 

Value
(000)

 
                    
Mortgage-backed obligations 62.02%                    
Federal agency   

Fannie Mae 4.00% 20361

     $  5,460        $ 5,803  
mortgage-backed   

Fannie Mae 4.00% 20471

     10,353          10,891  
obligations   

Fannie Mae 4.00% 20471

     3,985          4,192  
54.82%   

Fannie Mae 4.00%-5.00% 2036-20471,2

     2,523          2,660  
  

Freddie Mac 5.00% 20341

     1,816          1,991  
  

Freddie Mac 4.00% 20361

     6,443          6,851  
  

Freddie Mac 4.00% 20361

     1,107          1,169  
  

Freddie Mac 3.50% 20451

     10,635          11,016  
  

Freddie Mac 4.00% 20471,2

     47,854          50,232  
  

Freddie Mac 4.00% 20471

     10,000          10,528  
  

Freddie Mac 4.00% 20471

     9,969          10,501  
  

Freddie Mac 4.50% 20471,2

     3,700          3,963  
  

Freddie Mac Pool #760014 2.981% 20451,3

     3,309          3,405  
  

Government National Mortgage Assn. 3.75% 20341

     1,438          1,510  
  

Government National Mortgage Assn. 5.50% 20401

     2,558          2,862  
  

Government National Mortgage Assn. 5.00% 20411

     1,445          1,552  
  

Government National Mortgage Assn. 3.50% 20431

     2,588          2,703  
  

Government National Mortgage Assn. 3.50% 20431

     1,978          2,064  
  

Government National Mortgage Assn. 3.50% 20431

     1,942          2,013  
  

Government National Mortgage Assn. 4.25% 20441

     1,782          1,905  
  

Government National Mortgage Assn. 4.00% 20461

     1,608          1,668  
  

Government National Mortgage Assn. 4.00% 20471

     13,380          14,098  
  

Government National Mortgage Assn. 4.00% 20471

     4,972          5,248  
  

Government National Mortgage Assn. 4.50% 20471

     5,152          5,484  
  

Government National Mortgage Assn. 4.737% 20651

     1,995          2,102  
  

Government National Mortgage Assn. 4.62% 20661

     2,037          2,184  
  

Government National Mortgage Assn. 3.50%-6.50% 2038-20661

     12,773          13,366  
  

Seasoned Credit Risk Transfer, Series 2017-1, Class HA, 2.00% 20561

     1,571          1,574  
  

Vendee Mortgage Trust, Series 2011-2, Class V, 3.75% 20281

     4,727          4,793  
  

Vendee Mortgage Trust, Series 2010-1, Class DA, 4.25% 20351

     799          820  
          

 

 

 
             189,148  
          

 

 

 
                          
Collateralized   

Mortgage Repurchase Agreement Financing Trust, Series 2017-1, Class A1,

       
mortgage-backed   

        (1-month USD-LIBOR + 0.85%) 1.967% 20191,3,4

     1,620          1,621  
(privately   

Towd Point Mortgage Trust, Series 2017-1, Class A1, 2.75% 20561,3,4

     2,636          2,663  
originated)   

Towd Point Mortgage Trust, Series 2015-2, Class 2A11, 3.00% 20571,3,4

     2,520          2,556  
3.76%   

Other securities

          6,137  
          

 

 

 
             12,977  
          

 

 

 
                          
Other   

Freddie Mac, Series KJ02, Class A2, multifamily 2.597% 20201

     4,502          4,588  
mortgage-backed   

Freddie Mac, Series K031, Class A2, multifamily 3.30% 20231,3

     4,722          4,955  
securities   

Freddie Mac, Series K032, Class A2, multifamily 3.31% 20231,3

     1,250          1,313  
          

 

 

 
3.15%              10,856  
          

 

 

 
                          
Commercial   

Other securities

          995  
          

 

 

 
mortgage-backed   

Total mortgage-backed obligations

          213,976  
          

 

 

 

securities

0.29%

          
Federal agency bonds & notes 18.37%                    
  

Fannie Mae 1.875% 2022

     3,000          2,996  
  

Fannie Mae 2.00% 2022

     40,000          40,203  
  

Federal Home Loan Bank 1.375% 2021

     3,000          2,966  
  

Federal Home Loan Bank 1.875% 2021

     10,000          10,034  
  

United States Agency for International Development, Jordan (Kingdom of) 2.503% 2020

     7,000          7,184  
          

 

 

 
             63,383  
          

 

 

 

 

106   American Funds Insurance Series


Mortgage Fund

 

 

 

Bonds, notes & other debt instruments    Principal amount
(000)
      

 

Value
(000)

 
                    
U.S. Treasury bonds & notes 11.90%                    
U.S. Treasury   

U.S. Treasury Inflation-Protected Security 0.375% 20255,6

     $  10,516        $ 10,449  
inflation-protected   

U.S. Treasury Inflation-Protected Security 0.625% 20265,6

     4,497          4,529  
securities   

U.S. Treasury Inflation-Protected Security 2.125% 20416

     123          153  
8.79%   

U.S. Treasury Inflation-Protected Security 0.75% 20426

     6,963          6,641  
  

U.S. Treasury Inflation-Protected Security 1.375% 20446

     7,842          8,549  
          

 

 

 
             30,321  
          

 

 

 
                          
U.S. Treasury   

U.S. Treasury 1.875% 2022

     9,000          8,999  
3.11%   

U.S. Treasury 1.50%-2.13% 2020-2022

     1,744          1,755  
          

 

 

 
             10,754  
          

 

 

 
  

Total U.S. Treasury bonds & notes

          41,075  
          

 

 

 
          
Asset-backed obligations 5.32%                    
  

Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2015-1, Class A,
2.73% 20211,4

     1,823          1,814  
  

Other securities

          16,529  
          

 

 

 
             18,343  
          

 

 

 
          
Corporate bonds & notes 0.06%                    
Financials   

Other securities

          214  
          

 

 

 
0.06%   

Total bonds, notes & other debt instruments (cost: $335,741,000)

          336,991  
          

 

 

 
Short-term securities 18.17%                
                    
  

Bank of Tokyo-Mitsubishi UFJ, Ltd. 1.37% due 11/16/2017

     5,000          4,974  
  

Coca-Cola Co. 1.22% due 12/6/20174

     10,000          9,945  
  

Federal Home Loan Bank 1.00%-1.03% due 10/20/2017-11/10/2017

     15,679          15,621  
  

Freddie Mac 1.02% due 11/20/2017

     3,750          3,734  
  

General Electric Co. 1.08% due 7/3/2017

     8,800          8,799  
  

John Deere Canada ULC 1.16% due 7/25/20174

     4,700          4,696  
  

Mitsubishi UFJ Trust and Banking Corp. 1.35% due 11/16/20174

     5,000          4,974  
  

Private Export Funding Corp. 1.26% due 11/17/20174

     5,000          4,975  
  

Svenska Handelsbanken Inc. 1.28% due 11/29/20174

     5,000          4,972  
          

 

 

 
  

Total short-term securities (cost: $62,695,000)

          62,690  
          

 

 

 
  

Total investment securities 115.84% (cost: $398,436,000)

          399,681  
  

Other assets less liabilities (15.84)%

          (54,657
          

 

 

 
  

Net assets 100.00%

        $ 345,024  
          

 

 

 

This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio. “Other securities” includes securities which were valued under fair value procedures adopted by authority of the board of trustees. The total value of securities which were valued under fair value procedures was $1,423,000, which represented .41% of the net assets of the fund.

 

American Funds Insurance Series   107


Mortgage Fund

 

 

Futures contracts

 

 

    Contracts    Type      Number of
contracts
     Expiration      Notional
amount7
(000)
    Value at
6/30/20178
(000)
    Unrealized
appreciation
(depreciation)
at 6/30/2017
(000)
 

    20 Year U.S. Treasury Bond Futures

     Long        48        September 2017      $ 4,800     $ 7,377     $ 57  

    30 Year Ultra U.S. Treasury Bond Futures

     Long        5        September 2017        500       830       11  

    10 Year Ultra U.S. Treasury Note Futures

     Short        17        September 2017        (1,700     (2,292     16  

    5 Year U.S. Treasury Note Futures

     Long        2,195        October 2017        219,500       258,650       (626

    30 Day Federal Funds Futures

     Long        208        October 2017        86,667       85,629       (5
               

 

 

 
                $ (547
               

 

 

 

Swap contracts

 

Interest rate swaps

 

    Receive    Pay    Expiration
date
     Notional
(000)
     Value at
6/30/2017
(000)
    Upfront
payments/
receipts
(000)
     Unrealized
appreciation
(depreciation)
at 6/30/2017
(000)
 

    U.S. EFFR

   1.1745%      11/1/2017      $ 1,000,000      $ 30     $      $ 30  

    U.S. EFFR

   1.17865%      11/1/2017        500,000        10              10  

    U.S. EFFR

   1.2165%      11/1/2017        700,000        (14            (14

    3-month USD-LIBOR

   1.217%      9/22/2021        11,500        310              310  

    3-month USD-LIBOR

   1.225%      9/22/2021        11,500        306              306  

    3-month USD-LIBOR

   1.2796%      10/11/2021        14,500        361              361  

    3-month USD-LIBOR

   2.24%      12/5/2026        10,500        3              3  

    3-month USD-LIBOR

   2.27%      12/5/2026        8,500        (20            (20

    3-month USD-LIBOR

   3.34%      6/27/2044        3,500        (582            (582

    3-month USD-LIBOR

   3.206%      7/31/2044        2,000        (279            (279

    3-month USD-LIBOR

   3.238%      8/8/2044        2,000        (292            (292

    3-month USD-LIBOR

   3.2265%      9/25/2044        3,000        (431            (431

    3-month USD-LIBOR

   2.5055%      1/9/2045        2,000        9              9  

    3-month USD-LIBOR

   2.454%      1/15/2045        3,200        49              49  

    3-month USD-LIBOR

   2.516%      10/20/2045        2,500        6              6  

    3-month USD-LIBOR

   2.525%      10/20/2045        1,500        1              1  

    3-month USD-LIBOR

   2.5315%      10/26/2045        4,000        (3            (3

    3-month USD-LIBOR

   2.52822%      11/23/2045        3,560        9              9  

    3-month USD-LIBOR

   2.4835%      12/3/2045        2,000        19              19  

    3-month USD-LIBOR

   2.59125%      12/16/2045        2,250        (30            (30

    3-month USD-LIBOR

   2.4095%      1/14/2046        1,500        38              38  

    3-month USD-LIBOR

   2.33725%      2/1/2046        5,000        203              203  
             

 

 

    

 

 

 
              $      $ (306
             

 

 

    

 

 

 

The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.

 

1  Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.
2  Purchased on a TBA basis.
3  Coupon rate may change periodically.
4  Acquired in a transaction exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $55,065,000, which represented 15.96% of the net assets of the fund.
5  A portion of this security was pledged as collateral. The total value of pledged collateral was $9,431,000, which represented 2.73% of the net assets of the fund.
6  Index-linked bond whose principal amount moves with a government price index.
7  Notional amount is calculated based on the number of contracts and notional contract size.
8  Value is calculated based on the notional amount and current market price.
9  Amount less than one thousand.

 

108   American Funds Insurance Series


Mortgage Fund

 

 

Key to abbreviations and symbol

EFFR = Effective Federal Funds Rate

LIBOR = London Interbank Offered Rate

TBA = To-be-announced

USD/$ = U.S. dollars

See Notes to Financial Statements

 

American Funds Insurance Series   109


Ultra-Short Bond Fund

 

  
Investment portfolio June 30, 2017    unaudited

 

Short-term securities 100.11%    Principal amount
(000)
      

 

Value
(000)

 
                    

 

Commercial paper 72.15%

                   
  

 

Apple Inc. 1.08% due 8/3/20171

     $  9,000        $ 8,991  
  

Australia & New Zealand Banking Group, Ltd. 1.10% due 9/6/20171

     5,000          4,988  
  

Bridgestone Americas, Inc. 1.05% due 7/11/20171

     8,500          8,497  
  

CAFCO, LLC 1.28% due 10/3/20171

     10,000          9,968  
  

Chariot Funding, LLC 1.18% due 7/18/20171

     10,000          9,994  
  

Cisco Systems, Inc. 0.98% due 7/12/20171

     10,000          9,996  
  

Emerson Electric Co. 1.08% due 8/1/20171

     5,500          5,495  
  

ExxonMobil Corp. 1.14% due 9/11/2017

     10,000          9,977  
  

Fairway Finance Corp. 1.16% due 8/28/20171

     10,000          9,979  
  

John Deere Canada ULC 1.12% due 7/10/20171

     8,300          8,297  
  

KfW 0.95% due 7/5/20171

     10,000          9,999  
  

Liberty Street Funding Corp. 1.28% due 9/18/20171

     10,000          9,972  
  

Microsoft Corp. 0.97% due 7/17/20171

     10,000          9,995  
  

Mizuho Bank, Ltd. 1.11% due 7/3/20171

     10,000          9,999  
  

National Australia Bank Ltd. 1.14% due 7/24/20171

     11,400          11,391  
  

Nestlé Finance International Ltd. 1.14% due 9/7/2017

     8,000          7,982  
  

Old Line Funding, LLC 1.02% due 7/17/20171

     10,000          9,994  
  

Paccar Financial Corp. 1.12% due 7/28/2017

     6,700          6,694  
  

Pfizer Inc. 1.15% due 9/18/20171

     10,000          9,975  
  

Prudential Funding, LLC 1.10% due 7/17/2017

     10,000          9,995  
  

Simon Property Group, L.P. 1.08% due 8/14/20171

     10,000          9,985  
  

Sumitomo Mitsui Banking Corp. 1.15% due 8/1/20171

     12,900          12,886  
  

Total Capital Canada Ltd. 1.05% due 8/15/20171

     10,000          9,985  
  

United Parcel Service Inc. 1.08% due 7/5/20171

     9,000          8,999  
          

 

 

 
          

 

 

 

 

224,033

 

 

 

 

          

 

 

 
Federal agency discount notes 24.74%                    
  

 

Fannie Mae 0.80% due 7/17/2017

     15,000          14,995  
  

Federal Home Loan Bank 0.64%-0.90% due 7/7/2017-8/1/2017

     35,700          35,682  
  

Freddie Mac 0.82%-1.03% due 7/13/2017-11/10/2017

     16,300          16,251  
  

International Bank for Reconstruction and Development 0.86% due 7/13/2017

     9,900          9,898  
          

 

 

 
          

 

 

 

 

76,826

 

 

 

 

          

 

 

 
U.S. Treasury bonds & notes 3.22%                    
  

 

U.S. Treasury Bills 0.90% due 8/24/2017

     10,000          9,987  
          

 

 

 
  

Total short-term securities (cost: $310,858,000)

       

 

 

 

 

310,846

 

 

 

 

          

 

 

 
  

Total investment securities 100.11% (cost: $310,858,000)

          310,846  
  

Other assets less liabilities (0.11)%

         

 

(347

 

 

          

 

 

 
  

Net assets 100.00%

       

 

$

 

 

310,499

 

 

 

 

          

 

 

 

1 Acquired in a transaction exempt from registration under Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $189,386,000, which represented 60.99% of the net assets of the fund.

See Notes to Financial Statements

 

110   American Funds Insurance Series


U.S. Government/AAA-Rated Securities Fund

 

Summary investment portfolio June 30, 2017    unaudited

 

Bonds, notes & other debt instruments 97.12%    Principal amount
(000)
       Value
(000)
 
                    

 

U.S. Treasury bonds & notes 42.41%

 

                   

 

U.S. Treasury

  

U.S. Treasury 1.125% 2021

     $  31,950        $ 31,114  
32.16%   

U.S. Treasury 1.375% 2021

     20,000          19,786  
  

U.S. Treasury 1.75% 20211

     40,540          40,437  
  

U.S. Treasury 2.00% 2021

     46,300          46,638  
  

U.S. Treasury 2.00% 2021

     44,350          44,745  
  

U.S. Treasury 2.00% 2021

     26,500          26,769  
  

U.S. Treasury 2.125% 2021

     23,450          23,774  
  

U.S. Treasury 2.25% 2021

     64,745          65,989  
  

U.S. Treasury 2.25% 2021

     38,000          38,752  
  

U.S. Treasury 1.75% 2022

     198,300          197,138  
  

U.S. Treasury 1.875% 2022

     63,000          62,995  
  

U.S. Treasury 2.125% 2022

     21,970          22,146  
  

U.S. Treasury 1.50% 2023

     26,020          25,333  
  

U.S. Treasury 2.125% 2023

     98,795          99,135  
  

U.S. Treasury 2.00% 2024

     30,000          29,741  
  

U.S. Treasury 2.875% 2046

     23,339          23,504  
  

U.S. Treasury 3.00% 2047

     32,660          33,760  
  

U.S. Treasury 3.00% 2047

     17,140          17,708  
  

U.S. Treasury 0.75%-6.25% 2019-2030

     76,561          77,973  
          

 

 

 
             927,437  
          

 

 

 
                          

 

U.S. Treasury

  

U.S. Treasury Inflation-Protected Security 0.25% 20252

     26,984          26,533  
inflation-protected   

U.S. Treasury Inflation-Protected Security 0.375% 20252

     85,884          85,334  
securities   

U.S. Treasury Inflation-Protected Security 2.375% 20252

     24,645          28,096  
10.25%   

U.S. Treasury Inflation-Protected Security 0.375% 20272

     32,896          32,337  
  

U.S. Treasury Inflation-Protected Security 0.75% 20422

     21,306          20,320  
  

U.S. Treasury Inflation-Protected Security 1.375% 20441,2

     68,930          75,144  
  

U.S. Treasury Inflation-Protected Securities 0.13%-2.13% 2020-20472

     27,968          27,679  
          

 

 

 
             295,443  
          

 

 

 
  

Total U.S. Treasury bonds & notes

          1,222,880  
          

 

 

 

Mortgage-backed obligations 35.97%

 

                   

 

Federal agency

  

Fannie Mae 3.00% 20363

     30,230          30,707  
mortgage-backed   

Fannie Mae 4.00% 20363

     17,031          18,100  
obligations   

Fannie Mae 3.00% 20373

     19,307          19,612  
35.32%   

Fannie Mae 3.00% 20463

     29,492          29,476  
  

Fannie Mae 4.00% 20473,4

     56,000          58,760  
  

Fannie Mae 4.00% 20473

     46,481          48,897  
  

Fannie Mae 4.00% 20473

     25,000          26,300  
  

Fannie Mae 4.50% 20473,4

     64,000          68,645  
  

Fannie Mae 0%-9.47% 2017-20473,4,5

     77,529          81,587  
  

Freddie Mac 3.50% 20463

     57,957          59,791  
  

Freddie Mac 4.00% 20473,4

     84,742          88,953  
  

Freddie Mac 4.00% 20473,4

     75,000          78,870  
  

Freddie Mac 4.00% 20473

     58,200          61,273  
  

Freddie Mac 0%-5.50% 2023-20453,5

     18,081          18,783  
  

Government National Mortgage Assn. 4.50% 20453

     21,214          22,562  
  

Government National Mortgage Assn. 4.00% 20473

     87,804          92,676  
  

Government National Mortgage Assn. 4.00% 20473

     26,264          27,675  
  

Government National Mortgage Assn. 4.50% 20473

     24,310          25,876  
  

Government National Mortgage Assn. 1.68%-6.64% 2034-20653,5

     119,472          125,833  
  

Other securities

          34,048  
          

 

 

 
             1,018,424  
          

 

 

 

 

American Funds Insurance Series   111


U.S. Government/AAA-Rated Securities Fund

 

    

 

Bonds, notes & other debt instruments (continued)    Principal amount
(000)
       Value
(000)
 
                    

 

Mortgage-backed obligations (continued)

 

                   

 

Other

  

Fannie Mae 2.72%-3.50% 2022-20243,5

   $ 10,225        $ 10,676  

mortgage-backed

securities

0.65%

  

Freddie Mac 1.38%-3.32% 2020-20233,5

     8,050          8,102  
          

 

 

 
            

 

18,778

 

 

 

          

 

 

 
  

Total mortgage-backed obligations

         

 

1,037,202

 

 

 

          

 

 

 
Federal agency bonds & notes 18.74%                    
  

Fannie Mae 1.25%-7.13% 2019-2030

     31,400          33,110  
  

Federal Home Loan Bank 1.75% 2018

     74,000          74,372  
  

Federal Home Loan Bank 3.375% 2023

     16,715          17,929  
  

Federal Home Loan Bank 5.50% 2036

     600          814  
  

Freddie Mac 3.75% 2019

     12,750          13,265  
  

Private Export Funding Corp. 1.45%-3.55% 2019-2024

     28,840          29,342  
  

Tennessee Valley Authority, Series A, 3.875% 2021

     32,975          35,440  
  

Tennessee Valley Authority 2.88%-5.88% 2027-2060

     14,330          15,785  
  

TVA Southaven 3.846% 20333

     1,466          1,489  
  

U.S. Department of Housing and Urban Development 0.93%-3.70% 2017-2034

     91,632          93,759  
  

United States Agency for International Development, Jordan (Kingdom of) 1.945% 2019

     19,750          19,935  
  

United States Agency for International Development, Jordan (Kingdom of) 2.503% 2020

     88,000          90,310  
  

United States Agency for International Development, Jordan (Kingdom of) 2.578% 2022

     43,000          44,236  
  

United States Agency for International Development, Jordan (Kingdom of) 3.00% 2025

     43,250          45,198  
  

United States Agency for International Development, Morocco (Kingdom of) 7.55% 20263

     3,760          4,540  
  

United States Agency for International Development, State of Iraq, 2.149% 2022

     6,670          6,693  
  

United States Agency for International Development, Tunisia (Kingdom of) 1.416% 2021

     3,000          2,940  
  

United States Agency for International Development, Ukraine 1.47%-1.84% 2019-2021

     5,855          5,783  
  

Other securities

          5,208  
          

 

 

 
            

 

540,148

 

 

 

          

 

 

 
  

Total bonds, notes & other debt instruments (cost: $2,789,296,000)

         

 

2,800,230

 

 

 

          

 

 

 
Short-term securities 7.09%                
                    
  

Bank of Montreal 1.30% due 11/22/2017

     40,000          39,995  
  

General Electric Co. 1.08% due 7/3/2017

     35,000          34,997  
  

U.S. Treasury Bills 1.09% due 12/7/2017

     90,000          89,580  
  

Other securities

          39,973  
          

 

 

 
  

Total short-term securities (cost: $204,540,000)

         

 

204,545

 

 

 

          

 

 

 
  

Total investment securities 104.21% (cost: $2,993,836,000)

          3,004,775  
  

Other assets less liabilities (4.21)%

          (121,503
          

 

 

 
  

Net assets 100.00%

        $

 

2,883,272

 

 

 

          

 

 

 

This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio. “Other securities“ also includes securities (with an aggregate value of $25,458,000, which represented .88% of the net assets of the fund) which were acquired in transactions exempt from registration under Section 4(2) of the Securities Act of 1933 and may be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers.

 

112   American Funds Insurance Series


U.S. Government/AAA-Rated Securities Fund

 

    

 

Futures contracts

 

 

    Contracts   Type     Number of
contracts
    Expiration     Notional
amount6
(000)
    Value at
6/30/20177
(000)
    Unrealized
(depreciation)
appreciation
at 6/30/2017
(000)
 
    10 Year U.S. Treasury Note Futures     Long       1,141       September 2017     $ 114,100     $ 143,231       $(1,183
    10 Year Ultra U.S. Treasury Note Futures     Long       179       September 2017       17,900       24,131       (65
    20 Year U.S. Treasury Bond Futures     Short       3       September 2017       (300     (461     8  
    30 Year Ultra U.S. Treasury Bond Futures     Short       115       September 2017       (11,500     (19,076     183  
    5 Year U.S. Treasury Note Futures     Long       14,313       October 2017       1,431,300       1,686,586       (4,366
    2 Year U.S. Treasury Note Futures     Long       700       October 2017       140,000       151,277       (243
    30 Day Federal Funds Futures     Long       1,013       October 2017       422,084       417,031       (23
    90 Day Euro Dollar Futures     Short       1,175       September 2018       (293,750     (288,727     (487
    90 Day Euro Dollar Futures     Short       625       December 2018       (156,250     (153,438     (321
           

 

 

 
              $(6,497
           

 

 

 

Swap contracts

 

Interest rate swaps

 

    Receive   Pay   Expiration
date
    Notional
(000)
    Value at
6/30/2017
(000)
    Upfront
payments/
receipts
(000)
    Unrealized
appreciation
(depreciation)
at 6/30/2017
(000)
 
    U.S. EFFR   1.1745%     11/1/2017     $ 7,246,700       $    217       $–       $    217  
    U.S. EFFR   1.17865%     11/1/2017       3,623,300       72             72  
    U.S. EFFR   1.19125%     11/1/2017       3,075,000       31             31  
    U.S. EFFR   1.201%     11/1/2017       1,565,000                    
    U.S. EFFR   1.19875%     11/1/2017       1,565,000                    
    U.S. EFFR   1.211%     11/1/2017       1,940,000       (39           (39
    U.S. EFFR   1.2165%     11/1/2017       4,800,000       (96           (96
    1.6715%   3-month USD-LIBOR     3/17/2019       223,000       408             408  
    1.654%   3-month USD-LIBOR     3/20/2019       222,000       333             333  
    1.329%   U.S. EFFR     3/27/2019       131,000       (127           (127
    1.32625%   U.S. EFFR     4/5/2019       68,800       (74           (74
    1.34875%   U.S. EFFR     4/5/2019       120,000       (83           (83
    3-month USD-LIBOR   1.5165%     4/19/2019       130,000       146             146  
    3-month USD-LIBOR   1.504%     6/8/2019       60,500       105             105  
    3-month USD-LIBOR   1.5055%     6/8/2019       60,500       103             103  
    1.337%   U.S. EFFR     6/8/2019       121,000       (169           (169
    3-month USD-LIBOR   1.5395%     6/12/2019       60,500       66             66  
    1.367%   U.S. EFFR     6/12/2019       60,500       (51           (51
    3-month USD-LIBOR   1.553%     6/14/2019       60,500       53             53  
    1.37%   U.S. EFFR     6/14/2019       60,500       (48           (48
    3-month USD-LIBOR   1.555%     6/21/2019       60,500       59             59  
    1.362%   U.S. EFFR     6/21/2019       60,500       (60           (60
    3-month USD-LIBOR   1.5445%     6/28/2019       60,500       77             77  
    1.351%   U.S. EFFR     6/28/2019       60,500       (77           (77
    1.9425%   3-month USD-LIBOR     3/17/2020       165,000       1,044             1,044  
    3-month USD-LIBOR   1.217%     9/22/2021       60,000       1,616             1,616  
    3-month USD-LIBOR   1.225%     9/22/2021       60,000       1,596             1,596  
    3-month USD-LIBOR   1.2255%     9/23/2021       5,000       133             133  
    3-month USD-LIBOR   1.9665%     2/2/2022       50,000       (120           (120
    3-month USD-LIBOR   2.01215%     2/2/2022       119,000       (524           (524
    3-month USD-LIBOR   2.0025%     2/7/2022       59,000       (233           (233
    3-month USD-LIBOR   2.2175%     3/17/2022       52,000       (696           (696
    3-month USD-LIBOR   1.8675%     4/19/2022       70,000       204             204  
    3-month USD-LIBOR   1.75918%     4/29/2022       58,000       466             466  
    2.80%   3-month USD-LIBOR     9/2/2022       280,000       2,576             2,576  

 

American Funds Insurance Series   113


U.S. Government/AAA-Rated Securities Fund

 

    

 

Swap contracts (continued)

 

Interest rate swaps (continued)    

 

    Receive   Pay   Expiration
date
    Notional
(000)
    Value at
6/30/2017
(000)
    Upfront
payments/
receipts
(000)
    Unrealized
appreciation
(depreciation)
at 6/30/2017
(000)
 
    2.75%   3-month USD-LIBOR     9/2/2022     $ 280,000       $2,316       $–       $2,316  
    3-month USD-LIBOR   2.74125%     11/22/2023       15,000       (617           (617
    3-month USD-LIBOR   2.0815%     2/10/2024       28,700       (6           (6
    3-month USD-LIBOR   2.0955%     2/10/2024       14,300       (15           (15
    3-month USD-LIBOR   2.3875%     3/17/2024       160,700       (3,079           (3,079
    3-month USD-LIBOR   1.798%     2/2/2026       35,000       1,121             1,121  
    3-month USD-LIBOR   2.24%     12/5/2026       55,100       16             16  
    3-month USD-LIBOR   2.27%     12/5/2026       44,900       (103           (103
    2.579%   3-month USD-LIBOR     3/14/2027       53,000       1,518             1,518  
    2.333%   3-month USD-LIBOR     3/29/2027       42,000       278             278  
    3-month USD-LIBOR   2.97125%     9/2/2030       62,000       (1,920           (1,920
    3-month USD-LIBOR   3.005%     9/2/2030       62,000       (2,098           (2,098
    3-month USD-LIBOR   3.34%     6/27/2044       45,000       (7,477           (7,477
    3-month USD-LIBOR   3.206%     7/31/2044       16,000       (2,230           (2,230
    3-month USD-LIBOR   3.238%     8/8/2044       16,000       (2,333           (2,333
    3-month USD-LIBOR   2.7045%     1/2/2045       12,000       (440           (440
    3-month USD-LIBOR   2.5055%     1/9/2045       11,000       50             50  
    3-month USD-LIBOR   2.4945%     1/9/2045       2,000       14             14  
    3-month USD-LIBOR   2.7025%     9/10/2045       30,000       (1,105           (1,105
    3-month USD-LIBOR   2.516%     10/20/2045       36,000       91             91  
    3-month USD-LIBOR   2.525%     10/20/2045       24,000       15             15  
    3-month USD-LIBOR   2.5315%     10/26/2045       10,000       (8           (8
    3-month USD-LIBOR   2.52822%     11/23/2045       13,350       (1           (1
    3-month USD-LIBOR   2.59125%     12/16/2045       9,000       (121           (121
    3-month USD-LIBOR   1.768%     8/17/2046       8,200       1,344             1,344  
    3-month USD-LIBOR   2.3985%     6/9/2047       22,500       643             643  
    2.44345%   3-month USD-LIBOR     6/29/2047       21,000       (390           (390
         

 

 

   

 

 

 
            $–       $(7,629
         

 

 

   

 

 

 

The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.

 

1  A portion of this security was pledged as collateral. The total value of pledged collateral was $69,299,000, which represented 2.40% of the net assets of the fund.
2  Index-linked bond whose principal amount moves with a government price index.
3  Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.
4  Purchased on a TBA basis.
5  Coupon rate may change periodically.
6  Notional amount is calculated based on the number of contracts and notional contract size.
7  Value is calculated based on the notional amount and current market price.

Key to abbreviations

EFFR = Federal Funds Effective Rate

LIBOR = London Interbank Offered Rate

TBA = To-be-announced

See Notes to Financial Statements

 

114   American Funds Insurance Series


Managed Risk Growth Fund

 

  
Summary investment portfolio June 30, 2017    unaudited

 

Growth funds 93.32%    Shares       

Value

(000)

 
                    
  

American Funds Insurance Series – Growth Fund, Class 1

     3,280,267        $ 229,881  
          

 

 

 
  

Total growth funds (cost: $228,002,000)

         

 

229,881

 

 

 

          

 

 

 
Short-term securities 6.77%                
                    
  

Government Cash Management Fund

     16,661,618          16,662  
          

 

 

 
  

Total short-term securities (cost: $16,662,000)

         

 

16,662

 

 

 

          

 

 

 
  

Total investment securities 100.09% (cost: $244,664,000)

          246,543  
  

Other assets less liabilities (0.09)%

          (216
          

 

 

 
  

Net assets 100.00%

        $

 

246,327

 

 

 

          

 

 

 

Investment in affiliates

 

American Funds Insurance Series – Growth Fund, Class 1 is an affiliate of the fund under the Investment Company Act of 1940 since it is controlled by the same board of trustees as the series. Further details on this holding and related transactions during the six months

ended June 30, 2017, appear below.

 

      Beginning
shares
     Additions      Reductions      Ending
shares
     Net realized
loss
(000)
    Net unrealized
appreciation
(000)
     Dividend
income
(000)
     Value of
affiliate at
6/30/2017
(000)
 
     2,821,842        603,955        145,530        3,280,267        $(574     $8,123        $365        $229,881  

See Notes to Financial Statements

 

American Funds Insurance Series   115


Managed Risk International Fund

 

  
Investment portfolio June 30, 2017    unaudited

 

Growth funds 94.42%    Shares       

 

Value
(000)

 
                    
  

 

American Funds Insurance Series - International Fund, Class 1

     5,939,497        $ 116,830  
          

 

 

 
  

Total growth funds (cost: $109,949,000)

       

 

 

 

 

116,830

 

 

 

 

          

 

 

 
Short-term securities 5.67%                
                    
  

 

Government Cash Management Fund

     7,013,879          7,014  
          

 

 

 
  

Total short-term securities (cost: $7,014,000)

       

 

 

 

 

7,014

 

 

 

 

          

 

 

 
  

Total investment securities 100.09% (cost: $116,963,000)

          123,844  
  

Other assets less liabilities (0.09)%

          (108
          

 

 

 
  

Net assets 100.00%

       

 

$

 

 

123,736

 

 

 

 

          

 

 

 

Investment in affiliates

 

American Funds Insurance Series – International Fund, Class 1 is an affiliate of the fund under the Investment Company Act of 1940 since it is controlled by the same board of trustees as the series. Further details on this holding and related transactions during the six

months ended June 30, 2017, appear below.

 

      Beginning
shares
     Additions      Reductions      Ending
shares
     Net realized
loss
(000)
    Net unrealized
appreciation
(000)
     Dividend
income
(000)
     Value of
affiliate at
6/30/2017
(000)
 
     5,381,857        791,338        233,698        5,939,497        $(483     $16,607        $397        $116,830  

See Notes to Financial Statements

 

116   American Funds Insurance Series


Managed Risk Blue Chip Income and Growth Fund

 

Investment portfolio June 30, 2017    unaudited

 

Growth-and-income funds 94.65%    Shares       

 

Value
(000)

 
                    
  

 

American Funds Insurance Series – Blue Chip Income and Growth Fund, Class 1

     24,910,308        $ 342,268  
          

 

 

 
  

Total growth-and-income funds (cost: $338,625,000)

       

 

 

 

 

342,268

 

 

 

 

          

 

 

 
Short-term securities 5.44%                
                    
  

 

Government Cash Management Fund

     19,687,948          19,688  
          

 

 

 
  

Total short-term securities (cost: $19,688,000)

       

 

 

 

 

19,688

 

 

 

 

          

 

 

 
  

Total investment securities 100.09% (cost: $358,313,000)

          361,956  
  

Other assets less liabilities (0.09)%

          (323
          

 

 

 
  

Net assets 100.00%

       

 

$

 

 

361,633

 

 

 

 

          

 

 

 

Investment in affiliates

 

American Funds Insurance Series – Blue Chip Income and Growth Fund, Class 1 is an affiliate of the fund under the Investment Company Act of 1940 since it is controlled by the same board of trustees as the series. Further details on this holding and related transactions during the six months ended June 30, 2017, appear below.

 

      Beginning
shares
     Additions      Reductions      Ending
shares
     Net realized
loss
(000)
    Net unrealized
appreciation
(000)
     Dividend
income
(000)
     Value of
affiliate at
6/30/2017
(000)
 
     20,295,700        5,700,424        1,085,816        24,910,308        $(296     $3,936        $1,244        $342,268  

See Notes to Financial Statements

 

American Funds Insurance Series   117


Managed Risk Growth-Income Fund

 

Investment portfolio June 30, 2017    unaudited

 

Growth-and-income funds 95.01%    Shares       

 

Value
(000)

 
                    
  

 

American Funds Insurance Series – Growth-Income Fund, Class 1

     3,872,003        $ 176,447  
          

 

 

 
  

Total growth-and-income funds (cost: $182,552,000)

       

 

 

 

 

176,447

 

 

 

 

          

 

 

 
Short-term securities 5.07%                
                    
  

 

Government Cash Management Fund

     9,412,597          9,413  
          

 

 

 
  

Total short-term securities (cost: $9,413,000)

         

 

9,413

 

 

 

          

 

 

 
  

Total investment securities 100.08% (cost: $191,965,000)

          185,860  
  

Other assets less liabilities (0.08)%

          (154
          

 

 

 
  

Net assets 100.00%

       

 

$

 

 

185,706

 

 

 

 

          

 

 

 

Investment in affiliates

 

American Funds Insurance Series – Growth-Income Fund, Class 1 is an affiliate of the fund under the Investment Company Act of 1940 since it is controlled by the same board of trustees as the series. Further details on this holding and related transactions during the six months ended June 30, 2017, appear below.

 

      Beginning
shares
     Additions      Reductions      Ending
shares
     Net realized
loss
(000)
    Net unrealized
appreciation
(000)
     Dividend
income
(000)
     Value of
affiliate at
6/30/2017
(000)
 
     3,415,529        565,019        108,545        3,872,003        $(554     $4,193        $488        $176,447  

See Notes to Financial Statements

 

118   American Funds Insurance Series


Managed Risk Asset Allocation Fund

 

Investment portfolio June 30, 2017    unaudited

 

Asset allocation funds 94.13%    Shares       

 

Value
(000)

 
                    
  

 

American Funds Insurance Series – Asset Allocation Fund, Class 1

     172,084,829        $ 3,846,096  
          

 

 

 
  

Total asset allocation funds (cost: $3,739,099,000)

       

 

 

 

 

3,846,096

 

 

 

 

          

 

 

 
Short-term securities 5.97%                
                    
  

Government Cash Management Fund

     244,055,456          244,055  
          

 

 

 
  

Total short-term securities (cost: $244,055,000)

       

 

 

 

 

244,055

 

 

 

 

          

 

 

 
  

Total investment securities 100.10% (cost: $3,983,154,000)

          4,090,151  
  

Other assets less liabilities (0.10)%

          (3,925
          

 

 

 
  

Net assets 100.00%

       

 

$

 

 

4,086,226

 

 

 

 

          

 

 

 

Investment in affiliates

 

American Funds Insurance Series – Asset Allocation Fund, Class 1 is an affiliate of the fund under the Investment Company Act of 1940 since it is controlled by the same board of trustees as the series. Further details on this holding and related transactions during the six months ended June 30, 2017, appear below.

 

      Beginning
shares
     Additions      Reductions      Ending
shares
     Net realized
gain
(000)
     Net unrealized
appreciation
(000)
     Dividend
income
(000)
     Value of
affiliate at
6/30/2017
(000)
 
     153,453,622        19,254,736        623,529        172,084,829        $1,372        $97,975        $12,067        $3,846,096  

See Notes to Financial Statements

 

American Funds Insurance Series   119


Financial statements

Statements of assets and liabilities at June 30, 2017

 

                                                                
     

Global

Growth

Fund

    

Global

Small

Capitalization

Fund

    

Growth

Fund

    

International

Fund

    

New

World

Fund

 

Assets:

              

Investment securities, at value:

              

Unaffiliated issuers

     $5,861,471        $4,010,606        $23,627,714        $8,788,701        $3,130,570  

Affiliated issuers

            25,852                       

Cash

     522        1,412        4,457        81        7,786  

Cash denominated in currencies other than U.S. dollars

     2,465        130        1,115        2,672        642  

Unrealized appreciation on open forward currency contracts

     69        275               59        183  

Receivables for:

              

Sales of investments

     4,174        8,550        18,948        21,757        41,134  

Sales of fund’s shares

     3,230        1,295        9,536        4,861        3,298  

Dividends and interest

     14,596        4,318        25,910        16,327        10,630  

Closed forward currency contracts

                                  

Variation margin on futures contracts

                                  

Variation margin on swap contracts

                                  

Other

     102        48        29        433        96  
     5,886,629        4,052,486        23,687,709        8,834,891        3,194,339  

Liabilities:

              

Unrealized depreciation on open forward currency contracts

            561                      39  

Payables for:

              

Purchases of investments

     187        10,345        45,536        25,621        35,060  

Repurchases of fund’s shares

     30,325        3,300        35,223        20,368        1,610  

Investment advisory services

     2,536        2,353        6,383        3,586        1,863  

Services provided by related parties

     874        551        3,467        954        295  

Trustees’ deferred compensation

     67        44        507        217        28  

Closed forward currency contracts

            922                      13  

Variation margin on futures contracts

                                  

Variation margin on swap contracts

                                  

Non-U.S. taxes

     1,573        131        3,240        3,527        2,891  

Other

     517        420        640        1,000        635  
     36,079        18,627        94,996        55,273        42,434  

Net assets at June 30, 2017

     $5,850,550        $4,033,859        $23,592,713        $8,779,618        $3,151,905  
                                                 

Net assets consist of:

              

Capital paid in on shares of beneficial interest

     $3,828,761        $3,294,628        $14,280,881        $7,019,945        $2,613,842  

Undistributed (distributions in excess of) net investment income

     27,922        9,675        92,306        76,172        3,247  

Undistributed (accumulated) net realized gain (loss)

     328,168        34,174        1,707,987        217,143        57,659  

Net unrealized appreciation (depreciation)

     1,665,699        695,382        7,511,539        1,466,358        477,157  

Net assets at June 30, 2017

     $5,850,550        $4,033,859        $23,592,713        $8,779,618        $3,151,905  
                                                 

Investment securities, at cost:

              

Unaffiliated issuers

     $4,195,893        $3,317,537        $16,116,203        $7,319,843        $2,651,539  

Affiliated issuers

            23,266                       

Cash denominated in currencies other than U.S. dollars, at cost

     2,465        130        1,116        2,672        642  

See end of statements of assets and liabilities for footnote.

