N-CSRS

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 811-5017

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W&R Target Funds, Inc.

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(Exact name of registrant as specified in charter)

6300 Lamar Avenue, Overland Park, Kansas 66202

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(Address of principal executive offices) (Zip code)

Kristen A. Richards

6300 Lamar Avenue

Overland Park, Kansas 66202

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(Name and address of agent for service)

Registrant's telephone number, including area code: 913-236-2000

Date of fiscal year end: December 31

Date of reporting period: June 30, 2007

ITEM 1. REPORTS TO STOCKHOLDERS.

Semiannual Report
June 30, 2007


Asset Strategy Portfolio
Balanced Portfolio
Bond Portfolio
Core Equity Portfolio
Dividend Income Portfolio
Energy Portfolio
Global Natural Resources Portfolio
Growth Portfolio
High Income Portfolio
International Growth Portfolio
International Value Portfolio
Limited-Term Bond Portfolio
Micro Cap Growth Portfolio
Mid Cap Growth Portfolio
Money Market Portfolio
Mortgage Securities Portfolio
Real Estate Securities Portfolio
Science and Technology Portfolio
Small Cap Growth Portfolio
Small Cap Value Portfolio
Value Portfolio

3	President's Letter
5	Illustration of Portfolio Expenses
10	Asset Strategy Portfolio
28	Balanced Portfolio
42	Bond Portfolio
56	Core Equity Portfolio
65	Dividend Income Portfolio
74	Energy Portfolio
83	Global Natural Resources Portfolio
95	Growth Portfolio
104	High Income Portfolio
121	International Growth Portfolio
132	International Value Portfolio
143	Limited-Term Bond Portfolio
152	Micro Cap Growth Portfolio
162	Mid Cap Growth Portfolio
172	Money Market Portfolio
183	Mortgage Securities Portfolio
196	Real Estate Securities Portfolio
204	Science and Technology Portfolio
212	Small Cap Growth Portfolio
221	Small Cap Value Portfolio
231	Value Portfolio
241	Notes to Financial Statements
263	Shareholder Meeting Results
264	Proxy Voting Information
265	Quarterly Portfolio Schedule Information

President's Letter
      June 30, 2007
Dear Shareholder:

So far, 2007 has been a strong year for U.S. equities. The Standard & Poor's 500 Index is up 6.96% for the six-month period ended June 30, 2007, led by energy and natural resources stocks. Most bond markets, meanwhile, have struggled in recent months. Overall economic growth has been better than most economists and pundits have expected while foreign purchases of U.S. Treasuries have subsided. Globally, interest rates are on the rise.

Enclosed is our report on your W&R Target Portfolio's operations for the six-month period ended June 30, 2007. We are pleased to report that many equity sectors provided positive market returns for the first half of the year, with most of the gains coming between March and May. Financial stocks were the weakest area of the stock market, reflecting fallout over lending practices in the subprime mortgage market, as well as the prospect of higher interest rates. Consumer stocks were also weaker than the rest of the market. Back in December, the markets were expecting the Federal Reserve to ease monetary policy in the wake of an economic slowdown. Instead growth, led by exports, may be accelerating.

Tailwinds of growth

Since January gasoline prices - a key factor that helps shape consumer confidence - have been on a roller-coaster. Overall, we feel the long-term cost trend for energy is upward given rising global demand for a wide variety of natural resources and continuing concerns about energy supplies and energy-related politics, not just in the Middle East, but in energy-exporting countries from Nigeria to Russia to Venezuela.

On balance, the economic news has been good, including:

• Corporate profits remained solid, rising around 10 percent
• Inflation remains within the Fed's target (2 percent to 3 percent) range and
• Improving trade and federal deficits.

Economic Snapshot
	6-30-2007				12-31-2006
U.S. unemployment rate			4.50	%		4.50	%
Inflation (U.S. Consumer Price Index)			2.70	%		2.50	%
U.S. GDP			3.40	%		3.50	%
30-year fixed mortgage rate			6.63	%		6.16	%
Oil price per barrel		$	70.68		$	61.05

Source: Bloomberg, U.S. Department of Labor

The U.S. Consumer Price Index is the government's measure of the change in the retail cost of goods and services. Gross domestic product measures year-over-year changes in the output of goods and services. Mortgage rates shown reflect the average rate on a conventional loan with a 60-day lender commitment. Oil prices reflect the market price of West Texas intermediate grade crude.

Our Economic Snapshot chart highlights five selected indicators. Even though headline numbers for items such as inflation and oil can change a great deal from month to month, several of the economic indicators below are in a similar place compared to where they were six months ago - an attractive place to be, in our view.

From a historical perspective, we believe that stock prices appear reasonable, especially given corporate profit levels. We see an attractive path ahead for diversified investors for the balance of the calendar year, although one that might be marked by a few unexpected curves. As always, we believe that maintaining a well-rounded portfolio remains an important component of securing your financial future.

Our expertise

Since its earliest days under Cameron Reed and Chauncey Waddell in the 1930s, our organization has been focused on effective stock selection through intense fundamental research, coupled with a deep understanding of global markets. Our goal is to help you achieve your long-term financial goals. To that end, we are committed to offering you a financial planning philosophy that emphasizes both participation in positive markets and a strong effort to manage risk.

Thank you for your continued confidence in us.

Respectfully,

Henry J. Herrmann, CFA
President

The opinions expressed in this letter are those of the President of W&R Target Funds, Inc. and are current only through the end of the period of the report, as stated on the cover. The President's views are subject to change at any time, based on market and other conditions, and no forecasts can be guaranteed.

Illustration of Portfolio Expenses

As a shareholder of a Portfolio, you incur ongoing costs, including management fees, distribution and service fees, and other Portfolio expenses. The following tables are intended to help you understand your ongoing costs (in dollars) of investing in a Portfolio 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 six-month period ended June 30, 2007.

Actual Expenses

The first line in the following tables provides information about actual investment values and actual expenses. You may use the information in this line, together with your initial investment in Portfolio shares, to estimate the expenses that you paid over the period. Simply divide the value of that investment by $1,000 (for example, a $7,500 initial investment divided by $1,000 = 7.5), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your investment during this period. In addition, there are fees and expenses imposed under the variable annuity or variable life insurance contract through which shares of the Portfolio are held. Additional fees have the effect of reducing investment returns.

Hypothetical Example for Comparison Purposes

The second line of the following tables provides information about hypothetical investment values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio's actual return. The hypothetical investment values and expenses may not be used to estimate the actual investment value at the end of the period or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio 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 tables are meant to highlight your ongoing costs as a shareholder of the Portfolio and do not reflect any fees and expenses imposed under the variable annuity or variable life insurance contract through which shares of the Portfolio are held.

Asset Strategy Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,127.60		1.03	%		$	5.43
Based on 5% Return (2)		$	1,000		$	1,019.69		1.03	%		$	5.15

Balanced Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,058.70		1.02	%		$	5.25
Based on 5% Return (2)		$	1,000		$	1,019.73		1.02	%		$	5.15

Bond Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,009.10		0.84	%		$	4.22
Based on 5% Return (2)		$	1,000		$	1,020.62		0.84	%		$	4.24

Core Equity Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,080.80		0.97	%		$	4.99
Based on 5% Return (2)		$	1,000		$	1,019.98		0.97	%		$	4.85

Dividend Income Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,094.60		1.05	%		$	5.45
Based on 5% Return (2)		$	1,000		$	1,019.57		1.05	%		$	5.25

Energy Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,223.20		0.64	%		$	3.56
Based on 5% Return (2)		$	1,000		$	1,021.63		0.64	%		$	3.23

Global Natural Resources Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,220.00		1.39	%		$	7.66
Based on 5% Return (2)		$	1,000		$	1,017.90		1.39	%		$	6.96

Growth Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,077.10		0.98	%		$	5.09
Based on 5% Return (2)		$	1,000		$	1,019.94		0.98	%		$	4.95

High Income Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,044.80		0.91	%		$	4.60
Based on 5% Return (2)		$	1,000		$	1,020.27		0.91	%		$	4.55

International Growth Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,107.20		1.19	%		$	6.22
Based on 5% Return (2)		$	1,000		$	1,018.90		1.19	%		$	5.96

International Value Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,086.40		1.18	%		$	6.15
Based on 5% Return (2)		$	1,000		$	1,018.93		1.18	%		$	5.96

Limited-Term Bond Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,014.50		0.86	%		$	4.33
Based on 5% Return (2)		$	1,000		$	1,020.52		0.86	%		$	4.34

Micro Cap Growth Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,092.20		1.34	%		$	7.01
Based on 5% Return (2)		$	1,000		$	1,018.14		1.34	%		$	6.76

Mid Cap Growth Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,104.00		1.23	%		$	6.42
Based on 5% Return (2)		$	1,000		$	1,018.69		1.23	%		$	6.16

Money Market Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,022.30		0.76	%		$	3.84
Based on 5% Return (2)		$	1,000		$	1,021.02		0.76	%		$	3.84

Mortgage Securities Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,013.50		1.03	%		$	5.13
Based on 5% Return (2)		$	1,000		$	1,019.68		1.03	%		$	5.15

Real Estate Securities Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	933.60		1.32	%		$	6.28
Based on 5% Return (2)		$	1,000		$	1,018.25		1.32	%		$	6.56

Science and Technology Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,132.30		1.16	%		$	6.18
Based on 5% Return (2)		$	1,000		$	1,019.04		1.16	%		$	5.86

Small Cap Growth Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,083.80		1.15	%		$	5.94
Based on 5% Return (2)		$	1,000		$	1,019.11		1.15	%		$	5.75

Small Cap Value Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,053.40		1.19	%		$	6.06
Based on 5% Return (2)		$	1,000		$	1,018.89		1.19	%		$	5.96

Value Portfolio Expenses
For the Six Months Ended       June 30, 2007	Beginning Investment Value 12-31-06			Ending Investment Value 6-30-07			Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Portfolio Return (1)		$	1,000		$	1,083.10		1.02	%		$	5.21
Based on 5% Return (2)		$	1,000		$	1,019.75		1.02	%		$	5.05

*Portfolio expenses are equal to the Portfolio's annualized expense ratio (provided in the table), multiplied by the average investment value over the period, multiplied by 181 days in the six-month period ended June 30, 2007, and divided by 365.

(1)This line uses the Portfolio's actual total return and actual Portfolio expenses. It is a guide to the actual expenses paid by the Portfolio in the period. The "Ending Investment Value" shown is computed using the Portfolio's actual return and the "Expenses Paid During Period" column shows the dollar amount that would have been paid by an investor who started with $1,000 in the Portfolio. A shareholder may use the information here, together with the dollar amount invested, to estimate the expenses that were paid over the period. For every thousand dollars a shareholder has invested, the expenses are listed in the fourth column.

(2)This line uses a hypothetical 5% annual return and actual Portfolio expenses. It helps to compare the Portfolio's ongoing costs with other mutual funds. A shareholder can compare the Portfolio's ongoing costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.

The above illustration is based on ongoing costs only.

SHAREHOLDER SUMMARY OF ASSET STRATEGY PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target Asset Strategy Portfolio had net assets totaling $702,293,965 invested in a diversified portfolio of:

55.29%	Foreign Common Stocks
27.30%	Domestic Common Stocks
5.78%	Cash and Cash Equivalents, Investment Funds, Options and Unrealized Loss on Open Forward Currency Contracts
3.47%	Other Government Securities
3.11%	United States Government and Government Agency Obligations
2.56%	Foreign Corporate Debt Securities
2.00%	Bullion
0.49%	Domestic Corporate Debt Securities

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007, your Portfolio was invested by industry and by country, respectively, as follows:

Asset Allocation

Stocks	$	82.59
Financial Services Stocks	$	19.64
Raw Materials Stocks	$	12.25
Utilities Stocks	$	10.40
Capital Goods Stocks	$	9.72
Energy Stocks	$	7.97
Business Equipment and             Services Stocks	$	6.07
Consumer Nondurables Stocks	$	5.30
Miscellaneous Stocks	$	5.22
Consumer Durables Stocks	$	3.15
Technology Stocks	$	2.87
Bonds	$	9.63
Other Government Securities	$	3.47
United States Government and             Government Agency Obligations	$	3.11
Corporate Debt Securities	$	3.05
Cash and Cash Equivalents, Investment Funds,       Options and Unrealized Loss       on Open Forward Currency Contracts	$	5.78
Bullion	$	2.00

Country Weightings

North America	$	34.21
United States	$	32.21
Other North America (1)	$	2.00
Pacific Basin	$	25.64
China	$	8.36
South Korea	$	5.31
Japan	$	5.17
Other Pacific Basin (2)	$	3.71
India	$	3.09
Europe	$	23.04
Germany	$	8.74
United Kingdom	$	3.77
Other Europe (3)	$	3.09
Norway	$	2.73
Switzerland	$	2.50
France	$	2.21
Bahamas/Caribbean	$	7.09
Cayman Islands	$	5.50
Other Bahamas/Caribbean (4)	$	1.59
Cash and Cash Equivalents, Investment       Funds, Options and Unrealized Loss on       Open Forward Currency Contracts	$	5.78
Other(5)	$	2.24
Bullion	$	2.00

(1)Includes $0.43 Canada and $1.57 Mexico.

(2)Includes $2.68 Australia and $1.03 Malaysia.

(3)Includes $1.14 Finland, $0.28 Luxembourg, $0.15 Poland and $1.52 Russia.

(4)Includes $0.47 Bahamas, $0.91 Bermuda and $0.21 British Virgin Islands.

(5)Includes $1.95 South America and $0.29 South Africa.

The Investments of Asset Strategy Portfolio
June 30, 2007                                                                                                                (Unaudited)
BULLION - 2.00%		Troy Ounces			Value
Gold			21,679	$	14,077,388
(Cost: $14,794,321)
COMMON STOCKS		Shares
Aircraft - 1.73%
Boeing Company (The)			109,151		10,495,960
Raytheon Company			30,026		1,618,101
					12,114,061
Banks - 2.49%
China Merchants Bank Co., Limited, H Shares (A)*	1,179,500				3,590,150
Housing Development Finance Corporation Limited (A)			59,354		1,672,134
ICICI Bank Limited (A)			175,854		4,127,741
Standard Bank Group Limited (A)			144,414		2,008,616
Standard Chartered PLC (A)			186,320		6,098,671
					17,497,312
Business Equipment and Services - 5.88%
Akamai Technologies, Inc.*			24,420		1,188,155
Bucyrus International, Inc., Class A			56,954		4,028,926
Ctrip.com International, Ltd.			146,836		11,550,854
Infosys Technologies Limited (A)			55,667		2,638,114
Jacobs Engineering Group Inc.*			124,388		7,153,554
Mitsui & Co., Ltd. (A)			99,000		1,973,970
Renewable Energy Corporation ASA (A)*			326,990		12,753,661
					41,287,234
Capital Equipment - 5.67%
China Shenhua Energy Company Limited, H Shares (A)	1,717,500				5,996,489
Deere & Company			27,527		3,323,610
Foster Wheeler Ltd.*			33,129		3,541,490
Joy Global Inc.			68,535		4,000,731
SunPower Corporation, Class A*			236,016		14,877,269
Suntech Power Holdings Co., Ltd., ADR*			221,867		8,091,490
					39,831,079
Chemicals - Petroleum and Inorganic - 2.43%
E.I. du Pont de Nemours and Company			119,541		6,077,464
Monsanto Company			111,149		7,507,003
Yara International ASA (A)			115,596		3,489,276
					17,073,743

Chemicals - Specialty - 0.39%
Mosaic Company*			69,449		2,709,900
Coal - 0.91%
Yanzhou Coal Mining Company Limited, Class H (A)*	4,206,000				6,422,606
Communications Equipment - 1.14%
Nokia Corporation, Series A, ADR			285,945		8,037,914
Consumer Electronics - 2.47%
Nintendo Co., Ltd. (A)			47,400		17,362,355
Electrical Equipment - 1.00%
Siemens AG (A)			48,958		7,027,131
Food and Related - 4.57%
Archer Daniels Midland Company			233,295		7,719,732
Bunge Limited			132,051		11,158,310
Cermaq ASA (A)			89,300		1,559,772
IOI Corporation Berhad (A)	2,239,500				3,373,034
Kuala Lumpur Kepong Berhad (A)	1,029,200				3,845,526
Marine Harvest ASA (A)*	1,230,000				1,339,099
Olam International Limited (A)	1,528,000				3,074,467
					32,069,940
Forest and Paper Products - 0.35%
Pentair, Inc.			63,846		2,462,540
Health Care - Drugs - 0.79%
Abbott Laboratories			66,278		3,549,187
Shandong Simcere Medgenn Bio-Pharmaceutical       Company Limited*			142,402		2,009,292
					5,558,479
Hospital Supply and Management - 0.83%
Wilmar International Limited (A)	2,802,000				5,820,911
Hotels and Gaming - 0.93%
Las Vegas Sands, Inc.*			85,182		6,507,053
Household - General Products - 0.73%
Hengan International Group Company Limited (A)	1,450,000				5,155,259
Insurance - Life - 0.54%
Ping An Insurance (Group) Company of China, Ltd.,       H Shares (A)			534,500		3,776,745
Mining - 8.09%
BHP Billiton Plc (A)			634,000		18,828,863
Cameco Corporation (A)			60,120		3,047,623
Rio Tinto plc (A)			241,885		18,588,977
Southern Copper Corporation			173,734		16,376,167
					56,841,630
Motor Vehicles - 0.68%
Suzuki Motor Corporation (A)			126,200		3,587,411
Tata Motors Limited (A)			73,383		1,208,237
					4,795,648
Multiple Industry - 1.00%
Keppel Corporation Limited (A)			231,000		1,886,330
Reliance Industries Limited (A)			123,260		5,149,485
					7,035,815
Non-Residential Construction - 3.05%
China Communications Construction Company       Limited, H Shares (A)*	4,289,000				7,679,302
Fluor Corporation			62,459		6,956,059
Kurita Water Industries Ltd. (A)			214,700		6,748,337
					21,383,698
Petroleum - International - 3.74%
Apache Corporation			89,147		7,273,504
China Petroleum & Chemical Corporation, H Shares (A)	7,362,000				8,144,222
Devon Energy Corporation			89,981		7,044,613
OAO NOVATEK, GDR			72,500		3,770,000
					26,232,339
Petroleum - Services - 3.32%
Baker Hughes Incorporated			191,943		16,148,165
Transocean Inc.*			67,344		7,137,117
					23,285,282
Real Estate Investment Trust - 1.32%
Agile Property Holdings Limited (A)	2,572,000				3,368,283
Hongkong Land Holdings Limited			627,000		2,821,500
Keppel Land Limited (A)			540,000		3,086,722
					9,276,505
Security and Commodity Brokers - 16.61%
Chicago Mercantile Exchange Holdings Inc. (B)(C)			55,820		29,827,975
Deutsche Borse AG (A)			266,896		29,982,226
Goldman Sachs Group, Inc. (The)			30,604		6,633,417
NYMEX Holdings, Inc.			73,200		9,196,116
Nomura Holdings, Inc. (A)			339,300		6,613,767
Singapore Exchange Limited (A)	2,640,000				16,901,519
UBS AG			292,102		17,529,041
					116,684,061
Steel - 1.34%
Companhia Vale do Rio Doce, ADR			211,700		9,431,235
Timesharing and Software - 0.19%
Tencent Holdings Limited (A)			328,000		1,321,363
Utilities - Electric - 2.21%
Veolia Environment (A)			197,443		15,507,366
Utilities - Telephone - 8.19%
America Movil, S.A. de C.V.			167,351		10,364,047
Bharti Airtel Limited (A)*			172,866		3,550,113
China Mobile Limited (A)	2,105,000				22,600,106
Equinix, Inc.*			77,939		7,132,977
Open Joint Stock Company ''Vimpel-Communications'', ADR*			37,215		3,920,972
Reliance Communication Ventures Limited (A)*			264,732		3,365,326
Singapore Telecommunications Limited (A)	2,948,000				6,547,901
					57,481,442
TOTAL COMMON STOCKS - 82.59%				$	579,990,646
(Cost: $456,985,187)
INVESTMENT FUNDS - 0.04%
Vietnam Azalea Fund Limited (D)(E)		300,000		$	300,000
(Cost: $360,000)

CORPORATE DEBT SECURITIES	Principal Amount in Thousands
Banks - 0.15%
Norilsk Nickel Finance Luxembourg S.A.,
7.125%, 9-30-09	$	1,000	1,019,100

Beverages - 0.23%
Central European Distribution Corporation,
8.0%, 7-25-12 (F)(G)	EUR720				1,040,266
Companhia Brasileira de Bebidas,
10.5%, 12-15-11		$	500		587,500
					1,627,766
Construction Materials - 0.08%
Interface, Inc.,
9.5%, 2-1-14			550		592,625
Finance Companies - 0.61%
ALROSA Finance S.A.,
8.125%, 5-6-08			900		913,860
C5 Capital (SPV) Limited,
6.196%, 12-31-  49 (H)			1,500		1,486,485
Russian Standard Bank:
7.5%, 10-7-10			600		579,996
7.5%, 10-7-10 (H)			350		337,750
Toyota Motor Credit Corporation,
4.28%, 1-18-15 (I)			1,050		933,303
					4,251,394
Food and Related - 0.27%
Cosan S.A. Industria e Comercio,
9.0%, 11-1-09			1,800		1,903,500
Forest and Paper Products - 0.07%
Sino-Forest Corporation,
9.125%, 8-17-11 (H)			475		503,500
Homebuilders, Mobile Homes - 0.09%
Desarrolladora Homex, S.A. de C.V.,
7.5%, 9-28-15			627		648,945
Mining - 0.26%
Vedanta Resources plc,
6.625%, 2-22-10 (H)			1,800		1,795,500
Motion Pictures - 0.12%
Cinemark, Inc.,
0.0%, 3-15-14 (J)			900		819,000
Motor Vehicles - 0.15%
Hyundai Motor Company,
5.3%, 12-19-08 (F)		$1,080			1,071,201
Non-Residential Construction - 0.15%
Odebrecht Overseas Ltd.,
11.5%, 2-25-09 (F)		1,000			1,082,500
Trucking and Shipping - 0.31%
Ultrapetrol (Bahamas) Limited,
9.0%, 11-24-14			2,150		2,182,250
Utilities - Electric - 0.26%
CESP - Companhia Energetica de Sao Paulo,
9.75%, 1-15-15 (F)(G)	BRL3,000				1,794,930
Utilities - Telephone - 0.30%
Open Joint Stock Company Mobile TeleSystems,
9.75%, 1-30-08		$	1,000		1,017,900
Open Joint Stock Company "Vimpel-Communications",
8.0%, 2-11-10			1,050		1,079,820
					2,097,720
TOTAL CORPORATE DEBT SECURITIES - 3.05%				$	21,389,931
(Cost: $20,690,652)
OTHER GOVERNMENT SECURITIES - 3.47%
Germany
Bundesschatzanweisungen Federal Treasury Notes,
3.0%, 3-14-08 (G)	EUR18,200			$	24,406,992
(Cost: $23,222,704)

UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS	Principal Amount in Thousands
Mortgage-Backed Obligations - 1.43%
Federal Home Loan Mortgage Corporation Agency       REMIC/CMO (Interest Only):
5.5%, 9-15-17	$	5,873		941,663
5.0%, 11-15-17		510		59,928
5.0%, 4-15-19		1,021		150,022
5.0%, 4-15-19		500		72,990
5.0%, 2-15-20		467		2,485
5.0%, 7-15-21		972		50,596
5.0%, 6-15-22		654		15,089
5.0%, 7-15-22		2,989		71,999
5.0%, 11-15-22		520		82,048
5.0%, 1-15-23		682		20,238
5.5%, 3-15-23		940		189,239
5.0%, 4-15-23		524		30,616
5.0%, 5-15-23		902		146,229
5.0%, 8-15-23		669		115,810
5.5%, 11-15-23		3,735		191,076
5.5%, 11-15-23		1,499		86,167
5.0%, 9-15-24		1,551		95,924
5.5%, 9-15-24		822		50,544
5.5%, 4-15-25		431		32,353
5.5%, 4-15-25		220		27,638
5.0%, 9-15-25		2,344		167,151
5.5%, 10-15-25		1,993		416,123
5.0%, 4-15-26		2,315		174,046
5.0%, 10-15-28		459		89,493
5.5%, 2-15-30		627		70,177
5.0%, 8-15-30		1,212		124,307
5.5%, 3-15-31		905		123,905
6.0%, 11-15-35		1,073		247,245
Federal National Mortgage Association Agency       REMIC/CMO (Interest Only):
5.5%, 11-25-17		1,007		68,844
5.0%, 5-25-22		597		86,096
5.0%, 7-25-23		2,599		465,651
5.0%, 8-25-23		824		142,838
5.0%, 11-25-23		944		172,547
5.5%, 9-25-25		591		35,101
5.5%, 11-25-25		1,752		102,215
5.0%, 9-25-30		1,122		169,695
5.5%, 6-25-33		1,104		230,378
5.5%, 8-25-33		1,576		332,770
5.5%, 4-25-34		2,325		561,429
5.5%, 11-25-36		2,640		708,276
Government National Mortgage Association Agency       REMIC/CMO (Interest Only):
5.0%, 1-20-30		1,984		211,009
5.0%, 6-20-31		1,955		268,797
5.5%, 3-20-32		1,069		181,327
5.0%, 7-20-33		513		104,502
5.5%, 11-20-33		2,010		364,216
5.5%, 6-20-35		1,500		358,701
5.5%, 7-20-35		741		171,863
5.5%, 7-20-35		606		90,088
5.5%, 10-16-35		710		175,429
Government National Mortgage Association Fixed       Rate Pass-Through Certificates:
5.5%, 11-15-16		225		222,707
5.5%, 11-15-16		77		76,308
5.5%, 12-15-16		723		715,027
5.5%, 12-15-16		165		163,350
				10,024,265
Treasury Inflation Protected Obligation - 1.68%
United States Treasury Note,
2.0%, 1-15-14 (K)	11,000			11,824,812
TOTAL UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS - 3.11%			$	21,849,077
(Cost: $21,382,499)
PUT OPTIONS	Number of Contracts
Archer Daniels Midland Company, August 31.5,
Expires 8-17-07		2,333		182,207
Corporate Executive Board Company (The) Collar, August 60,       Expires 8-17-07		246		30,898
TOTAL PUT OPTIONS - 0.03%			$	213,105
(Cost: $160,807)

UNREALIZED GAIN (LOSS) ON OPEN FORWARD       CURRENCY CONTRACTS - (0.24%)		Face Amount in Thousands
Chinese Yuan Renminbi, 11-9-07 (G)	CNY112,000			$	35,315
Chinese Yuan Renminbi, 11-9-07 (G)		165,000			(24,757	)
Chinese Yuan Renminbi, 11-16-07 (G)		14,000			1,609
Chinese Yuan Renminbi, 11-16-07 (G)		160,000			(60,566	)
Chinese Yuan Renminbi, 12-6-07 (G)			7,500		643
Euro, 1-10-08 (G)		EUR15,900			512,171
Japanese Yen, 1-10-08 (G)	JPY4,910,000				(2,369,886	)
Russian Ruble, 6-25-08 (G)	RUB496,000				128,174
Singapore Dollar, 8-21-07 (G)		SGD8,500			71,630
South Korean Won, 4-21-08 (G)	KRW10,400,000				42,002
				$	(1,663,665	)
SHORT-TERM SECURITIES		Principal Amount in Thousands
Commercial Paper
Capital Equipment - 2.15%
Caterpillar Inc.:
5.32%, 7-2-07		$10,000			9,998,522
5.32%, 7-3-07			5,136		5,134,482
					15,133,004
Finance Companies - 0.71%
General Electric Capital Corporation,
5.26%, 7-2-07			5,000		4,999,269
Health Care - Drugs - 0.98%
Abbott Laboratories,
5.26%, 7-12-07			6,860		6,848,975
Household - General Products - 0.50%
Procter & Gamble Company (The),
5.26%, 8-20-07			3,500		3,474,431
Total Commercial Paper - 4.34%					30,455,679
Notes - 0.77%
Non-Residential Construction
Healthcare Property Group, LLC, Taxable Variable            Rate Bonds, Series 2005 (SunTrust Bank),
5.37%, 7-5-07 (I)			5,400		5,400,000
TOTAL SHORT-TERM SECURITIES - 5.11%				$	35,855,679
(Cost: $35,855,679)

TOTAL INVESTMENT SECURITIES - 99.16%	$	696,419,153
(Cost: $573,451,849)
CASH (B) AND OTHER ASSETS, NET OF LIABILITIES - 0.84%		5,874,812
NET ASSETS - 100.00%	$	702,293,965

Notes to Schedule of Investments
Certain acronyms may be used within the body of the Portfolio's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.
The following credit default swap agreements were outstanding at June 30, 2007. (See Note 7 to financial statements):
	Counterparty	Reference Entity	Fixed Rate	Expiration Date	Notional Amount	Unrealized Appreciation (Depreciation)
	Bear Stearns	CMBX BBB 7.1	2.0%	12-13-49	$2,200,000		$	84,001
	Goldman Sachs	CMBX BBB 7.1	2.0%	12-13-49	2,800,000			104,974
	Merrill Lynch    International	CMBX BBB 7.1	2.0%	12-13-49	1,700,000			70,794
	Lehman Brothers	Dow Jones CDX    Emerging Markets    Series 5	1.35%	6-20-11	4,000,000			(199,553)
	Merrill Lynch    International	Dow Jones CDX    Emerging Markets    Series 5	1.35%	6-20-11	4,000,000			(206,708)
	Morgan Stanley	Dow Jones CDX    Emerging Markets    Series 5	1.35%	6-20-11	8,000,000			(410,556)
	Goldman Sachs	Dow Jones CDX    Emerging Markets    Series 7	1.25%	6-20-12	6,400,000			(32,162)
	Lehman Brothers	Dow Jones CDX    Emerging Markets    Series 7	1.25%	6-20-12	6,000,000			(30,153)
		Dow Jones CDX    Emerging Markets    Series 7	1.25%	6-20-12	4,700,000			28,188
	Morgan Stanley	Dow Jones CDX    Emerging Markets    Series 7	1.25%	6-20-12	1,900,000			11,395
	Lehman Brothers	Dow Jones CDX    North America High    Yield Series 7	3.25%	12-20-11	21,400,000			(310,181)
	Merrill Lynch    International	Dow Jones CDX    North America High    Yield Series 7	3.25%	12-20-11	16,600,000			(232,371)
		Dow Jones CDX    North America High    Yield Series 7	3.25%	12-20-11	3,000,000			205,732
	Morgan Stanley	Dow Jones CDX    North America High    Yield Series 7	3.25%	12-20-11	16,600,000			(235,274)
		Dow Jones CDX    North America High    Yield Series 7	3.25%	12-20-11	4,300,000			294,883

	Goldman Sachs	Dow Jones CDX    North America High    Yield Series 8	2.75%	6-20-12	2,100,000		(39,715)
	Lehman Brothers	Dow Jones CDX    North America High    Yield Series 8	2.75%	6-20-12	2,500,000		(47,280)
	Morgan Stanley	Dow Jones CDX    North America High    Yield Series 8	2.75%	6-20-12	2,500,000		(47,280)
	Goldman Sachs	Dow Jones LCDX    Series 8	1.2%	6-20-12	2,200,000		(15,346)
		Dow Jones LCDX    Series 8	1.2%	6-20-12	4,500,000		142
	Bear Stearns	Federative Republic    of Brazil	1.04%	3-20-12	3,500,000		(50,687)
	Goldman Sachs	Federative Republic    of Brazil	1.04%	3-20-12	3,700,000		(53,583)
	Morgan Stanley	Federative Republic    of Brazil	1.89%	6-20-11	5,200,000		(240,843)
		Federative Republic    of Brazil	0.94%	4-20-12	6,200,000		(62,095)
	Bear Stearns	Republic of Turkey	1.91%	3-20-12	3,100,000		(67,838)
	Goldman Sachs	Republic of Turkey	1.92%	3-20-12	3,100,000		(69,086)
		Republic of Turkey	1.93%	3-20-12	3,100,000		(70,324)
		Republic of Turkey	1.76%	4-20-12	6,200,000		(93,175)
	Lehman Brothers	Republic of Turkey	1.9%	3-20-12	3,100,000		(66,591)
						$	(1,780,692)
*No dividends were paid during the preceding 12 months.
(A)Listed on an exchange outside the United States.
(B)Cash and security serve as collateral for the following open futures contracts at June 30, 2007. (See Note 6 to financial statements):

	Description	Type	Expiration Date	Number of Contracts		Market Value	Unrealized Appreciation (Depreciation)
	Nasdaq 100 E-Mini	Short	9-21-07	695	$	27,188,400		$	(390,779)
	Russell 2000 E-Mini	Short	9-21-07	236		19,873,560			(288,409)
	S&P 500 E-Mini	Short	9-21-07	440		33,338,800			59,471
					$	80,400,760		$	(619,717)
(C)Security serves as cover for the following written call option outstanding as of June 30, 2007. (See Note 5 to financial statements):

Underlying Security	Contracts Subject to Call	Premium Received			Market Value
Corporate Executive Board Company (The) Collar	246		$	44,034		$	29,840

(D)Deemed to be an affiliate due to the Portfolio having at least 5% of the voting securities.
(E)Restricted security. At June 30, 2007, the following restricted security was owned:
	Security	Acquisition Date	Shares		Cost		Market Value
	Vietnam Azalea Fund Limited	6-28-07	300,000	$	360,000	$	300,000
The total market value of restricted securities represents approximately 0.04% of net assets at June 30, 2007.
(F)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be illiquid under guidelines established by the Board of Directors. At June 30, 2007, the total value of these securities amounted to $4,988,897 or 0.71% of net assets.
(G)Principal amounts are denominated in the indicated foreign currency, where applicable (BRL - Brazilian Real, CNY - Chinese Yuan Renminbi, EUR - Euro, JPY - Japanese Yen, KRW - South Korean Won, RUB - Russian Ruble, SGD - Singapore Dollar).
(H)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be liquid under guidelines established by the Board of Directors. At June 30, 2007, the total value of these securities amounted to $4,123,235 or 0.59% of net assets.
(I)Variable rate security. Interest rate disclosed is that which is in effect June 30, 2007.
(J)This security does not bear interest for an initial period of time and subsequently becomes interest bearing.

