-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, An82mS7tFbDnQ2C28so2AZT7k7k4/ZrHD2AgRKlNN7T+SsmYRyHzC1iBWfhSaklM UrblJ88QyXKYsbzr3dLheg== 0000912057-96-003353.txt : 19960301 0000912057-96-003353.hdr.sgml : 19960301 ACCESSION NUMBER: 0000912057-96-003353 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960229 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONNECTICUT MUTUAL INVESTMENT ACCOUNTS INC CENTRAL INDEX KEY: 0000356865 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 061052841 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-03346 FILM NUMBER: 96528170 BUSINESS ADDRESS: STREET 1: 140 GARDEN ST CITY: HARTFORD STATE: CT ZIP: 06154 BUSINESS PHONE: 2039875002 FORMER COMPANY: FORMER CONFORMED NAME: CONNECTICUT MUTUAL LIQUID ACCOUNT INC DATE OF NAME CHANGE: 19851106 N-30D 1 N-30D CONNECTICUT MUTUAL INVESTMENT ACCOUNTS, INC. --------------------------- 1995 ANNUAL REPORT DEAR CMIA SHAREHOLDER: The stock and bond markets both turned in impressive performances last year, making 1995 a banner year for investors. It was a year in which the Dow Jones Industrial Average exceeded 5200 and the yield on the 30-year Treasury bond dropped by almost 200 basis points. What went right for the markets in 1995? Just about everything that mattered. We entered the year with a strong economy. The Central Bank, in a tightening mode, had been increasing interest rates to head off inflation. The November elections brought victory for the Republicans in Congress, signalling a better political time for markets. As expected, the increasing interest rates of 1994 and early 1995 put the brakes on the economy, slowing it sufficiently to avoid higher inflation, but not enough to cause a recession. The Fed began to ease its grip on interest rates, the dollar gathered strength, and inflation remained stagnant -- setting a positive tone for the bond market and providing a good backdrop for the stock market. At the same time, corporate earnings grew vigorously and the federal government continued moving toward greater fiscal responsibility -- contributing to a superlative year for the stock market. Because our portfolio managers were anticipating this type of environment, Connecticut Mutual Investment Accounts (CMIA) investors were able to capitalize on market trends. All of the CMIA funds performed well in their respective categories. The CMIA Liquid Account, as with all money market funds, responded to lower inflation and lower interest rates with modest returns. The CMIA Liquid Fund was up 5.11 percent for the 12 months ended December 31, 1995 -- in line with the category average of 5.37 percent, according to Lipper Analytical Services, Inc. The CMIA Income Account was up 11.72 percent, compared with the category average increase of 10.84 percent for the 12 months ended December 31, 1995, according to Lipper. The Fund was well-positioned for a decreasing interest rate environment and held maturities that were a little longer than the average bond fund. The CMIA Total Return Account, with a mix of stocks, bonds and cash, ended the 12 months with a 23.95 percent increase, according to Lipper. The Fund maintained its strict asset allocation discipline, but a slight underweight in stocks contributed to its underperformance. The category average was 25.16 percent. The CMIA Growth Account boasted a 36.40 percent gain in the 12 months ended December 31, 1995, according to Lipper, outperforming the category average increase of 30.79 percent. The Fund's investment discipline of looking for stocks with low P/Es and positive earnings surprise contributed to its impressive results. The CMIA Government Securities Account performed well, turning in a gain of 17.90 percent and outperforming the category average of 17.34 percent for the 12 months, according to Lipper. The Fund continued to de-emphasize mortgage-backed securities and held bonds with maturities a little longer than average. We are certainly pleased with the performance of CMIA throughout 1995, and we will continue to monitor economic and market conditions to help maintain CMIA's position as a top-performing mutual fund. You likely will find that the expertise of our investment professionals is even more valuable as we grapple with the federal budget battle and anticipate the Presidential elections in the months ahead. ECONOMIC FORECAST: FIRST AND SECOND QUARTERS 1996 A look ahead at 1996 shows a continuation of 1995, with low inflation, a slow economy and continued reductions in interest rates by the Fed. This scenario -- combined with a strong dollar and decreasing rates overseas -- provides a favorable backdrop for the bond market. In the bond market, the ingredients for still lower yields are present, but most of the rally seems to be behind us. With our inflation forecast of 2 percent, long-term treasury yields should be about 6 percent. A strong bond market and low interest rates should fuel more growth in the stock market. That growth could, however, be dampened by a lag in corporate earnings. Lackluster corporate earnings could introduce downward pressures on the market and create some volatility. Our investment managers also are keeping a close eye on Washington. Although the current battle over the federal budget signifies another step in the march toward fiscal responsibility, it could create short-term volatility in the markets. The presidential election in November bears watching as well. Overall, the fundamentals are extraordinarily bullish: a slowing economy, no inflation, improving prospects of a balanced federal budget and falling short-term interest rates. Until these dynamics change, we look forward to another strong year in the financial markets. SUMMARY For most investors, the current bull market is a dream come true. But, anyone who has watched the markets over time knows that circumstances can change quickly and double-digit returns can easily dwindle. Successful investors anticipate those ups and downs and ride them out -- because they know that, in the long run, the stock market has provided financial rewards. That why we, too, stick to a tried and true investment discipline designed to work in good times and in bad, over time. On the whole, we are pleased with the results of CMIA for 1995 and we hope you share our enthusiasm and optimism for the coming year. If you want to know more about CMIA and the options available to you, talk to your registered representative or call 1-800-234-5606. David E. Sams, Jr. PRESIDENT AND CHIEF EXECUTIVE OFFICER CONNECTICUT MUTUAL LIFE INSURANCE COMPANY THE CMIA ACCOUNTS LIQUID The objective of this Account is to achieve as high a level of current income as possible consistent with safety of principal and maintenance of liquidity by investing in money market instruments. GOVERNMENT SECURITIES The Account seeks to provide a high level of current income with a high degree of safety of principal by investing in securities issued by, or guaranteed as to principal and interest by, the U.S. Government, its agencies, or authorities or instrumentalities and by obligations that are fully collateralized or otherwise fully backed by U.S. Government Securities.* INCOME This objective of this Account is to obtain a high level of current income consistent with prudent investment risk and preservation of capital, by investing primarily in fixed-income debt securities that generally mature within five years of purchase. TOTAL RETURN This Account attempts to maximize over time the return achieved from capital appreciation and income by varying the allocation of the Account's assets among stocks, corporate bonds, securities issued by the U.S. Government, and money market instruments of the type acquired respectively by the Growth Account, the Government Securities Account, the Income Account and the Liquid Account. GROWTH This Account invests in common stock with low price-earnings ratios and better than anticipated earnings, with the goal of long-term growth of capital. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE. LIPPER RANKINGS DO NOT TAKE INTO CONSIDERATION THE EFFECT OF SALES CHARGES AND HAD SALES CHARGES BEEN INCLUDED, THE PERFORMANCE RANKINGS WOULD HAVE BEEN LESS FAVORABLE. * THE GOVERNMENT BACKING APPLIES ONLY TO THE TIMELY PAYMENT OF PRINCIPAL AND INTEREST AND DOES NOT APPLY TO THE SHARES OF THE FUND. THIS MATERIAL IS INTENDED FOR USE ONLY WHEN ACCOMPANIED OR PRECEDED BY A PROSPECTUS. LIQUID ACCOUNT The CMIA Liquid Account showed a 5.11 percent increase -- about comparable with the Lipper category average of 5.37 percent -- for the year ended December 31, 1995. Money market yields were modest, consistent with low interest rates and low inflation in 1995. We expect interest rates to remain low and money markets to continue producing low yields Over time, however, the CMIA Liquid Account has turned in respectable results, with a 20.5% return for the five years ended December 31, 1995, according to Lipper Analytical Services, Inc.
FISCAL PERIOD CMIA ENDED LIQUID FUND CPI - ----------- ----------- --------- 12/31/85 10,000 10,000 12/31/86 10,603 10,119 12/31/87 11,236 10,566 12/31/88 12,003 11,032 12/31/89 13,027 11,543 12/31/90 14,008 12,265 12/31/91 14,751 12,630 12/31/92 15,177 13,005 12/31/93 15,525 13,361 12/31/94 16,054 13,708 12/31/95 16,875 14,064
Comparative performance of $10,000 invested in the CMIA Liquid Account and the Consumer Price Index. The Consumer Price Index is an unmanaged index and represents price changes in a broad market basket of consumer goods and is indicative of the rate of inflation. AN INVESTMENT IN THE LIQUID ACCOUNT IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT AND THERE IS NO ASSURANCE THAT THE MONEY MARKET INSTRUMENTS WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE. Past performance is not predictive of future performance. - -------------------------------------------------------------------------------- FOR PERIODS ENDED 12/31/95. THE W/O SC RETURNS DO NOT REFLECT THE EFFECTS OF SALES CHARGES. THE W/ SC ASSUMES THE CURRENT MAXIMUM INITIAL SALES CHARGES OF 2.00% FOR THE INCOME ACCOUNT, 4.00% FOR THE GOVERNMENT SECURITIES ACCOUNT AND 5.00% FOR THE TOTAL RETURN AND GROWTH ACCOUNTS. THE LIQUID ACCOUNT HAS NO INITIAL SALES CHARGES. ALL PORTFOLIOS BECAME EFFECTIVE SEPTEMBER 16, 1985 EXCEPT FOR THE LIQUID ACCOUNT WHICH WAS FIRST OFFERED TO THE PUBLIC ON MARCH 31, 1982. STANDARD RETURNS ARE NET OF FUND EXPENSES AND INCLUDE REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. LIPPER RANKINGS DO NOT TAKE INTO CONSIDERATION THE EFFECT OF SALES CHARGES AND HAD SALES CHARGES BEEN INCLUDED, THE PERFORMANCE RANKINGS MAY HAVE BEEN LESS FAVORABLE. GOVERNMENT SECURITIES ACCOUNT The CMIA Government Securities Account outperformed the competition, turning in a 17.90 percent return for the year ended December 31, 1996, compared with 17.34 percent for the Lipper category average. We continued to de-emphasize mortgage-backed securities, which tend to underperform in periods of falling interest rates. We also maintained bonds with maturities a little longer than average, which paid off well in last year's falling rate environment. We will continue with these strategies as we look for interest rates to remain low and the bond market to remain healthy. Over the past five years ended December 31, 1995, the CMIA Government Securities Account has provided a return of 51.67 percent.
CMIA FISCAL GOVERNMENT MERRILL LYNCH PERIOD SECURITIES GOVERNMENT ENDED FUND CPI MASTER INDEX - ----------- --------- --------- ------------- 12/31/85 10,000 10,000 10,000 12/31/86 10,719 10,119 11,539 12/31/87 11,076 10,566 11,789 12/31/88 11,961 11,032 12,627 12/31/89 13,648 11,543 14,412 12/31/90 14,936 12,265 15,684 12/31/91 17,181 12,630 18,069 12/31/92 18,224 13,005 19,376 12/31/93 19,966 13,361 21,435 12/31/94 19,132 13,708 20,743 12/31/95 22,558 14,064 24,540
Comparative performance of $10,000 invested in the CMIA Government Securities Account, the Merrill Lynch Government Master Index and the Consumer Price Index. The Merrill Lynch Government Master Index represents a broad index of unmanaged Government bonds not adjusted for expenses. If portfolio expenses had been applied to the index, its ending value would have been lower. The Consumer Price Index is an unmanaged index and represents price changes in a broad market basket of consumer goods and is indicative of the rate of inflation. Past performance is not predictive of future performance. FOR EACH ACCOUNT, THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL INVESTMENT. INCOME ACCOUNT The CMIA Income Account had another very competitive year, providing a return of 11.72 percent -- compared with the Lipper category average of 10.84 percent for other investment guide short-term bond funds. The Fund continued to invest in high quality corporate bonds and was well-positioned for the declining interest rate environment. In line with our economic views, we held bonds with slightly longer than average maturities. We continued our conservative management approach and maintained relatively stable net asset values. The CMIA Income account, in fact, was cited by U.S. NEWS & WORLD REPORT on January 29, 1996 as one of the "best funds for the long haul" -- funds that are "tops at rewarding investors over time." As interest rates and inflation remain low, we expect bond funds such as the CMIA Income Account to continue to perform well.