See Notes to Financial Statements

 

120   American Funds Insurance Series


unaudited

(dollars in thousands)

 

                                                                                                       
Blue Chip      Global             International                                  
Income and      Growth      Growth-      Growth     Capital     Asset      Global            Global  
Growth      and Income      Income      and Income     Income     Allocation      Balanced      Bond     Bond  
Fund      Fund      Fund      Fund     Builder     Fund      Fund      Fund     Fund  
                             
                             
  $8,861,523        $1,905,317        $28,245,732        $1,385,629       $500,195       $24,118,389        $287,156        $12,479,885       $2,410,691  
                                                        
  3,653        826        9,219        (631     227       5,697        164        6,728       1,516  
         2,892        1,750        1,145       42       176        67        5,698       946  
                                          167        1,952       4,096  
                             
  11,968        34,405        46,304        1,862       6,500       375,868        2,342        1,651,319       50,152  
  1,687        764        12,051        331       277       17,908        666        3,283       5,342  
  11,191        7,813        31,347        6,945       2,732       81,492        1,362        60,244       19,501  
                                                       185  
                                   139               393       11  
                                   484               1,659       293  
  25        93        233        49       8       129        17        83       417  
  8,890,047        1,952,110        28,346,636        1,395,330       509,981       24,600,282        291,941        14,211,244       2,493,150  
                             
                             5              119        4,449       5,273  
                             
  2,383        12,999        68,823        13,336       7,613       939,301        1,949        3,693,052       87,634  
  3,816        1,580        10,079        1,624       162       7,758        29        4,204       824  
  2,863        984        6,102        674       205       5,222        156        3,239       1,042  
  812        331        3,122        75       64       1,957        46        934       262  
  69        21        577        7       1       231        2        106       22  
                                          9              299  
                                                 1,470       209  
                                   273               780       151  
         1,020        374              72       4,039        51              345  
  332        159        519        1,246       196       2,184        28        311       413  
  10,275        17,094        89,596        16,962       8,318       960,965        2,389        3,708,545       96,474  
  $8,879,772        $1,935,016        $28,257,040        $1,378,368       $501,663       $23,639,317        $289,552        $10,502,699       $2,396,676  
                                                                             
                             
  $6,601,086        $1,418,581        $20,172,320        $1,270,585       $484,727       $18,507,550        $242,493        $10,362,915       $2,383,849  
  96,117        28,427        217,613        22,391       1,143       209,787        1,472        112,798       20,272  
  412,570        126,714        1,189,775        (12,441     (3,691     590,837        6,492        (52,014     (25,858
  1,769,999        361,294        6,677,332        97,833       19,484       4,331,143        39,095        79,000       18,413  
  $8,879,772        $1,935,016        $28,257,040        $1,378,368       $501,663       $23,639,317        $289,552        $10,502,699       $2,396,676  
                                                                             
                             
  $7,091,549        $1,543,551        $21,568,511        $1,287,111       $480,715       $19,781,083        $248,124        $12,402,750       $2,392,131  
                                                        
         2,887        1,750        1,142       42       176        67        5,626       945  

 

American Funds Insurance Series   121


Statements of assets and liabilities at June 30, 2017

 

                                                                          
                        U.S.        
     High-                  Government/     Managed  
     Income                  AAA-Rated     Risk  
     Bond     Mortgage      Ultra-Short     Securities     Growth  
      Fund     Fund      Bond Fund     Fund     Fund  

Assets:

           

Investment securities, at value:

           

Unaffiliated issuers

     $1,565,009       $399,681        $310,846       $3,004,775       $  16,662  

Affiliated issuers

                              229,881  

Cash

     2,087       1,268        141       5,626        

Cash denominated in currencies other than U.S. dollars

                             

Receivables for:

           

Sales of investments

     23,105       98,441              1,299,112       33  

Sales of fund’s shares

     166       31        74       710       12  

Dividends and interest

     24,063       1,178              10,370       11  

Variation margin on futures contracts

           6              216        

Variation margin on swap contracts

     89       273              3,491        

Other

     4                           
     1,614,523       500,878        311,061       4,324,300       246,599  

Liabilities:

           

Payables for:

           

Purchases of investments

     37,730       154,771              1,434,167       2  

Repurchases of fund’s shares

     1,310       518        390       1,014       45  

Investment advisory services

     635       122        83       823       20  

Services provided by related parties

     186       17        60       345       199  

Trustees’ deferred compensation

     53       2        19       60       1  

Variation margin on futures contracts

           412              2,983        

Variation margin on swap contracts

     166       5              1,584        

Non-U.S. taxes

     5                           

Other

     480       7        10       52       5  
     40,565       155,854        562       1,441,028       272  

Net assets at June 30, 2017

     $1,573,958       $345,024        $310,499       $2,883,272       $246,327  

    

                                         

Net assets consist of:

           

Capital paid in on shares of beneficial interest

     $1,731,295       $339,619        $310,090       $2,848,473       $230,262  

Undistributed (distributions in excess of) net investment income

     50,886       2,404        421       22,411       (312

Undistributed (accumulated) net realized gain (loss)

     (204,289     2,608              15,576       14,498  

Net unrealized appreciation (depreciation)

     (3,934     393        (12     (3,188     1,879  

Net assets at June 30, 2017

     $1,573,958       $345,024        $310,499       $2,883,272       $246,327  

    

                                         

Investment securities, at cost:

           

Unaffiliated issuers

     $1,569,335       $398,436        $310,858       $2,993,836       $  16,662  

Affiliated issuers

                              228,002  

Cash denominated in currencies other than U.S. dollars, at cost

                             

See end of statements of assets and liabilities for footnote.

See Notes to Financial Statements

 

122   American Funds Insurance Series


unaudited

(dollars in thousands)

 

                                                   
      Managed      Managed     Managed       
Managed     Risk Blue      Risk     Risk       
Risk     Chip Income      Growth-     Asset       
International     and Growth      Income     Allocation                                                                           
Fund     Fund      Fund     Fund       
                  
                  
  $    7,014       $  19,688        $    9,413       $   244,055     
  116,830       342,268        176,447       3,846,096     
                         
                         
                  
  28       18                  
  82       12        118       8,289     
  5       14        6       169     
                         
                         
                       
  123,959       362,000        185,984       4,098,609     
                  
                  
        8        107       6,991     
  112       23        3       772     
  10       30        15       335     
  100       295        150       3,016     
  1       1        1       16     
                         
                         
                         
        10        2       1,253     
  223       367        278       12,383     
  $123,736       $361,633        $185,706       $4,086,226     
                                    
                  
  $122,756       $347,062        $184,750       $3,803,412     
  56       197        (35     2,234     
  (5,957     10,731        7,096       173,583     
  6,881       3,643        (6,105     106,997     
  $123,736       $361,633        $185,706       $4,086,226     
                                    
                  
  $    7,014       $  19,688        $    9,413       $   244,055     
  109,949       338,625        182,552       3,739,099     
                         

 

American Funds Insurance Series   123


Statements of assets and liabilities at June 30, 2017

 

                 Global                       
          Global      Small                    New  
          Growth      Capitalization      Growth      International      World  
            Fund      Fund      Fund      Fund      Fund  

Shares of beneficial interest issued and outstanding
(no stated par value) – unlimited shares authorized

 

              

Class 1:

   Net assets      $1,866,425        $1,526,093        $7,756,995        $4,486,803        $1,840,696  
   Shares outstanding      67,412        67,096        110,682        228,103        81,594  
   Net asset value per share      $27.69        $22.74        $70.08        $19.67        $22.56  

Class 1A:        

   Net assets      $561        $147        $811        $369        $167  
   Shares outstanding      20        7        12        19        7  
   Net asset value per share      $27.67        $22.73        $70.03        $19.65        $22.54  

Class 2:

   Net assets      $3,849,664        $2,446,269        $15,059,300        $4,164,515        $990,023  
   Shares outstanding      140,379        110,503        216,397        212,643        44,314  
   Net asset value per share      $27.42        $22.14        $69.59        $19.58        $22.34  

Class 3:

   Net assets                        $200,617        $29,834           
   Shares outstanding            2,847        1,515     
   Net asset value per share            $70.47        $19.70     

Class 4:

   Net assets      $133,900        $61,350        $574,990        $98,097        $321,019  
   Shares outstanding      4,897        2,747        8,341        5,049        14,411  
   Net asset value per share      $27.35        $22.33        $68.93        $19.43        $22.28  
                               U.S.         
          High-                    Government/      Managed  
          Income                    AAA-Rated      Risk  
          Bond      Mortgage      Ultra-Short      Securities      Growth  
            Fund      Fund      Bond Fund      Fund      Fund  

Shares of beneficial interest issued and outstanding
(no stated par value) – unlimited shares authorized

 

              

Class 1:

   Net assets      $741,061        $273,166        $32,502        $1,328,206     
   Shares outstanding      70,436        25,725        2,878        108,547     
   Net asset value per share      $10.52        $10.62        $11.30        $12.24     

Class 1A:

   Net assets      $111        $104        $10        $111     
   Shares outstanding      11        10        1        9     
   Net asset value per share      $10.52        $10.61        $11.30        $12.24     

Class 2:

   Net assets      $797,660        $62,273        $257,613        $1,486,950     
   Shares outstanding      77,013        5,881        23,411        122,821     
   Net asset value per share      $10.36        $10.59        $11.00        $12.11     

Class 3:

   Net assets      $13,052                 $3,675        $10,727     
   Shares outstanding      1,237           331        875     
   Net asset value per share      $10.55           $11.12        $12.26     

Class 4:

   Net assets      $22,074        $9,481        $16,699        $57,278     
   Shares outstanding      1,983        901        1,501        4,724     
   Net asset value per share      $11.13        $10.52        $11.12        $12.13     

Class P1:

   Net assets                                          $1,322  
   Shares outstanding                  111  
   Net asset value per share                  $11.95  

Class P2:

   Net assets                  $245,005  
   Shares outstanding                  20,616  
   Net asset value per share                  $11.88  

*Amount less than one thousand.

See Notes to Financial Statements

 

124   American Funds Insurance Series


unaudited

(dollars and shares in thousands, except per-share amounts)

 

Blue Chip     Global           International                                    
Income and     Growth     Growth-     Growth     Capital      Asset      Global             Global  
Growth     and Income     Income     and Income     Income      Allocation      Balanced      Bond      Bond  
Fund     Fund     Fund     Fund     Builder      Fund      Fund      Fund      Fund  
 

 

    

    

 

 

 

 

                   
  $5,269,923       $409,724       $14,186,521       $1,066,860       $201,987        $15,067,547        $75,469        $6,409,191        $1,222,013  
  383,409       27,964       311,300       63,870       20,022        674,106        6,145        590,394        104,285  
  $13.74       $14.65       $45.57       $16.70       $10.09        $22.35        $12.28        $10.86        $11.72  
  $161       $11       $450       $17       $75        $1,979        $11        $391        $31  
  12       1       10       1       7        89        1        36        3  
  $13.74       $14.65       $45.55       $16.70       $10.08        $22.34        $12.28        $10.85        $11.72  
  $3,434,403       $1,500,617       $13,333,215       $264,171       $732        $5,349,839        $193,166        $3,971,247        $1,160,083  
  252,757       102,680       295,740       15,876       73        241,782        15,774        370,598        99,817  
  $13.59       $14.61       $45.08       $16.64       $10.09        $22.13        $12.25        $10.72        $11.62  
                  $159,906                        $36,628                             
      3,505            1,638           
      $45.62            $22.36           
  $175,285       $24,664       $576,948       $47,320       $298,869        $3,183,324        $20,906        $121,870        $14,549  
  12,922       1,704       12,896       2,857       29,679        144,458        1,718        11,361        1,260  
  $13.56       $14.47       $44.74       $16.56       $10.07        $22.04        $12.17        $10.73        $11.55  
      Managed     Managed     Managed                                    
Managed     Risk Blue     Risk     Risk                                    
Risk     Chip Income     Growth-     Asset                                    
International     and Growth     Income     Allocation                                    
Fund     Fund     Fund     Fund                                    
 

 

    

    

 

 

 

 

                   
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
  $125       $201       $1,792       $1,466,442                
  12       17       156       115,455                
  $10.17       $11.96       $11.45       $12.70                
  $123,611       $361,432       $183,914       $2,619,784                
  12,238       30,441       16,138       206,573                
  $10.10       $11.87       $11.40       $12.68                

 

American Funds Insurance Series   125


Statements of operations for the six months ended June 30, 2017

 

                                            
           Global                    
     Global     Small                 New  
     Growth     Capitalization     Growth     International     World  
      Fund     Fund     Fund     Fund     Fund  

Investment income:

          

Income (net of non-U.S. taxes)*:

          

Dividends

     $  56,592       $  27,833       $   137,104       $     97,141       $  29,601  

Interest

     1,196       1,457       4,798       5,105       6,559  
     57,788       29,290       141,902       102,246       36,160  

Fees and expenses*:

          

Investment advisory services

     14,558       14,170       37,258       20,281       11,051  

Distribution services

     4,749       3,060       19,178       5,092       1,550  

Insurance administrative services

     140       65       645       100       351  

Transfer agent services

                 1              

Administrative services

     279       203       1,140       408       156  

Reports to shareholders

     152       105       626       216       80  

Registration statement and prospectus

     9       15       45       11       16  

Trustees’ compensation

     27       20       111       39       15  

Auditing and legal

           3       4       4       17  

Custodian

     344       225       238       674       401  

Other

     6       44       3       15       20  

Total fees and expenses before waivers/reimbursements

     20,264       17,910       59,249       26,840       13,657  

Less waivers/reimbursements of fees and expenses:

          

Investment advisory services waivers

                              

Miscellaneous fee reimbursements

                              

Total waivers/reimbursements of fees and expenses

                              

Total fees and expenses after waivers/reimbursements

     20,264       17,910       59,249       26,840       13,657  

Net investment income (loss)

     37,524       11,380       82,653       75,406       22,503  

Net realized gain (loss) and unrealized appreciation (depreciation):

          

Net realized gain (loss) on*:

          

Investments

          

Unaffiliated issuers

     329,123       8,706       1,883,619       214,021       184,399  

Affiliated issuers

           (3,537                  

Futures contracts

                              

Forward currency contracts

     134       (3,099           (8,385     (859

Swap contracts

                              

Currency transactions

     (1,077     27       (282     (905     (1,656
     328,180       2,097       1,883,337       204,731       181,884  

Net unrealized appreciation (depreciation) on:

          

Investments

          

Unaffiliated issuers

     586,020       463,321       1,218,360       1,103,867       218,406  

Affiliated issuers

           14,483                    

Futures contracts

                              

Forward currency contracts

     (290     (1,672           2,203       134  

Swap contracts

                              

Currency translations

     502       81       65       572       (64
     586,232       476,213       1,218,425       1,106,642       218,476  

Net realized gain (loss) and unrealized appreciation (depreciation)

     914,412       478,310       3,101,762       1,311,373       400,360  

Net increase in net assets resulting from operations

     $951,936       $489,690       $3,184,415       $1,386,779       $422,863  
        

See end of statements of operations for footnotes.

See Notes to Financial Statements

 

126   American Funds Insurance Series


unaudited

(dollars in thousands)

 

Blue Chip     Global           International                                
Income and     Growth     Growth-     Growth     Capital     Asset     Global           Global  
Growth     and Income     Income     and Income     Income     Allocation     Balanced     Bond     Bond  
Fund     Fund     Fund     Fund     Builder     Fund     Fund     Fund     Fund  
                        
                        
  $117,580       $  33,520       $   257,726       $  25,860       $  9,573       $  160,259       $  2,571       $          –       $         84  
  1,689       2,408       9,438       1,699       836       95,123       1,163       139,252       33,891  
  119,269       35,928       267,164       27,559       10,409       255,382       3,734       139,252       33,975  
                        
  17,382       6,061       35,953       3,690       1,138       30,178       887       19,889       6,109  
  4,478       1,834       17,289       370       346       10,448       250       5,056       1,438  
  195       24       671       52       345       3,823       18       136       16  
              2                   1             1        
  447       102       1,364       59       23       1,121       13       551       115  
  170       35       588       12       5       585       3       270       43  
  153       3       40       17       22       251       4       120       4  
  44       10       133       6       2       109       1       55       11  
  1       1       5       1             3       1       2       1  
  57       140       242       118       14       107       15       108       300  
  2       5       7       2       1       114       10       30       20  
  22,929       8,215       56,294       4,327       1,896       46,740       1,202       26,218       8,057  
               
                                                   
                                                   
                                                   
  22,929       8,215       56,294       4,327       1,896       46,740       1,202       26,218       8,057  
  96,340       27,713       210,870       23,232       8,513       208,642       2,532       113,034       25,918  
               
               
               
  380,596       127,997       1,140,134       (1,933     3,295       592,305       5,873       (18,640     (10,428
                                                   
                                1,548             19,307       657  
        (157           (143     (26           (115     (43,217     (10,947
                                3,474             (1,445     (918
  (14     (269     (223     (366     24       (660     (14     390       (3,174
  380,582       127,571       1,139,911       (2,442     3,293       596,667       5,744       (43,605     (24,810
               
               
  25,575       132,297       1,200,176       148,712       23,246       955,474       19,960       217,370       108,647  
                                                   
                                104             (2,500     16  
        (147           105                   (53     (4,424     4,188  
                                (2,901           (637     (339
  38       115       178       128       17       116       28       407       755  
  25,613       132,265       1,200,354       148,945       23,263       952,793       19,935       210,216       113,267  
  406,195       259,836       2,340,265       146,503       26,556       1,549,460       25,679       166,611       88,457  
  $502,535       $287,549       $2,551,135       $169,735       $35,069       $1,758,102       $28,211       $279,645       $114,375  
     

 

American Funds Insurance Series   127


Statements of operations for the six months ended June 30, 2017

 

                                            
                       U.S.        
     High-                 Government/     Managed  
     Income                 AAA-Rated     Risk  
     Bond     Mortgage     Ultra-Short     Securities     Growth  
      Fund     Fund     Bond Fund     Fund     Fund  

Investment income:

          

Income (net of non-U.S. taxes)*:

          

Dividends

     $     783       $      –       $      –       $        –       $     365  

Interest

     56,796       3,282       1,365       29,712       42  
     57,579       3,282       1,365       29,712       407  

Fees and expenses*:

          

Investment advisory services

     4,128       716       520       5,091       170  

Distribution services

     1,040       89       362       1,933       283  

Insurance administrative services

     32       11       17       68       284  

Transfer agent services

                              

Administrative services

     89       17       16       151        

Accounting and administrative services

                             28  

Reports to shareholders

     33       3       6       54       2  

Registration statement and prospectus

     3       1       1       6       7  

Trustees’ compensation

     10       1       1       15       1  

Auditing and legal

     9                          

Custodian

     4       1       1       4       6  

Other

     19       18             22       115  

Total fees and expenses before waivers/reimbursements

     5,367       857       924       7,344       896  

Less waivers/reimbursements of fees and expenses:

          

Investment advisory services waivers

                             57  

Miscellaneous fee reimbursements

                             125  

Total waivers/reimbursements of fees and expenses

                             182  

Total fees and expenses after waivers/reimbursements

     5,367       857       924       7,344       714  

Net investment income (loss)

     52,212       2,425       441       22,368       (307

Net realized gain (loss) and unrealized appreciation (depreciation):

          

Net realized gain (loss) on*:

          

Investments

          

Unaffiliated issuers

     30,949       143             (1,796      

Affiliated issuers

                             (574

Futures contracts

           1,927             11,432        

Swap contracts

     330       261             16,310        

Currency transactions

     (38     (1                  

Capital gain distributions received

                             21,739  
     31,241       2,330             25,946       21,165  

Net unrealized appreciation (depreciation) on:

          

Investments

          

Unaffiliated issuers

     (2,555     1,601       (35     24,528        

Affiliated issuers

                             8,123  

Futures contracts

           (230           (82      

Swap contracts

     (676     (962           (17,657      
     (3,231     409       (35     6,789       8,123  

Net realized gain (loss) and unrealized appreciation (depreciation)

     28,010       2,739       (35     32,735       29,288  

Net increase in net assets resulting from operations

     $80,222       $5,164       $   406       $ 55,103       $28,981  
        

* Additional information related to non-U.S. taxes, affiliated transactions and class-specific fees and expenses is included in the Notes to Financial Statements.

† Amount less than one thousand.

See Notes to Financial Statements

 

128   American Funds Insurance Series


unaudited

(dollars in thousands)

 

                                                                                                                                                                                                   
      Managed     Managed     Managed                                                                  
Managed     Risk Blue     Risk     Risk                             
Risk     Chip Income     Growth-     Asset                             
International     and Growth     Income     Allocation                             
Fund     Fund     Fund     Fund                                            
                
                
  $     397       $  1,244       $     488       $  12,067             
  21       61       29       749             
  418       1,305       517       12,816             
                
  84       259       131       2,889             
  140       431       217       3,127             
  140       432       219       4,815             
                                
                                
  26       29       27       68             
  1       3       2       45             
  3       16       4       98             
  1       2       1       18             
                                
  6       6       6       6             
  42       186       83       342             
  443       1,364       690       11,408             
                
  28       86       44       963             
  62       190       96       —               
  90       276       140       963             
  353       1,088       550       10,445             
  65       217       (33     2,371             
                
                
                
                                
  (483     (296     (554     1,372             
  (506                             
                                
  8                               
  1,333       12,607       11,243       172,372             
  352       12,311       10,689       173,744             
                
                
                                
  16,607       3,936       4,193       97,975             
  18                               
                                
  16,625       3,936       4,193       97,975             
  16,977       16,247       14,882       271,719             
  $17,042       $16,464       $14,849       $274,090             
                

 

American Funds Insurance Series   129


Statements of changes in net assets

 

                 Global Small              
      Global Growth Fund     Capitalization Fund     Growth Fund  
     Six months           Six months           Six months        
     ended     Year ended     ended     Year ended     ended     Year ended  
     June 30     December 31     June 30     December 31     June 30     December 31  
     2017*     2016     2017*     2016     2017*     2016  

Operations:

            

Net investment income (loss)

     $     37,524       $     43,253       $     11,380       $     16,207       $       82,653       $     179,970  

Net realized gain (loss)

     328,180       182,760       2,097       (26,426     1,883,337       2,252,045  

Net unrealized appreciation (depreciation)

     586,232       (192,438     476,213       93,893       1,218,425       (489,479

Net increase (decrease) in net assets resulting from operations

     951,936       33,575       489,690       83,674       3,184,415       1,942,536  

Dividends and distributions paid to shareholders:

            

Dividends from net investment income

     (5,483     (51,522     (16,092     (13,487     (31,422     (177,667

Distributions from net realized gain on investments

     (174,096     (443,911           (724,863     (2,251,429     (1,900,853

Total dividends and distributions paid to shareholders

     (179,579     (495,433     (16,092     (738,350     (2,282,851     (2,078,520

Net capital share transactions

     (128,527     134,946       (316,593     300,027       1,141,399       (111,950

Total increase (decrease) in net assets

     643,830       (326,912     157,005       (354,649     2,042,963       (247,934

Net assets:

            

Beginning of period

     5,206,720       5,533,632       3,876,854       4,231,503       21,549,750       21,797,684  

End of period

     $5,850,550       $5,206,720       $4,033,859       $3,876,854       $23,592,713       $21,549,750  
        

Undistributed (distributions in excess of) net investment income

     $27,922       $(4,119     $9,675       $14,387       $92,306       $41,075  
        
     International Growth                          
      and Income Fund     Capital Income Builder     Asset Allocation Fund  
     Six months           Six months           Six months        
     ended     Year ended     ended     Year ended     ended     Year ended  
     June 30     December 31     June 30     December 31     June 30     December 31  
     2017*     2016     2017*     2016     2017*     2016  

Operations:

            

Net investment income (loss)

     $     23,232       $     30,357       $    8,513       $  10,171       $     208,642       $     356,748  

Net realized gain (loss)

     (2,442     (11,768     3,293       (5,074     596,667       1,072,096  

Net unrealized appreciation (depreciation)

     148,945       (534     23,263       5,120       952,793       360,724  

Net increase (decrease) in net assets resulting from operations

     169,735       18,055       35,069       10,217       1,758,102       1,789,568  

Dividends and distributions paid to shareholders:

            

Dividends from net investment income

     (2,360     (30,394     (6,422     (11,031     (70,189     (347,205

Distributions from net realized gain on investments

           (4,687                 (1,069,604     (465,866

Total dividends and distributions paid to shareholders

     (2,360     (35,081     (6,422     (11,031     (1,139,793     (813,071

Net capital share transactions

     109,541       125,599       60,981       175,844       1,973,107       1,700,837  

Total increase (decrease) in net assets

     276,916       108,573       89,628       175,030       2,591,416       2,677,334  

Net assets:

            

Beginning of period

     1,101,452       992,879       412,035       237,005       21,047,901       18,370,567  

End of period

     $1,378,368       $1,101,452       $501,663       $412,035       $23,639,317       $21,047,901  
                

Undistributed (distributions in excess of) net investment income

     $22,391       $1,519       $1,143       $(948     $209,787       $71,334  
        

See end of statements of changes in net assets for footnote.

See Notes to Financial Statements

 

130   American Funds Insurance Series


(dollars in thousands)

 

                                                                                
                        Blue Chip Income     Global Growth              
International Fund     New World Fund     and Growth Fund     and Income Fund     Growth-Income Fund  
Six months           Six months           Six months           Six months           Six months        
ended     Year ended     ended     Year ended     ended     Year ended     ended     Year ended     ended     Year ended  
June 30     December 31     June 30     December 31     June 30     December 31     June 30     December 31     June 30     December 31  
2017*     2016     2017*     2016     2017*     2016     2017*     2016     2017*     2016  
                          
  $     75,406       $   107,613       $     22,503       $     30,850       $     96,340       $   173,682       $     27,713       $     37,944       $     210,870       $     406,211  
  204,731       174,210       181,884       (49,262     380,582       340,410       127,571       63,152       1,139,911       1,870,618  
  1,106,642       486       218,476       165,410       25,613       803,943       132,265       36,088       1,200,354       478,434  
 

    

1,386,779

 

 

    282,309       422,863       146,998       502,535       1,318,035       287,549       137,184       2,551,135       2,755,263  
                          
  (28,350     (112,086     (4,703     (26,290     (30,871     (170,997     (5,647     (36,671     (72,640     (395,167
  (100,923     (637,485                 (328,661     (595,206     (33,691           (1,807,557     (2,694,334
  (129,273     (749,571     (4,703     (26,290     (359,532     (766,203     (39,338     (36,671     (1,880,197     (3,089,501
  67,237       439,487       (160,120     79,376       93,531       1,193,132       (304,804     114,314       1,492,912       2,214,035  
  1,324,743       (27,775     258,040       200,084       236,534       1,744,964       (56,593     214,827       2,163,850       1,879,797  
                          
  7,454,875       7,482,650       2,893,865       2,693,781       8,643,238       6,898,274       1,991,609       1,776,782       26,093,190       24,213,393  
  $8,779,618       $7,454,875       $3,151,905       $2,893,865       $8,879,772       $8,643,238       $1,935,016       $1,991,609       $28,257,040       $26,093,190  
     
 

    

$76,172

 

 

    $29,116       $3,247       $(14,553     $96,117       $30,648       $28,427       $6,361       $217,613       $79,383  
     
Global Balanced Fund     Bond Fund     Global Bond Fund     High-Income Bond Fund     Mortgage Fund  
Six months           Six months           Six months           Six months           Six months        
ended     Year ended     ended     Year ended     ended     Year ended     ended     Year ended     ended     Year ended  
June 30     December 31     June 30     December 31     June 30     December 31     June 30     December 31     June 30     December 31  
2017*     2016     2017*     2016     2017*     2016     2017*     2016     2017*     2016  
                          
  $    2,532       $    3,667       $     113,034       $     188,699       $     25,918       $     49,208       $     52,212       $   106,342       $    2,425       $    4,590  
  5,744       1,518       (43,605     163,219       (24,810     (11,548     31,241       (82,614     2,330       4,966  
  19,935       5,219       210,216       (52,479     113,267       25,290       (3,231     262,380       409       (1,322
 

    

28,211

 

 

    10,404       279,645       299,439       114,375       62,950       80,222       286,108       5,164       8,234  
                          
        (3,285     (60,071     (197,417           (15,576     (19,156     (106,140     (1,054     (6,310
  (934           (157,394     (35,948     (14,450     (4,207                 (2,214     (3,532
  (934     (3,285     (217,465     (233,365     (14,450     (19,783     (19,156     (106,140     (3,268     (9,842
  10,395       25,497       (448,998     898,544       48,567       (40,534     (268,749     (193,559     2,723       (117
  37,672       32,616       (386,818     964,618       148,492       2,633       (207,683     (13,591     4,619       (1,725
                          
  251,880       219,264       10,889,517       9,924,899       2,248,184       2,245,551       1,781,641       1,795,232       340,405       342,130  
  $289,552       $251,880       $10,502,699       $10,889,517       $2,396,676       $2,248,184       $1,573,958       $1,781,641       $345,024       $340,405  
     
 

    

$1,472

 

 

    $(1,060     $112,798       $59,835       $20,272       $(5,646     $50,886       $17,830       $2,404       $1,033  
     

 

American Funds Insurance Series   131


Statements of changes in net assets

 

                 U.S. Government/     Managed Risk  
      Ultra-Short Bond Fund     AAA-Rated Securities Fund     Growth Fund  
     Six months           Six months           Six months        
     ended     Year ended     ended     Year ended     ended     Year ended  
     June 30     December 31     June 30     December 31     June 30     December 31  
     2017*     2016     2017*     2016     2017*     2016  

Operations:

            

Net investment income (loss)

     $       441       $      (452     $    22,368       $     36,028       $      (307     $       731  

Net realized gain (loss)

                 25,946       9,371       21,165       (560

Net unrealized appreciation (depreciation)

     (35     (3     6,789       (5,718     8,123       6,120  

Net increase (decrease) in net assets resulting from operations

     406       (455     55,103       39,681       28,981       6,291  

Dividends and distributions paid to shareholders:

            

Dividends from net investment income

                 (7,654     (46,049     (734     (330

Distributions from net realized gain on investments

                       (60,973     (4,142     (15,012

Total dividends and distributions paid to shareholders

                 (7,654     (107,022     (4,876     (15,342

Net capital share transactions

     (40,923     (11,965     (201,901     43,179       21,094       64,347  

Total increase (decrease) in net assets

     (40,517     (12,420     (154,452     (24,162     45,199       55,296  

Net assets:

            

Beginning of period

     351,016       363,436       3,037,724       3,061,886       201,128       145,832  

End of period

     $310,499       $351,016       $2,883,272       $3,037,724       $246,327       $201,128  
                

Undistributed (distributions in excess of) net investment income

     $421       $(20     $22,411       $7,697       $(312     $729  
        

*Unaudited.

See Notes to Financial Statements

 

132   American Funds Insurance Series


(dollars in thousands)

 

Managed Risk     Managed Risk Blue Chip     Managed Risk     Managed Risk  
International Fund     Income and Growth Fund     Growth-Income Fund     Asset Allocation Fund  
Six months           Six months           Six months           Six months        
ended     Year ended     ended     Year ended     ended     Year ended     ended     Year ended  
June 30     December 31     June 30     December 31     June 30     December 31     June 30     December 31  
2017*     2016     2017*     2016     2017*     2016     2017*     2016  
                                             
  $         65       $     884       $       217       $    4,012       $        (33     $    1,562       $       2,371       $     41,207  
  352       (4,433     12,311       5,539       10,689       5,070       173,744       37,559  
  16,625       1,071       3,936       15,029       4,193       2,438       97,975       148,316  
 

    

17,042

 

 

    (2,478     16,464       24,580       14,849       9,070       274,090       227,082  
             
  (900     (843     (4,294     (3,375     (1,867     (1,707     (31,722     (44,188
  (1,403     (2,185     (5,569     (5,923     (7,726     (8,465     (38,742     (93,578
  (2,303     (3,028     (9,863     (9,298     (9,593     (10,172     (70,464     (137,766
  11,392       19,951       63,816       138,529       19,694       39,189       323,620       804,645  
  26,131       14,445       70,417       153,811       24,950       38,087       527,246       893,961  
             
  97,605       83,160       291,216       137,405       160,756       122,669       3,558,980       2,665,019  
  $123,736       $97,605       $361,633       $291,216       $185,706       $160,756       $4,086,226       $3,558,980  
     
  $56       $891       $197       $4,274       $(35     $1,865       $2,234       $31,585  
     

 

American Funds Insurance Series   133


Notes to financial statements    unaudited

1. Organization

 

American Funds Insurance Series (the “series”) is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company with 28 different funds (the “funds”). Twenty-three funds in the series are covered in this report. The other five funds in the series are covered in a separate report. The assets of each fund are segregated, with each fund accounted for separately. Capital Research and Management Company (“CRMC”) is the series’ investment adviser. Milliman Financial Risk Management LLC (“Milliman FRM”) is the subadviser for the risk management strategy for eight of the funds (the “managed risk funds”), five of which are covered in this report.

The managed risk funds covered in this report are Managed Risk Growth Fund, Managed Risk International Fund, Managed Risk Blue Chip Income and Growth Fund, Managed Risk Growth-Income Fund and Managed Risk Asset Allocation Fund. The managed risk funds invest in other funds within the series (the “underlying funds”) and employ Milliman FRM to implement the risk management strategy, which consists of using hedging instruments – primarily short positions on exchange-traded futures contracts – to attempt to stabilize the volatility of the funds around target volatility levels and reduce the downside exposure of the funds during periods of significant market declines.

Shareholders approved a proposal to reorganize the series from a Massachusetts business trust to a Delaware statutory trust. The reorganization may be completed in the next 12 months; however, the series reserves the right to delay the implementation.

The investment objectives for each fund covered in this report are as follows:

Global Growth Fund – Seeks to provide long-term growth of capital.

Global Small Capitalization Fund – Seeks to provide long-term growth of capital.

Growth Fund – Seeks to provide growth of capital.

International Fund – Seeks to provide long-term growth of capital.

New World Fund – Seeks long-term capital appreciation.

Blue Chip Income and Growth Fund – Seeks to produce income exceeding the average yield on U.S. stocks generally and to provide an opportunity for growth of principal consistent with sound common stock investing.

Global Growth and Income Fund – Seeks to provide long-term growth of capital while providing current income.

Growth-Income Fund – Seeks to achieve long-term growth of capital and income.

International Growth and Income Fund – Seeks to provide long-term growth of capital while providing current income.

Capital Income Builder – Seeks to provide a level of current income that exceeds the average yield on U.S. stocks generally and to provide a growing stream of income over the years. Secondarily, seeks to provide growth of capital.

Asset Allocation Fund – Seeks to provide high total return consistent with preservation of capital over the long term.

Global Balanced Fund – Seeks the balanced accomplishment of three objectives: long-term growth of capital, conservation of principal and current income.

Bond Fund – Seeks to provide as high a level of current income as is consistent with the preservation of capital.

Global Bond Fund – Seeks to provide, over the long term, a high level of total return consistent with prudent investment management.

High-Income Bond Fund – Seeks to provide a high level of current income and, secondarily, capital appreciation.

Mortgage Fund – Seeks to provide current income and preservation of capital.

 

134   American Funds Insurance Series


Ultra-Short Bond Fund – Seeks to provide current income, consistent with the maturity and quality standards applicable to the fund, and preservation of capital and liquidity.

U.S. Government/AAA-Rated Securities Fund – Seeks to provide a high level of current income consistent with preservation of capital.

Managed Risk Growth Fund – Seeks to provide growth of capital while seeking to manage volatility and provide downside protection.

Managed Risk International Fund – Seeks to provide long-term growth of capital while seeking to manage volatility and provide downside protection.

Managed Risk Blue Chip Income and Growth Fund – Seeks to produce income exceeding the average yield on U.S. stocks generally and to provide an opportunity for growth of principal consistent with sound common stock investing, in each case while seeking to manage volatility and provide downside protection.

Managed Risk Growth-Income Fund – Seeks to achieve long-term growth of capital and income while seeking to manage volatility and provide downside protection.

Managed Risk Asset Allocation Fund – Seeks to provide high total return consistent with preservation of capital over the long term while seeking to manage volatility and provide downside protection.

Each fund in the series, except the managed risk funds, offers either four or five share classes (Classes 1, 1A, 2, 3 or 4); the managed risk funds offer two share classes (Classes P1 and P2). Holders of all share classes of each fund have equal pro rata rights to assets, dividends and liquidation proceeds of each fund held. Each share class of each fund has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses (“class-specific fees and expenses”), primarily due to different arrangements for certain distribution expenses. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each class of each fund.

2. Significant accounting policies

 

Each fund is an investment company that applies the accounting and reporting guidance issued in Topic 946 by the U.S. Financial Accounting Standards Board. Each fund’s financial statements have been prepared to comply with U.S. generally accepted accounting principles (“U.S. GAAP”). These principles require the series’ investment adviser to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. Subsequent events, if any, have been evaluated through the date of issuance in the preparation of the financial statements. The funds follow the significant accounting policies described in this section, as well as the valuation policies described in the next section on valuation.

Security transactions and related investment income – Security transactions are recorded by the funds as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. In the event a security is purchased with a delayed payment date, the funds will segregate liquid assets sufficient to meet their payment obligations. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.

Fees and expenses – The fees and expenses of the underlying funds held by the managed risk funds are not included in the fees and expenses reported for each of the managed risk funds; however, they are indirectly reflected in the valuation of each of the underlying funds. These fees are included in the net effective expense ratios that are provided as supplementary information in the financial highlights tables.

Class allocations – Income, fees and expenses (other than class-specific fees and expenses) and realized and unrealized gains and losses are allocated daily among the various share classes of each fund based on their relative net assets. Class-specific fees and expenses, such as distribution expenses, are accrued daily and charged directly to the respective share class of each fund.

Dividends and distributions to shareholders – Dividends and distributions to shareholders are recorded on each fund’s ex-dividend date.

 

American Funds Insurance Series   135


Currency translation – Assets and liabilities, including investment securities, denominated in currencies other than U.S. dollars are translated into U.S. dollars at the exchange rates supplied by one or more pricing vendors on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. The effects of changes in exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments in the funds’ statements of operations. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in currencies other than U.S. dollars are disclosed separately.

3. Valuation

 

CRMC, the series’ investment adviser, values the funds’ investments at fair value as defined by U.S. GAAP. The net asset value of each share class of each fund is generally determined as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open.

Methods and inputs – The series’ investment adviser uses the following methods and inputs to establish the fair value of each fund’s assets and liabilities. Use of particular methods and inputs may vary over time based on availability and relevance as market and economic conditions evolve.

Equity securities are generally valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market on which the security trades. The value of an underlying fund is based on its reported net asset value.

Fixed-income securities, including short-term securities, are generally valued at prices obtained from one or more pricing vendors. Vendors value such securities based on one or more of the inputs described in the following table. The table provides examples of inputs that are commonly relevant for valuing particular classes of fixed-income securities in which the funds are authorized to invest. However, these classifications are not exclusive and any of the inputs may be used to value any other class of fixed-income security.

 

    Fixed-income class

 

  

Examples of standard inputs

 

All

  

Benchmark yields, transactions, bids, offers, quotations from dealers and trading systems, new issues, spreads and other relationships observed in the markets among comparable securities; and proprietary pricing models such as yield measures calculated using factors such as cash flows, financial or collateral performance and other reference data (collectively referred to as “standard inputs”)

 

Corporate bonds & notes; convertible securities

 

  

Standard inputs and underlying equity of the issuer

 

Bonds & notes of governments & government agencies

 

  

Standard inputs and interest rate volatilities

 

Mortgage-backed; asset-backed obligations

  

Standard inputs and cash flows, prepayment information, default rates, delinquency and loss assumptions, collateral characteristics, credit enhancements and specific deal information

 

Municipal securities

  

Standard inputs and, for certain distressed securities, cash flows or liquidation values using a net present value calculation based on inputs that include, but are not limited to, financial statements and debt contracts

 

When the series’ investment adviser deems it appropriate to do so (such as when vendor prices are unavailable or not deemed to be representative), fixed-income securities will be valued in good faith at the mean quoted bid and ask prices that are reasonably and timely available (or bid prices, if ask prices are not available) or at prices for securities of comparable maturity, quality and type.

 

136   American Funds Insurance Series


Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are generally valued in the manner described for either equity or fixed-income securities, depending on which method is deemed most appropriate by the series’ investment adviser. The Government Cash Management Fund held by the managed risk funds is managed to maintain a $1.00 net asset value per share. The net asset value of each share class of each managed risk fund is calculated based on the reported net asset values of the underlying funds in which each fund invests.

Exchange-traded futures are generally valued at the official settlement price of, or the last reported sale price on, the exchange or market on which such instruments are traded, as of the close of business on the day the futures are being valued or, lacking any sales, at the last available bid price. Prices for each future are taken from the exchange or market on which the security trades. Forward currency contracts are valued at the mean of representative quoted bid and ask prices, generally based on prices supplied by one or more pricing vendors. Interest rate swaps and credit default swaps are generally valued by pricing vendors based on market inputs that include the index and term of index, reset frequency, payer/receiver, currency and pay frequency.

Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the series’ investment adviser are fair valued as determined in good faith under fair value guidelines adopted by authority of the series’ board of trustees as further described. The investment adviser follows fair valuation guidelines, consistent with U.S. Securities and Exchange Commission rules and guidance, to consider relevant principles and factors when making fair value determinations. The investment adviser considers relevant indications of value that are reasonably and timely available to it in determining the fair value to be assigned to a particular security, such as the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. In addition, the closing prices of equity securities and futures that trade in markets outside U.S. time zones may be adjusted to reflect significant events that occur after the close of local trading but before the net asset value of each share class of each fund is determined. Fair valuations and valuations of investments and futures that are not actively trading involve judgment and may differ materially from valuations that would have been used had greater market activity occurred.