(K)The interest rate for this security is a stated rate, but the interest payments are determined by multiplying the inflation-adjusted principal by one half of the stated rate for each semiannual interest payment date.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      ASSET STRATEGY PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                            (Unaudited)

ASSETS
Investments - at value (Notes 1 and 3):
Securities (cost - $558,298)	$	682,042
Affiliated Company (cost - $360)		300
Bullion (cost - $14,794)		14,077
		696,419
Cash		67
Cash denominated in foreign currencies (cost - $1,897)		1,897
Deposit with brokers for swaps		2,112
Unrealized appreciation on swap agreements (Note 7)		800
Initial margin - futures		755
Amortized swap premiums paid (Note 7)		474
Receivables:
Dividends and interest		1,862
Investment securities sold		1,355
Portfolio shares sold		641
Variation margin		105
Prepaid and other assets		9
Total assets		706,496
LIABILITIES
Unrealized depreciation on swap agreements (Note 7)		2,581
Amortized swap premiums received (Note 7)		394
Payable for investment securities purchased		359
Payable to Portfolio shareholders		163
Outstanding written options - at value (premium received - $44) (Note 5)		30
Accrued management fee (Note 2)		27
Accrued shareholder servicing (Note 2)		16
Accrued accounting services fee (Note 2)		14
Accrued service fee (Note 2)		10
Other		608
Total liabilities		4,202
Total net assets	$	702,294
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	69
Additional paid-in capital		538,919
Accumulated undistributed income:
Accumulated undistributed net investment income		8,242
Accumulated undistributed net realized gain on investment transactions		34,605
Net unrealized appreciation in value of investments		120,459
Net assets applicable to outstanding units of capital	$	702,294
Net asset value, redemption and offering price per share	$	10.1313
Capital shares outstanding		69,319
Capital shares authorized		130,000

See Notes to Financial Statements.

Statement of Operations
      ASSET STRATEGY PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                              (Unaudited)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $363)	$	4,490
Interest and amortization		3,964
Total income		8,454
Expenses (Note 2):
Investment management fee		2,232
Service fee		797
Custodian fees		98
Accounting services fee		80
Shareholder servicing		18
Audit fees		14
Legal fees		11
Other		61
Total		3,311
Less waiver of investment management fee (Notes 2 and 9)		(32	)
Total expenses		3,279
Net investment income		5,175
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		33,613
Realized net gain on forward currency contracts		524
Realized net loss on futures contracts	(14,493		)
Realized net gain on written options		52
Realized net loss on swaps		(612	)
Realized net gain on foreign currency exchange transactions		424
Realized net gain on investments		19,508
Unrealized appreciation in value of securities during the period		55,306
Unrealized depreciation in value of forward currency contracts            during the period		(2,501	)
Unrealized depreciation in value of futures contracts during the period		(620	)
Unrealized appreciation in value of written options during the period		14
Unrealized appreciation in value of swaps during the period		633
Unrealized depreciation in value of foreign currency exchange            transactions during the period		(24	)
Unrealized appreciation in value of investments during the period		52,808
Net gain on investments		72,316
Net increase in net assets resulting from operations	$	77,491

See Notes to Financial Statements.

Statement of Changes in Net Assets
      ASSET STRATEGY PORTFOLIO
      (In Thousands)                                                                                                               (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
INCREASE IN NET ASSETS
Operations:
Net investment income		$	5,175		$	6,090
Realized net gain on investments			19,508			106,546
Unrealized appreciation (depreciation)			52,808			(22,090	)
Net increase in net assets resulting                       from operations			77,491			90,546
Dividends to shareholders from (Note 1E): (1)
Net investment income			(–	)		(2,000	)
Realized gains on investment transactions			(–	)		(91,802	)
			(–	)		(93,802	)
Capital share transactions (2)			22,656			189,235
Total increase			100,147			185,979
NET ASSETS
Beginning of period			602,147			416,168
End of period		$	702,294		$	602,147
Undistributed net investment income		$	8,242		$	2,643
(1)See "Financial Highlights" on page 27.
(2)Shares issued from sale of shares			4,982			12,474
Shares issued from reinvestment of dividend       and/or capital gains distribution			–			10,439
Shares redeemed			(2,556	)		(2,978	)
Increase in outstanding capital shares			2,426			19,935
Value issued from sale of shares		$	46,781		$	125,418
Value issued from reinvestment of dividend       and/or capital gains distribution			–			93,802
Value redeemed			(24,125	)		(29,985	)
Increase in outstanding capital		$	22,656		$	189,235

See Notes to Financial Statements.

Financial Highlights
      ASSET STRATEGY PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended December 31,
	6-30-07				2006			2005			2004			2003			2002
Net asset value,       beginning of period		$	9.0016		$	8.8625		$	7.6926		$	6.9237		$	6.3078		$	6.2046
Income from investment       operations:
Net investment income			0.0733			0.0958			0.0836			0.0699			0.0769			0.1005
Net realized and             unrealized gain             on investments			1.0564			1.7042			1.7847			0.8508			0.6469			0.1032
Total from investment       operations			1.1297			1.8000			1.8683			0.9207			0.7238			0.2037
Less distributions from:
Net investment income		(0.0000		)	(0.0354		)	(0.0762		)	(0.0990		)	(0.0769		)	(0.1005		)
Capital gains		(0.0000		)	(1.6255		)	(0.6222		)	(0.0528		)	(0.0310		)	(0.0000		)
Total distributions		(0.0000		)	(1.6609		)	(0.6984		)	(0.1518		)	(0.1079		)	(0.1005		)
Net asset value,       end of period		$	10.1313		$	9.0016		$	8.8625		$	7.6926		$	6.9237		$	6.3078
Total return			12.76	%		20.15	%		24.27	%		13.30	%		11.47	%		3.28	%
Net assets, end of period       (in millions)			$702			$602			$416			$282			$227			$167
Ratio of expenses to       average net assets       including expense       waiver			1.03	%(1)		1.02	%		1.03	%		1.06	%		1.03	%		1.04	%
Ratio of net investment       income to average       net assets including       expense waiver			1.62	%(1)		1.16	%		1.10	%		1.02	%		1.27	%		1.90	%
Ratio of expenses to       average net assets       excluding expense       waiver			1.04	%(1)		1.03	%		1.03	%(2)		1.06	%(2)		1.03	%(2)		1.04	%(2)
Ratio of net investment       income to average       net assets excluding       expense waiver			1.61	%(1)		1.15	%		1.10	%(2)		1.02	%(2)		1.27	%(2)		1.90	%(2)
Portfolio turnover rate			41	%		148	%		79	%		118	%		224	%		95	%

(1)Annualized.

(2)There was no waiver of expenses during the period.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF BALANCED PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target Balanced Portfolio had net assets totaling $554,845,221 invested in a diversified portfolio of:

71.52%	Domestic Common Stocks
16.48%	United States Government and Government Agency Obligations
4.93%	Foreign Common Stocks
4.16%	Cash and Cash Equivalents
2.38%	Domestic Corporate Debt Securities
0.30%	Other Government Securities
0.23%	Foreign Corporate Debt Securities

Asset Allocation

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007,
your Portfolio owned:

Stocks	$	76.45
Technology Stocks	$	16.13
Health Care Stocks	$	10.73
Financial Services Stocks	$	10.24
Energy Stocks	$	7.92
Consumer Nondurables Stocks	$	7.77
Consumer Services Stocks	$	4.77
Miscellaneous Stocks	$	3.85
Utilities Stocks	$	3.30
Capital Goods Stocks	$	3.11
Multi-Industry Stocks	$	3.02
Retail Stocks	$	2.96
Raw Materials Stocks	$	2.65
Bonds	$	19.39
United States Government and             Government Agency Obligations	$	16.48
Corporate Debt Securities	$	2.61
Other Government Securities	$	0.30
Cash and Cash Equivalents	$	4.16

The Investments of Balanced Portfolio
June 30, 2007                                                                                                                  (Unaudited)
COMMON STOCKS	Shares		Value
Air Transportation - 0.89%
Southwest Airlines Co.	333,000	$	4,965,030
Aircraft - 1.73%
Boeing Company (The)	100,100		9,625,616
Banks - 2.47%
Bank of America Corporation	100,300		4,903,667
Northern Trust Corporation	137,200		8,809,612
			13,713,279
Beverages - 4.64%
Anheuser-Busch Companies, Inc.	99,000		5,163,840
Brown-Forman Corporation, Class B	71,200		5,203,296
Coca-Cola Company (The)	113,600		5,942,416
PepsiCo, Inc.	145,900		9,461,615
			25,771,167
Business Equipment and Services - 1.11%
Pitney Bowes Inc.	131,300		6,147,466
Chemicals - Petroleum and Inorganic - 1.31%
E.I. du Pont de Nemours and Company	143,400		7,290,456
Chemicals - Specialty - 1.34%
Air Products and Chemicals, Inc.	92,200		7,410,114
Communications Equipment - 5.20%
Cisco Systems, Inc.*	423,400		11,781,105
Nokia Corporation, Series A, ADR	339,500		9,543,345
QUALCOMM Incorporated	173,600		7,529,900
			28,854,350
Computers - Micro - 2.42%
Apple Inc.*	109,800		13,402,188
Computers - Peripherals - 1.28%
Microsoft Corporation	240,900		7,096,914
Defense - 2.59%
General Dynamics Corporation	183,600		14,361,192
Electrical Equipment - 1.15%
Emerson Electric Co.	136,600		6,392,880
Electronic Components - 2.91%
Microchip Technology Incorporated	210,700		7,808,542
Texas Instruments Incorporated	221,400		8,331,282
			16,139,824
Food and Related - 1.27%
Wm. Wrigley Jr. Company	127,600		7,057,556
Health Care - Drugs - 5.20%
Allergan, Inc.	134,600		7,758,344
Genentech, Inc.*	83,300		6,302,478
Gilead Sciences, Inc.*	192,600		7,471,917
Pfizer Inc.	286,900		7,336,033
			28,868,772
Health Care - General - 4.29%
DENTSPLY International Inc.	212,500		8,127,063
Johnson & Johnson	163,300		10,062,546
Zimmer Holdings, Inc.*	66,100		5,611,229
			23,800,838
Hospital Supply and Management - 1.24%
Medtronic, Inc.	132,700		6,881,822
Hotels and Gaming - 0.98%
Las Vegas Sands, Inc.*	71,500		5,461,885
Household - General Products - 1.86%
Colgate-Palmolive Company	158,900		10,304,665
Insurance - Life - 1.29%
Aflac Incorporated	138,900		7,139,460
Insurance - Property and Casualty - 1.23%
Berkshire Hathaway Inc., Class B*	1,900		6,849,500
Leisure Time Industry - 1.08%
Time Warner Inc.	285,900		6,015,336
Motion Pictures - 1.54%
News Corporation Limited, Class A	402,700		8,541,267
Multiple Industry - 3.02%
Altria Group, Inc.	59,300		4,159,302
General Electric Company	328,756		12,584,780
			16,744,082
Non-Residential Construction - 1.96%
Fluor Corporation	97,700		10,880,849
Petroleum - Domestic - 1.50%
BP p.l.c., ADR	115,500		8,332,170
Petroleum - International - 4.22%
Chevron Corporation	83,000		6,991,920
Exxon Mobil Corporation	195,546		16,402,398
			23,394,318
Petroleum - Services - 2.20%
Schlumberger Limited	143,700		12,205,878
Publishing - 1.17%
Meredith Corporation	105,500		6,498,800
Retail - General Merchandise - 2.20%
Target Corporation	91,300		5,806,680
Wal-Mart Stores, Inc.	132,900		6,393,819
			12,200,499
Retail - Specialty Stores - 0.76%
Best Buy Co., Inc.	90,000		4,200,300
Security and Commodity Brokers - 5.25%
American Express Company	110,300		6,748,154
Chicago Mercantile Exchange Holdings Inc.	9,400		5,022,984
J.P. Morgan Chase & Co.	162,400		7,868,280
UBS AG	157,900		9,475,579
			29,114,997
Timesharing and Software - 1.12%
Paychex, Inc.	159,200		6,228,700
Trucking and Shipping - 0.73%
Expeditors International of Washington, Inc.	97,400		4,023,594
Utilities - Electric - 1.57%
Exelon Corporation	119,800		8,697,480
Utilities - Telephone - 1.73%
AT&T Inc.	231,000		9,586,500
TOTAL COMMON STOCKS - 76.45%		$	424,199,744
(Cost: $301,778,629)

CORPORATE DEBT SECURITIES	Principal Amount in Thousands
Air Transportation - 0.06%
Southwest Airlines Co.,
7.875%, 9-1-07	$	360	361,206
Banks - 0.24%
Wells Fargo Bank, N.A.,
7.55%, 6-21-10		1,250	1,322,791
Beverages - 0.30%
Coca-Cola Enterprises Inc.,
6.7%, 10-15-36		500	527,905
Diageo Capital plc,
3.5%, 11-19-07		1,150	1,141,323
			1,669,228
Finance Companies - 0.99%
American International Group,
3.85%, 11-26-07 (A)		1,400	1,391,720
Banco Hipotecario Nacional:
7.916%, 7-25-09 (A)		16	165
8.0%, 3-31-11 (A)		598	149,609

First Union-Lehman Brothers-Bank of America       Commercial Mortgage Trust,
6.56%, 11-18-35	705		707,386
First Union-Lehman Brothers Company,
6.65%, 11-18-29	249		248,431
Mellon Residential Funding,
6.75%, 6-26-28	97		96,660
Prudential Insurance Company of America,
6.6%, 5-15-08 (A)	1,500		1,512,771
Unilever Capital Corporation,
5.9%, 11-15-32	1,450		1,371,123
			5,477,865
Food and Related - 0.48%
Archer-Daniels-Midland Company,
7.0%, 2-1-31	1,350		1,459,913
Cargill, Inc.,
6.375%, 6-1-12 (B)	1,150		1,184,717
			2,644,630
Insurance - Life - 0.26%
StanCorp Financial Group, Inc.,
6.875%, 10-1-12	1,375		1,432,821
Insurance - Property and Casualty - 0.28%
Principal Life Global,
6.25%, 2-15-12 (B)	1,500		1,542,935
TOTAL CORPORATE DEBT SECURITIES - 2.61%		$	14,451,476
(Cost: $14,630,453)
OTHER GOVERNMENT SECURITIES - 0.30%
Canada
Hydro-Quebec,
8.0%, 2-1-13	1,500	$	1,674,747
(Cost: $1,636,061)

UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS
Agency Obligations - 0.19%
Federal National Mortgage Association,
7.25%, 1-15-10	$	1,000	$	1,048,094
Mortgage-Backed Obligations - 2.89%
Federal National Mortgage Association Fixed Rate       Pass-Through Certificates:
6.23%, 1-1-08		1,570		1,566,653
6.0%, 9-1-17		548		551,806
5.0%, 1-1-18		442		429,108
5.5%, 4-1-18		219		216,327
5.0%, 5-1-18		219		212,250
4.5%, 7-1-18		2,857		2,722,391
7.0%, 9-1-25		86		89,058
6.5%, 10-1-28		347		354,235
6.5%, 2-1-29		251		256,447
7.5%, 4-1-31		204		214,631
7.0%, 7-1-31		316		330,839
7.0%, 9-1-31		249		260,084
7.0%, 9-1-31		329		342,144
7.0%, 11-1-31		74		77,174
6.5%, 2-1-32		1,114		1,141,335
7.0%, 2-1-32		380		397,100
7.0%, 2-1-32		368		384,178
7.0%, 3-1-32		240		250,369
7.0%, 7-1-32		595		616,566
6.0%, 9-1-32		2,157		2,147,550
6.0%, 2-1-33		516		513,398
5.5%, 5-1-33		1,638		1,587,310
5.5%, 5-1-33		434		420,590
5.5%, 6-1-33		750		726,507
Government National Mortgage Association Fixed       Rate Pass-Through Certificates:
6.0%, 8-15-28		27		26,657
6.5%, 8-15-28		57		58,433
United States Department of Veterans Affairs,       Guaranteed REMIC Pass-Through Certificates,       Vendee Mortgage Trust, 1997-A Class 3-A,
8.293%, 12-15-26		131		137,453
				16,030,593
Treasury Inflation Protected Obligation - 0.21%
United States Treasury Note,
3.0%, 7-15-12 (C)	$ 1,000			1,171,802
Treasury Obligations - 13.19%
United States Treasury Bonds:
7.5%, 11-15-16		1,500		1,768,946
7.25%, 8-15-22		4,000		4,842,188
6.25%, 8-15-23		5,250		5,829,553
5.25%, 2-15-29		1,150		1,157,906
United States Treasury Notes:
3.25%, 8-15-07		5,000		4,990,235
4.25%, 10-31-07		1,200		1,197,469
3.0%, 11-15-07		4,000		3,971,876
3.0%, 2-15-08		3,000		2,962,734
2.625%, 5-15-08		4,000		3,918,752
4.75%, 11-15-08		4,000		3,987,188
4.0%, 3-15-10		3,200		3,128,749
4.25%, 10-15-10	10,000			9,807,810
3.875%, 2-15-13		3,000		2,849,298
3.625%, 5-15-13		3,000		2,804,766
4.25%, 8-15-13		4,000		3,862,188
4.25%, 8-15-15	17,000			16,130,076
				73,209,734
TOTAL UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS - 16.48%			$	91,460,223
(Cost: $92,850,852)
SHORT-TERM SECURITIES
Finance Companies - 1.38%
Ciesco, LLC,
5.37%, 7-2-07		2,154		2,153,679
PACCAR Financial Corp.:
5.29%, 7-3-07		2,500		2,499,265
5.24%, 7-31-07		3,000		2,986,900
				7,639,844

Insurance - Life - 1.08%
American General Finance Corporation,
5.27%, 7-2-07	$	6,000		5,999,121
Restaurants - 1.44%
Starbucks Corporation,
5.45%, 7-2-07		8,000		7,998,789
TOTAL SHORT-TERM SECURITIES - 3.90%			$	21,637,754
(Cost: $21,637,754)
TOTAL INVESTMENT SECURITIES - 99.74%			$	553,423,944
(Cost: $432,533,749)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.26%				1,421,277
NET ASSETS - 100.00%			$	554,845,221

Notes to Schedule of Investments

Certain acronyms may be used within the body of the Portfolio's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.

*No dividends were paid during the preceding 12 months.

(A)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be illiquid under guidelines established by the Board of Directors. At June 30, 2007, the total value of these securities amounted to $3,054,265 or 0.55% of net assets.

(B)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities has been determined to be liquid under guidelines established by the Board of Directors. At June 30, 2007, the total value of these securities amounted to $2,727,652 or 0.49% of net assets.

(C)The interest rate for this security is a stated rate, but the interest payments are determined by multiplying the inflation-adjusted principal by one half of the stated rate for each semiannual interest payment date.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      BALANCED PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $432,534) (Notes 1 and 3)	$	553,424
Cash		1
Receivables:
Dividends and interest		1,686
Portfolio shares sold		183
Prepaid and other assets		9
Total assets		555,303
LIABILITIES
Payable to Portfolio shareholders		335
Accrued management fee (Note 2)		21
Accrued shareholder servicing (Note 2)		15
Accrued accounting services fee (Note 2)		13
Accrued service fee (Note 2)		8
Other		66
Total liabilities		458
Total net assets	$	554,845
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	60
Additional paid-in capital		442,835
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		4,335
Accumulated undistributed net realized loss on investment transactions		(13,275	)
Net unrealized appreciation in value of investments		120,890
Net assets applicable to outstanding units of capital	$	554,845
Net asset value, redemption and offering price per share	$	9.2164
Capital shares outstanding		60,202
Capital shares authorized		170,000

See Notes to Financial Statements.

Statement of Operations
      BALANCED PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                               (Unaudited)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $84)	$	3,781
Interest and amortization		3,292
Total income		7,073
Expenses (Note 2):
Investment management fee		1,947
Service fee		695
Accounting services fee		76
Audit fees		17
Shareholder servicing		17
Custodian fees		10
Legal fees		10
Other		64
Total expenses		2,836
Net investment income		4,237
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		8,606
Unrealized appreciation in value of investments during the period		19,158
Net gain on investments		27,764
Net increase in net assets resulting from operations	$	32,001

See Notes to Financial Statements.

Statement of Changes in Net Assets
      BALANCED PORTFOLIO
      (In Thousands)                                                                                                                (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
DECREASE IN NET ASSETS
Operations:
Net investment income		$	4,237			$	7,815
Realized net gain on investments			8,606				25,783
Unrealized appreciation			19,158				26,992
Net increase in net assets resulting                       from operations			32,001				60,590
Dividends to shareholders from (Note 1E): (1)
Net investment income			(–	)			(7,700	)
Realized gains on investment transactions			(–	)			(1,888	)
			(–	)			(9,588	)
Capital share transactions (2)			(41,990	)			(67,753	)
Total decrease			(9,989	)			(16,751	)
NET ASSETS
Beginning of period			564,834				581,585
End of period		$	554,845			$	564,834
Undistributed net investment income		$	4,335			$	98
(1)See "Financial Highlights" on page 41.
(2)Shares issued from sale of shares			811				2,013
Shares issued from reinvestment of dividend       and/or capital gains distribution			–				1,102
Shares redeemed			(5,491	)			(11,268	)
Decrease in outstanding capital shares			(4,680	)			(8,153	)
Value issued from sale of shares		$	7,268			$	16,982
Value issued from reinvestment of dividend       and/or capital gains distribution			–				9,588
Value redeemed			(49,258	)			(94,323	)
Decrease in outstanding capital		$	(41,990	)		$	(67,753	)

See Notes to Financial Statements.

Financial Highlights
      BALANCED PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended December 31,
	6-30-07				2006			2005			2004			2003			2002
Net asset value,       beginning of period		$	8.7056		$	7.9631		$	7.6783		$	7.1491		$	6.0423		$	6.7224
Income (loss) from       investment operations:
Net investment income			0.0705			0.1224			0.0999			0.1096			0.0467			0.1145
Net realized and             unrealized gain             (loss) on             investments			0.4403			0.7704			0.2851			0.5292			1.1068		(0.6801		)
Total from investment       operations			0.5108			0.8928			0.3850			0.6388			1.1535		(0.5656		)
Less distributions from:
Net investment income		(0.0000		)	(0.1207		)	(0.1002		)	(0.1096		)	(0.0467		)	(0.1145		)
Capital gains		(0.0000		)	(0.0296		)	(0.0000		)	(0.0000		)	(0.0000		)	(0.0000		)
Total distributions		(0.0000		)	(0.1503		)	(0.1002		)	(0.1096		)	(0.0467		)	(0.1145		)
Net asset value,       end of period		$	9.2164		$	8.7056		$	7.9631		$	7.6783		$	7.1491		$	6.0423
Total return			5.87	%		11.21	%		5.01	%		8.93	%		19.09	%		- -8.41	%
Net assets, end of period       (in millions)			$555			$565			$582			$628			$615			$168
Ratio of expenses to       average net assets			1.02	% (1)		1.01	%		1.01	%		1.02	%		1.00	%		1.01	%
Ratio of net investment       income to average       net assets			1.52	% (1)		1.37	%		1.20	%		1.45	%		1.37	%		1.79	%
Portfolio turnover rate			5	%		28	%		52	%		39	%		43	%		58	%

(1)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF BOND PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target Bond Portfolio had net assets totaling $215,038,791 invested in a diversified portfolio of:

88.34%	Domestic Bonds
9.26%	Foreign Bonds
2.40%	Cash and Cash Equivalents

Sector Weightings

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007,
your Portfolio owned:

Corporate Debt Securities	$	43.10
United States Government       Mortgage-Backed Obligations	$	34.50
United States Government Agency Obligations	$	10.96
United States Government Treasury Obligations	$	6.39
Other Government Securities	$	2.65
Cash and Cash Equivalents	$	2.40

Quality Weightings

At June 30, 2007, the breakdown of bonds (by ratings) held by the Portfolio was as follows:

AAA	59.89	%
AA	8.19	%
A	7.12	%
BBB	13.28	%
BB	4.00	%
B	1.12	%
Below B	0.06	%
Not Rated	3.94	%
Cash and Cash Equivalents	2.40	%

Ratings reflected in the wheel are taken from Standard & Poor's.

Certain U.S. government securities in which the Portfolio may invest, such as Treasury securities and securities issued by the Government National Mortgage Association (Ginnie Mae), are backed by the full faith and credit of the U.S. government. However, other U.S. government securities in which the Portfolio may invest, such as securities issued by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Banks (FHLB) are not backed by the full faith and credit of the U.S. government, are not insured or guaranteed by the U.S. government and, instead, may be supported only by the right of the issuer to borrow from the U.S. Treasury or by the credit of the issuer.