SALOMON BROTHERS 1-3 YEAR TREASURY/ FISCAL GOVERNMENT PERIOD CMIA SPONSORED/ ENDED INCOME FUND CPI CORPORATE INDEX - ----------- ----------- --------- --------------- 12/31/85 10,000 10,000 10,000 12/31/86 10,900 10,119 11,046 12/31/87 11,121 10,566 11,677 12/31/88 11,886 11,032 12,424 12/31/89 13,001 11,543 13,782 12/31/90 13,824 12,265 15,119 12/31/91 15,789 12,630 16,911 12/31/92 16,831 13,005 18,002 12/31/93 18,173 13,361 19,017 12/31/94 18,097 13,708 19,133 12/31/95 20,227 14,064 21,216
Comparative performance of $10,000 invested in the CMIA Income Account, the Salomon Brothers 1-3 Year Treasury/Government Sponsored/Corporate Index and the Consumer Price Index. The Salomon Brothers Index represents an unmanaged group of bonds not adjusted for operating expenses. If portfolio operating expenses had been applied to the index, its ending value would have been lower. The Consumer Price Index is an unmanaged index and represents price changes in a broad market basket of consumer goods and is indicative of the rate of inflation. In the fourth quarter of 1987, the Income Account investment objectives changed from a general bond fund to investing primarily in fixed-income debt securities that generally mature within five years of purchase. Past performance is not predictive of future performance. 2 TOTAL RETURN ACCOUNT The CMIA Total Return Account posted a 23.95 percent increase for the year ended December 31, 1995, performing near the Lipper category average of 25.16 percent. This Fund holds stocks, bonds and cash -- each managed with the same investment disciplines used in our CMIA stock, bond and money market accounts. In addition, we vary the mix of stocks, bonds and cash in line with a quantitatively based, value-oriented asset allocation discipline. Although the return of the Total Return Account was excellent last year, it was below the category average because of a slight underweight in stocks. We maintained our stock weighting near 40 percent for most of the year, consistent with our asset allocation discipline. The impact of imbalance in the stock/bond weighting was lessened somewhat by our good stock selection -- producing about average performance. Over time, the CMIA Total Return Account has provided healthy returns: Five Years Ten Years CMIA 98.13% 211.15% Avg. Balanced Fund 85.12% 196.14%
FISCAL PERIOD CMIA TOTAL ENDED RETURN FUND CPI - ----------- ----------- --------- 12/31/85 00,000 00,000 12/31/86 00,000 00,000 12/31/87 00,000 00,000 12/31/88 00,000 00,000 12/31/89 00,000 00,000 12/31/90 00,000 00,000 12/31/91 00,000 00,000 12/31/92 00,000 00,000 12/31/93 00,000 00,000 12/31/94 00,000 00,000 12/31/95 00,000 00,000
Comparative performance of $10,000 invested in the CMIA Total Return Account, the Merrill Lynch Corporate & Government Master Index, the S&P 500 and the Consumer Price Index. The Merrill Lynch Government Corporate Master Index represents an unmanaged group of bonds not adjusted for operating expenses. The S&P 500 represents a broad index of unmanaged securities not adjusted for expenses. If portfolio expenses had been applied to these indices, their ending values would have been lower. The Consumer Price Index is an unmanaged index and represents price changes in a broad market basket of consumer goods and is indicative of the rate of inflation. Past performance is not predictive of future performance. GROWTH ACCOUNT The CMIA Growth Account had a strong year in 1995, returning 36.40 percent to investors, according to Lipper Analytical Services Inc. That performance outshone the average growth fund, which Lipper said returned 30.79 percent. The Growth Account's stellar performance can be attributed to two factors. First was our consistent strategy of buying stocks with low price-earnings ratios and positive earnings surprise. Second was the fund's strong performance in the fourth quarter -- a quarter in which other stock funds were battered by the underperformance of technology stocks. Because we adhered to our discipline and didn't chase after the technology stock fad, we were able to avoid the fall and come out ahead. Our discipline calls for us to find stocks that are undervalued and out of favor but are starting to show earnings momentum. This discipline has worked well over time as evidenced by the long-term results of the CMIA Growth Fund: Five Years Ten Years CMIA 151.12% 298.62% Avg. Growth Fund 113.44% 251.83% SOURCE: LIPPER ANALYTICAL SERVICES The CMIA Growth Fund was cited by U.S. NEWS & WORLD REPORT in its January 29, 1996, issue as one of the "best funds for the long haul."
FISCAL PERIOD CMIA ENDED GROWTH FUND CPI - ----------- ----------- --------- 12/31/85 00,000 00,000 12/31/86 00,000 00,000 12/31/87 00,000 00,000 12/31/88 00,000 00,000 12/31/89 00,000 00,000 12/31/90 00,000 00,000 12/31/91 00,000 00,000 12/31/92 00,000 00,000 12/31/93 00,000 00,000 12/31/94 00,000 00,000 12/31/95 00,000 00,000
Comparative performance of $10,000 invested in the CMIA Growth Account, the S&P 500 and the Consumer Price Index. The S&P 500 represents a broad index of unmanaged securities not adjusted for expenses. If portfolio expenses had been applied to the index, its ending value would have been lower. The Consumer Price Index is an unmanaged index and represents price changes in a broad market basket of consumer goods and is indicative of the rate of inflation. Past performance is not indicative of future performance. 3 CONNECTICUT MUTUAL INVESTMENT ACCOUNTS, INC. F I N A N C I A L S T A T E M E N T S - ----------DECEMBER 31, 1995 Liquid Account Government Securities Account Income Account Total Return Account Growth Account PERFORMANCE -- TOTAL RETURN*
SALES CHARGE ADJUSTED PERFORMANCE AS OF 12/31/95* -- AFTER EXPENSES AVERAGE ANNUALIZED ACCOUNTS ONE YEAR FIVE YEAR TEN YEAR SINCE INCEPTION LIQUID** 5.11% 3.79% 5.37% 6.44% GOVERNMENT SECURITIES 13.18% 7.71% 8.48% 9.17% INCOME 7.29% 7.03% 7.30% 7.87% TOTAL RETURN 17.75% 13.48% 11.45% 12.17% GROWTH 29.58% 19.00% 14.25% 14.93%
30 DAY CURRENT YIELD ACCOUNTS AS OF 12/31/95 LIQUID** 4.72% GOVERNMENT SECURITIES 4.89% INCOME 5.41% TOTAL RETURN GROWTH
Sales Charge Adjusted Performance assumes the current initial sales charge reduces portfolio performance and was paid at the beginning of each period shown. The current maximum initial sales charges are 4.00% for the Government Securities and Income Accounts and 5.00% for the Total Return and Growth Accounts. The Liquid Account has no initial sales charge. ACTUAL PORTFOLIO PERFORMANCE AS OF 12/31/95* -- AFTER EXPENSES AVERAGE ANNUALIZED ACCOUNTS ONE YEAR FIVE YEAR TEN YEAR SINCE INCEPTION LIQUID** 5.11% 3.79% 5.37% 6.44% GOVERNMENT SECURITIES 17.90% 8.59% 8.92% 9.61% INCOME 11.77% 7.91% 7.74% 8.30% TOTAL RETURN 23.95% 14.65% 12.02% 12.73% GROWTH 36.40% 20.23% 14.84% 15.50%
7-DAY CURRENT YIELD ACCOUNTS AS OF 12/31/95 LIQUID** 4.73% GOVERNMENT SECURITIES INCOME TOTAL RETURN GROWTH
Actual Portflio Performance assumes the initial sales charge is paid by a client in a prior period and is not reflected on this table. All portfolios became effective September 16, 1985 except for the Liquid Account which was first offered to the public on March 31, 1982. * Total Return figures include reinvestment of all dividends and capital gains. Performance data quoted represents past performance. The investment return and principal values of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. ** There can be no assurance that the Liquid Account will be able to maintain a stable net asset value of $1.00 per share. An investment in the Liquid Account is neither insured not guaranteed by the U.S. Government. 1 SCHEDULE OF INVESTMENTS CONNECTICUT MUTUAL INVESTMENT ACCOUNTS, INC. December 31, 1995
LIQUID ACCOUNT
PRINCIPAL MARKET AMOUNT SECURITY VALUE COMMERCIAL PAPER (95.9% OF NET ASSETS) American Express Credit Corp. $ 1,300,000 5.60%, due 3/5/96 $ 1,300,000 950,000 5.63%, due 3/20/96 950,000 700,000 5.53%, due 3/29/96 700,000 American Home Products Corp. 1,500,000 5.60%, due 3/4/96 1,485,300 Anheuser-Busch Companies, Inc. 1,000,000 5.55%, due 3/6/96 989,979 Banc One Corp. 1,600,000 5.68%, due 1/19/96 1,595,456 Beneficial Corp. 800,000 5.66%, due 1/3/96 799,748 1,500,000 5.50%, due 4/8/96 1,477,542 Cargill, Inc. 1,500,000 5.65%, due 1/16/96 1,496,469 1,000,000 5.55%, due 3/4/96 990,287 Cargill Financial Services Corp. 1,000,000 5.52%, due 6/3/96 976,387 Carolina Telephone & Telegraph Co. 775,000 5.87%, due 1/2/96 774,874 Clorox Company 1,125,000 5.53%, due 3/11/96 1,112,903 Corporate Asset Funding Co., Inc. 1,500,000 5.67%, due 1/24/96 1,494,566 1,100,000 5.625%, due 2/22/96 1,091,062 Corporate Receivables Corp. 725,000 5.68%, due 2/6/96 720,882 1,500,000 5.68%, due 2/7/96 1,491,243 Electronic Data Systems Corp. 1,500,000 5.70%, due 1/4/96 1,499,287 Ford Motor Credit Co. 1,300,000 5.55%, due 1/12/96 1,297,795 1,400,000 5.69%, due 2/5/96 1,400,000 910,000 5.69%, due 2/12/96 910,000 Gateway Fuel Co. 1,500,000 5.63%, due 1/26/96 1,494,135 General Electric Capital Corp. 1,000,000 5.58%, due 2/8/96 994,110 1,000,000 5.65%, due 2/16/96 992,781 1,000,000 5.58%, due 4/4/96 985,430 500,000 5.50%, due 4/15/96 491,979 Golden Peanut Co. 2,130,000 5.62%, due 3/7/96 2,108,054 Heinz (H.J.) Co. 1,000,000 5.80%, due 1/30/96 995,328 2,000,000 5.75%, due 2/2/96 1,989,778 Hewlett-Packard Co. 1,050,000 5.70%, due 1/2/96 1,049,834 1,000,000 5.42%, due 3/19/96 988,257 Household Finance Corp. 1,000,000 5.70%, due 2/9/96 993,825 International Lease Finance Corp. 1,100,000 5.67%, due 1/11/96 1,098,267 2,220,000 5.65%, due 2/26/96 2,200,489 McGraw-Hill Inc. 1,500,000 5.52%, due 3/11/96 1,483,900
PRINCIPAL MARKET AMOUNT SECURITY VALUE MCI Communications Corp. $ 1,000,000 5.53%, due 2/28/96 $ 991,091 Merrill Lynch & Co., Inc. 1,250,000 5.72%, due 1/18/96 1,246,624 1,000,000 5.63%, due 2/21/96 992,024 Monsanto Co. 1,000,000 5.80%, due 1/23/96 996,456 Morgan (J.P.) & Company, Inc. 1,100,000 5.58%, due 3/15/96 1,087,383 1,500,000 5.45%, due 3/18/96 1,482,515 Morgan Guaranty Trust Co. 1,000,000 5.57%, due 3/1/96 990,717 National Rural Utilities Cooperative Finance Corp. 1,100,000 5.68%, due 1/9/96 1,098,612 Norwest Corp. 1,600,000 5.67%, due 2/23/96 1,586,644 PHH Corporation 1,500,000 5.68%, due 1/8/96 1,498,343 1,000,000 5.65%, due 1/17/96 997,489 1,000,000 5.70%, due 1/29/96 995,567 Penney (J.C.) Funding Corp. 1,500,000 5.60%, due 2/29/96 1,486,233 Republic National Bank of New York 2,000,000 5.57%, due 2/1/96 1,990,407 Swiss Bank Corp. 1,000,000 5.67%, due 3/25/96 999,769 Tampa Electric Co. 1,200,000 5.67%, due 1/29/96 1,194,708 Transamerica Finance Corp. 1,000,000 5.60%, due 1/5/96 999,378 1,400,000 5.65%, due 1/5/96 1,399,121 1,090,000 5.71%, due 1/16/96 1,087,407 U.S. Bancorp 1,000,000 5.55%, due 2/13/96 993,371 2,450,000 5.50%, due 2/22/96 2,430,536 Xerox Corp. 1,500,000 5.70%, due 1/10/96 1,497,862 1,150,000 5.69%, due 1/17/96 1,147,092 1,100,000 5.70%, due 1/22/96 1,096,342 ----------- TOTAL COMMERCIAL PAPER (COST $72,705,638) 72,705,638 ----------- U.S. GOVERNMENT & AGENCY SHORT-TERM OBLIGATIONS (4.0% OF NET ASSETS) Student Loan Marketing Assn. 2,000,000 5.23%, due 5/14/96 2,000,000 U.S. Treasury Note 1,000,000 6.125%, due 7/31/96 1,001,875 ----------- TOTAL U.S. GOVERNMENT AGENCY SHORT-TERM OBLIGATIONS (COST $3,001,875) 3,001,875 ----------- TOTAL INVESTMENTS (COST $75,707,513) $75,707,513 ----------- -----------