Processes and structure – The series’ board of trustees has delegated authority to the series’ investment adviser to make fair value determinations, subject to board oversight. The investment adviser has established a Joint Fair Valuation Committee (the “Fair Valuation Committee”) to administer, implement and oversee the fair valuation process, and to make fair value decisions. The Fair Valuation Committee regularly reviews its own fair value decisions, as well as decisions made under its standing instructions to the investment adviser’s valuation teams. The Fair Valuation Committee reviews changes in fair value measurements from period to period and may, as deemed appropriate, update the fair valuation guidelines to better reflect the results of back testing and address new or evolving issues. The Fair Valuation Committee reports any changes to the fair valuation guidelines to the board of trustees with supplemental information to support the changes. The series’ board and audit committee also regularly review reports that describe fair value determinations and methods.

The series’ investment adviser has also established a Fixed-Income Pricing Review Group to administer and oversee the fixed-income valuation process, including the use of fixed-income pricing vendors. This group regularly reviews pricing vendor information and market data. Pricing decisions, processes and controls over security valuation are also subject to additional internal reviews, including an annual control self-evaluation program facilitated by the investment adviser’s compliance group.

Classifications – The series’ investment adviser classifies the funds’ assets and liabilities into three levels based on the inputs used to value the assets or liabilities. Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Certain securities trading outside the U.S. may transfer between Level 1 and Level 2 due to valuation adjustments resulting from significant market movements following the close of local trading. Level 3 values are based on significant unobservable inputs that reflect the investment adviser’s determination of assumptions that market participants might reasonably use in valuing the securities.

 

American Funds Insurance Series   137


The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The following tables present the funds’ valuation levels as of June 30, 2017 (dollars in thousands):

Global Growth Fund

 

     Investment securities  
  

 

 

 
    

Level 1*

 

      

Level 2

 

      

Level 3

 

      

Total    

 

 

 

 

    Assets:

                 

Common stocks:

                 

Information technology

     $1,741,170          $            –          $–          $1,741,170      

Consumer discretionary

     1,079,024          32,599                   1,111,623      

Health care

     813,379                            813,379      

Financials

     569,702                            569,702      

Consumer staples

     444,881                            444,881      

Industrials

     359,346                            359,346      

Energy

     144,098                            144,098      

Materials

     111,407          8,898                   120,305      

Telecommunication services

     85,633                            85,633      

Miscellaneous

     291,977                            291,977      

Bonds, notes & other debt instruments

              1,999                   1,999      

Short-term securities

              177,358                   177,358      

 

 

    Total

 

    

 

$5,640,617

 

 

 

      

 

$220,854

 

 

 

      

 

$–

 

 

 

      

 

$5,861,471    

 

 

 

 

 
     Other investments  
  

 

 

 
    

Level 1

 

      

Level 2

 

      

Level 3

 

      

Total    

 

 

 

 

    Assets:

                 

Unrealized appreciation on open forward currency contracts

     $–          $69          $–          $69      

 

 

  *Securities with a value of $2,454,098,000, which represented 41.95% of the net assets of the fund, transferred from Level 2 to Level 1 since the prior fiscal year-end, primarily due to a lack of significant market movements following the close of local trading.

 

  Forward currency contracts are not included in the investment portfolio.  

Global Small Capitalization Fund

 

 

     Investment securities  
  

 

 

 
    

Level 1*

 

      

Level 2

 

      

Level 3

 

      

Total    

 

 

 

 

    Assets:

                 

Common stocks:

                 

Consumer discretionary

     $   855,368          $14,839          $         –          $   870,207      

Information technology

     668,640                            668,640      

Health care

     644,673          2,626                   647,299      

Industrials

     385,813          18,288                   404,101      

Financials

     338,845                            338,845      

Consumer staples

     147,184                            147,184      

Materials

     139,439                            139,439      

Real estate

     110,782                            110,782      

Energy

     93,339          1,355          9,848          104,542      

Utilities

     87,230                            87,230      

Telecommunication services

     10,878          6,161                   17,039      

Miscellaneous

     191,853          1,563          1,860          195,276      

Rights & warrants

     651                            651      

Bonds, notes & other debt instruments

              28,120                   28,120      

Short-term securities

              277,103                   277,103      

 

 

    Total

 

    

 

$3,674,695

 

 

 

      

 

$350,055

 

 

 

      

 

$11,708

 

 

 

      

 

$4,036,458    

 

 

 

 

 

 

138   American Funds Insurance Series


     Other investments  
      Level 1      Level 2     Level 3      Total  

Assets:

          

Unrealized appreciation on open forward currency contracts

   $      $ 275     $      $ 275  

Liabilities:

          

Unrealized depreciation on open forward currency contracts

            (561            (561

 

 

Total

   $      $ (286   $      $ (286

 

 

*Securities with a value of $1,441,058,000, which represented 35.72% of the net assets of the fund, transferred from Level 2 to Level 1 since the prior fiscal year-end, primarily due to a lack of significant market movements following the close of local trading.

Forward currency contracts are not included in the investment portfolio.

Growth Fund

 

     Investment securities  
      Level 1*      Level 2      Level 3      Total  

Assets:

           

Common stocks:

           

Information technology

   $ 7,139,327      $      $      $ 7,139,327  

Consumer discretionary

     4,901,933                      4,901,933  

Health care

     3,442,868                      3,442,868  

Energy

     1,758,064                      1,758,064  

Financials

     1,732,006                      1,732,006  

Industrials

     1,446,255                      1,446,255  

Consumer staples

     547,711                      547,711  

Telecommunication services

     219,461                      219,461  

Other

     324,938                      324,938  

Miscellaneous

     402,317                      402,317  

Convertible stocks

                   12,276        12,276  

Short-term securities

            1,700,558               1,700,558  

 

 

Total

   $ 21,914,880      $ 1,700,558      $ 12,276      $ 23,627,714  

 

 

*Securities with a value of $1,434,478,000, which represented 6.08% of the net assets of the fund, transferred from Level 2 to Level 1 since the prior fiscal year-end, primarily due to a lack of significant market movements following the close of local trading.

International Fund

 

     Investment securities  
      Level 1*      Level 2      Level 3      Total  

Assets:

           

Common stocks:

           

Financials

   $ 1,198,172      $ 261,259      $      $ 1,459,431  

Information technology

     1,194,960                      1,194,960  

Consumer discretionary

     1,160,780                      1,160,780  

Health care

     841,549                      841,549  

Consumer staples

     727,159                      727,159  

Industrials

     709,289                      709,289  

Utilities

     514,170                      514,170  

Materials

     464,340                      464,340  

Energy

     333,663                      333,663  

Telecommunication services

     265,173                      265,173  

Real estate

     169,869                      169,869  

Miscellaneous

     86,831                      86,831  

Bonds, notes & other debt instruments

            65,688               65,688  

Short-term securities

            795,799               795,799  

 

 

Total

   $ 7,665,955      $ 1,122,746      $      $ 8,788,701  

 

 

See next page for footnote.

 

American Funds Insurance Series   139


     Other investments  
      Level 1      Level 2      Level 3      Total  

Assets:

           

Unrealized appreciation on open forward currency contracts

   $      $ 59      $      $ 59  

 

 

*Securities with a value of $6,567,118,000, which represented 74.80% of the net assets of the fund, transferred from Level 2 to Level 1 since the prior fiscal year-end, primarily due to a lack of significant market movements following the close of local trading.

Forward currency contracts are not included in the investment portfolio.

New World Fund

 

     Investment securities  
      Level 1*      Level 2     Level 3      Total  

Assets:

          

Common stocks:

          

Information technology

   $ 758,557      $     $      $ 758,557  

Consumer discretionary

     305,448        40,941              346,389  

Financials

     282,536        53,654              336,190  

Consumer staples

     270,766                     270,766  

Energy

     257,425        12,591              270,016  

Industrials

     197,477                     197,477  

Health care

     156,011                     156,011  

Materials

     151,643        2,085              153,728  

Utilities

     85,757                     85,757  

Telecommunication services

     61,130                     61,130  

Real estate

     36,777              27        36,804  

Miscellaneous

     133,078                     133,078  

Rights & warrants

            48,361              48,361  

Bonds, notes & other debt instruments

            100,959              100,959  

Short-term securities

            175,347              175,347  

 

 

Total

   $ 2,696,605      $ 433,938     $ 27      $ 3,130,570  

 

 
     Other investments  
      Level 1      Level 2     Level 3      Total  

Assets:

          

Unrealized appreciation on open forward currency contracts

   $      $ 183     $      $ 183  

Liabilities:

          

Unrealized depreciation on open forward currency contracts

            (39            (39

 

 

Total

   $      $ 144     $      $ 144  

 

 

*Securities with a value of $841,725,000, which represented 26.71% of the net assets of the fund, transferred from Level 2 to Level 1 since the prior fiscal year-end, primarily due to a lack of significant market movements following the close of local trading.

Forward currency contracts are not included in the investment portfolio.

 

140   American Funds Insurance Series


Blue Chip Income and Growth Fund

 

     Investment securities  
      Level 1      Level 2      Level 3      Total  

Assets:

           

Common stocks:

           

Health care

   $ 1,481,553      $      $      $ 1,481,553  

Financials

     1,287,642                      1,287,642  

Information technology

     1,210,398                      1,210,398  

Consumer staples

     1,158,178                      1,158,178  

Industrials

     866,684                      866,684  

Telecommunication services

     669,531                      669,531  

Energy

     517,820                      517,820  

Consumer discretionary

     427,223                      427,223  

Materials

     330,876                      330,876  

Utilities

     147,983                      147,983  

Real estate

     40,072                      40,072  

Miscellaneous

     435,631                      435,631  

Short-term securities

            287,932               287,932  

 

 

Total

   $ 8,573,591      $ 287,932      $      $ 8,861,523  

 

 

Global Growth and Income Fund

 

     Investment securities  
      Level 1*      Level 2      Level 3      Total  

Assets:

           

Common stocks:

           

Information technology

   $ 429,421      $      $      $ 429,421  

Financials

     208,557                      208,557  

Industrials

     192,035                      192,035  

Consumer staples

     189,662                      189,662  

Consumer discretionary

     170,603                      170,603  

Energy

     136,859                      136,859  

Health care

     135,246                      135,246  

Materials

     81,888                      81,888  

Real estate

     69,904                      69,904  

Utilities

     67,797                      67,797  

Telecommunication services

     32,609                      32,609  

Miscellaneous

     69,554        6,491               76,045  

Rights & warrants

     178                      178  

Convertible bonds

            6,821               6,821  

Bonds, notes & other debt instruments

            38,353               38,353  

Short-term securities

            69,339               69,339  

 

 

Total

   $ 1,784,313      $ 121,004      $      $ 1,905,317  

 

 

*Securities with a value of $741,282,000, which represented 38.31% of the net assets of the fund, transferred from Level 2 to Level 1 since the prior fiscal year-end, primarily due to a lack of significant market movements following the close of local trading.

 

American Funds Insurance Series   141


Growth-Income Fund

 

     Investment securities  
      Level 1*      Level 2      Level 3      Total  

Assets:

           

Common stocks:

           

Information technology

   $ 4,498,198      $      $      $ 4,498,198  

Consumer discretionary

     4,231,362                      4,231,362  

Health care

     4,117,707                      4,117,707  

Financials

     3,202,666                      3,202,666  

Industrials

     2,292,789                      2,292,789  

Consumer staples

     1,956,533        97,914               2,054,447  

Energy

     1,678,819                      1,678,819  

Materials

     1,322,517                      1,322,517  

Real estate

     517,877                      517,877  

Telecommunication services

     506,765                      506,765  

Utilities

     239,796                      239,796  

Mutual funds

     132,822                      132,822  

Miscellaneous

     1,320,207        38,611               1,358,818  

Convertible stocks

            5,722               5,722  

Convertible bonds

            93,133               93,133  

Bonds, notes & other debt instruments

            56,801               56,801  

Short-term securities

            1,935,493               1,935,493  

 

 

Total

   $ 26,018,058      $ 2,227,674      $      $ 28,245,732  

 

 

*Securities with a value of $1,532,209,000, which represented 5.42% of the net assets of the fund, transferred from Level 2 to Level 1 since the prior fiscal year-end, primarily due to a lack of significant market movements following the close of local trading.

International Growth and Income Fund

 

     Investment securities  
      Level 1*      Level 2      Level 3      Total  

Assets:

           

Common stocks:

           

Financials

   $ 195,509      $ 53,170      $      $ 248,679  

Consumer staples

     141,525               2,092        143,617  

Industrials

     143,296                      143,296  

Consumer discretionary

     101,120        9,759               110,879  

Utilities

     106,169                      106,169  

Information technology

     103,140                      103,140  

Health care

     83,606                      83,606  

Energy

     63,883                      63,883  

Real estate

     60,842                      60,842  

Telecommunication services

     37,867                      37,867  

Materials

     37,046                      37,046  

Miscellaneous

     38,208                      38,208  

Bonds, notes & other debt instruments

            40,849               40,849  

Short-term securities

            167,548               167,548  

 

 

Total

   $ 1,112,211      $ 271,326      $ 2,092      $ 1,385,629  

 

 

*Securities with a value of $781,320,000, which represented 56.68% of the net assets of the fund, transferred from Level 2 to Level 1 since the prior fiscal year-end, primarily due to a lack of significant market movements following the close of local trading.

 

142   American Funds Insurance Series


Capital Income Builder

 

     Investment securities  
      Level 1*      Level 2      Level 3      Total  

Assets:

           

Common stocks:

           

Financials

   $ 70,538      $ 1,040      $      $ 71,578  

Consumer staples

     63,534                      63,534  

Telecommunication services

     39,630                      39,630  

Energy

     37,101                      37,101  

Health care

     30,239                      30,239  

Information technology

     24,757                      24,757  

Real estate

     23,484                      23,484  

Industrials

     20,433                      20,433  

Utilities

     19,922                      19,922  

Consumer discretionary

     18,069                      18,069  

Materials

     6,178                      6,178  

Miscellaneous

     10,684                      10,684  

Convertible stocks

     6,134                      6,134  

Bonds, notes & other debt instruments:

           

Mortgage-backed obligations

            37,554               37,554  

U.S. Treasury bonds & notes

            37,460               37,460  

Corporate bonds & notes

            22,927               22,927  

Asset-backed obligations

            5,117               5,117  

Short-term securities

            25,394               25,394  

 

 

Total

   $ 370,703      $ 129,492      $      $ 500,195  

 

 
     Other investments  
      Level 1      Level 2      Level 3      Total  

Liabilities:

           

Unrealized depreciation on open forward currency contracts

     $–        $(5)        $–        $(5)  

*Securities with a value of $152,994,000, which represented 30.50% of the net assets of the fund, transferred from Level 2 to Level 1 since the prior fiscal year-end, primarily due to a lack of significant market movements following the close of local trading.

Forward currency contracts are not included in the investment portfolio.

Asset Allocation Fund

 

     Investment securities  
      Level 1*      Level 2      Level 3      Total  

Assets:

           

Common stocks:

           

Information technology

   $ 4,321,483      $      $ 2,628      $ 4,324,111  

Health care

     2,012,092               619        2,012,711  

Consumer discretionary

     1,881,995                      1,881,995  

Financials

     1,808,282        7,645               1,815,927  

Consumer staples

     1,224,153                      1,224,153  

Energy

     1,059,504                      1,059,504  

Industrials

     832,587        1,766        1        834,354  

Materials

     800,596        1,602               802,198  

Real estate

     279,872                      279,872  

Telecommunication services

     230,118                      230,118  

Utilities

     76,630                      76,630  

Miscellaneous

     335,415                      335,415  

Convertible stocks

            4,426        5,350        9,776  

Bonds, notes & other debt instruments:

           

U.S. Treasury bonds & notes

            2,967,349               2,967,349  

Corporate bonds & notes

            2,278,161        13,147        2,291,308  

Mortgage-backed obligations

            1,341,845               1,341,845  

Federal agency bonds & notes

            51,361               51,361  

Other

            234,779               234,779  

Short-term securities

            2,344,983               2,344,983  

 

 

Total

   $ 14,862,727      $ 9,233,917      $ 21,745      $ 24,118,389  

 

 

 

American Funds Insurance Series   143


     Other investments  
      Level 1      Level 2     Level 3      Total  

Assets:

          

Unrealized appreciation on futures contracts

   $ 345      $     $      $ 345  

Unrealized appreciation on interest rate swaps

            180              180  

Liabilities:

          

Unrealized depreciation on interest rate swaps

            (6,710            (6,710

 

 

Total

   $ 345      $ (6,530   $      $ (6,185

 

 

*Securities with a value of $591,467,000, which represented 2.50% of the net assets of the fund, transferred from Level 2 to Level 1 since the prior fiscal year-end, primarily due to a lack of significant market movements following the close of local trading.

Futures contracts and interest rate swaps are not included in the investment portfolio.

Global Balanced Fund

 

     Investment securities  
      Level 1*      Level 2     Level 3      Total  

Assets:

          

Common stocks:

          

Information technology

   $ 36,294      $     $      $ 36,294  

Consumer staples

     22,927                     22,927  

Industrials

     21,446                     21,446  

Financials

     17,770        1,468              19,238  

Health care

     16,612                     16,612  

Consumer discretionary

     13,774                     13,774  

Materials

     12,976        772              13,748  

Energy

     12,648                     12,648  

Utilities

     6,278                     6,278  

Real estate

     3,430                     3,430  

Telecommunication services

     1,804                     1,804  

Miscellaneous

     13,687                     13,687  

Bonds, notes & other debt instruments:

          

Bonds & notes of governments & government agencies outside the U.S.

            42,096              42,096  

U.S. Treasury bonds & notes

            24,713              24,713  

Corporate bonds & notes

            19,854              19,854  

Mortgage-backed obligations

            3,413              3,413  

Asset-backed obligations

            200              200  

Short-term securities

            14,994              14,994  

 

 

Total

   $ 179,646      $ 107,510     $      $ 287,156  

 

 
     Other investments  
      Level 1      Level 2     Level 3      Total  

Assets:

          

Unrealized appreciation on open forward currency contracts

   $      $ 167     $      $ 167  

Liabilities:

          

Unrealized depreciation on open forward currency contracts

            (119            (119

 

 

Total

   $      $ 48     $      $ 48  

 

 

*Securities with a value of $71,519,000, which represented 24.70% of the net assets of the fund, transferred from Level 2 to Level 1 since the prior fiscal year-end, primarily due to a lack of significant market movements following the close of local trading.

Forward currency contracts are not included in the investment portfolio.

 

144   American Funds Insurance Series


Bond Fund

 

     Investment securities  
      Level 1     Level 2     Level 3      Total  

Assets:

         

Bonds, notes & other debt instruments:

         

Corporate bonds & notes

   $     $ 3,795,603       $   457      $ 3,796,060  

Mortgage-backed obligations

           2,860,076              2,860,076  

U.S. Treasury bonds & notes

           2,228,457              2,228,457  

Bonds & notes of governments & government agencies outside the U.S.

           699,205              699,205  

Asset-backed obligations

           376,981              376,981  

Municipals

           186,794              186,794  

Federal agency bonds & notes

           12,135              12,135  

Common stocks

     1,049             1,095        2,144  

Rights & warrants

                 71        71  

Short-term securities

           2,317,962              2,317,962  

 

 

Total

   $ 1,049     $ 12,477,213       $1,623      $ 12,479,885  

 

 
     Other investments*  
      Level 1     Level 2     Level 3      Total  

Assets:

         

Unrealized appreciation on futures contracts

   $ 939     $       $–      $ 939  

Unrealized appreciation on open forward currency contracts

           1,952              1,952  

Unrealized appreciation on interest rate swaps

           15,160              15,160  

Liabilities:

         

Unrealized depreciation on futures contracts

     (4,547                  (4,547

Unrealized depreciation on open forward currency contracts

           (4,449            (4,449

Unrealized depreciation on interest rate swaps

           (7,336            (7,336

 

 

Total

   $ (3,608   $ 5,327       $–      $ 1,719  

 

 

*Futures contracts, forward currency contracts and interest rate swaps are not included in the investment portfolio.

Global Bond Fund

 

     Investment securities  
      Level 1      Level 2      Level 3      Total  

Assets:

           

Bonds, notes & other debt instruments:

           

Euros

   $      $ 309,028      $      $ 309,028  

Japanese yen

            218,758               218,758  

Polish zloty

            107,838               107,838  

Mexican pesos

            82,146               82,146  

Indian rupees

            58,380               58,380  

Malaysian ringgits

            50,426               50,426  

British pounds

            42,138               42,138  

Norwegian kroner

            40,554               40,554  

Australian dollars

            40,378               40,378  

Colombian pesos

            29,310               29,310  

Danish kroner

            25,593               25,593  

Turkish lira

            24,431               24,431  

Israeli shekels

            19,754               19,754  

Chilean pesos

            19,736               19,736  

Canadian dollars

            14,534               14,534  

Hungarian forints

            12,713               12,713  

U.S. dollars

            963,589        195        963,784  

Other

            39,430               39,430  

Convertible stocks

            143        909        1,052  

Common stocks

     104        494        402        1,000  

Short-term securities

            309,708               309,708  

 

 

Total

   $ 104      $ 2,409,081      $ 1,506      $ 2,410,691  

 

 

 

American Funds Insurance Series   145


     Other investments*  
      Level 1     Level 2     Level 3      Total  

Assets:

         

Unrealized appreciation on futures contracts

   $ 216     $     $      $ 216  

Unrealized appreciation on open forward currency contracts

           4,096              4,096  

Unrealized appreciation on interest rate swaps

           1,706              1,706  

Liabilities:

         

Unrealized depreciation on futures contracts

     (200                  (200

Unrealized depreciation on open forward currency contracts

           (5,273            (5,273

Unrealized depreciation on interest rate swaps

           (923            (923

 

 

Total

   $ 16     $ (394   $      $ (378

 

 

*Futures contracts, forward currency contracts and interest rate swaps are not included in the investment portfolio.

High-Income Bond Fund

 

     Investment securities  
      Level 1      Level 2     Level 3      Total  

Assets:

          

Bonds, notes & other debt instruments:

          

Corporate bonds & notes

   $      $ 1,440,254     $ 12,878      $ 1,453,132  

Other

            14,467              14,467  

Convertible bonds

            5,839              5,839  

Convertible stocks

     8,476        3,163       5,189        16,828  

Common stocks

     3,052        4,062       5,493        12,607  

Rights & warrants

                  46        46  

Short-term securities

            62,090              62,090  

 

 

Total

   $ 11,528      $ 1,529,875     $ 23,606      $ 1,565,009  

 

 
     Other investments*  
      Level 1      Level 2     Level 3      Total  

Assets:

          

Unrealized appreciation on interest rate swaps

   $      $ 267     $      $ 267  

Unrealized appreciation on credit default swaps

            149              149  

Liabilities:

          

Unrealized depreciation on interest rate swaps

            (21            (21

 

 

Total

   $      $ 395     $      $ 395  

 

 

*Interest rate swaps and credit default swaps are not included in the investment portfolio.

The following table reconciles the valuation of the fund’s Level 3 investment securities and related transactions for the six months ended June 30, 2017 (dollars in thousands):

 

      Beginning
value at
1/1/2017
    

Transfers  

into  

Level 32

     Purchases      Sales    

Net  

realized  

gain3

    

Unrealized  

appreciation3

    

Transfers  

out of  

Level 32

     Ending
value at
6/30/2017
 

Investment securities

   $ 22,631      $ 47      $ 258      $ (16   $      $ 686      $      $ 23,606  

Net unrealized appreciation during the period on Level 3 investment securities held at June 30, 2017

 

   $ 686  

2Transfers into or out of Level 3 are based on the beginning market value of the quarter in which they occurred.

3Net realized gain and unrealized appreciation are included in the related amounts on investments in the statement of operations.

 

146   American Funds Insurance Series


Unobservable inputs – Valuation of the fund’s Level 3 securities is based on significant unobservable inputs that reflect the investment adviser’s determination of assumptions that market participants might reasonably use in valuing the securities. The following table provides additional information used by the fund’s investment adviser to fair value the fund’s Level 3 securities (dollars in thousands):

 

      Value at
6/30/2017
     Valuation
techniques
   Unobservable
inputs
   Range     Impact to
valuation from
an increase in
input*
 

Corporate bonds & notes

   $ 12,878      Yield to call price    Yield to call      2.5% - 5.0%       Decrease  
      Yield analysis    Yield risk premium      100 - 500 bps risk premium       Decrease  

Convertible stocks

     5,189      Accreted value (stated value increased by accrued dividends)    Payment-in-kind (PIK) dividend rate      N/A       Increase  

Common stocks

     5,493      Estimated liquidation proceeds    Discount to reflect timing of receipt and amount of proceeds      25% discount       Decrease  
      Enterprise valuation    EV/EBITDA multiple      5.0x - 11.5x       Increase  
      Arms-length transaction    Arms-length transaction      N/A       N/A  

Rights & warrants

     46      Net Present Value Model    Discount rate      12% discount       Decrease  
   $ 23,606             
  

 

 

            

*This column represents the directional change in fair value of the Level 3 securities that would result in an increase from the corresponding input. A decrease to the unobservable input would have the opposite effect. Significant increases and decreases in these inputs in isolation could result in significantly higher or lower fair value measurements.

Key to abbreviations

EBITDA = Earnings before income taxes, depreciation and amortization

EV = Enterprise value

Mortgage Fund

 

     Investment securities  
      Level 1      Level 2      Level 3      Total  

Assets:

           

Bonds, notes & other debt instruments:

           

Mortgage-backed obligations

     $–      $ 213,976      $      $ 213,976  

Federal agency bonds & notes

            63,383               63,383  

U.S. Treasury bonds & notes

            41,075               41,075  

Asset-backed obligations

            18,343               18,343  

Corporate bonds & notes

                   214        214  

Short-term securities

            62,690               62,690  

 

 

Total

     $–      $ 399,467      $ 214      $ 399,681  

 

 
     Other investments*  
      Level 1      Level 2      Level 3      Total  

Assets:

           

Unrealized appreciation on futures contracts

   $ 84      $      $      $ 84  

Unrealized appreciation on interest rate swaps

            1,345               1,345  

Liabilities:

           

Unrealized depreciation on futures contracts

     (631                    (631

Unrealized depreciation on interest rate swaps

            (1,651             (1,651

 

 

Total

   $ (547    $ (306    $      $ (853

 

 

*Futures contracts and interest rate swaps are not included in the investment portfolio.

Ultra-Short Bond Fund

At June 30, 2017, all of the fund’s investment securities were classified as Level 2.

 

American Funds Insurance Series   147


U.S. Government/AAA-Rated Securities Fund

 

     Investment securities  
      Level 1     Level 2     Level 3      Total  

Assets:

         

Bonds, notes & other debt instruments:

         

U.S. Treasury bonds & notes

   $     $ 1,222,880     $      $ 1,222,880  

Mortgage-backed obligations

           1,037,202              1,037,202  

Federal agency bonds & notes

           540,148              540,148  

Short-term securities

           204,545              204,545  

 

 

Total

   $     $ 3,004,775     $      $ 3,004,775  

 

 
     Other investments  
      Level 1     Level 2     Level 3      Total  

Assets:

         

Unrealized appreciation on futures contracts

   $ 191     $     $      $ 191  

Unrealized appreciation on interest rate swaps

           16,711              16,711  

Liabilities:

         

Unrealized depreciation on futures contracts

     (6,688                  (6,688

Unrealized depreciation on interest rate swaps

           (24,340            (24,340

 

 

Total

   $ (6,497   $ (7,629   $      $ (14,126

 

 

*Futures contracts and interest rate swaps are not included in the investment portfolio.

Managed Risk Growth Fund

At June 30, 2017, all of the fund’s investments were classified as Level 1.

Managed Risk International Fund

At June 30, 2017, all of the fund’s investments were classified as Level 1.

Managed Risk Blue Chip Income and Growth Fund

At June 30, 2017, all of the fund’s investments were classified as Level 1.

Managed Risk Growth-Income Fund

At June 30, 2017, all of the fund’s investments were classified as Level 1.

Managed Risk Asset Allocation Fund

At June 30, 2017, all of the fund’s investments were classified as Level 1.

4. Risk factors

 

 

Investing in the funds may involve certain risks including, but not limited to, those described below.

Market conditions – The prices of, and the income generated by, the common stocks, bonds and other securities held by a fund may decline – sometimes rapidly or unpredictably – due to various factors, including events or conditions affecting the general economy or particular industries; overall market changes; local, regional or global political, social or economic instability; governmental or governmental agency responses to economic conditions; and currency exchange rate, interest rate and commodity price fluctuations.

Issuer risks – The prices of, and the income generated by, securities held by a fund may decline in response to various factors directly related to the issuers of such securities, including reduced demand for an issuer’s goods or services, poor management performance and strategic initiatives such as mergers, acquisitions or dispositions and the market response to any such initiatives.

Investing in growth-oriented stocks – Growth-oriented common stocks and other equity-type securities (such as preferred stocks, convertible preferred stocks and convertible bonds) may involve larger price swings and greater potential for loss than other types of investments. These risks may be even greater in the case of smaller capitalization stocks.

Investing in income-oriented stocks – Income provided by a fund may be reduced by changes in the dividend policies of, and the capital resources available for dividend payments at, the companies in which the fund invests.

 

148   American Funds Insurance Series


Investing in small companies — Investing in smaller companies may pose additional risks. For example, it is often more difficult to value or dispose of small company stocks and more difficult to obtain information about smaller companies than about larger companies. Furthermore, smaller companies often have limited product lines, operating histories, markets and/or financial resources, may be dependent on one or a few key persons for management, and can be more susceptible to losses. Moreover, the prices of their stocks may be more volatile than stocks of larger, more established companies.

Investing outside the U.S. — Securities of issuers domiciled outside the U.S., or with significant operations or revenues outside the U.S., may lose value because of adverse political, social, economic or market developments (including social instability, regional conflicts, terrorism and war) in the countries or regions in which the issuers operate or generate revenue. These securities may also lose value due to changes in foreign currency exchange rates against the U.S. dollar and/or currencies of other countries. Issuers of these securities may be more susceptible to actions of foreign governments, such as the imposition of price controls or punitive taxes, that could adversely impact the value of these securities. Securities markets in certain countries may be more volatile and/or less liquid than those in the U.S. Investments outside the U.S. may also be subject to different accounting practices and different regulatory, legal and reporting standards and practices, and may be more difficult to value, than those in the U.S. In addition, the value of investments outside the U.S. may be reduced by foreign taxes, including foreign withholding taxes on interest and dividends. Further, there may be increased risks of delayed settlement of securities purchased or sold by the fund. The risks of investing outside the U.S. may be heightened in connection with investments in emerging markets.

Investing in developing countries — Investing in countries with developing economies and/or markets may involve risks in addition to and greater than those generally associated with investing in developed countries. For instance, developing countries may have less developed legal and accounting systems than those in developed countries. The governments of these countries may be less stable and more likely to impose capital controls, nationalize a company or industry, place restrictions on foreign ownership and on withdrawing sale proceeds of securities from the country, and/or impose punitive taxes that could adversely affect the prices of securities. In addition, the economies of these countries may be dependent on relatively few industries that are more susceptible to local and global changes. Securities markets in these countries can also be relatively small and have substantially lower trading volumes. As a result, securities issued in these countries may be more volatile and less liquid, and may be more difficult to value, than securities issued in countries with more developed economies and/or markets. Less certainty with respect to security valuations may lead to additional challenges and risks in calculating the fund’s net asset value. Additionally, there may be increased settlement risks for transactions in local securities.

Investing in emerging markets — Investing in emerging markets may involve risks in addition to and greater than those generally associated with investing in the securities markets of developed countries. For instance, developing countries may have less developed legal and accounting systems than those in developed countries. The governments of these countries may be less stable and more likely to impose capital controls, nationalize a company or industry, place restrictions on foreign ownership and on withdrawing sale proceeds of securities from the country, and/or impose punitive taxes that could adversely affect the prices of securities. In addition, the economies of these countries may be dependent on relatively few industries that are more susceptible to local and global changes. Securities markets in these countries can also be relatively small and have substantially lower trading volumes. As a result, securities issued in these countries may be more volatile and less liquid, and may be more difficult to value, than securities issued in countries with more developed economies and/or markets. Less certainty with respect to security valuations may lead to additional challenges and risks in calculating a fund’s net asset value. Additionally, there may be increased settlement risks for transactions in local securities.

Investing in debt instruments — The prices of, and the income generated by, bonds and other debt securities held by a fund may be affected by changing interest rates and by changes in the effective maturities and credit ratings of these securities.

Rising interest rates will generally cause the prices of bonds and other debt securities to fall. Falling interest rates may cause an issuer to redeem, call or refinance a debt security before its stated maturity, which may result in a fund having to reinvest the proceeds in lower yielding securities. Longer maturity debt securities generally have greater sensitivity to changes in interest rates and may be subject to greater price fluctuations than shorter maturity debt securities.

Bonds and other debt securities are also subject to credit risk, which is the possibility that the credit strength of an issuer will weaken and/or an issuer of a debt security will fail to make timely payments of principal or interest and the security will go into default. Lower quality debt securities generally have higher rates of interest and may be subject to greater price fluctuations than higher quality debt securities. Credit risk is gauged, in part, by the credit ratings of the debt securities in which a fund invests. However, ratings are only the opinions of the rating agencies issuing them and are not guarantees as to credit quality or an evaluation of market risk. The funds’ investment adviser relies on its own credit analysts to research issuers and issues in seeking to mitigate various credit and default risks.

 

American Funds Insurance Series   149


Investing in lower rated debt instruments — Lower rated bonds and other lower rated debt securities generally have higher rates of interest and involve greater risk of default or price declines due to changes in the issuer’s creditworthiness than those of higher quality debt securities. The market prices of these securities may fluctuate more than the prices of higher quality debt securities and may decline significantly in periods of general economic difficulty. These risks may be increased with respect to investments in junk bonds.

Investing in derivatives — The use of derivatives involves a variety of risks, which may be different from, or greater than, the risks associated with investing in traditional cash securities, such as stocks and bonds. Changes in the value of a derivative may not correlate perfectly with, and may be more sensitive to market events than, the underlying asset, rate or index, and a derivative instrument may expose a fund to losses in excess of its initial investment. Derivatives may be difficult for a fund to buy or sell at an opportune time or price and may be difficult to terminate or otherwise offset. A fund’s use of derivatives may result in losses to the fund, and investing in derivatives may reduce a fund’s returns and increase a fund’s price volatility. A fund’s counterparty to a derivative transaction (including, if applicable, the fund’s clearing broker, the derivatives exchange or the clearinghouse) may be unable or unwilling to honor its financial obligations in respect of the transaction.

Currency — The prices of, and the income generated by, most debt securities held by a fund may also be affected by changes in relative currency values. If the U.S. dollar appreciates against foreign currencies, the value in U.S. dollars of a fund’s securities denominated in such currencies would generally fall and vice versa. U.S. dollar-denominated securities of foreign issuers may also be affected by changes in relative currency values.

Investing in mortgage-related and other asset-backed securities — Mortgage-related securities, such as mortgage-backed securities, and other asset-backed securities, include debt obligations that represent interests in pools of mortgages or other income-bearing assets, such as consumer loans or receivables. Such securities often involve risks that are different from or more acute than the risks associated with investing in other types of debt securities. Mortgage-backed and other asset-backed securities are subject to changes in the payment patterns of borrowers of the underlying debt. When interest rates fall, borrowers are more likely to refinance or prepay their debt before its stated maturity. This may result in a fund having to reinvest the proceeds in lower yielding securities, effectively reducing a fund’s income. Conversely, if interest rates rise and borrowers repay their debt more slowly than expected, the time in which the mortgage-backed and other asset-backed securities are paid off could be extended, reducing a fund’s cash available for reinvestment in higher yielding securities.

Investing in future delivery contracts — A fund may enter into contracts, such as to-be-announced contracts and mortgage dollar rolls, that involve a fund selling mortgage-related securities and simultaneously contracting to repurchase similar securities for delivery at a future date at a predetermined price. This can increase a fund’s market exposure, and the market price of the securities that the fund contracts to repurchase could drop below their purchase price. While a fund can preserve and generate capital through the use of such contracts by, for example, realizing the difference between the sale price and the future purchase price, the income generated by the fund may be reduced by engaging in such transactions. In addition, these transactions may increase the turnover rate of a fund.

Investing in inflation linked bonds — The values of inflation linked bonds generally fluctuate in response to changes in real interest rates — i.e., rates of interest after factoring in inflation. A rise in real interest rates may cause the prices of inflation linked securities to fall, while a decline in real interest rates may cause the prices to increase. Inflation linked bonds may experience greater losses than other debt securities with similar durations when real interest rates rise faster than nominal interest rates. There can be no assurance that the value of an inflation linked security will be directly correlated to changes in interest rates; for example, if interest rates rise for reasons other than inflation, the increase may not be reflected in the security’s inflation measure.

Investing in inflation linked bonds may also reduce a fund’s distributable income during periods of extreme deflation. If prices for goods and services decline throughout the economy, the principal and income on inflation linked securities may decline and result in losses to a fund.

Investing in securities backed by the U.S. government — Securities backed by the U.S. Treasury or the full faith and credit of the U.S. government are guaranteed only as to the timely payment of interest and principal when held to maturity. Accordingly, the current market values for these securities will fluctuate with changes in interest rates. Securities issued by government-sponsored entities and federal agencies and instrumentalities that are not backed by the full faith and credit of the U.S. government are neither issued nor guaranteed by the U.S. government.

Investing in repurchase agreements — Upon entering into a repurchase agreement, a fund purchases a security from a bank or broker-dealer, which simultaneously commits to repurchase the security within a specified time at the fund’s cost with interest. The security purchased by the fund constitutes collateral for the seller’s repurchase obligation. If the party agreeing to repurchase should default, the fund may seek to sell the security it holds as collateral. The fund may incur a loss if the value of the collateral securing the repurchase obligation falls below the repurchase price. The fund may also incur disposition costs and encounter procedural delays in connection with liquidating the collateral.

 

150   American Funds Insurance Series


Interest rate risk — The values and liquidity of the securities held by a fund may be affected by changing interest rates. For example, the values of these securities may decline when interest rates rise and increase when interest rates fall. Longer maturity debt securities generally have greater sensitivity to changes in interest rates and may be subject to greater price fluctuations than shorter maturity debt securities. A fund may invest in variable and floating rate securities. Although such securities are generally less sensitive to interest rate changes, the value of variable and floating rate securities may decline if their interest rates do not rise as quickly, or as much, as general interest rates. Conversely, floating rate securities will not generally increase in value if interest rates decline. During periods of extremely low short-term interest rates, a fund may not be able to maintain a positive yield and, given the current historically low interest rate environment, risks associated with rising rates are currently heightened.

Credit and liquidity support — Changes in the credit quality of banks and financial institutions providing credit and liquidity support features with respect to securities held by a fund could cause the values of these securities to decline.

Asset allocation — A fund’s percentage allocation to equity securities, debt securities and money market instruments could cause the fund to underperform relative to relevant benchmarks and other funds with similar investment objectives.

Nondiversification — As nondiversified funds, certain funds have the ability to invest a larger percentage of their assets in the securities of a smaller number of issuers than diversified funds. Although the funds do not intend to limit their investments to the securities of a small number of issuers, if they were to do so, poor performance by a single large holding could adversely impact the funds’ investment results more than if the funds were invested in a larger number of issuers.

Liquidity risk — Certain fund holdings may be deemed to be less liquid or illiquid because they cannot be readily sold without significantly impacting the value of the holdings. Liquidity risk may result from the lack of an active market for a holding, legal or contractual restrictions on resale, or the reduced number and capacity of market participants to make a market in such holding. Market prices for less liquid or illiquid holdings may be volatile, and reduced liquidity may have an adverse impact on the market price of such holdings. Additionally, the sale of less liquid or illiquid holdings may involve substantial delays (including delays in settlement) and additional costs and the fund may be unable to sell such holdings when necessary to meet its liquidity needs.

Management — The investment adviser to the funds actively manages the funds’ investments. Consequently, the funds are subject to the risk that the methods and analyses employed by the investment adviser in this process may not produce the desired results. This could cause the funds to lose value or their investment results to lag relevant benchmarks or other funds with similar objectives.

Investing in the managed risk funds may involve additional risks including, but not limited to, those described below.

Fund structure — The managed risk funds invest in underlying funds and incur expenses related to those underlying funds. In addition, investors in the managed risk funds will incur fees to pay for certain expenses related to the operations of the managed risk funds. An investor holding the underlying fund directly would incur lower overall expenses but would not receive the benefit of the managed risk strategy.

Management — The managed risk funds are subject to the risk that the methods employed by the subadviser in implementing the managed risk strategy may not produce the desired results. This could cause the managed risk funds to lose value or their investment results to lag relevant benchmarks or other funds with similar objectives.

Underlying fund risks — Because the managed risk funds’ investments consist of individual underlying funds, the managed risk funds’ risks are directly related to the risks of the respective underlying fund in which each managed fund invests. For this reason, it is important to understand the risks associated with investing both in the managed risk fund and the respective underlying fund.