The Investments of Bond Portfolio
June 30, 2007                                                                                                                  (Unaudited)
CORPORATE DEBT SECURITIES	Principal Amount in Thousands			Value
Banks - 2.38%
First Union National Bank of Florida,
6.18%, 2-15-36	$	4,000	$	4,118,152
SouthTrust Bank, National Association,
6.125%, 1-9-28		1,000		1,005,534
				5,123,686
Broadcasting - 1.76%
Comcast Cable Communications, Inc.,
8.5%, 5-1-27		1,250		1,475,766
EchoStar DBS Corporation,
6.375%, 10-1-11		750		735,000
TCA Cable TV, Inc.,
6.53%, 2-1-28		1,000		1,005,420
Westinghouse Electric Corporation,
8.875%, 6-14-14		500		559,446
				3,775,632
Business Equipment and Services - 0.19%
Quebecor World Capital Corporation,
4.875%, 11-15-08		425		412,250
Coal - 0.46%
Peabody Energy Corporation,
6.875%, 3-15-13		1,000		995,000
Communications Equipment - 0.23%
Harris Corporation,
6.35%, 2-1-28		500		501,384
Construction Materials - 1.24%
Hanson PLC,
7.875%, 9-27-10		2,500		2,668,535
Finance Companies - 23.86%
Alternative Loan Trust 2005-J4,
5.5%, 11-25-35		1,750		1,620,851
Banc of America Commercial Mortgage Inc.,       Commercial Mortgage Pass-Through Certificates,       Series 2005-2,
4.783%, 7-10-43 (A)		2,500		2,412,390
CHL Mortgage Pass-Through Trust 2005-28,
5.25%, 1-25-19		2,907		2,838,122
CHYPS CBO 1997-1 Ltd.,
6.72%, 1-15-10 (B)		337		131,527
COMM 2005-C6,
5.144%, 6-10-44		6,000		5,858,703
First Horizon Alternative Mortgage Securities       Trust 2005-FA6,
5.5%, 9-25-35		2,265		2,187,194
GSR Mortgage Loan Trust 2004-2F,
7.0%, 1-25-34		1,120		1,145,645
General Motors Acceptance Corporation,
5.125%, 5-9-08		2,500		2,468,778
ISA Capital do Brasil S.A.,
7.875%, 1-30-12 (C)		500		511,250
J.P. Morgan Chase Commercial Mortgage Securities       Corp., Commercial Mortgage Pass-Through       Certificates, Series 2004-C1,
4.719%, 1-15-38		2,000		1,888,189
MASTR Adjustable Rate Mortgages Trust 2005-1,
5.40914%, 3-25-35 (A)		2,959		2,930,624
Merrill Lynch Mortgage Trust 2005-CIP1,
4.949%, 7-12-38 (A)		2,000		1,934,901
Preferred Term Securities XVI, Ltd. and Preferred       Term Securities XVI, Inc.,
7.96%, 3-23-35 (B)		1,250		1,268,750
Preferred Term Securities XVII, Ltd. and Preferred       Term Securities XVII, Inc.,
7.56%, 6-23-35 (B)		1,000		1,008,750
Student Loan Marketing Association,
0.0%, 10-3-22		3,000		1,293,066
Structured Adjustable Rate Mortgage Loan Trust,       Mortgage Pass-Through Certificates:
Series 2004-3AC,
4.9348%, 3-25-34 (A)		1,821		1,787,266
Series 2004-5,
4.95831%, 5-25-34 (A)		1,725		1,622,278
Series 2004-6,
5.11999%, 6-25-34 (A)		902		851,243
Series 2004-12,
5.12324%, 9-25-34 (A)		2,975		2,838,395
Series 2004-18,
5.19322%, 12-25-34 (A)		4,035		3,942,701
Series 2004-A,
4.82596%, 2-25-34 (A)		1,117		1,107,819
Series 2005-21,
5.6979%, 11-25-35 (A)		1,235		1,182,724
Structured Adjustable Rate Mortgage Loan Trust:
Series 2005-22,
5.61469%, 12-25-35 (A)		1,274		1,215,891
Series 2006-1,
6.08084%, 2-25-36 (A)		1,292		1,247,528
Structured Asset Securities Corporation, Mortgage       Pass-Through Certificates, Series 2003-  40A,
4.9197%, 1-25-34 (A)		788		763,419
Structured Asset Securities Corporation Trust 2005-16,
5.5%, 9-25-35		3,000		2,880,592
Wells Fargo Mortgage Pass-Through Certificates,       Series 2003-10,
4.5%, 9-25-18		2,500		2,363,939
				51,302,535
Food and Related - 0.24%
ConAgra, Inc.,
6.7%, 8-1-27		500		519,070
Forest and Paper Products - 1.31%
Bowater Canada Finance Corporation,
7.95%, 11-15-11		1,000		941,250
Champion International Corporation,
6.65%, 12-15-37		1,500		1,509,394
Westvaco Corporation,
7.5%, 6-15-27		364		373,195
				2,823,839
Homebuilders, Mobile Homes - 1.34%
D.R. Horton, Inc.,
8.0%, 2-1-09		1,364		1,402,316
Pulte Homes, Inc.,
4.875%, 7-15-09		1,500		1,475,845
				2,878,161
Hospital Supply and Management - 0.49%
HCA - The Healthcare Company,
8.75%, 9-1-10		1,000		1,043,750
Household - General Products - 1.14%
Procter & Gamble Company (The),
8.0%, 9-1-24		2,000		2,446,012
Household - Major Appliances - 0.47%
Controladora Mabe S.A. de C.V.,
6.5%, 12-15-15 (B)		1,000		1,002,500
Petroleum - Domestic - 0.59%
Chesapeake Energy Corporation,
7.5%, 9-15-13		1,250		1,271,875
Petroleum - International - 1.52%
Pemex Project Funding Master Trust,
7.375%, 12-15-14		3,000		3,260,535
Petroleum - Services - 0.97%
Halliburton Company,
6.75%, 2-1-27		2,000		2,088,790
Real Estate Investment Trust - 0.35%
Diversified REIT Owner Trust 1999-1,
6.78%, 3-18-11 (A)(B)		750		759,435
Utilities - Electric - 1.81%
Dominion Resources, Inc.,
5.25%, 8-1-33		2,500		2,391,298
HQI Transelec Chile S.A.,
7.875%, 4-15-11		750		790,855
Pepco Holdings, Inc.,
4.0%, 5-15-10		750		717,817
				3,899,970
Utilities - Gas and Pipeline - 0.96%
Tennessee Gas Pipeline Company,
7.0%, 3-15-27		2,000		2,057,510
Utilities - Telephone - 1.79%
Deutsche Telekom International Finance B.V.,
8.0%, 6-15-10		1,500		1,598,789
New York Telephone Company,
6.7%, 11-1-23		750		739,336
Pacific Bell,
7.25%, 11-1-27		750		768,366
Telefonos de Mexico, S.A. de C.V.,
4.5%, 11-19-08		750		737,462
				3,843,953
TOTAL CORPORATE DEBT SECURITIES - 43.10%				$92,674,422
(Cost: $93,418,914)

OTHER GOVERNMENT SECURITIES
Brazil - 0.26%
Federative Republic of Brazil (The),
9.25%, 10-22-10			500		552,500
Canada - 0.80%
Province de Quebec,
7.14%, 2-27-26			1,500		1,730,232
Japan - 1.10%
Japanese Government 15 Year Floating Rate Bond,
0.97194%, 1-20-18 (A)(D)	JPY300,000				2,365,888
Supranational - 0.49%
Inter-American Development Bank,
8.4%, 9-1-09		$	1,000		1,062,884
TOTAL OTHER GOVERNMENT SECURITIES - 2.65%				$	5,711,504
(Cost: $5,648,492)
UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS
Agency Obligations - 10.96%
Federal Agricultural Mortgage Corporation       Guaranteed Notes Trust 2006-1,
4.875%, 1-14-11			1,500		1,475,550
Federal Home Loan Bank,
5.75%, 12-13-13			2,000		1,982,458
Federal Home Loan Mortgage Corporation:
4.75%, 5-6-13			2,000		1,927,912
5.375%, 1-9-14			1,500		1,480,452
5.0%, 12-14-18			5,054		4,749,335
5.2%, 3-5-19			2,500		2,402,490
5.5%, 8-20-19			2,500		2,476,835
Federal National Mortgage Association:
5.3%, 2-22-11			4,000		3,978,900
5.5%, 3-26-14			1,000		993,244
6.0%, 1-4-17			2,125		2,103,283
					23,570,459
Mortgage-Backed Obligations - 34.50%
Federal Home Loan Mortgage Corporation       Adjustable Rate Participation Certificates:
5.239%, 6-1-34 (A)			469		463,246
5.695%, 7-1-36 (A)			1,345		1,339,211
5.953%, 1-1-37 (A)			2,382		2,402,962

Federal Home Loan Mortgage Corporation       Agency REMIC/CMO:
5.0%, 5-15-19	1,000		957,935
5.0%, 7-15-19	1,031		990,599
5.0%, 5-15-23	1,500		1,429,910
5.5%, 4-15-24	2,434		132,320
5.5%, 4-15-24	625		27,452
5.0%, 3-15-25	4,000		3,707,099
6.0%, 3-15-29	321		321,323
5.0%, 7-15-29	1,588		188,261
7.5%, 9-15-29	578		606,677
4.25%, 3-15-31	262		250,383
5.0%, 9-15-31	2,711		439,382
5.0%, 9-15-32	1,500		1,382,741
Federal Home Loan Mortgage Corporation Fixed       Rate Participation Certificates:
5.0%, 6-1-21	1,790		1,730,962
6.0%, 9-1-21	2,258		2,268,076
5.0%, 11-1-21	2,822		2,727,234
5.0%, 7-1-25	2,480		2,362,387
6.0%, 2-1-27	2,688		2,685,908
6.0%, 11-1-28	583		582,446
6.5%, 10-1-31	112		114,086
6.5%, 11-1-31	120		122,214
6.0%, 2-1-32	285		284,791
5.0%, 3-1-35	1,626		1,527,678
5.5%, 10-1-35	1,305		1,261,438
5.5%, 8-1-36	1,896		1,829,301
5.453%, 12-1-36 (A)	3,693		3,668,091
Federal Home Loan Mortgage Corporation       Non-Agency REMIC/CMO:
5.5%, 12-15-13 (Interest Only)	661		112,270
5.5%, 3-15-31	2,000		1,985,232
5.5%, 9-15-31	3,750		3,693,241
Federal National Mortgage Association Agency       REMIC/CMO:
5.0%, 3-25-18	3,500		3,357,985
5.0%, 3-25-18 (Interest Only)	799		52,085
5.0%, 6-25-18	2,173		2,106,891
5.0%, 3-25-29	5,100		4,958,254
5.5%, 2-25-32	1,500		1,480,865
4.0%, 11-25-32	635		590,918
4.0%, 3-25-33	651		606,480
3.5%, 8-25-33	1,464		1,298,038
5.5%, 11-25-36 (Interest Only)	5,185		1,391,257
Federal National Mortgage Association Fixed Rate       Pass-Through Certificates:
5.5%, 1-1-17	846		836,842
4.0%, 11-1-18	1,097		1,021,334
5.5%, 10-1-23	733		716,201
5.0%, 4-1-24	2,518		2,401,316
6.0%, 12-1-28	107		106,999
6.0%, 4-1-33	1,110		1,105,310
5.5%, 6-1-33	2,227		2,157,404
5.414%, 12-1-36 (A)	2,223		2,223,463
Federal National Mortgage Association       Non-Agency REMIC/CMO:
4.5%, 7-25-24	1,000		893,295
5.5%, 9-25-31	1,000		976,626
4.5%, 12-25-34	2,000		1,881,562
Government National Mortgage Association       Agency REMIC/CMO (Interest Only),
5.5%, 6-20-28	2,717		192,422
Government National Mortgage Association Fixed       Rate Pass-Through Certificates:
7.5%, 7-15-23	12		12,283
7.5%, 12-15-23	141		148,045
8.0%, 9-15-25	53		55,969
7.0%, 7-20-27	16		16,888
7.0%, 8-20-27	45		46,679
6.5%, 5-15-29	86		87,733
7.5%, 7-15-29	33		34,021
Government National Mortgage Association       Non-Agency REMIC/CMO,
4.0%, 1-16-30	313		290,344
United States Department of Veterans Affairs,       Guaranteed REMIC Pass-Through Certificates,       Vendee Mortgage Trust:
2003-2 Class D,
5.0%, 11-15-23	57		57,288
2003-2 Class E,
5.0%, 12-15-25	1,500		1,490,415
			74,190,068
Treasury Obligations - 6.39%
United States Treasury Bond,
6.125%, 11-15-27	4,000		4,458,124
United States Treasury Notes:
4.0%, 4-15-10	2,000		1,953,906
4.375%, 8-15-12	2,250		2,199,200
4.0%, 2-15-15	4,400		4,120,186
5.125%, 5-15-16	1,000		1,005,625
			13,737,041
TOTAL UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS - 51.85%		$	111,497,568
(Cost: $113,169,481)
SHORT-TERM SECURITIES - 1.45%
Forest and Paper Products
Sonoco Products Co.,
5.52%, 7-2-07	3,120	$	3,119,522
(Cost: $3,119,522)
TOTAL INVESTMENT SECURITIES - 99.05%		$	213,003,016
(Cost: $215,356,409)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.95%			2,035,775
NET ASSETS - 100.00%		$	215,038,791

Notes to Schedule of Investments

Certain acronyms may be used within the body of the Portfolio's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.

(A)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2007.

(B)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be illiquid under guidelines established by the Board of Directors. At June 30, 2007, the total value of these securities amounted to $4,170,962 or 1.94% of net assets.

(C)Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. This security has been determined to be liquid under guidelines established by the Board of Directors. At June 30, 2007, the total value of this security amounted to 0.24% of net assets.

(D)Principal amount is denominated in the indicated foreign currency, where applicable (JPY - Japanese Yen).

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      BOND PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $215,356) (Notes 1 and 3)	$	213,003
Cash		1
Receivables:
Dividends and interest		1,960
Portfolio shares sold		278
Investment securities sold		100
Prepaid and other assets		4
Total assets		215,346
LIABILITIES
Payable to Portfolio shareholders		248
Accrued accounting services fee (Note 2)		7
Accrued management fee (Note 2)		6
Accrued shareholder servicing (Note 2)		6
Accrued service fee (Note 2)		3
Other		37
Total liabilities		307
Total net assets	$	215,039
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	40
Additional paid-in capital		215,018
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		5,059
Accumulated undistributed net realized loss on investment transactions		(2,724	)
Net unrealized depreciation in value of investments		(2,354	)
Net assets applicable to outstanding units of capital	$	215,039
Net asset value, redemption and offering price per share	$	5.3225
Capital shares outstanding		40,402
Capital shares authorized		90,000

See Notes to Financial Statements.

Statement of Operations
      BOND PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                             (Unaudited)

INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	5,869
Expenses (Note 2):
Investment management fee		557
Service fee		266
Accounting services fee		42
Legal fees		16
Audit fees		12
Custodian fees		7
Shareholder servicing		6
Other		28
Total		934
Less waiver of investment management fee (Notes 2 and 9)		(42	)
Total expenses		892
Net investment income		4,977
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on securities		(519	)
Realized net loss on foreign currency transactions		(1	)
Realized net loss on investments		(520	)
Unrealized depreciation in value of investments during the period	(2,582		)
Net loss on investments	(3,102		)
Net increase in net assets resulting from operations	$	1,875

See Notes to Financial Statements.

Statement of Changes in Net Assets
      BOND PORTFOLIO
      (In Thousands)                                                                                                                (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
INCREASE IN NET ASSETS
Operations:
Net investment income		$	4,977		$	9,393
Realized net loss on investments			(520	)		(2,095	)
Unrealized appreciation (depreciation)			(2,582	)		1,432
Net increase in net assets resulting                       from operations			1,875			8,730
Dividends to shareholders from (Note 1E): (1)
Net investment income			(–	)		(9,300	)
Realized gains on investment transactions			(–	)		(64	)
			(–	)		(9,364	)
Capital share transactions (2)			260			1,546
Total increase			2,135			912
NET ASSETS
Beginning of period			212,904			211,992
End of period		$	215,039		$	212,904
Undistributed net investment income		$	5,059		$	83
(1)See "Financial Highlights" on page 55.
(2)Shares issued from sale of shares			2,482			3,657
Shares issued from reinvestment of dividend      and/or capital gains distribution			–			1,775
Shares redeemed			(2,439	)		(5,126	)
Increase in outstanding capital shares			43			306
Value issued from sale of shares		$	13,249		$	19,607
Value issued from reinvestment of dividend      and/or capital gains distribution			–			9,364
Value redeemed			(12,989	)		(27,425	)
Increase in outstanding capital		$	260		$	1,546

See Notes to Financial Statements.

Financial Highlights
      BOND PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended December 31,
	6-30-07				2006			2005			2004			2003			2002
Net asset value,       beginning of period		$	5.2752		$	5.2928		$	5.4762		$	5.5710		$	5.6032		$	5.3615
Income (loss) from       investment operations:
Net investment income			0.1232			0.2434			0.2356			0.2463			0.2667			0.2396
Net realized and             unrealized gain             (loss) on             investments		(0.0759		)	(0.0182		)	(0.1464		)	(0.0302		)	(0.0322		)		0.2417
Total from investment       operations			0.0473			0.2252			0.0892			0.2161			0.2345			0.4813
Less distributions from:
Net investment income		(0.0000		)	(0.2411		)	(0.2464		)	(0.2463		)	(0.2667		)	(0.2396		)
Capital gains		(0.0000		)	(0.0017		)	(0.0262		)	(0.0646		)	(0.0000		)	(0.0000		)
Total distributions		(0.0000		)	(0.2428		)	(0.2726		)	(0.3109		)	(0.2667		)	(0.2396		)
Net asset value,       end of period		$	5.3225		$	5.2752		$	5.2928		$	5.4762		$	5.5710		$	5.6032
Total return			0.91	%		4.24	%		1.61	%		3.88	%		4.18	%		8.98	%
Net assets, end of period       (in millions)			$215			$213			$212			$218			$235			$247
Ratio of expenses to       average net assets       including expense       waiver			0.84	%(1)		0.84	%		0.86	%		0.85	%		0.84	%		0.83	%
Ratio of net investment       income to average       net assets including       expense waiver			4.69	%(1)		4.49	%		4.17	%		4.16	%		4.26	%		4.92	%
Ratio of expenses to       average net assets       excluding expense       waiver			0.88	%(1)		0.85	%		0.86	%(2)		0.85	%(2)		0.84	%(2)		0.83	%(2)
Ratio of net investment       income to average       net assets excluding       expense waiver			4.65	%(1)		4.48	%		4.17	%(2)		4.16	%(2)		4.26	%(2)		4.92	%(2)
Portfolio turnover rate			18	%		54	%		43	%		47	%		53	%		34	%

(1)Annualized.

(2)There was no waiver of expenses during the period.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF CORE EQUITY PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target Core Equity Portfolio had net assets totaling $765,133,540 invested in a diversified portfolio of:

93.15%	Domestic Common Stocks
6.41%	Foreign Common Stocks
0.44%	Cash and Cash Equivalents

Sector Weightings

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007, your Portfolio owned:

Technology Stocks	$	25.30
Financial Services Stocks	$	15.75
Capital Goods Stocks	$	10.19
Energy Stocks	$	9.64
Raw Materials Stocks	$	7.29
Health Care Stocks	$	6.97
Retail Stocks	$	5.45
Consumer Nondurables Stocks	$	5.04
Utilities Stocks	$	3.16
Consumer Durables Stocks	$	3.09
Consumer Services Stocks	$	2.72
Multi-Industry Stocks	$	2.49
Transportation Stocks	$	2.47
Cash and Cash Equivalents	$	0.44

The Investments of Core Equity Portfolio
June 30, 2007                                                                                                                  (Unaudited)
COMMON STOCKS		Shares			Value
Aircraft - 4.61%
Boeing Company (The)			366,700	$	35,261,872
Beverages - 4.46%
Coca-Cola Company (The)			379,400		19,846,414
PepsiCo, Inc.			219,900		14,260,515
					34,106,929
Broadcasting - 2.72%
Comcast Corporation, Class A Special*			743,900		20,780,847
Capital Equipment - 7.02%
Deere & Company			274,400		33,131,056
Illinois Tool Works Inc.			221,900		12,024,761
Joy Global Inc.			147,200		8,592,800
					53,748,617
Chemicals - Petroleum and Inorganic - 5.17%
E.I. du Pont de Nemours and Company			390,900		19,873,356
Monsanto Company			291,500		19,687,910
					39,561,266
Chemicals - Specialty - 2.12%
Air Products and Chemicals, Inc.			202,050		16,238,758
Communications Equipment - 2.56%
Cisco Systems, Inc.*			704,300		19,597,147
Computers - Main and Mini - 6.07%
Hewlett-Packard Company			593,000		26,459,660
Xerox Corporation*	1,080,000				19,958,400
					46,418,060
Computers - Micro - 2.08%
Apple Inc.*			130,300		15,904,418
Computers - Peripherals - 2.78%
Adobe Systems Incorporated*			530,500		21,288,965
Defense - 3.96%
General Dynamics Corporation			387,100		30,278,962
Electronic Components - 2.99%
Intel Corporation			611,900		14,523,446
SanDisk Corporation*			171,000		8,367,885
					22,891,331
Electronic Instruments - 0.25%
Applied Materials, Inc.			97,800		1,942,797
Food and Related - 0.58%
Dean Foods Company			140,300		4,471,361
Health Care - Drugs - 6.97%
Abbott Laboratories			450,900		24,145,695
Amgen Inc.*			183,200		10,128,212
Merck & Co., Inc.			106,100		5,283,780
Novartis AG, Registered Shares (A)			149,650		8,453,418
Schering-Plough Corporation			174,000		5,296,560
					53,307,665
Insurance - Property and Casualty - 0.70%
Ambac Financial Group, Inc.			61,500		5,362,185
Metal Fabrication - 1.50%
Precision Castparts Corp.			94,600		11,480,656
Motor Vehicles - 3.09%
Ford Motor Company	2,512,700				23,669,634
Multiple Industry - 2.49%
Altria Group, Inc.			250,300		17,556,042
Blackstone Group L.P. (The)*			50,000		1,463,500
					19,019,542
Non-Residential Construction - 1.67%
Fluor Corporation			114,500		12,751,865
Petroleum - International - 3.11%
Exxon Mobil Corporation			284,076		23,828,295
Petroleum - Services - 6.53%
Schlumberger Limited			174,500		14,822,030
Smith International, Inc.			185,600		10,883,584
Transocean Inc.*			51,500		5,457,970
Weatherford International Ltd.*			340,000		18,781,600
					49,945,184
Railroad - 2.47%
Union Pacific Corporation			164,200		18,907,630
Restaurants - 1.10%
YUM! Brands, Inc.			256,600		8,395,952
Retail - General Merchandise - 1.06%
Target Corporation			127,200		8,089,920
Retail - Specialty Stores - 3.29%
Lowe's Companies, Inc.			343,200		10,532,808
Tiffany & Co.			276,400		14,665,784
					25,198,592
Security and Commodity Brokers - 15.05%
Charles Schwab Corporation (The)			903,100		18,513,550
Goldman Sachs Group, Inc. (The)			71,000		15,389,250
J.P. Morgan Chase & Co.			497,700		24,113,565
Merrill Lynch & Co., Inc.			163,200		13,640,256
Prudential Financial, Inc.			223,400		21,721,182
UBS AG (A)			362,000		21,811,871
					115,189,674
Utilities - Electric - 1.90%
Mirant Corporation*			340,100		14,505,265
Utilities - Telephone - 1.26%
Verizon Communications Inc.			234,500		9,654,365
TOTAL COMMON STOCKS - 99.56%				$	761,797,754
(Cost: $604,995,607)

SHORT-TERM SECURITIES - 0.65%	Principal Amount in Thousands
Publishing
E.W. Scripps Co.,
5.35%, 7-2-07	$	4,960	$	4,959,263
(Cost: $4,959,263)
TOTAL INVESTMENT SECURITIES - 100.21%			$	766,757,017
(Cost: $609,954,870)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.21%)				(1,623,477	)
NET ASSETS - 100.00%			$	765,133,540

Notes to Schedule of Investments

*No dividends were paid during the preceding 12 months.

(A)Listed on an exchange outside the United States.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      CORE EQUITY PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $609,955) (Notes 1 and 3)	$	766,757
Cash		1
Receivables:
Investment securities sold		8,679
Dividends and interest		980
Portfolio shares sold		225
Prepaid and other assets		11
Total assets		776,653
LIABILITIES
Payable for investment securities purchased		10,923
Payable to Portfolio shareholders		412
Accrued management fee (Note 2)		27
Accrued shareholder servicing (Note 2)		20
Accrued accounting services fee (Note 2)		16
Accrued service fee (Note 2)		11
Other		110
Total liabilities		11,519
Total net assets	$	765,134
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	56
Additional paid-in capital		547,464
Accumulated undistributed income:
Accumulated undistributed net investment income		4,108
Accumulated undistributed net realized gain on investment transactions		56,702
Net unrealized appreciation in value of investments		156,804
Net assets applicable to outstanding units of capital	$	765,134
Net asset value, redemption and offering price per share	$	13.5626
Capital shares outstanding		56,415
Capital shares authorized		170,000

See Notes to Financial Statements.

Statement of Operations
      CORE EQUITY PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                             (Unaudited)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $124)	$	7,344
Interest and amortization		194
Total income		7,538
Expenses (Note 2):
Investment management fee		2,645
Service fee		945
Accounting services fee		97
Custodian fees		26
Shareholder servicing		22
Audit fees		15
Legal fees		12
Other		87
Total		3,849
Less waiver of investment management fee (Notes 2 and 9)		(189	)
Total expenses		3,660
Net investment income		3,878
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		28,918
Realized net loss on foreign currency exchange transactions		(18	)
Realized net gain on investments		28,900
Unrealized appreciation in value of investments during the period		26,475
Net gain on investments		55,375
Net increase in net assets resulting from operations	$	59,253

See Notes to Financial Statements.

Statement of Changes in Net Assets
      CORE EQUITY PORTFOLIO
      (In Thousands)                                                                                                                (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
INCREASE IN NET ASSETS
Operations:
Net investment income		$	3,878			$	4,656
Realized net gain on investments			28,900				138,999
Unrealized appreciation (depreciation)			26,475				(26,886	)
Net increase in net assets resulting                       from operations			59,253				116,769
Dividends to shareholders from (Note 1E): (1)
Net investment income			(–	)			(6,400	)
Realized gains on investment transactions			(–	)			(20,679	)
			(–	)			(27,079	)
Capital share transactions (2)			(55,868	)			(51,091	)
Total increase			3,385				38,599
NET ASSETS
Beginning of period			761,749				723,150
End of period		$	765,134			$	761,749
Undistributed net investment income		$	4,108			$	248
(1)See "Financial Highlights" on page 64.
(2) Shares issued from sale of shares			896				2,303
Shares issued from reinvestment of dividend       and/or capital gains distribution			–				2,158
Shares redeemed			(5,186	)			(8,775	)
Decrease in outstanding capital shares			(4,290	)			(4,314	)
Value issued from sale of shares		$	11,620			$	27,937
Value issued from reinvestment of dividend       and/or capital gains distribution			–				27,079
Value redeemed			(67,488	)		(106,107		)
Decrease in outstanding capital		$	(55,868	)		$	(51,091	)

See Notes to Financial Statements.

Financial Highlights
      CORE EQUITY PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended December 31,
	6-30-07				2006			2005			2004			2003			2002
Net asset value,       beginning of period		$	12.5485		$	11.1221		$	10.2369		$	9.3996		$	8.0720		$	10.3608
Income (loss) from       investment operations:
Net investment income			0.0690			0.0805			0.0358			0.0622			0.0662			0.0476
Net realized and             unrealized gain             (loss) on             investments			0.9451			1.8084			0.8859			0.8373			1.3276			(2.2888	)
Total from investment       operations			1.0141			1.8889			0.9217			0.8995			1.3938			(2.2412	)
Less distributions from:
Net investment income			(0.0000	)		(0.1093	)		(0.0365	)		(0.0622	)	(0.0662		)		(0.0476	)
Capital gains			(0.0000	)		(0.3532	)		(0.0000	)		(0.0000	)	(0.0000		)		(0.0000	)
Total distributions			(0.0000	)		(0.4625	)		(0.0365	)		(0.0622	)	(0.0662		)		(0.0476	)
Net asset value,       end of period		$	13.5626		$	12.5485		$	11.1221		$	10.2369		$	9.3996		$	8.0720
Total return			8.08	%		16.99	%		9.01	%		9.57	%		17.27	%		- -21.63	%
Net assets, end of period       (in millions)			$765			$762			$723			$737			$736			$650
Ratio of expenses to       average net assets       including expense       waiver			0.97	%(1)		0.99	%		1.01	%		1.01	%		1.00	%		0.99	%
Ratio of net investment       income to average       net assets including       expense waiver			1.03	%(1)		0.62	%		0.32	%		0.62	%		0.78	%		0.50	%
Ratio of expenses to       average net assets       excluding expense       waiver			1.02	%(1)		1.00	%		1.01	%(2)		1.01	%(2)		1.00	%(2)		0.99	%(2)
Ratio of net investment       income to average       net assets excluding       expense waiver			0.98	%(1)		0.61	%		0.32	%(2)		0.62	%(2)		0.78	%(2)		0.50	%(2)
Portfolio turnover rate			49	%		103	%		62	%		54	%		49	%		38	%

(1)Annualized.