4 The accompanying notes are an integral part of these financial statements.
GOVERNMENT SECURITIES ACCOUNT INCOME ACCOUNT
3
PRINCIPAL MARKET AMOUNT SECURITY VALUE U.S. GOVERNMENT & AGENCY LONG-TERM OBLIGATIONS (97.4% OF NET ASSETS) Federal National Mortgage Assn. $ 870,467 7.00%, 2019 $ 876,178 Government National Mortgage Assn. 62,393 11.50%, 1998 65,980 31,954 9.50%, 2001 33,581 46,713 7.25%, 2005 48,844 297,452 7.50%, 2006 310,260 187,668 8.00%, 2006 197,716 450,852 8.00%, 2007 470,293 168,055 8.25%, 2008 177,600 78,352 9.00%, 2008 83,871 501,423 9.00%, 2009 537,000 74,173 13.00%, 2011 88,057 3,408 13.50%, 2011 4,099 52,664 14.00%, 2011 64,316 31,389 15.00%, 2011 38,461 3,466 12.00%, 2012 4,018 107,759 13.50%, 2012 128,856 166,026 15.00%, 2012 203,214 104,227 11.50%, 2013 119,329 44,287 13.00%, 2013 52,482 174,954 13.50%, 2013 210,436 82,420 12.00%, 2014 95,813 280,426 12.50%, 2014 330,306 137,371 13.00%, 2014 163,084 1,406 13.50%, 2014 1,692 422,135 7.375%, 2017 428,995 391,370 10.00%, 2019 430,749 62,082 12.50%, 2019 72,113 2,092,796 6.50%, 2023 2,075,782 1,251,999 7.00%, 2023 1,267,350 U.S. Treasury Bond 8,500,000 9.25%, 2016 11,683,505 U.S. Treasury Notes 3,500,000 8.875%, 1997 3,725,295 6,750,000 9.25%, 1998 7,403,872 2,500,000 6.75%, 1999 2,614,050 1,500,000 9.125%, 1999 1,673,910 2,500,000 7.50%, 2001 2,753,525 4,050,000 11.75%, 2001 5,201,091 4,450,000 7.25%, 2004 4,948,533 ----------- TOTAL U.S. GOVERNMENT & AGENCY LONG-TERM OBLIGATIONS (COST $46,462,748) 48,584,256 ----------- REPURCHASE AGREEMENTS* (.7% OF NET ASSETS) State Street Bank & Trust Co. 4.75%, due 1/2/96 (COST 377,000 $377,000) 377,000 ----------- TOTAL INVESTMENTS (COST $46,839,748) $48,961,256 ----------- -----------
*Repurchase agreements are fully collateralized by U.S. Government obligations.
PRINCIPAL MARKET AMOUNT SECURITY VALUE CORPORATE BONDS (68.7% OF NET ASSETS) AEROSPACE (1.7%) British Aerospace Finance BV $ 300,000 8.00%, 1997 $ 309,000 Coltec Industries Inc. 250,000 9.75%, 2000 257,500 ----------- 566,500 ----------- AIRLINES (1.6%) Southwest Airlines Co. 500,000 9.25%, 1998 533,600 ----------- AUTO & AUTO RELATED (2.4%) Burmah Castrol Capital, Ltd. 500,000 7.00%, 1997 513,800 Ford Motor Co. 286,301 6.27%, 2000 289,261 ----------- 803,061 ----------- BANKING (8.6%) Barnett Banks, Inc. 325,000 8.50%, 1999 351,111 Chemical Banking Corp. 325,000 6.625%, 1998 331,269 Citicorp 325,000 9.46%, 1996 328,731 First Fidelity Bancorporation 325,000 8.50%, 1998 342,885 First Union Corp. 325,000 6.75%, 1998 331,103 Home Savings of America 500,000 10.50%, 1997 504,475 Mellon Financial Co. 325,000 6.50%, 1997 330,223 Security Pacific Corp. 325,000 7.75%, 1996 331,097 ----------- 2,850,894 ----------- BROKER/DEALER (1.0%) Merrill Lynch & Co., Inc. 325,000 8.25%, 1996 330,912 ----------- CHEMICALS (2.0%) FMC Corp. 250,000 8.75%, 1999 269,248 Lyondell Petrochemical Co. 400,000 8.25%, 1997 410,320 ----------- 679,568 ----------- CONGLOMERATES (1.2%) Tenneco, Inc. 375,000 10.00%, 1998 412,237 ----------- ELECTRIC UTILITIES (3.8%) Consumers Power Co. 250,000 8.75%, 1998 263,335 Long Island Lighting Co. 500,000 8.75%, 1996 506,145
5 INCOME ACCOUNT (cont'd)
PRINCIPAL MARKET AMOUNT SECURITY VALUE Midwest Power Systems Inc. $ 500,000 6.25%, 1998 $ 505,235 ----------- 1,274,715 ----------- ELECTRICAL & ELECTRONIC EQUIPMENT (1.5%) Westinghouse Electric Corp. 500,000 7.75%, 1996 502,105 ----------- FINANCIAL SERVICES (13.0%) American General Finance Corp. 300,000 8.50%, 1998 320,706 Associates Corp. of North America 300,000 7.40%, 1999 316,149 Avco Financial Services, Inc. 500,000 5.875%, 1997 501,975 Banque Nationale de Paris 205,000 9.875%, 1998 224,157 Beneficial Corp. 500,000 9.125%, 1998 534,940 Countrywide Funding Corp. 300,000 6.57%, 1997 304,269 General Motors Acceptance Corp. 500,000 5.65%, 1997 500,675 Green Tree Financial Corp. 250,000 7.70%, 2019 260,232 Household Financial Corporation Ltd. 250,000 6.00%, 1998 251,853 Household International Netherlands BV 250,000 6.00%, 1999 251,222 Norwest Financial, Inc. 325,000 6.50%, 1997 330,275 Transamerica Finance Group, Inc. 500,000 7.42%, 1998 517,065 ----------- 4,313,518 ----------- FOOD & BEVERAGES (4.6%) ConAgra, Inc. 500,000 9.75%, 1997 532,925 Grand Metropolitan Investment Corp. 325,000 8.125%, 1996 329,602 Nabisco Brands Inc. 325,000 8.00%, 2000 345,443 Seagram Company Ltd. 300,000 9.75%, 2000 304,167 ----------- 1,512,137 ----------- INSURANCE (1.2%) SunAmerica Inc. 370,000 9.00%, 1999 399,186 ----------- LEASING (2.6%) Penske Truck Leasing Co. 325,000 7.75%, 1999 339,417 U.S. Leasing International Inc. 500,000 7.00%, 1997 511,645 ----------- 851,062 -----------
PRINCIPAL MARKET AMOUNT SECURITY VALUE LEISURE & ENTERTAINMENT (.8%) Blockbuster Entertainment Corp. $ 250,000 6.625%, 1998 $ 252,798 ----------- MANUFACTURING (.8%) First Brands Corp. 265,000 9.125%, 1999 273,679 ----------- MORTGAGE-BACKED SECURITIES (2.9%) GE Capital Mortgage Services, Inc. 135,893 6.50%, 2024 135,596 Housing Securities, Inc. 193,964 7.25%, 2012 196,752 Ryland Mortgage Securities Corp. 413,677 8.339%, 2030 417,167 Salomon Brothers, Inc. 239,258 0.00%, 2017 (principal only) 174,881 161,680 12.50%, 2017 44,664 ----------- 969,060 ----------- OFFICE EQUIPMENT (.8%) Xerox Corp. 270,000 9.20%, 1999 274,450 ----------- OIL & GAS (6.8%) Arkla, Inc. 505,000 9.875%, 1997 525,513 Coastal Corp. 325,000 8.75%, 1999 350,681 Empresa Columbia de Petroleos 250,000 7.25%, 1998 249,375 Florida Gas Transmission Co. 500,000 7.75%, 1997 516,745 Phillips Petroleum Co. 458,313 7.53%, 1998 470,781 Transcontinental Gas Pipe Line Corp. 150,000 9.00%, 1996 153,974 ----------- 2,267,069 ----------- PAPER & FOREST PRODUCTS (2.0%) Celulosa Arauco y Constitucion SA 350,000 7.25%, 1998 359,187 Georgia-Pacific Corp. 300,000 9.85%, 1997 316,293 ----------- 675,480 ----------- PRINTING & PUBLISHING (2.6%) Reed Publishing USA Inc. 325,000 7.24%, 1997 330,986 Time Warner Inc. 500,000 7.45%, 1998 513,925 ----------- 844,911 ----------- RETAIL TRADE (1.0%) Sears, Roebuck & Co. 300,000 8.39%, 1999 322,965 ----------- SAVINGS & LOAN (1.1%) Golden West Financial Corp. 325,000 8.625%, 1998 346,986 -----------
6 The accompanying notes are an integral part of these financial statements. INCOME ACCOUNT (cont'd)
PRINCIPAL MARKET AMOUNT SECURITY VALUE TELECOMMUNICATIONS (.9%) Tele-Communications, Inc. $ 315,000 5.28%, 1996 $ 313,743 ----------- TELEPHONE UTILITIES (1.9%) GTE Corp. 300,000 8.85%, 1998 319,845 MCI Communications Corp. 300,000 7.625%, 1996 304,779 ----------- 624,624 ----------- TOBACCO (1.9%) B.A.T Capital Corp. 300,000 6.66%, 2000 306,930 Philip Morris Companies Inc. 300,000 8.75%, 1996 308,247 ----------- 615,177 ----------- TOTAL CORPORATE BONDS (COST $22,975,602) 22,810,437 ----------- U.S. GOVERNMENT & AGENCY LONG-TERM OBLIGATIONS (25.6% OF NET ASSETS) Federal Home Loan Mortgage Corp. 130,372 5.50%, 1997 129,241 369,783 5.50%, 1998 366,199 Federal National Mortgage Assn. 813,043 7.50%, 2008 836,158 822,819 7.00%, 2009 837,983 250,000 6.00%, 2019 249,295 Government National Mortgage Assn. 387,056 7.00%, 2009 396,004 45,963 13.00%, 2014 54,566 U.S. Treasury Notes 3,350,000 6.75%, 1999 3,502,827 1,950,000 7.75%, 1999 2,116,062 ----------- TOTAL U.S. GOVERNMENT & AGENCY LONG-TERM OBLIGATIONS (COST $8,352,192) 8,488,335 ----------- COMMERCIAL PAPER (3.8% OF NET ASSETS) Carolina Telephone & Telegraph Co. 1,250,000 5.87%, due 1/2/96 1,249,796 ----------- TOTAL INVESTMENTS (COST $32,577,590) $32,548,568 ----------- -----------
TOTAL RETURN ACCOUNT
NUMBER OF MARKET SHARES SECURITY VALUE COMMON STOCKS (42.5% OF NET ASSETS) AEROSPACE (4.2%) 22,600 General Dynamics Corp. $1,336,225 29,671 Lockheed Martin Corp. 2,344,009 80,300 Loral Corp. 2,840,612 19,000 McDonnell Douglas Corp. 1,748,000