Investing in futures contracts — In addition to the risks generally associated with investing in derivative instruments, futures contracts are subject to the creditworthiness of the clearing organizations, exchanges and futures commission merchants with which a fund transacts. Additionally, although futures require only a small initial investment in the form of a deposit of initial margin, the amount of a potential loss on a futures contract could greatly exceed the initial amount invested. While futures contracts are generally liquid instruments, under certain market conditions, futures may be deemed to be illiquid. For example, a fund may be temporarily prohibited from closing out its position in a futures contract if intraday price change limits or limits on trading volume imposed by the applicable futures exchange are triggered. If a fund is unable to close out a position on a futures contract, the fund would remain subject to the risk of adverse price movements until the fund is able to close out the futures position. The ability of a fund to successfully utilize futures contracts may depend in part upon the ability of the fund’s investment adviser or subadviser to accurately forecast interest rates and other economic factors and to assess and predict the impact of such economic factors on the futures in which the fund invests. If the investment adviser or subadviser incorrectly forecasts economic developments or incorrectly predicts the impact of such developments on the futures in which it invests, a fund could be exposed to the risk of loss.

 

American Funds Insurance Series   151


Hedging — There may be imperfect or even negative correlation between the prices of the futures contracts and the prices of the underlying securities. For example, futures contracts may not provide an effective hedge because changes in futures contract prices may not track those of the underlying securities or indexes they are intended to hedge. In addition, there are significant differences between the securities and futures markets that could result in an imperfect correlation between the markets, causing a given hedge not to achieve its objectives. The degree of imperfection of correlation depends on circumstances such as variations in speculative market demand for futures, including technical influences in futures trading, and differences between the financial instruments being hedged and the instruments underlying the standard contracts available for trading. A decision as to whether, when and how to hedge involves the exercise of skill and judgment, and even a well-conceived hedge may be unsuccessful to some degree because of market behavior or unexpected interest rate trends. In addition, the fund’s investment in exchange-traded futures and their resulting costs could limit the fund’s gains in rising markets relative to those of the underlying fund, or to those of unhedged funds in general.

Short positions — Losses from short positions in futures contracts occur when the underlying index increases in value. As the underlying index increases in value, the holder of the short position in the corresponding futures contract is required to pay the difference in value of the futures contract resulting from the increase in the index on a daily basis. Losses from a short position in an index futures contract could potentially be very large if the value of the underlying index rises dramatically in a short period of time.

5. Certain investment techniques

 

 

Index-linked bonds — Some of the funds have invested in index-linked bonds, which are fixed-income securities whose principal value is periodically adjusted to a government price index. Over the life of an index-linked bond, interest is paid on the adjusted principal value. Increases or decreases in the principal value of index-linked bonds are recorded as interest income in the fund’s statement of operations.

Mortgage dollar rolls — Some of the funds have entered into mortgage dollar roll transactions in which the fund sells a mortgage-backed security to a counterparty and simultaneously enters into an agreement with the same counterparty to buy back a similar security on a specific future date at a predetermined price. Mortgage dollar rolls are accounted for as purchase and sale transactions, which may increase the funds’ portfolio turnover rates.

Loan transactions — Some of the funds have entered into loan transactions in which the fund acquires a loan either through an agent, by assignment from another holder, or as a participation interest in another holder’s portion of a loan. The loan is often administered by a financial institution that acts as agent for the holders of the loan, and the fund may be required to receive approval from the agent and/or borrower prior to the sale of the investment. The loan’s interest rate and maturity date may change based on the terms of the loan, including potential early payments of principal.

Short-term securities — The managed risk funds hold shares of the Government Cash Management Fund, a cash management vehicle offered by the Bank of New York Mellon (“BNY Mellon”), the funds’ custodian bank. The Government Cash Management Fund is managed by the Dreyfus Corporation.

Futures contracts — Some of the funds have entered into futures contracts, which provide for the future sale by one party and purchase by another party of a specified amount of a specific financial instrument for a specified price, date, time and place designated at the time the contract is made. Futures contracts are used to strategically manage portfolio volatility and downside equity risk.

Upon entering into futures contracts, and to maintain the fund’s open positions in futures contracts, the fund is required to deposit with a futures broker, or FCM, in a segregated account in the name of the FCM an amount of cash, U.S. government securities, suitable money market instruments, or other liquid securities, known as “initial margin.” The margin required for a particular futures contract is set by the exchange on which the contract is traded to serve as collateral, and may be significantly modified from time to time by the exchange during the term of the contract. When initial margin is deposited with brokers, a receivable is recorded in the fund’s statement of assets and liabilities.

On a daily basis, each fund pays or receives variation margin based on the increase or decrease in the value of the futures contracts and records variation margin on futures contracts in each fund’s statement of assets and liabilities. In addition, each fund segregates liquid assets equivalent to the fund’s outstanding obligations under the contract in excess of the initial margin and variation margin, if any. Futures contracts may involve a risk of loss in excess of the variation margin shown on each fund’s statement of assets and liabilities.

 

152   American Funds Insurance Series


Each fund records realized gains or losses at the time the futures contract is closed or expires. Net realized gains or losses and net unrealized appreciation or depreciation from futures contracts are recorded in each fund’s statement of operations.

Forward currency contracts — Some of the funds have entered into forward currency contracts, which represent agreements to exchange currencies on specific future dates at predetermined rates. The series’ investment adviser uses forward currency contracts to manage the fund’s exposure to changes in exchange rates. Upon entering into these contracts, risks may arise from the potential inability of counterparties to meet the terms of their contracts and from possible movements in exchange rates.

On a daily basis, the series’ investment adviser values forward currency contracts based on the applicable exchange rates and records unrealized appreciation or depreciation for open forward currency contracts in each fund’s statement of assets and liabilities. Realized gains or losses are recorded at the time the forward contract is closed or offset by another contract with the same broker for the same settlement date and currency. Closed forward currency contracts that have not reached their settlement date are included in the respective receivables or payables for closed forward currency contracts in each fund’s statement of assets and liabilities. Net realized gains or losses from closed forward currency contracts and net unrealized appreciation or depreciation from open forward currency contracts are recorded in each fund’s statement of operations.

Interest rate swaps — Some of the funds have entered into interest rate swaps, which are agreements to exchange one stream of future interest payments for another based on a specified notional amount. Typically, interest rate swaps exchange a fixed interest rate for a payment that floats relative to a benchmark or vice versa. The series’ investment adviser uses interest rate swaps to manage the interest rate sensitivity of the fund by increasing or decreasing the duration of the fund or a portion of the fund’s portfolio. Risks may arise as a result of the series’ investment adviser incorrectly anticipating changes in interest rates, increased volatility, reduced liquidity and the potential inability of counterparties to meet the terms of their agreements.

Upon entering into an interest rate swap contract, the fund is required to deposit cash, U.S. government securities or other liquid securities, which is known as “initial margin.” Generally, the initial margin required for a particular interest rate swap is set and held as collateral by the clearinghouse on which the contract is cleared. The amount of initial margin required may be significantly modified from time to time by the clearinghouse during the term of the contract.

On a daily basis, the series’ investment adviser records daily interest accruals related to the exchange of future payments as a receivable and payable in each fund’s statement of assets and liabilities. Each fund also pays or receives a “variation margin” based on the increase or decrease in the value of the interest rate swaps, including accrued interest, and records variation margin on interest rate swaps in each fund’s statement of assets and liabilities. Each fund records realized gains and losses on both the net accrued interest and any gain or loss recognized at the time the interest rate swap is closed or expires. Net realized gains or losses, as well as any net unrealized appreciation or depreciation, from interest rate swaps are recorded in each fund’s statement of operations.

Credit default swap indices — Some of the funds have entered into centrally cleared credit default swap agreements on credit indices (“CDSI”) that involve one party (the protection buyer) making a stream of payments to another party (the protection seller) in exchange for the right to receive a specified return upon the occurrence of a credit event, such as a default or restructuring, with respect to any of the underlying issuers (reference obligations) in the referenced index. The series’ investment adviser uses credit default swaps to assume exposure to a diversified portfolio of credits or to hedge against existing credit risks.

CDSI are portfolios of credit instruments or exposures designed to be representative of some part of the credit market, such as the high-yield or investment-grade credit market. CDSI are generally traded using standardized terms, including a fixed spread and standard maturity dates, and reference all the names in the index. If there is a credit event, it is settled based on that name’s weight in the index. The composition of the underlying issuers or obligations within a particular index may change periodically, usually every six months. A specified credit event may affect all or individual underlying reference obligations included in the index, and will be settled based upon the relative weighting of the affected obligation(s) within the index. The value of each CDSI can be used as a measure of the current payment/performance risk of the CDSI and represents the likelihood of an expected liability or profit should the notional amount of the CDSI be closed or sold as of the period end. An increasing value, as compared to the notional amount of the CDSI, represents a deterioration of the referenced indices’ credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement. When a fund provides sell protection, its maximum exposure is the notional amount of the credit default swap agreement.

Upon entering into a centrally cleared CDSI contract, the fund is required to deposit with a derivatives clearing member (“DCM”) in a segregated account in the name of the DCM an amount of cash, U.S. government securities or other liquid securities, which is known as initial margin. Generally, the initial margin required for a particular credit default swap is set and held as collateral by the clearinghouse on which the contract is cleared. The amount of initial margin required may be significantly modified from time to time by the clearinghouse during the term of the contract. Securities deposited as initial margin are designated on the investment portfolio.

 

American Funds Insurance Series    153


On a daily basis, interest accruals related to the exchange of future payments are recorded as a receivable and payable in each fund’s statement of assets and liabilities. Each fund also pays or receives a variation margin based on the increase or decrease in the value of the centrally cleared swaps, and records variation margin in each fund’s statement of assets and liabilities. Each fund records realized gains and losses on both the net accrued interest and any gain or loss recognized at the time the swap is closed or expires. Net realized gains or losses, as well as any net unrealized appreciation or depreciation, from credit default swaps are recorded in each fund’s statement of operations.

The following table presents the average month-end notional amounts of futures contracts, forward currency contracts, interest rate swaps and credit default swaps for each fund (dollars in thousands):

 

     

Futures

 

   

Forwards

 

   

Interest

rate

swaps

 

    

Credit

default

swaps

 

 

Global Growth Fund

     Not applicable       $    5,416       Not applicable        Not applicable  

Global Small Capitalization Fund

     Not applicable       94,919       Not applicable        Not applicable  

International Fund

     Not applicable       259,198       Not applicable        Not applicable  

New World Fund

     Not applicable       13,461       Not applicable        Not applicable  

Global Growth and Income Fund

     Not applicable       7,767     Not applicable        Not applicable  

International Growth and Income Fund

     Not applicable       15,682     Not applicable        Not applicable  

Capital Income Builder

     Not applicable       469       Not applicable        Not applicable  

Asset Allocation Fund

     $    219,612       Not applicable       $    2,097,900        Not applicable  

Global Balanced Fund

     Not applicable       17,483       Not applicable        Not applicable  

Bond Fund

     1,612,655       385,299       1,705,816        Not applicable  

Global Bond Fund

     89,251       519,687       244,046        Not applicable  

High-Income Bond Fund

     Not applicable       Not applicable       23,513        $    33,633  

Mortgage Fund

     231,062       Not applicable       408,752        Not applicable  

U.S. Government/AAA-Rated Securities Fund

     2,614,240       Not applicable       6,343,500        Not applicable  

Managed Risk International Fund

 

    

 

42,606

 

 

   

 

Not applicable

 

 

 

   

 

Not applicable

 

 

 

    

 

Not applicable

 

 

 

 

*No contracts were held at the end of the reporting period; amount represents the average month-end notional amount of contracts while they were held.

 

154        American Funds Insurance Series   


The following tables present the financial statement impacts resulting from the funds’ use of futures contracts, forward currency contracts, interest rate swaps and/or credit default swaps as of, or for the six months ended June 30, 2017 (dollars in thousands):

 

                  Global
    Growth    
Fund
   

    Global    

Small
Capitalization
Fund

    International
Fund
 

Assets

  

Risk type

 

  

Location on statements of assets and liabilities

 

      

Futures contracts

   Interest    Net unrealized appreciation*      $     –       $        –       $       –  

Futures contracts

   Equity    Net unrealized appreciation*                   

Futures contracts

   Currency    Net unrealized appreciation*                   

Forward currency

   Currency    Unrealized appreciation on open forward currency contracts      69       275       59  

Forward currency

   Currency    Receivables for closed forward currency contracts                   

Interest rate swaps

   Interest    Net unrealized appreciation*                   

Credit default swaps

   Credit    Net unrealized appreciation*                   
           $   69       $    275       $     59  
                              
                                    

Liabilities

  

Risk type

 

  

Location on statements of assets and liabilities

 

      

Futures contracts

   Interest    Net unrealized depreciation*      $     –       $        –       $        –  

Futures contracts

   Equity    Net unrealized depreciation*                   

Futures contracts

   Currency    Net unrealized depreciation*                   

Forward currency

   Currency    Unrealized depreciation on open forward currency contracts            561        

Forward currency

   Currency    Payables for closed forward currency contracts            922        

Interest rate swaps

   Interest    Net unrealized depreciation*                   

Credit default swaps

   Credit    Net unrealized depreciation*                   
           $     –       $ 1,483       $        –  
                              
                                    

Net realized

gain (loss)

 

  

Risk type

 

  

Location on statements of operations

 

      

Futures contracts

   Interest    Net realized gain on futures contracts      $     –       $        –       $        –  

Futures contracts

   Equity    Net realized gain on futures contracts                   

Futures contracts

   Currency    Net realized gain on futures contracts                   

Forward currency

   Currency    Net realized gain (loss) on forward currency contracts      134       (3,099     (8,385

Interest rate swaps

   Interest    Net realized gain on interest rate swaps                   

Credit default swaps

   Credit    Net realized gain on credit default swaps                   
           $ 134       $(3,099     $(8,385
                              
                                    

Net unrealized

(depreciation)

appreciation

 

  

Risk type

 

  

Location on statements of operations

 

      

Futures contracts

   Interest    Net unrealized appreciation (depreciation) on futures contracts      $     –       $        –       $        –  

Futures contracts

   Equity    Net unrealized appreciation on futures contracts                   

Futures contracts

   Currency    Net unrealized appreciation on futures contracts                   

Forward currency

   Currency   

Net unrealized (depreciation) appreciation on forward currency contracts

     (290     (1,672     2,203  

Interest rate swaps

   Interest    Net unrealized appreciation on interest rate swaps                   

Credit default swaps

   Credit    Net unrealized appreciation on credit default swaps                   
           $(290     $(1,672     $ 2,203  
           $(290     $(1,672     $2,203  

See end of tables for footnote.

 

American Funds Insurance Series   155


                 

New

    World    

Fund

   

Global

Growth

    and Income    

Fund

   

    International    

Growth

and Income

Fund

 

Assets

   Risk type    Location on statements of assets and liabilities       

Futures contracts

   Interest    Net unrealized appreciation*      $   –       $     –       $     –  

Futures contracts

   Equity    Net unrealized appreciation*                   

Futures contracts

   Currency    Net unrealized appreciation*                   

Forward currency

   Currency    Unrealized appreciation on open forward currency contracts      183              

Forward currency

   Currency    Receivables for closed forward currency contracts                   

Interest rate swaps

   Interest    Net unrealized appreciation*                   

Credit default swaps

   Credit    Net unrealized appreciation*                   
           $ 183       $     –       $     –  
                              
                                    

Liabilities

   Risk type    Location on statements of assets and liabilities       

Futures contracts

   Interest    Net unrealized depreciation*      $     –       $     –       $     –  

Futures contracts

   Equity    Net unrealized depreciation*                   

Futures contracts

   Currency    Net unrealized depreciation*                   

Forward currency

   Currency    Unrealized depreciation on open forward currency contracts      39              

Forward currency

   Currency    Payables for closed forward currency contracts      13              

Interest rate swaps

   Interest    Net unrealized depreciation*                   

Credit default swaps

   Credit    Net unrealized depreciation*                   
           $   52       $     –       $     –  
                              
                                    

Net realized

loss

   Risk type    Location on statements of operations       

Futures contracts

   Interest    Net realized gain on futures contracts      $     –       $     –       $     –  

Futures contracts

   Equity    Net realized gain on futures contracts                   

Futures contracts

   Currency    Net realized gain on futures contracts                   

Forward currency

   Currency    Net realized loss on forward currency contracts      (859     (157     (143

Interest rate swaps

   Interest    Net realized gain on interest rate swaps                   

Credit default swaps

   Credit    Net realized gain on credit default swaps                   
           $(859     $(157     $(143
                              
                                    

Net unrealized

appreciation

(depreciation)

   Risk type    Location on statements of operations       

Futures contracts

   Interest    Net unrealized appreciation on futures contracts      $     –       $     –       $     –  

Futures contracts

   Equity    Net unrealized appreciation on futures contracts                   

Futures contracts

   Currency    Net unrealized appreciation on futures contracts                   

Forward currency

   Currency   

Net unrealized appreciation (depreciation) on forward currency contracts

     134       (147     105  

Interest rate swaps

   Interest    Net unrealized appreciation on interest rate swaps                   

Credit default swaps

   Credit    Net unrealized appreciation on credit default swaps                   
           $ 134       $(147     $ 105  
                              

 

156   American Funds Insurance Series


                 

Capital

    Income    

Builder

   

Asset

    Allocation    

Fund

   

Global

    Balanced    

Fund

 

Assets

 

   Risk type    Location on statements of assets and liabilities       

Futures contracts

   Interest    Net unrealized appreciation*      $    –       $   345       $     –  

Futures contracts

   Equity    Net unrealized appreciation*                   

Futures contracts

   Currency    Net unrealized appreciation*                   

Forward currency

   Currency    Unrealized appreciation on open forward currency contracts                  167  

Forward currency

   Currency    Receivables for closed forward currency contracts                   

Interest rate swaps

   Interest    Net unrealized appreciation*            180        

Credit default swaps

   Credit    Net unrealized appreciation*                   
           $    –       $   525       $ 167  
                              
                                    

Liabilities

 

   Risk type    Location on statements of assets and liabilities       

Futures contracts

   Interest    Net unrealized depreciation*      $    –       $       –       $     –  

Futures contracts

   Equity    Net unrealized depreciation*                   

Futures contracts

   Currency    Net unrealized depreciation*                   

Forward currency

   Currency    Unrealized depreciation on open forward currency contracts      5             119  

Forward currency

   Currency    Payables for closed forward currency contracts                  9  

Interest rate swaps

   Interest    Net unrealized depreciation*            6,710        

Credit default swaps

   Credit    Net unrealized depreciation*                   
           $    5       $ 6,710       $ 128  
                              
                                    

Net realized

gain (loss)

 

  

Risk type

 

  

Location on statements of operations

 

      

Futures contracts

   Interest    Net realized gain on futures contracts      $    –       $ 1,548       $     –  

Futures contracts

   Equity    Net realized gain on futures contracts                   

Futures contracts

   Currency    Net realized gain on futures contracts                   

Forward currency

   Currency    Net realized loss on forward currency contracts      (26           (115

Interest rate swaps

   Interest    Net realized gain on interest rate swaps            3,474        

Credit default swaps

   Credit    Net realized gain on credit default swaps                   
           $(26     $ 5,022       $(115
                              
                                    

Net unrealized

appreciation

(depreciation)

 

  

Risk type

 

  

Location on statements of operations

 

      

Futures contracts

   Interest    Net unrealized appreciation on futures contracts      $    –       $    104       $     –  

Futures contracts

   Equity    Net unrealized appreciation on futures contracts                   

Futures contracts

   Currency    Net unrealized appreciation on futures contracts                   

Forward currency

   Currency    Net unrealized depreciation on forward currency contracts                  (53

Interest rate swaps

   Interest    Net unrealized depreciation on interest rate swaps            (2,901      

Credit default swaps

   Credit    Net unrealized appreciation on credit default swaps                   
           $    –       $(2,797     $  (53
                              

See end of tables for footnote.

 

American Funds Insurance Series   157


                 

    Bond    

Fund

   

    Global    

Bond

Fund

   

High-

    Income    

Bond

Fund

 

Assets

 

   Risk type    Location on statements of assets and liabilities       

Futures contracts

   Interest    Net unrealized appreciation*      $      939       $      216       $      –  

Futures contracts

   Equity    Net unrealized appreciation*                   

Futures contracts

   Currency    Net unrealized appreciation*                   

Forward currency

   Currency    Unrealized appreciation on open forward currency contracts      1,952       4,096        

Forward currency

   Currency    Receivables for closed forward currency contracts            185        

Interest rate swaps

   Interest    Net unrealized appreciation*      15,160       1,706       267  

Credit default swaps

   Credit    Net unrealized appreciation*                  149  
           $ 18,051       $   6,203       $ 416  
                              
                                    

Liabilities

 

   Risk type    Location on statements of assets and liabilities       

Futures contracts

   Interest    Net unrealized depreciation*      $   4,547       $      200       $      –  

Futures contracts

   Equity    Net unrealized depreciation*                   

Futures contracts

   Currency    Net unrealized depreciation*                   

Forward currency

   Currency    Unrealized depreciation on open forward currency contracts      4,449       5,273        

Forward currency

   Currency    Payables for closed forward currency contracts            299        

Interest rate swaps

   Interest    Net unrealized depreciation*      7,336       923       21  

Credit default swaps

   Credit    Net unrealized depreciation*                   
           $ 16,332       $   6,695       $    21  
                              
                                    

Net realized

gain (loss)

 

  

Risk type

 

  

Location on statements of operations

 

      

Futures contracts

   Interest    Net realized gain on futures contracts      $ 19,307       $      657       $      –  

Futures contracts

   Equity    Net realized gain on futures contracts                   

Futures contracts

   Currency    Net realized gain on futures contracts                   

Forward currency

   Currency    Net realized loss on forward currency contracts      (43,217     (10,947      

Interest rate swaps

   Interest    Net realized loss on interest rate swaps      (1,445     (918     (223

Credit default swaps

   Credit    Net realized gain on credit default swaps                  553  
           $(25,355     $(11,208     $  330  
                              
                                    

Net unrealized

(depreciation)

appreciation

 

  

Risk type

 

  

Location on statements of operations

 

      

Futures contracts

   Interest    Net unrealized (depreciation) appreciation on futures contracts      $  (2,500     $        16       $      –  

Futures contracts

   Equity    Net unrealized appreciation on futures contracts                   

Futures contracts

   Currency    Net unrealized appreciation on futures contracts                   

Forward currency

   Currency    Net unrealized (depreciation) appreciation on forward currency contracts      (4,424     4,188        

Interest rate swaps

   Interest    Net unrealized depreciation on interest rate swaps      (637     (339     (181

Credit default swaps

   Credit    Net unrealized depreciation on credit default swaps                  (495
           $  (7,561     $   3,865       $(676
                              

 

158   American Funds Insurance Series


                  Mortgage
Fund
    U.S.
Government/
AAA-Rated
Securities
Fund
    Managed
Risk
International
Fund
 

Assets

   Risk type    Location on statements of assets and liabilities       

Futures contracts

   Interest    Net unrealized appreciation*      $       84       $       191       $     –  

Futures contracts

   Equity    Net unrealized appreciation*                   

Futures contracts

   Currency    Net unrealized appreciation*                   

Forward currency

   Currency    Unrealized appreciation on open forward currency contracts                   

Forward currency

   Currency    Receivables for closed forward currency contracts                   

Interest rate swaps

   Interest    Net unrealized appreciation*      1,345       16,711        

Credit default swaps

   Credit    Net unrealized appreciation*                   
                   $ 1,429               $ 16,902       $     –  
                              
                                    

Liabilities

   Risk type    Location on statements of assets and liabilities       

Futures contracts

   Interest    Net unrealized depreciation*      $    631       $   6,688       $     –  

Futures contracts

   Equity    Net unrealized depreciation*                   

Futures contracts

   Currency    Net unrealized depreciation*                   

Forward currency

   Currency    Unrealized depreciation on open forward currency contracts                   

Forward currency

   Currency    Payables for closed forward currency contracts                   

Interest rate swaps

   Interest    Net unrealized depreciation*      1,651       24,340        

Credit default swaps

   Credit    Net unrealized depreciation*                   
           $ 2,282       $ 31,028       $     –  
                              
                                    

Net realized

gain (loss)

   Risk type    Location on statements of operations       

Futures contracts

   Interest    Net realize gain on futures contracts      $ 1,927       $ 11,432       $     –  

Futures contracts

   Equity    Net realized loss on futures contracts                  (624

Futures contracts

   Currency    Net realized gain on futures contracts                  118  

Forward currency

   Currency    Net realized gain on forward currency contracts                   

Interest rate swaps

   Interest    Net realized gain on interest rate swaps      261       16,310        

Credit default swaps

   Credit    Net realized gain on credit default swaps                   
           $ 2,188       $ 27,742       $(506
                              
                                    

Net unrealized

(depreciation)

appreciation

   Risk type    Location on statements of operations       

Futures contracts

   Interest    Net unrealized depreciation on futures contracts      $   (230     $        (82     $     –  

Futures contracts

   Equity    Net unrealized depreciation on futures contracts                  160  

Futures contracts

   Currency    Net unrealized appreciation on futures contracts                  (142

Forward currency

   Currency    Net unrealized appreciation on forward currency contracts                   

Interest rate swaps

   Interest    Net unrealized depreciation on interest rate swaps      (962     (17,657      

Credit default swaps

   Credit    Net unrealized appreciation on credit default swaps                   
           $(1,192     $(17,739     $   18  
                              

 

* Includes cumulative appreciation/depreciation on futures contracts, interest rate swaps and/or credit default swaps as reported in the applicable table(s) following each fund’s investment portfolio. Only current day’s variation margin is reported within the statements of assets and liabilities.

 

American Funds Insurance Series   159


Collateral – Funds that invest in futures contracts, forward currency contracts, interest rate swaps, credit default swaps and/or future delivery contracts participate in a collateral program. For futures contracts, interest rate swaps and credit default swaps, the program calls for the fund to pledge collateral for initial and variation margin by contract. For forward currency contracts, the program calls for the fund to either receive or pledge collateral based on the net gain or loss on unsettled forward currency contracts by counterparty. For future delivery contracts, the program calls for the fund to either receive or pledge collateral based on the net gain or loss on unsettled contracts by certain counterparties. The purpose of the collateral is to cover potential losses that could occur in the event that either party cannot meet its contractual obligations.

Rights of offset – Funds that hold forward currency contracts have enforceable master netting agreements with certain counterparties, where amounts payable by each party to the other in the same currency (with the same settlement date and with the same counter-party) are settled net of each party’s payment obligation. If an early termination date occurs under these agreements following an event of default or termination event, all obligations of each party to its counterparty are settled net through a single payment in a single currency (“close-out netting”). For financial reporting purposes, the funds do not offset financial assets and financial liabilities that are subject to these master netting arrangements in the statements of assets and liabilities.

The following tables present each fund’s forward currency contracts by counterparty that are subject to master netting agreements but that are not offset in the funds’ statements of assets and liabilities. The net amount column shows the impact of offsetting on the funds’ statement of assets and liabilities as of June 30, 2017, if close-out netting was exercised (dollars in thousands):

Global Growth Fund

 

     Gross amounts
recognized in the
     Gross amounts not offset in the
statement of assets and liabilities and
subject to a master netting agreement
        
    Counterparty    statement of assets
and liabilities
         Available
to offset
     Non-cash
    collateral*
    Cash
    collateral
     Net
amount
 

    Assets:

             

    Bank of America, N.A.

     $69        $–         $–        $–         $69    
Global Small Capitalization Fund              
     Gross amounts
recognized in the
     Gross amounts not offset in the
statement of assets and liabilities and
subject to a master netting agreement
        
Counterparty    statement of assets
and liabilities
     Available
to offset
     Non-cash
collateral*
    Cash
collateral
     Net
amount
 

    Assets:

             

    Citibank

     $      30        $ 30         $     –        $–         $    –  

    JPMorgan Chase

     162        –         –        –         162  

    UBS AG

     83        –         –        –         83  

    Total

     $    275        $(30)        $     –        $–         $245  
        

    Liabilities:

             

    Bank of America, N.A.

     $    442        $   –         $(339     $–         $103  

    Citibank

     317        (30)        (287     –          

    Goldman Sachs

     480        –         –        –         480  

    HSBC Bank

     244        –         –        –         244  

    Total

     $1,483        $(30)        $(626)       $–         $827  
        
International Fund              
     Gross amounts
recognized in the
     Gross amounts not offset in the
statement of assets and liabilities and
subject to a master netting agreement
        
Counterparty    statement of assets
and liabilities
     Available
to offset
     Non-cash
collateral*
    Cash
collateral
     Net
amount
 

    Assets:

             

    Bank of America, N.A.

     $59        $–        $–        $–        $59  

 

160   American Funds Insurance Series


New World Fund

 

             
    

Gross amounts

recognized in the

     Gross amounts not offset in the
statement of assets and liabilities and
subject to a master netting agreement
        
    Counterparty   

statement of assets

and liabilities

     Available
to offset
   

Non-cash  

collateral*

    

Cash

collateral

     Net  
amount  
 

    Assets:

             

    Bank of America, N.A.

     $  25        $(21)       $–        $–        $  4    

    Barclays Bank PLC

     28                            28    

    Citibank

     27        (2)                     25    

    Goldman Sachs

     21                            21    

    JPMorgan Chase

     73        (12)                     61    

    UBS AG

     9                            9    

    Total

     $183        $(35)       $–        $–        $148    
        

    Liabilities:

             

    Bank of America, N.A.

     $21        $(21)       $–        $–        $–    

    Citibank

     2        (2)                     –    

    HSBC Bank

     17                            17    

    JPMorgan Chase

     12        (12)                     –    

    Total

     $  52        $(35)       $–        $–        $17    
        
Capital Income Builder              
     Gross amounts
recognized in the
     Gross amounts not offset in the
statement of assets and liabilities and
subject to a master netting agreement
        
    Counterparty    statement of assets
and liabilities
     Available
to offset
    Non-cash  
collateral*
     Cash
collateral
     Net  
amount  
 

    Liabilities:

             

    Bank of America, N.A.

     $5        $–       $–        $–        $5    
Global Balanced Fund              
     Gross amounts
recognized in the
     Gross amounts not offset in the
statement of assets and liabilities and
subject to a master netting agreement
        
    Counterparty    statement of assets
and liabilities
     Available
to offset
    Non-cash  
collateral*
     Cash
collateral
     Net  
amount  
 

    Assets:

             

    Bank of America, N.A.

     $  42        $(33)       $–        $–        $9    

    Bank of New York Mellon

     7                            7    

    Barclays Bank PLC

     11        (10)                     1    

    Citibank

     57        (10)                     47    

    Goldman Sachs

     10        (10)                     –    

    HSBC Bank

     5        (5)                     –    

    JPMorgan Chase

     10        (10)                     –    

    UBS AG

     25        (13)                     –    

    Total

     $167        $(91)       $–        $–        $76    
        

    Liabilities:

             

    Bank of America, N.A.

     $  33        $(33     $–        $–        $–    

    Barclays Bank PLC

     10        (10                   –    

    Citibank

     10        (10                   –    

    Goldman Sachs

     13        (10                   –    

    HSBC Bank

     11        (5                   3    

    JPMorgan Chase

     38        (10                   6    

    UBS AG

     13        (13                   28    

    Total

     $128        $(91     $–        $–        $37    
        

See end of tables for footnote.

 

American Funds Insurance Series   161


Bond Fund

 

    

Gross amounts
recognized in the
statement of assets
and liabilities

     Gross amounts not offset in the
statement of assets and liabilities and
subject to a master netting agreement
        
    Counterparty       Available
to offset
   

Non-cash 

collateral*

     Cash
collateral
     Net
amount
 

    Assets:

                                           

    Bank of America, N.A.

     $   280        $(280)       $        –         $–        $   –  

    Barclays Bank PLC

     9        –        –                9  

    HSBC Bank

     599        –        (400)               199  

    JPMorgan Chase

     408        (408)       –                 

    UBS AG

     656        –        (391)               265  
  

 

 

 

    Total

     $1,952        $(688)       $   (791)        $–        $   –  
  

 

 

 

    Liabilities:

             

    Bank of America, N.A.

     $   561        $(280)       $   (281)        $–        $   –  

    Citi

     1,504        –        (1,504)                

    JPMorgan Chase

     2,384        (408)       (1,976)                
  

 

 

 

    Total

                     $4,449        $(688)       $(3,761)        $–        $   –  
  

 

 

 
Global Bond Fund              
    

Gross amounts
recognized in the
statement of assets
and liabilities

     Gross amounts not offset in the
statement of assets and  liabilities and
subject to a master netting agreement
        
    Counterparty       Available
to offset
   

Non-cash 

collateral*

     Cash
collateral
     Net
amount
 

    Assets:

                                           

    Bank of America, N.A.

     $   461        $   (461     $        –         $–        $   –  

    Barclays Bank PLC

     444        –        (353)               91  

    Citibank

     1,119        (761     –                358  

    Goldman Sachs

     406        (388     –                18  

    HSBC Bank

     130        (130     –                 

    JPMorgan Chase

     768        (768     –                 

    UBS AG

     953        (329     (573)               51  
  

 

 

 

    Total

     $4,281        $(2,837     $   (926)        $–        $518  
  

 

 

 

    Liabilities:

             

    Bank of America, N.A.

     $1,636        $   (461     $(1,174)        $–        $   1  

    Citibank

     761        (761     –                 

    Goldman Sachs

     388        (388     –                 

    HSBC Bank

     1,044        (130     (914)                

    JPMorgan Chase

     1,414        (768     (547)               99  

    UBS AG

     329        (329     –                 
  

 

 

 

    Total

                     $5,572        $(2,837     $(2,635)        $–        $100  
  

 

 

 

*Non-cash collateral is shown on a settlement basis.

6. Taxation and distributions

 

Federal income taxation –  Each fund complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The funds are not subject to income taxes to the extent such distributions are made. Therefore, no federal income tax provision is required.

As of and during the period ended June 30, 2017, none of the funds had a liability for any unrecognized tax benefits. Each fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statements of operations. During the period, none of the funds incurred any significant interest or penalties.

The funds are not subject to examination by U.S. federal tax authorities for tax years before 2013. Capital Income Builder is not subject to examination by U.S. federal tax authorities for tax years before 2014, the year the fund commenced operations.

 

162   American Funds Insurance Series


The funds are not subject to examination by state tax authorities for tax years before 2012. Managed Risk Growth Fund, Managed Risk International Fund, Managed Risk Blue Chip Income and Growth Fund and Managed Risk Growth-Income Fund are not subject to examination by state tax authorities for tax years before 2013, the year the funds commenced operations. Capital Income Builder is not subject to examination by state tax authorities for tax years before 2014, the year the fund commenced operations.

The following funds are not subject to examination by tax authorities outside the U.S. for the years indicated: Global Growth Fund, Global Small Capitalization Fund, Growth Fund, International Fund, New World Fund, Global Growth and Income Fund and Growth-Income Fund for tax years before 2010; International Growth and Income Fund for tax years before 2011; Global Balanced Fund for tax years before 2012; Asset Allocation Fund, Bond Fund and Global Bond Fund for tax years before 2014 and High-Income Bond Fund for tax years before 2015. All other funds are not subject to examination by tax authorities outside the U.S.

Non-U.S. taxation – Dividend and interest income are recorded net of non-U.S. taxes paid. The funds may file withholding tax reclaims in certain jurisdictions to recover a portion of amounts previously withheld. As a result of recent rulings from European courts, some of the funds filed for additional reclaims related to prior years. These reclaims are recorded when the amount is known and there are no significant uncertainties on collectability. Gains realized by the funds on the sale of securities in certain countries, if any, may be subject to non-U.S. taxes. If applicable, the funds record an estimated deferred tax liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.

Distributions – Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to different treatment for items such as currency gains and losses; short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; unrealized appreciation of certain investments in securities outside the U.S.; deferred expenses; cost of investments sold; paydowns on fixed-income securities; net capital losses; net operating losses; non-U.S. taxes on capital gains and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes.

As indicated in the tables in this section, some of the funds had capital loss carryforwards available at December 31, 2016. These will be used to offset any capital gains realized by the funds in the current year or in subsequent years through the expiration date. Funds with capital loss carryforwards will not make distributions from capital gains while a capital loss carryforward remains.

Under the Regulated Investment Company Modernization Act of 2010 (the “Act”), net capital losses recognized after December 31, 2010, may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses. Previously, net capital losses were carried forward for eight years and treated as short-term losses. As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses.

Additional tax basis disclosures are as follows (dollars in thousands):

 

     Global
Growth
Fund
    Global
Small
Capitalization
Fund
    Growth
Fund
    International
Fund
    New
World
Fund
    Blue Chip
Income and
Growth
Fund
 

    As of December 31, 2016:

           

Undistributed ordinary income

  $ 5,309       $     16,070     $ 87,925     $ 31,353     $ 4,686     $ 69,604  

Undistributed long-term capital gain

    174,084       –        2,194,931       97,715       –        288,969  

Capital loss carryforward:

           

No expiration

    –        (55,253     –        –        (123,342     –   

    As of June 30, 2017:

           

Gross unrealized appreciation on investment securities

    1,723,657       995,883       7,934,845       1,907,042       566,247       1,945,350  

Gross unrealized depreciation on investment securities

    (67,086     (213,154     (588,537     (426,727     (107,302     (142,595

Net unrealized appreciation (depreciation) on investment securities

    1,656,571       782,729       7,346,308       1,480,315       458,945       1,802,755  

    Cost of investment securities

    4,204,900       3,253,729       16,281,406       7,308,386       2,671,625       7,058,768  

 

American Funds Insurance Series   163


     

Global
Growth

and Income
Fund

    Growth-
Income
Fund
   

International
Growth

and Income
Fund

    Capital
Income
Builder
    Asset
Allocation
Fund
    Global
Balanced
Fund
 

As of December 31, 2016:

            

Undistributed ordinary income

   $ 5,588     $ 95,174     $ 2,317     $ 21     $ 85,089     $  

Late year ordinary loss deferral*

                                   (473

Undistributed long-term capital gain

     33,689       1,784,903                   1,054,302       933  

Capital loss carryforward:

            

No expiration

                 (12,324     (6,972            

As of June 30, 2017:

            

Gross unrealized appreciation on investment securities

     393,064       7,610,076       142,939       31,197       4,922,131       45,605  

Gross unrealized depreciation on investment securities

     (31,215     (875,561     (43,073     (13,180     (588,465     (6,316

Net unrealized appreciation (depreciation) on investment securities

     361,849       6,734,515       99,866       18,017       4,333,666       39,289  

Cost of investment securities

     1,543,468       21,511,217       1,285,763       482,178       19,784,723       247,867  
     

Bond

Fund

   

Global

Bond

Fund

   

High-
Income
Bond

Fund

    Mortgage
Fund
   

Ultra-Short
Bond

Fund

   

 

U.S.
Government/
AAA-Rated
Securities
Fund

 

As of December 31, 2016:

            

Undistributed ordinary income

   $ 176,002     $ 14,185     $ 19,119     $ 1,751     $     $ 7,538  

Late year ordinary loss deferral*

           (9,683                        

Undistributed long-term capital gain

     41,190       267             1,475              

Capital loss carryforward:

            

No expiration

                 (170,563                 (6,295

Expiring 2017

                 (45,026                  
                 (215,589                 (6,295
                                                  

As of June 30, 2017:

            

Gross unrealized appreciation on investment securities

     135,012       58,070       38,595       2,810       5       16,247  

Gross unrealized depreciation on investment securities

     (65,501     (41,725     (65,040     (1,580     (17     (13,386

Net unrealized appreciation (depreciation) on investment securities

     69,511       16,345       (26,445     1,230       (12     2,861  

Cost of investment securities

     12,410,374       2,394,346       1,591,454       398,451       310,858       3,001,914  
      Managed
Risk
Growth
Fund
    Managed
Risk
International
Fund
    Managed
Risk Blue
Chip Income
and Growth
Fund
    Managed
Risk
Growth-
Income
Fund
   

Managed
Risk

Asset
Allocation
Fund

       

As of December 31, 2016:

            

Undistributed ordinary income

   $ 729     $ 891     $ 4,274     $ 1,865     $ 31,585    

Undistributed long-term capital gain

     4,133       1,396       5,561       7,717       38,638    

As of June 30, 2017:

            

Gross unrealized appreciation on investment securities

           211       1,764             106,941    

Gross unrealized depreciation on investment securities

     (5,400                 (10,243        

Net unrealized appreciation (depreciation) on investment securities

     (5,400     211       1,764       (10,243     106,941    

Cost of investment securities

     251,943       123,633       360,192       196,103       3,983,210    

  *These deferrals are considered incurred in the subsequent year.