(2)There was no waiver of expenses during the period.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF DIVIDEND INCOME PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target Dividend Income Portfolio had net assets totaling $102,346,778 invested in a diversified portfolio of:

84.42%	Domestic Common Stocks
8.52%	Cash and Cash Equivalents
7.06%	Foreign Common Stocks

Sector Weightings

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007, your Portfolio owned:

Financial Services Stocks	$	17.89
Energy Stocks	$	16.13
Cash and Cash Equivalents	$	8.52
Capital Goods Stocks	$	8.49
Consumer Nondurables Stocks	$	8.22
Technology Stocks	$	8.00
Multi-Industry Stocks	$	7.13
Utilities Stocks	$	6.99
Raw Materials Stocks	$	6.13
Miscellaneous Stocks	$	3.62
Shelter Stocks	$	3.15
Health Care Stocks	$	3.09
Consumer Services Stocks	$	2.64

The Investments of Dividend Income Portfolio
June 30, 2007                                                                                                                  (Unaudited)
COMMON STOCKS	Shares			Value
Aircraft - 5.75%
Boeing Company (The)		30,973	$	2,978,364
Goodrich Corporation		26,594		1,583,939
Raytheon Company		24,605		1,325,964
				5,888,267
Banks - 1.73%
Bank of America Corporation		36,302		1,774,805
Beverages - 3.94%
Coca-Cola Company (The)		24,100		1,260,671
Diageo plc, ADR		18,511		1,542,151
PepsiCo, Inc.		18,984		1,231,112
				4,033,934
Capital Equipment - 4.02%
Caterpillar Inc.		12,153		951,580
Deere & Company		26,234		3,167,493
				4,119,073
Chemicals - Petroleum and Inorganic - 4.00%
E.I. du Pont de Nemours and Company		29,577		1,503,695
Monsanto Company		21,256		1,435,630
UAP Holding Corp.		38,176		1,150,816
				4,090,141
Chemicals - Specialty - 1.54%
Air Products and Chemicals, Inc.		19,570		1,572,841
Computers - Peripherals - 1.21%
Microsoft Corporation		42,000		1,237,320
Electrical Equipment - 0.96%
Emerson Electric Co.		21,018		983,642
Electronic Components - 1.04%
Microchip Technology Incorporated		28,808		1,067,624
Health Care - Drugs - 2.14%
Abbott Laboratories		22,000		1,178,100
Merck & Co., Inc.		20,350		1,013,430
				2,191,530
Hospital Supply and Management - 0.95%
Medtronic, Inc.		18,748		972,271
Hotels and Gaming - 2.64%
Harrah's Entertainment, Inc.		11,962		1,019,880
Starwood Hotels & Resorts Worldwide, Inc.		25,150		1,686,811
				2,706,691
Household - General Products - 3.23%
Colgate-Palmolive Company		26,065		1,690,315
Procter & Gamble Company (The)		26,318		1,610,398
				3,300,713
Insurance - Life - 0.93%
Aflac Incorporated		18,444		948,022
Insurance - Property and Casualty - 5.05%
ACE Limited		13,589		849,584
Ambac Financial Group, Inc.		14,650		1,277,334
Everest Re Group, Ltd.		9,319		1,012,416
MBIA Inc.		16,750		1,042,185
Travelers Companies, Inc. (The)		18,393		984,026
				5,165,545
Metal Fabrication - 1.19%
Loews Corporation, Carolina Group		15,714		1,214,221
Mining - 0.59%
Rio Tinto plc, ADR		1,974		604,281
Multiple Industry - 7.13%
Altria Group, Inc.		40,357		2,830,640
Blackstone Group L.P. (The)*		7,000		204,890
General Electric Company		66,718		2,553,965
NuStar GP Holdings, LLC		44,600		1,706,396
				7,295,891
Non-Residential Construction - 2.32%
Fluor Corporation		21,311		2,373,406
Petroleum - International - 6.00%
Anadarko Petroleum Corporation		27,238		1,416,104
Apache Corporation		17,059		1,391,844
Exxon Mobil Corporation		33,057		2,772,821
Marathon Oil Corporation		9,282		556,549
				6,137,318
Petroleum - Services - 10.13%
Baker Hughes Incorporated		25,377		2,134,967
Grant Prideco, Inc.*		20,174		1,085,966
National Oilwell Varco, Inc.*		13,849		1,443,620
Schlumberger Limited		39,239		3,332,961
Transocean Inc.*		10,782		1,142,676
Weatherford International Ltd.*		22,124		1,222,130
				10,362,320
Railroad - 2.35%
Burlington Northern Santa Fe Corporation		10,774		917,298
Union Pacific Corporation		12,960		1,492,344
				2,409,642
Real Estate Investment Trust - 3.15%
Douglas Emmett, Inc.		47,950		1,186,283
ProLogis		13,829		786,870
Simon Property Group, Inc.		13,386		1,245,433
				3,218,586
Restaurants - 1.27%
McDonald's Corporation		25,673		1,303,161
Security and Commodity Brokers - 10.18%
AllianceBernstein Holding L.P.		32,245		2,808,217
Chicago Mercantile Exchange Holdings Inc.		4,873		2,603,936
J.P. Morgan Chase & Co.		43,216		2,093,815
NYMEX Holdings, Inc.		13,300		1,670,879
UBS AG		20,770		1,246,408
				10,423,255
Tobacco - 1.05%
Reynolds American Inc.		16,522		1,077,234
Utilities - Electric - 2.71%
Dominion Resources, Inc.		13,478		1,163,286
NRG Energy, Inc.*		38,792		1,612,583
				2,775,869
Utilities - Gas and Pipeline - 0.73%
Enbridge Inc.		22,245		751,436
Utilities - Telephone - 3.55%
AT&T Inc.		33,055		1,371,783
Iowa Telecommunications Services, Inc.		51,438		1,169,186
Windstream Corporation		73,864		1,090,233
				3,631,202
TOTAL COMMON STOCKS - 91.48%			$	93,630,241
(Cost: $74,547,009)

SHORT-TERM SECURITIES	Principal Amount in Thousands
Finance Companies
Ciesco, LLC,
5.37%, 7-2-07	$	4,772	$	4,771,288
PACCAR Financial Corp.:
5.29%, 7-3-07		2,500		2,499,265
5.24%, 7-31-07		2,000		1,991,267
TOTAL SHORT-TERM SECURITIES - 9.05%			$	9,261,820
(Cost: $9,261,820)
TOTAL INVESTMENT SECURITIES - 100.53%			$	102,892,061
(Cost: $83,808,829)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.53%)				(545,283	)
NET ASSETS - 100.00%			$	102,346,778

Notes to Schedule of Investments

Certain acronyms may be used within the body of the Portfolio's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.

*No income dividends were paid during the preceding 12 months.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      DIVIDEND INCOME PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $83,809) (Notes 1 and 3)	$	102,892
Cash		1
Receivables:
Investment securities sold		954
Dividends and interest		179
Portfolio shares sold		47
Prepaid and other assets		1
Total assets		104,074
LIABILITIES
Payable for investment securities purchased		1,626
Payable to Portfolio shareholders		84
Accrued accounting services fee (Note 2)		5
Accrued management fee (Note 2)		4
Accrued service fee (Note 2)		2
Accrued shareholder servicing (Note 2)		2
Other		4
Total liabilities		1,727
Total net assets	$	102,347
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	13
Additional paid-in capital		81,678
Accumulated undistributed income:
Accumulated undistributed net investment income		638
Accumulated undistributed net realized gain on investment transactions		935
Net unrealized appreciation in value of investments		19,083
Net assets applicable to outstanding units of capital	$	102,347
Net asset value, redemption and offering price per share	$	7.6242
Capital shares outstanding		13,424
Capital shares authorized		60,000

See Notes to Financial Statements.

Statement of Operations
      DIVIDEND INCOME PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                             (Unaudited)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $8)	$	927
Interest and amortization		171
Total income		1,098
Expenses (Note 2):
Investment management fee		317
Service fee		113
Accounting services fee		23
Audit fees		9
Shareholder servicing		3
Custodian fees		1
Legal fees		1
Other		9
Total expenses		476
Net investment income		622
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		642
Unrealized appreciation in value of investments during the period		7,016
Net gain on investments		7,658
Net increase in net assets resulting from operations	$	8,280

See Notes to Financial Statements.

Statement of Changes in Net Assets
      DIVIDEND INCOME PORTFOLIO
      (In Thousands)                                                                                                                (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
INCREASE IN NET ASSETS
Operations:
Net investment income		$	622			$	978
Realized net gain on investments			642				864
Unrealized appreciation			7,016				6,989
Net increase in net assets                      resulting from operations			8,280				8,831
Dividends to shareholders from (Note 1E): (1)
Net investment income			(–	)			(970	)
Realized gains on investment transactions			(–	)			(394	)
			(–	)			(1,364	)
Capital share transactions (2)			13,005				30,195
Total increase			21,285				37,662
NET ASSETS
Beginning of period			81,062				43,400
End of period		$	102,347			$	81,062
Undistributed net investment income		$	638			$	16
(1)See "Financial Highlights" on page 73.
(2)Shares issued from sale of shares			2,081				4,682
Shares issued from reinvestment of dividend       and/or capital gains distribution			–				196
Shares redeemed			(295	)			(341	)
Increase in outstanding capital shares			1,786				4,537
Value issued from sale of shares		$	15,166			$	31,080
Value issued from reinvestment of dividend       and/or capital gains distribution			–				1,364
Value redeemed			(2,161	)			(2,249	)
Increase in outstanding capital		$	13,005			$	30,195

See Notes to Financial Statements.

Financial Highlights
      DIVIDEND INCOME PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended December 31,									For the fiscal period from 12-30-03(1) through
	6-30-07				2006			2005			2004			12-31-03
Net asset value,       beginning of period		$	6.9651		$	6.1121		$	5.4645		$	5.0000			$	5.0000
Income from investment       operations:
Net investment income			0.0461			0.0857			0.0643			0.0337				0.0000
Net realized and             unrealized gain             on investments			0.6130			0.8867			0.6476			0.4645				0.0000
Total from investment       operations			0.6591			0.9724			0.7119			0.4982				0.0000
Less distributions from:
Net investment income		(0.0000		)	(0.0849		)	(0.0643		)	(0.0337		)		(0.0000		)
Capital gains		(0.0000		)	(0.0345		)	(0.0000		)	(0.0000		)		(0.0000		)
Total distributions		(0.0000		)	(0.1194		)	(0.0643		)	(0.0337		)		(0.0000		)
Net asset value,       end of period		$	7.6242		$	6.9651		$	6.1121		$	5.4645			$	5.0000
Total return			9.46	%		15.91	%		13.03	%		9.96	%			0.00	%
Net assets, end of period       (in millions)			$102			$81			$43			$17				$–	*
Ratio of expenses to average       net assets including       voluntary expense waiver			1.05	%(2)		1.07	%		0.93	%		0.76	%			0.00	%
Ratio of net investment       income to average       net assets including       voluntary expense waiver			1.37	%(2)		1.63	%		1.53	%		2.08	%			0.00	%
Ratio of expenses to average       net assets excluding       voluntary expense waiver			1.05	%(2)(3)		1.07	% (3)		1.12	%		1.46	%			0.00	%
Ratio of net investment       income to average       net assets excluding       voluntary expense waiver			1.37	%(2)(3)		1.63	% (3)		1.34	%		1.38	%			0.00	%
Portfolio turnover rate			17	%		17	%		22	%		22	%			0	%

*Not shown due to rounding.

(1)Commencement of operations.

(2)Annualized.

(3)There was no waiver of expenses during the period.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF ENERGY PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target Energy Portfolio had net assets totaling $11,762,666 invested in a diversified portfolio of:

73.97%	Domestic Common Stocks
19.99%	Foreign Common Stocks
6.04%	Cash and Cash Equivalents

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007,
your Portfolio was invested by industry and geographic region, respectively, as follows:

Sector Weightings

Energy Stocks	$	67.19
Capital Goods Stocks	$	12.11
Utilities Stocks	$	8.07
Cash and Cash Equivalents	$	6.04
Miscellaneous Stocks	$	3.85
Business Equipment and Services Stocks	$	2.74

Country Weightings

North America	$	79.52
United States	$	73.97
Canada	$	5.55
Bahamas/ Caribbean	$	8.05
Bermuda	$	4.72
Cayman Islands	$	3.33
Cash and Cash Equivalents	$	6.04
Europe(1)	$	4.35
Other	$	2.04

(1)Includes $1.54 France, $0.76 Norway and $2.05 United Kingdom.

The Investments of Energy Portfolio
June 30, 2007                                                                                                               (Unaudited)
COMMON STOCKS	Shares			Value
Business Equipment and Services - 2.74%
Bucyrus International, Inc., Class A		2,150	$	152,091
Jacobs Engineering Group Inc.*		2,950		169,654
				321,745
Capital Equipment - 6.30%
Cameron International Corporation*		4,400		314,468
Shaw Group Inc. (The)*		2,650		122,669
SunPower Corporation, Class A*		2,650		167,043
Suntech Power Holdings Co., Ltd., ADR*		3,750		136,763
				740,943
Coal - 2.28%
Foundation Coal Holdings, Inc.		2,200		89,408
Peabody Energy Corporation		3,700		179,006
				268,414
Electrical Equipment - 2.81%
First Solar, Inc.*		3,700		330,188
Electronic Instruments - 0.59%
Energy Conversion Devices, Inc.*		2,250		69,300
Mining - 2.10%
Arch Coal, Inc.		3,600		125,280
Cameco Corporation		2,400		121,776
				247,056
Multiple Industry - 1.16%
Continental Resources, Inc.*		8,550		136,800
Non-Residential Construction - 3.00%
Fluor Corporation		2,050		228,308
Technip SA, ADR		1,500		123,885
				352,193
Petroleum - Canada - 1.22%
Suncor Energy Inc.		1,600		143,872
Petroleum - Domestic - 5.28%
BP p.l.c., ADR		3,350		241,669
Sunoco, Inc.		1,800		143,424
Valero Energy Corporation		2,300		169,878
XTO Energy Inc.		1,100		66,110
				621,081
Petroleum - International - 29.52%
Anadarko Petroleum Corporation		3,950		205,360
Apache Corporation		3,400		277,406
CNOOC Limited, ADR		1,000		113,690
ConocoPhillips		2,900		227,650
Devon Energy Corporation		3,050		238,784
ENSCO International Incorporated		3,000		183,030
EOG Resources, Inc.		3,000		219,180
Exxon Mobil Corporation		4,500		377,460
Hess Corporation		1,950		114,972
Marathon Oil Corporation		3,800		227,848
Newfield Exploration Company*		5,950		271,023
Noble Energy, Inc.		4,250		265,158
Occidental Petroleum Corporation		3,900		225,732
PetroChina Company Limited, ADR		450		66,906
Petroleo Brasileiro S.A. - Petrobras, ADR		500		60,635
Statoil ASA, ADR		2,900		89,929
TOTAL S.A., ADR		700		56,686
Talisman Energy Inc.	10,150			196,200
Ultra Petroleum Corp.*		1,000		55,240
				3,472,889
Petroleum - Services - 28.89%
BJ Services Company		5,700		162,108
Baker Hughes Incorporated		4,300		361,759
Complete Production Services, Inc.*		8,900		230,065
FMC Technologies, Inc.*		850		67,337
Grant Prideco, Inc.*		4,800		258,384
Halliburton Company		5,000		172,500
Nabors Industries Ltd.*		8,100		270,378
National Oilwell Varco, Inc.*		4,400		458,656
Schlumberger Limited		5,000		424,700
Smith International, Inc.		4,600		269,744
TODCO, Class A*		3,900		184,119
Transocean Inc.*		2,400		254,352
Weatherford International Ltd.*		5,150		284,486
				3,398,588
Utilities - Electric - 5.50%
Entergy Corporation		2,450		263,007
Exelon Corporation		3,100		225,060
Mirant Corporation*		1,200		51,180
NRG Energy, Inc.*		2,600		108,082
				647,329
Utilities - Gas and Pipeline - 2.57%
Enbridge Inc.		5,650		190,857
Southwestern Energy Company*		2,500		111,250
				302,107
TOTAL COMMON STOCKS - 93.96%			$	11,052,505
(Cost: $9,494,013)

SHORT-TERM SECURITIES	Principal Amount in Thousands
Beverages - 3.49%
PepsiCo, Inc.,
5.33%, 7-2-07	$	411		410,939
Forest and Paper Products - 4.25%
Sonoco Products Co.,
5.52%, 7-2-07		500		499,923
Insurance - Life - 4.25%
American General Finance Corporation,
5.27%, 7-2-07		500		499,927
Publishing - 4.06%
E.W. Scripps Co.,
5.35%, 7-2-07		477		476,929
TOTAL SHORT-TERM SECURITIES - 16.05%			$	1,887,718
(Cost: $1,887,718)
TOTAL INVESTMENT SECURITIES - 110.01%			$	12,940,223
(Cost: $11,381,731)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (10.01%)				(1,177,557	)
NET ASSETS - 100.00%			$	11,762,666

Notes to Schedule of Investments

Certain acronyms may be used within the body of the Portfolio's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.

*No dividends were paid during the preceding 12 months.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      ENERGY PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $11,382) (Notes 1 and 3)	$	12,940
Cash		2
Receivables:
Portfolio shares sold		17
Dividends and interest		3
Prepaid and other assets		1
Total assets		12,963
LIABILITIES
Payable for investment securities purchased		1,197
Accrued accounting services fee (Note 2)		1
Payable to Portfolio shareholders		1
Accrued service fee (Note 2)		–	*
Accrued shareholder servicing (Note 2)		–	*
Other		1
Total liabilities		1,200
Total net assets	$	11,763
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	2
Additional paid-in capital		10,173
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		38
Accumulated undistributed net realized loss on investment transactions		(8	)
Net unrealized appreciation in value of investments		1,558
Net assets applicable to outstanding units of capital	$	11,763
Net asset value, redemption and offering price per share	$	5.6698
Capital shares outstanding		2,075
Capital shares authorized		60,000

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Operations
      ENERGY PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                             (Unaudited)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $2)	$	40
Interest and amortization		24
Total income		64
Expenses (Note 2):
Investment management fee		36
Service fee		10
Audit fees		7
Legal fees		5
Custodian fees		3
Accounting services fee		1
Shareholder servicing		–	*
Other		1
Total		63
Less voluntary waiver of investment management fee (Note 2)		(36	)
Total expenses		27
Net investment income		37
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on investments		(13	)
Unrealized appreciation in value of investments during the period		1,730
Net gain on investments		1,717
Net increase in net assets resulting from operations	$	1,754

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Changes in Net Assets
      ENERGY PORTFOLIO
      (In Thousands)                                                                                                                (Unaudited)

	For the six months ended				For the period from 5-1-06(1) through
	6-30-07				12-31-06
INCREASE IN NET ASSETS
Operations:
Net investment income		$	37			$	36
Realized net gain (loss) on investments			(13	)			5
Unrealized appreciation (depreciation)			1,730				(172	)
Net increase (decrease) in net assets                      resulting from operations			1,754				(131	)
Distributions to shareholders from (Note 1E):(2)
Net investment income			(–	)			(35	)
Realized gains on investment transactions			(–	)			(–	)
			(–	)			(35	)
Capital share transactions(3)			3,261				6,914
Total increase			5,015				6,748
NET ASSETS
Beginning of period			6,748				–
End of period		$	11,763			$	6,748
Undistributed net investment income		$	38			$	1
(1)Commencement of operations.
(2)See "Financial Highlights" on page 82.
(3)Shares issued from sale of shares			705				1,559
Shares issued from reinvestment of dividend       and/or capital gains distribution			–				8
Shares redeemed			(86	)			(111	)
Increase in outstanding capital shares			619				1,456
Value issued from sale of shares		$	3,672			$	7,375
Value issued from reinvestment of dividend       and/or capital gains distribution			–				35
Value redeemed			(411	)			(496	)
Increase in outstanding capital		$	3,261			$	6,914

See Notes to Financial Statements.

Financial Highlights
      ENERGY PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:                            (Unaudited)

	For the six months ended				For the period from 5-1-06(1) through
	6-30-07				12-31-06
Net asset value, beginning of period		$	4.6351			$	5.0000
Income (loss) from investment operations:
Net investment income			0.0177				0.0248
Net realized and unrealized gain (loss) on investments			1.0170			(0.3654		)
Total from investment operations			1.0347			(0.3406		)
Less distributions from:
Net investment income		(0.0000		)		(0.0243		)
Capital gains		(0.0000		)		(0.0000		)
Total distributions		(0.0000		)		(0.0243		)
Net asset value, end of period		$	5.6698			$	4.6351
Total return			22.32	%			- -6.81	%
Net assets, end of period (in millions)		$12				$7
Ratio of expenses to average net assets       including voluntary expense waiver			0.64	%(2)			0.64	%(2)
Ratio of net investment income to average net       assets including voluntary expense waiver			0.88	%(2)			1.05	%(2)
Ratio of expenses to average net assets       excluding voluntary expense waiver			1.49	%(2)			1.49	%(2)
Ratio of net investment income to average net       assets excluding voluntary expense waiver			0.03	%(2)			0.20	%(2)
Portfolio turnover rate			12	%			12	%

(1)Commencement of operations.

(2)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF
GLOBAL NATURAL RESOURCES PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target Global Natural Resources Portfolio had net assets totaling $125,438,239 invested in a diversified portfolio of:

50.08%	Foreign Common Stocks
35.46%	Domestic Common Stocks
14.38%	Cash and Cash Equivalents and Unrealized Loss       on Open Forward Currency Contracts
0.08%	Corporate Debt Securities

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007, your Portfolio was invested by geographic region and by industry, respectively, as follows:

Country Weightings

North America	$	47.10
United States	$	35.46
Canada	$	9.88
Mexico	$	1.76
Cash and Cash Equivalents and       Unrealized Loss on Open Forward       Currency Contracts	$	14.38
South America (1)	$	12.22
Pacific Basin (2)	$	8.62
Europe (3)	$	7.83
Bahamas/Caribbean	$	5.72
Cayman Islands	$	4.70
Bermuda	$	1.02
Other (4)	$	4.13

(1)Includes $12.22 Brazil.

(2)Includes $1.68 China, $0.98 Hong Kong, $0.62 Japan, $1.34 Papua New Guinea, $0.07 Philippines, $0.57 South Korea, $1.25 Taiwan and $2.11 Thailand.

(3)Includes $0.08 Cyprus, $2.98 France, $1.24 Germany, $0.76 Luxembourg, $0.87 Norway, $0.18 Russia, $0.47 Switzerland and $1.25 United Kingdom.

(4)Includes $4.13 South Africa.

Sector Weightings

Energy Stocks	$	32.75
Raw Materials Stocks	$	26.58
Cash and Cash Equivalents, Corporate Debt       Securities and Unrealized Loss on       Open Forward Currency Contracts	$	14.46
Capital Goods Stocks	$	7.70
Multi-Industry Stocks	$	6.06
Miscellaneous Stocks	$	5.98
Shelter Stocks	$	3.73
Utilities Stocks	$	2.74

The Investments of Global Natural Resources Portfolio
June 30, 2007                                                                                                                  (Unaudited)
COMMON STOCKS	Shares		Value
Bermuda - 1.02%
Aquarius Platinum Limited (A)	10,000	$	314,069
China Gas Holdings Limited (A)	782,500		335,248
Weatherford International Ltd.*	11,400		629,736
			1,279,053
Brazil - 12.14%
Aracruz Celulose S.A., ADR	11,800		781,632
Bradespar S.A. (A)	33,100		1,257,594
Brasil Ecodiesel Industria e Comercio de Biocombustiveis       e Oleos Vegetais S.A. (A)*	11,700		75,210
CPFL Energia S.A. (A)	16,500		332,395
CPFL Energia S.A., ADR	5,400		327,942
Companhia de Saneamento Basico do Estado de Sao       Paulo - SABESP, ADR	16,600		731,728
Companhia Energetica de Minas Gerais - CEMIG, ADR	47,800		1,008,580
Companhia Siderurgica Nacional (A)	25,300		1,306,314
Companhia Siderurgica Nacional, ADR	10,000		517,200
Companhia Vale do Rio Doce, ADR	87,700		3,907,035
Cosan S.A. Industria e Comercio (A)*	19,500		320,451
Suzano Bahia Sul Papel E Celulose S.A. (A)	193,100		2,600,694
Usinas Siderurgicas de Minas Gerais S.A. - USIMINA S (A)	14,500		955,391
Votorantim Celulose e Papel S.A. (A)	14,600		334,158
Votorantim Celulose e Papel S.A., ADR	34,100		776,457
			15,232,781
Canada - 9.88%
ARISE Technologies Corporation (A)*	105,000		91,669
Agnico-Eagle Mines Limited (A)*	35,200		1,279,459
Barrick Gold Corporation (A)	53,600		1,558,829
Eldorado Gold Corporation (A)*	60,000		351,467
Goldcorp Inc. (A)	19,500		462,948
IAMGOLD Corporation (A)	194,800		1,499,516
Kinross Gold Corporation (A)*	126,600		1,472,494
Mullen Group Income Fund (A)	3,900		77,982
OPTI Canada Inc. (A)*	25,300		539,607
Pason Systems Inc. (A)	39,000		610,674
Progress Energy Trust (A)	35,600		432,113
Pure Energy Services Ltd. (A)*	4,900		48,988
Savanna Energy Services Corp. (A)*	15,600		292,889
Silver Wheaton Corp. (A)*	81,800		966,780
Sino-Forest Corporation (A)(B)*	13,000		186,717
Talisman Energy Inc. (A)	82,800		1,601,202
Trican Well Service Ltd. (A)	38,500		783,915
Xtreme Coil Drilling Corp. (A)*	12,700		131,143
			12,388,392
Cayman Islands - 4.70%
Neo-Neon Holdings Limited (A)*	117,000		249,586
Noble Corporation	42,900		4,183,608
Suntech Power Holdings Co., Ltd., ADR*	40,000		1,458,800
			5,891,994
China - 1.68%
China Shenhua Energy Company Limited, H Shares (A)	146,500		511,491
Xinao Gas Holdings Limited (A)	350,800		440,564
Yingli Green Energy Holding Company Limited*	80,000		1,160,000
			2,112,055
Cyprus - 0.08%
Buried Hill Energy (Cyprus) Public Company Limited (B)(C)*	65,000		97,500
France - 2.98%
L'Air Liquide S.A. (A)	4,600		606,651
Schneider Electric SA (A)	2,000		281,870
TOTAL S.A. (A)	19,500		1,590,404
Vallourec (A)	3,900		1,257,385
			3,736,310
Germany - 1.24%
Q-Cells AG (A)*	7,800		668,888
SGL Carbon AG (A)*	9,700		403,045
Siemens AG (A)	3,400		488,015
			1,559,948
Hong Kong - 0.98%
CNOOC Limited (A)	819,000		928,016
Guangdong Investment Limited (A)	506,000		295,089
			1,223,105
Japan - 0.62%
DOWA HOLDINGS Co., Ltd. (A)	49,000		523,330
Sumitomo Electric Industries, Ltd. (A)*	16,600		247,534
			770,864
Luxembourg - 0.76%
Tenaris S.A., ADR	19,500		954,720
Mexico - 1.76%
Cemex, S.A. de C.V., ADR*	59,984		2,213,410
Norway - 0.87%
Statoil ASA (A)	35,100		1,092,234
Papua New Guinea - 1.34%
Lihir Gold Limited (A)*	662,367		1,684,669
Philippines - 0.07%
PNOC Energy Development Corporation (A)	748,800		90,665
Russia - 0.18%
OAO LUKOIL, ADR	3,000		228,600
South Africa - 4.13%
Gold Fields Limited (A)	97,400		1,507,684
Gold Fields Limited, ADR	146,100		2,293,770
Impala Platinum Holdings Limited (A)	34,100		1,042,179
Mvelaphanda Resources Limited (A)*	39,000		336,611
			5,180,244
South Korea - 0.57%
GS Holdings Corp. (A)	9,530		463,167
Korea Electric Power Corporation (A)	5,800		257,401
			720,568
Switzerland - 0.47%
Givaudan SA, Registered Shares (A)	600		594,351
Taiwan - 1.25%
Everlight Electronics Co., Ltd. (A)	146,100		522,325
Motech Industries Inc. (A)	54,500		713,047
Motech Industries Inc., GDR (B)*	25,000		327,085
			1,562,457
Thailand - 2.11%
PTT Public Company Limited (A)	194,800		1,523,418
Rayong Refinery Public Company Limited (A)	292,200		164,191
Thai Oil Public Company Limited (A)	467,600		954,838
			2,642,447
United Kingdom - 1.25%
BG Group plc (A)	48,900		806,686
Randgold Resources Limited, ADR	29,200		647,510
Titanium Resources Group Ltd. (A)*	79,100		109,601
			1,563,797
United States - 34.34%
Air Products and Chemicals, Inc.	12,000		964,440
Allegheny Technologies Incorporated	4,900		513,912
Andersons, Inc. (The)	14,300		648,290
Arch Coal, Inc.	54,200		1,886,160
Atwood Oceanics, Inc.*	17,500		1,200,850
Aventine Renewable Energy Holdings, Inc.*	31,500		534,555
Bunge Limited	13,600		1,149,200
Burlington Northern Santa Fe Corporation	6,800		578,952
CONSOL Energy Inc.	29,200		1,346,412
Cameron International Corporation*	8,800		628,936
Celanese Corporation, Series A	29,200		1,132,376
Cytec Industries Inc.	19,500		1,243,515
Diamond Offshore Drilling, Inc.	42,900		4,356,924
First Solar, Inc.*	1,800		160,632
General Electric Company	94,200		3,605,976
GlobalSanteFe Corporation	39,000		2,817,750
Grant Prideco, Inc.*	12,000		645,960
Helix Energy Solutions Group, Inc.*	29,200		1,165,372
MEMC Electronic Materials, Inc.*	7,000		427,840
Oceaneering International, Inc.*	25,400		1,337,056
Peabody Energy Corporation	43,800		2,119,044
Praxair, Inc.	29,300		2,109,307
Smith International, Inc.	44,000		2,580,160
SunPower Corporation, Class A*	11,700		737,509
Superior Energy Services, Inc.*	29,200		1,165,664
TETRA Technologies, Inc.*	38,000		1,071,600
Tesoro Corporation	13,600		777,240
Ultra Petroleum Corp.*	12,200		673,928
Valero Energy Corporation	55,500		4,099,230
VeraSun Energy Corporation*	20,800		301,184
WESCO International, Inc.*	3,900		235,755
			43,081,279
TOTAL COMMON STOCKS - 84.42%		$	105,901,443
(Cost: $80,463,735)
INVESTMENT FUNDS - 1.12%
United States
iShares Silver Trust*	7,000		865,550
UltraShort QQQ ProShares	24,000		1,095,840
UltraShort S&P500 ProShares	5,800		305,602
(Cost: $2,621,776)		$	1,401,442

CORPORATE DEBT SECURITIES - 0.08%		Principal Amount in Thousands
Brazil
Bahia Sul Celulose S.A.,
0.0%, 12-1-12 (B)(D)		BRL180		$	101,521
(Cost: $88,593)
UNREALIZED GAIN (LOSS) ON OPEN FORWARD       CURRENCY CONTRACTS - (0.06%)		Face Amount in Thousands
Canadian Dollar, 7-11-07 (D)	CAD1,400				(2,159	)
Canadian Dollar, 7-18-07 (D)			1,100		(2,408	)
Canadian Dollar, 7-25-07 (D)			400		(18,894	)
Canadian Dollar, 8-1-07 (D)			610		(19,158	)
Canadian Dollar, 8-8-07 (D)			610		(19,142	)
Canadian Dollar, 8-15-07 (D)			610		(19,137	)
Canadian Dollar, 8-22-07 (D)			1,000		6,730
Canadian Dollar, 8-29-07 (D)			1,000		6,359
Canadian Dollar, 9-5-07 (D)			900		1,989
Canadian Dollar, 9-12-07 (D)			1,200		7,569
Canadian Dollar, 9-19-07 (D)			1,100		(2,344	)
Canadian Dollar, 9-26-07 (D)			1,100		(2,331	)
South African Rand, 7-18-07 (D)	ZAR2,680				(3,959	)
South African Rand, 7-25-07 (D)			1,500		(703	)
South African Rand, 8-1-07 (D)			1,995		5,200
South African Rand, 8-15-07 (D)			1,995		5,290
South African Rand, 8-22-07 (D)			2,500		(9,417	)
South African Rand, 8-29-07 (D)			1,900		(2,023	)
South African Rand, 9-6-07 (D)			1,900		(1,986	)
South African Rand, 9-12-07 (D)			2,800		(4,406	)
South African Rand, 9-19-07 (D)			1,500		(514	)
South African Rand, 9-27-07 (D)			570		(793	)
				$	(76,237	)
SHORT-TERM SECURITIES		Principal Amount in Thousands
Beverages - 3.19%
PepsiCo, Inc.,
5.33%, 7-2-07		$	4,000		3,999,408

Finance Companies - 6.55%
Ciesco, LLC,
5.37%, 7-2-07	3,724		3,723,444
PACCAR Financial Corp.:
5.29%, 7-3-07	2,500		2,499,265
5.24%, 7-31-07	2,000		1,991,267
			8,213,976
Forest and Paper Products - 2.57%
Sonoco Products Co.,
5.52%, 7-2-07	3,225		3,224,505
Health Care - Drugs - 1.59%
Abbott Laboratories,
5.26%, 7-12-07	2,000		1,996,786
TOTAL SHORT-TERM SECURITIES - 13.90%		$	17,434,675
(Cost: $17,434,675)
TOTAL INVESTMENT SECURITIES - 99.46%		$	124,762,844
(Cost: $100,608,779)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.54%			675,395
NET ASSETS - 100.00%		$	125,438,239

Notes to Schedule of Investments

Certain acronyms may be used within the body of the Portfolio's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.