NUMBER OF MARKET SHARES SECURITY VALUE 17,600 Rockwell International Corp. $ 930,600 ------------ 9,199,446 ------------ AIRLINES (1.5%) 12,400 AMR Corp. 920,700 15,900 Delta Air Lines, Inc. 1,174,612 25,100 Northwest Airlines Corp. 1,280,100 ------------ 3,375,412 ------------ BANKING (4.0%) 42,800 Bank of Boston Corp. 1,979,500 12,600 Bankers Trust New York Corp. 837,900 32,400 Chase Manhattan Corp. 1,964,250 21,300 Morgan (J.P.) & Company, Inc. 1,709,325 34,100 PNC Bank Corp. 1,099,725 5,400 Wells Fargo & Co. 1,166,400 ------------ 8,757,100 ------------ BUILDING MATERIALS & CONSTRUCTION (.5%) 33,800 USG Corp. 1,014,000 ------------ CHEMICALS (4.0%) 9,600 Cabot Corp. 517,200 16,000 FMC Corp. 1,082,000 15,000 Goodrich (B.F.) Co. 1,021,875 28,800 Grace (W.R.) & Co. 1,702,800 39,600 IMC Global, Inc. 1,618,650 12,000 Monsanto Co. 1,470,000 Potash Corporation of Saskatchewan 19,800 Inc. 1,403,325 ------------ 8,815,850 ------------ CONGLOMERATES (1.5%) 26,000 Textron, Inc. 1,755,000 41,600 Tyco International Ltd. 1,482,000 ------------ 3,237,000 ------------ DRUGS & COSMETICS (.4%) 9,500 American Home Products Corp. 921,500 ------------ ELECTRIC UTILITIES (3.0%) 50,700 Entergy Corp. 1,482,975 37,300 FPL Group, Inc. 1,729,787 33,900 Illinova Corp. 1,017,000 10,600 Texas Utilities Co. 435,925 54,300 Unicom Corp. 1,778,325 ------------ 6,444,012 ------------ FOOD & BEVERAGES (.4%) 24,100 Dole Food Company, Inc. 843,500 ------------ HEALTH SERVICES & HOSPITAL SUPPLIES (1.6%) 24,100 Baxter International Inc. 1,009,188 28,700 Columbia Healthcare Corp. 1,456,525 44,300 OrNda HealthCorp. 1,029,975 ------------ 3,495,688 ------------ INSURANCE (4.2%) 26,500 Aetna Life & Casualty Co. 1,835,125
7 TOTAL RETURN ACCOUNT (cont'd)
NUMBER OF MARKET SHARES SECURITY VALUE 41,381 Allstate Corp. $1,701,794 12,600 CIGNA Corp. 1,300,950 15,300 St. Paul Companies Inc. 851,062 36,100 TIG Holdings, Inc. 1,028,850 39,200 Travelers Group 2,464,700 ------------ 9,182,481 ------------ LEISURE RELATED (.5%) 37,675 Mattel, Inc. 1,158,506 ------------ MACHINERY & EQUIPMENT (2.3%) 26,300 AGCO Corp. 1,341,300 38,400 Case Corp. 1,756,800 11,400 Harnischfeger Industries, Inc. 379,050 33,390 Mark IV Industries, Inc. 659,453 25,650 Parker-Hannifin Corp. 878,513 ------------ 5,015,116 ------------ MANUFACTURING (.4%) 25,300 Black & Decker Corp. 891,825 ------------ MISCELLANEOUS (.8%) 35,800 Premark International, Inc. 1,812,375 ------------ OFFICE EQUIPMENT (.8%) 12,400 Xerox Corp. 1,698,800 ------------ OIL & GAS (3.3%) 13,400 Amoco Corp. 963,125 26,400 Chevron Corp. 1,386,000 16,400 Mobil Corp. 1,836,800 71,200 Panhandle Eastern Corp. 1,984,700 8,000 Royal Dutch Petroleum Co. 1,129,000 ------------ 7,299,625 ------------ PAPER & FOREST PRODUCTS (.9%) 24,336 Kimberly-Clark Corp. 2,013,804 ------------ REAL ESTATE (.1%) 8,033 Castle & Cooke Inc. 134,558 ------------ RETAIL TRADE (2.5%) 25,100 Eckerd Corp. 1,120,088 49,700 Kroger Co. 1,863,750 42,700 Sears, Roebuck & Co. 1,665,300 37,100 Service Merchandise Co., Inc. 185,500 37,000 Waban Inc. 693,750 ------------ 5,528,388 ------------ SAVINGS & LOAN (.5%) 39,000 Ahmanson (H.F.) & Co. 1,033,500 ------------ TECHNOLOGY (2.8%) 26,000 Compaq Computer Corp. 1,248,000 21,200 Conner Peripherals, Inc. 445,200 20,900 Seagate Technology Inc. 992,750 30,600 Storage Technology Corp. 730,575 38,600 Stratus Computer, Inc. 1,336,525 28,000 Sun Microsystems, Inc. 1,277,500 ------------ 6,030,550 ------------ TELEPHONE UTILITIES (2.3%) 31,400 Ameritech Corp. 1,852,600
NUMBER OF MARKET SHARES SECURITY VALUE 37,100 GTE Corp. $1,632,400 27,200 NYNEX Corp. 1,468,800 ------------ 4,953,800 ------------ TOTAL COMMON STOCKS (COST $70,464,960) 92,856,836 ------------ PRINCIPAL CORPORATE BONDS AMOUNT (16.3% OF NET ASSETS) AEROSPACE (.4%) British Aerospace Finance BV $ 500,000 8.00%, 1997 515,000 Coltec Industries, Inc. 250,000 9.75%, 2000 257,500 ------------ 772,500 ------------ AUTO & AUTO RELATED (.2%) Burmah Castrol Capital, Ltd. 500,000 7.00%, 1997 513,800 ------------ BANKING (1.2%) BankAmerica Corp. 500,000 6.00%, 1997 503,515 Chemical Banking Corp. 250,000 10.125%, 2000 293,310 First Fidelity Bancorporation 500,000 8.50%, 1998 527,515 Fleet Financial Group, Inc. 250,000 9.90%, 2001 292,550 Marshall & Ilsley Corp. 500,000 6.95%, 1997 508,285 Mellon Financial Co. 400,000 6.50%, 1997 406,428 ------------ 2,531,603 ------------ CHEMICALS (1.4%) FMC Corp. 500,000 8.75%, 1999 538,495 Lyondell Petrochemical Co. 1,100,000 8.25%, 1997 1,128,380 Morton International, Inc. 500,000 9.25%, 2020 653,780 PPG Industries, Inc. 250,000 9.00%, 2021 320,792 Reliance Industries Ltd. 400,000 8.125%, 2005 402,000 ------------ 3,043,447 ------------ CONGLOMERATES (.7%) Norsk Hydro 500,000 8.75%, 2001 562,500 Tenneco Credit Corp. 500,000 9.25%, 1996 513,235 Tenneco, Inc. 375,000 10.00%, 1998 412,238 ------------ 1,487,973 ------------ DRUGS & COSMETICS (.5%) Procter & Gamble Co. 250,000 9.36%, 2021 319,375
8 The accompanying notes are an integral part of these financial statements. TOTAL RETURN ACCOUNT (cont'd)
PRINCIPAL MARKET AMOUNT SECURITY VALUE Roche Holdings Inc. $ 950,000 2.75%, 2000 $ 845,500 ------------ 1,164,875 ------------ ELECTRIC UTILITIES (.3%) Long Island Lighting Co. 500,000 8.75%, 1996 506,145 Public Service Co. of New Hampshire 250,000 8.875%, 1996 252,733 ------------ 758,878 ------------ ELECTRICAL & ELECTRONIC EQUIPMENT (.5%) Electrolux 500,000 7.75%, 1997 514,062 Westinghouse Electric Corp. 500,000 7.75%, 1996 502,105 ------------ 1,016,167 ------------ FINANCIAL SERVICES (4.2%) American General Finance Corp. 500,000 7.70%, 1997 517,670 500,000 8.50%, 1998 534,510 Aristar, Inc. 250,000 8.125%, 1997 260,955 Associates Corp. of North America 500,000 6.75%, 1999 514,915 Countrywide Funding Corp. 250,000 6.57%, 1997 253,557 500,000 6.085%, 1999 503,090 Fleet Mortgage Corp. 1,000,000 6.125%, 1997 1,006,130 250,000 6.50%, 1999 255,380 Ford Motor Credit Co. 500,000 8.00%, 1997 520,760 500,000 6.25%, 1998 507,455 General Motors Acceptance Corp. 1,000,000 5.65%, 1997 1,001,350 750,000 7.75%, 1997 766,673 Green Tree Financial Corp. 500,000 8.00%, 2020 524,375 Household Financial Corporation Ltd. 250,000 6.00%, 1998 251,853 Household International Netherlands BV 500,000 6.00%, 1999 502,445 Norwest Financial, Inc. 500,000 6.50%, 1997 508,115 Transamerica Finance Corp. 500,000 6.75%, 1997 508,240 250,000 6.80%, 1999 257,702 ------------ 9,195,175 ------------ FOOD & BEVERAGES (1.0%) Bass America Inc. 250,000 6.75%, 1999 257,310 ConAgra, Inc. 500,000 9.75%, 1997 532,925
PRINCIPAL MARKET AMOUNT SECURITY VALUE Nabisco Brands Inc. $ 500,000 8.00%, 2000 $ 531,450 Seagram Company Ltd. 950,000 9.75%, 2000 963,195 ------------ 2,284,880 ------------ INSURANCE (.2%) SunAmerica Inc. 450,000 9.00%, 1999 485,496 ------------ LEASING (.8%) Penske Truck Leasing Co. 750,000 7.75%, 1999 783,270 PHH Corp. 350,000 6.50%, 2000 357,360 U.S. Leasing International Inc. 500,000 7.00%, 1997 511,645 ------------ 1,652,275 ------------ LEISURE & ENTERTAINMENT (.2%) Blockbuster Entertainment Corp. 500,000 6.625%, 1998 505,595 ------------ MANUFACTURING (.2%) Black & Decker Corp. 400,000 6.625%, 2000 408,032 ------------ MORTGAGE-BACKED SECURITIES (.2%) Fleet Mortgage Securities, Inc. 20,523 8.25%, 2023 20,523 Housing Securities, Inc. 310,342 7.25%, 2012 314,803 ------------ 335,326 ------------ OIL & GAS (2.0%) Arkla, Inc. 750,000 9.875%, 1997 780,465 BP America, Inc. 500,000 8.875%, 1997 530,165 Coastal Corp. 500,000 8.125%, 2002 546,885 Petroliam Nasional Berhad 500,000 6.875%, 2003 518,635 Phillips Petroleum Co. 916,625 7.53%, 1998 941,561 TransCanada Pipelines Ltd. 500,000 9.875%, 2021 672,620 Transco Energy Co. 250,000 9.625%, 2000 282,693 ------------ 4,273,024 ------------ PAPER & FOREST PRODUCTS (.6%) Celulosa Arauco y Constitucion SA 500,000 7.25%, 1998 513,125 Georgia-Pacific Corp. 750,000 9.85%, 1997 790,732 ------------ 1,303,857 ------------
9 TOTAL RETURN ACCOUNT (cont'd)