 

164   American Funds Insurance Series


The tax character of distributions paid to shareholders of each fund was as follows (dollars in thousands):

Global Growth Fund

 

     Six months ended June 30, 2017           Year ended December 31, 2016  
  

 

 

     

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
      

Total

dividends and
distributions
paid

          Ordinary
income
       Long-term
capital gains
      

Total

dividends and
distributions
paid

 

 

     

 

 

 

    Class 1

     $2,246        $  55,298          $  57,544           $24,109          $126,735          $150,844  

    Class 1A*

     1        16          17                

    Class 2

     3,157        114,893          118,050         44,725          291,772          336,497  

    Class 4

     79        3,889          3,968         945          7,147          8,092  
  

 

 

     

 

 

 

    Total

     $5,483        $174,096          $179,579         $69,779          $425,654          $495,433  
  

 

 

     

 

 

 
                        

 

Global Small Capitalization Fund

 

                        
     Six months ended June 30, 2017           Year ended December 31, 2016  
  

 

 

     

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
       Total
dividends
paid
          Ordinary
income
       Long-term
capital gains
       Total
dividends and
distributions
paid
 

 

     

 

 

 

    Class 1

     $  6,344        $–          $  6,344         $11,807          $273,687          $285,494  

    Class 1A*

                                    

    Class 2

     9,528                 9,528         12,193          433,806          445,999  

    Class 4

     220                 220         142          6,715          6,857  
  

 

 

     

 

 

 

    Total

     $16,092        $–          $16,092         $24,142          $714,208          $738,350  
  

 

 

     

 

 

 
                        

 

Growth Fund

 

                        
     Six months ended June 30, 2017           Year ended December 31, 2016  
  

 

 

     

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
       Total
dividends and
distributions
paid
          Ordinary
income
       Long-term
capital gains
       Total
dividends and
distributions
paid
 

 

     

 

 

 

    Class 1

     $30,665        $   713,987          $   744,652         $  68,458          $   603,135          $   671,593  

    Class 1A*

     3        63          66                

    Class 2

     54,612        1,409,266          1,463,878         105,243          1,244,603          1,349,846  

    Class 3

     740        18,484          19,224         1,482          16,336          17,818  

    Class 4

     1,903        53,128          55,031         2,484          36,779          39,263  
  

 

 

     

 

 

 

    Total

     $87,923        $2,194,928          $2,282,851         $177,667          $1,900,853          $2,078,520  
  

 

 

     

 

 

 
                        

 

International Fund

 

                        
     Six months ended June 30, 2017           Year ended December 31, 2016  
  

 

 

     

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
       Total
dividends and
distributions
paid
          Ordinary
income
       Long-term
capital gains
       Total
dividends and
distributions
paid
 

 

     

 

 

 

    Class 1

     $16,895        $49,783          $  66,678         $  59,237          $296,124          $355,361  

    Class 1A*

     1        3          4                

    Class 2

     14,140        46,642          60,782         51,666          334,251          385,917  

    Class 3

     103        331          434         389          2,445          2,834  

    Class 4

     309        1,066          1,375         794          4,665          5,459  
  

 

 

     

 

 

 

    Total

     $31,448        $97,825          $129,273         $112,086          $637,485          $749,571  
  

 

 

     

 

 

 
                        

See end of tables for footnotes.

 

American Funds Insurance Series   165


New World Fund

 

     Six months ended June 30, 2017            Year ended December 31, 2016  
  

 

 

      

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
     Total
dividends
paid
           Ordinary
income
       Long-term
capital gains
       Total
dividends
paid
 

 

      

 

 

 

    Class 1

     $3,080        $–        $3,080          $17,725          $–          $17,725  

    Class 1A*

                                   

    Class 2

     1,283               1,283          7,100                   7,100  

    Class 4

     340               340          1,465                   1,465  
  

 

 

      

 

 

 

    Total

     $4,703        $–        $4,703          $26,290          $–          $26,290  
  

 

 

      

 

 

 
                       

 

Blue Chip Income and Growth Fund

 

                       
     Six months ended June 30, 2017            Year ended December 31, 2016  
  

 

 

      

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
     Total
dividends and
distributions
paid
           Ordinary
income
       Long-term
capital gains
       Total
dividends and
distributions
paid
 

 

      

 

 

 

    Class 1

     $42,318        $170,748        $213,066          $137,434          $292,079          $429,513  

    Class 1A*

     2        5        7                 

    Class 2

     26,549        113,013        139,562          92,301          236,696          328,997  

    Class 4

     1,292        5,605        6,897          2,759          4,934          7,693  
  

 

 

      

 

 

 

    Total

     $70,161        $289,371        $359,532          $232,494          $533,709          $766,203  
  

 

 

      

 

 

 
                       

 

Global Growth and Income Fund

 

                       
     Six months ended June 30, 2017            Year ended December 31, 2016  
  

 

 

      

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
     Total
dividends and
distributions
paid
           Ordinary
income
       Long-term
capital gains
       Total
dividends
paid
 

 

      

 

 

 

    Class 1

     $1,322        $  7,109        $  8,431          $11,131          $–          $11,131  

    Class 1A*

                                   

    Class 2

     4,262        26,178        30,440          25,283                   25,283  

    Class 4

     63        404        467          257                   257  
  

 

 

      

 

 

 

    Total

     $5,647        $33,691        $39,338          $36,671          $–          $36,671  
  

 

 

      

 

 

 
                       

 

Growth-Income Fund

 

                       
     Six months ended June 30, 2017            Year ended December 31, 2016  
  

 

 

      

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
     Total
dividends and
distributions
paid
           Ordinary
income
       Long-term
capital gains
       Total
dividends and
distributions
paid
 

 

      

 

 

 

    Class 1

     $50,076        $   884,958        $   935,034          $263,296          $1,172,060          $1,435,356  

    Class 1A*

     1        16        17                 

    Class 2

     43,011        853,292        896,303          250,881          1,329,722          1,580,603  

    Class 3

     528        10,140        10,668          3,141          16,262          19,403  

    Class 4

     1,662        36,513        38,175          8,305          45,834          54,139  
  

 

 

      

 

 

 

    Total

     $95,278        $1,784,919        $1,880,197          $525,623          $2,563,878          $3,089,501  
  

 

 

      

 

 

 
                       

 

166   American Funds Insurance Series


International Growth and Income Fund

 

     Six months ended June 30, 2017            Year ended December 31, 2016  
  

 

 

      

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
    

Total

dividends

paid

           Ordinary
income
       Long-term
capital gains
      

Total

dividends and

distributions

paid

 

 

      

 

 

 

    Class 1

     $1,924        $–        $1,924          $23,268          $3,458          $26,726  

    Class 1A*

                                   

    Class 2

     382               382          6,231          1,080          7,311  

    Class 4

     54               54          895          149          1,044  
  

 

 

      

 

 

 

    Total

     $2,360        $–        $2,360          $30,394          $4,687          $35,081  
  

 

 

      

 

 

 
                       

 

Capital Income Builder

 

                       
     Six months ended June 30, 2017            Year ended December 31, 2016  
  

 

 

      

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
    

Total

dividends

paid

           Ordinary
income
       Long-term
capital gains
      

Total

dividends

paid

 

 

      

 

 

 

    Class 1

     $2,810        $–        $2,810          $  4,372          $–          $  4,372  

    Class 1A*

     1               1                 

    Class 2

     7               7          2                   2  

    Class 4

     3,604               3,604          6,657                   6,657  
  

 

 

      

 

 

 

    Total

     $6,422        $–        $6,422          $11,031          $–          $11,031  
  

 

 

      

 

 

 
                       

 

Asset Allocation Fund

 

                       
     Six months ended June 30, 2017            Year ended December 31, 2016  
  

 

 

      

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
    

Total

dividends and

distributions

paid

           Ordinary
income
       Long-term
capital gains
      

Total
dividends and

distributions

paid

 

 

      

 

 

 

    Class 1

     $56,922        $   666,425        $   723,347          $229,739          $280,306          $510,045  

    Class 1A*

     6        70        76                 

    Class 2

     18,277        241,077        259,354          81,019          120,303          201,322  

    Class 3

     130        1,646        1,776          580          860          1,440  

    Class 4

     10,033        145,207        155,240          38,591          61,673          100,264  
  

 

 

      

 

 

 

    Total

     $85,368        $1,054,425        $1,139,793          $349,929          $463,142          $813,071  
  

 

 

      

 

 

 
                       

 

Global Balanced Fund

 

                       
     Six months ended June 30, 2017            Year ended December 31, 2016  
  

 

 

      

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
     Total
distributions
paid
           Ordinary
income
       Long-term
capital gains
       Total
dividends
paid
 

 

      

 

 

 

    Class 1

     $–        $243        $243          $   939          $–          $   939  

    Class 1A*

                                   

    Class 2

            628        628          2,225                   2,225  

    Class 4

            63        63          121                   121  
  

 

 

      

 

 

 

    Total

     $–        $934        $934          $3,285          $–          $3,285  
  

 

 

      

 

 

 
                       

See end of tables for footnotes.

 

American Funds Insurance Series   167


Bond Fund

 

     Six months ended June 30, 2017            Year ended December 31, 2016  
  

 

 

      

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
     Total
dividends and
distributions
paid
           Ordinary
income
       Long-term
capital gains
       Total
dividends and
distributions
paid
 

 

      

 

 

 

    Class 1

     $110,298        $25,594        $135,892          $138,255          $11,305          $149,560  

    Class 1A*

     6        1        7                 

    Class 2

     64,031        15,280        79,311          74,576          7,465          82,041  

    Class 4

     1,814        441        2,255          1,614          150          1,764  
  

 

 

      

 

 

 

    Total

     $176,149        $41,316        $217,465          $214,445          $18,920          $233,365  
  

 

 

      

 

 

 
                       

 

Global Bond Fund

 

                       
     Six months ended June 30, 2017            Year ended December 31, 2016  
  

 

 

      

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
     Total
distributions
paid
           Ordinary
income
       Long-term
capital gains
       Total
dividends and
distributions
paid
 

 

      

 

 

 

    Class 1

     $  7,194        $103        $  7,297          $10,101          $   872          $10,973  

    Class 1A*

                                   

    Class 2

     6,965        100        7,065          7,811          923          8,734  

    Class 4

     87        1        88          68          8          76  
  

 

 

      

 

 

 

    Total

     $14,246        $204        $14,450          $17,980          $1,803          $19,783  
  

 

 

      

 

 

 
                       

 

High-Income Bond Fund

 

                       
     Six months ended June 30, 2017            Year ended December 31, 2016  
  

 

 

      

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
     Total
dividends
paid
           Ordinary
income
       Long-term
capital gains
       Total
dividends
paid
 

 

      

 

 

 

    Class 1

     $  9,084        $–        $  9,084          $  57,104          $–          $  57,104  

    Class 1A*

     1               1                 

    Class 2

     9,562               9,562          47,007                   47,007  

    Class 3

     156               156          746                   746  

    Class 4

     353               353          1,283                   1,283  
  

 

 

      

 

 

 

    Total

     $19,156        $–        $19,156          $106,140          $–          $106,140  
  

 

 

      

 

 

 
                       

 

Mortgage Fund

 

                       
     Six months ended June 30, 2017            Year ended December 31, 2016  
  

 

 

      

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
     Total
dividends and
distributions
paid
           Ordinary
income
       Long-term
capital gains
       Total
dividends and
distributions
paid
 

 

      

 

 

 

    Class 1

     $1,450        $1,186        $2,636          $7,780          $152          $7,932  

    Class 1A*

                                   

    Class 2

     291        262        553          1,648          35          1,683  

    Class 4

     40        39        79          222          5          227  
  

 

 

      

 

 

 

    Total

     $1,781        $1,487        $3,268          $9,650          $192          $9,842  
  

 

 

      

 

 

 
                       

 

168   American Funds Insurance Series


U.S. Government/AAA-Rated Securities Fund

 

     Six months ended June 30, 2017            Year ended December 31, 2016  
  

 

 

      

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
       Total
dividends
paid
           Ordinary
income
       Long-term
capital gains
       Total
dividends and
distributions
paid
 

 

      

 

 

 

    Class 1

   $ 3,834      $        $ 3,834        $ 44,429        $ 7,982        $ 52,411  

    Class 1A*

                                     

    Class 2

     3,682                 3,682          43,530          8,728          52,258  

    Class 3

     27                 27          307          60          367  

    Class 4

     111                 111          1,615          371          1,986  
  

 

 

      

 

 

 

    Total

   $ 7,654      $        $ 7,654        $ 89,881        $ 17,141        $ 107,022  
  

 

 

      

 

 

 
                         

 

Managed Risk Growth Fund

 

                         
     Six months ended June 30, 2017            Year ended December 31, 2016  
  

 

 

      

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
       Total
dividends and
distributions
paid
           Ordinary
income
       Long-term
capital gains
       Total
dividends and
distributions
paid
 

 

      

 

 

 

    Class P1

   $ 7      $ 22        $ 29        $ 3        $ 57        $ 60  

    Class P2

     727        4,120          4,847          327          14,955          15,282  
  

 

 

      

 

 

 

    Total

   $ 734      $ 4,142        $ 4,876        $ 330        $ 15,012        $ 15,342  
  

 

 

      

 

 

 
                         

 

Managed Risk International Fund

 

                         
     Six months ended June 30, 2017            Year ended December 31, 2016  
  

 

 

      

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
       Total
dividends and
distributions
paid
           Ordinary
income
       Long-term
capital gains
       Total
dividends and
distributions
paid
 

 

      

 

 

 

    Class P1

   $ 1      $ 2        $ 3        $ 2        $ 4        $ 6  

    Class P2

     899        1,401          2,300          841          2,181          3,022  
  

 

 

      

 

 

 

    Total

   $ 900      $ 1,403        $ 2,303        $ 843        $ 2,185        $ 3,028  
  

 

 

      

 

 

 
                         

 

Managed Risk Blue Chip Income and Growth Fund

 

 

                      
     Six months ended June 30, 2017            Year ended December 31, 2016  
  

 

 

      

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
       Total
dividends and
distributions
paid
           Ordinary
income
       Long-term
capital gains
       Total
dividends and
distributions
paid
 

 

      

 

 

 

    Class P1

   $ 2      $ 3        $ 5        $ 5        $ 8        $ 13  

    Class P2

     4,292        5,566          9,858          3,370          5,915          9,285  
  

 

 

      

 

 

 

    Total

   $ 4,294      $ 5,569        $ 9,863        $ 3,375        $ 5,923        $ 9,298  
  

 

 

      

 

 

 
                         

 

Managed Risk Growth-Income Fund

 

 

                      
     Six months ended June 30, 2017            Year ended December 31, 2016  
  

 

 

      

 

 

 
    Share class    Ordinary
income
     Long-term
capital gains
       Total
dividends and
distributions
paid
           Ordinary
income
       Long-term
capital gains
       Total
dividends and
distributions
paid
 

 

      

 

 

 

    Class P1

   $ 19      $ 73        $ 92        $ 15        $ 64        $ 79  

    Class P2

     1,848        7,653          9,501          1,692          8,401          10,093  
  

 

 

      

 

 

 

    Total

   $ 1,867      $ 7,726        $ 9,593        $ 1,707        $ 8,465        $ 10,172  
  

 

 

      

 

 

 
                         

See end of tables for footnotes.

 

 

American Funds Insurance Series   169


Managed Risk Asset Allocation Fund

 

     Six months ended June 30, 2017            Year ended December 31, 2016  
  

 

 

      

 

 

 
    Share class    Ordinary
income
       Long-term
capital gains
       Total
dividends and
distributions
paid
           Ordinary
income
       Long-term
capital gains
       Total
dividends and
distributions
paid
 

 

      

 

 

 

    Class P1

   $ 11,454        $ 13,811        $ 25,265        $ 16,330        $ 29,417        $ 45,747  

    Class P2

     20,268          24,931          45,199          27,858          64,161          92,019  
  

 

 

      

 

 

 

    Total

   $ 31,722        $ 38,742        $ 70,464        $ 44,188        $ 93,578        $ 137,766  
  

 

 

      

 

 

 
                           

*Class 1A shares began investment operations on January 6, 2017.

Amount less than one thousand.

7. Fees and transactions

 

CRMC, the series’ investment adviser, is the parent company of American Funds Distributors,® Inc. (“AFD”), the distributor of the series’ shares, and American Funds Service Company® (“AFS”), the series’ transfer agent. CRMC, AFD and AFS are considered related parties to the series.

Investment advisory services – The series has an investment advisory and service agreement with CRMC that provides for monthly fees accrued daily. These fees are based on annual rates that generally decrease as average net asset levels increase. CRMC receives investment advisory fees from the underlying funds held by the managed risk funds. These fees are included in the net effective expense ratios that are provided as supplementary information in the financial highlights tables. Subadvisory fees for the managed risk funds are paid by CRMC to Milliman FRM. The managed risk funds are not responsible for paying any subadvisory fees.

Investment advisory services waivers – CRMC is waiving a portion of its investment advisory services fees for each of the managed risk funds. Investment advisory services fees are presented in each fund’s statement of operations gross of the waivers from CRMC. For the six months ended June 30, 2017, total investment advisory services fees waived by CRMC were $1,178,000.

 

170   American Funds Insurance Series


The range of rates, net asset levels and the current annualized rates of average net assets for each fund before and after any investment advisory services waivers (if applicable), are as follows:

 

     Rates             Net asset level        
(in billions)
    

For the
period ended
June 30,
2017,

before waiver

   

For the
period ended
June 30,
2017,

after waiver

 
    Fund    Beginning
with
    Ending
with
    Up to      In excess of       
             

    Global Growth Fund

     .690     .460   $ .6      $ 5.0        .523     .523

    Global Small Capitalization Fund

     .800       .635       .6        5.0        .698       .698  

    Growth Fund

     .500       .280       .6        34.0        .327       .327  

    International Fund

     .690       .430       .5        21.0        .498       .498  

    New World Fund

     .850       .620       .5        2.5        .707       .707  

    Blue Chip Income and Growth Fund

     .500       .360       .6        6.5        .389       .389  

    Global Growth and Income Fund

     .690       .480       .6        3.0        .593       .593  

    Growth-Income Fund

     .500       .219       .6        34.0        .264       .264  

    International Growth and Income Fund

     .690       .530       .5        1.0        .622       .622  

    Capital Income Builder Fund

     .500         all           .500       .500  

    Asset Allocation Fund

     .500       .240       .6        21.0        .269       .269  

    Global Balanced Fund

     .660       .510       .5        1.0        .660       .660  

    Bond Fund

     .480       .330       .6        8.0        .361       .361  

    Global Bond Fund

     .570       .450       1.0        3.0        .530       .530  

    High-Income Bond Fund

     .500       .420       .6        2.0        .465       .465  

    Mortgage Fund

     .420       .290       .6        3.0        .420       .420  

    Ultra-Short Bond Fund

     .320       .270       1.0        2.0        .320       .320  

    U.S. Government/AAA-Rated Securities Fund

     .420       .290       .6        3.0        .338       .338  

    Managed Risk Growth Fund

     .150         all           .150       .100  

    Managed Risk International Fund

     .150         all           .150       .100  

    Managed Risk Blue Chip Income and Growth Fund

     .150         all           .150       .100  

    Managed Risk Growth-Income Fund

     .150         all           .150       .100  

    Managed Risk Asset Allocation Fund

 

    

 

.150

 

 

 

           

 

all

 

 

 

             

 

.150

 

 

 

   

 

.100

 

 

 

Distribution services – The series has plans of distribution for all share classes except Class 1. Under the plans, the board of trustees approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares. The plans provide for payments to pay service fees to firms that have entered into agreements with the series. These payments, based on an annualized percentage of average daily net assets, range from 0.18% to 0.50% as noted in the table below. In some cases, the board of trustees has limited the amounts that may be paid to less than the maximum allowed by the plans.

 

    Share class    Currently approved limits       Plan limits    

    Class 1A

       0.00 %       0.25 %

    Class 2

       0.25       0.25

    Class 3

       0.18       0.18

    Class 4

       0.25       0.25

    Class P1

       0.00       0.25

    Class P2

 

      

 

0.25

 

 

     

 

0.50

 

 

Insurance administrative services – The series has an insurance administrative services plan for Class 1A, 4, P1 and P2 shares. Under the plan, these share classes pay 0.25% of each insurance company’s respective average daily net assets in each share class to compensate the insurance companies for services provided to their separate accounts and contractholders for which the shares of the fund are beneficially owned as underlying investments of such contractholders’ annuities. These services include, but are not limited to, maintenance, shareholder communications and transactional services. The insurance companies are not related parties to the series.

Transfer agent services – The series has a shareholder services agreement with AFS under which the funds compensate AFS for providing transfer agent services to all of the funds’ share classes. These services include recordkeeping, shareholder communications and transaction processing. In addition, the managed risk funds reimburse AFS for amounts paid to third parties for performing transfer agent services on behalf of fund shareholders.

Administrative services – The series has an administrative services agreement with CRMC to provide administrative services to all of the funds’ share classes. The services include, but are not limited to, coordinating, monitoring, assisting and overseeing third parties that provide services to fund shareholders. Under the agreement, each share class of each fund, except the managed risk funds, pays an

 

American Funds Insurance Series   171


annual fee of 0.01% based on its respective average daily net assets to compensate CRMC for providing administrative services. For the managed risk funds, CRMC receives administrative services fees of 0.01% of average daily net assets from Class 1 shares of the underlying funds for administrative services provided to the series.

Accounting and administrative services – The managed risk funds have a subadministration agreement with BNY Mellon under which the fund compensates BNY Mellon for providing accounting and administrative services to each of the managed risk funds’ share classes. These services include, but are not limited to, fund accounting (including calculation of net asset value), financial reporting and tax services. BNY Mellon is not a related party to the managed risk funds.

Miscellaneous fee reimbursements – CRMC is currently reimbursing a portion of miscellaneous fees and expenses for each of the managed risk funds. Miscellaneous expenses exclude investment advisory services and distribution services fees. For the six months ended June 30, 2017, total expenses reimbursed by CRMC were $473,000.

Class-specific expenses under the agreements described above were as follows (dollars in thousands):

 

Global Growth Fund

 

Share class    Distribution
services
     Insurance
administrative
services
    Administrative
services
 

 

 

Class 1

     Not applicable        Not applicable       $  89  

Class 1A*

     $       –        $    –        

Class 2

     4,609        Not applicable       184  

Class 4

     140        140       6  
  

 

 

 

Total class-specific expenses

     $4,749        $140       $279  
  

 

 

 

 

International Fund

 

Share class    Distribution
services
     Insurance
administrative
services
    Administrative
services
 

 

 

Class 1

     Not applicable        Not applicable       $203  

Class 1A*

     $       –        $    –        

Class 2

     4,966        Not applicable       199  

Class 3

     26        Not applicable       2  

Class 4

     100        100       4  
  

 

 

 

Total class-specific expenses

     $5,092        $100       $408  
  

 

 

 
 

 

Global Small Capitalization Fund

 

Share class    Distribution
services
     Insurance
administrative
services
    Administrative
services
 

 

 

Class 1

     Not applicable        Not applicable       $  81  

Class 1A*

     $       –        $  –        

Class 2

     2,995        Not applicable       120  

Class 4

     65        65       2  
  

 

 

 

Total class-specific expenses

     $3,060        $65       $203  
  

 

 

 

 

New World Fund

 

Share class    Distribution
services
     Insurance
administrative
services
    Administrative
services
 

 

 

Class 1

     Not applicable        Not applicable       $  94  

Class 1A*

     $       –        $     –        

Class 2

     1,199        Not applicable       48  

Class 4

     351        351       14  
  

 

 

 

Total class-specific expenses

     $1,550        $351       $156  
  

 

 

 
 

Growth Fund

 

Share class    Distribution
services
     Insurance
administrative
services
    Administrative
services
 

 

 

Class 1

     Not applicable        Not applicable       $   370  

Class 1A*

     $         –        $    –        

Class 2

     18,358        Not applicable       734  

Class 3

     175        Not applicable       10  

Class 4

     645        645       26  
  

 

 

 

Total class-specific expenses

     $19,178        $645       $1,140  
  

 

 

 

Blue Chip Income and Growth Fund

 

Share class    Distribution
services
     Insurance
administrative
services
    Administrative
services
 

 

 

Class 1

     Not applicable        Not applicable       $268  

Class 1A*

     $       –        $    –           –  

Class 2

     4,283        Not applicable       171  

Class 4

     195        195       8  
  

 

 

 

Total class-specific expenses

     $4,478        $195       $447  
  

 

 

 
 

 

172   American Funds Insurance Series


Global Growth and Income Fund

 

Share class    Distribution
services
     Insurance
administrative
services
     Administrative
services
 

Class 1

     Not applicable        Not applicable        $  29  

Class 1A*

     $     —        $ —         

Class 2

     1,810        Not applicable        72  

Class 4

     24        24        1  
  

 

 

 

Total class-specific expenses

     $1,834        $24        $102  
  

 

 

 

 

Global Balanced Fund

 

Share class    Distribution
services
     Insurance
administrative
services
     Administrative
services
 

Class 1

     Not applicable        Not applicable        $   3  

Class 1A*

     $   —        $ —         

Class 2

     232        Not applicable        9  

Class 4

     18        18        1  
  

 

 

 

Total class-specific expenses

     $250        $18        $13  
  

 

 

 
 

 

Growth-Income Fund

 

Share class    Distribution
services
     Insurance
administrative
services
    Administrative
services
 

Class 1

     Not applicable        Not applicable       $   670  

Class 1A*

     $       —        $   —        

Class 2

     16,474        Not applicable       659  

Class 3

     144        Not applicable       8  

Class 4

     671        671       27  
  

 

 

 

Total class-specific expenses

     $17,289        $671       $1,364  
  

 

 

 

 

Bond Fund

 

Share class    Distribution
services
     Insurance
administrative
services
    Administrative
services
 

Class 1

     Not applicable        Not applicable       $349  

Class 1A*

     $     —        $   —        

Class 2

     4,920        Not applicable       197  

Class 4

     136        136       5  
  

 

 

 

Total class-specific expenses

     $5,056        $136       $551  
  

 

 

 
 

 

International Growth and Income Fund

 

Share class    Distribution
services
     Insurance
administrative
services
    Administrative
services
 

Class 1

     Not applicable        Not applicable       $44  

Class 1A*

     $  —        $ —        

Class 2

     318        Not applicable       13  

Class 4

     52        52       2  
  

 

 

 

Total class-specific expenses

     $370        $52       $59  
  

 

 

 

 

Global Bond Fund

 

Share class    Distribution
services
     Insurance
administrative
services
    Administrative
services
 

Class 1

     Not applicable        Not applicable       $  58  

Class 1A*

     $      —        $  —        

Class 2

     1,422        Not applicable       57  

Class 4

     16        16        
  

 

 

 

Total class-specific expenses

     $1,438        $16       $115  
  

 

 

 
 

 

Capital Income Builder

 

Share class    Distribution
services
     Insurance
administrative
services
    Administrative
services
 

Class 1

     Not applicable        Not applicable       $  9  

Class 1A*

     $  —        $  —        

Class 2

     1        Not applicable        

Class 4

     345        345       14  
  

 

 

 

Total class-specific expenses

     $346        $345       $23  
  

 

 

 

 

High-Income Bond Fund

 

Share class    Distribution
services
     Insurance
administrative
services
    Administrative
services
 

Class 1

     Not applicable        Not applicable       $47  

Class 1A*

     $      —        $  —        

Class 2

     996        Not applicable       40  

Class 3

     12        Not applicable       1  

Class 4

     32        32       1  
  

 

 

 

Total class-specific expenses

     $1,040        $32       $89  
  

 

 

 
 

 

Asset Allocation Fund

 

Share class    Distribution
services
     Insurance
administrative
services
     Administrative
services
 

Class 1

     Not applicable        Not applicable        $   702  

Class 1A*

     $       —        $       1        † 

Class 2

     6,593        Not applicable        264  

Class 3

     33        Not applicable        2  

Class 4

     3,822        3,822        153  
  

 

 

 

Total class-specific expenses

     $10,448        $3,823        $1,121  
  

 

 

 
 

 

See end of tables for footnotes.

 

American Funds Insurance Series   173


Mortgage Fund

 

Share class    Distribution
services
     Insurance
administrative
services
    Administrative
services
 

 

 

Class 1

     Not applicable        Not applicable       $14  

Class 1A*

     $  –        $   – †      † 

Class 2

     78        Not applicable       3  

Class 4

     11        11        
  

 

 

 

Total class-specific expenses

     $89        $11       $17  
  

 

 

 

 

Managed Risk International Fund

 

     Distribution
services
     Insurance
administrative
services
 

 

 

Class P1

     Not applicable        $    – † 

Class P2

     $140        140  
  

 

 

 

Total class-specific expenses

     $140        $140  
  

 

 

 
 

Ultra-Short Bond Fund

 

Share class    Distribution
services
     Insurance
administrative
services
     Administrative
services
 

 

 

Class 1

     Not applicable        Not applicable        $  2  

Class 1A*

     $    –        $   –         

Class 2

     341        Not applicable        13  

Class 3

     4        Not applicable         

Class 4

     17        17        1  
  

 

 

 

Total class-specific expenses

     $362        $17        $16  
  

 

 

 

 

Managed Risk Blue Chip

Income and Growth Fund

     Distribution
services
     Insurance
administrative
services
 

 

 

Class P1

     Not applicable        $    – † 

Class P2

     $431        432  
  

 

 

 

Total class-specific expenses

     $431        $432  
  

 

 

 
 

U.S. Government/AAA-Rated Securities Fund

 

Share class    Distribution
services
     Insurance
administrative
services
    Administrative
services
 

 

 

Class 1

     Not applicable        Not applicable       $  73  

Class 1A*

     $       –        $  – †      † 

Class 2

     1,856        Not applicable       74  

Class 3

     9        Not applicable       1  

Class 4

     68        68       3  
  

 

 

 

Total class-specific expenses

     $1,933        $68       $151  
  

 

 

 

Managed Risk Growth-Income Fund

 

     Distribution
services
     Insurance
administrative
services
 

 

 

Class P1

     Not applicable        $    2  

Class P2

     $217        217  
  

 

 

 

Total class-specific expenses

     $217        $219  
  

 

 

 
 

Managed Risk Growth Fund

 

     Distribution
services
     Insurance
administrative
services
 

 

 

Class P1

     Not applicable        $    1  

Class P2

     $283        283  
  

 

 

 

Total class-specific expenses

     $283        $284  
  

 

 

 

* Class 1A shares began investment operations on January 6, 2017.

† Amount less than one thousand.

Managed Risk Asset Allocation Fund

 

     Distribution
services
     Insurance
administrative
services
 

 

 

Class P1

     Not applicable        $1,688  

Class P2

     $3,127        3,127  
  

 

 

 

Total class-specific expenses

     $3,127        $4,815  
  

 

 

 
 

 

174   American Funds Insurance Series


Trustees’ deferred compensation – Trustees who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the funds, are treated as if invested in one or more of the American Funds. These amounts represent general, unsecured liabilities of the funds and vary according to the total returns of the selected funds. Trustees’ compensation, shown on the accompanying financial statements, reflects current fees (either paid in cash or deferred) and a net increase in the value of the deferred amounts as follows (dollars in thousands):

 

      Current fees      Increase in value of
deferred amounts
    Total trustees’    
compensation    
 

Global Growth Fund

     $19        $  8       $  27      

Global Small Capitalization Fund

     14        6       20      

Growth Fund

     80        31       111      

International Fund

     28        11       39      

New World Fund

     11        4       15      

Blue Chip Income and Growth Fund

     32        12       44      

Global Growth and Income Fund

     7        3       10      

Growth-Income Fund

     96        37       133      

International Growth and Income Fund

     4        2       6      

Capital Income Builder

     1        1       2      

Asset Allocation Fund

     78        31       109      

Global Balanced Fund

     1            1      

Bond Fund

     40        15       55      

Global Bond Fund

     8        3       11      

High-Income Bond Fund

     7        2       9      

Mortgage Fund

     1            1      

Ultra-Short Bond Fund

     1            1      

U.S. Government/AAA-Rated Securities Fund

     11        4       15      

Managed Risk Growth Fund

     1            1      

Managed Risk International Fund

     1            1      

Managed Risk Blue Chip Income and Growth Fund

     2            2      

Managed Risk Growth-Income Fund

     1            1      

Managed Risk Asset Allocation Fund

     13        5       18      

*Amount less than one thousand.

Affiliated officers and trustees – Officers and certain trustees of the series are or may be considered to be affiliated with CRMC, AFD and AFS. No affiliated officers or trustees received any compensation directly from any fund in the series.

Security transactions with related funds – The funds may purchase from, or sell securities to, other CRMC-managed funds (or funds managed by certain affiliates of CRMC) under procedures adopted by the fund’s board of trustees. The funds involved in such transactions are considered related by virtue of having a common investment adviser (or affiliated investment advisers), common trustees and/or common officers. When such transactions occur, each transaction is executed at the current market price of the security and no brokerage commissions or fees are paid in accordance with Rule 17a-7 of the 1940 Act.

The following table presents purchase and sales transactions between each fund and related funds as of June 30, 2017 (dollars in thousands):

 

      Purchases      Sales      

Global Small Capitalization Fund

     $15,273      $ 105,787      

International Fund

     68,017        31,582      

Blue Chip Income and Growth Fund

     67,182        170,978      

8. Committed line of credit

 

 

Global Small Capitalization Fund, New World Fund and High-Income Bond Fund participate with other funds managed by CRMC in a $1 billion credit facility (the “line of credit”) to be utilized for temporary purposes to fund shareholder redemptions. Each fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which are reflected in other expenses in each fund’s statement of operations. None of the funds borrowed on this line of credit at any time during the six months ended June 30, 2017.

 

American Funds Insurance Series   175


9. Capital share transactions

 

 

Capital share transactions in the funds were as follows (dollars and shares in thousands):

Global Growth Fund

 

     Sales1      Reinvestments of
dividends and distributions
    Repurchases1      Net (decrease)
increase
 
Share class    Amount      Shares      Amount      Shares     Amount       Shares       Amount       Shares    

Six months ended June 30, 2017

                      

Class 1

     $  89,305        3,373        $  57,544        2,074       $(157,017)        (5,802)        $  (10,168)        (355)   

Class 1A2

     538        19        16        1       (1)        3        553         20    

Class 2

     29,976        1,163        118,050        4,296       (292,351)        (11,106)        (144,325)        (5,647)   

Class 4

     26,902        1,016        3,969        145       (5,458)        (208)        25,413         953    
  

 

 

 

Total net increase (decrease)

     $146,721        5,571        $179,579        6,516       $(454,827)        (17,116)        $(128,527)        (5,029)   
  

 

 

 

Year ended December 31, 2016

                      

Class 1

     $214,321        8,771        $150,842        6,520       $(225,629)        (9,136)        $ 139,534         6,155    

Class 2

     98,924        4,087        336,499        14,694       (451,495)        (18,489)        (16,072)        292    

Class 4

     31,776        1,313        8,092        354       (28,384)        (1,172)        11,484         495    
  

 

 

 

Total net increase (decrease)

     $345,021        14,171        $495,433        21,568       $(705,508)        (28,797)        $ 134,946         6,942    
  

 

 

 

 

Global Small Capitalization Fund

 

 

                
     Sales1      Reinvestments of
dividends and distributions
    Repurchases1      Net (decrease)
increase
 
Share class    Amount      Shares      Amount      Shares     Amount       Shares       Amount       Shares    

Six months ended June 30, 2017

                      

Class 1

     $  78,076        3,560        $    6,317        277       $(280,989)        (12,408)        $(196,596)        (8,571)   

Class 1A2

     141        7               3       3        3        141         7    

Class 2

     15,219        726        9,527        429       (158,031)        (7,414)        (133,285)        (6,259)   

Class 4

     15,135        704        220        9       (2,208)        (103)        13,147         610    
  

 

 

 

Total net increase (decrease)

     $108,571        4,997        $  16,064        715       $(441,228)        (19,925)        $(316,593)        (14,213)   
  

 

 

 

Year ended December 31, 2016

                      

Class 1

     $161,105        7,595        $285,447        14,932       $(368,707)        (16,753)        $   77,845         5,774    

Class 2

     54,521        2,619        445,999        23,986       (293,447)        (14,137)        207,073         12,468    

Class 4

     16,563        792        6,857        365       (8,311)        (402)        15,109         755    
  

 

 

 

Total net increase (decrease)

     $232,189        11,006        $738,303        39,283       $(670,465)        (31,292)        $ 300,027         18,997    
  

 

 

 

 

176   American Funds Insurance Series


Growth Fund

 

     Sales1      Reinvestments of
dividends and distributions
    Repurchases1      Net increase
(decrease)
 
Share class    Amount      Shares      Amount      Shares     Amount       Shares       Amount       Shares    

Six months ended June 30, 2017

                      

Class 1

     $282,329        3,905        $   742,365        10,520       $  (491,403)        (6,732)        $   533,291         7,693    

Class 1A2

     802        11        66        1       (5)        3        863         12    

Class 2

     116,105        1,603        1,463,878        20,888       (1,084,545)        (14,970)        495,438         7,521    

Class 3

     275        4        19,224        271       (10,062)        (137)        9,437         138    

Class 4

     68,757        954        55,030        793       (21,417)        (300)        102,370         1,447    
  

 

 

 

Total net increase (decrease)

     $468,268        6,477        $2,280,563        32,473       $(1,607,432)        (22,139)        $1,141,399         16,811    
  

 

 

 

Year ended December 31, 2016

                      

Class 1

     $458,166        7,079        $   669,418        10,693       $  (964,251)        (14,691)        $   163,333         3,081    

Class 2

     177,712        2,745        1,349,846        21,732       (1,859,064)        (28,538)        (331,506)        (4,061)   

Class 3

     1,102        18        17,818        284       (27,723)        (425)        (8,803)        (123)   

Class 4

     75,062        1,167        39,264        638       (49,300)        (768)        65,026         1,037    
  

 

 

 

Total net increase (decrease)

     $712,042        11,009        $2,076,346        33,347       $(2,900,338)        (44,422)        $  (111,950)        (66)   
  

 

 

 

 

International Fund

 

 

                
     Sales1      Reinvestments of
dividends and distributions
    Repurchases1      Net increase
(decrease)
 
Share class    Amount      Shares      Amount      Shares     Amount       Shares       Amount       Shares    

Six months ended June 30, 2017

                      

Class 1

     $383,721        20,353        $  66,548        3,387       $  (240,741)        (12,822)        $ 209,528         10,918    

Class 1A2

     361        19        4        3       3        3        365         19    

Class 2

     85,351        4,660        60,782        3,107       (308,160)        (16,553)        (162,027)        (8,786)   

Class 3

     159        9        434        22       (1,871)        (101)        (1,278)        (70)   

Class 4

     24,587        1,324        1,376        71       (5,314)        (287)        20,649         1,108    
  

 

 

 

Total net increase (decrease)

     $494,179        26,365        $129,144        6,587       $  (556,086)        (29,763)        $   67,237         3,189    
  

 

 

 

Year ended December 31, 2016

                      

Class 1

     $502,624        29,474        $355,240        22,171       $  (416,969)        (24,055)        $ 440,895         27,590    

Class 2

     190,542        11,247        385,917        24,231       (598,017)        (34,790)        (21,558)        688    

Class 3

     122        7        2,834        177       (5,902)        (343)        (2,946)        (159)   

Class 4

     25,077        1,477        5,458        345       (7,439)        (436)        23,096         1,386    
  

 

 

 

Total net increase (decrease)

     $718,365        42,205        $749,449        46,924       $(1,028,327)        (59,624)        $ 439,487         29,505    
  

 

 

 

 

New World Fund

 

 

                
     Sales1      Reinvestments of dividends     Repurchases1      Net (decrease)
increase
 
Share class    Amount      Shares      Amount      Shares     Amount       Shares       Amount       Shares    

Six months ended June 30, 2017

                      

Class 1

     $126,934        5,828        $  3,072        136       $(287,145)        (12,786)        $(157,139)        (6,822)   

Class 1A2

     163        7               3       3        3        163         7    

Class 2

     123,916        5,750        1,283        57       (173,508)        (8,085)        (48,309)        (2,278)   

Class 4

     53,144        2,480        340        15       (8,319)        (389)        45,165         2,106    
  

 

 

 

Total net increase (decrease)

     $304,157        14,065        $  4,695        208       $(468,972)        (21,260)        $(160,120)        (6,987)   
  

 

 

 

Year ended December 31, 2016

                      

Class 1

     $343,390        17,604        $17,686        901       $(250,303)        (12,858)        $ 110,773         5,647    

Class 2

     51,238        2,661        7,100        365       (149,682)        (7,790)        (91,344)        (4,764)   

Class 4

     71,177        3,754        1,465        75       (12,695)        (670)        59,947         3,159    
  

 

 

 

Total net increase (decrease)

     $465,805        24,019        $26,251        1,341       $(412,680)        (21,318)        $   79,376         4,042    
  

 

 

 

See end of tables for footnotes.