*No dividends were paid during the preceding 12 months.

(A)Listed on an exchange outside the United States.

(B)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be illiquid under guidelines established by the Board of Directors. At June 30, 2007, the total value of these securities amounted to $712,823 or 0.57% of net assets.

(C)Security valued in good faith by management's valuation committee subject to the supervision of the Board of Directors.

(D)Principal amounts are denominated in the indicated foreign currency, where applicable (BRL - Brazilian Real; CAD - Canadian Dollar; ZAR - South African Rand).

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      GLOBAL NATURAL RESOURCES PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $100,609) (Notes 1 and 3)	$	124,763
Cash		1
Cash denominated in foreign currencies (cost - $58)		59
Receivables:
Investment securities sold		1,066
Dividends and interest		221
Portfolio shares sold		45
Prepaid and other assets		1
Total assets		126,156
LIABILITIES
Payable for investment securities purchased		669
Payable to Portfolio shareholders		10
Accrued management fee (Note 2)		7
Accrued accounting services fee (Note 2)		5
Accrued service fee (Note 2)		2
Accrued shareholder servicing (Note 2)		2
Other		23
Total liabilities		718
Total net assets	$	125,438
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	14
Additional paid-in capital		92,561
Accumulated undistributed income:
Accumulated undistributed net investment income		308
Accumulated undistributed net realized gain on investment transactions		8,398
Net unrealized appreciation in value of investments		24,157
Net assets applicable to outstanding units of capital	$	125,438
Net asset value, redemption and offering price per share	$	9.2371
Capital shares outstanding		13,580
Capital shares authorized		50,000

See Notes to Financial Statements.

Statement of Operations
      GLOBAL NATURAL RESOURCES PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                             (Unaudited)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $70)	$	979
Interest and amortization (net of foreign withholding taxes of $1)		67
Total income		1,046
Expenses (Note 2):
Investment management fee		522
Service fee		130
Accounting services fee		26
Custodian fees		16
Audit fees		11
Shareholder servicing		5
Other		15
Total expenses		725
Net investment income		321
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		8,547
Realized net loss on forward currency contracts		(383	)
Realized net loss on foreign currency exchange transactions		(26	)
Realized net gain on investments		8,138
Unrealized appreciation in value of securities during the period		13,158
Unrealized depreciation in value of forward currency contracts            during the period		(115	)
Unrealized appreciation in value of foreign currency exchange            transactions during the period		3
Unrealized appreciation in value of investments                 during the period		13,046
Net gain on investments		21,184
Net increase in net assets resulting from operations	$	21,505

See Notes to Financial Statements.

Statement of Changes in Net Assets
      GLOBAL NATURAL RESOURCES PORTFOLIO
      (In Thousands)
                                                                                                                                               (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
INCREASE IN NET ASSETS
Operations:
Net investment income		$	321			$	342
Realized net gain on investments			8,138				3,352
Unrealized appreciation			13,046				8,107
Net increase in net assets resulting                      from operations			21,505				11,801
Distributions to shareholders from (Note 1E): (1)
Net investment income			(–	)			(270	)
Realized gains on investment transactions			(–	)			(3,166	)
			(–	)			(3,436	)
Capital share transactions (2)			13,481				49,784
Total increase			34,986				58,149
NET ASSETS
Beginning of period			90,452				32,303
End of period		$	125,438			$	90,452
Undistributed net investment income		$	308			$	13
(1)See "Financial Highlights" on page 94.
(2)Shares issued from sale of shares			2,031				6,926
Shares issued from reinvestment of dividend       and/or capital gains distribution			–				454
Shares redeemed			(398	)			(583	)
Increase in outstanding capital shares			1,633				6,797
Value issued from sale of shares		$	16,732			$	50,652
Value issued from reinvestment of dividend       and/or capital gains distribution			–				3,436
Value redeemed			(3,251	)			(4,304	)
Increase in outstanding capital		$	13,481			$	49,784

See Notes to Financial Statements.

Financial Highlights
      GLOBAL NATURAL RESOURCES PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:
                                                                                                                                               (Unaudited)

	For the six months ended				For the fiscal year ended			For the period from 4-28-05(1) through
	6-30-07				12-31-06			12-31-05
Net asset value, beginning of period		$	7.5711		$	6.2719		$	5.0000
Income (loss) from investment operations:
Net investment income (loss)			0.0246			0.0295		(0.0112		)
Net realized and unrealized             gain on investments			1.6414			1.5690			1.3132
Total from investment operations			1.6660			1.5985			1.3020
Less distributions from:
Net investment income		(0.0000		)	(0.0235		)	(0.0000		)
Capital gains		(0.0000		)	(0.2758		)	(0.0301		)
Total distributions		(0.0000		)	(0.2993		)	(0.0301		)
Net asset value, end of period		$	9.2371		$	7.5711		$	6.2719
Total return			22.00	%		25.49	%		26.04	%
Net assets, end of period (in millions)			$125			$90			$32
Ratio of expenses to average net assets			1.39	%(2)		1.51	%		2.17	%(2)
Ratio of net investment income       (loss) to average net assets			0.62	%(2)		0.53	%		- -0.60	%(2)
Portfolio turnover rate			58	%		111	%		66	%

(1)Commencement of operations.

(2)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF GROWTH PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target Growth Portfolio had net assets totaling $1,184,841,848 invested in a diversified portfolio of:

89.80%	Domestic Common Stocks
9.20%	Foreign Common Stocks
1.00%	Cash and Cash Equivalents

Sector Weightings

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007, your Portfolio owned:

Technology Stocks	$	26.23
Health Care Stocks	$	18.53
Financial Services Stocks	$	11.26
Consumer Nondurables Stocks	$	9.95
Consumer Services Stocks	$	5.80
Energy Stocks	$	5.51
Capital Goods Stocks	$	5.27
Raw Materials Stocks	$	4.44
Retail Stocks	$	4.27
Miscellaneous Stocks	$	4.13
Business Equipment and Services Stocks	$	3.61
Cash and Cash Equivalents	$	1.00

The Investments of Growth Portfolio
June 30, 2007                                                                                                               (Unaudited)
COMMON STOCKS		Shares		Value
Aircraft - 3.11%
Boeing Company (The)		320,000	$	30,771,200
United Technologies Corporation		85,000		6,029,050
				36,800,250
Beverages - 3.92%
Coca-Cola Company (The)		225,000		11,769,750
PepsiCo, Inc.		535,000		34,694,750
				46,464,500
Broadcasting - 1.33%
Comcast Corporation, Class A*		561,000		15,766,905
Capital Equipment - 4.28%
Deere & Company		320,000		38,636,800
Illinois Tool Works Inc.		115,000		6,231,850
Joy Global Inc.		100,000		5,837,500
				50,706,150
Chemicals - Petroleum and Inorganic - 4.44%
E.I. du Pont de Nemours and Company		165,000		8,388,600
Monsanto Company		655,000		44,238,700
				52,627,300
Communications Equipment - 5.70%
Cisco Systems, Inc.*	1,710,000			47,580,750
Nokia Corporation, Series A, ADR		200,000		5,622,000
QUALCOMM Incorporated		330,000		14,313,750
				67,516,500
Computers - Main and Mini - 1.77%
Hewlett-Packard Company		470,000		20,971,400
Computers - Micro - 4.61%
Apple Inc.*		448,000		54,682,880
Computers - Peripherals - 7.02%
Adobe Systems Incorporated*		945,000		37,922,850
Electronic Arts Inc.*		445,000		21,050,725
Microsoft Corporation		821,100		24,189,606
				83,163,181
Consumer Electronics - 2.50%
Research In Motion Limited*		148,200		29,651,115
Defense - 2.21%
General Dynamics Corporation		334,600		26,172,412
Electrical Equipment - 0.99%
Emerson Electric Co.		250,000		11,700,000
Electronic Components - 1.81%
Broadcom Corporation, Class A*		297,500		8,698,900
Microchip Technology Incorporated		343,600		12,733,816
				21,432,716
Food and Related - 0.73%
Wm. Wrigley Jr. Company		157,000		8,683,670
Health Care - Drugs - 13.59%
Abbott Laboratories		703,000		37,645,650
Alcon, Inc.		102,100		13,774,311
Allergan, Inc.		201,000		11,585,640
Genentech, Inc.*		430,000		32,533,800
Gilead Sciences, Inc.*	1,014,800			39,369,166
Roche Holding Ltd, ADR		130,000		11,553,750
Schering-Plough Corporation		480,000		14,611,200
				161,073,517
Health Care - General - 4.16%
Baxter International Inc.		335,000		18,873,900
DENTSPLY International Inc.		335,000		12,812,075
Zimmer Holdings, Inc.*		207,900		17,648,631
				49,334,606
Hospital Supply and Management - 0.78%
Medtronic, Inc.		178,500		9,257,010
Hotels and Gaming - 4.47%
International Game Technology		605,000		24,018,500
Las Vegas Sands, Inc.*		378,900		28,944,171
				52,962,671
Household - General Products - 5.30%
Colgate-Palmolive Company		695,000		45,070,750
Procter & Gamble Company (The)		290,000		17,745,100
				62,815,850
Insurance - Life - 0.59%
Aflac Incorporated		135,000		6,939,000
Insurance - Property and Casualty - 1.16%
Ambac Financial Group, Inc.		157,500		13,732,425
Motor Vehicles - 0.40%
Harley-Davidson, Inc.		80,200		4,780,722
Petroleum - Services - 5.51%
Schlumberger Limited		383,100		32,540,514
Smith International, Inc.		557,800		32,709,392
				65,249,906
Restaurants - 0.99%
YUM! Brands, Inc.		358,800		11,739,936
Retail - Food Stores - 0.76%
Walgreen Co.		206,900		9,008,426
Retail - General Merchandise - 2.52%
Kohl's Corporation*		165,000		11,719,950
Target Corporation		285,000		18,126,000
				29,845,950
Security and Commodity Brokers - 9.51%
Chicago Mercantile Exchange Holdings Inc.		78,200		41,786,952
Goldman Sachs Group, Inc. (The)		147,600		31,992,300
NYMEX Holdings, Inc.		40,000		5,025,200
UBS AG		565,000		33,905,650
				112,710,102
Timesharing and Software - 3.61%
Google Inc., Class A*		81,660		42,738,394
Utilities - Telephone - 1.23%
America Movil, S.A. de C.V.		130,000		8,050,900
China Mobile (Hong Kong) Limited, ADR		120,000		6,468,000
				14,518,900
TOTAL COMMON STOCKS - 99.00%			$	1,173,046,394
(Cost: $892,960,325)

SHORT-TERM SECURITIES	Principal Amount in Thousands			Value
Publishing - 0.29%
E.W. Scripps Co.,
5.35%, 7-2-07	$3,403			3,402,494
Utilities - Telephone - 0.25%
AT&T Inc.,
5.28%, 7-25-07		3,000		2,989,440
TOTAL SHORT-TERM SECURITIES - 0.54%			$	6,391,934
(Cost: $6,391,934)
TOTAL INVESTMENT SECURITIES - 99.54%			$	1,179,438,328
(Cost: $899,352,259)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.46%				5,403,520
NET ASSETS - 100.00%			$	1,184,841,848

Notes to Schedule of Investments

Certain acronyms may be used within the body of the Portfolio's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.

*No dividends were paid during the preceding 12 months.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      GROWTH PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $899,352) (Notes 1 and 3)	$	1,179,438
Cash		2
Receivables:
Investment securities sold		5,614
Dividends and interest		720
Portfolio shares sold		177
Prepaid and other assets		19
Total assets		1,185,970
LIABILITIES
Payable to Portfolio shareholders		852
Accrued management fee (Note 2)		43
Accrued shareholder servicing (Note 2)		31
Accrued accounting services fee (Note 2)		21
Accrued service fee (Note 2)		16
Other		165
Total liabilities		1,128
Total net assets	$	1,184,842
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	112
Additional paid-in capital		958,358
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		560
Accumulated undistributed net realized loss on investment transactions		(54,274	)
Net unrealized appreciation in value of investments		280,086
Net assets applicable to outstanding units of capital	$	1,184,842
Net asset value, redemption and offering price per share	$	10.5357
Capital shares outstanding		112,460
Capital shares authorized		300,000

See Notes to Financial Statements.

Statement of Operations
      GROWTH PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                             (Unaudited)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $210)	$	5,973
Interest and amortization		378
Total income		6,351
Expenses (Note 2):
Investment management fee		4,064
Service fee		1,468
Accounting services fee		124
Shareholder servicing		35
Legal fees		21
Custodian fees		18
Audit fees		17
Other		138
Total		5,885
Less waiver of investment management fee (Notes 2 and 9)		(149	)
Total expenses		5,736
Net investment income		615
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		51,674
Unrealized appreciation in value of investments during the period		35,660
Net gain on investments		87,334
Net increase in net assets resulting from operations	$	87,949

See Notes to Financial Statements.

Statement of Changes in Net Assets
      GROWTH PORTFOLIO
      (In Thousands)
                                                                                                                                               (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)		$	615		$	(1	)
Realized net gain on investments			51,674			79,840
Unrealized appreciation (depreciation)			35,660			(21,637	)
Net increase in net assets resulting                      from operations			87,949			58,202
Dividends to shareholders from (Note 1E): (1)
Net investment income			(–	)		(–	)
Realized gains on investment transactions			(–	)		(–	)
			(–	)		(–	)
Capital share transactions (2)			(80,092	)		(133,479	)
Total increase (decrease)			7,857			(75,277	)
NET ASSETS
Beginning of period			1,176,985			1,252,262
End of period		$	1,184,842		$	1,176,985
Undistributed net investment income (loss)		$	560		$	(55	)
(1)See "Financial Highlights" on page 103.
(2)Shares issued from sale of shares			2,135			5,747
Shares issued from reinvestment of dividend       and/or capital gains distribution			–			–
Shares redeemed			(10,005	)		(19,889	)
Decrease in outstanding capital shares			(7,870	)		(14,142	)
Value issued from sale of shares		$	21,736		$	54,351
Value issued from reinvestment of dividend       and/or capital gains distribution			–			–
Value redeemed			(101,828	)		(187,830	)
Decrease in outstanding capital		$	(80,092	)	$	(133,479	)

See Notes to Financial Statements.

Financial Highlights
      GROWTH PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:
                                                                                                                                               (Unaudited)

	For the six months ended				For the fiscal year ended December 31,
	6-30-07				2006			2005			2004			2003			2002
Net asset value,       beginning of period		$	9.7813		$	9.3125		$	8.3728		$	8.1267		$	6.6041		$	8.3923
Income (loss) from       investment operations:
Net investment             income (loss)			0.0054		(0.0001		)	(0.0029		)		0.0228		(0.0048		)		0.0009
Net realized and             unrealized gain (loss)             on investments			0.7490			0.4689			0.9429			0.2460			1.5275		(1.7882		)
Total from investment       operations			0.7544			0.4688			0.9400			0.2688			1.5227		(1.7873		)
Less distributions from:
Net investment income			(0.0000	)	(0.0000		)	(0.0003		)	(0.0227		)	(0.0001		)	(0.0009		)
Capital gains			(0.0000	)	(0.0000		)	(0.0000		)	(0.0000		)	(0.0000		)	(0.0000		)
Total distributions			(0.0000	)	(0.0000		)	(0.0003		)	(0.0227		)	(0.0001		)	(0.0009		)
Net asset value,       end of period		$	10.5357		$	9.7813		$	9.3125		$	8.3728		$	8.1267		$	6.6041
Total return			7.71	%		5.04	%		11.23	%		3.31	%		23.06	%		- -21.30	%
Net assets, end of period       (in millions)			$1,185			$1,177			$1,252			$1,252			$1,283			$705
Ratio of expenses to       average net assets       including expense waiver			0.98	%(1)		0.99	%		1.00	%		1.00	%		0.99	%		0.99	%
Ratio of net investment       income (loss) to average       net assets including       expense waiver			0.10	%(1)		0.00	%		- -0.03	%		0.27	%		- -0.09	%		0.01	%
Ratio of expenses to       average net assets       excluding expense waiver			1.00	%(1)		1.00	%		1.00	%(2)		1.00	%(2)		0.99	%(2)		0.99	%(2)
Ratio of net investment       income (loss) to average       net assets excluding       expense waiver			0.08	%(1)		- -0.01	%		- -0.03	%(2)		0.27	%(2)		- -0.09	%(2)		0.01	%(2)
Portfolio turnover rate			26	%		67	%		59	%		81	%		59	%		41	%

(1)Annualized.

(2)There was no waiver of expenses during the period.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF HIGH INCOME PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target High Income Portfolio had net assets totaling $215,114,498 invested in a diversified portfolio of:

93.67%	Domestic Corporate Debt Securities
3.53%	Foreign Corporate Debt Securities
1.98%	Cash and Cash Equivalents
0.82%	Common Stocks and Warrants

Sector Weightings

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007, your Portfolio owned:

Financial Services Bonds	$	12.19
Capital Goods Bonds	$	10.42
Business Equipment and Services Bonds	$	10.20
Health Care Bonds	$	8.77
Raw Materials Bonds	$	8.68
Consumer Services Bonds	$	8.26
Retail Bonds	$	7.47
Consumer Nondurables Bonds	$	6.46
Multi Industry Bonds	$	5.50
Miscellaneous Bonds	$	4.79
Technology Bonds	$	4.39
Energy Bonds	$	4.18
Consumer Durables Bonds	$	3.13
Utilities Bonds	$	2.76
Cash and Cash Equivalents	$	1.98
Common Stocks and Warrants	$	0.82

Quality Weightings

On June 30, 2007, the breakdown of bonds (by ratings) held by the Portfolio was as follows:

BB	10.95	%
B	59.23	%
CCC	26.68	%
Not Rated	0.34	%
Cash and Cash Equivalents and Equities	2.80	%

Ratings reflected in the wheel above are taken from Standard & Poors.

The Investments of High Income Portfolio
June 30, 2007			(Unaudited)
COMMON STOCKS AND WARRANTS	Shares			Value
Broadcasting - 0.05%
Citadel Broadcasting Corporation		15,000	$	96,750
Chemicals - Specialty - 0.09%
Mosaic Company*		5,000		195,100
Hospital Supply and Management - 0.13%
HMS Holdings Corp.*		14,000		268,240
Hotels and Gaming - 0.16%
Pinnacle Entertainment, Inc.*		12,500		351,875
Petroleum - Services - 0.39%
Baker Hughes Incorporated		5,000		420,650
Schlumberger Limited		5,000		424,700
				845,350
Utilities - Telephone - 0.00%
GT Group Telecom, Inc., Warrants (A)(B)*		300		-	**
TOTAL COMMON STOCKS AND WARRANTS - 0.82%			$	1,757,315
(Cost: $1,326,759)

CORPORATE DEBT SECURITIES	Principal Amount in Thousands
Air Transportation - 0.69%
Continental Airlines, Inc.,
7.339%, 4-19-14	$	1,500	1,481,250
Aircraft - 0.87%
Esterline Technologies Corporation,
7.75%, 6-15-13		750	757,500
L-3 Communications Corporation:
6.125%, 1-15-14		200	188,500
5.875%, 1-15-15		1,000	927,500
			1,873,500
Apparel - 0.71%
Oxford Industries, Inc.,
8.875%, 6-1-11		500	516,250
Perry Ellis International, Inc.,
8.875%, 9-15-13		1,000	1,015,000
			1,531,250

Beverages - 0.81%
Constellation Brands, Inc.,
7.25%, 9-1-16	750		731,250
Cott Beverages Inc.,
8.0%, 12-15-11	1,000		1,010,000
			1,741,250
Broadcasting - 3.53%
Cablevision Systems Corporation,
9.82%, 4-1-09 (C)	1,835		1,917,575
Charter Communications Operating, LLC and Charter       Communications Operating Capital Corp.,
8.0%, 4-30-12 (D)	1,000		1,012,500
Insight Communications Company, Inc.,
12.25%, 2-15-11	1,500		1,567,500
PanAmSat Corporation,
9.0%, 6-15-16	1,000		1,047,500
Radio One, Inc.,
8.875%, 7-1-11	2,000		2,052,500
			7,597,575
Business Equipment and Services - 9.90%
Allied Waste North America, Inc.,
7.125%, 5-15-16	2,000		1,955,000
Carriage Services, Inc.,
7.875%, 1-15-15	150		151,875
Corrections Corporation of America,
7.5%, 5-1-11	1,000		1,013,750
Da-Lite Screen Company, Inc.,
9.5%, 5-15-11	2,000		2,100,000
Hexion U.S. Finance Corp. and Hexion Nova Scotia       Finance, ULC,
9.75%, 11-15-14	1,750		1,811,250
Iron Mountain Incorporated,
8.625%, 4-1-13	1,500		1,503,750
Lamar Advertising Company,
6.625%, 8-15-15	2,000		1,895,000
Lamar Media Corp.,
6.625%, 8-15-15	500		473,750
Mobile Mini, Inc.,
6.875%, 5-1-15 (D)	1,200		1,164,000
R.H. Donnelley Corporation,
6.875%, 1-15-13	750		710,625
SunGard Data Systems Inc.,
10.25%, 8-15-15	3,000		3,172,500
Tube City IMS Corporation,
9.75%, 2-1-15 (D)	640		656,000
West Corporation:
9.5%, 10-15-14	1,000		1,025,000
11.0%, 10-15-16	3,500		3,657,500
			21,290,000
Capital Equipment - 3.47%
CDRV Investors, Inc.:
9.86%, 12-1-11 (C)(D)	400		400,000
0.0%, 1-1-15 (E)	1,105		1,005,550
Chase Merger Sub, Inc.:
9.5%, 8-1-14	1,025		1,050,625
11.75%, 8-1-16	500		537,500
RBS Global, Inc. and Rexnord LLC,
8.875%, 9-1-16	310		310,775
Simmons Bedding Company,
7.875%, 1-15-14	1,225		1,218,875
Simmons Company,
0.0%, 12-15-14 (E)	3,500		2,940,000
			7,463,325
Chemicals - Petroleum and Inorganic - 1.07%
Lyondell Chemical Company:
8.0%, 9-15-14	750		770,625
8.25%, 9-15-16	750		783,750
Nalco Company,
7.75%, 11-15-11	750		755,625
			2,310,000
Chemicals - Specialty - 6.69%
Compass Minerals International, Inc.:
0.0%, 12-15-12 (E)	1,920		1,972,800
0.0%, 6-1-13 (E)	2,500		2,481,250
Huntsman International LLC,
7.375%, 1-1-15	2,000		2,100,000
Matrix Acquisition Corp.,
9.5%, 4-15-17 (D)	650		653,250
Momentive Performance Materials Inc.:
9.75%, 12-1-14 (D)	2,500		2,525,000
11.5%, 12-1-16 (D)	2,500		2,525,000
Mosaic Company (The):
7.375%, 12-1-14 (D)	350		353,500
7.625%, 12-1-16 (D)	1,750		1,789,375
			14,400,175
Communications Equipment - 0.81%
Intelsat (Bermuda), Ltd.,
8.87188%, 1-15-15 (C)	1,700		1,736,125
Computers - Peripherals - 1.44%
ASG Consolidated LLC and ASG Finance, Inc.,
0.0%, 11-1-11 (E)	3,325		3,092,250
Construction Materials - 5.88%
AMH Holdings, Inc.,
0.0%, 3-1-14 (E)	1,000		745,000
Ames True Temper, Inc.,
9.35563%, 1-15-12 (C)	1,650		1,662,375
Associated Materials Incorporated,
9.75%, 4-15-12	525		548,625
Builders FirstSource, Inc.,
9.61%, 2-15-12 (C)	3,000		3,037,500
Interface, Inc.,
9.5%, 2-1-14	2,415		2,602,163
Ply Gem Industries, Inc.,
9.0%, 2-15-12	4,500		4,044,375
			12,640,038
Containers - 0.21%
Graham Packaging Company, L.P. and GPC       Capital Corp. I:
8.5%, 10-15-12	150		150,938
9.875%, 10-15-14	300		303,375
			454,313
Cosmetics and Toiletries - 0.96%
Playtex Products, Inc.,
8.0%, 3-1-11	2,000		2,060,000
Electrical Equipment - 0.49%
Baldor Electric Company,
8.625%, 2-15-17	1,000		1,057,500
Electronic Components - 1.27%
NXP B.V. and NXP Funding LLC,
7.875%, 10-15-14	500		492,500
Seagate Technology HDD Holdings,
6.8%, 10-1-16	1,800		1,728,000
Viasystems, Inc.,
10.5%, 1-15-11	500		510,000
			2,730,500
Finance Companies - 10.46%
Ferrellgas, L.P. and Ferrellgas Finance Corp.,
6.75%, 5-1-14	500		473,750
Ford Motor Credit Company:
9.875%, 8-10-11	1,000		1,049,633
8.105%, 1-13-12 (C)	350		349,112
Goodman Global Holdings, Inc.:
8.36%, 6-15-12 (C)	965		972,238
7.875%, 12-15-12	1,605		1,588,950
KAR Holdings, Inc.:
8.75%, 5-1-14 (D)	160		156,800
9.35813%, 5-1-14 (C)(D)	1,750		1,745,625
10.0%, 5-1-15 (D)	160		156,000
Norcraft Companies, L.P. and Norcraft Finance Corp.,
0.0%, 9-1-12 (E)	1,600		1,464,000
PIH Acquisition Co.,
10.75%, 10-1-13 (D)	475		496,375
Sally Holdings LLC and Sally Capital Inc.:
9.25%, 11-15-14 (D)	750		751,875
10.5%, 11-15-16 (D)	3,000		3,015,000
Toll Corp.,
8.25%, 12-1-11	890		918,925
Visant Holding Corp.,
8.75%, 12-1-13	3,825		3,978,000
Xerox Capital Trust I,
8.0%, 2-1-27	5,250		5,389,718
			22,506,001
Food and Related - 2.81%
Pierre Merger Corp.,
9.875%, 7-15-12	1,970		1,999,550
Pilgrim's Pride Corporation:
7.625%, 5-1-15	875		872,812
8.375%, 5-1-17	500		495,000
Reddy Ice Holdings, Inc.,
0.0%, 11-1-12 (E)	2,850		2,679,000
			6,046,362
Forest and Paper Products - 2.16%
Buckeye Cellulose Corporation,
9.25%, 9-15-08	1,846		1,846,000
Buckeye Technologies Inc.,
8.0%, 10-15-10	2,800		2,800,000
			4,646,000
Health Care - Drugs - 0.49%
Warner Chilcott Corporation,
8.75%, 2-1-15	1,033		1,061,408
Homebuilders, Mobile Homes - 0.19%
Standard Pacific Corp.,
6.5%, 8-15-10	450		418,500
Hospital Supply and Management - 8.28%
CHS/Community Health Systems, Inc.,
8.875%, 7-15-15 (D)	1,600		1,622,000
HCA Inc.:
6.95%, 5-1-12	3,500		3,368,750
9.125%, 11-15-14 (D)	475		499,344
9.25%, 11-15-16 (D)	1,075		1,144,875
9.625%, 11-15-16 (D)	325		349,375
Psychiatric Solutions, Inc.,
7.75%, 7-15-15	1,425		1,408,969
Rural/Metro Corporation,
0.0%, 3-15-16 (E)	1,415		1,174,450
Rural/Metro Operating Company, LLC and       Rural/Metro (Delaware) Inc.,
9.875%, 3-15-15	1,100		1,157,750
Triad Hospitals, Inc.,
7.0%, 11-15-13	4,348		4,570,613
United Surgical Partners International, Inc.,
8.875%, 5-1-17 (D)	2,000		2,005,000
US Oncology, Inc.,
10.75%, 8-15-14	475		508,250
			17,809,376
Hotels and Gaming - 1.80%
Inn of the Mountain Gods Resort and Casino,
12.0%, 11-15-10	1,750		1,876,875
Pinnacle Entertainment, Inc.,
8.25%, 3-15-12	1,485		1,529,550
Station Casinos, Inc.,
6.0%, 4-1-12	500		470,000
			3,876,425
Household - General Products - 0.96%
JohnsonDiversey, Inc.,
9.625%, 5-15-12	1,060		1,106,375
Solo Cup Company,
8.5%, 2-15-14	1,100		962,500
			2,068,875
Metal Fabrication - 0.58%
Aurora Acquisition Merger Sub, Inc.:
9.0%, 12-15-14 (D)	750		756,562
10.0%, 12-15-16 (D)	500		496,250
			1,252,812
Mining - 0.65%
Freeport-McMoRan Copper & Gold Inc.:
8.25%, 4-1-15	325		342,875
8.56438%, 4-1-15 (C)	500		523,750
8.375%, 4-1-17	500		533,750
			1,400,375
Motion Pictures - 1.91%
Cinemark, Inc.,
0.0%, 3-15-14 (E)	3,550		3,230,500
Marquee Holdings Inc.,
0.0%, 8-15-14 (E)	1,000		870,000
			4,100,500
Motor Vehicles - 3.13%
Ford Motor Company,
7.45%, 7-16-31	500		399,375
General Motors Corporation,
8.375%, 7-15-33	1,500		1,368,750
Group 1 Automotive, Inc.,
8.25%, 8-15-13	2,500		2,581,250
Sonic Automotive, Inc.,
8.625%, 8-15-13	1,353		1,393,590
United Auto Group, Inc.,
7.75%, 12-15-16	1,000		995,000
			6,737,965
Multiple Industry - 5.50%
Dynegy Holdings Inc.,
8.375%, 5-1-16	1,000		977,500
Fontainebleau Las Vegas Holdings and Fontainebleau       Capital Corp.,
10.25%, 6-15-15 (D)	1,080		1,063,800
Freescale Semiconductor, Inc.:
8.875%, 12-15-14 (D)	1,260		1,203,300
9.125%, 12-15-14 (D)	1,000		940,000
K&F Acquisition, Inc.,
7.75%, 11-15-14	1,400		1,484,000
Shingle Springs Tribal Gaming Authority,
9.375%, 6-15-15 (D)	800		807,000
UCI Holdco, Inc.,
12.36%, 12-15-13 (C)(D)(F)	2,122		2,138,151
Umbrella Acquisition, Inc.,
9.75%, 3-15-15 (D)	3,250		3,209,375
			11,823,126
Petroleum - Domestic - 3.01%
Chesapeake Energy Corporation:
6.375%, 6-15-15	500		476,875
6.25%, 1-15-18	1,000		933,750
Denbury Resources Inc.:
7.5%, 4-1-13	250		250,000
7.5%, 12-15-15	500		498,750
EXCO Resources, Inc.,
7.25%, 1-15-11	900		895,500
Ferrellgas Partners, L.P. and Ferrellgas Partners       Finance Corp.,
8.75%, 6-15-12	1,000		1,030,000
Petrohawk Energy Corporation,
9.125%, 7-15-13	2,250		2,379,375
			6,464,250
Petroleum - Services - 1.17%
Hanover Compressor Company:
8.625%, 12-15-10	500		515,625
7.5%, 4-15-13	350		351,750
9.0%, 6-1-14	150		158,625
SemGroup, L.P. and SemGroup Finance Corp.,
8.75%, 11-15-15 (D)	725		728,625
Stallion Oilfield Services Ltd. and Stallion Oilfield       Finance Corp.,
9.75%, 2-1-15 (D)	750		765,000
			2,519,625
Publishing - 1.02%
Dex Media, Inc.,
0.0%, 11-15-13 (E)	1,500		1,411,875
Dex Media West LLC and Dex Media West Finance Co.,
8.5%, 8-15-10	750		777,187
			2,189,062
Railroad - 1.39%
Kansas City Southern de Mexico, S.A. de C.V.:
7.625%, 12-1-13 (D)	350		349,125
7.375%, 6-1-14 (D)	500		496,250
Kansas City Southern Railway Company (The),
7.5%, 6-15-09	950		942,875
TFM, S.A. de C.V.,
9.375%, 5-1-12	1,125		1,203,750
			2,992,000
Restaurants - 2.26%
Landry's Restaurants, Inc.,
7.5%, 12-15-14	1,000		970,000
NPC International, Inc.,
9.5%, 5-1-14	4,000		3,880,000
			4,850,000
Retail - Food Stores - 1.85%
Couche-Tard U.S. L.P. and Couche-Tard Financing Corp.,
7.5%, 12-15-13	1,005		1,012,538
Pantry, Inc. (The),
7.75%, 2-15-14	975		950,625
Rite Aid Corporation,
8.125%, 5-1-10	1,000		1,011,250
Stater Bros. Holdings Inc.,
8.125%, 6-15-12	1,000		1,007,500
			3,981,913
Retail - General Merchandise - 1.82%
Dollar General Corporation,
10.625%, 7-15-15 (D)	3,000		2,895,000
Intcomex, Inc.,
11.75%, 1-15-11	1,000		1,030,000
			3,925,000
Retail - Specialty Stores - 1.54%
Claire's Stores, Inc.:
9.25%, 6-1-15 (D)	750		712,500
9.625%, 6-1-15 (D)(F)	750		687,432
10.5%, 6-1-17 (D)	1,000		912,500
Nebraska Book Company, Inc.,
8.625%, 3-15-12	1,000		992,500
			3,304,932
Security and Commodity Brokers - 1.73%
Elan Finance public limited company and Elan       Finance Corp.:
7.75%, 11-15-11	1,250		1,251,563
8.875%, 12-1-13	800		836,000
Global Cash Access, L.L.C. and Global Cash       Access Finance Corporation,
8.75%, 3-15-12	1,564		1,622,650
			3,710,213
Steel - 0.27%
PNA Group, Inc.,
10.75%, 9-1-16 (D)	540		588,600
Timesharing and Software - 0.30%
iPayment, Inc.,
9.75%, 5-15-14	650		650,000
Trucking and Shipping - 0.36%
Quality Distribution, LLC and QD Capital Corporation,
9.0%, 11-15-10	800		776,000
Utilities - Electric - 1.01%
NRG Energy, Inc.:
7.25%, 2-1-14	750		751,875
7.375%, 2-1-16	750		751,875
Tenaska Alabama Partners, L.P.,
7.0%, 6-30-21 (D)	660		675,225
			2,178,975
Utilities - Gas and Pipeline - 0.31%
Copano Energy, L.L.C.,
8.125%, 3-1-16	650		659,750
Utilities - Telephone - 1.44%
MetroPCS Communications, Inc.,
9.25%, 11-1-14 (D)	2,250		2,323,125
MetroPCS Wireless, Inc.,
9.25%, 11-1-14 (A)	750		774,375
			3,097,500
TOTAL CORPORATE DEBT SECURITIES - 97.20%		$	209,094,596
(Cost: $207,068,083)