PRINCIPAL MARKET AMOUNT SECURITY VALUE PRINTING & PUBLISHING (.5%) Reed Elsevier, Inc. $ 400,000 6.625%, 2023 $ 390,224 Time Warner Inc. 700,000 7.45%, 1998 719,495 ------------ 1,109,719 ------------ RETAIL TRADE (.1%) Sears, Roebuck & Co. 300,000 8.39%, 1999 322,965 ------------ SAVINGS & LOAN (.2%) Golden West Financial Corp. 500,000 10.25%, 1997 529,240 ------------ TELECOMMUNICATIONS (.2%) Tele-Communications, Inc. 400,000 7.15%, 1998 409,100 ------------ TELEPHONE UTILITIES (.6%) GTE Corp. 750,000 8.85%, 1998 799,612 MCI Communications Corp. 500,000 7.125%, 2000 520,950 ------------ 1,320,562 ------------ TRANSPORTATION (.1%) Federal Express Corp. 250,000 6.25%, 1998 252,062 ------------ TOTAL CORPORATE BONDS (COST $34,849,067) 35,676,551 ------------ U.S. GOVERNMENT & AGENCY LONG-TERM OBLIGATIONS (18.3% OF NET ASSETS) Federal Home Loan Mortgage Corp. 1,000,000 6.00%, 2007 955,930 Federal National Mortgage Assn. 1,207,257 7.50%, 2008 1,241,580 800,000 6.00%, 2019 797,744 653,381 7.00%, 2022 618,262 Government National Mortgage Assn. 645,858 7.00%, 2009 660,791 944,737 7.50%, 2009 976,914 574,570 8.00%, 2017 603,919 2,492,635 6.50%, 2023 2,472,370 3,625,377 6.50%, 2024 3,595,903 1,133,072 7.00%, 2024 1,146,522 U.S. Treasury Bonds 2,150,000 7.50%, 2016 2,520,875 8,250,000 8.75%, 2017 10,910,625 550,000 8.125%, 2019 691,537 U.S. Treasury Notes 3,120,000 6.75%, 1999 3,262,335 250,000 9.125%, 1999 278,985 2,500,000 7.50%, 2001 2,753,525 300,000 5.75%, 2003 303,609 5,620,000 7.25%, 2004 6,249,609 ------------ TOTAL U.S. GOVERNMENT & AGENCY LONG-TERM OBLIGATIONS (COST $36,540,338) 40,041,035 ------------
PRINCIPAL MARKET AMOUNT SECURITY VALUE FOREIGN GOVERNMENT BONDS (.4% OF NET ASSETS) Fomento Economico Mexicano $ 450,000 9.50%, 1997 $ 447,188 Republic of Columbia 300,000 7.125%, 1998 300,000 United Mexican States 250,000 6.97%, 2000 205,000 ------------ TOTAL FOREIGN GOVERNMENT BONDS (COST $989,997) 952,188 ------------ COMMERCIAL PAPER (22.7% OF NET ASSETS) Beneficial Corp. 4,075,000 5.77%, due 1/2/96 4,074,347 Carolina Telephone & Telegraph Co. 1,125,000 5.88%, due 1/5/96 1,124,265 Corporate Receivables Corp. 3,395,000 5.85%, due 1/9/96 3,390,586 Duke Power Co. 4,050,000 5.70%, due 1/5/96 4,047,435 Ford Motor Credit Co. 4,152,000 5.80%, due 1/3/96 4,152,000 General Electric Capital Corp. 3,747,000 5.80%, due 1/10/96 3,747,000 GTE California, Inc. 4,800,000 5.79%, due 1/8/96 4,794,596 Household Finance Corp. 2,015,000 5.77%, due 1/11/96 2,011,770 International Lease Finance Corp. 2,553,000 5.74%, due 1/4/96 2,551,779 Johnson Controls, Inc. 1,250,000 5.90%, due 1/2/96 1,249,795 Oklahoma Gas & Electric Co. 3,300,000 5.75%, due 1/5/96 3,297,892 Pacific Gas & Electric Co. 3,000,000 5.75%, due 1/16/96 2,992,813 PHH Corp. 5,750,000 5.85%, due 1/19/96 5,733,181 U S West Communications, Inc. 4,360,000 5.70%, due 1/4/96 4,357,929 Xerox Corp. 2,150,000 5.70%, due 1/11/96 2,146,596 ------------ TOTAL COMMERCIAL PAPER (COST $49,671,984) 49,671,984 ------------ TOTAL INVESTMENTS (COST $192,516,346) 2$19,198,594 ------------ ------------
GROWTH ACCOUNT
NUMBER OF MARKET SHARES SECURITY VALUE COMMON STOCKS (90.8% OF NET ASSETS) AEROSPACE (8.9%) 25,400 General Dynamics Corp. $1,501,775
10 The accompanying notes are an integral part of these financial statements. GROWTH ACCOUNT (cont'd)
NUMBER OF MARKET SHARES SECURITY VALUE 31,371 Lockheed Martin Corp. $2,478,309 83,400 Loral Corp. 2,950,275 24,500 McDonnell Douglas Corp. 2,254,000 26,900 Rockwell International Corp. 1,422,338 ------------ 10,606,697 ------------ AIRLINES (3.2%) 15,700 AMR Corp. 1,165,725 14,400 Delta Air Lines, Inc. 1,063,800 30,000 Northwest Airlines Corp. 1,530,000 ------------ 3,759,525 ------------ BANKING (9.0%) 48,500 Bank of Boston Corp. 2,243,125 16,800 Bankers Trust New York Corp. 1,117,200 35,200 Chase Manhattan Corp. 2,134,000 30,000 Morgan (J.P.) & Company, Inc. 2,407,500 45,700 PNC Bank Corp. 1,473,825 6,300 Wells Fargo & Co. 1,360,800 ------------ 10,736,450 ------------ BUILDING MATERIALS & CONSTRUCTION (1.1%) 42,400 USG Corp. 1,272,000 ------------ CHEMICALS (9.0%) 12,900 Cabot Corp. 694,988 18,400 FMC Corp. 1,244,300 20,300 Goodrich (B.F.) Co. 1,382,938 28,700 Grace (W.R.) & Co. 1,696,887 54,700 IMC Global, Inc. 2,235,863 13,800 Monsanto Co. 1,690,500 Potash Corporation of Saskatchewan 24,100 Inc. 1,708,087 ------------ 10,653,563 ------------ CONGLOMERATES (3.4%) 31,800 Textron, Inc. 2,146,500 51,800 Tyco International Ltd. 1,845,375 ------------ 3,991,875 ------------ DRUGS & COSMETICS (.8%) 9,900 American Home Products Corp. 960,300 ------------ ELECTRIC UTILITIES (6.0%) 62,500 Entergy Corp. 1,828,125 35,600 FPL Group, Inc. 1,650,950 35,000 Illinova Corp. 1,050,000 14,400 Texas Utilities Co. 592,200 62,600 Unicom Corp. 2,050,150 ------------ 7,171,425 ------------ FOOD & BEVERAGES (.9%) 30,400 Dole Food Company, Inc. 1,064,000 ------------ HEALTH SERVICES & HOSPITAL SUPPLIES (3.3%) 23,200 Baxter International Inc. 971,500 32,700 Columbia Healthcare Corp. 1,659,525 57,000 OrNda HealthCorp 1,325,250 ------------ 3,956,275 ------------ INSURANCE (8.6%) 24,000 Aetna Life & Casualty Co. 1,662,000
NUMBER OF MARKET SHARES SECURITY VALUE 46,827 Allstate Corp. $1,925,760 16,100 CIGNA Corp. 1,662,325 26,700 St. Paul Companies Inc. 1,485,187 36,400 TIG Holdings, Inc. 1,037,400 39,500 Travelers Group 2,483,563 ------------ 10,256,235 ------------ LEISURE RELATED (.9%) 35,968 Mattel, Inc. 1,106,016 ------------ MACHINERY & EQUIPMENT (5.3%) 32,600 AGCO Corp. 1,662,600 44,000 Case Corp. 2,013,000 15,200 Harnischfeger Industries, Inc. 505,400 38,955 Mark IV Industries, Inc. 769,361 37,400 Parker-Hannifin Corp. 1,280,950 ------------ 6,231,311 ------------ MANUFACTURING (.9%) 30,000 Black & Decker Corp. 1,057,500 ------------ MISCELLANEOUS (1.7%) 39,000 Premark International, Inc. 1,974,375 ------------ OFFICE EQUIPMENT (1.5%) 12,700 Xerox Corp. 1,739,900 ------------ OIL & GAS (7.0%) 16,400 Amoco Corp. 1,178,750 32,200 Chevron Corp. 1,690,500 18,900 Mobil Corp. 2,116,800 73,100 Panhandle Eastern Corp. 2,037,663 9,400 Royal Dutch Petroleum Co. 1,326,575 ------------ 8,350,288 ------------ PAPER & FOREST PRODUCTS (1.5%) 21,996 Kimberly-Clark Corp. 1,820,169 ------------ REAL ESTATE (.1%) 10,133 Castle & Cooke Inc. 169,733 ------------ RETAIL TRADE (5.4%) 29,200 Eckerd Corp. 1,303,050 52,300 Kroger Co. 1,961,250 53,100 Sears, Roebuck & Co. 2,070,900 46,900 Service Merchandise Co., Inc. 234,500 45,300 Waban Inc. 849,375 ------------ 6,419,075 ------------ SAVINGS & LOAN (.9%) 40,400 Ahmanson (H.F.) & Co. 1,070,600 ------------ TECHNOLOGY (6.4%) 31,500 Compaq Computer Corp. 1,512,000 26,500 Conner Peripherals, Inc. 556,500 25,600 Seagate Technology Inc. 1,216,000 47,300 Storage Technology Corp. 1,129,288 44,300 Stratus Computer, Inc. 1,533,887 35,800 Sun Microsystems, Inc. 1,633,375 ------------ 7,581,050 ------------ TELEPHONE UTILITIES (5.0%) 33,000 Ameritech Corp. 1,947,000
11 GROWTH ACCOUNT (cont'd)
NUMBER OF MARKET SHARES SECURITY VALUE 44,500 GTE Corp. $1,958,000 37,300 NYNEX Corp. 2,014,200 ------------ 5,919,200 ------------ TOTAL COMMON STOCKS (COST $82,143,516) 107,867,562 ------------ PRINCIPAL COMMERCIAL PAPER AMOUNT (10.9% OF NET ASSETS) Beneficial Corp. $ 2,020,000 5.83%, due 1/8/96 2,017,710 Carolina Telephone & Telegraph Co. 2,225,000 5.88%, due 1/5/96 2,223,546 Ford Motor Credit Co. 652,000 5.75%, due 1/3/96 652,000
PRINCIPAL MARKET AMOUNT SECURITY VALUE General Electric Capital Corp. $ 2,210,000 5.80%, due 1/3/96 $2,210,000 Gillette Co. 1,855,000 5.80%, due 1/5/96 1,853,805 Household Finance Corp. 2,000,000 5.90%, due 1/4/96 1,999,017 U S West Communications, Inc. 1,970,000 5.70%, due 1/2/96 1,969,688 ------------ TOTAL COMMERCIAL PAPER (COST $12,925,766) 12,925,766 ------------ TOTAL INVESTMENTS (COST $95,069,282) 1$20,793,328 ------------ ------------
NOTES TO SCHEDULE OF INVESTMENTS December 31, 1995 A C C O U N T S 1. Aggregate gross unrealized appreciation (depreciation) as of December 31, 1995, based on cost for Federal income tax GOVERNMENT TOTAL purposes, was as follows: LIQUID SECURITIES INCOME RETURN GROWTH Aggregate gross unrealized appreciation $ -- $2,294,937 $ 435,777 $ 27,208,985 $25,984,836 Aggregate gross unrealized depreciation -- (173,429) (464,799) (526,737) (260,790) -------------- -------------- -------------- -------------- -------------- Net unrealized appreciation (depreciation) $ -- $2,121,508 $ (29,022) $ 26,682,248 $25,724,046 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- 2. The aggregate cost of investments for Federal income tax purposes was: $75,707,513 $46,839,748 $32,577,590 $192,516,346 $95,069,282 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- 3. Purchases and sales of securities (excluding short-term securities) for the year ended December 31, 1995 are summarized as follows: Purchases $ -- $27,090,969 $23,653,745 $ 88,015,567 $70,697,765 Sales $ -- $41,107,836 $37,629,462 $115,330,077 $61,274,945