 

American Funds Insurance Series   177


Blue Chip Income and Growth Fund

 

     Sales1      Reinvestments of
dividends and distributions
    Repurchases1      Net increase
(decrease)
 
Share class    Amount      Shares      Amount     Shares     Amount       Shares       Amount       Shares    

Six months ended June 30, 2017

 

                  

Class 1

     $  345,090        24,688        $211,819       15,371       $(475,150)        (33,513)        $     81,759         6,546    

Class 1A2

     168        12        7       1       (10)        (1)        165         12    

Class 2

     27,058        1,962        139,561       10,239       (197,271)        (14,224)        (30,652)        (2,023)   

Class 4

     49,953        3,614        6,897       507       (14,591)        (1,051)        42,259         3,070    
  

 

 

 

Total net increase (decrease)

     $  422,269        30,276        $358,284       26,118       $(687,022)        (48,789)        $     93,531         7,605    
  

 

 

 

Year ended December 31, 2016

                     

Class 1

     $  986,168        74,990        $426,031       33,628       $(260,962)        (20,029)        $1,151,237         88,589    

Class 2

     42,572        3,274        328,996       26,334       (424,524)        (32,897)        (52,956)        (3,289)   

Class 4

     105,759        8,137        7,693       611       (18,601)        (1,441)        94,851         7,307    
  

 

 

 

Total net increase (decrease)

     $1,134,499        86,401        $762,720       60,573       $(704,087)        (54,367)        $1,193,132         92,607    
  

 

 

 

 

Global Growth and Income Fund

 

 

               
     Sales1      Reinvestments of
dividends and distributions
    Repurchases1      Net (decrease)
increase
 
Share class    Amount      Shares      Amount     Shares     Amount       Shares       Amount       Shares    

Six months ended June 30, 2017

                     

Class 12

     $  43,654        3,156        $  7,982       546       $(289,329)        (19,613)        $(237,693)        (15,911)   

Class 1A

     10        1        3       3                     10         1    

Class 2

     11,144        809        30,440       2,091       (115,651)        (8,266)        (74,067)        (5,366)   

Class 4

     8,243        584        467       33       (1,764)        (126)        6,946         491    
  

 

 

 

Total net increase (decrease)

     $  63,051        4,550        $38,889       2,670       $(406,744)        (28,005)        $(304,804)        (20,785)   
  

 

 

 

Year ended December 31, 2016

                     

Class 1

     $292,208        23,201        $10,481       808       $  (49,576)        (3,887)        $ 253,113         20,122    

Class 2

     25,520        2,043        25,283       1,955       (199,986)        (15,865)        (149,183)        (11,867)   

Class 4

     12,357        989        257       20       (2,230)        (180)        10,384         829    
  

 

 

 

Total net increase (decrease)

     $330,085        26,233        $36,021       2,783       $(251,792)        (19,932)        $ 114,314         9,084    
  

 

 

 

 

Growth-Income Fund

 

 

               
     Sales1      Reinvestments of
dividends and distributions
    Repurchases1      Net increase
(decrease)
 
Share class    Amount      Shares      Amount     Shares     Amount       Shares       Amount       Shares    

Six months ended June 30, 2017

                     

Class 1

     $   885,451        18,923        $   932,415       20,385       $   (538,378)        (11,476)        $1,279,488         27,832    

Class 1A2

     452        10        17       3       (3)        3        466         10    

Class 2

     71,012        1,527        896,303       19,808       (825,238)        (17,743)        142,077         3,592    

Class 3

     232        5        10,668       233       (11,221)        (239)        (321)        (1)   

Class 4

     56,549        1,226        38,175       850       (23,522)        (509)        71,202         1,567    
  

 

 

 

Total net increase (decrease)

     $1,013,696        21,691        $1,877,578       41,276       $(1,398,362)        (29,967)        $1,492,912         33,000    
  

 

 

 

Year ended December 31, 2016

                     

Class 1

     $1,364,357        31,261        $1,429,866       34,358       $   (830,642)        (18,888)        $1,963,581         46,731    

Class 2

     142,903        3,288        1,580,603       38,422       (1,561,195)        (35,880)        162,311         5,830    

Class 3

     1,293        30        19,402       467       (23,792)        (543)        (3,097)        (46)   

Class 4

     72,892        1,695        54,139       1,325       (35,791)        (829)        91,240         2,191    
  

 

 

 

Total net increase (decrease)

     $1,581,445        36,274        $3,084,010       74,572       $(2,451,420)        (56,140)        $2,214,035         54,706    
  

 

 

 

 

178   American Funds Insurance Series


International Growth and Income Fund

 

     Sales1      Reinvestments of
dividends and distributions
    Repurchases1      Net increase
(decrease)
 
Share class    Amount      Shares      Amount     Shares     Amount      Shares       Amount       Shares    

Six months ended June 30, 2017

                    

Class 1

     $170,779        10,248        $  1,924       116       $(51,629)       (3,183)        $121,074         7,181    

Class 1A2

     15        1        3       3       –        –         15         1    

Class 2

     4,036        261        383       23       (20,376)       (1,299)        (15,957)        (1,015)   

Class 4

     5,798        368        53       3       (1,442)       (92)        4,409         279    
  

 

 

 

Total net increase (decrease)

     $180,628        10,878        $  2,360       142       $(73,447)       (4,574)        $109,541         6,446    
  

 

 

 

Year ended December 31, 2016

                    

Class 1

     $105,994        7,226        $26,726       1,853       $(5,982)       (396)        $126,738         8,683    

Class 2

     17,101        1,182        7,312       508       (30,910)       (2,088)        (6,497)        (398)   

Class 4

     8,076        551        1,044       73       (3,762)       (258)        5,358         366    
  

 

 

 

Total net increase (decrease)

     $131,171        8,959        $35,082       2,434       $(40,654)       (2,742)        $125,599         8,651    
  

 

 

 
Capital Income Builder                     
     Sales1      Reinvestments of dividends     Repurchases1      Net increase  
Share class    Amount      Shares      Amount     Shares     Amount     Shares      Amount      Shares    

Six months ended June 30, 2017

                    

Class 1

     $  36,029        3,673        $  2,810       282       $(3,569)       (367)        $35,270         3,588    

Class 1A2

     73        7        1       3       3       3        74         7    

Class 2

     569        58        7       1       (10)       (1)        566         58    

Class 4

     31,567        3,215        3,604       363       (10,100)       (1,029)        25,071         2,549    
  

 

 

 

Total net increase (decrease)

     $  68,238        6,953        $  6,422       646       $(13,679)       (1,397)        $60,981         6,202    
  

 

 

 

Year ended December 31, 2016

                    

Class 1

     $  95,122        9,946        $  4,372       458       $(23,129)       (2,439)        $76,365         7,965    

Class 2

     144        15        2       –         (2)       –          144         15    

Class 4

     113,152        11,813        6,657       699       (20,474)       (2,162)        99,335         10,350    
  

 

 

 

Total net increase (decrease)

     $208,418        21,774        $11,031       1,157       $(43,605)       (4,601)        $175,844         18,330    
  

 

 

 
Asset Allocation Fund                     
     Sales1      Reinvestments of
dividends and distributions
    Repurchases1      Net increase
(decrease)
 
Share class    Amount      Shares      Amount     Shares     Amount     Shares      Amount      Shares    

Six months ended June 30, 2017

                    

Class 1

     $1,223,552        53,798        $   723,346       32,207       $(270,322)       (11,893)        $1,676,576         74,112    

Class 1A2

     1,962        85        76       4       (1)       3        2,037         89    

Class 2

     79,620        3,555        259,355       11,661       (287,825)       (12,784)        51,150         2,432    

Class 3

     561        25        1,775       78       (2,001)       (88)        335         15    

Class 4

     198,612        8,889        155,241       7,009       (110,844)       (4,987)        243,009         10,911    
  

 

 

 

Total net increase (decrease)

     $1,504,307        66,352        $1,139,793       50,959       $(670,993)       (29,752)        $1,973,107         87,559    
  

 

 

 

Year ended December 31, 2016

                    

Class 1

     $1,419,998        67,404        $  510,045       24,119       $   (436,287)       (20,771)        $1,493,756         70,752    

Class 2

     190,550        9,074        201,323       9,626       (504,479)       (24,294)        (112,606)        (5,594)   

Class 3

     672        32        1,439       68       (4,926)       (233)        (2,815)        (133)   

Class 4

     385,933        18,332        100,264       4,812       (163,695)       (7,917)        322,502         15,227    
  

 

 

 

Total net increase (decrease)

     $1,997,153        94,842        $  813,071       38,625       $(1,109,387)       (53,215)        $1,700,837         80,252    
  

 

 

 

See end of tables for footnotes.

 

American Funds Insurance Series   179


Global Balanced Fund

 

     Sales1      Reinvestments of
dividends and distributions
    Repurchases1      Net increase
(decrease)
 
Share class    Amount      Shares      Amount     Shares     Amount      Shares       Amount       Shares    

Six months ended June 30, 2017

                    

Class 1

     $  7,400        625        $  243       20       $  (2,827)       (243)        $  4,816         402    

Class 1A2

     10        1        3       3                    10         1    

Class 2

     8,051        686        628       51       (13,017)       (1,108)        (4,338)        (371)   

Class 4

     10,398        883        63       5       (554)       (47)        9,907         841    
  

 

 

 

Total net increase (decrease)

     $25,859        2,195        $934       76       $(16,398)       (1,398)        $10,395         873    
  

 

 

 

Year ended December 31, 2016

                    

Class 1

     $20,046        1,826        $939       85       $(6,690)       (590)        $14,295         1,321    

Class 2

     22,939        2,066        2,226       201       (22,938)       (2,086)        2,227         181    

Class 4

     9,506        864        121       11       (652)       (59)        8,975         816    
  

 

 

 

Total net increase (decrease)

     $52,491        4,756        $3,286       297       $(30,280)       (2,735)        $25,497         2,318    
  

 

 

 
Bond Fund                     
     Sales1      Reinvestments of
dividends and distributions
    Repurchases1      Net (decrease)
increase
 
Share class    Amount      Shares      Amount     Shares     Amount     Shares      Amount      Shares    

Six months ended June 30, 2017

                    

Class 1

     $  510,398        46,925        $134,744       12,407       $(1,110,594)       (101,036)        $  (465,452)        (41,704)   

Class 1A2

     390        35        7       1       3       3        397         36    

Class 2

     61,700        5,733        79,311       7,392       (144,658)       (13,418)        (3,647)        (293)   

Class 4

     28,880        2,677        2,255       210       (11,431)       (1,057)        19,704         1,830    
  

 

 

 

Total net increase (decrease)

     $  601,368        55,370        $216,317       20,010       $(1,266,683)       (115,511)        $  (448,998)        (40,131)   
  

 

 

 

Year ended December 31, 2016

                    

Class 1

     $1,345,167        121,199        $148,075       13,631       $  (420,052)       (38,234)        $1,073,190         96,596    

Class 2

     144,585        13,214        82,041       7,631       (444,145)       (40,888)        (217,519)        (20,043)   

Class 4

     57,784        5,273        1,763       164       (16,674)       (1,523)        42,873         3,914    
  

 

 

 

Total net increase (decrease)

     $1,547,536        139,686        $231,879       21,426       $  (880,871)       (80,645)        $   898,544         80,467    
  

 

 

 
Global Bond Fund                     
     Sales1      Reinvestments of
dividends and distributions
    Repurchases1      Net increase
(decrease)
 
Share class    Amount      Shares      Amount     Shares     Amount     Shares      Amount      Shares    

Six months ended June 30, 2017

                    

Class 1

     $  84,823        7,382        $7,297       621       $(35,529)       (3,105)        $56,591         4,898    

Class 1A2

     31        3        3       3       3       –         31         3    

Class 2

     25,366        2,239        7,064       606       (42,479)       (3,713)        (10,049)        (868)   

Class 4

     3,024        266        88       7       (1,118)       (98)        1,994         175    
  

 

 

 

Total net increase (decrease)

     $113,244        9,890        $14,449       1,234       $(79,126)       (6,916)        $48,567         4,208    
  

 

 

 

Year ended December 31, 2016

                    

Class 1

     $213,129        18,309        $10,956       974       $(159,412)       (13,652)        $64,673         5,631    

Class 2

     36,347        3,158        8,734       780       (156,676)       (13,741)        (111,595)        (9,803)   

Class 4

     10,946        954        76       7       (4,634)       (404)        6,388         557    
  

 

 

 

Total net increase (decrease)

     $260,422        22,421        $19,766       1,761       $(320,722)       (27,797)        $(40,534)        (3,615)   
  

 

 

 

 

180   American Funds Insurance Series


High-Income Bond Fund

 

     Sales1

 

     Reinvestments of
dividends

 

    Repurchases1

 

    Net (decrease)
increase

 

 
Share class   

 

Amount

    

 

Shares

    

 

Amount

    

 

Shares

   

 

Amount

   

 

Shares

   

 

Amount

   

 

Shares   

 

Six months ended June 30, 2017

                   

Class 1

      $  38,805        3,712        $8,924        846     $ (290,478     (27,344     $(242,749)       (22,786)    

Class 1A2

     114        11        1        3       (5     3       110        11     

Class 2

     8,564        833        9,562        921       (45,151     (4,381     (27,025)       (2,627)    

Class 3

     380        36        156        15       (641     (61     (105)       (10)    

Class 4

     54,593        4,954        353        31       (53,926     (4,896     1,020        89     
  

 

 

 

Total net increase (decrease)

      $102,456        9,546        $18,996        1,813     $ (390,201     (36,682     $(268,749)       (25,323)    
  

 

 

 

Year ended December 31, 2016

                   

Class 1

      $  69,042        6,945        $  56,592        5,626     $ (291,328     (30,021     $(165,694)       (17,450)    

Class 2

     22,831        2,394        47,007        4,738       (116,168     (11,943     (46,330)       (4,811)    

Class 3

     2,650        279        746        74       (3,553     (365     (157)       (12)    

Class 4

     90,979        8,413        1,283        120       (73,640     (6,754     18,622        1,779     
  

 

 

 

Total net increase (decrease)

      $185,502        18,031        $105,628        10,558     $ (484,689     (49,083     $(193,559)       (20,494)    
  

 

 

 

 

Mortgage Fund

                   
     Sales1

 

     Reinvestments of
dividends and distributions

 

    Repurchases1

 

    Net increase
(decrease)

 

 
Share class   

 

Amount

    

 

Shares

    

 

Amount

    

 

Shares

   

 

Amount

   

 

Shares

   

 

Amount

   

 

Shares   

 

Six months ended June 30, 2017

                   

Class 1

      $29,211        2,753        $2,512        236     $ (29,154     (2,743   $ 2,569       246     

Class 1A2

     109        10        1        1       (5     (1     105       10     

Class 2

     3,827        361        553        52       (5,124     (483     (744     (70)    

Class 4

     3,237        307        79        7       (2,523     (239     793       75     
  

 

 

 

Total net increase (decrease)

      $36,384        3,431        $3,145        296     $ (36,806     (3,466   $ 2,723       261     
  

 

 

 

Year ended December 31, 2016

                   

Class 1

      $28,827        2,669        $7,933        749     $ (38,385     (3,569   $ (1,625     (151)    

Class 2

     18,388        1,714        1,683        159       (15,825     (1,473     4,246       400     

Class 4

     14,879        1,395        227        22       (17,844     (1,676     (2,738     (259)    
  

 

 

 

Total net increase (decrease)

      $62,094        5,778        $9,843        930     $ (72,054     (6,718   $ (117     (10)    
  

 

 

 

 

Ultra-Short Bond Fund

                   
     Sales1

 

     Reinvestments of
dividends and distributions

 

    Repurchases1

 

    Net (decrease)
increase

 

 
Share class   

 

Amount

    

 

Shares

    

 

Amount

    

 

Shares

   

 

Amount

   

 

Shares

   

 

Amount

   

 

Shares   

 

Six months ended June 30, 2017

                   

Class 1

      $    3,979        353        $—          —       $ (9,066     (804     $  (5,087)       (451)    

Class 1A2

     10        1        —          —                     10        1     

Class 2

     26,711        2,429        —          —         (66,149     (6,017     (39,438)       (3,588)    

Class 3

     74        7        —          —         (351     (31     (277)       (24)    

Class 4

     9,477        852        —          —         (5,608     (504     3,869       348     
  

 

 

 

Total net increase (decrease)

      $  40,251        3,642        $—          —       $ (81,174     (7,356     $(40,923)       (3,714)    
  

 

 

 

Year ended December 31, 2016

                   

Class 1

      $  15,562        1,382        $—          —       $ (17,527     (1,556     $  (1,965)       (174)    

Class 2

     128,178        11,656        —          —         (133,142     (12,108     (4,964)       (452)    

Class 3

     2,647        238        —          —         (4,768     (429     (2,121)       (191)    

Class 4

     18,372        1,649        —          —         (21,287     (1,911     (2,915)       (262)    
  

 

 

 

Total net increase (decrease)

      $164,759        14,925        $—          —       $ (176,724     (16,004     $(11,965)       (1,079)    
  

 

 

 

See end of tables for footnotes.

 

American Funds Insurance Series   181


U.S. Government/AAA-Rated Securities Fund

 

     Sales1

 

     Reinvestments of
dividends and distributions

 

    Repurchases1

 

    Net (decrease)
increase

 

 
Share class   

 

Amount

    

 

Shares

    

 

Amount

   

 

Shares

   

 

Amount

    

 

Shares

   

 

Amount

    

 

Shares

 

Six months ended June 30, 2017

                    

Class 1

      $  44,091        3,625         $    3,834       312       $(211,044)        (17,165     $(163,119)        (13,228)    

Class 1A2

     111        9        3       3       3        3       111        9     

Class 2

     18,100        1,504        3,682       303       (60,061)        (4,986     (38,279)        (3,179)    

Class 3

     691        57        26       2       (642)        (53     75        6     

Class 4

     11,941        987        111       10       (12,741)        (1,058     (689)        (61)    
  

 

 

 

Total net increase (decrease)

      $  74,934        6,182         $    7,653       627       $(284,488)        (23,262     $(201,901)        (16,453)    
  

 

 

 

Year ended December 31, 2016

                    

Class 1

      $111,564        8,949         $  52,411       4,280       $(89,943)        (7,217     $74,032        6,012     

Class 2

     65,544        5,287        52,257       4,303       (160,525)        (13,019     (42,724)        (3,429)    

Class 3

     1,568        125        368       30       (2,199)        (176     (263)        (21)    

Class 4

     58,794        4,745        1,986       163       (48,646)        (3,930     12,134        978     
  

 

 

 

Total net increase (decrease)

      $237,470        19,106         $107,022       8,776       $(301,313)        (24,342     $  43,179        3,540     
  

 

 

 

 

Managed Risk Growth Fund

 

              
     Sales1

 

     Reinvestments of
dividends and distributions

 

    Repurchases1

 

    Net increase

 

 
Share class   

 

Amount

    

 

Shares

    

 

Amount

   

 

Shares

   

 

Amount

    

 

Shares

   

 

Amount

    

 

Shares

 

Six months ended June 30, 2017

                    

Class P1

     $     506        43        $       29       3       $       (95)        (8     $     440        38     

Class P2

     23,896        2,084        4,847       408       (8,089)        (699     20,654        1,793     
  

 

 

 

Total net increase (decrease)

     $24,402        2,127        $  4,876       411       $  (8,184)        (707     $21,094        1,831     
  

 

 

 

Year ended December 31, 2016

                    

Class P1

     $     492        46        $       60       6       $     (168)        (16     $     384        36     

Class P2

     63,452        5,983        15,282       1,507       (14,771)        (1,388     63,963        6,102     
  

 

 

 

Total net increase (decrease)

     $63,944        6,029        $15,342       1,513       $(14,939)        (1,404     $64,347        6,138     
  

 

 

 

 

Managed Risk International Fund

 

              
     Sales1

 

     Reinvestments of
dividends and distributions

 

    Repurchases1

 

    Net (decrease)
increase

 

 
Share class   

 

Amount

    

 

Shares

    

 

Amount

   

 

Shares

   

 

Amount

    

 

Shares

   

 

Amount

    

 

Shares

 

Six months ended June 30, 2017

                    

Class P1

     $       95        10        $       3       3       $   (131)        (13     $     (33)        (3)    

Class P2

     14,561        1,527        2,300       230       (5,436)        (552     11,425        1,205     
  

 

 

 

Total net increase (decrease)

     $14,656        1,537        $2,303       230       $(5,567)        (565     $11,392        1,202     
  

 

 

 

Year ended December 31, 2016

                    

Class P1

     $       41        4        $       6       1       $       (53)        (6     $       (6)        (1)    

Class P2

     25,545        2,830        3,022       346       (8,610)        (948     19,957        2,228     
  

 

 

 

Total net increase (decrease)

     $25,586        2,834        $3,028       347       $  (8,663)        (954     $19,951        2,227     
  

 

 

 

 

182   American Funds Insurance Series


Managed Risk Blue Chip Income and Growth Fund

 

     Sales1      Reinvestments of
dividends and distributions
     Repurchases1     Net (decrease)
increase
 
Share class    Amount      Shares      Amount      Shares      Amount     Shares     Amount     Shares    

Six months ended June 30, 2017

 

              

Class P1

    $ 59        5        $       5        1        $     (133)       (11   $ (69     (5)   

Class P2

     73,692        6,177        9,858        830        (19,665     (1,636     63,885       5,371    
  

 

 

 

Total net increase (decrease)

    $ 73,751        6,182        $9,863        831        $(19,798)       (1,647   $ 63,816       5,366    
  

 

 

 

Year ended December 31, 2016

                    

Class P1

    $ 60        6        $     13        1        $       (20)       (2   $ 53       5    

Class P2

     139,800        12,424        9,285        848        (10,609     (952     138,476       12,320    
  

 

 

 

Total net increase (decrease)

    $ 139,860        12,430        $9,298        849        $(10,629)       (954   $ 138,529       12,325    
  

 

 

 

 

Managed Risk Growth-Income Fund

 

              
     Sales1      Reinvestments of
dividends and distributions
     Repurchases1     Net increase  
Share class    Amount      Shares      Amount      Shares      Amount     Shares     Amount     Shares    

Six months ended June 30, 2017

 

                 

Class P1

     $     549        47        $       92        8        $       (91)       (8     $     550       47    

Class P2

     17,017        1,467        9,501        835        (7,374)       (636     19,144       1,666    
  

 

 

 

Total net increase (decrease)

     $17,566        1,514        $  9,593        843        $  (7,465)       (644     $19,694       1,713    
  

 

 

 

Year ended December 31, 2016

 

                 

Class P1

     $     746        68        $       79        7        $     (343)       (31     $     482       44    

Class P2

     41,955        3,864        10,093        964        (13,341)       (1,227     38,707       3,601    
  

 

 

 

Total net increase (decrease)

     $42,701        3,932        $10,172        971        $(13,684)       (1,258     $39,189       3,645    
  

 

 

 

 

Managed Risk Asset Allocation Fund

 

              
     Sales1      Reinvestments of
dividends and distributions
     Repurchases1     Net increase  
Share class    Amount      Shares      Amount      Shares      Amount     Shares     Amount     Shares    

Six months ended June 30, 2017

 

                 

Class P1

    $ 167,060        13,314        $  25,265        1,986        $  (13,626)       (1,081   $ 178,699       14,219    

Class P2

     173,524        13,882        45,199        3,559        (73,802)       (5,872     144,921       11,569    
  

 

 

 

Total net increase (decrease)

    $ 340,584        27,196        $  70,464        5,545        $  (87,428)       (6,953   $ 323,620       25,788    
  

 

 

 

Year ended December 31, 2016

 

                 

Class P1

    $ 443,537        37,855        $  45,747        3,957        $  (14,583)       (1,270   $ 474,701       40,542    

Class P2

     369,887        31,502        92,019        7,990        (131,962)       (11,243     329,944       28,249    
  

 

 

 

Total net increase (decrease)

    $ 813,424        69,357        $137,766        11,947        $(146,545)       (12,513   $ 804,645       68,791    
  

 

 

 

1Includes exchanges between share classes of the fund.

2Class 1A shares began investment operations on January 6, 2017.

3Amount less than one thousand.

 

American Funds Insurance Series   183


10. Investment transactions and other disclosures

 

 

The following tables present additional information for each of the funds for the six months ended June 30, 2017 (dollars in thousands):

 

          Global                   Blue Chip
     Global    Small              New    Income and
     Growth    Capitalization    Growth    International    World    Growth
      Fund    Fund    Fund    Fund    Fund    Fund

Purchases of investment securities*

       $1,296,935          $   697,762          $3,483,444          $1,232,121          $1,178,332          $1,874,187  

Sales of investment securities*

       1,445,347          1,010,526          5,044,575          1,446,519          1,181,361          1,711,030  

Non-U.S. taxes paid on interest income

       –          –          –          (11)         19          –  

Non-U.S. taxes paid on realized gains

       51          –          –          512          –          –  

Non-U.S. taxes provided on unrealized gains

       49          33          –          2,992          2,114          –  

Dividends from affiliated issuers

       –          999          –          –          –          –  

Net realized (loss) gain from affiliated issuers

       –          (3,537)         –          –          –          –  
                             
     Global         International               
     Growth    Growth-    Growth    Capital    Asset    Global
     and Income    Income    and Income    Income    Allocation    Balanced
      Fund    Fund    Fund    Builder    Fund    Fund

Purchases of investment securities*

       $438,265          $3,807,445          $448,899          $183,484          $7,356,916          $72,913  

Sales of investment securities*

       728,490          3,914,474          390,545          137,173          6,913,815          56,404  

Non-U.S. taxes paid on interest income

       –          –          8          –          –          10  

Non-U.S. taxes paid on realized gains

       494          10          66          –          –          1  

Non-U.S. taxes provided on unrealized gains

       569          122          737          –          108          3  

Dividends from affiliated issuers

       –          –          –          –          –          –  

Net realized (loss) gain from affiliated issuers

       –          –          –          –          –          –  
                             
                              U.S.
               High-              Government/
          Global    Income         Ultra-Short    AAA-Rated
     Bond    Bond    Bond    Mortgage    Bond    Securities
      Fund    Fund    Fund    Fund    Fund    Fund

Purchases of investment securities*

       $10,776,837          $1,043,219          $698,302          $1,402,401          $–          $9,719,948  

Sales of investment securities*

       12,666,209          1,178,903          896,758          1,393,925          –          9,645,828  

Non-U.S. taxes paid on interest income

       –          313          (5)         –          –          –  

Non-U.S. taxes paid on realized gains

       –          223          –          –          –          –  

Non-U.S. taxes provided on unrealized gains

       10          188          5          –          –          –  

Dividends from affiliated issuers

       –          –          –          –          –          –  

Net realized (loss) gain from affiliated issuers

       –          –          –          –          –          –  
                             
               Managed    Managed    Managed     
     Managed    Managed    Risk Blue    Risk    Risk     
     Risk    Risk    Chip Income    Growth-    Asset     
     Growth    International    and Growth    Income    Allocation     
      Fund    Fund    Fund    Fund    Fund     

Purchases of investment securities*

       $43,200          $14,631          $79,280          $26,194          $434,120       

Sales of investment securities*

       10,750          4,448          15,254          5,069          14,247       

Non-U.S. taxes paid on interest income

       –          –          –          –          –       

Non-U.S. taxes paid on realized gains

       –          –          –          –          –       

Non-U.S. taxes provided on unrealized gains

       –          –          –          –          –       

Dividends from affiliated issuers

       365          397          1,244          488          12,067       

Net realized (loss) gain from affiliated issuers

       (574)         (483)         (296)         (554)         1,372       

*Excludes short-term securities and U.S. government obligations, if any.

 

184   American Funds Insurance Series


11. Ownership concentration

 

 

At June 30, 2017, CRMC held aggregate ownership of 11% of the outstanding shares of Global Balanced Fund. The ownership represents the seed money invested in the fund when the fund began operations. In addition, American Funds Insurance Series -Portfolio Series - Managed Risk Growth and Income Portfolio, American Funds Insurance Series - Managed Risk Asset Allocation Fund and American Funds Insurance Series - Portfolio Series - Managed Risk Global Allocation Portfolio held 34%, 16% and 15% of the outstanding shares of Capital Income Builder, Asset Allocation Fund and Global Balanced Fund, respectively.

 

American Funds Insurance Series   185


Financial highlights

 

            Income (loss) from
investment operations1
    Dividends and distributions                                 
Period ended    Net asset
value,
beginning
of period
     Net
investment
income
(loss)
   

Net gains

(losses) on
securities

(both
realized and
unrealized)

    Total from
investment
operations
   

Dividends

(from net
investment
income)

   

Distributions

(from
capital

gains)

   

Total

dividends

and

distributions

   

Net asset

value,

end
of period

     Total
return
    Net assets,
end of period
(in millions)
   

Ratio of

expenses

to average

net assets

   

Ratio of
net income

(loss)

to average
net assets

 

Global Growth Fund

 

Class 1:

                          

6/30/172,3

     $24.05        $.20       $4.31       $4.51       $(.03     $(.84)       $(.87     $27.69        18.75 %4      $1,866       .55 %5      1.53 %5 

12/31/16

     26.39        .25       (.14     .11       (.29     (2.16)       (2.45     24.05        .87       1,630       .56       1.00  

12/31/15

     27.48        .25       1.80       2.05       (.35     (2.79)       (3.14     26.39        7.24       1,626       .55       .90  

12/31/14

     30.11        .31 6      .40       .71       (.40     (2.94)       (3.34     27.48        2.52       1,558       .55       1.08 6 

12/31/13

     23.58        .31       6.62       6.93       (.40           (.40     30.11        29.51       1,508       .55       1.17  

12/31/12

     19.40        .30       4.14       4.44       (.26           (.26     23.58        22.89       1,466       .56       1.38  

Class 1A:

                          

6/30/172,3,7

     24.50        .24       3.80       4.04       (.03     (.84     (.87     27.67        16.49 4      1       .38 4      .87 4 

Class 2:

                          

6/30/172,3

     23.85        .16       4.27       4.43       (.02     (.84     (.86)       27.42        18.57 4      3,850      
.80

5 
    1.27 5 

12/31/16

     26.19        .18       (.14     .04       (.22     (2.16     (2.38     23.85        .62       3,483       .81       .76  

12/31/15

     27.30        .18       1.78       1.96       (.28     (2.79     (3.07     26.19        6.94       3,817       .80       .66  

12/31/14

     29.92        .24 6      .41       .65       (.33     (2.94     (3.27     27.30        2.31       3,992       .80       .85 6 

12/31/13

     23.44        .24       6.58       6.82       (.34           (.34     29.92        29.18       4,379       .80       .91  

12/31/12

     19.29        .24       4.11       4.35       (.20           (.20     23.44        22.56       3,723       .81       1.13  

Class 4:

                          

6/30/172,3

     23.81        .14       4.26       4.40       (.02     (.84     (.86)       27.35        18.44 4      134       1.05 5      1.07 5 

12/31/16

     26.16        .12       (.14     (.02     (.17     (2.16     (2.33     23.81        .37       94       1.06       .50  

12/31/15

     27.34        .09       1.81       1.90       (.29     (2.79     (3.08     26.16        6.69       91       1.05       .34  

12/31/14

     30.07        .07 6      .50       .57       (.36     (2.94     (3.30     27.34        2.01       19       1.05       .26 6 

12/31/13

     23.58        .13       6.77       6.90       (.41           (.41     30.07        29.36       1       1.06       .43  

12/31/122,8

     23.53        .01       .29       .30       (.25           (.25     23.58        1.27 4,9      10      .02 4,9      .04 4,9 

Global Small Capitalization Fund

 

Class 1:

                          

6/30/172,3

     $20.24        $.08       $2.52       $2.60       $ (.10     $ –       $(.10)       $22.74        12.82 %4      $1,526       .73 %5      .72 %5 

12/31/16

     24.41        .12       .17       .29       (.11     (4.35     (4.46     20.24        2.35       1,532       .74       .57  

12/31/15

     26.09        .04       .36       .40             (2.08     (2.08     24.41        .50       1,706       .73       .15  

12/31/14

     25.69        .09       .52       .61       (.09     (.12     (.21     26.09        2.36       1,411       .74       .34  

12/31/13

     20.16        .04       5.70       5.74       (.21           (.21     25.69        28.60       1,241       .74       .17  

12/31/12

     17.28        .09       3.09       3.18       (.30           (.30     20.16        18.51       1,019       .75       .46  

Class 1A:

                          

6/30/172,3,7

     20.70        .11       2.02       2.13       (.10           (.10     22.73        10.26 4      10      .45 4      .49 4 

Class 2:

                          

6/30/172,3

     19.72        .05       2.46       2.51       (.09           (.09     22.14        12.71 4      2,447       .98 5      .46 5 

12/31/16

     23.90        .07       .15       .22       (.05     (4.35     (4.40     19.72        2.10       2,303       .99       .31  

12/31/15

     25.64        (.03     .37       .34             (2.08     (2.08     23.90        .27       2,492       .98       (.10

12/31/14

     25.25        .03       .51       .54       (.03     (.12     (.15     25.64        2.12       2,738       .99       .10  

12/31/13

     19.86        (.01     5.60       5.59       (.20           (.20     25.25        28.28       2,955       .99       (.05

12/31/12

     17.04        .04       3.03       3.07       (.25           (.25     19.86        18.18       2,603       1.00       .20  

Class 4:

                          

6/30/172,3

     19.91        .03       2.47       2.50       (.08           (.08     22.33        12.57 4      61       1.23 5      .26 5 

12/31/16

     24.11        .01       .16       .17       (.02     (4.35     (4.37     19.91        1.85       42       1.24       .03  

12/31/15

     25.92        (.10     .37       .27             (2.08     (2.08     24.11        (.02     34       1.23       (.37

12/31/14

     25.57        (.05     .54       .49       (.02     (.12     (.14     25.92        1.88       12       1.24       (.17

12/31/13

     20.16        (.12     5.74       5.62       (.21           (.21     25.57        28.01       4       1.24       (.50

12/31/122,8

     19.68        .01       .54       .55       (.07           (.07     20.16        2.80 4,9      10      .04 4,9      .04 4,9 

 

186   American Funds Insurance Series


 

            Income (loss) from
investment operations1
     Dividends and distributions                                 

Period ended

   Net asset
value,
beginning
of period
     Net
investment
income
(loss)
   

Net gains
(losses) on
securities

(both
realized and
unrealized)

     Total from
investment
operations
     Dividends
(from net
investment
income)
    Distributions
(from capital
gains)
    Total
dividends
and
distributions
   

Net asset
value,
end

of period

     Total
return
    Net assets,
end of period
(in millions)
    Ratio of
expenses
to average
net assets
   

Ratio of
net income
(loss)

to average
net assets

 

Growth Fund

 

Class 1:

                            

6/30/172,3

     $67.29        $.33       $9.91        $10.24        $(.12     $(7.33     $(7.45     $70.08        15.15 %4      $7,757       .35 %5      .90 %5 

12/31/16

     68.02        .67       5.40        6.07        (.67     (6.13     (6.80     67.29        9.77       6,931       .35       1.03  

12/31/15

     80.15        .64       5.08        5.72        (.61     (17.24     (17.85     68.02        7.12       6,796       .35       .87  

12/31/14

     78.54        .88 6      5.79        6.67        (1.16     (3.90     (5.06     80.15        8.78       7,118       .35       1.12 6 

12/31/13

     60.90        .64       17.84        18.48        (.84           (.84     78.54        30.43       7,003       .35       .93  

12/31/12

     52.07        .63       8.83        9.46        (.63           (.63     60.90        18.19       7,116       .35       1.10  

Class 1A:

                            

6/30/172,3,7

     68.84        .38       8.26        8.64        (.12     (7.33     (7.45     70.03        12.48 4      1       .28 4      .51 4 

Class 2:

                            

6/30/172,3

     66.92        .23       9.86        10.09        (.09     (7.33     (7.42     69.59        15.00 4      15,059       .60 5      .65 5 

12/31/16

     67.69        .51       5.36        5.87        (.51     (6.13     (6.64     66.92        9.49       13,978       .60       .78  

12/31/15

     79.84        .46       5.06        5.52        (.43     (17.24     (17.67     67.69        6.86       14,414       .60       .62  

12/31/14

     77.94        .68 6      5.75        6.43        (.63     (3.90     (4.53     79.84        8.51       15,413       .60       .87 6 

12/31/13

     60.45        .47       17.68        18.15        (.66           (.66     77.94        30.11       16,334       .60       .68  

12/31/12

     51.68        .47       8.77        9.24        (.47           (.47     60.45        17.89       14,911       .60       .83  

Class 3:

                            

6/30/172,3

     67.67        .26       9.97        10.23        (.10     (7.33     (7.43     70.47        15.05 4      201       .53 5      .72 5 

12/31/16

     68.37        .56       5.42        5.98        (.55     (6.13     (6.68     67.67        9.56       183       .53       .85  

12/31/15

     80.47        .51       5.11        5.62        (.48     (17.24     (17.72     68.37        6.92       194       .53       .69  

12/31/14

     78.62        .74 6      5.79        6.53        (.78     (3.90     (4.68     80.47        8.58       208       .53       .94 6 

12/31/13

     60.97        .52       17.84        18.36        (.71           (.71     78.62        30.20       216       .53       .75  

12/31/12

     52.13        .53       8.83        9.36        (.52           (.52     60.97        17.97       189       .53       .92  

Class 4:

                            

6/30/172,3

     66.41        .15       9.77        9.92        (.07     (7.33     (7.40     68.93        14.86 4      575       .85 5      .41 5 

12/31/16

     67.26        .34       5.32        5.66        (.38     (6.13     (6.51     66.41        9.22       458       .85       .53  

12/31/15

     79.74        .29       5.02        5.31        (.55     (17.24     (17.79     67.26        6.59       394       .85       .42  

12/31/14

     78.32        .37 6      5.87        6.24        (.92     (3.90     (4.82     79.74        8.25       24       .85       .47 6 

12/31/13

     60.90        .29       17.90        18.19        (.77           (.77     78.32        29.96       5       .85       .40  

12/31/122,8

     60.55        .03       .78        .81        (.46           (.46     60.90        1.33 4,9      10      .02 4,9      .05 4,9 

See end of tables for footnotes.