SHORT-TERM SECURITIES
Forest and Paper Products - 0.85%
Sonoco Products Co.,
5.52%, 7-2-07	$	1,824		1,823,720
Household - General Products - 0.93%
Clorox Co.,
5.4%, 7-2-07		2,000		1,999,700
TOTAL SHORT-TERM SECURITIES - 1.78%			$	3,823,420
(Cost: $3,823,420)
TOTAL INVESTMENT SECURITIES - 99.80%			$	214,675,331
(Cost: $212,218,262)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.20%				439,167
NET ASSETS - 100.00%			$	215,114,498

Notes to Schedule of Investments

Certain acronyms may be used within the body of the Portfolio's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.

*No dividends were paid during the preceding 12 months.

**Not shown due to rounding.

(A)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be illiquid under guidelines established by the Board of Directors. At June 30, 2007, the total value of these securities amounted to $774,375 or 0.36% of net assets.

(B)Security valued in good faith by management's valuation committee subject to the supervision of the Board of Directors.

(C)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2007.

(D)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be liquid under guidelines established by the Board of Directors. At June 30, 2007, the total value of these securities amounted to $44,768,714 or 20.81% of net assets.

(E)The security does not bear interest for an initial period of time and subsequently becomes interest bearing.

(F)Payment in kind bond.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      HIGH INCOME PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $212,218) (Notes 1 and 3)	$	214,675
Cash		579
Receivables:
Dividends and interest		3,712
Investment securities sold		1,267
Portfolio shares sold		52
Prepaid and other assets		4
Total assets		220,289
LIABILITIES
Payable for investment securities purchased		5,087
Payable to Portfolio shareholders		39
Accrued accounting services fee (Note 2)		7
Accrued management fee (Note 2)		7
Accrued shareholder servicing (Note 2)		5
Accrued service fee (Note 2)		3
Other		27
Total liabilities		5,175
Total net assets	$	215,114
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	62
Additional paid-in capital		236,786
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		8,238
Accumulated undistributed net realized loss on investment transactions	(32,429)
Net unrealized appreciation in value of investments		2,457
Net assets applicable to outstanding units of capital	$	215,114
Net asset value, redemption and offering price per share	$	3.4887
Capital shares outstanding		61,661
Capital shares authorized		120,000

See Notes to Financial Statements.

Statement of Operations
      HIGH INCOME PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                             (Unaudited)

INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	8,864
Dividends		64
Total income		8,928
Expenses (Note 2):
Investment management fee		656
Service fee		262
Accounting services fee		42
Audit fees		13
Shareholder servicing		6
Legal fees		4
Custodian fees		1
Other		26
Total		1,010
Less waiver of investment management fee (Notes 2 and 9)		(52	)
Total expenses		958
Net investment income		7,970
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		1,432
Unrealized depreciation in value of investments during the period		(325	)
Net gain on investments		1,107
Net increase in net assets resulting from operations	$	9,077

See Notes to Financial Statements.

Statement of Changes in Net Assets
      HIGH INCOME PORTFOLIO
      (In Thousands)
                                                                                                                                               (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
INCREASE IN NET ASSETS
Operations:
Net investment income		$	7,970		$	14,305
Realized net gain (loss) on investments			1,432			(1,102	)
Unrealized appreciation (depreciation)			(325	)		5,666
Net increase in net assets resulting                      from operations			9,077			18,869
Dividends to shareholders from (Note 1E): (1)
Net investment income			(–	)		(14,000	)
Realized gains on investment transactions			(–	)		(–	)
			(–	)		(14,000	)
Capital share transactions (2)			2,491			12,812
Total increase			11,568			17,681
NET ASSETS
Beginning of period			203,546			185,865
End of period		$	215,114		$	203,546
Undistributed net investment income		$	8,238		$	268
(1)See "Financial Highlights" on page 120.
(2) Shares issued from sale of shares			3,991			5,925
Shares issued from reinvestment of dividend       and/or capital gains distribution			–			4,194
Shares redeemed			(3,276	)		(6,324	)
Increase in outstanding capital shares			715			3,795
Value issued from sale of shares		$	13,819		$	20,200
Value issued from reinvestment of dividend       and/or capital gains distribution			–			14,000
Value redeemed			(11,328	)		(21,388	)
Increase in outstanding capital		$	2,491		$	12,812

See Notes to Financial Statements.

Financial Highlights
      HIGH INCOME PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:
                                                                                                                                               (Unaudited)

	For the six months ended				For the fiscal year ended December 31,
	6-30-07				2006			2005			2004			2003			2002
Net asset value,       beginning of period		$	3.3398		$	3.2521		$	3.4276		$	3.3375		$	2.9986		$	3.3261
Income (loss) from       investment operations:
Net investment income			0.1292			0.2518			0.2626			0.2391			0.2529			0.2602
Net realized and             unrealized gain             (loss) on             investments			0.0197			0.0827		(0.1749		)		0.0901			0.3389		(0.3275		)
Total from investment       operations			0.1489			0.3345			0.0877			0.3292			0.5918		(0.0673		)
Less distributions from:
Net investment income		(0.0000		)	(0.2468		)	(0.2632		)	(0.2391		)	(0.2529		)	(0.2602		)
Capital gains		(0.0000		)	(0.0000		)	(0.0000		)	(0.0000		)	(0.0000		)	(0.0000		)
Total distributions		(0.0000		)	(0.2468		)	(0.2632		)	(0.2391		)	(0.2529		)	(0.2602		)
Net asset value,       end of period		$	3.4887		$	3.3398		$	3.2521		$	3.4276		$	3.3375		$	2.9986
Total return			4.48	%		10.27	%		2.55	%		9.86	%		19.74	%		- -2.02	%
Net assets, end of period       (in millions)			$215			$204			$186			$190			$164			$128
Ratio of expenses to       average net assets       including expense       waiver			0.91	%(1)		0.94	%		0.95	%		0.96	%		0.95	%		0.95	%
Ratio of net investment       income to average       net assets including       expense waiver			7.59	%(1)		7.48	%		7.35	%		7.13	%		7.99	%		8.42	%
Ratio of expenses to       average net assets       excluding expense       waiver			0.96	%(1)		0.95	%		0.95	%(2)		0.96	%(2)		0.95	%(2)		0.95	%(2)
Ratio of net investment       income to average       net assets excluding       expense waiver			7.54	%(1)		7.47	%		7.35	%(2)		7.13	%(2)		7.99	%(2)		8.42	%(2)
Portfolio turnover rate			43	%		71	%		54	%		83	%		119	%		85	%

(1)Annualized.

(2)There was no waiver of expenses during the period.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF INTERNATIONAL GROWTH PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target International Growth Portfolio had net assets totaling $264,657,703 invested in a diversified portfolio of:

93.05%	Foreign Common Stocks
4.02%	Cash and Cash Equivalents
2.93%	Domestic Common Stocks

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007, your Portfolio was invested by geographic region and by industry, respectively, as follows:

Country Weightings

Europe	$	61.41
Germany	$	16.47
Switzerland	$	10.32
United Kingdom	$	10.08
France	$	10.02
Other Europe (1)	$	7.25
Greece	$	4.11
Italy	$	3.16
Pacific Basin	$	26.48
Japan	$	18.34
Other Pacific Basin (2)	$	4.94
China	$	3.20
North America	$	4.62
Cash and Cash Equivalents	$	4.02
Other (3)	$	3.47

(1)Includes $0.69 Austria, $0.90 Finland, $1.77 Ireland, $0.59 Netherlands, $1.68 Norway, $0.61 Russia and $1.01 Sweden.

(2)Includes $2.08 Australia, $0.12 India, $0.73 Singapore and $2.01 South Korea.

(3)Includes $2.49 Bahamas/Caribbean and $0.98 South America (Brazil).

Sector Weightings

Financial Services Stocks	$	20.04
Capital Goods Stocks	$	16.54
Consumer Nondurables Stocks	$	11.88
Raw Materials Stocks	$	8.24
Consumer Durables Stocks	$	7.96
Business Equipment and Services Stocks	$	5.69
Technology Stocks	$	4.91
Miscellaneous Stocks	$	4.87
Utilities Stocks	$	4.34
Energy Stocks	$	4.14
Cash and Cash Equivalents	$	4.02
Health Care Stocks	$	3.93
Retail Stocks	$	3.44

The Investments of International Growth Portfolio
June 30, 2007				(Unaudited)
COMMON STOCKS		Shares			Value
Australia - 2.08%
Boart Longyear Limited (A)(B)*	1,620,000			$	3,062,771
QBE Insurance Group Limited (A)			92,000		2,433,532
					5,496,303
Austria - 0.69%
Erste Bank der oesterreichischen Sparkassen AG (A)			23,200		1,814,929
Bermuda - 1.15%
Esprit Holdings Limited (A)			239,000		3,032,126
Brazil - 0.98%
Petroleo Brasileiro S.A. - Petrobras, ADR			21,500		2,607,305
Canada - 1.23%
Goldcorp Inc. (A)			60,000		1,424,454
Shoppers Drug Mart Corporation (A)(B)			39,700		1,838,815
					3,263,269
Cayman Islands - 1.34%
Agile Property Holdings Limited (A)	2,700,000				3,535,912
China - 3.20%
China Mobile Limited (A)			397,000		4,262,348
Qiao Xing Mobile Communication Co., Ltd.*			121,500		1,145,745
SINA Corporation*			73,000		3,053,955
					8,462,048
Finland - 0.90%
Fortum Oyj (A)			76,000		2,385,383
France - 10.02%
ALSTOM (A)*			8,800		1,479,510
L'Oreal (A)			12,300		1,461,650
LVMH Moet Hennessy - Louis Vuitton (A)			30,000		3,473,235
Pernod Ricard (A)			11,880		2,636,159
SUEZ (A)			31,000		1,782,757
Technip-Coflexip (A)			32,000		2,654,937
TOTAL S.A. (A)			52,000		4,241,077
VINCI (A)			91,000		6,833,160
Vallourec (A)			6,100		1,966,679
					26,529,164
Germany - 16.47%
Allianz Aktiengesellschaft, Registered Shares (A)			13,800		3,223,767
Bayer Aktiengesellschaft (A)			74,000		5,589,687
Commerzbank Aktiengesellschaft (A)			55,000		2,624,010
DaimlerChrysler AG, Registered Shares (A)			30,000		2,771,199
Deutsche Borse AG (A)			44,400		4,987,751
E.ON AG (A)			18,300		3,061,104
Fresenius AG (A)			30,600		2,332,533
Siemens AG (A)			73,400		10,535,386
Vossloh AG (A)			22,500		2,645,429
Wacker Chemie AG (A)			10,400		2,463,288
Wacker Construction Equipment AG (A)*			38,000		1,413,332
Wacker Construction Equipment AG (A)(B)*			52,500		1,952,629
					43,600,115
Greece - 4.11%
Alpha Bank (A)			70,000		2,207,485
Bank of Cyprus Limited (A)			225,000		3,812,682
National Bank of Greece S.A. (A)			45,000		2,582,392
Piraeus Bank S.A. (A)			62,500		2,289,030
					10,891,589
India - 0.12%
ICICI Bank Limited, ADR			6,400		314,560
Ireland - 1.77%
Anglo Irish Bank Corporation plc (Great Britain) (A)			61,600		1,258,929
CRH public limited company (A)			64,600		3,200,928
Irish Life & Permanent plc (A)			8,700		219,605
					4,679,462
Italy - 3.16%
Finmeccanica SpA (A)			50,000		1,544,969
Saipem S.p.A. (A)			76,200		2,615,459
UniCredito Italiano S.p.A. (A)			470,000		4,217,500
					8,377,928
Japan - 18.34%
Astellas Pharma Inc. (A)			29,500		1,284,223
Bank of Yokohama, Ltd. (The) (A)			150,000		1,052,589
Canon Inc. (A)			70,500		4,139,817
Daiwa Securities Group Inc. (A)			113,000		1,205,027
DENSO CORPORATION (A)			29,000		1,135,269
Hokuhoku Financial Group, Inc. (A)*			410,000		1,328,650
Hoya Corporation (A)			89,000		2,956,426
Japan Tobacco Inc. (A)			600		2,962,843
Kabushiki Kaisha Mitsubishi Tokyo Financial Group (A)			150		1,656,853
Kirin Brewery Company, Limited (A)			150,000		2,245,279
Kurita Water Industries Ltd. (A)			60,000		1,885,888
Makita Corporation (A)			72,000		3,204,548
Mitsubishi Estate Co., Ltd. (A)			103,000		2,802,437
Nintendo Co., Ltd. (A)			12,200		4,468,792
ORIX Corporation (A)			12,000		3,162,640
SUMCO Corporation (A)			68,000		3,418,640
Shin-Etsu Chemical Co., Ltd. (A)			43,500		3,112,569
Toyota Motor Corporation (A)			77,900		4,934,985
YAMADA-DENKI Co., Ltd. (A)*			15,000		1,569,137
					48,526,612
Mexico - 0.46%
Grupo Televisa, S.A., GDR			44,000		1,214,840
Netherlands - 0.59%
Royal Numico N.V. (A)			30,000		1,564,458
Norway - 1.68%
Aker Kvaerner ASA (A)			76,500		1,945,921
Statoil ASA (A)			80,000		2,489,423
					4,435,344
Russia - 0.61%
OAO LUKOIL, ADR			21,100		1,607,820
Singapore - 0.73%
Singapore Exchange Limited (A)			300,000		1,920,627
South Korea - 2.01%
Kookmin Bank (A)			30,000		2,633,544
Samsung Electronics Co., Ltd. (A)			4,400		2,695,676
					5,329,220
Sweden - 1.01%
H & M Hennes & Mauritz AB (A)			45,000		2,674,655
Switzerland - 10.32%
ABB Ltd (A)			76,000		1,729,677
Compagnie Financiere Richemont SA (A)			44,400		2,671,633
Holcim Ltd, Registered Shares (A)			28,900		3,141,973
Nestle S.A., Registered Shares (A)			13,500		5,150,225
Nobel Biocare Holding AG (A)			4,600		1,508,228
Roche Holdings AG, Genussschein (A)			29,700		5,285,944
SGS SA (A)			1,180		1,402,669
Swatch Group Ltd (The), Bearer Shares (A)			4,500		1,285,714
UBS AG (A)			40,000		2,410,151
Zurich Financial Services, Registered Shares (A)			8,800		2,732,214
					27,318,428
United Kingdom - 10.08%
BAE Systems plc (A)			290,000		2,358,528
BHP Billiton Plc (A)			150,000		4,186,915
British American Tobacco p.l.c. (A)			145,500		4,961,223
Diageo plc (A)			87,000		1,811,699
IG Group Holdings plc (A)(B)			258,000		1,532,260
Informa plc (A)			168,000		1,880,798
Intertek Group plc (A)			152,000		3,003,494
Reckitt Benckiser plc (A)			85,500		4,695,821
Safestore Holdings Limited (A)(B)*			215,000		824,632
Standard Chartered PLC (A)			43,500		1,423,852
					26,679,222
United States - 2.93%
Research In Motion Limited*			38,800		7,762,910
TOTAL COMMON STOCKS - 95.98%				$	254,024,229
(Cost: $190,786,349)

SHORT-TERM SECURITIES	Principal Amount in Thousands
Security and Commodity Brokers
UBS Finance Delaware LLC (UBS AG):
5.35%, 7-2-07	$	9,263		9,261,624
5.45%, 7-2-07		5,053		5,052,235
TOTAL SHORT-TERM SECURITIES - 5.41%			$	14,313,859
(Cost: $14,313,859)
TOTAL INVESTMENT SECURITIES - 101.39%			$	268,338,088
(Cost: $205,100,208)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (1.39%)				(3,680,385	)
NET ASSETS - 100.00%			$	264,657,703

Notes to Schedule of Investments

Certain acronyms may be used within the body of the Portfolio's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.

*No dividends were paid during the preceding 12 months.

(A)Listed on an exchange outside the United States.

(B)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be liquid under guidelines established by the Board of Directors. At June 30, 2007, the total value of these securities amounted to $9,211,107 or 3.48% of net assets.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      INTERNATIONAL GROWTH PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $205,100) (Notes 1 and 3)	$	268,338
Cash		61
Receivables:
Investment securities sold		2,794
Dividends and interest		651
Portfolio shares sold		29
Prepaid and other assets		4
Total assets		271,877
LIABILITIES
Payable for investment securities purchased		7,072
Payable to Portfolio shareholders		66
Accrued management fee (Note 2)		12
Accrued accounting services fee (Note 2)		7
Accrued shareholder servicing (Note 2)		6
Accrued service fee (Note 2)		4
Other		52
Total liabilities		7,219
Total net assets	$	264,658
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	26
Additional paid-in capital		202,114
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(130	)
Accumulated undistributed net realized loss on investment transactions		(615	)
Net unrealized appreciation in value of investments		63,263
Net assets applicable to outstanding units of capital	$	264,658
Net asset value, redemption and offering price per share	$	10.1149
Capital shares outstanding		26,165
Capital shares authorized		60,000

See Notes to Financial Statements.

Statement of Operations
      INTERNATIONAL GROWTH PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                             (Unaudited)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $342)	$	2,944
Interest and amortization		204
Total income		3,148
Expenses (Note 2):
Investment management fee		1,065
Service fee		313
Custodian fees		47
Accounting services fee		44
Audit fees		15
Shareholder servicing		7
Legal fees		4
Other		32
Total		1,527
Less waiver of investment management fee (Notes 2 and 9)		(38	)
Total expenses		1,489
Net investment income		1,659
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		21,000
Realized net gain on foreign currency exchange transactions		2
Realized net gain on investments		21,002
Unrealized appreciation in value of investments during the period		3,235
Net gain on investments		24,237
Net increase in net assets resulting from operations	$	25,896

See Notes to Financial Statements.

Statement of Changes in Net Assets
      INTERNATIONAL GROWTH PORTFOLIO
      (In Thousands)                                                                                                               (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
INCREASE IN NET ASSETS
Operations:
Net investment income		$	1,659		$	1,817
Realized net gain on investments			21,002			32,145
Unrealized appreciation			3,235			8,902
Net increase in net assets resulting                      from operations			25,896			42,864
Dividends to shareholders from (Note 1E): (1)
Net investment income			(–	)		(1,400	)
Realized gains on investment transactions			(–	)		(–	)
			(–	)		(1,400	)
Capital share transactions (2)			(6,422	)		(2,173	)
Total increase			19,474			39,291
NET ASSETS
Beginning of period			245,184			205,893
End of period		$	264,658		$	245,184
Undistributed net investment loss		$	(130	)	$	(1,791	)
(1)See "Financial Highlights" on page 131.
(2) Shares issued from sale of shares			1,142			2,849
Shares issued from reinvestment of dividend       and/or capital gains distribution			–			153
Shares redeemed			(1,816	)		(3,274	)
Decrease in outstanding capital shares			(674	)		(272	)
Value issued from sale of shares		$	10,859		$	23,479
Value issued from reinvestment of dividend       and/or capital gains distribution			–			1,400
Value redeemed			(17,281	)		(27,052	)
Decrease in outstanding capital		$	(6,422	)	$	(2,173	)

See Notes to Financial Statements.

Financial Highlights
      INTERNATIONAL GROWTH PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended December 31,
	6-30-07				2006			2005			2004			2003			2002
Net asset value,       beginning of period		$	9.1353		$	7.5943		$	6.6534		$	5.8722		$	4.7683		$	5.8536
Income (loss) from       investment operations:
Net investment income			0.0614			0.0672			0.0493			0.0367			0.0833			0.0227
Net realized and             unrealized gain (loss)             on investments			0.9182			1.5263			1.0465			0.7853			1.1039		(1.0853		)
Total from investment       operations			0.9796			1.5935			1.0958			0.8220			1.1872		(1.0626		)
Less distributions from:
Net investment income			(0.0000	)	(0.0525		)	(0.1549		)	(0.0408		)	(0.0833		)	(0.0227		)
Capital gains			(0.0000	)	(0.0000		)	(0.0000		)	(0.0000		)	(0.0000		)	(0.0000		)
Total distributions			(0.0000	)	(0.0525		)	(0.1549		)	(0.0408		)	(0.0833		)	(0.0227		)
Net asset value,       end of period		$	10.1149		$	9.1353		$	7.5943		$	6.6534		$	5.8722		$	4.7683
Total return			10.72	%		20.99	%		16.47	%		14.00	%		24.90	%		- -18.15	%
Net assets, end of period       (in millions)			$265			$245			$206			$187			$170			$139
Ratio of expenses to average       net assets including       expense waiver			1.19	%(1)		1.20	%		1.21	%		1.20	%		1.24	%		1.30	%
Ratio of net investment       income to average       net assets including       expense waiver			1.32	%(1)		0.81	%		0.67	%		0.59	%		1.70	%		0.41	%
Ratio of expenses to average       net assets excluding       expense waiver			1.22	%(1)		1.21	%		1.21	%(2)		1.20	%(2)		1.24	%(2)		1.30	%(2)
Ratio of net investment       income to average       net assets excluding       expense waiver			1.29	%(1)		0.80	%		0.67	%(2)		0.59	%(2)		1.70	%(2)		0.41	%(2)
Portfolio turnover rate			53	%		96	%		86	%		81	%		131	%		116	%

(1)Annualized.

(2)There was no waiver of expenses during the period.

See Notes to Financial Statements.

SUMMARY OF INTERNATIONAL VALUE PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target International Value Portfolio had net assets totaling $636,683,354 invested in a diversified portfolio of:

96.99%	Foreign Common Stocks
3.01%	Cash and Cash Equivalents

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007, your Portfolio was invested by geographic region and by industry, respectively, as follows:

Country Weightings

Europe	$	68.94
United Kingdom	$	29.62
Other Europe (1)	$	13.43
France	$	9.59
Netherlands	$	6.83
Germany	$	5.38
Switzerland	$	4.09
Pacific Basin	$	23.79
Taiwan	$	5.42
South Korea	$	5.37
Japan	$	5.16
Singapore	$	4.01
Other Pacific Basin (2)	$	3.83
Other (3)	$	4.26
Cash and Cash Equivalents	$	3.01

(1)Includes $0.46 Austria, $0.78 Belgium, $0.47 Denmark, $2.33 Finland, $2.83 Italy, $2.69 Norway, $2.98 Spain and $0.89 Sweden.

(2)Includes $1.36 Australia, $0.98 China and $1.49 Hong Kong (Thailand not shown due to rounding).

(3)Includes $0.94 Canada, $1.73 Cayman Islands and $1.59 Israel.