12 The accompanying notes are an integral part of these financial statements. STATEMENT OF NET ASSETS CONNECTICUT MUTUAL INVESTMENT ACCOUNTS, INC. December 31, 1995
A C C O U N T S GOVERNMENT TOTAL LIQUID SECURITIES INCOME RETURN GROWTH ASSETS Investments: Bonds, at market value (Cost $46,462,748, $31,327,794, $72,379,402) $ -- $48,584,256 $31,298,772 $ 76,669,774 $ -- Common stocks, at market value (Cost $70,464,960, $82,143,516) -- -- -- 92,856,836 107,867,562 Short-term securities 75,707,513 377,000 1,249,796 49,671,984 12,925,766 ------------ ------------ ------------ ------------- ------------- 75,707,513 48,961,256 32,548,568 219,198,594 120,793,328 Cash 12,344 107 13,220 6,632 21,967 Investment income receivable 103,419 1,058,287 654,267 1,390,464 220,695 Receivable from securities sold -- -- -- 104,295 140,291 Receivable from Fund shares sold 112,587 6,461 4,629 67,621 58,292 ------------ ------------ ------------ ------------- ------------- Total Assets 75,935,863 50,026,111 33,220,684 220,767,606 121,234,573 ------------ ------------ ------------ ------------- ------------- LIABILITIES Accrued expenses payable 124,293 123,228 34,323 377,614 199,744 Payable for securities purchased -- -- -- 1,640,712 2,200,297 Dividends payable 3,819 -- -- -- -- ------------ ------------ ------------ ------------- ------------- Total Liabilities 128,112 123,228 34,323 2,018,326 2,400,041 ------------ ------------ ------------ ------------- ------------- NET ASSETS $75,807,751 $49,902,883 $33,186,361 $218,749,280 $118,834,532 ------------ ------------ ------------ ------------- ------------- ------------ ------------ ------------ ------------- ------------- OUTSTANDING SHARES -- CLASS A 75,807,751 4,644,816 3,478,038 14,108,084 6,619,121 ------------ ------------ ------------ ------------- ------------- ------------ ------------ ------------ ------------- ------------- OUTSTANDING SHARES -- CLASS B -- 6,904 6,150 41,504 39,640 ------------ ------------ ------------ ------------- ------------- ------------ ------------ ------------ ------------- ------------- NET ASSET VALUE PER SHARE -- CLASS A $1.00 $10.73 $9.52 $15.46 $17.84 ------------ ------------ ------------ ------------- ------------- ------------ ------------ ------------ ------------- ------------- NET ASSET VALUE PER SHARE -- CLASS B -- $10.77 $9.56 $15.66 $18.08 ------------ ------------ ------------ ------------- ------------- ------------ ------------ ------------ ------------- ------------- NET ASSETS CONSIST OF: Capital (par value and paid-in surplus) $75,807,751 $51,220,513 $35,612,380 $191,347,357 $ 92,323,812 Undistributed net investment income -- 32,873 19,045 68,633 11,438 Accumulated undistributed net realized gain (loss) -- (3,472,011) (2,416,042) 651,042 775,236 Net unrealized appreciation (depreciation) -- 2,121,508 (29,022) 26,682,248 25,724,046 ------------ ------------ ------------ ------------- ------------- NET ASSETS $75,807,751 $49,902,883 $33,186,361 $218,749,280 $118,834,532 ------------ ------------ ------------ ------------- ------------- ------------ ------------ ------------ ------------- -------------
The accompanying notes are an integral part of these financial statements. 13 STATEMENT OF OPERATIONS CONNECTICUT MUTUAL INVESTMENT ACCOUNTS, INC. For the year ended December 31, 1995
A C C O U N T S GOVERNMENT TOTAL LIQUID SECURITIES INCOME RETURN GROWTH INVESTMENT INCOME Income: Interest $4,162,889 $4,326,765 $3,327,978 $8,376,038 $ 598,872 Dividends -- -- -- 1,826,407 2,035,451 --------------- --------------- --------------- -------------- -------------- Total Income 4,162,889 4,326,765 3,327,978 10,202,445 2,634,323 --------------- --------------- --------------- -------------- -------------- Expenses: Investment advisory fees 349,609 342,325 274,057 1,251,666 613,378 Transfer agent fees 216,300 84,800 61,100 354,800 181,400 Distribution fees -- Class A -- -- -- 348,698 176,158 Distribution fees -- Class B -- 75 112 917 742 Registration fees 26,942 24,048 23,316 52,101 45,955 Custodian fees 28,900 24,600 26,900 42,800 35,600 Professional services 16,580 20,660 15,180 59,820 37,710 Shareholder reports 13,000 9,400 7,400 34,850 17,800 Directors' fees 4,383 3,829 3,396 10,303 5,859 Other 18,946 25,140 -- 42,120 18,014 Expense reimbursement from investment adviser -- -- (137,292) -- -- --------------- --------------- --------------- -------------- -------------- Total Expenses 674,660 534,877 274,169 2,198,075 1,132,616 --------------- --------------- --------------- -------------- -------------- NET INVESTMENT INCOME 3,488,229 3,791,888 3,053,809 8,004,370 1,501,707 --------------- --------------- --------------- -------------- -------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on investments 2 (618,861) (717,369) 7,754,106 7,939,891 Net unrealized appreciation on investments -- 6,078,046 2,639,614 26,965,439 20,902,301 --------------- --------------- --------------- -------------- -------------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 2 5,459,185 1,922,245 34,719,545 28,842,192 --------------- --------------- --------------- -------------- -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $3,488,231 $9,251,073 $4,976,054 $42,723,915 $30,343,899 --------------- --------------- --------------- -------------- -------------- --------------- --------------- --------------- -------------- --------------
14 The accompanying notes are an integral part of these financial statements. (This page has been left blank intentionally.) 15 STATEMENT OF CHANGES IN NET ASSETS CONNECTICUT MUTUAL INVESTMENT ACCOUNTS, INC. For the years ended December 31, 1995 and 1994
A C C O U N T S LIQUID GOVERNMENT SECURITIES 1995 1994 1995 1994 INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: Net investment income $ 3,488,229 $ 2,575,968 $ 3,791,888 $ 4,942,102 Net realized gain (loss) on investments 2 (987) (618,861) (2,822,974) Net unrealized appreciation (depreciation) on investments -- -- 6,078,046 (5,366,869) ------------- -------------- ------------- ------------- Net increase (decrease) in net assets resulting from operations 3,488,231 2,574,981 9,251,073 (3,247,741) ------------- -------------- ------------- ------------- DIVIDENDS TO SHAREHOLDERS FROM: Net investment income -- Class A (3,488,229) (2,574,981) (3,790,617) (4,939,034) Net investment income -- Class B -- -- (376) -- Net realized gain on investments -- Class A (2) -- -- (56,279) Net realized gain on investments -- Class B -- -- -- -- ------------- -------------- ------------- ------------- (3,488,231) (2,574,981) (3,790,993) (4,995,313) ------------- -------------- ------------- ------------- FROM CAPITAL SHARE TRANSACTIONS: Net proceeds from sale of shares 184,452,934 177,469,640 3,206,633 7,468,147 Net asset value of shares issued to shareholders from reinvestment of dividends 3,424,659 2,548,202 3,327,217 4,527,905 Cost of shares reacquired (176,015,712) (192,692,366) (22,253,386) (21,186,898) ------------- -------------- ------------- ------------- Increase (decrease) in net assets derived from capital share transactions 11,861,881 (12,674,524) (15,719,536) (9,190,846) ------------- -------------- ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS 11,861,881 (12,674,524) (10,259,456) (17,433,900) NET ASSETS -- BEGINNING OF PERIOD 63,945,870 76,620,394 60,162,339 77,596,239 ------------- -------------- ------------- ------------- NET ASSETS -- END OF PERIOD $ 75,807,751 $ 63,945,870 $ 49,902,883 $ 60,162,339 ------------- -------------- ------------- ------------- ------------- -------------- ------------- ------------- Undistributed net investment income included in net assets at end of period -- -- $32,873 $31,978 ------------- ------------- ------------- ------------- Undistributed net realized gain (loss) on investments included in net assets at end of period -- -- $(3,472,011) $(2,853,150) ------------- ------------- ------------- -------------