 

American Funds Insurance Series   187


Financial highlights (continued)

 

            Income (loss) from
investment operations1
    Dividends and distributions                                 
Period ended    Net asset
value,
beginning
of period
     Net
investment
income
(loss)
    Net gains
(losses) on
securities
(both
realized and
unrealized)
    Total from
investment
operations
    Dividends
(from net
investment
income)
    Distributions
(from capital
gains)
    Total
dividends
and
distributions
    Net asset
value,
end
of period
     Total
return
    Net assets,
end of period
(in millions)
    Ratio of
expenses
to average
net assets
    Ratio of
net income
(loss)
to average
net assets
 

International Fund

 

Class 1:

                          

6/30/172,3

     $16.82        $.18       $2.97       $3.15       $(.07     $(.23     $(.30     $19.67        18.71 %4      $4,487       .53 %5      1.98 %5 

12/31/16

     18.08        .27       .30       .57       (.28     (1.55     (1.83     16.82        3.78       3,652       .54       1.57  

12/31/15

     20.35        .29       (1.03     (.74     (.35     (1.18     (1.53     18.08        (4.25     3,427       .54       1.41  

12/31/14

     21.22        .30       (.81     (.51     (.36           (.36     20.35        (2.41     3,282       .54       1.43  

12/31/13

     17.68        .27       3.59       3.86       (.32           (.32     21.22        21.91       3,324       .54       1.41  

12/31/12

     15.21        .30       2.47       2.77       (.30           (.30     17.68        18.21       3,618       .54       1.81  

Class 1A:

                          

6/30/172,3,7

     17.17        .17       2.61       2.78       (.07     (.23     (.30     19.65        16.17 4      10      .36 4      .90 4 

Class 2:

                          

6/30/172,3

     16.76        .16       2.95       3.11       (.06     (.23     (.29     19.58        18.55 4      4,165       .78 5      1.72 5 

12/31/16

     18.02        .23       .30       .53       (.24     (1.55     (1.79     16.76        3.53       3,710       .79       1.35  

12/31/15

     20.29        .24       (1.03     (.79     (.30     (1.18     (1.48     18.02        (4.53     3,978       .79       1.17  

12/31/14

     21.15        .25       (.81     (.56     (.30           (.30     20.29        (2.65     4,374       .79       1.19  

12/31/13

     17.62        .22       3.58       3.80       (.27           (.27     21.15        21.64       5,916       .79       1.15  

12/31/12

     15.16        .26       2.45       2.71       (.25           (.25     17.62        17.91       5,465       .79       1.57  

Class 3:

                          

6/30/172,3

     16.85        .16       2.98       3.14       (.06     (.23     (.29     19.70        18.64 4      30       .71 5      1.79 5 

12/31/16

     18.11        .24       .30       .54       (.25     (1.55     (1.80     16.85        3.57       27       .72       1.42  

12/31/15

     20.38        .25       (1.03     (.78     (.31     (1.18     (1.49     18.11        (4.44     32       .72       1.24  

12/31/14

     21.24        .27       (.82     (.55     (.31           (.31     20.38        (2.56     38       .72       1.28  

12/31/13

     17.70        .23       3.59       3.82       (.28           (.28     21.24        21.67       46       .72       1.22  

12/31/12

     15.23        .27       2.47       2.74       (.27           (.27     17.70        17.97       44       .72       1.65  

Class 4:

                          

6/30/172,3

     16.64        .14       2.94       3.08       (.06     (.23     (.29     19.43        18.48 4      98       1.03 5      1.51 5 

12/31/16

     17.93        .18       .29       .47       (.21     (1.55     (1.76     16.64        3.21       66       1.04       1.03  

12/31/15

     20.23        .17       (1.00     (.83     (.29     (1.18     (1.47     17.93        (4.75     46       1.04       .88  

12/31/14

     21.16        .07       (.68     (.61     (.32           (.32     20.23        (2.88     18       1.04       .31  

12/31/13

     17.68        (.01     3.79       3.78       (.30           (.30     21.16        21.48       2       1.04       (.07

12/31/122,8

     17.79        .01       .16       .17       (.28           (.28     17.68        .98 4,9      10      .02 4,9      .05 4,9 

New World Fund

 

Class 1:

                          

6/30/172,3

     $19.72        $.17       $2.71       $2.88       $(.04     $    –       $(.04     $22.56        14.59 %4      $1,841       .75 %5      1.55 %5 

12/31/16

     18.87        .24       .81       1.05       (.20           (.20     19.72        5.59       1,743       .78       1.25  

12/31/15

     20.72        .19       (.71     (.52     (.17     (1.16     (1.33     18.87        (2.96     1,562       .79       .92  

12/31/14

     25.08        .29 6      (1.92     (1.63     (.29     (2.44     (2.73     20.72        (7.63     1,433       .78       1.23 6 

12/31/13

     22.93        .34       2.31       2.65       (.39     (.11     (.50     25.08        11.66       1,388       .78       1.45  

12/31/12

     19.65        .33       3.23       3.56       (.28           (.28     22.93        18.13       1,140       .79       1.54  

Class 1A:

                          

6/30/172,3,7

     20.14        .21       2.23       2.44       (.04           (.04     22.54        12.10 4      10      .46 4      .95 4 

Class 2:

                          

6/30/172,3

     19.54        .14       2.69       2.83       (.03           (.03     22.34        14.48 4      990       1.00 5      1.31 5 

12/31/16

     18.71        .19       .79       .98       (.15           (.15     19.54        5.26       911       1.03       1.00  

12/31/15

     20.54        .14       (.69     (.55     (.12     (1.16     (1.28     18.71        (3.14     961       1.04       .68  

12/31/14

     24.88        .24 6      (1.91     (1.67     (.23     (2.44     (2.67     20.54        (7.87     1,084       1.03       1.01 6 

12/31/13

     22.75        .28       2.29       2.57       (.33     (.11     (.44     24.88        11.38       1,307       1.03       1.22  

12/31/12

     19.50        .28       3.19       3.47       (.22           (.22     22.75        17.82       1,378       1.04       1.31  

Class 4:

                          

6/30/172,3

     19.51        .12       2.67       2.79       (.02           (.02     22.28        14.32 4      321       1.25 5      1.12 5 

12/31/16

     18.69        .14       .80       .94       (.12           (.12     19.51        5.04       240       1.28       .75  

12/31/15

     20.56        .08       (.68     (.60     (.11     (1.16     (1.27     18.69        (3.37     171       1.29       .39  

12/31/14

     24.99        .09 6      (1.83     (1.74     (.25     (2.44     (2.69     20.56        (8.13     64       1.28       .40 6 

12/31/13

     22.93        .14       2.41       2.55       (.38     (.11     (.49     24.99        11.20       8       1.29       .56  

12/31/122,8

     22.83        .01       .35       .36       (.26           (.26     22.93        1.58 4,9      10      .04 4,9      .04 4,9 

 

188   American Funds Insurance Series


            Income (loss) from
investment operations1
    Dividends and distributions                                 
Period ended    Net asset
value,
beginning
of period
     Net
investment
income
(loss)
    Net gains
(losses) on
securities
(both
realized and
unrealized)
    Total from
investment
operations
    Dividends
(from net
investment
income)
    Distributions
(from capital
gains)
    Total
dividends
and
distributions
    Net asset
value,
end
of period
     Total
return
    Net assets,
end of period
(in millions)
    Ratio of
expenses
to average
net assets
   

Ratio of
net income
(loss)

to average
net assets

 

Blue Chip Income and Growth Fund

 

Class 1:

                          

6/30/172,3

     $13.53        $.16       $.63       $.79       $(.05     $(.53     $(.58     $13.74        5.82 %4      $5,270       .41 %5      2.26 %5 

12/31/16

     12.62        .31       1.97       2.28       (.29     (1.08     (1.37     13.53        19.06       5,099       .41       2.39  

12/31/15

     14.69        .31       (.64     (.33     (.29     (1.45     (1.74     12.62        (2.72     3,638       .41       2.23  

12/31/14

     13.12        .46 6      1.59       2.05       (.48           (.48     14.69        15.69       3,542       .42       3.31 6 

12/31/13

     10.05        .27       3.06       3.33       (.26           (.26     13.12        33.26       2,814       .42       2.27  

12/31/12

     9.00        .24       1.04       1.28       (.23           (.23     10.05        14.18       1,357       .43       2.41  

Class 1A:

                          

6/30/172,3,7

     13.75        .13       .44       .57       (.05     (.53     (.58     13.74        4.05 4      10      .29 4      .92 4 

Class 2:

                          

6/30/172,3

     13.39        .14       .64       .78       (.05     (.53     (.58     13.59        5.76 4      3,435       .66 5      2.01 5 

12/31/16

     12.51        .28       1.94       2.22       (.26     (1.08     (1.34     13.39        18.70       3,412       .66       2.16  

12/31/15

     14.57        .27       (.62     (.35     (.26     (1.45     (1.71     12.51        (2.93     3,228       .66       1.97  

12/31/14

     13.02        .44 6      1.55       1.99       (.44           (.44     14.57        15.36       3,722       .67       3.14 6 

12/31/13

     9.97        .23       3.05       3.28       (.23           (.23     13.02        33.00       3,755       .67       2.03  

12/31/12

     8.93        .21       1.03       1.24       (.20           (.20     9.97        13.88       3,382       .68       2.17  

Class 4:

                          

6/30/172,3

     13.39        .12       .62       .74       (.04     (.53     (.57     13.56        5.52 4      175       .91 5      1.75 5 

12/31/16

     12.53        .24       1.96       2.20       (.26     (1.08     (1.34     13.39        18.49       132       .91       1.81  

12/31/15

     14.63        .24       (.63     (.39     (.26     (1.45     (1.71     12.53        (3.21     32       .91       1.75  

12/31/14

     13.12        .34 6      1.63       1.97       (.46           (.46     14.63        15.13       9       .92       2.33 6 

12/31/13

     10.05        .18       3.15       3.33       (.26           (.26     13.12        33.27       10      .86       1.39  

12/31/122,8

     10.20        .01       .03       .04       (.19           (.19     10.05        .38 4,9      10      .02 4,9      .10 4,9 

Global Growth and Income Fund

 

Class 1:

                          

6/30/172,3

     $13.02        $.20       $1.74       $1.94       $(.05     $(.26)       $(.31     $14.65        14.88 %4      $410       .62 %5      2.89 %5 

12/31/16

     12.35        .28       .66       .94       (.27           (.27     13.02        7.61       571       .63       2.18  

12/31/15

     12.78        .36       (.50     (.14     (.29           (.29     12.35        (1.14     293       .64       2.79  

12/31/14

     12.53        .43 6      .31       .74       (.49           (.49     12.78        6.00       200       .63       3.34 6 

12/31/13

     10.56        .39       2.00       2.39       (.42           (.42     12.53        22.81       206       .62       3.35  

12/31/12

     9.20        .25       1.39       1.64       (.28           (.28     10.56        17.93       180       .62       2.56  

Class 1A:

                          

6/30/172,3,7

     13.21        .20       1.55       1.75       (.05     (.26     (.31     14.65        13.23 4,9      10      .29 4,9      1.43 4,9 

Class 2:

                          

6/30/172,3

     13.00        .18       1.73       1.91       (.04     (.26     (.30     14.61        14.70 4      1,500       .87 5      2.65 5 

12/31/16

     12.33        .25       .65       .90       (.23           (.23     13.00        7.34       1,405       .88       1.98  

12/31/15

     12.75        .22       (.39     (.17     (.25           (.25     12.33        (1.34     1,479       .89       1.73  

12/31/14

     12.51        .41 6      .29       .70       (.46           (.46     12.75        5.64       1,685       .88       3.22 6 

12/31/13

     10.54        .36       2.00       2.36       (.39           (.39     12.51        22.54       1,822       .87       3.09  

12/31/12

     9.19        .23       1.38       1.61       (.26           (.26     10.54        17.56       1,837       .87       2.31  

Class 4:

                          

6/30/172,3

     12.89        .17       1.71       1.88       (.04     (.26     (.30     14.47        14.58 4      25       1.12 5      2.49 5 

12/31/16

     12.26        .21       .65       .86       (.23           (.23     12.89        7.04       16       1.13       1.63  

12/31/15

     12.71        .17       (.37     (.20     (.25           (.25     12.26        (1.60     5       1.14       1.32  

12/31/14

     12.50        .30 6      .37       .67       (.46           (.46     12.71        5.41       1       1.13       2.30 6 

12/31/13

     10.55        .28       2.09       2.37       (.42           (.42     12.50        22.60       1       1.12       2.27  

12/31/122,8

     10.64        .01       .13       .14       (.23           (.23     10.55        1.27 4,9      10      .03 4,9      .08 4,9 

See end of tables for footnotes.

 

American Funds Insurance Series   189


Financial highlights (continued)

 

            Income (loss) from
investment operations1
    Dividends and distributions                                 
Period ended    Net asset
value,
beginning
of period
     Net
investment
income
(loss)
    Net gains
(losses) on
securities
(both
realized and
unrealized)
    Total from
investment
operations
    Dividends
(from net
investment
income)
    Distributions
(from capital
gains)
    Total
dividends
and
distributions
    Net asset
value,
end
of period
    

Total

return

    Net assets,
end of period
(in millions)
    Ratio of
expenses
to average
net assets
   

Ratio of
net income
(loss)

to average
net assets

 

Growth-Income Fund

 

Class 1:

                          

6/30/172,3

   $ 44.41      $ .39     $ 4.02     $ 4.41     $ (.14   $ (3.11   $ (3.25   $ 45.57        9.90 %4    $ 14,187       .28 %5      1.68 %5 

12/31/16

     45.40        .79       4.09       4.88       (.75     (5.12     (5.87     44.41        11.80       12,588       .29       1.79  

12/31/15

     52.76        .79       .37       1.16       (.75     (7.77     (8.52     45.40        1.72       10,747       .29       1.59  

12/31/14

     50.72        .81       4.57       5.38       (.80     (2.54     (3.34     52.76        10.91       10,812       .29       1.56  

12/31/13

     38.48        .66       12.31       12.97       (.73           (.73     50.72        33.82       9,857       .29       1.49  

12/31/12

     33.27        .66       5.25       5.91       (.70           (.70     38.48        17.79       9,782       .29       1.79  

Class 1A:

                          

6/30/172,3,7

     45.39        .32       3.09       3.41       (.14     (3.11     (3.25     45.55        7.48 4      10      .23 4      .68 4 

Class 2:

                          

6/30/172,3

     44.00        .33       3.98       4.31       (.12     (3.11     (3.23     45.08        9.77 4      13,333       .53 5      1.43 5 

12/31/16

     45.04        .67       4.05       4.72       (.64     (5.12     (5.76     44.00        11.51       12,854       .54       1.54  

12/31/15

     52.41        .66       .37       1.03       (.63     (7.77     (8.40     45.04        1.45       12,895       .54       1.34  

12/31/14

     50.40        .67       4.55       5.22       (.67     (2.54     (3.21     52.41        10.63       14,337       .54       1.31  

12/31/13

     38.24        .55       12.23       12.78       (.62           (.62     50.40        33.50       14,980       .54       1.25  

12/31/12

     33.07        .56       5.22       5.78       (.61           (.61     38.24        17.48       13,403       .54       1.53  

Class 3:

                          

6/30/172,3

     44.47        .35       4.03       4.38       (.12     (3.11     (3.23     45.62        9.83 4      160       .46 5      1.50 5 

12/31/16

     45.46        .71       4.09       4.80       (.67     (5.12     (5.79     44.47        11.59       156       .47       1.61  

12/31/15

     52.82        .70       .37       1.07       (.66     (7.77     (8.43     45.46        1.53       161       .47       1.41  

12/31/14

     50.77        .71       4.59       5.30       (.71     (2.54     (3.25     52.82        10.71       185       .47       1.38  

12/31/13

     38.52        .58       12.32       12.90       (.65           (.65     50.77        33.58       193       .47       1.32  

12/31/12

     33.30        .59       5.26       5.85       (.63           (.63     38.52        17.59       168       .47       1.60  

Class 4:

                          

6/30/172,3

     43.73        .27       3.95       4.22       (.10     (3.11     (3.21     44.74        9.64 4      577       .78 5      1.18 5 

12/31/16

     44.82        .56       4.02       4.58       (.55     (5.12     (5.67     43.73        11.25       495       .79       1.29  

12/31/15

     52.39        .58       .33       .91       (.71     (7.77     (8.48     44.82        1.21       410       .79       1.25  

12/31/14

     50.56        .58       4.51       5.09       (.72     (2.54     (3.26     52.39        10.34       30       .79       1.11  

12/31/13

     38.47        .45       12.33       12.78       (.69           (.69     50.56        33.32       3       .79       .96  

12/31/122,8

     38.65        .01       .39       .40       (.58           (.58     38.47        1.02 4,9      10      .01 4,9      .03 4,9 

International Growth and Income Fund

 

Class 1:

                          

6/30/172,3

   $ 14.48      $ .31     $ 1.94     $ 2.25     $ (.03   $     $ (.03   $ 16.70        15.54 %4    $ 1,067       .66 %5      3.98 %5 

12/31/16

     14.72        .43       (.19     .24       (.42     (.06     (.48     14.48        1.71       820       .68       2.93  

12/31/15

     16.27        .42       (1.25     (.83     (.38     (.34     (.72     14.72        (5.34     707       .68       2.60  

12/31/14

     17.48        .58 6      (1.09     (.51     (.53     (.17     (.70     16.27        (2.93     740       .68       3.32 6 

12/31/13

     15.29        .44       2.50       2.94       (.47     (.28     (.75     17.48        19.39       696       .69       2.63  

12/31/12

     13.40        .37       1.89       2.26       (.37           (.37     15.29        16.84       203       .74       2.50  

Class 1A:

                          

6/30/172,3,7

     14.69        .33       1.71       2.04       (.03           (.03     16.70        13.89 4,9      10      .33 4,9      2.09 4,9 

Class 2:

                          

6/30/172,3

     14.43        .29       1.94       2.23       (.02           (.02     16.64        15.48 4      264       .91 5      3.76 5 

12/31/16

     14.68        .40       (.21     .19       (.38     (.06     (.44     14.43        1.44       244       .93       2.72  

12/31/15

     16.22        .38       (1.24     (.86     (.34     (.34     (.68     14.68        (5.60     254       .93       2.32  

12/31/14

     17.43        .56 6      (1.10     (.54     (.50     (.17     (.67     16.22        (3.15     248       .93       3.21 6 

12/31/13

     15.25        .38       2.51       2.89       (.43     (.28     (.71     17.43        19.09       257       .94       2.28  

12/31/12

     13.37        .40       1.81       2.21       (.33           (.33     15.25        16.50       225       .99       2.77  

Class 4:

                          

6/30/172,3

     14.38        .28       1.92       2.20       (.02           (.02     16.56        15.29 4      47       1.16 5      3.57 5 

12/31/16

     14.63        .36       (.19     .17       (.36     (.06     (.42     14.38        1.18       37       1.18       2.43  

12/31/15

     16.19        .33       (1.23     (.90     (.32     (.34     (.66     14.63        (5.82     32       1.18       2.02  

12/31/14

     17.45        .26 6      (.85     (.59     (.50     (.17     (.67     16.19        (3.39     20       1.18       1.52 6 

12/31/13

     15.29        .03       2.87       2.90       (.46     (.28     (.74     17.45        19.16       1       1.19       .18  

12/31/122,8

     15.56        .01       .09       .10       (.37           (.37     15.29        .62 4,9      10      .04 4,9      .07 4,9 

 

190   American Funds Insurance Series


            Income (loss) from
investment operations1
    Dividends and distributions                                 
Period ended    Net asset
value,
beginning
of period
     Net
investment
income
(loss)
     Net gains
(losses) on
securities
(both
realized and
unrealized)
    Total from
investment
operations
    Dividends
(from net
investment
income)
    Distributions
(from capital
gains)
    Total
dividends
and
distributions
    Net asset
value,
end
of period
     Total
return
    Net assets,
end of period
(in millions)
    Ratio of
expenses
to average
net assets
    Ratio of
net income
(loss)
to average
net assets
 

Capital Income Builder

 

Class 1:

                           

6/30/172,3

     $  9.46        $.20        $  .58       $.78       $(.15     $      –       $  (.15     $10.09        8.27 %4      $     202       .53 %5      4.07 %5 

12/31/16

     9.40        .32        .07       .39       (.33           (.33     9.46        4.17       156       .54       3.39  

12/31/15

     9.81        .28        (.40     (.12     (.29           (.29     9.40        (1.23     80       .56       2.88  

12/31/142,11

     10.00        .19        (.18     .01       (.19     (.01     (.20     9.81        .12 4      20       .56 5      2.87 5 

Class 1A:

                           

6/30/172,3,7

     9.57        .21        .45       .66       (.15           (.15     10.08        6.88 4      10      .33 4      2.09 4 

Class 2:

                           

6/30/172,3

     9.46        .20        .57       .77       (.14           (.14     10.09        8.15 4      1       .78 5      4.13 5 

12/31/16

     9.40        .27        .11       .38       (.32           (.32     9.46        4.08       10      .80       2.82  

12/31/15

     9.81        .31        (.43     (.12     (.29           (.29     9.40        (1.23 )9      10      .46 9      3.12 9 

12/31/142,11

     10.00        .20        (.19     .01       (.19     (.01     (.20     9.81        .12 4,9      10      .47 5,9      2.94 5,9 

Class 4:

                           

6/30/172,3

     9.45        .17        .58       .75       (.13           (.13     10.07        7.92 4      299       1.03 5      3.53 5 

12/31/16

     9.38        .27        .08       .35       (.28           (.28     9.45        3.78       256       1.04       2.88  

12/31/15

     9.80        .25        (.42     (.17     (.25           (.25     9.38        (1.79     157       1.05       2.55  

12/31/142,11

     10.00        .14        (.16     (.02     (.17     (.01     (.18     9.80        (.21 )4      55       1.06 5      2.08 5 

Asset Allocation Fund

 

Class 1:

                           

6/30/172,3

     $21.68        $.22        $1.58       $1.80       $(.07     $(1.06     $(1.13     $22.35        8.28 %4      $15,067       .29 %5      1.99 %5 

12/31/16

     20.62        .42        1.54       1.96       (.39     (.51     (.90     21.68        9.69       13,008       .29       1.97  

12/31/15

     22.23        .40        (.02     .38       (.40     (1.59     (1.99     20.62        1.64       10,913       .29       1.85  

12/31/14

     22.49        .44        .81       1.25       (.39     (1.12     (1.51     22.23        5.66       11,997       .30       1.95  

12/31/13

     18.43        .35        4.07       4.42       (.36           (.36     22.49        24.04       10,515       .31       1.71  

12/31/12

     16.17        .37        2.28       2.65       (.39           (.39     18.43        16.44       7,199       .31       2.11  

Class 1A:

                           

6/30/172,3,7

     21.97        .26        1.24       1.50       (.07     (1.06     (1.13     22.34        6.81 4      2       .25 4      1.14 4 

Class 2:

                           

6/30/172,3

     21.49        .19        1.57       1.76       (.06     (1.06     (1.12     22.13        8.17 4      5,350       .54 5      1.73 5 

12/31/16

     20.45        .36        1.53       1.89       (.34     (.51     (.85     21.49        9.41       5,144       .54       1.72  

12/31/15

     22.06        .34        (.01     .33       (.35     (1.59     (1.94     20.45        1.40       5,008       .54       1.60  

12/31/14

     22.33        .37        .81       1.18       (.33     (1.12     (1.45     22.06        5.40       5,494       .55       1.69  

12/31/13

     18.31        .30        4.03       4.33       (.31           (.31     22.33        23.69       5,760       .56       1.47  

12/31/12

     16.06        .33        2.27       2.60       (.35           (.35     18.31        16.19       5,225       .56       1.86  

Class 3:

                           

6/30/172,3

     21.70        .20        1.59       1.79       (.07     (1.06     (1.13     22.36        8.20 4      37       .47 5      1.80 5 

12/31/16

     20.64        .38        1.54       1.92       (.35     (.51     (.86     21.70        9.49       35       .47       1.79  

12/31/15

     22.25        .36        (.02     .34       (.36     (1.59     (1.95     20.64        1.46       36       .47       1.67  

12/31/14

     22.51        .39        .81       1.20       (.34     (1.12     (1.46     22.25        5.47       40       .48       1.76  

12/31/13

     18.45        .32        4.06       4.38       (.32           (.32     22.51        23.81       42       .49       1.54  

12/31/12

     16.18        .34        2.29       2.63       (.36           (.36     18.45        16.28       38       .49       1.93  

Class 4:

                           

6/30/172,3

     21.43        .17        1.56       1.73       (.06     (1.06     (1.12     22.04        8.02 4      3,183       .79 5      1.49 5 

12/31/16

     20.40        .31        1.53       1.84       (.30     (.51     (.81     21.43        9.16       2,861       .79       1.47  

12/31/15

     22.11        .30        (.02     .28       (.40     (1.59     (1.99     20.40        1.14       2,414       .79       1.45  

12/31/14

     22.46        .34        .79       1.13       (.36     (1.12     (1.48     22.11        5.16       32       .80       1.55  

12/31/13

     18.43        .27        4.12       4.39       (.36           (.36     22.46        23.89       1       .79       1.22  

12/31/122,8

     18.52        .01        .21       .22       (.31           (.31     18.43        1.17 4,9      10      .01 4,9      .08 4,9 

See end of tables for footnotes.

 

American Funds Insurance Series   191


Financial highlights (continued)

 

            Income (loss) from
investment operations1
    Dividends and distributions                                 
Period ended    Net asset
value,
beginning
of period
     Net
investment
income
(loss)
    Net gains
(losses) on
securities
(both
realized and
unrealized)
   

Total from

investment
operations

   

Dividends

(from net

investment
income)

   

Distributions

(from
capital
gains)

   

Total
dividends

and

distributions

   

Net asset

value,

end

of period

    

Total

return

   

Net assets,

end of period
(in millions)

   

Ratio of

expenses

to average
net assets

   

Ratio of
net income
(loss)

to average

net assets

 

Global Balanced Fund

 

Class 1:

                          

6/30/172,3

     $11.08        $.12       $1.12       $1.24       $    –       $(.04     $(.04     $12.28        11.19 %4      $     76       .69 %5      2.09 %5 

12/31/16

     10.74        .19       .32       .51       (.17           (.17     11.08        4.73       64       .72       1.73  

12/31/15

     11.11        .20       (.28     (.08     (.14     (.15     (.29     10.74        (.69     47       .72       1.80  

12/31/14

     11.37        .25 6      (.03     .22       (.18     (.30     (.48     11.11        1.87       37       .71       2.14 6 

12/31/13

     10.34        .22       1.07       1.29       (.18     (.08     (.26     11.37        12.56       36       .70       2.05  

12/31/12

     9.35        .20       .98       1.18       (.19           (.19     10.34        12.58       32       .72       2.00  

Class 1A:

 

                  

6/30/172,3,7

     11.18        .12       1.02       1.14             (.04     (.04     12.28        10.20 4,9      10      .33 4,9      1.03 4,9 

Class 2:

                          

6/30/172,3

     11.06        .11       1.12       1.23             (.04     (.04     12.25        11.12 4      193       .94 5      1.83 5 

12/31/16

     10.72        .16       .32       .48       (.14           (.14     11.06        4.48       178       .97       1.48  

12/31/15

     11.09        .18       (.28     (.10     (.12     (.15     (.27     10.72        (.95     171       .97       1.60  

12/31/14

     11.35        .22 6      (.03     .19       (.15     (.30     (.45     11.09        1.63       179       .96       1.88 6 

12/31/13

     10.33        .20       1.06       1.26       (.16     (.08     (.24     11.35        12.23       156       .95       1.79  

12/31/12

     9.35        .17       .97       1.14       (.16           (.16     10.33        12.24       119       .97       1.76  

Class 4:

 

                  

6/30/172,3

     11.00        .10       1.11       1.21             (.04     (.04     12.17        11.00 4      21       1.19 5      1.67 5 

12/31/16

     10.69        .12       .33       .45       (.14           (.14     11.00        4.21       10       1.24       1.12  

12/31/15

     11.09        .06       (.17     (.11     (.14     (.15     (.29     10.69        (1.00     1       1.34       .58  

12/31/14

     11.35        .24 6      (.02     .22       (.18     (.30     (.48     11.09        1.88 9      10      .67 9      2.07 6,9 

12/31/13

     10.33        .22       1.06       1.28       (.18     (.08     (.26     11.35        12.49 9      10      .71 9      1.98 9 

12/31/122,8

     10.47        .01       .03       .04       (.18           (.18     10.33        .40 4,9      10      .03 4,9      .05 4,9 

Bond Fund

 

Class 1:

 

          

6/30/172,3

     $10.80        $.12       $.16       $.28       $(.06     $(.16     $(.22     $10.86        2.62 %4      $6,409       .38 %5      2.15 %5 

12/31/16

     10.70        .21       .14       .35       (.21     (.04     (.25     10.80        3.27       6,829       .38       1.91  

12/31/15

     11.08        .22       (.17     .05       (.21     (.22     (.43     10.70        .45       5,731       .38       1.95  

12/31/14

     10.73        .23       .37       .60       (.25     12      (.25     11.08        5.59       4,977       .39       2.03  

12/31/13

     11.29        .22       (.43     (.21     (.23     (.12     (.35     10.73        (1.89     4,506       .39       2.01  

12/31/12

     10.99        .25       .36       .61       (.31           (.31     11.29        5.58       3,917       .39       2.23  

Class 1A:

 

                  

6/30/172,3,7

     10.82        .10       .15       .25       (.06     (.16     (.22     10.85        2.34 4            .29 4      .96 4 

Class 2:

                          

6/30/172,3

     10.67        .10       .17       .27       (.06     (.16     (.22     10.72        2.51 4      3,972       .63 5      1.90 5 

12/31/16

     10.58        .18       .13       .31       (.18     (.04     (.22     10.67        2.95       3,959       .63       1.65  

12/31/15

     10.95        .18       (.15     .03       (.18     (.22     (.40     10.58        .28       4,135       .63       1.69  

12/31/14

     10.61        .20       .36       .56       (.22     12      (.22     10.95        5.28       4,565       .64       1.79  

12/31/13

     11.17        .19       (.43     (.24     (.20     (.12     (.32     10.61        (2.16     4,763       .64       1.76  

12/31/12

     10.87        .22       .36       .58       (.28           (.28     11.17        5.37       5,044       .64       1.97  

Class 4:

                          

6/30/172,3

     10.70        .09       .16       .25       (.06     (.16     (.22     10.73        2.29 4      122       .88 5      1.65 5 

12/31/16

     10.61        .15       .15       .30       (.17     (.04     (.21     10.70        2.80       102       .88       1.41  

12/31/15

     11.01        .16       (.16           (.18     (.22     (.40     10.61        (.08     59       .88       1.47  

12/31/14

     10.69        .16       .39       .55       (.23     12      (.23     11.01        5.15       29       .89       1.43  

12/31/13

     11.29        .17       (.43     (.26     (.22     (.12     (.34     10.69        (2.34     3       .89       1.58  

12/31/122,8

     11.55        .01       (.02     (.01     (.25           (.25     11.29        (.04 )4,9      10      .02 4,9      .10 4,9 

 

192   American Funds Insurance Series


            Income (loss) from
investment operations1
    Dividends and distributions                                 
Period ended    Net asset
value,
beginning
of period
     Net
investment
income
(loss)
     Net gains
(losses) on
securities
(both
realized and
unrealized)
    Total from
investment
operations
    Dividends
(from net
investment
income)
    Distributions
(from capital
gains)
    Total
dividends
and
distributions
    Net asset
value,
end
of period
    

Total

return

    Net assets,
end of period
(in millions)
    Ratio of
expenses
to average
net assets
    Ratio of
net income
(loss)
to average
net assets
 

Global Bond Fund

 

Class 1:

                           

6/30/172,3

     $11.22        $.14        $ .43       $ .57       $    –       $(.07     $(.07     $11.72        5.09 %4      $1,222       .57 %5      2.38 %5 

12/31/16

     11.01        .26        .06       .32       (.09     (.02     (.11     11.22        2.92       1,115       .57       2.26  

12/31/15

     11.77        .27        (.71     (.44     (.01     (.31     (.32     11.01        (3.75     1,032       .57       2.34  

12/31/14

     11.88        .29        (.08     .21       (.21     (.11     (.32     11.77        1.71       1,194       .57       2.35  

12/31/13

     12.32        .28        (.58     (.30           (.14     (.14     11.88        (2.40     1,093       .56       2.37  

12/31/12

     11.96        .28        .48       .76       (.29     (.11     (.40     12.32        6.43       959       .56       2.29  

Class 1A:

                           

6/30/172,3,7

     11.22        .13        .44       .57             (.07     (.07     11.72        5.09 4,9      10      .28 4,9      1.15 4,9 

Class 2:

                           

6/30/172,3

     11.14        .12        .43       .55             (.07     (.07     11.62        4.94 4      1,160       .82 5      2.12 5 

12/31/16

     10.93        .23        .07       .30       (.07     (.02     (.09     11.14        2.71       1,121       .82       2.01  

12/31/15

     11.72        .24        (.71     (.47     (.01     (.31     (.32     10.93        (4.07     1,208       .82       2.09  

12/31/14

     11.81        .26        (.09     .17       (.15     (.11     (.26     11.72        1.39       1,386       .82       2.11  

12/31/13

     12.27        .25        (.57     (.32           (.14     (.14     11.81        (2.58     1,496       .81       2.11  

12/31/12

     11.91        .25        .48       .73       (.26     (.11     (.37     12.27        6.19       1,664       .81       2.06  

Class 4:

                           

6/30/172,3

     11.08        .11        .43       .54             (.07     (.07     11.55        4.88 4      15       1.07 5      1.88 5 

12/31/16

     10.89        .20        .06       .26       (.05     (.02     (.07     11.08        2.42       12       1.07       1.76  

12/31/15

     11.70        .21        (.71     (.50     12      (.31     (.31     10.89        (4.27     6       1.07       1.86  

12/31/14

     11.87        .20        (.05     .15       (.21     (.11     (.32     11.70        1.16       4       1.09       1.66  

12/31/13

     12.31        .27        (.57     (.30           (.14     (.14     11.87        (2.41     10      .79       2.25  

12/31/122,8

     12.53        .01        (.04     (.03     (.19           (.19     12.31        (.28 )4,9      10      .02 4,9      .11 4,9 

See end of tables for footnotes.

 

American Funds Insurance Series   193


Financial highlights (continued)

 

            Income (loss) from
investment operations1
    Dividends and distributions                                 
Period ended    Net asset
value,
beginning
of period
     Net
investment
income
(loss)
    Net gains
(losses) on
securities
(both
realized and
unrealized)
    Total from
investment
operations
    Dividends
(from net
investment
income)
    Distributions
(from capital
gains)
    Total
dividends
and
distributions
    Net asset
value,
end
of period
    

Total

return

    Net assets,
end of period
(in millions)
    Ratio of
expenses
to average
net assets
    Ratio of
net income
(loss)
to average
net assets
 

High-Income Bond Fund

 

Class 1:

                          

6/30/172,3

     $10.18        $.31       $   .16       $  .47       $(.13     $    –       $(.13     $10.52        4.60 %4      $   741       .48 %5      6.00 %5 

12/31/16

     9.19        .61       1.02       1.63       (.64           (.64     10.18        17.83       949       .49       6.18  

12/31/15

     10.54        .64       (1.36     (.72     (.63           (.63     9.19        (6.94     1,017       .48       6.12  

12/31/14

     11.13        .67       (.59     .08       (.67           (.67     10.54        .80       1,017       .48       5.90  

12/31/13

     11.16        .75       .01       .76       (.79           (.79     11.13        6.89       856       .48       6.54  

12/31/12

     10.54        .81       .64       1.45       (.83           (.83     11.16        13.90       894       .48       7.25  

Class 1A:

                          

6/30/172,3,7

     10.28        .29       .08       .37       (.13           (.13     10.52        3.59 4      10      .34 4      2.78 4 

Class 2:

                          

6/30/172,3

     10.04        .29       .16       .45       (.13           (.13     10.36        4.43 4      798       .73 5      5.75 5 

12/31/16

     9.06        .58       1.01       1.59       (.61           (.61     10.04        17.69       799       .74       5.92  

12/31/15

     10.41        .60       (1.35     (.75     (.60           (.60     9.06        (7.30     765       .73       5.85  

12/31/14

     10.99        .63       (.57     .06       (.64           (.64     10.41        .63       929       .73       5.67  

12/31/13

     11.03        .71       .01       .72       (.76           (.76     10.99        6.60       1,061       .73       6.29  

12/31/12

     10.42        .78       .63       1.41       (.80           (.80     11.03        13.70       1,135       .73       7.00  

Class 3:

                          

6/30/172,3

     10.22        .30       .16       .46       (.13           (.13     10.55        4.46 4      13       .66 5      5.82 5 

12/31/16

     9.22        .59       1.03       1.62       (.62           (.62     10.22        17.68       13       .67       5.99  

12/31/15

     10.57        .62       (1.37     (.75     (.60           (.60     9.22        (7.13     12       .66       5.91  

12/31/14

     11.16        .65       (.59     .06       (.65           (.65     10.57        .59       16       .66       5.74  

12/31/13

     11.18        .73       .02       .75       (.77           (.77     11.16        6.77       19       .66       6.36  

12/31/12

     10.56        .80       .63       1.43       (.81           (.81     11.18        13.67       21       .66       7.07  

Class 4:

                          

6/30/172,3

     10.79        .30       .16       .46       (.12           (.12     11.13        4.29 4      22       .98 5      5.48 5 

12/31/16

     9.73        .60       1.07       1.67       (.61           (.61     10.79        17.29       21       .99       5.55  

12/31/15

     11.05        .62       (1.43     (.81     (.51           (.51     9.73        (7.42     1       .98       5.51  

12/31/14

     11.12        .63       (.59     .04       (.11           (.11     11.05        .35       10      .98       5.49  

12/31/13

     11.16        .67       .08       .75       (.79           (.79     11.12        6.81       10      .93       5.82  

12/31/122,8

     11.80        .04       12      .04       (.68           (.68     11.16        .34 4,9      10      .02 4,9      .35 4,9 

Mortgage Fund

 

Class 1:

                          

6/30/172,3

     $10.56        $.08       $   .08       $  .16       $(.03     $(.07     $(.10     $10.62        1.51 %4      $   273       .44 %5      1.48 %5 

12/31/16

     10.61        .15       .11       .26       (.20     (.11     (.31     10.56        2.50       269       .46       1.39  

12/31/15

     10.70        .10       .13       .23       (.18     (.14     (.32     10.61        2.09       272       .45       .89  

12/31/14

     10.23        .12       .45       .57       (.10           (.10     10.70        5.54       292       .45       1.12  

12/31/13

     10.47        .04       (.18     (.14     (.08     (.02     (.10     10.23        (1.41     198       .44       .35  

12/31/12

     10.37        .01       .25       .26       (.06     (.10     (.16     10.47        2.57       87       .45       .08  

Class 1A:

                          

6/30/172,3,7

     10.55        .07       .09       .16       (.03     (.07     (.10     10.61        1.52 4      10      .32 4      .68 4 

Class 2:

                          

6/30/172,3

     10.54        .06       .09       .15       (.03     (.07     (.10     10.59        1.37 4      62       .69 5      1.23 5 

12/31/16

     10.59        .12       .12       .24       (.18     (.11     (.29     10.54        2.25       63       .71       1.14  

12/31/15

     10.68        .07       .13       .20       (.15     (.14     (.29     10.59        1.86       59       .70       .65  

12/31/14

     10.22        .10       .44       .54       (.08           (.08     10.68        5.23       52       .70       .91  

12/31/13

     10.46        12      (.17     (.17     (.05     (.02     (.07     10.22        (1.68     49       .69       (.02

12/31/12

     10.36        (.02     .26       .24       (.04     (.10     (.14     10.46        2.38       49       .70       (.16

Class 4:

                          

6/30/172,3

     10.48        .05       .08       .13       (.02     (.07     (.09     10.52        1.25 4      10       .94 5      .98 5 

12/31/16

     10.52        .09       .12       .21       (.14     (.11     (.25     10.48        2.01       8       .96       .86  

12/31/15

     10.65        .04       .14       .18       (.17     (.14     (.31     10.52        1.62       11       .97       .37  

12/31/14

     10.23        .05       .46       .51       (.09           (.09     10.65        4.98       1       .94       .47  

12/31/13

     10.47        .02       (.16     (.14     (.08     (.02     (.10     10.23        (1.41 )9      10      .38 9      .23 9 

12/31/122,8

     10.60        12      .01       .01       (.06     (.08     (.14     10.47        .09 4,9      10      .02 4,9      .04 4,9 

 

194   American Funds Insurance Series


            Income (loss) from
investment operations1
                                
Period ended    Net asset
value,
beginning
of period
     Net
investment
income
(loss)
    Net gains
(losses) on
securities
(both
realized and
unrealized)
    Total from
investment
operations
    Net asset
value,
end
of period
    

Total

return

    Net assets,
end of period
(in millions)
    Ratio of
expenses
to average
net assets
   

Ratio of
net income
(loss)

to average
net assets

 

Ultra-Short Bond Fund

 

Class 1:

                    

6/30/172,3

     $11.27        $ .03       $    – 12      $ .03       $11.30        .27 %4      $  32       .34 %5      .50 %5 

12/31/1613

     11.26        .01       12      .01       11.27        .09       37       .35       .11  

12/31/15

     11.28        (.03     .01       (.02     11.26        (.18     39       .34       (.24

12/31/14

     11.31        (.03           (.03     11.28        (.27     49       .34       (.26

12/31/13

     11.34        (.03     12      (.03     11.31        (.27     57       .34       (.24

12/31/12

     11.36        (.03     .01       (.02     11.34        (.18     66       .34       (.22

Class 1A:

                    

6/30/172,3,7

     11.27        .03       12      .03       11.30        .27 4,9      10      .16 4,9      .25 4,9 

Class 2:

                    

6/30/172,3

     10.99        .01       12      .01       11.00        .09 4      257       .59 5      .25 5 

12/31/1613

     11.01        (.02     12      (.02     10.99        (.18     297       .60       (.14

12/31/15

     11.06        (.05     12      (.05     11.01        (.45     302       .59       (.49

12/31/14

     11.12        (.06           (.06     11.06        (.54     331       .59       (.51

12/31/13

     11.17        (.05     12      (.05     11.12        (.45     395       .59       (.49

12/31/12

     11.22        (.05     12      (.05     11.17        (.45     459       .59       (.47

Class 3:

                    

6/30/172,3

     11.10        .02       12      .02       11.12        .18 4      4       .52 5      .33 5 

12/31/1613

     11.11        (.01     12      (.01     11.10        (.09     4       .53       (.08

12/31/15

     11.16        (.05     12      (.05     11.11        (.45     6       .52       (.42

12/31/14

     11.21        (.05           (.05     11.16        (.45     8       .52       (.44

12/31/13

     11.26        (.05     12      (.05     11.21        (.44     8       .52       (.42

12/31/12

     11.30        (.05     .01       (.04     11.26        (.35     11       .52       (.40

Class 4:

                    

6/30/172,3

     11.12        12            12      11.12        (.00 )4      17       .84 5      .02 5 

12/31/1613

     11.17        (.04     (.01     (.05     11.12        (.45     13       .85       (.40

12/31/15

     11.25        (.08     12      (.08     11.17        (.71     16       .85       (.74

12/31/14

     11.30        (.09     .04       (.05     11.25        (.44     7       .84       (.77

12/31/13

     11.34        (.04     12      (.04     11.30        (.35 )9      10      .37 9      (.32 )9 

12/31/122,8

     11.34        12      12      12      11.34        .00 4,9      10      .02 4,9      (.01 )4,9 

See end of tables for footnotes.