Sector Weightings

Financial Services Stocks	$	23.51
Utilities Stocks	$	16.35
Technology Stocks	$	10.73
Energy Stocks	$	7.56
Consumer Services Stocks	$	6.04
Health Care Stocks	$	5.72
Consumer Durables Stocks	$	5.46
Business Equipment and Services Stocks	$	4.69
Retail Stocks	$	3.72
Miscellaneous Stocks	$	3.66
Consumer Nondurables Stocks	$	3.44
Shelter Stocks	$	3.35
Cash and Cash Equivalents	$	3.01
Capital Goods Stocks	$	2.76

The Investments of International Value Portfolio
June 30, 2007			(Unaudited)
COMMON STOCKS		Shares		Value
Australia - 1.36%
National Australia Bank Limited (A)		249,043	$	8,660,933
Austria - 0.46%
Telekom Austria Aktiengesellschaft (A)		117,390		2,939,318
Belgium - 0.78%
Belgacom SA (A)		111,330		4,949,842
Canada - 0.94%
Barrick Gold Corporation (A)		206,300		5,999,694
Cayman Islands - 1.73%
ACE Limited		83,770		5,237,300
XL Capital Ltd, Class A		68,390		5,764,593
				11,001,893
China - 0.98%
China Telecom Corporation Limited (A)	7,374,000			4,338,091
China Telecom Corporation Limited (A)(B)	3,240,000			1,906,077
				6,244,168
Denmark - 0.47%
Vestas Wind Systems A/S (A)*		44,861		2,969,824
Finland - 2.33%
Stora Enso Oyj, Class R (A)		340,690		6,446,297
Stora Enso Oyj, Class R (A)		71,073		1,322,383
UPM-Kymmene Corporation (A)		286,300		7,091,142
				14,859,822
France - 9.59%
AXA S.A. (A)		333,933		14,467,342
France Telecom (A)		577,809		15,953,581
Sanofi-Aventis (A)		161,600		13,144,969
THOMSON (A)		485,110		9,277,396
TOTAL S.A. (A)		101,088		8,244,654
				61,087,942
Germany - 5.38%
Bayerische Motoren Werke Aktiengesellschaft (A)		72,100		4,650,857
Deutsche Post AG (A)		241,000		7,808,811
E.ON AG (A)		33,900		5,670,571
Munchener Ruckversicherungs-Gesellschaft Aktiengesellschaft,       Registered Shares (A)		40,980		7,526,543
Siemens AG (A)		59,900		8,597,679
				34,254,461
Hong Kong - 1.49%
Hutchison Whampoa Limited, Ordinary Shares (A)		955,100		9,484,796
Israel - 1.59%
Check Point Software Technologies Ltd.*		442,720		10,102,870
Italy - 2.83%
Eni S.p.A. (A)		257,739		9,383,744
Mediaset S.p.A. (A)		833,528		8,635,930
				18,019,674
Japan - 5.16%
AIFUL Corporation (A)		89,800		2,581,864
Kabushiki Kaisha Mitsubishi Tokyo Financial Group (A)		394		4,352,000
Konica Minolta Holdings, Inc. (A)		363,000		5,362,818
Nissan Motor Co., Ltd. (A)		285,200		3,059,892
Promise Co., Ltd. (A)*		96,150		2,967,472
Sony Corporation (A)		179,200		9,212,881
Takeda Pharmaceutical Company Limited (A)		82,200		5,314,209
				32,851,136
Netherlands - 6.83%
ING Groep N.V., Certicaaten Van Aandelen (A)		334,484		14,844,326
Koninklijke Philips Electronics N.V., Ordinary Shares (A)		200,550		8,566,499
Reed Elsevier NV (A)		564,310		10,799,680
Vedior N.V. (A)		307,890		9,255,244
				43,465,749
Norway - 2.69%
Norske Skogindustrier ASA (A)		448,441		6,479,144
Telenor ASA (A)		541,050		10,620,157
				17,099,301
Singapore - 4.01%
DBS Group Holdings Ltd (A)		300,000		4,468,398
Flextronics International Ltd.*		559,100		6,046,667
Singapore Telecommunications Limited (A)	3,411,000			7,576,286
Venture Corporation Limited (A)		724,000		7,425,641
				25,516,992
South Korea - 5.37%
KT Corporation, ADR		329,160		7,722,094
Kookmin Bank, ADR		73,760		6,470,227
SK Telecom Co., Ltd., ADR		184,530		5,046,896
Samsung Electronics Co., Ltd., GDR (B)		48,290		14,945,755
				34,184,972
Spain - 2.98%
Gamesa Corporacion Tecnologica, S.A. (A)		164,181		5,999,712
Repsol YPF, S.A. (A)		167,139		6,616,791
Telefonica, S.A., ADR		95,274		6,360,492
				18,976,995
Sweden - 0.89%
Securitas AB, Class B (A)		172,280		2,745,719
Securitas Systems AB, Class B (A)		856,640		2,930,953
				5,676,672
Switzerland - 4.09%
Nestle S.A., Registered Shares (A)		21,620		8,247,990
Novartis AG, Registered Shares (A)		111,420		6,293,885
Swiss Reinsurance Company, Registered Shares (A)		66,770		6,116,711
UBS AG (A)		88,800		5,350,536
				26,009,122
Taiwan - 5.42%
Chunghwa Telecom Co., Ltd., ADR		355,848		6,711,293
Compal Electronics Inc., GDR		452,309		2,442,785
Compal Electronics Inc., GDR (B)		528,412		2,853,795
Lite-On Technology Corporation (A)		1,383,000		1,782,086
Lite-On Technology Corporation, GDR		768,928		9,908,182
Mega Financial Holding Company (A)	15,986,000			10,822,385
				34,520,526
Thailand - 0.00%
Advanced Info Service Public Company Limited (A)		3,000		7,516
United Kingdom - 29.62%
Aviva plc (A)		714,530		10,668,160
BAE Systems plc (A)		649,760		5,284,405
BP p.l.c. (A)		1,189,790		14,407,072
British Sky Broadcasting Group plc (A)		919,890		11,822,354
Centrica plc (A)		1,015,750		7,924,392
Compass Group PLC (A)		1,749,720		12,148,393
Fiberweb plc (A)		135,665		429,759
GlaxoSmithKline plc (A)		445,620		11,677,861
Group 4 Securicor plc (A)		1,930,840		8,200,584
HSBC Holdings plc (A)		545,140		10,016,529
INVESCO PLC (A)		340,700		4,423,120
Kingfisher plc (A)		1,319,310		6,000,717
Old Mutual plc (A)		3,098,150		10,508,003
Pearson plc (A)		425,050		7,195,412
Rentokil Initial plc (A)		2,082,700		6,712,586
Rolls-Royce Group plc (A)		695,160		7,517,243
Royal Bank of Scotland Group plc (The) (A)		1,133,240		14,405,015
Royal Dutch Shell plc, Class B (A)		226,693		9,482,339
tesco plc (A)		657,030		5,521,649
Unilever PLC (A)		241,385		7,828,346
Vodafone Group Plc (A)		4,877,865		16,436,518
				188,610,457
TOTAL COMMON STOCKS - 96.99%			$	617,494,675
(Cost: $438,071,041)

SHORT-TERM SECURITIES	Principal Amount in Thousands
Finance Companies - 1.86%
ED&F Man Treasury Management PLC       (Societe Generale N.A.),
5.4%, 7-2-07	$	6,830		6,828,976
PACCAR Financial Corp.,
5.24%, 7-31-07		5,023		5,001,066
				11,830,042
Retail - General Merchandise - 0.31%
Target Corporation,
5.27%, 7-2-07		2,000		1,999,707
TOTAL SHORT-TERM SECURITIES - 2.17%			$	13,829,749
(Cost: $13,829,749)
TOTAL INVESTMENT SECURITIES - 99.16%			$	631,324,424
(Cost: $451,900,790)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.84%				5,358,930
NET ASSETS - 100.00%			$	636,683,354

Notes to Schedule of Investments

Certain acronyms may be used within the body of the Fund's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.

*No income dividends were paid during the preceding 12 months.

(A)Listed on an exchange outside the United States.

(B)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be illiquid under guidelines established by the Board of Directors. At June 30, 2007, the total value of these securities amounted to $19,705,627 or 3.10% of net assets.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      INTERNATIONAL VALUE PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $451,901) (Notes 1 and 3)	$	631,324
Cash		12
Cash denominated in foreign currencies (cost - $3,396)		3,428
Receivables:
Dividends and interest		2,347
Portfolio shares sold		323
Prepaid and other assets		8
Total assets		637,442
LIABILITIES
Payable to Portfolio shareholders		379
Payable for investment securities purchased		233
Accrued management fee (Note 2)		30
Accrued shareholder servicing (Note 2)		15
Accrued accounting services fee (Note 2)		13
Accrued service fee (Note 2)		9
Other		80
Total liabilities		759
Total net assets	$	636,683
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	26
Additional paid-in capital		405,709
Accumulated undistributed income:
Accumulated undistributed net investment income		9,037
Accumulated undistributed net realized gain on investment transactions		42,376
Net unrealized appreciation in value of investments		179,535
Net assets applicable to outstanding units of capital	$	636,683
Net asset value, redemption and offering price per share	$	24.7480
Capital shares outstanding		25,727
Capital shares authorized		60,000

See Notes to Financial Statements.

Statement of Operations
      INTERNATIONAL VALUE PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                             (Unaudited)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $1,147)	$	11,327
Interest and amortization		492
Total income		11,819
Expenses (Note 2):
Investment management fee		2,572
Service fee		757
Accounting services fee		79
Custodian fees		62
Shareholder servicing		17
Audit fees		16
Legal fees		12
Other		61
Total expenses		3,576
Net investment income		8,243
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		31,417
Realized net gain on foreign currency exchange transactions		44
Realized net gain on investments		31,461
Unrealized appreciation in value of securities during the period		11,069
Unrealized depreciation in value of foreign currency exchange                 transactions during the period		(20	)
Unrealized appreciation in value of investments during the period		11,049
Net gain on investments		42,510
Net increase in net assets resulting from operations	$	50,753

See Notes to Financial Statements.

Statement of Changes in Net Assets
      INTERNATIONAL VALUE PORTFOLIO
      (In Thousands)                                                                                                                (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
INCREASE IN NET ASSETS
Operations:
Net investment income		$	8,243		$	10,926
Realized net gain on investments			31,461			50,792
Unrealized appreciation			11,049			73,226
Net increase in net assets resulting                      from operations			50,753			134,944
Dividends to shareholders from (Note 1E): (1)
Net investment income			(–	)		(9,700	)
Realized gains on investment transactions			(–	)		(39,274	)
			(–	)		(48,974	)
Capital share transactions (2)			(2,581	)		39,704
Total increase			48,172			125,674
NET ASSETS
Beginning of period			588,511			462,837
End of period		$	636,683		$	588,511
Undistributed net investment income		$	9,037		$	750
(1)See "Financial Highlights" on page 142.
(2) Shares issued from sale of shares			1,197			2,164
Shares issued from reinvestment of dividend       and/or capital gains distribution			–			2,150
Shares redeemed			(1,305	)		(2,621	)
Increase (decrease) in outstanding capital shares			(108	)		1,693
Value issued from sale of shares		$	28,271		$	46,839
Value issued from reinvestment of dividend       and/or capital gains distribution			–			48,974
Value redeemed			(30,852	)		(56,109	)
Increase (decrease) in outstanding capital		$	(2,581	)	$	39,704

See Notes to Financial Statements.

Financial Highlights
      INTERNATIONAL VALUE PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended December 31,
	6-30-07				2006			2005			2004			2003			2002
Net asset value,       beginning of period		$	22.7794		$	19.1711		$	19.1681		$	15.8947		$	11.0000		$	13.4000
Income (loss) from       investment operations:
Net investment             income			0.3203			0.4593			0.3199			0.2759			0.2558			0.2000
Net realized and             unrealized gain             (loss) on             investments			1.6483			5.2176			1.8192			3.3285			4.8829			(2.6000	)
Total from investment       operations			1.9686			5.6769			2.1391			3.6044			5.1387			(2.4000	)
Less distributions from:
Net investment             income			(0.0000	)		(0.4097	)		(0.4226	)		(0.1850	)		(0.2440	)		(0.0000	)
Capital gains			(0.0000	)		(1.6589	)		(1.7135	)		(0.1460	)		(0.0000	)		(0.0000	)
Total distributions			(0.0000	)		(2.0686	)		(2.1361	)		(0.3310	)		(0.2440	)		(0.0000	)
Net asset value,       end of period		$	24.7480		$	22.7794		$	19.1711		$	19.1681		$	15.8947		$	11.0000
Total return			8.64	%		29.61	%		11.16	%		22.68	%		46.85	%		- -17.82	%
Net assets, end of period       (in millions)			$637			$589			$463			$401			$324			$223
Ratio of expenses to       average net assets			1.18	%(1)		1.18	%		1.19	%		1.19	%		1.07	%		0.99	%
Ratio of net investment       income to average       net assets			2.72	%(1)		2.13	%		1.63	%		1.65	%		2.03	%		1.87	%
Portfolio turnover rate			12	%		29	%		23	%		31	%		35	%		33	%

(1)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF LIMITED-TERM BOND PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target Limited-Term Bond Portfolio had net assets totaling $65,164,963 invested in a diversified portfolio of:

76.49%	United States Government and Government Agency Obligations
18.37%	Corporate Debt Securities
5.14%	Cash and Cash Equivalents

Sector Weightings

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007,
your Portfolio owned:

United States Government       Mortgage-Backed Obligations	$	29.57
United States Government Agency Obligations	$	25.03
United States Government Treasury Obligations	$	21.89
Miscellaneous Bonds	$	8.38
Business Equipment and Services Bonds	$	5.33
Cash and Cash Equivalents	$	5.14
Technology Bonds	$	4.66

Quality Weightings

On June 30, 2007, the breakdown of bonds (by ratings) held by the Portfolio was as follows:

AAA	76.49	%
AA	2.27	%
A	3.87	%
BBB	12.23	%
Cash and Cash Equivalents	5.14	%

Ratings reflected in the wheel are taken from Standard & Poor's.

Certain U.S. government securities in which the Portfolio may invest, such as Treasury securities and securities issued by the Government National Mortgage Association (Ginnie Mae), are backed by the full faith and credit of the U.S. government. However, other U.S. government securities in which the Portfolio may invest, such as securities issued by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Banks (FHLB), are not backed by the full faith and credit of the U.S. government, are not insured or guaranteed by the U.S. government and, instead, may be supported only by the right of the issuer to borrow from the U.S. Treasury or by the credit of the issuer.

The Investments of Limited-Term Bond Portfolio
June 30, 2007                                                                                                                  (Unaudited)
CORPORATE DEBT SECURITIES	Principal Amount in Thousands			Value
Aircraft - 3.12%
Raytheon Company,
6.75%, 8-15-07	$	2,030	$	2,032,637
Broadcasting - 2.25%
Cox Communications, Inc.,
4.625%, 1-15-10		1,500		1,465,114
Business Equipment and Services - 2.27%
International Lease Finance Corporation,
5.0%, 4-15-10		1,500		1,482,312
Communications Equipment - 1.54%
Cisco Systems, Inc.,
5.44%, 2-20-09 (A)		1,000		1,001,716
Forest and Paper Products - 2.25%
International Paper Company,
4.25%, 1-15-09		1,500		1,469,925
Mining - 1.56%
BHP Billiton Finance (USA) Limited,
5.0%, 12-15-10		1,030		1,015,634
Railroad - 1.55%
CSX Corporation,
6.25%, 10-15-08		1,000		1,008,093
Timesharing and Software - 3.06%
Equifax Inc.,
4.95%, 11-1-07		2,000		1,996,170
Utilities - Telephone - 0.77%
SBC Communications Inc.,
5.57%, 11-14-08 (A)		500		501,493
TOTAL CORPORATE DEBT SECURITIES - 18.37%			$	11,973,094
(Cost: $12,025,981)

UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS
Agency Obligations - 25.03%
Federal Agricultural Mortgage Corporation Guaranteed       Notes Trust 2006-1,
4.875%, 1-14-11	6,000			5,902,200
Federal Home Loan Bank,
5.0%, 2-29-08	2,000			1,995,148
Federal Home Loan Mortgage Corporation:
3.625%, 9-15-08	2,000			1,961,962
5.0%, 10-18-10	2,500			2,480,375
5.375%, 1-9-14	2,000			1,973,936
Federal National Mortgage Association,
4.25%, 7-15-07	2,000			1,999,124
				16,312,745
Mortgage-Backed Obligations - 29.57%
Federal Home Loan Mortgage Corporation Agency       REMIC/CMO:
4.0%, 5-15-16	1,289			1,247,289
3.5%, 12-15-16	690			658,228
5.5%, 10-15-23	2,304			100,030
5.0%, 6-15-24	1,786			120,358
5.0%, 11-15-24	860			853,730
4.25%, 3-15-31	806			770,673
5.5%, 5-15-34	829			824,937
Federal Home Loan Mortgage Corporation Fixed       Rate Participation Certificates:
7.0%, 8-1-07	-	*		354
4.5%, 5-1-10	765			754,467
4.0%, 6-1-14	1,186			1,137,227
5.5%, 1-1-17	91			89,481
5.5%, 5-1-17	96			94,988
4.5%, 1-1-18	1,025			976,788
4.5%, 4-1-18	1,031			982,429
4.5%, 3-1-19	1,356			1,290,379
5.5%, 6-1-22	1,000			984,860
Federal Home Loan Mortgage Corporation Non-Agency       REMIC/CMO,
5.5%, 3-15-31	530			526,087
Federal National Mortgage Association Agency       REMIC/CMO:
5.0%, 6-25-22	1,562			1,540,631
5.5%, 11-25-36 (Interest Only)	5,185			1,391,257
Federal National Mortgage Association Fixed Rate       Pass-Through Certificates:
6.0%, 11-1-13	9			9,509
7.0%, 10-1-14	11			10,883
6.0%, 3-1-16	34			34,310
6.0%, 3-1-16	31			31,358
5.5%, 2-1-17	339			334,775
5.5%, 1-1-18	539			532,560
5.0%, 3-1-18	955			926,008
5.0%, 6-1-20	1,008			975,208
Government National Mortgage Association Fixed       Rate Pass-Through Certificates:
6.5%, 1-15-14	12			11,862
7.5%, 3-15-15	13			13,508
6.0%, 8-15-16	43			43,153
6.0%, 12-15-16	104			104,929
5.5%, 1-15-17	137			135,349
6.0%, 1-15-17	84			84,506
5.5%, 7-15-17	200			197,805
5.5%, 10-15-17	126			124,542
5.0%, 12-15-17	696			675,774
7.0%, 6-15-28	15			15,596
7.0%, 7-15-29	23			24,482
4.75%, 1-20-34 (A)	535			533,760
Government National Mortgage Association       Non-Agency REMIC/CMO,
4.0%, 1-16-30	111			102,853
				19,266,923
Treasury Inflation Protected Obligation - 0.90%
United States Treasury Notes,
3.0%, 7-15-12 (B)	500			585,901
Treasury Obligations - 20.99%
United States Treasury Notes:
5.0%, 2-15-11	1,000			1,004,531
5.0%, 8-15-11	3,000			3,013,125
4.375%, 8-15-12	4,750			4,642,755
4.25%, 8-15-13	5,200			5,020,844
				13,681,255
TOTAL UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS - 76.49%			$	49,846,824
(Cost: $50,728,745)

SHORT-TERM SECURITIES - 3.90%
Forest and Paper Products
Sonoco Products Co.,
5.52%, 7-2-07	2,538	$	2,537,611
(Cost: $2,537,611)
TOTAL INVESTMENT SECURITIES - 98.76%		$	64,357,529
(Cost: $65,292,337)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.24%			807,434
NET ASSETS - 100.00%		$	65,164,963

Notes to Schedule of Investments

Certain acronyms may be used within the body of the Portfolio's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.

*Not shown due to rounding.

(A)Variable rate security. Interest rate disclosed is that which is in effect June 30, 2007.

(B)The interest rate for this security is a stated rate, but the interest payments are determined by multiplying the inflation-adjusted principal by one half of the stated rate for each semiannual interest payment date.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      LIMITED-TERM BOND PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $65,292) (Notes 1 and 3)	$	64,358
Cash		1
Receivables:
Dividends and interest		834
Portfolio shares sold		2
Prepaid and other assets		1
Total assets		65,196
LIABILITIES
Payable to Portfolio shareholders		12
Accrued accounting services fee (Note 2)		4
Accrued management fee (Note 2)		2
Accrued shareholder servicing (Note 2)		2
Accrued service fee (Note 2)		1
Other		10
Total liabilities		31
Total net assets	$	65,165
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	12
Additional paid-in capital		65,199
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		1,449
Accumulated undistributed net realized loss on investment transactions		(560	)
Net unrealized depreciation in value of investments		(935	)
Net assets applicable to outstanding units of capital	$	65,165
Net asset value, redemption and offering price per share	$	5.5634
Capital shares outstanding		11,713
Capital shares authorized		40,000

See Notes to Financial Statements.

Statement of Operations
      LIMITED-TERM BOND PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                             (Unaudited)

INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	1,650
Expenses (Note 2):
Investment management fee		168
Service fee		84
Accounting services fee		21
Audit fees		11
Legal fees		4
Custodian fees		3
Shareholder servicing		2
Other		11
Total		304
Less waiver of investment management fee (Notes 2 and 9)		(15	)
Total expenses		289
Net investment income		1,361
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on investments		(183	)
Unrealized depreciation in value of investments during the period		(200	)
Net loss on investments		(383	)
Net increase in net assets resulting from operations	$	978

See Notes to Financial Statements.

Statement of Changes in Net Assets
      LIMITED-TERM BOND PORTFOLIO
      (In Thousands)                                                                                                                (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
DECREASE IN NET ASSETS
Operations:
Net investment income		$	1,361		$	2,590
Realized net gain (loss) on investments			(183	)		69
Unrealized appreciation (depreciation)			(200	)		127
Net increase in net assets resulting                      from operations			978			2,786
Dividends to shareholders from (Note 1E): (1)
Net investment income			(–	)		(2,500	)
Realized gains on investment transactions			(–	)		(–	)
			(–	)		(2,500	)
Capital share transactions (2)			(5,534	)		(5,618	)
Total decrease			(4,556	)		(5,332	)
NET ASSETS
Beginning of period			69,721			75,053
End of period		$	65,165		$	69,721
Undistributed net investment income		$	1,449		$	88
(1)See "Financial Highlights" on page 151.
(2)Shares issued from sale of shares			268			1,210
Shares issued from reinvestment of dividend       and/or capital gains distribution			–			456
Shares redeemed			(1,267	)		(2,672	)
Decrease in outstanding capital shares			(999	)		(1,006	)
Value issued from sale of shares		$	1,484		$	6,700
Value issued from reinvestment of dividend       and/or capital gains distribution			–			2,500
Value redeemed			(7,018	)	(14,818		)
Decrease in outstanding capital		$	(5,534	)	$	(5,618	)

See Notes to Financial Statements.

Financial Highlights
      LIMITED-TERM BOND PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended December 31,
	6-30-07				2006			2005			2004			2003			2002
Net asset value,       beginning of period		$	5.4845		$	5.4710		$	5.5593		$	5.6245		$	5.6068		$	5.4437
Income (loss) from       investment operations:
Net investment income			0.1168			0.2110			0.1823			0.1559			0.1594			0.1327
Net realized and             unrealized gain             (loss) on             investments		(0.0379		)		0.0064		(0.0881		)	(0.0651		)		0.0176			0.1631
Total from investment       operations			0.0789			0.2174			0.0942			0.0908			0.1770			0.2958
Less distributions from:
Net investment income		(0.0000		)	(0.2039		)	(0.1825		)	(0.1560		)	(0.1593		)	(0.1327		)
Capital gains		(0.0000		)	(0.0000		)	(0.0000		)	(0.0000		)	(0.0000		)	(0.0000		)
Total distributions		(0.0000		)	(0.2039		)	(0.1825		)	(0.1560		)	(0.1593		)	(0.1327		)
Net asset value,       end of period		$	5.5634		$	5.4845		$	5.4710		$	5.5593		$	5.6245		$	5.6068
Total return			1.45	%		3.96	%		1.68	%		1.61	%		3.16	%		5.43	%
Net assets, end of period       (in millions)			$65			$70			$75			$79			$74			$47
Ratio of expenses to       average net assets       including expense       waiver			0.86	%(1)		0.85	%		0.87	%		0.87	%		0.84	%		0.69	%
Ratio of net investment       income to average       net assets including       expense waiver			4.06	%(1)		3.60	%		3.16	%		2.85	%		2.91	%		3.97	%
Ratio of expenses to       average net assets       excluding expense       waiver			0.91	%(1)		0.86	%		0.87	%(2)		0.87	%(2)		0.84	%(2)		0.87	%
Ratio of net investment       income to average       net assets excluding       expense waiver			4.01	%(1)		3.59	%		3.16	%(2)		2.85	%(2)		2.91	%(2)		3.79	%
Portfolio turnover rate			41	%		24	%		39	%		39	%		41	%		27	%

(1)Annualized.

(2)There was no waiver of expenses during the period.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF MICRO CAP GROWTH PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target Micro Cap Growth Portfolio had net assets totaling $63,228,968 invested in a diversified portfolio of:

94.23%	Domestic Common Stocks
3.62%	Foreign Common Stocks
2.15%	Cash and Cash Equivalents

Sector Weightings

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007, your Portfolio owned:

Health Care Stocks	$	26.73
Technology Stocks	$	22.14
Business Equipment and Services Stocks	$	18.71
Miscellaneous Stocks	$	12.70
Capital Goods Stocks	$	10.85
Retail Stocks	$	6.72
Cash and Cash Equivalents	$	2.15

The Investments of Micro Cap Growth Portfolio
June 30, 2007
COMMON STOCKS		Shares			Value
Air Transportation - 0.84%
Pinnacle Airlines Corp.*			28,400	$	532,358
Aircraft - 1.73%
Innovative Solutions and Support, Inc.*			35,200		816,992
Apparel - 2.09%
Ashworth, Inc.*			39,100		274,873
Volcom, Inc.*			26,300		1,318,025
					1,592,898
Broadcasting - 1.07%
RRSat Global Communications Network Ltd.*			34,000		678,300
Business Equipment and Services - 4.91%
Cbeyond, Inc.*			19,200		739,584
Energy Focus, Inc.*			51,700		342,254
Grubb & Ellis Company*			69,000		800,400
Kenexa Corporation*			10,900		411,093
Salary.com, Inc.*			30,300		363,297
Unica Corporation*			27,000		445,500
					3,102,128
Capital Equipment - 6.18%
CollaGenex Pharmaceuticals, Inc.*			55,000		683,375
NATCO Group Inc., Class A*			38,400		1,767,936
Somanetics Corporation*			29,300		537,216
T-3 Energy Services, Inc.*			27,500		920,013
					3,908,540
Communications Equipment - 1.63%
Blue Coat Systems, Inc.*			11,200		554,736
Intervoice, Inc.*			57,400		478,142
					1,032,878
Computers - Main and Mini - 1.51%
SourceForge, Inc.*	225,500				952,738
Computers - Peripherals - 9.57%
Applix, Inc.*			34,200		562,248
Entrust, Inc.*	185,800				753,419
Lawson Software, Inc.*			70,200		693,927
NetScout Systems, Inc.*			55,400		480,318
Phase Forward Incorporated*			84,100		1,415,824
Sigma Designs, Inc.*			18,800		490,586
Taleo Corporation, Class A*			48,700		1,096,724
Xyratex Ltd*			25,000		555,625
					6,048,671
Construction Materials - 0.77%
Comtech Group, Inc.*			29,500		487,782
Electrical Equipment - 2.11%
EXFO Electro-Optical Engineering Inc.*			72,100		503,979
Power-One, Inc.*			87,100		347,094
Ultralife Batteries, Inc.*			45,500		479,798
					1,330,871
Electronic Components - 3.06%
Bell Microproducts Inc.*			32,800		213,364
Hittite Microwave Corporation*			3,500		149,555
Integrated Silicon Solution, Inc.*			65,800		414,540
NetLogic Microsystems, Inc.*			27,800		885,986
Techwell, Inc.*			20,700		271,274
					1,934,719
Electronic Instruments - 4.64%
Asyst Technologies, Inc.*			51,300		370,129
Eagle Test Systems, Inc.*			36,100		579,946
Energy Conversion Devices, Inc.*			21,600		665,280
Intevac, Inc.*			21,500		457,090
Mattson Technology, Inc.*			45,600		442,092
Microtune, Inc.*			79,900		418,676
					2,933,213
Health Care - Drugs - 11.21%
Auxilium Pharmaceuticals, Inc.*			59,500		949,620
BioSphere Medical, Inc.*			41,500		292,575
Cavium Networks, Inc.*			24,900		563,362
Dyax Corp.*			72,800		305,396
Independence Holding Company			18,900		386,127
InterMune, Inc.*			30,200		783,539
Maxygen, Inc.*			66,000		565,950
Medifast, Inc.*			51,100		457,345
Obagi Medical Products, Inc.*			42,100		746,222
POZEN Inc.*			40,400		730,230
Sciele Pharma, Inc.*			31,100		732,094
SuperGen, Inc.*	103,500				576,495
					7,088,955
Health Care - General - 14.12%
Bruker BioSciences Corporation*			53,400		481,401
Candela Corporation*			63,400		735,440
Cutera, Inc.*			29,800		742,616
Dynamic Materials Corporation*			17,200		645,086
Greatbatch, Inc.*			11,200		362,880
Micrus Endovascular Corporation*			27,100		665,440
NuVasive, Inc.*			29,000		783,145
PolyMedica Corporation			22,900		935,923
Quidel Corporation*			85,600		1,502,708
Spectranetics Corporation (The)*			80,200		923,503
Systems Xcellence Inc.*			19,200		551,328
Tutogen Medical, Inc.*			60,100		600,399
					8,929,869
Hospital Supply and Management - 1.40%
Health Grades, Inc.*	135,900				884,709
Metal Fabrication - 1.79%
A.M. Castle & Co.			18,600		667,926
DXP Enterprises, Inc.*			10,900		466,574
					1,134,500
Mining - 1.21%
Smith & Wesson Holding Corporation*			45,800		767,379
Motion Pictures - 1.31%
On Assignment, Inc.*			77,100		826,898
Petroleum - Services - 1.58%
Brigham Exploration Company*			84,400		496,272
Bronco Drilling Company, Inc.*			30,500		500,352
					996,624
Restaurants - 3.17%
BUCA, Inc.*			36,000		125,100
McCormick & Schmick's Seafood Restaurants, Inc.*			28,500		738,862
Red Robin Gourmet Burgers, Inc.*			17,200		694,106
Ruth's Chris Steak House, Inc.*			26,100		443,570
					2,001,638
Retail - Specialty Stores - 3.55%
Gaiam, Inc., Class A*			34,600		631,796
Jos. A. Bank Clothiers, Inc.*			23,383		968,875
LJ International Inc.*			59,400		645,975
					2,246,646
Security and Commodity Brokers - 2.03%
FCStone Group, Inc.*			12,400		709,962
Sanders Morris Harris Group Inc.			49,300		574,099
					1,284,061
Steel - 1.07%
Claymont Steel Holdings, Inc.*			31,600		675,924
Timesharing and Software - 13.80%
Blackbaud, Inc.			31,300		691,260
Concur Technologies, Inc.*			60,300		1,377,553
CyberSource Corporation*			25,500		307,912
DivX, Inc.*			40,000		600,400
eResearch Technology, Inc.*			67,400		640,637
Guidance Software, Inc.*			10,500		147,997
Liquidity Services, Inc.*			27,500		516,450
LivePerson, Inc.*			51,600		276,576
PROS Holdings, Inc.*			19,900		260,690
Smith Micro Software, Inc.*			19,800		297,891
Ultimate Software Group, Inc. (The)*			44,700		1,293,171
VASCO Data Security International, Inc.*			40,700		925,315
Vocus, Inc.*			25,900		650,479
Wireless Ronin Technologies, Inc.*			92,800		738,224
					8,724,555
Trucking and Shipping - 1.05%
U.S. Xpress Enterprises, Inc., Class A*			35,900		666,484
Utilities - Telephone - 0.45%
ORBCOMM Inc.*			17,400		285,360
TOTAL COMMON STOCKS - 97.85%				$	61,865,690
(Cost: $48,327,243)

SHORT-TERM SECURITIES - 2.61%	Principal Amount in Thousands
Beverages
PepsiCo, Inc.,
5.33%, 7-2-07	$	1,653	$	1,652,755
(Cost: $1,652,755)
TOTAL INVESTMENT SECURITIES - 100.46%			$	63,518,445
(Cost: $49,979,998)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.46%)				(289,477	)
NET ASSETS - 100.00%			$	63,228,968

Notes to Schedule of Investments

*No dividends were paid during the preceding 12 months.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      MICRO CAP GROWTH PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $49,980) (Notes 1 and 3)	$	63,518
Cash		1
Receivables:
Investment securities sold		107
Portfolio shares sold		11
Dividends and interest		5
Prepaid and other assets		1
Total assets		63,643
LIABILITIES
Payable for investment securities purchased		384
Payable to Portfolio shareholders		15
Accrued accounting services fee (Note 2)		3
Accrued management fee (Note 2)		3
Accrued shareholder servicing (Note 2)		2
Accrued service fee (Note 2)		1
Other		6
Total liabilities		414
Total net assets	$	63,229
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	3
Additional paid-in capital		51,548
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(351	)
Accumulated undistributed net realized loss on investment transactions		(1,509	)
Net unrealized appreciation in value of investments		13,538
Net assets applicable to outstanding units of capital	$	63,229
Net asset value, redemption and offering price per share	$	21.9392
Capital shares outstanding		2,882
Capital shares authorized		50,000

See Notes to Financial Statements.