16 The accompanying notes are an integral part of these financial statements.
A C C O U N T S INCOME TOTAL RETURN GROWTH 1995 1994 1995 1994 1995 1994 INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: Net investment income $ 3,053,809 $ 3,484,675 $ 8,004,370 $ 7,127,925 $ 1,501,707 $ 1,077,298 Net realized gain (loss) on investments (717,369) (660,384) 7,754,106 2,872,138 7,939,891 3,074,097 Net unrealized appreciation (depreciation) on investments 2,639,614 (3,054,974) 26,965,439 (14,089,642) 20,902,301 (4,619,868) ------------ ------------- ------------- ------------- ------------ ------------ Net increase (decrease) in net assets resulting from operations 4,976,054 (230,683) 42,723,915 (4,089,579) 30,343,899 (468,473) ------------ ------------- ------------- ------------- ------------ ------------ DIVIDENDS TO SHAREHOLDERS FROM: Net investment income -- Class A (3,051,490) (3,473,505) (7,977,727) (7,098,435) (1,491,101) (1,076,035) Net investment income -- Class B (633) -- (2,581) -- (561) -- Net realized gain on investments -- Class A -- -- (7,615,071) (3,186,699) (7,649,952) (3,254,775) Net realized gain on investments -- Class B -- -- (20,687) -- (42,834) -- ------------ ------------- ------------- ------------- ------------ ------------ (3,052,123) (3,473,505) (15,616,066) (10,285,134) (9,184,448) (4,330,810) ------------ ------------- ------------- ------------- ------------ ------------ FROM CAPITAL SHARE TRANSACTIONS: Net proceeds from sale of shares 7,223,431 11,501,443 30,319,938 52,357,416 21,362,895 20,893,600 Net asset value of shares issued to shareholders from reinvestment of dividends 2,567,525 3,019,579 15,328,598 10,101,758 9,082,811 4,286,409 Cost of shares reacquired (25,075,490) (12,906,272) (31,911,112) (41,385,584) (11,160,463) (6,485,813) ------------ ------------- ------------- ------------- ------------ ------------ Increase (decrease) in net assets derived from capital share transactions (15,284,534) 1,614,750 13,737,424 21,073,590 19,285,243 18,694,196 ------------ ------------- ------------- ------------- ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS (13,360,603) (2,089,438) 40,845,273 6,698,877 40,444,694 13,894,913 NET ASSETS -- BEGINNING OF PERIOD 46,546,964 48,636,402 177,904,007 171,205,130 78,389,838 64,494,925 ------------ ------------- ------------- ------------- ------------ ------------ NET ASSETS -- END OF PERIOD $33,186,361 $ 46,546,964 $218,749,280 $177,904,007 $118,834,532 $78,389,838 ------------ ------------- ------------- ------------- ------------ ------------ ------------ ------------- ------------- ------------- ------------ ------------ Undistributed net investment income included in net assets at end of period $ 19,045 $ 17,359 $ 68,633 $ 44,571 $ 11,438 $ 1,393 ------------ ------------- ------------- ------------- ------------ ------ ------------ ------------- ------------- ------------- ------------ ------ Undistributed net realized gain (loss) on investments included in net assets at end of period $(2,416,042) $(1,698,673) $651,042 $532,694 $775,236 $528,131 ------------ ------------- ------------- ------------- ------------ ------------ ------------ ------------- ------------- ------------- ------------ ------------
17 FINANCIAL HIGHLIGHTS CONNECTICUT MUTUAL INVESTMENT ACCOUNTS, INC. December 31, 1995 Selected data for a share of capital stock outstanding throughout the period:
NET REALIZED DISTRIBUTIONS RATIO OF RATIO OF NET DIVIDENDS & UNREALIZED FROM NET NET ASSET NET ASSET OPERATING INVESTMENT YEARS NET FROM NET GAIN (LOSS) REALIZED VALUE AT VALUE AT EXPENSES TO INCOME TO ENDED INVESTMENT INVESTMENT ON GAIN ON BEGINNING END AVERAGE AVERAGE DECEMBER 31 INCOME INCOME INVESTMENTS INVESTMENTS OF PERIOD OF PERIOD NET ASSETS NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------- LIQUID ACCOUNT 1986 $ .0588 $ (.0588) $ -- $ -- $ 1.00 $ 1.00 1.00 % 5.88 % 1987 .0581 (.0581) -- -- 1.00 1.00 1.00 5.81 1988 .0664 (.0664) -- -- 1.00 1.00 1.04 6.64 1989 .0822 (.0822) -- -- 1.00 1.00 1.06 8.22 1990 .0731 (.0731) -- -- 1.00 1.00 1.06 7.31 1991 .0522 (.0522) -- -- 1.00 1.00 1.01 5.22 1992 .0287 (.0287) -- -- 1.00 1.00 1.02 2.87 1993 .0227 (.0227) -- -- 1.00 1.00 .95 2.27 1994 .0334 (.0334) -- -- 1.00 1.00 .93 3.34 1995 .0499 (.0499) -- -- 1.00 1.00 .96 4.99 GOVERNMENT SECURITIES ACCOUNT -- CLASS A 1986 .92 (.92) .28 (.11) 10.73 10.90 1.27 8.92 1987 .84 (.84) (.52) (.21) 10.90 10.17 1.24 8.12 1988 .84 (.85) (.05) (.05) 10.17 10.06 1.16 8.27 1989 .84 (.84) .52 -- 10.06 10.58 1.19 8.14 1990 .84 (.84) .10 -- 10.58 10.68 1.16 8.07 1991 .85 (.85) .68 -- 10.68 11.36 1.07 7.83 1992 .77 (.77) (.12) (.05) 11.36 11.19 1.01 6.92 1993 .70 (.70) .36 (.64) 11.19 10.91 .93 6.03 1994 .69 (.69) (1.14) (.01) 10.91 9.76 .91 6.71 1995 .72 (.72) .97 -- 9.76 10.73 .98 6.93 INCOME ACCOUNT -- CLASS A 1986 .83 (.83) .57 (.08) 10.55 11.04 1.29 7.69 1987 .76 (.76) (.56) (.51) 11.04 9.97 1.27 7.32 1988 .84 (.85) (.19) -- 9.97 9.77 1.24 8.43 1989 .88 (.88) .02 -- 9.77 9.79 1.27 8.93 1990 .94 (.94) (.35) -- 9.79 9.44 1.24 9.78 1991 .81 (.81) .47 -- 9.44 9.91 1.12 8.44 1992 .79 (.79) (.16) -- 9.91 9.75 .63 8.09 1993 .65 (.65) .11 -- 9.75 9.86 .63 6.56 1994 .68 (.68) (.72) -- 9.86 9.14 .63 7.16 1995 .67 (.66) .37 -- 9.14 9.52 .63 6.97 TOTAL RETURN ACCOUNT -- CLASS A 1986 .31 (.30) .99 (.04) 10.91 11.87 1.26 3.22 1987 .38 (.38) .13 (1.09) 11.87 10.91 1.08 3.15 1988 .53 (.53) .60 -- 10.91 11.51 1.11 4.61 1989 .76 (.76) 1.81 (.63) 11.51 12.69 1.20 5.90 1990 .66 (.66) (.68) (.07) 12.69 11.94 1.24 5.31 1991 .54 (.54) 2.79 (.71) 11.94 14.02 1.20 4.02 1992 .50 (.50) .86 (1.07) 14.02 13.81 1.11 3.61 1993 .48 (.48) 1.70 (.97) 13.81 14.54 1.02 3.40 1994 .55 (.55) (.86) (.24) 14.54 13.44 .96 3.80 1995 .60 (.60) 2.59 (.57) 13.44 15.46 1.17 4.00 GROWTH ACCOUNT -- CLASS A 1986 .24 (.24) 1.11 (.08) 10.94 11.97 1.31 2.21 1987 .22 (.22) (.12) (2.05) 11.97 9.80 1.17 1.71 1988 .20 (.20) 1.20 -- 9.80 11.00 1.23 1.95 1989 .51 (.51) 3.30 (1.25) 11.00 13.05 1.18 3.90 1990 .34 (.34) (1.36) (.07) 13.05 11.62 1.19 2.73 1991 .25 (.25) 4.00 (1.22) 11.62 14.40 1.19 1.74 1992 .26 (.26) 1.44 (1.64) 14.40 14.20 1.12 1.74 1993 .30 (.30) 2.64 (1.70) 14.20 15.14 1.05 1.95 1994 .22 (.22) (.32) (.62) 15.14 14.20 1.02 1.50 1995 .25 (.25) 4.88 (1.24) 14.20 17.84 1.22 1.53 NET ASSETS AT END YEARS OF PERIOD ANNUAL ENDED PORTFOLIO (IN TOTAL DECEMBER 31 TURNOVER THOUSANDS) RETURN(A) - -------------- 1986 n/a $ 74,111 6.03 % 1987 n/a 68,908 5.97 1988 n/a 73,921 6.82 1989 n/a 87,264 8.53 1990 n/a 84,387 7.53 1991 n/a 69,932 5.31 1992 n/a 67,549 2.89 1993 n/a 76,620 2.30 1994 n/a 63,946 3.40 1995 n/a 75,808 5.11 GOVERNMENT SEC 1986 111.68 22,947 11.66 1987 207.67 24,703 3.33 1988 175.50 35,910 7.99 1989 68.14 41,561 14.10 1990 44.19 47,524 9.44 1991 27.50 55,332 15.03 1992 131.79 67,612 6.07 1993 224.02 77,596 9.56 1994 156.90 60,162 (4.18) 1995 50.64 49,829 17.90 INCOME ACCOUNT 1986 164.13 14,620 13.54 1987 231.39 15,367 2.03 1988 150.04 16,789 6.70 1989 52.95 18,705 9.56 1990 90.20 19,809 6.33 1991 50.44 22,839 14.22 1992 109.47 38,675 6.60 1993 145.94 48,636 7.97 1994 62.88 46,547 (0.42) 1995 57.08 33,127 11.77 TOTAL RETURN A 1986 143.32 35,382 11.88 1987 197.79 44,770 3.92 1988 223.62 54,253 10.40 1989 149.22 65,071 22.61 1990 115.45 66,382 (0.21) 1991 122.40 86,455 28.21 1992 177.85 109,701 9.90 1993 155.16 171,205 15.89 1994 115.01 177,904 (2.11) 1995 55.20 218,099 23.95 GROWTH ACCOUNT 1986 163.15 19,469 12.25 1987 214.32 19,638 (0.29) 1988 246.14 26,285 14.32 1989 169.75 37,323 34.86 1990 143.95 35,202 (7.98) 1991 148.30 40,716 36.91 1992 141.69 45,600 11.99 1993 99.67 64,495 20.91 1994 98.46 78,390 (0.65) 1995 69.69 118,118 36.40
(a) Annual total returns do not include the effect of sales charges 18 The accompanying notes are an integral part of these financial statements. FINANCIAL HIGHLIGHTS (CONT'D)
NET REALIZED DISTRIBUTIONS RATIO OF RATIO OF NET DIVIDENDS & UNREALIZED FROM NET NET ASSET NET ASSET OPERATING INVESTMENT YEARS NET FROM NET GAIN (LOSS) REALIZED VALUE AT VALUE AT EXPENSES TO INCOME TO ENDED INVESTMENT INVESTMENT ON GAIN ON BEGINNING END AVERAGE AVERAGE DECEMBER 31 INCOME INCOME INVESTMENTS INVESTMENTS OF PERIOD OF PERIOD NET ASSETS (A) NET ASSETS (A) - ---------------------------------------------------------------------------------------------------------------------------------- GOVERNMENT SECURITIES ACCOUNT -- CLASS B 1995 (c) $ .12 $ (.12) $ .32 $ -- $ 10.45 $ 10.77 1.98 % 1.36 % INCOME ACCOUNT -- CLASS B 1995 (c) .13 (.13) .10 -- 9.46 9.56 1.63 1.43 TOTAL RETURN ACCOUNT -- CLASS B 1995 (c) .07 (.07) .70 (.52) 15.48 15.66 1.92 .73 GROWTH ACCOUNT -- CLASS B 1995 (c) .02 (.02) 1.40 (1.15) 17.83 18.08 1.97 .21 NET ASSETS YEARS AT END ANNUAL ENDED PORTFOLIO OF PERIOD TOTAL DECEMBER 31 TURNOVER (IN THOUSANDS) RETURN(B) - -------------- 1995 50.64 $ 74 4.20 % INCOME ACCOUNT 1995 57.08 59 2.41 TOTAL RETURN A 1995 55.20 650 4.93 GROWTH ACCOUNT 1995 69.69 717 8.04
(a) Annualized (b) Annual total returns do not include the effect of sales charges (c) For the period from October 1, 1995 (Inception) through December 31, 1995 19 NOTES TO FINANCIAL STATEMENTS CONNECTICUT MUTUAL INVESTMENT ACCOUNTS, INC. December 31, 1995 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Connecticut Mutual Investment Accounts, Inc. (the Fund), a Maryland corporation, is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund is comprised of thirteen distinct mutual funds, including the following five Accounts included in these financial statements: Liquid, Government Securities, Income, Total Return and Growth. The Fund offers both Class A and Class B shares. Class A shares are sold with a front-end sales charge. Class B shares may be subject to a contingent deferred sales charge. An interest in the Fund is limited to the assets of the Account or Accounts in which shares are held by shareholders, and such shareholders are entitled to a pro rata share of all dividends and distributions arising from the net investment income and net realized capital gains on the investments of such Accounts. The following is a summary of significant accounting policies followed by the Fund: (a)VALUATION OF INVESTMENT SECURITIES - Except with respect to securities held by the Liquid Account, equity and debt securities which are traded on securities exchanges are valued at the last sales price as of the close of business on the day the securities are being valued. Lacking any sales, equity securities are valued at the last bid price and debt securities are valued at the mean between closing bid and asked prices. Securities traded in the over-the-counter market and included in the NASDAQ National Market System are valued using the last sales price when available. Otherwise, over-the-counter securities are valued at the mean between the bid and asked prices or yield equivalent as obtained from one or more dealers who make a market in the securities. Short-term securities are valued on an amortized cost basis, which approximates market value. Securities for which market quotations are not readily available are valued at fair value as determined in accordance with procedures established by the Board of Directors of the Fund, including the use of valuations furnished by a private service retained by the custodian. Securities held by the Liquid Account are valued on an amortized cost basis. This basis involves valuing a security at cost and thereafter assuming a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the market value of the instrument. The amortized cost method, in the opinion of the Board of Directors, represents the fair value of the particular security. The Board monitors the deviation between the Account's net asset value per share as determined by using available market quotations and its amortized cost price per share. If the deviation exceeds one half of one percent per share, the Board will consider what action, if any, should be initiated to provide fair valuation. Throughout 1995, the deviation was less than one half of one percent. (b)FEDERAL INCOME TAXES - The Fund intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code. Under such provisions, by distributing substantially all of its taxable income to its shareholders or otherwise complying with requirements for regulated investment companies, the Fund will not be subject to Federal income taxes. Accordingly, no provision for Federal income taxes is required. For Federal tax reporting purposes, each Account is treated as a separate taxable entity. (c)GAINS AND LOSSES - Realized gains and losses from sales of investments are determined on the identified cost basis. (d)AFFILIATE HOLDINGS - Connecticut Mutual Life Insurance Company and its affiliates own 33,548,333 shares of the five Accounts of the Fund as follows:
LIQUID GOVERNMENT SECURITIES INCOME TOTAL RETURN 30,904,449 662,517 239 222 LIQUID GROWTH 30,904,449 1,980,906
(e)OTHER - Investment transactions are accounted for on the trade date which is the date the order to buy or sell is executed. Dividend income is recorded on the ex-dividend date and interest income is accrued on a daily basis. All expenses are accrued on a daily basis. 2. INVESTMENT ADVISORY FEES AND OTHER AFFILIATE TRANSACTIONS The Fund has an Investment Advisory Agreement with G.R. Phelps & Co., Inc. (the Investment Adviser), a wholly-owned subsidiary of Connecticut Mutual Life Insurance Company. The Investment Adviser, subject to review by the Board of Directors, is responsible for the investment management of each Account and has the responsibility for making decisions to buy, sell or hold any particular security. The Investment Adviser is obligated to perform certain administrative services for the Fund. 20 As compensation for its services to the Liquid Account, the Investment Adviser receives monthly compensation at the annual rate of 0.50% of the first $200 million of average daily net assets, 0.45% of the next $100 million of average daily net assets and 0.40% of the average daily net assets in excess of $300 million of the Account. As compensation for its services to the Government Securities, Income, Total Return and Growth Accounts, the Investment Adviser receives monthly compensation at the annual rate of 0.625% of the first $300 million of average daily net assets, 0.50% of the next $100 million of average daily net assets and 0.45% of the average daily net assets in excess of $400 million of each Account. The investment advisory fees, which also cover certain administrative and management services, amounted to $2,831,035 for all Accounts for the year ended December 31, 1995. For the year ended December 31, 1995, the Investment Adviser, serving as principal underwriter for sale of shares of the Accounts, earned $1,642,321 related to sales charges deducted from proceeds for shares sold. Expenses incurred in the operation of the Fund are borne by the Fund. However, the Investment Adviser has agreed that in any year the aggregate expenses (including the investment advisory fee, but excluding interest, taxes, brokerage fees, commissions and uncommon charges such as litigation costs) exceed 1% of the value of the average daily net assets of the Liquid Account or 1.5% of the value of the average daily net assets in each of the other four Accounts, it will reimburse the Accounts for such excess. 3. DISTRIBUTION PLANS Each Account has adopted a distribution plan for both Class A shares (Class A Plan) and Class B shares (Class B Plan) and, with respect to the Liquid Account, for its shares (Liquid Account Plan) designed to meet the requirements of Rule 12b-1 under the Investment Company Act of 1940. Under the Class A Plan of each Account, each Account may make payments for personal services and/or the maintenance of shareholder accounts to account executives of Connecticut Mutual Financial Services, Inc. (CMFS), the Distributor, and other broker dealer firms with whom CMFS has agreements in amounts not exceeding 0.25% of the average daily net assets of the Account's Class A shares for any fiscal year. Effective May 1, 1995, the Total Return and Growth Accounts commenced accruing fees daily and paying fees monthly to the Distributor. For the eight months ended December 31, 1995, the Distributor received $524,856 in fees from these Accounts. The Government Securities and Income Accounts accrued no fees and paid no amounts pursuant to any Plan during the year ended December 31, 1995. Under each Account's Class B Plan, such Account may pay CMFS a service fee at the annualized rate of up to 0.25% of the average daily net assets of the Account's Class B shares for its expenditures incurred in servicing and maintaining shareholder accounts, and may pay CMFS a distribution fee at the annualized rate of up to 0.75% of the average daily net assets of the Account's Class B shares for its expenditures incurred in providing services as distributor. Effective October 1, 1995, the Government Securities, Income, Total Return and Growth Accounts commenced accruing fees daily and paying fees monthly to the Distributor. For the three months ended December 31, 1995, the Distributor received $1,846 in fees from these Accounts. Under the Liquid Account Plan, the Liquid Account reimburses CMFS for its actual expenses associated with the sale of shares of the Liquid Account. This reimbursement may include payments to third parties, such as banks or broker dealers, that provide shareholder support services or engage in the sale of shares of the Liquid Account. However, payments to CMFS from the assets of the Liquid Account cannot exceed 0.10% of the average daily net assets of the Liquid Account's shares. The Liquid Account accrued no fees and paid no amounts pursuant to any Plan during the year ended December 31, 1995. 21 4. DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income are declared and paid monthly for the Government Securities and Income Accounts and semi-annually for the Total Return and Growth Accounts. Dividends from net investment income of the Liquid Account, which include any net short-term capital gains, are declared and accrued daily and paid monthly. All net realized capital gains, if any, are declared and paid at least annually. 5. CAPITAL STOCK The authorized capital stock of the Fund at December 31, 1995 consisted of 3,000,000,000 shares of common stock, par value $0.001 per share. The shares of stock are divided among thirteen separate Accounts, five of which are indicated below. All shares of common stock have equal voting rights, except that only shares of a particular Account are entitled to vote on matters pertaining to that Account. Transactions in capital stock were as follows:
CLASS A SHARES FOR THE YEAR ENDED DECEMBER 31, 1995 GOVERNMENT TOTAL LIQUID SECURITIES INCOME RETURN Shares authorized (in millions) 250 200 200 200 Shares sold 184,452,934 304,895 764,273 1,998,083 Shares issued to shareholders from reinvestment of dividends 3,424,659 324,108 274,100 1,003,774 --------------- --------------- --------------- --------------- Total issued 187,877,593 629,003 1,038,373 3,001,857 Shares reacquired (176,015,712) (2,147,453) (2,654,709) (2,126,335) --------------- --------------- --------------- --------------- Net increase (decrease) 11,861,881 (1,518,450) (1,616,336) 875,522 --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- GROWTH Shares authorized (in millions) 200 Shares sold 1,242,427 Shares issued to shareholders from reinvestment of dividends 513,302 --------------- Total issued 1,755,729 Shares reacquired (657,052) --------------- Net increase (decrease) 1,098,677 --------------- ---------------
CLASS B SHARES FOR THE PERIOD FROM OCTOBER 1, 1995 (INCEPTION) TO DECEMBER 31, 1995 GOVERNMENT TOTAL SECURITIES INCOME RETURN GROWTH Shares authorized (in millions) 50 50 50 50 Shares sold 6,888 6,140 40,033 37,415 Shares issued to shareholders from reinvestment of dividends 35 10 1,471 2,434 ------------- ------------- ------------- ------------- Total issued 6,923 6,150 41,504 39,849 Shares reacquired (19) -- -- (209) ------------- ------------- ------------- ------------- Net increase 6,904 6,150 41,504 39,640 ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
6. SUBSEQUENT EVENT On January 27, 1996, the policyholders of Connecticut Mutual Life Insurance Company (CML) approved a merger, subject to regulatory approval, of CML into the Massachusetts Mutual Life Insurance Company (MML). In connection with this merger, the shareholders of the Fund are being asked to consider and approve a new investment advisory agreement between the Fund and OppenheimerFunds, Inc., an indirect subsidiary of MML. 22 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of Connecticut Mutual Investment Accounts, Inc.: We have audited the accompanying statement of net assets, including the schedule of investments, of Connecticut Mutual Investment Accounts, Inc. (a Maryland corporation) Liquid, Government Securities, Income, Total Return, and Growth Accounts as of December 31, 1995, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the ten years in the period then ended. These financial statements and financial highlights are the responsibility of the Accounts' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1995, by correspondence with the custodian bank. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the respective Accounts comprising Connecticut Mutual Investment Accounts, Inc. as of December 31, 1995, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the ten years in the period then ended, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Hartford, Connecticut February 9, 1996 23 (This page has been left blank intentionally.) CONNECTICUT MUTUAL INVESTMENT ACCOUNTS, INC. -------------------------------------- BOARD OF DIRECTORS AND OFFICERS DIRECTORS RICHARD H. AYERS, Director Chairman and Chief Executive Officer The Stanley Works DAVID E. A. CARSON, Director President, Chairman and Chief Executive Officer People's Bank RICHARD W. GREENE, Director Executive Vice President and Treasurer University of Rochester BEVERLY L. HAMILTON, Director President ARCO Investment Management Company DONALD H. POND, JR., President and Director Retired Executive Vice President Connecticut Mutual Life Insurance Company DAVID E. SAMS, JR., Director President and Chief Executive Officer Connecticut Mutual Life Insurance Company OFFICERS DONALD H. POND, JR., President and Director Retired Executive Vice President Connecticut Mutual Life Insurance Company LINDA M. NAPOLI, Treasurer and Controller Treasurer, Mutual Funds Connecticut Mutual Life Insurance Company LOUIS A. LACCAVOLE, CPA, General Auditor Vice President and General Auditor Connecticut Mutual Life Insurance Company ANN F. LOMELI, Secretary Corporate Secretary and Counsel Connecticut Mutual Life Insurance Company AUDITORS ARTHUR ANDERSEN LLP Hartford, CT This report has been prepared for shareholders of the Account and may be distributed to prospective investors in the Account when preceded or accompanied by a current prospectus. -----END PRIVACY-ENHANCED MESSAGE-----