 

American Funds Insurance Series   195


Financial highlights (continued)

 

            Income (loss) from
investment operations1
    Dividends and distributions                                 
Period ended    Net asset
value,
beginning
of period
     Net
investment
income
(loss)
     Net gains
(losses) on
securities
(both
realized and
unrealized)
    Total from
investment
operations
    Dividends
(from net
investment
income)
    Distributions
(from capital
gains)
    Total
dividends
and
distributions
    Net asset
value,
end
of period
     Total
return
    Net assets,
end of period
(in millions)
    Ratio of
expenses
to average
net assets
    Ratio of
net income
(loss)
to average
net assets
 

U.S. Government/AAA-Rated Securities Fund

 

Class 1:

                           

6/30/172,3

     $12.05        $.10        $.13       $.23       $(.04     $    –       $(.04     $12.24        1.87 %4      $1,328       .35 %5      1.62 %5 

12/31/16

     12.31        .16        .03       .19       (.20     (.25     (.45     12.05        1.44       1,467       .36       1.31  

12/31/15

     12.40        .13        .09       .22       (.21     (.10     (.31     12.31        1.93       1,426       .35       1.02  

12/31/14

     11.94        .15        .48       .63       (.17           (.17     12.40        5.24       1,723       .35       1.24  

12/31/13

     12.75        .08        (.44     (.36     (.11     (.34     (.45     11.94        (2.87     1,584       .35       .67  

12/31/12

     13.00        .10        .18       .28       (.16     (.37     (.53     12.75        2.22       1,809       .34       .75  

Class 1A:

                           

6/30/172,3,7

     12.05        .10        .13       .23       (.04           (.04     12.24        1.87 4      10      .24 5      .82 5 

Class 2:

                           

6/30/172,3

     11.93        .08        .13       .21       (.03           (.03     12.11        1.76 4      1,487       .60 5      1.37 5 

12/31/16

     12.20        .13        .02       .15       (.17     (.25     (.42     11.93        1.19       1,503       .61       1.05  

12/31/15

     12.29        .10        .09       .19       (.18     (.10     (.28     12.20        1.59       1,579       .60       .79  

12/31/14

     11.83        .12        .47       .59       (.13           (.13     12.29        5.01       1,717       .60       1.00  

12/31/13

     12.63        .05        (.43     (.38     (.08     (.34     (.42     11.83        (3.08     1,801       .60       .42  

12/31/12

     12.89        .06        .18       .24       (.13     (.37     (.50     12.63        1.91       1,995       .59       .50  

Class 3:

                           

6/30/172,3

     12.07        .09        .13       .22       (.03           (.03     12.26        1.83 4      11       .53 5      1.44 5 

12/31/16

     12.34        .14        .02       .16       (.18     (.25     (.43     12.07        1.24       11       .54       1.12  

12/31/15

     12.43        .11        .09       .20       (.19     (.10     (.29     12.34        1.64       11       .53       .85  

12/31/14

     11.96        .13        .48       .61       (.14           (.14     12.43        5.11       13       .53       1.08  

12/31/13

     12.76        .06        (.43     (.37     (.09     (.34     (.43     11.96        (3.00     14       .53       .47  

12/31/12

     13.01        .07        .19       .26       (.14     (.37     (.51     12.76        2.02       20       .52       .58  

Class 4:

                           

6/30/172,3

     11.96        .07        .12       .19       (.02           (.02     12.13        1.62 4      57       .85 5      1.12 5 

12/31/16

     12.22        .10        .03       .13       (.14     (.25     (.39     11.96        .99       57       .86       .82  

12/31/15

     12.34        .07        .08       .15       (.17     (.10     (.27     12.22        1.29       46       .85       .56  

12/31/14

     11.93        .06        .51       .57       (.16           (.16     12.34        4.76       21       .85       .50  

12/31/13

     12.75        .08        (.44     (.36     (.12     (.34     (.46     11.93        (2.95     10      .84       .68  

12/31/122,8

     12.88        .01        (.01           (.13           (.13     12.75        (.01 )4,9      10      .02 4,9      .05 4,9 

 

            Income from investment operations1      Dividends and distributions                                             
Period ended    Net asset
value,
beginning
of period
     Net
investment
income
(loss)
    Net gains
(losses) on
securities
(both
realized and
unrealized)
    Total from
investment
operations
     Dividends
(from net
investment
income)
    Distribu-
tions
(from capital
gains)
    Total
dividends
and
distribu-
tions
    Net asset
value, end
of period
     Total return14     Net assets,
end of
period
(in millions)
    Ratio of
expenses
to average
net assets
before
waivers/
reimburse-
ments
    Ratio of
expenses
to average
net assets
after
waivers/
reimburse-
ments14
    Net
effective
expense
ratio14,15
    Ratio of
net income
(loss)
to average
net assets14
 

Managed Risk Growth Fund

 

                     

Class P1:

                               

6/30/172,3

   $ 10.71        $    – 12    $ 1.51     $ 1.51      $ (.07   $ (.20   $ (.27   $ 11.95        14.10 %4,9    $ 1       .52 %5,9      .36 %5,9      .70 %5,9      .03 %5,9 

12/31/16

     11.49        .08       .20       .28        (.05     (1.01     (1.06     10.71        2.89 9      1       .50 9      .34 9      .68 9      .79 9 

12/31/15

     11.37        .09       .03       .12                          11.49        1.06 9      10      .53 9      .29 9      .63 9      .80 9 

12/31/14

     11.43        .31       (.06     .25        (.12     (.19     (.31     11.37        2.18 9      10      .50 9      .32 9      .65 9      2.71 9 

12/31/132,16

     10.00        .12       1.38       1.50        (.07           (.07     11.43        15.05 4,9      10      .88 5,9      .25 5,9      .58 5,9      1.64 5,9 

Class P2:

                               

6/30/172,3

     10.64        (.02     1.50       1.48        (.04     (.20     (.24     11.88        13.91 4      245       .79 5      .63 5      .97 5      (.27 )5 

12/31/16

     11.43        .05       .19       .24        (.02     (1.01     (1.03     10.64        2.52       200       .79       .63       .97       .43  

12/31/15

     11.35        .04       .04       .08                          11.43        .71       146       .89       .66       1.00       .31  

12/31/14

     11.43        .12       .08       .20        (.09     (.19     (.28     11.35        1.77       79       .87       .69       1.02       1.01  

12/31/132,16

     10.00        .12       1.37       1.49        (.06           (.06     11.43        14.94 4,9      28       1.05 5,9      .52 5,9      .85 5,9      1.69 5,9 

 

196   American Funds Insurance Series


            Income from investment operations1     Dividends and distributions                                             
Period ended    Net asset
value,
beginning
of period
     Net
investment
income
(loss)
    Net gains
(losses) on
securities
(both
realized and
unrealized)
    Total from
investment
operations
    Dividends
(from net
investment
income)
    Distributions
(from capital
gains)
    Total
dividends
and
distributions
    Net asset
value, end
of period
     Total return14     Net assets,
end of
period
(in millions)
    Ratio of
expenses
to average
net assets
before
waivers/
reimbursements
    Ratio of
expenses
to average
net assets
after
waivers/
reimbursements14
    Net
effective
expense
ratio14,15
    Ratio of
net income
(loss)
to average
net assets14
 

Managed Risk International Fund

 

              

Class P1:

                              

6/30/172,3

     $  8.89        $.02       $ 1.48       $1.50       $(.10     $(.12     $(.22     $10.17        16.87 %4,9      $      – 10      .38 %5,9      .22 %5,9      .73 %5,9      .34 %5,9 

12/31/16

     9.48        .10       (.35     (.25     (.12     (.22     (.34     8.89        (2.59 )9      10      .39 9      .23 9      .74 9      1.15 9 

12/31/15

     10.10        .18       (.80     (.62     12            12      9.48        (6.12 )9      10      .45 9      .21 9      .72 9      1.75 9 

12/31/14

     10.82        .14       (.71     (.57     (.15           (.15     10.10        (5.31 )9      10      .50 9      .25 9      .76 9      1.33 9 

12/31/132,16

     10.00        .13       .78       .91       (.09           (.09     10.82        9.08 4,9      10      1.05 5,9      .23 5,9      .73 5,9      1.92 5,9 

Class P2:

                              

6/30/172,3

     8.83        .01       1.46       1.47       (.08     (.12     (.20     10.10        16.57 4      124       .79 5      .63 5      1.14 5      .12 5 

12/31/16

     9.43        .09       (.38     (.29     (.09     (.22     (.31     8.83        (3.05     97       .79       .63       1.14       .97  

12/31/15

     10.09        .13       (.79     (.66     12            12      9.43        (6.52     83       .90       .66       1.17       1.30  

12/31/14

     10.82        .16       (.77     (.61     (.12           (.12     10.09        (5.68     46       .91       .67       1.18       1.51  

12/31/132,16

     10.00        .18       .72       .90       (.08           (.08     10.82        8.99 4,9      17       1.19 5,9      .44 5,9      .94 5,9      2.66 5,9 

Managed Risk Blue Chip Income and Growth Fund

 

     

Class P1:

                              

6/30/172,3

     $11.67        $.02       $   .61       $  .63       $(.15     $(.19     $(.34     $11.96        5.37 %4,9      $      – 10      .42 %5,9      .27 %5,9      .66 %5,9      .31 %5,9 

12/31/16

     10.80        .20       1.25       1.45       (.21     (.37     (.58     11.67        13.77 9      10      .43 9      .27 9      .67 9      1.83 9 

12/31/15

     11.70        .19       (1.02     (.83     (.07           (.07     10.80        (7.07 )9      10      .50 9      .27 9      .66 9      1.64 9 

12/31/14

     11.05        .40       .55       .95       (.30           (.30     11.70        8.58 9      10      .50 9      .31 9      .70 9      3.43 9 

12/31/132,16

     10.00        .20       1.01       1.21       (.16           (.16     11.05        12.16 4,9      10      .84 5,9      .24 5,9      .64 5,9      2.80 5,9 

Class P2:

                              

6/30/172,3

     11.61        .01       .59       .60       (.15     (.19     (.34     11.87        5.11 4      361       .79 5      .63 5      1.03 5      .13 5 

12/31/16

     10.76        .23       1.18       1.41       (.19     (.37     (.56     11.61        13.39       291       .79       .63       1.03       2.04  

12/31/15

     11.67        .18       (1.05     (.87     (.04           (.04     10.76        (7.43     137       .89       .66       1.05       1.57  

12/31/14

     11.05        .50       .40       .90       (.28           (.28     11.67        8.10       98       .88       .69       1.08       4.27  

12/31/132,16

     10.00        .28       .92       1.20       (.15           (.15     11.05        12.05 4,9      26       1.04 5,9      .54 5,9      .94 5,9      3.91 5,9 

Managed Risk Growth-Income Fund

 

     

Class P1:

                              

6/30/172,3

     $11.07        $.02       $   .99       $1.01       $(.13     $(.50     $(.63     $11.45        9.11 %4,9      $      2       .53 %5,9      .37 %5,9      .65 %5,9      .27 %5,9 

12/31/16

     11.25        .16       .52       .68       (.16     (.70     (.86     11.07        6.49 9      1       .52 9      .36 9      .64 9      1.46 9 

12/31/15

     11.67        .25       (.63     (.38     (.04           (.04     11.25        (3.27 )9      1       .56 9      .31 9      .59 9      2.17 9 

12/31/14

     11.50        .35       .21       .56       (.14     (.25     (.39     11.67        4.85 9      10      .45 9      .25 9      .52 9      2.94 9 

12/31/132,16

     10.00        .14       1.47       1.61       (.11           (.11     11.50        16.15 4,9      10      .92 5,9      .23 5,9      .50 5,9      2.01 5,9 

Class P2:

                              

6/30/172,3

     11.02        12      1.00       1.00       (.12     (.50     (.62     11.40        9.10 4      184       .79 5      .63 5      .91 5      (.04 )5 

12/31/16

     11.22        .12       .52       .64       (.14     (.70     (.84     11.02        6.08       160       .79       .63       .91       1.13  

12/31/15

     11.65        .12       (.54     (.42     (.01           (.01     11.22        (3.64     122       .89       .66       .94       1.04  

12/31/14

     11.50        .16       .35       .51       (.11     (.25     (.36     11.65        4.42       76       .87       .69       .96       1.38  

12/31/132,16

     10.00        .20       1.40       1.60       (.10           (.10     11.50        16.04 4,9      24       1.09 5,9      .50 5,9      .77 5,9      2.73 5,9 

Managed Risk Asset Allocation Fund

 

     

Class P1:

                              

6/30/172,3

     $12.02        $.02       $   .88       $  .90       $(.10     $(.12     $(.22     $12.70        7.53 %4      $1,466       .43 %5      .38 %5      .66 %5      .30 %5 

12/31/16

     11.72        .19       .67       .86       (.19     (.37     (.56     12.02        7.57       1,217       .43       .38       .66       1.65  

12/31/15

     12.29        .25       (.34     (.09     (.22     (.26     (.48     11.72        (.83     712       .54       .40       .68       2.06  

12/31/14

     11.93        .13       .26       .39       (.03           (.03     12.29        3.24       277       .53       .48       .76       1.04  

12/31/13

     9.99        .27       1.81       2.08       (.14           (.14     11.93        20.82 9      112       .55 9      .47 9      .75 9      2.37 9 

12/31/122,17

     10.00        .15       (.03     .12       (.13           (.13     9.99        1.24 4,9      10      .15 5,9      .07 5,9      .37 5,9      1.72 5,9 

Class P2:

                              

6/30/172,3

     12.01        12      .89       .89       (.10     (.12     (.22     12.68        7.43 4      2,620       .68 5      .63 5      .91 5      .03 5 

12/31/16

     11.71        .14       .69       .83       (.16     (.37     (.53     12.01        7.27       2,342       .68       .63       .91       1.20  

12/31/15

     12.27        .14       (.26     (.12     (.18     (.26     (.44     11.71        (1.07     1,953       .79       .66       .94       1.16  

12/31/14

     11.93        .16       .19       .35       (.01           (.01     12.27        2.91       1,780       .79       .73       1.01       1.33  

12/31/13

     9.99        .28       1.77       2.05       (.11           (.11     11.93        20.58 9      795       .80 9      .73 9      1.01 9      2.43 9 

12/31/122,17

     10.00        .17       (.05     .12       (.13           (.13     9.99        1.21 4,9      10      .24 5,9      .11 5,9      .41 5,9      2.38 5,9 

See end of tables for footnotes.

 

American Funds Insurance Series   197


Financial highlights (continued)

 

 

    

Six months ended

June 30, 20172,3,4

  Period ended December 31  
Portfolio turnover rate for all share classes18      2016     2015     2014     2013     2012  

Global Growth Fund

      25%     27     29     22     39     22

Global Small Capitalization Fund

     18     40       36       28       36       40  

Growth Fund

     16     26       20       29       19       21  

International Fund

     16     31       37       18       21       29  

New World Fund

     41     32       39       36       43       32  

Blue Chip Income and Growth Fund

     20     30       26       37       30       36  

Global Growth and Income Fund

     23     57       37       28       31       30  

Growth-Income Fund

     15     27       25       25       19       25  

International Growth and Income Fund

     35     32       35       34       34       31  

Capital Income Builder Fund

     37     53       128       35 4,11     

Asset Allocation Fund

     39     83       76       88       74       61  

Global Balanced Fund

     23     65       76       73       81       80  

Bond Fund

   247     375       434       365       354       253  

Global Bond Fund

     60     154       159       200       213       160  

High-Income Bond Fund

     45     89       66       54       64       48  

Mortgage Fund

   428     713       1103       790       715       444  

Ultra-Short Bond Fund

      —19     13,19,20      N/A       N/A       N/A       N/A  

U.S. Government/AAA-Rated Securities Fund

   388     539       901       387       621       447  

Managed Risk Growth Fund

       5     15       16       22       10 2,4,16   

Managed Risk International Fund

       4     26       15       22       6 2,4,16   

Managed Risk Blue Chip Income and Growth Fund

       5     9       20       22       3 2,4,16   

Managed Risk Growth-Income Fund

       3     14       11       28       2 2,4,16   

Managed Risk Asset Allocation Fund

      —19     3       3       3       3       2,4,17,19 
Portfolio turnover rate for all share classes    Six months ended   Period ended December 31  
excluding mortgage dollar roll transactions18    June 30, 20172,3,4   2016     2015     2014     2013     2012  

Capital Income Builder

      19%     41     38     24 %4,12     

Asset Allocation Fund

     21     43       28       42                  

Global Balanced Fund

     17     43       36       40        

Bond Fund

   102     108       141       121       Not available          

Global Bond Fund

     44     70       88       134        

Mortgage Fund

     60     113       138       108        

U.S. Government/AAA-Rated Securities Fund

     81     273       352       88                  

 

198   American Funds Insurance Series


1  Based on average shares outstanding.
2  Based on operations for the period shown and, accordingly, is not representative of a full year.
3  Unaudited.
4  Not annualized.
5  Annualized.
6  For the year ended December 31, 2014, reflects the impact of a corporate action event that resulted in a one-time increase to net investment income. If the corporate action event had not occurred, the net investment income per share and ratio of net income to average net assets would have been lower for all share classes.
7  Class 1A shares began investment operations on January 6, 2017.
8  Class 4 shares began investment operations on December 14, 2012.
9  All or a significant portion of assets in this class consisted of seed capital invested by CRMC and/or its affiliates. Certain fees (including, where applicable, fees for distribution services) are not charged or accrued on these seed capital assets. If such fees were paid by the fund on seed capital assets, fund expenses would have been higher and net income and total return would have been lower.
10  Amount less than $1 million.
11  For the period May 1, 2014, commencement of operations, through December 31, 2014.
12  Amount less than $.01.
13  On May 1, 2016, the fund converted from a cash fund to an ultra-short-term bond fund and changed its name from Cash Management Fund to Ultra-Short Bond Fund.
14  This column reflects the impact of certain waivers/reimbursements by CRMC. CRMC waived a portion of investment advisory services and reimbursed a portion of miscellaneous fees and expenses for the managed risk funds.
15  Ratio reflects weighted average net expense ratio of the underlying fund for the period presented. See Expense Example for further information regarding fees and expenses.
16  For the period May 1, 2013, commencement of operations, through December 31, 2013.
17  For the period September 28, 2012, commencement of operations, through December 31, 2012.
18  Refer to Note 5 for further information on mortgage dollar rolls.
19  Amount is either less than 1% or there is no turnover.
20  As revised to correct the December 31, 2016, portfolio turnover rate. Rate previously presented was 300%.

See Notes to Financial Statements

 

American Funds Insurance Series   199


Expense example

 

   unaudited

 

 

   The funds in American Funds Insurance Series serve as the underlying investment vehicle for various insurance products. As an owner of an insurance contract that invests in one of the funds in the series, you incur two types of costs: (1) transaction costs, such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads), and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other expenses. Additional fees are charged by the insurance companies related to the various benefits they provide. This example is intended to help you understand your ongoing costs (in dollars) of investing in the underlying funds so you can compare these costs with the ongoing costs of investing in other mutual funds that serve a similar function in other annuity products. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period (January 1, 2017, through June 30, 2017).   

Actual expenses:

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

 

Hypothetical example for comparison purposes:

The second line of each share class in the table on the following pages provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for the share class and an assumed rate of return of 5.00% per year before expenses, which is not the actual return of the share class. 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 the fund and other funds. To do so, compare this 5.00% hypothetical example with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.

 

Notes:

Additional fees are charged by the insurance companies related to the various benefits they provide. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would be lower by the amount of these fees.

 

Note that the expenses shown in the table on the following pages are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the second line of each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

200   American Funds Insurance Series


      Beginning
account value
1/1/2017
     Ending
account value
6/30/2017
     Expenses
paid during
period1
     Annualized
expense
ratio
 

Global Growth Fund

           

Class 1 – actual return

     $1,000.00        $1,187.51        $2.98        .55

Class 1 – assumed 5% return

     1,000.00        1,022.07        2.76        .55  

Class 1A – actual return2

     1,000.00        1,164.85        4.05        .78  

Class 1A – assumed 5% return2

     1,000.00        1,020.93        3.91        .78  

Class 2 – actual return

     1,000.00        1,185.67        4.34        .80  

Class 2 – assumed 5% return

     1,000.00        1,020.83        4.01        .80  

Class 4 – actual return

     1,000.00        1,184.45        5.69        1.05  

Class 4 – assumed 5% return

     1,000.00        1,019.59        5.26        1.05  

Global Small Capitalization Fund

           

Class 1 – actual return

     $1,000.00        $1,128.20        $3.85        .73

Class 1 – assumed 5% return

     1,000.00        1,021.17        3.66        .73  

Class 1A – actual return2

     1,000.00        1,102.63        4.74        .94  

Class 1A – assumed 5% return2

     1,000.00        1,020.13        4.71        .94  

Class 2 – actual return

     1,000.00        1,127.06        5.17        .98  

Class 2 – assumed 5% return

     1,000.00        1,019.93        4.91        .98  

Class 4 – actual return

     1,000.00        1,125.66        6.48        1.23  

Class 4 – assumed 5% return

     1,000.00        1,018.70        6.16        1.23  

Growth Fund

           

Class 1 – actual return

     $1,000.00        $1,151.48        $1.87        .35

Class 1 – assumed 5% return

     1,000.00        1,023.06        1.76        .35  

Class 1A – actual return2

     1,000.00        1,124.75        2.95        .58  

Class 1A – assumed 5% return2

     1,000.00        1,021.92        2.91        .58  

Class 2 – actual return

     1,000.00        1,150.04        3.20        .60  

Class 2 – assumed 5% return

     1,000.00        1,021.82        3.01        .60  

Class 3 – actual return

     1,000.00        1,150.49        2.83        .53  

Class 3 – assumed 5% return

     1,000.00        1,022.17        2.66        .53  

Class 4 – actual return

     1,000.00        1,148.65        4.53        .85  

Class 4 – assumed 5% return

     1,000.00        1,020.58        4.26        .85  

International Fund

           

Class 1 – actual return

     $1,000.00        $1,187.06        $2.87        .53

Class 1 – assumed 5% return

     1,000.00        1,022.17        2.66        .53  

Class 1A – actual return2

     1,000.00        1,161.69        3.89        .75  

Class 1A – assumed 5% return2

     1,000.00        1,021.08        3.76        .75  

Class 2 – actual return

     1,000.00        1,185.45        4.23        .78  

Class 2 – assumed 5% return

     1,000.00        1,020.93        3.91        .78  

Class 3 – actual return

     1,000.00        1,186.37        3.85        .71  

Class 3 – assumed 5% return

     1,000.00        1,021.27        3.56        .71  

Class 4 – actual return

     1,000.00        1,184.80        5.58        1.03  

Class 4 – assumed 5% return

     1,000.00        1,019.69        5.16        1.03  

New World Fund

           

Class 1 – actual return

     $1,000.00        $1,145.94        $3.99        .75

Class 1 – assumed 5% return

     1,000.00        1,021.08        3.76        .75  

Class 1A – actual return2

     1,000.00        1,121.05        4.88        .96  

Class 1A – assumed 5% return2

     1,000.00        1,020.03        4.81        .96  

Class 2 – actual return

     1,000.00        1,144.77        5.32        1.00  

Class 2 – assumed 5% return

     1,000.00        1,019.84        5.01        1.00  

Class 4 – actual return

     1,000.00        1,143.21        6.64        1.25  

Class 4 – assumed 5% return

     1,000.00        1,018.60        6.26        1.25  

See end of tables for footnotes.

 

American Funds Insurance Series   201


      Beginning
account value
1/1/2017
     Ending
account value
6/30/2017
     Expenses
paid during
period1
     Annualized
expense
ratio
 

Blue Chip Income and Growth Fund

           

Class 1 – actual return

     $1,000.00        $1,058.20        $2.09        .41

Class 1 – assumed 5% return

     1,000.00        1,022.76        2.06        .41  

Class 1A – actual return2

     1,000.00        1,040.53        2.98        .61  

Class 1A – assumed 5% return2

     1,000.00        1,021.77        3.06        .61  

Class 2 – actual return

     1,000.00        1,057.61        3.37        .66  

Class 2 – assumed 5% return

     1,000.00        1,021.52        3.31        .66  

Class 4 – actual return

     1,000.00        1,055.18        4.64        .91  

Class 4 – assumed 5% return

     1,000.00        1,020.28        4.56        .91  

Global Growth and Income Fund

           

Class 1 – actual return

     $1,000.00        $1,148.78        $3.30        .62

Class 1 – assumed 5% return

     1,000.00        1,021.72        3.11        .62  

Class 1A – actual return2

     1,000.00        1,132.25        3.12        .61  

Class 1A – assumed 5% return2

     1,000.00        1,021.77        3.06        .61  

Class 2 – actual return

     1,000.00        1,147.00        4.63        .87  

Class 2 – assumed 5% return

     1,000.00        1,020.48        4.36        .87  

Class 4 – actual return

     1,000.00        1,145.78        5.96        1.12  

Class 4 – assumed 5% return

     1,000.00        1,019.24        5.61        1.12  

Growth-Income Fund

           

Class 1 – actual return

     $1,000.00        $1,098.97        $1.46        .28

Class 1 – assumed 5% return

     1,000.00        1,023.41        1.40        .28  

Class 1A – actual return2

     1,000.00        1,074.84        2.39        .48  

Class 1A – assumed 5% return2

     1,000.00        1,022.41        2.41        .48  

Class 2 – actual return

     1,000.00        1,097.65        2.76        .53  

Class 2 – assumed 5% return

     1,000.00        1,022.17        2.66        .53  

Class 3 – actual return

     1,000.00        1,098.35        2.39        .46  

Class 3 – assumed 5% return

     1,000.00        1,022.51        2.31        .46  

Class 4 – actual return

     1,000.00        1,096.35        4.05        .78  

Class 4 – assumed 5% return

     1,000.00        1,020.93        3.91        .78  

International Growth and Income Fund

           

Class 1 – actual return

     $1,000.00        $1,155.39        $3.53        .66

Class 1 – assumed 5% return

     1,000.00        1,021.52        3.31        .66  

Class 1A – actual return2

     1,000.00        1,138.89        3.54        .69  

Class 1A – assumed 5% return2

     1,000.00        1,021.37        3.46        .69  

Class 2 – actual return

     1,000.00        1,154.82        4.86        .91  

Class 2 – assumed 5% return

     1,000.00        1,020.28        4.56        .91  

Class 4 – actual return

     1,000.00        1,152.92        6.19        1.16  

Class 4 – assumed 5% return

     1,000.00        1,019.04        5.81        1.16  

Capital Income Builder

           

Class 1 – actual return

     $1,000.00        $1,082.74        $2.74        .53

Class 1 – assumed 5% return

     1,000.00        1,022.17        2.66        .53  

Class 1A – actual return2

     1,000.00        1,068.83        3.42        .69  

Class 1A – assumed 5% return2

     1,000.00        1,021.37        3.46        .69  

Class 2 – actual return

     1,000.00        1,081.55        4.03        .78  

Class 2 – assumed 5% return

     1,000.00        1,020.93        3.91        .78  

Class 4 – actual return

     1,000.00        1,079.18        5.31        1.03  

Class 4 – assumed 5% return

     1,000.00        1,019.69        5.16        1.03  

 

202   American Funds Insurance Series


      Beginning
account value
1/1/2017
     Ending
account value
6/30/2017
     Expenses
paid during
period1
     Annualized
expense
ratio
 

Asset Allocation Fund

           

Class 1 – actual return

     $1,000.00        $1,082.81        $1.50        .29

Class 1 – assumed 5% return

     1,000.00        1,023.36        1.45        .29  

Class 1A – actual return2

     1,000.00        1,068.08        2.63        .53  

Class 1A – assumed 5% return2

     1,000.00        1,022.17        2.66        .53  

Class 2 – actual return

     1,000.00        1,081.69        2.79        .54  

Class 2 – assumed 5% return

     1,000.00        1,022.12        2.71        .54  

Class 3 – actual return

     1,000.00        1,081.96        2.43        .47  

Class 3 – assumed 5% return

     1,000.00        1,022.46        2.36        .47  

Class 4 – actual return

     1,000.00        1,080.20        4.07        .79  

Class 4 – assumed 5% return

     1,000.00        1,020.88        3.96        .79  

Global Balanced Fund

           

Class 1 – actual return

     $1,000.00        $1,111.92        $3.61        .69

Class 1 – assumed 5% return

     1,000.00        1,021.37        3.46        .69  

Class 1A – actual return2

     1,000.00        1,101.96        3.48        .69  

Class 1A – assumed 5% return2

     1,000.00        1,021.37        3.46        .69  

Class 2 – actual return

     1,000.00        1,111.21        4.92        .94  

Class 2 – assumed 5% return

     1,000.00        1,020.13        4.71        .94  

Class 4 – actual return

     1,000.00        1,110.00        6.23        1.19  

Class 4 – assumed 5% return

     1,000.00        1,018.89        5.96        1.19  

Bond Fund

           

Class 1 – actual return

     $1,000.00        $1,026.20        $1.91        .38

Class 1 – assumed 5% return

     1,000.00        1,022.91        1.91        .38  

Class 1A – actual return2

     1,000.00        1,023.36        2.91        .60  

Class 1A – assumed 5% return2

     1,000.00        1,021.82        3.01        .60  

Class 2 – actual return

     1,000.00        1,025.11        3.16        .63  

Class 2 – assumed 5% return

     1,000.00        1,021.67        3.16        .63  

Class 4 – actual return

     1,000.00        1,022.88        4.41        .88  

Class 4 – assumed 5% return

     1,000.00        1,020.43        4.41        .88  

Global Bond Fund

           

Class 1 – actual return

     $1,000.00        $1,050.89        $2.90        .57

Class 1 – assumed 5% return

     1,000.00        1,021.97        2.86        .57  

Class 1A – actual return2

     1,000.00        1,050.87        2.85        .58  

Class 1A – assumed 5% return2

     1,000.00        1,021.92        2.91        .58  

Class 2 – actual return

     1,000.00        1,049.45        4.17        .82  

Class 2 – assumed 5% return

     1,000.00        1,020.73        4.11        .82  

Class 4 – actual return

     1,000.00        1,048.81        5.44        1.07  

Class 4 – assumed 5% return

     1,000.00        1,019.49        5.36        1.07  

See end of tables for footnotes.

 

American Funds Insurance Series   203


      Beginning
account value
1/1/2017
     Ending
account value
6/30/2017
     Expenses
paid during
period1
     Annualized
expense
ratio
 

High-Income Bond Fund

           

Class 1 – actual return

     $1,000.00        $1,046.04        $2.44        .48

Class 1 – assumed 5% return

     1,000.00        1,022.41        2.41        .48  

Class 1A – actual return2

     1,000.00        1,035.87        3.42        .70  

Class 1A – assumed 5% return2

     1,000.00        1,021.32        3.51        .70  

Class 2 – actual return

     1,000.00        1,044.30        3.70        .73  

Class 2 – assumed 5% return

     1,000.00        1,021.17        3.66        .73  

Class 3 – actual return

     1,000.00        1,044.58        3.35        .66  

Class 3 – assumed 5% return

     1,000.00        1,021.52        3.31        .66  

Class 4 – actual return

     1,000.00        1,042.87        4.96        .98  

Class 4 – assumed 5% return

     1,000.00        1,019.93        4.91        .98  

Mortgage Fund

           

Class 1 – actual return

     $1,000.00        $1,015.13        $2.20        .44

Class 1 – assumed 5% return

     1,000.00        1,022.61        2.21        .44  

Class 1A – actual return2

     1,000.00        1,015.16        3.24        .67  

Class 1A – assumed 5% return2

     1,000.00        1,021.47        3.36        .67  

Class 2 – actual return

     1,000.00        1,013.74        3.45        .69  

Class 2 – assumed 5% return

     1,000.00        1,021.37        3.46        .69  

Class 4 – actual return

     1,000.00        1,012.49        4.69        .94  

Class 4 – assumed 5% return

     1,000.00        1,020.13        4.71        .94  

Ultra-Short Bond Fund

           

Class 1 – actual return

     $1,000.00        $1,002.66        $1.69        .34

Class 1 – assumed 5% return

     1,000.00        1,023.11        1.71        .34  

Class 1A – actual return2

     1,000.00        1,002.66        1.58        .33  

Class 1A – assumed 5% return2

     1,000.00        1,023.16        1.66        .33  

Class 2 – actual return

     1,000.00        1,000.91        2.93        .59  

Class 2 – assumed 5% return

     1,000.00        1,021.87        2.96        .59  

Class 3 – actual return

     1,000.00        1,001.80        2.58        .52  

Class 3 – assumed 5% return

     1,000.00        1,022.22        2.61        .52  

Class 4 – actual return

     1,000.00        1,000.00        4.17        .84  

Class 4 – assumed 5% return

     1,000.00        1,020.63        4.21        .84  

U.S. Government/AAA-Rated Securities Fund

           

Class 1 – actual return

     $1,000.00        $1,018.67        $1.75        .35

Class 1 – assumed 5% return

     1,000.00        1,023.06        1.76        .35  

Class 1A – actual return2

     1,000.00        1,018.67        2.47        .51  

Class 1A – assumed 5% return2

     1,000.00        1,022.27        2.56        .51  

Class 2 – actual return

     1,000.00        1,017.59        3.00        .60  

Class 2 – assumed 5% return

     1,000.00        1,021.82        3.01        .60  

Class 3 – actual return

     1,000.00        1,018.30        2.65        .53  

Class 3 – assumed 5% return

     1,000.00        1,022.17        2.66        .53  

Class 4 – actual return

     1,000.00        1,016.22        4.25        .85  

Class 4 – assumed 5% return

     1,000.00        1,020.58        4.26        .85  

 

204   American Funds Insurance Series


     Beginning
account value
1/1/2017
    Ending
account value
6/30/2017
    Expenses
paid during
period1,3
    Annualized
expense ratio3
    Effective
expenses paid
during period4
    Effective
annualized
expense ratio5
 

Managed Risk Growth Fund

           

Class P1 – actual return

    $1,000.00       $1,141.01       $1.91       .36     $3.72       .70

Class P1 – assumed 5% return

    1,000.00       1,023.01       1.81       .36       3.51       .70  

Class P2 – actual return

    1,000.00       1,139.10       3.34       .63       5.14       .97  

Class P2 – assumed 5% return

    1,000.00       1,021.67       3.16       .63       4.86       .97  

Managed Risk International Fund

           

Class P1 – actual return

    $1,000.00       $1,168.73       $1.18       .22     $3.93       .73

Class P1 – assumed 5% return

    1,000.00       1,023.70       1.10       .22       3.66       .73  

Class P2 – actual return

    1,000.00       1,165.74       3.38       .63       6.12       1.14  

Class P2 – assumed 5% return

    1,000.00       1,021.67       3.16       .63       5.71       1.14  

Managed Risk Blue Chip Income and Growth Fund

 

     

Class P1 – actual return

    $1,000.00       $1,053.66       $1.32       .26     $3.36       .66

Class P1 – assumed 5% return

    1,000.00       1,023.51       1.30       .26       3.31       .66  

Class P2 – actual return

    1,000.00       1,051.08       3.20       .63       5.24       1.03  

Class P2 – assumed 5% return

    1,000.00       1,021.67       3.16       .63       5.16       1.03  

Managed Risk Growth-Income Fund

 

         

Class P1 – actual return

    $1,000.00       $1,091.07       $1.92       .37     $3.37       .65

Class P1 – assumed 5% return

    1,000.00       1,022.96       1.86       .37       3.26       .65  

Class P2 – actual return

    1,000.00       1,091.03       3.27       .63       4.72       .91  

Class P2 – assumed 5% return

    1,000.00       1,021.67       3.16       .63       4.56       .91  

Managed Risk Asset Allocation Fund

 

         

Class P1 – actual return

    $1,000.00       $1,075.26       $1.96       .38     $3.40       .66

Class P1 – assumed 5% return

    1,000.00       1,022.91       1.91       .38       3.31       .66  

Class P2 – actual return

    1,000.00       1,074.33       3.24       .63       4.68       .91  

Class P2 – assumed 5% return

    1,000.00       1,021.67       3.16       .63       4.56       .91  

 

 1 The “expenses paid during period” are equal to the “annualized expense ratio,” multiplied by the average account value over the period, multiplied by the number of days in the period, and divided by 365 (to reflect the one-half year period).
 2 The period for the “annualized expense ratio” and “actual return” line is based on the number of days since the initial sale of the share class on January 6, 2017. The “assumed 5% return” line is based on 181 days.
 3 The “expenses paid during period” and “annualized expense ratio” do not include the expenses of the underlying funds in which each fund invests.
 4 The “effective expenses paid during period” are equal to the “effective annualized expense ratio,” multiplied by the average account value over the period, multiplied by the number of days in the period, and divided by 365 (to reflect the period).
 5 The “effective annualized expense ratio” reflects the net annualized expense ratio of the class plus the class’s pro-rata share of the weighted average expense ratio of the underlying funds in which it invests.

 

American Funds Insurance Series   205


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206   American Funds Insurance Series


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American Funds Insurance Series   207


Offices of the series and of the investment adviser

Capital Research and Management Company

333 South Hope Street

Los Angeles, CA 90071-1406

6455 Irvine Center Drive

Irvine, CA 92618-4518

Investment subadviser

Milliman Financial Risk Management LLC

(Managed Risk Funds only)

71 South Wacker Drive, 31st Floor

Chicago, IL 60606

Custodians of assets

State Street Bank and Trust Company

One Lincoln Street

Boston, MA 02111

Bank of New York Mellon

(Managed Risk Funds only)

One Wall Street

New York, NY 10286

Counsel

Morgan, Lewis & Bockius LLP

300 South Grand Avenue, 22nd Floor

Los Angeles, CA 90071-3132

Independent registered public accounting firm

PricewaterhouseCoopers LLP

601 South Figueroa Street

Los Angeles, CA 90017-3874

 

208   American Funds Insurance Series


Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the series prospectuses and summary prospectuses, which can be obtained from your financial professional and should be read carefully before investing. You may also call American Funds Service Company (AFS) at (800) 421-4225 or visit the American Funds website at americanfunds.com. Securities offered through American Funds Distributors, Inc.

“American Funds Proxy Voting Procedures and Principles” – which describes how we vote proxies relating to portfolio securities – is available on the American Funds website or upon request by calling AFS. The series files its proxy voting record with the U.S. Securities and Exchange Commission (SEC) for the 12 months ended June 30 by August 31. The proxy voting record is available free of charge on the SEC website at sec.gov and on the American Funds website.

Complete June 30, 2017, portfolios of American Funds Insurance Series’ investments are available free of charge by calling AFS or visiting the SEC website (where they are part of Form N-CSR).

American Funds Insurance Series files a complete list of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. This filing is available free of charge on the SEC website. You may also review or, for a fee, copy this filing at the SEC’s Public Reference Room in Washington, D.C. Additional information regarding the operation of the Public Reference Room may be obtained by calling the SEC’s Office of Investor Education and Advocacy at (800) SEC-0330. Additionally, the list of portfolio holdings is available by calling AFS.

This report is for the information of American Funds Insurance Series investors, but it also may be used as sales literature when preceded or accompanied by the current prospectuses or summary prospectuses for American Funds Insurance Series and the prospectus for the applicable insurance contract, which give details about charges, expenses, investment objectives and operating policies of the series. If used as sales material after September 30, 2017, this report must be accompanied by a statistical update for the most recently completed calendar quarter.

Fund attribution data was produced using FactSet, a third-party software system, based on daily portfolios. Securities in their initial period of acquisition may not be included in this analysis. The analysis includes equity investments only and excludes forward contracts and fixed income investments, if applicable. It does not account for buy-and-sell transactions that might have occurred intraday. As a result, average portfolio weight percentages are approximate and the actual average portfolio weight percentages might be higher or lower. Data elements, such as pricing, income, market cap, etc., were provided by FactSet. The indexes provided for attribution are based on FactSet’s methodology. The indexes are broad-based market benchmarks and may not be used by Capital Group® as the sole comparative index for the funds. Capital Group believes the software and information from FactSet to be reliable. However, Capital Group cannot be responsible for inaccuracies, incomplete information or updating of information by FactSet.

Futures contracts may not provide an effective hedge of the underlying securities because changes in the prices of futures contracts may not track those of the securities they are intended to hedge. In addition, the managed risk strategy may not effectively protect the fund from market declines and will limit the fund’s participation in market gains. The use of the managed risk strategy could cause the fund’s return to lag that of the underlying fund in certain rising market conditions.

Bloomberg® is a trademark and service mark of Bloomberg Finance L.P. (collectively with its affiliates, “Bloomberg”). Barclays® is a trademark and service mark of Barclays Bank Plc (collectively with its affiliates, “Barclays”), used under license. Bloomberg or Bloomberg’s licensors, including Barclays, own all proprietary rights in the Bloomberg Barclays Indices. Neither Bloomberg nor Barclays approve or endorse this material, or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith. MSCI has not approved, reviewed or produced this report, makes no express or implied warranties or representations and is not liable whatsoever for any data in the report. You may not redistribute the MSCI data or use it as a basis for other indices or investment products. The S&P 500 is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Capital Group. Copyright © 2017 S&P Dow Jones Indices LLC, a division of S&P Global, and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part is prohibited without written permission of S&P Dow Jones Indices LLC.


 

 

American Funds from Capital Group

 The Capital AdvantageSM

Since 1931, American Funds, part of Capital Group, has helped investors pursue long-term investment success. Our consistent approach – in combination with The Capital SystemSM – has resulted in a superior long-term track record for American Funds Insurance Series®.

 

Aligned with investor success

   The Capital System    Superior long-term track record
   

We base our decisions on a long-term perspective, which we believe aligns our goals with the interests of our clients. American Funds Insurance Series (AFIS) portfolio managers average 27 years of investment experience, including 22 years at our company, reflecting a career commitment to our long-term approach.1

   The Capital System combines individual accountability with teamwork. Funds using The Capital System are divided into portions that are managed independently by investment professionals with diverse backgrounds, ages and investment approaches. An extensive global research effort is the backbone of our system.    AFIS equity funds have beaten their comparable Lipper indexes in 89% of 10-year periods and 100% of 20-year periods. AFIS fixed income funds have beaten comparable Lipper indexes in 52% of 10-year periods and 81% of 20-year periods.2 We strive to keep management fees competitive. Over the past 20 years, most funds’ fees have been below industry averages.3

 

 

1  Portfolio manager experience as of the American Funds Insurance Series prospectus dated May 1, 2017.

 

2  Based on Class 2 share results for rolling periods through December 31, 2016. Periods covered are the shorter of the fund’s lifetime or since the comparable Lipper index inception date. The comparable Lipper indexes are: Global Funds Index (Global Growth Fund), Growth Funds Index (Growth Fund), International Funds Index (International Fund), Emerging Markets Funds Index (New World Fund), Growth & Income Funds Index (Blue Chip Income and Growth Fund, Growth-Income Fund), Balanced Funds Index (Asset Allocation Fund), Core Bond Funds Index (Bond Fund), High Yield Funds Index (High-Income Bond Fund) and General U.S. Government Funds Index (U.S. Government/AAA-Rated Securities Fund). The Lipper Global Small-/Mid-Cap Funds Average was used for Global Small Capitalization Fund.

 

3  Based on management fees for the 20-year period ended December 31, 2016, versus comparable Lipper categories, excluding funds of funds.

 

  Lit. No. INGESRX-998-0817P


Item 2. Code of Ethics.

Not applicable to this semi-annual filing.

Item 3. Audit Committee Financial Expert.

Not applicable to this semi-annual filing.

Item 4. Principal Accountant Fees and Services.

Not applicable to this semi-annual filing.

Item 5. Audit Committee of Listed Registrants

Not applicable to this semi-annual filing.

Item 6. Investments.

 

  (a)

The Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the annual report filed under Item 1 of this form.

  (b)

Not applicable.

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.

Not applicable.

Item 11. Controls and Procedures.

 

  (a)

The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are generally effective to provide reasonable assurance, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).


  (b)

The registrant did not experience a change in internal control over financial reporting.

Item 12. Exhibits.

 

 

(a)

  

(1)  Not applicable to this semi-annual filing.

    

(2)  Separate certifications for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)).

    

(3)  Not applicable

 

(b)

  

Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002.


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.

HIMCO Variable Insurance Trust

 

By:

   

/s/ Matthew Poznar

   

Matthew Poznar

   

President

   

August 11, 2017

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.

HIMCO Variable Insurance Trust

 

By:

   

/s/ Matthew Poznar

   

Matthew Poznar

   

President

   

August 11, 2017

By:

   

/s/ Peter Sannizzaro

   

Peter Sannizzaro

   

Treasurer

   

August 11, 2017