Statement of Operations
      MICRO CAP GROWTH PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                             (Unaudited)

INVESTMENT LOSS
Income (Note 1B):
Interest and amortization	$	33
Dividends		19
Total income		52
Expenses (Note 2):
Investment management fee		285
Service fee		75
Accounting services fee		21
Audit fees		9
Shareholder servicing		2
Custodian fees		1
Legal fees		1
Other		8
Total expenses		402
Net investment loss		(350	)
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		3,285
Unrealized appreciation in value of investments during the period		2,469
Net gain on investments		5,754
Net increase in net assets resulting from operations	$	5,404

See Notes to Financial Statements.

Statement of Changes in Net Assets
      MICRO CAP GROWTH PORTFOLIO
      (In Thousands)                                                                                                                (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
INCREASE IN NET ASSETS
Operations:
Net investment loss		$	(350	)	$	(617	)
Realized net gain on investments			3,285			7,714
Unrealized appreciation (depreciation)			2,469			(886	)
Net increase in net assets resulting                      from operations			5,404			6,211
Dividends to shareholders from (Note 1E): (1)
Net investment income			(–	)		(–	)
Realized gains on investment transactions			(–	)		(–	)
			(–	)		(–	)
Capital share transactions (2)			(2,301	)		1,369
Total increase			3,103			7,580
NET ASSETS
Beginning of period			60,126			52,546
End of period		$	63,229		$	60,126
Undistributed net investment loss		$	(351	)	$	(1	)
(1)See "Financial Highlights" on page 161.
(2) Shares issued from sale of shares			157			663
Shares issued from reinvestment of dividend       and/or capital gains distribution			–			–
Shares redeemed			(269	)		(607	)
Increase (decrease) in outstanding capital shares			(112	)		56
Value issued from sale of shares		$	3,209		$	12,683
Value issued from reinvestment of dividend       and/or capital gains distribution			–			–
Value redeemed			(5,510	)	(11,314		)
Increase (decrease) in outstanding capital		$	(2,301	)	$	1,369

See Notes to Financial Statements.

Financial Highlights
      MICRO CAP GROWTH PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended					For the fiscal year ended December 31,
	6-30-07					2006			2005			2004			2003			2002
Net asset value,       beginning of period		$	20.0796		$	17.8866		$	14.7992		$	13.4476		$	8.7000		$	15.5000
Income (loss) from       investment operations:
Net investment loss			(0.1214	)		(0.2064	)		(0.1737	)		(0.1794	)		(0.1178	)	(0.1000		)
Net realized and             unrealized gain             (loss) on             investments			1.9810			2.3994			3.2611			1.5310			4.8654		(6.7000		)
Total from investment       operations			1.8596			2.1930			3.0874			1.3516			4.7476		(6.8000		)
Less distributions from:
Net investment             income			(0.0000	)		(0.0000	)		(0.0000	)		(0.0000	)		(0.0000	)	(0.0000		)
Capital gains			(0.0000	)		(0.0000	)		(0.0000	)		(0.0000	)		(0.0000	)	(0.0000		)
Total distributions			(0.0000	)		(0.0000	)		(0.0000	)		(0.0000	)		(0.0000	)	(0.0000		)
Net asset value,       end of period		$	21.9392		$	20.0796		$	17.8866		$	14.7992		$	13.4476		$	8.7000
Total return			9.22	%		12.26	%		20.87	%		10.05	%		54.41	%		-43.64	%
Net assets, end of period       (in millions)			$63			$60			$53			$41			$41			$25
Ratio of expenses to       average net assets       including expense       waiver			1.34	%(1)		1.32	%		1.35	%		1.35	%		1.37	%		1.34	%
Ratio of net investment       loss to average net       assets including       expense waiver			- -1.17	%(1)		- -1.06	%		- -1.15	%		- -1.26	%		- -1.17	%		- -1.10	%
Ratio of expenses to       average net assets       excluding expense       waiver			1.34	%(1)(2)		1.32	%(2)		1.35	%(2)		1.35	%(2)		1.51	%		1.45	%
Ratio of net investment       loss to average net       assets excluding       expense waiver			- -1.17	%(1)(2)		- -1.06	%(2)		- -1.15	%(2)		- -1.26	%(2)		- -1.31	%		- -1.21	%
Portfolio turnover rate			32	%		60	%		54	%		65	%		74	%		68	%

(1)Annualized.

(2)There was no waiver of expenses during the period.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF MID CAP GROWTH PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target Mid Cap Growth Portfolio had net assets totaling $49,231,523 invested in a diversified portfolio of:

87.16%	Domestic Common Stocks
9.49%	Cash and Cash Equivalents
3.35%	Foreign Common Stocks

Sector Weightings

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007, your Portfolio owned:

Health Care Stocks	$	19.52
Financial Services Stocks	$	12.25
Technology Stocks	$	12.25
Business Equipment and Services Stocks	$	10.12
Cash and Cash Equivalents	$	9.49
Retail Stocks	$	9.29
Miscellaneous Stocks	$	7.41
Capital Goods Stocks	$	6.62
Consumer Nondurables Stocks	$	5.31
Energy Stocks	$	4.59
Consumer Services Stocks	$	3.15

The Investments of Mid Cap Growth Portfolio
June 30, 2007                                                                                                                  (Unaudited)
COMMON STOCKS	Shares			Value
Banks - 5.22%
Northern Trust Corporation		22,600	$	1,451,146
Synovus Financial Corp.		36,450		1,119,015
				2,570,161
Beverages - 1.55%
Brown-Forman Corporation, Class B		10,450		763,686
Business Equipment and Services - 5.45%
Akamai Technologies, Inc.*		10,200		496,281
Bucyrus International, Inc., Class A (A)		4,950		350,163
Lamar Advertising Company, Class A		7,850		492,627
Republic Services, Inc., Class A		16,175		495,602
Stericycle, Inc.*		19,100		848,900
				2,683,573
Capital Equipment - 1.89%
IDEX Corporation		24,150		930,741
Chemicals - Specialty - 0.95%
Air Products and Chemicals, Inc.		5,800		466,146
Communications Equipment - 0.94%
Marvell Technology Group Ltd.*		25,300		460,966
Computers - Micro - 4.06%
Apple Inc.*		12,200		1,489,132
Sun Microsystems, Inc.*		96,900		509,694
				1,998,826
Computers - Peripherals - 1.07%
Citrix Systems, Inc.*		7,300		245,937
Electronic Arts Inc.*		5,950		281,465
				527,402
Consumer Electronics - 1.28%
Research In Motion Limited*		3,150		630,236
Electrical Equipment - 1.00%
Molex Incorporated, Class A		18,600		493,551
Electronic Components - 6.17%
Broadcom Corporation, Class A*		32,375		946,645
Microchip Technology Incorporated		26,100		967,266
Network Appliance, Inc. (A)*		30,850		900,820
PMC-Sierra, Inc.*		29,100		224,652
				3,039,383
Farm Machinery - 1.22%
AGCO Corporation*		13,800		599,058
Food and Related - 3.76%
Hershey Foods Corporation		17,050		863,071
Wm. Wrigley Jr. Company		17,875		988,666
				1,851,737
Health Care - Drugs - 4.41%
Allergan, Inc.		24,800		1,429,472
Gilead Sciences, Inc.*		19,100		740,984
				2,170,456
Health Care - General - 8.77%
DENTSPLY International Inc.		19,200		734,304
Gen-Probe Incorporated (A)*		7,500		452,962
Henry Schein, Inc.*		26,800		1,431,790
Hologic, Inc.*		12,100		669,311
Kyphon Inc.*		10,700		515,526
Zimmer Holdings, Inc.*		6,050		513,585
				4,317,478
Hospital Supply and Management - 6.34%
C. R. Bard, Inc.		15,325		1,266,305
Cytyc Corporation*		21,100		910,254
Laboratory Corporation of America Holdings*		12,100		946,946
				3,123,505
Insurance - Property and Casualty - 2.41%
AXIS Capital Holdings Limited		13,700		556,905
Ambac Financial Group, Inc.		7,200		627,768
				1,184,673
Metal Fabrication - 2.51%
Fastenal Company		29,550		1,237,554
Motor Vehicles - 0.86%
Harley-Davidson, Inc.		7,100		423,231
Petroleum - Domestic - 1.04%
XTO Energy Inc. (A)		8,550		513,855
Petroleum - International - 1.20%
Noble Energy, Inc. (A)		9,500		592,705
Petroleum - Services - 2.35%
BJ Services Company (A)*		8,300		236,052
Complete Production Services, Inc. (A)*		10,300		266,255
National Oilwell Varco, Inc. (A)		3,350		349,204
Smith International, Inc. (A)		5,200		304,928
				1,156,439
Publishing - 3.15%
Getty Images, Inc.*		12,700		607,187
Meredith Corporation		15,300		942,480
				1,549,667
Restaurants - 2.87%
Chipotle Mexican Grill, Inc., Class A*		3,550		302,744
P.F. Chang's China Bistro, Inc.*		18,550		653,053
YUM! Brands, Inc.		14,000		458,080
				1,413,877
Retail - Food Stores - 0.92%
Longs Drug Stores Corporation		8,600		451,672
Retail - General Merchandise - 1.13%
Saks Incorporated		26,100		557,235
Retail - Specialty Stores - 4.37%
Chico's FAS, Inc.*		21,100		513,574
Coldwater Creek Inc.*		22,400		520,128
J. Crew Group, Inc.*		20,650		1,116,958
				2,150,660
Security and Commodity Brokers - 4.62%
Chicago Mercantile Exchange Holdings Inc.		2,190		1,170,248
Legg Mason, Inc.		3,200		314,816
TD Ameritrade Holding Corporation*		39,550		790,605
				2,275,669
Timesharing and Software - 4.67%
eBay Inc.*		15,850		509,815
Global Payments Inc.		15,400		610,610
Paychex, Inc.		30,100		1,177,663
				2,298,088
Trucking and Shipping - 2.41%
C.H. Robinson Worldwide, Inc.		13,450		706,932
Expeditors International of Washington, Inc.		11,600		479,196
				1,186,128
Utilities - Telephone - 1.92%
Equinix, Inc.*		2,650		242,528
MetroPCS Communications, Inc.*		21,200		700,448
				942,976
TOTAL COMMON STOCKS - 90.51%			$	44,561,334
(Cost: $37,963,338)

PUT OPTIONS - 0.00%	Number of Contracts
Lehman Brothers Inc. Custom Energy Basket Collar,       July 90%, Expires 7-23-07		9,575	$	96
(Cost: $10,150)
SHORT-TERM SECURITIES	Principal Amount in Thousands
Commercial Paper
Beverages - 3.03%
PepsiCo, Inc.,
5.33%, 7-2-07	$	1,489		1,488,780
Forest and Paper Products - 4.06%
Sonoco Products Co.,
5.52%, 7-2-07		2,000		1,999,693
Total Commercial Paper - 7.09%				3,488,473
United States Government Agency Obligations - 3.24%
Federal Home Loan Mortgage Corporation,
4.95%, 7-2-07		1,597		1,596,780
TOTAL SHORT-TERM SECURITIES - 10.33%			$	5,085,253
(Cost: $5,085,253)
TOTAL INVESTMENT SECURITIES - 100.84%			$	49,646,683
(Cost: $43,058,741)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.84%)				(415,160	)
NET ASSETS - 100.00%			$	49,231,523

Notes to Schedule of Investments
*No dividends were paid during the preceding 12 months.
(A)Securities serve as cover for the following written call options outstanding at June 30, 2007. (See Note 5 to financial statements):
	Underlying Security	Contracts Subject to Call	Expiration Month/ Exercise Price	Premium Received			Market Value
	Bucyrus International, Inc.,       Class A	49	July/80		$	6,223	$	1,103
	Gen-Probe Incorporated	75	August/55			9,524		44,250
	Lehman Brothers Inc. Custom       Energy Basket Collar	9,575	July/108%			10,150		23,650
	Network Appliance, Inc.	241	September/34			13,014		13,014
					$	38,911	$	82,017
See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      MID CAP GROWTH PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $43,059) (Notes 1 and 3):	$	49,647
Cash		1
Receivables:
Investment securities sold		670
Dividends and interest		31
Portfolio shares sold		11
Prepaid and other assets		1
Total assets		50,361
LIABILITIES
Payable for investment securities purchased		1,024
Outstanding written options - at value (premium received - $39) (Note 5)		82
Payable to Portfolio shareholders		13
Accrued accounting services fee (Note 2)		2
Accrued management fee (Note 2)		2
Accrued service fee (Note 2)		1
Accrued shareholder servicing (Note 2)		1
Other		4
Total liabilities		1,129
Total net assets	$	49,232
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	7
Additional paid-in capital		42,139
Accumulated undistributed income:
Accumulated undistributed net investment income		72
Accumulated undistributed net realized gain on investment transactions		469
Net unrealized appreciation in value of investments		6,545
Net assets applicable to outstanding units of capital	$	49,232
Net asset value, redemption and offering price per share	$	7.2427
Capital shares outstanding		6,797
Capital shares authorized		50,000

See Notes to Financial Statements.

Statement of Operations
      MID CAP GROWTH PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                             (Unaudited)

INVESTMENT INCOME
Income (Note 1B):
Dividends	$	185
Interest and amortization		146
Total income		331
Expenses (Note 2):
Investment management fee		181
Service fee		53
Accounting services fee		14
Audit fees		9
Custodian fees		3
Legal fees		2
Shareholder servicing		1
Other		6
Total		269
Less waiver of investment management fee (Notes 2 and 9)		(7	)
Total expenses		262
Net investment income		69
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		536
Realized net gain on written options		28
Realized net gain on investments		564
Unrealized appreciation in value of securities
during the period		3,620
Unrealized depreciation in value of written options during the period		(43	)
Unrealized appreciation in value of investments during the period		3,577
Net gain on investments		4,141
Net increase in net assets resulting from operations	$	4,210

See Notes to Financial Statements.

Statement of Changes in Net Assets
      MID CAP GROWTH PORTFOLIO
      (In Thousands)
                                                                                                                                            (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
INCREASE IN NET ASSETS
Operations:
Net investment income		$	69		$	115
Realized net gain (loss) on investments			564			(80	)
Unrealized appreciation			3,577			2,056
Net increase in net assets resulting                      from operations			4,210			2,091
Distributions to shareholders from (Note 1E):(1)
Net investment income			(–	)		(126	)
Realized gains on investment transactions			(–	)		(10	)
			(–	)		(136	)
Capital share transactions(2)			7,679			22,255
Total increase			11,889			24,210
NET ASSETS
Beginning of period			37,343			13,133
End of period		$	49,232		$	37,343
Undistributed net investment income		$	72		$	3
(1)See "Financial Highlights" on page 171.
(2)Shares issued from sale of shares			1,344			3,743
Shares issued from reinvestment of dividend       and/or capital gains distribution			–			21
Shares redeemed			(239	)		(237	)
Increase in outstanding capital shares			1,105			3,527
Value issued from sale of shares		$	9,333		$	23,600
Value issued from reinvestment of dividend       and/or capital gains distribution			–			136
Value redeemed			(1,654	)		(1,481	)
Increase in outstanding capital		$	7,679		$	22,255

See Notes to Financial Statements.

Financial Highlights
      MID CAP GROWTH PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:
                                                                                                                                            (Unaudited)

	For the six months ended				For the fiscal year ended			For the period from 4-28-05(1) through
	6-30-07				12-31-06			12-31-05
Net asset value, beginning of period		$	6.5601		$	6.0653		$	5.0000
Income from investment operations:
Net investment income			0.0101			0.0164			0.0064
Net realized and unrealized             gain on investments			0.6725			0.5025			1.0589
Total from investment operations			0.6826			0.5189			1.0653
Less distributions from:
Net investment income		(0.0000		)	(0.0223		)	(0.0000		)
Capital gains		(0.0000		)	(0.0018		)	(0.0000		)
Total distributions		(0.0000		)	(0.0241		)	(0.0000		)
Net asset value, end of period		$	7.2427		$	6.5601		$	6.0653
Total return			10.40	%		8.56	%		21.31	%
Net assets, end of period (in millions)			$49			$37			$13
Ratio of expenses to average net       assets including expense waiver			1.23	%(2)		0.97	%		0.69	%(2)
Ratio of net investment income       to average net assets       including expense waiver			0.33	%(2)		0.45	%		0.33	%(2)
Ratio of expenses to average net       assets excluding expense waiver			1.26	%(2)		1.31	%		1.54	%(2)
Ratio of net investment income       (loss) to average net assets       excluding expense waiver			0.30	%(2)		0.11	%		- -0.52	%(2)
Portfolio turnover rate			13	%		23	%		11	%

(1)Commencement of operations.

(2)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF MONEY MARKET PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target Money Market Portfolio had net assets totaling $77,200,015.

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007, your Portfolio owned:

Corporate Obligations - Notes	$	32.27
Corporate Obligations -       Commercial Paper	$	22.23
Corporate Obligations -       Commercial Paper (backed by       irrevocable bank letter of credit)	$	17.03
Municipal Obligations - Taxable	$	16.76
Corporate Obligations -       Certificates of Deposit	$	7.64
United States Government       Agency Obligations	$	3.56
Cash and Other Assets,       Net of Liabilities	$	0.51

Please remember that an investment in the Portfolio is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. Although the Portfolio seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Portfolio.

The Investments of Money Market Portfolio
June 30, 2007			(Unaudited)
CORPORATE OBLIGATIONS	Principal Amount in Thousands			Value
Certificates of Deposit - 7.64%
Banks
Barclays Bank PLC,
5.37%, 4-15-08	$	1,500	$	1,500,000
Barclays Bank PLC, New York Branch,
5.35%, 5-5-08		1,000		1,000,000
Citibank, N.A.:
5.3%, 8-3-07		1,500		1,500,000
5.305%, 8-27-07		1,000		1,000,000
5.31%, 9-7-07		900		900,000
				5,900,000
Commercial Paper
Capital Equipment - 1.93%
Deere (John) Capital Corporation:
5.26%, 7-30-07		500		497,881
5.27%, 8-13-07		300		298,112
5.22%, 8-29-07		700		694,011
				1,490,004
Finance Companies - 1.93%
Ciesco, LLC,
5.25%, 8-3-07		1,500		1,492,781
Food and Related - 5.03%
McCormick & Co. Inc.:
5.0%, 8-31-07		1,100		1,090,681
5.02%, 11-26-07		350		342,777
5.22%, 11-28-07		2,000		1,956,500
Wm. Wrigley Jr. Company,
5.27%, 8-17-07		500		496,560
				3,886,518
Insurance - Life - 4.74%
AEGON N.V.:
5.23%, 8-13-07		1,000		993,753
5.24%, 8-13-07		2,680		2,663,226
				3,656,979
Security and Commodity Brokers - 4.02%
Societe Generale N.A. Inc.,
5.26%, 9-10-07		250		247,407
UBS Finance Delaware LLC (UBS AG):
5.45%, 7-2-07		1,214		1,213,816
5.27%, 8-3-07		400		398,068
5.23%, 8-8-07		1,250		1,243,099
				3,102,390
Trucking and Shipping - 1.29%
United Parcel Service Inc.,
5.06%, 7-31-07		1,000		995,783
Utilities - Telephone - 3.29%
AT&T Inc.,
5.25%, 7-31-07		2,550		2,538,844
Total Commercial Paper - 22.23%				17,163,299
Commercial Paper (backed by irrevocable       bank letter of credit)
Finance Companies - 10.37%
ED&F Man Treasury Management PLC            (Royal Bank of Scotland PLC (The)),
5.23%, 7-2-07		1,500		1,499,782
NATC California LLC (SunTrust Bank),
5.24%, 7-13-07		1,500		1,497,380
River Fuel Company #2, Inc.            (Bank of New York (The)),
5.25%, 7-16-07		1,460		1,456,806
River Fuel Trust #1 (Bank of New York (The)),
5.28%, 8-15-07		675		670,545
Vehicle Services of America Ltd.            (Bank of America, N.A.),
5.27%, 8-23-07		2,903		2,880,477
				8,004,990
Food and Related - 4.08%
COFCO Capital Corp. (Rabobank Nederland):
5.27%, 7-9-07		850		849,005
5.26%, 7-10-07		2,300		2,296,975
				3,145,980
Multiple Industry - 2.58%
Louis Dreyfus Corporation            (Barclays Bank PLC, New York Branch),
5.265%, 7-27-07		2,000		1,992,395
Total Commercial Paper (backed by irrevocable       bank letter of credit) - 17.03%				13,143,365
Notes
Banks - 7.02%
Bank of America, N.A.,
5.27%, 9-14-07		1,200		1,200,000
Lloyds TSB Bank PLC,
5.29%, 7-6-07 (A)		740		740,000
U.S. Bancorp,
5.1%, 7-15-07		975		974,833
U.S. Bank, N.A.,
6.3%, 7-15-08		500		504,229
Wells Fargo & Company:
5.38%, 7-2-07 (A)		1,500		1,500,000
5.33%, 7-16-07 (A)		500		500,000
				5,419,062
Business Equipment and Services - 1.48%
Playworld Systems Incorporated, Taxable Variable Rate            Demand/Fixed Rate Revenue Bonds,            Series A of 1998 (Wachovia Bank, N.A.),
5.44%, 7-5-07 (A)		1,145		1,145,000
Computers - Main and Mini - 2.59%
International Business Machines Corporation:
5.28%, 7-3-07 (A)		750		750,000
5.33%, 7-9-07 (A)		1,250		1,250,000
				2,000,000
Finance Companies - 5.56%
Capital Markets Access Company LC,            Taxable Variable Rate Demand Bonds            (LSPB Real Estate, LLC Project), Series 2007            (Wachovia Bank, N.A.),
5.39%, 7-5-07 (A)		700		700,000
Toyota Motor Credit Corporation:
5.24%, 5-2-08		1,500		1,500,000
5.28%, 5-23-08		740		740,000
5.41%, 6-16-08		1,000		1,000,000
Unilever Capital Corporation,
5.31%, 7-12-07 (A)		350		350,000
				4,290,000
Forest and Paper Products - 0.65%
Kimberly-Clark Corporation,
5.263%, 12-19-07		500		500,000
Furniture and Furnishings - 0.23%
Capo & Sons Corporation, Taxable Variable            Rate Demand Bonds, Series 1998            (Wachovia Bank, N.A.),
5.49%, 7-5-07 (A)		175		175,000
Leisure Time Industry - 1.61%
Ansley Golf Club, Inc., Incremental Taxable            Variable Rate Demand Bonds, Series 1998            (Wachovia Bank, N.A.),
5.49%, 7-5-07 (A)		1,240		1,240,000
Multiple Industry - 4.02%
3M Company,
5.656%, 12-12-07 (B)		1,500		1,502,465
Coweta Summit Associates, LLC, Taxable Revenue            Bonds, Series 2005 (SunTrust Bank),
5.37%, 7-5-07 (A)		1,600		1,600,000
				3,102,465
Non-Residential Construction - 1.46%
Healthcare Property Group, LLC, Taxable Variable            Rate Bonds, Series 2005 (SunTrust Bank),
5.37%, 7-5-07 (A)		1,125		1,125,000
Real Estate Investment Trust - 1.82%
Arden Realty Limited Partnership,
7.0%, 11-15-07		1,400		1,408,707
Retail - General Merchandise - 3.51%
Wal-Mart Stores, Inc.,
5.933%, 6-1-08		2,700		2,714,219
Security and Commodity Brokers - 0.65%
UBS AG,
5.4%, 2-1-08		500		499,657
Trucking and Shipping - 1.67%
Volpe Family Partnership, L.P., Taxable            Variable Rate Demand Revenue Bonds,            Series of 2001 (Wachovia Bank, N.A.),
5.37%, 7-5-07 (A)		1,290		1,290,000
Total Notes - 32.27%				24,909,110
TOTAL CORPORATE OBLIGATIONS - 79.17%			$	61,115,774
(Cost: $61,115,774)
MUNICIPAL OBLIGATIONS - TAXABLE
Arkansas - 1.26%
City of Little Rock, Arkansas, Taxable Variable Rate       Demand Revenue Bonds (Ringwood Containers,       L.P. Project), Series 2006A (SunTrust Bank),
5.37%, 7-5-07 (A)		975		975,000
California - 9.07%
California Pollution Control Financing Authority,       Environmental Improvement Revenue Bonds:
Atlantic Richfield Company Project,       Series 1997 (Taxable), (BP p.l.c.),
5.3%, 8-2-07		3,900		3,900,000
Air Products Manufacturing Corporation,       Taxable Series 1997A,
5.3%, 7-3-07		3,100		3,100,000
				7,000,000
Florida - 1.04%
University of South Florida Research Foundation,       Incorporated, Variable Rate Demand Revenue Bonds       (Interdisciplinary Research Building Project),       Taxable Series 2004B (Bank of America, N.A.),
5.37%, 7-5-07 (A)		800		800,000

Georgia - 4.42%
Municipal Electric Authority of Georgia, General Resolution       Projects Bond Anticipation Notes, Series B (Taxable):
5.41%, 8-2-07	1,850		1,850,000
5.42%, 8-21-07	1,567		1,567,000
			3,417,000
New York - 0.97%
City of New York (The), General Obligation Bonds,       Fiscal 1995 Series B, Taxable Adjustable Rate       Bonds (WestLB AG),
5.4%, 8-1-07	750		750,000
TOTAL MUNICIPAL OBLIGATIONS - TAXABLE - 16.76%		$	12,942,000
(Cost: $12,942,000)
UNITED STATES GOVERNMENT       AGENCY OBLIGATIONS
Federal Home Loan Mortgage Corporation,
5.375%, 2-12-08	750		750,000
Overseas Private Investment Corporation,
5.35%, 7-4-07 (A)	2,000		2,000,000
TOTAL UNITED STATES GOVERNMENT       AGENCY OBLIGATIONS - 3.56%		$	2,750,000
(Cost: $2,750,000)
TOTAL INVESTMENT SECURITIES - 99.49%		$	76,807,774
(Cost: $76,807,774)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.51%			392,241
NET ASSETS - 100.00%		$	77,200,015

Notes to Schedule of Investments

(A)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2007.

(B)Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. This security has been determined to be liquid under guidelines established by the Board of Directors. At June 30, 2007, the total value of this security amounted to 1.95% of net assets.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

Statement of Assets and Liabilities
      MONEY MARKET PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $76,808) (Note 1)	$	76,808
Cash		–	*
Receivables:
Interest		366
Portfolio shares sold		224
Prepaid and other assets		3
Total assets		77,401
LIABILITIES
Payable to Portfolio shareholders		160
Dividends payable		32
Accrued accounting services fee (Note 2)		4
Accrued management fee (Note 2)		2
Accrued shareholder servicing (Note 2)		2
Accrued service fee (Note 2)		1
Total liabilities		201
Total net assets	$	77,200
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	77
Additional paid-in capital		77,123
Net assets applicable to outstanding units of capital	$	77,200
Net asset value, redemption and offering price per share	$	1.0000
Capital shares outstanding		77,200
Capital shares authorized	110,000

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Operations
      MONEY MARKET PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                             (Unaudited)

INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	1,964
Expenses (Note 2):
Investment management fee		147
Service fee		92
Accounting services fee		22
Audit fees		8
Custodian fees		3
Shareholder servicing		2
Legal fees		1
Other		4
Total expenses		279
Net investment income		1,685
Net increase in net assets resulting from operations	$	1,685

See Notes to Financial Statements.

Statement of Changes in Net Assets
      MONEY MARKET PORTFOLIO
      (In Thousands)                                                                                                              (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
INCREASE IN NET ASSETS
Operations:
Net investment income		$	1,685		$	2,582
Net increase in net assets                      resulting from operations			1,685			2,582
Dividends to shareholders from net            investment income (Note 1E) (1)			(1,685	)		(2,582	)
Capital share transactions (2)			7,168			17,991
Total increase			7,168			17,991
NET ASSETS
Beginning of period			70,032			52,041
End of period		$	77,200		$	70,032
Undistributed net investment income		$	–		$	–
(1)See "Financial Highlights" on page 182.
(2) Shares issued from sale of shares			30,494			55,159
Shares issued from reinvestment of dividends			1,638			2,582
Shares redeemed		(24,964		)	(39,750		)
Increase in outstanding capital shares			7,168			17,991
Value issued from sale of shares		$	30,494		$	55,159
Value issued from reinvestment of dividends			1,638			2,582
Value redeemed		(24,964		)	(39,750		)
Increase in outstanding capital		$	7,168		$	17,991

See Notes to Financial Statements.

Financial Highlights
      MONEY MARKET PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:
                                                                                                                                              (Unaudited)

	For the six months ended				For the fiscal year ended December 31,
	6-30-07				2006			2005			2004			2003			2002
Net asset value,       beginning of period		$	1.0000		$	1.0000		$	1.0000		$	1.0000		$	1.0000		$	1.0000
Net investment income			0.0223			0.0424			0.0247			0.0070			0.0051			0.0113
Less dividends declared		(	0.0223	)	(	0.0424	)	(	0.0247	)	(	0.0070	)	(	0.0051	)	(	0.0113	)
Net asset value,       end of period		$	1.0000		$	1.0000		$	1.0000		$	1.0000		$	1.0000		$	1.0000
Total return			2.23	%		4.32	%		2.50	%		0.70	%		0.52	%		1.12	%
Net assets, end of period       (in millions)			$77			$70			$52			$55			$64			$103
Ratio of expenses to       average net assets			0.76	%(1)		0.77	%		0.79	%		0.76	%		0.75	%		0.75	%
Ratio of net investment       income to average       net assets			4.58	%(1)		4.29	%		2.46	%		0.69	%		0.53	%		1.13	%

(1)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF MORTGAGE SECURITIES PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target Mortgage Securities Portfolio had net assets totaling $28,242,549 invested in a diversified portfolio of:

56.50%	Corporate Mortgage-Related Debt Securities
38.97%	United States Government and Government Agency Obligations
4.53%	Cash and Cash Equivalents

On June 30, 2007, the breakdown of bonds (by ratings) held by the Portfolio was as follows:

AAA	64.74	%
AA	10.19	%
A	8.43	%
BBB	8.94	%
BB	3.17	%
Cash and Cash Equivalents	4.53	%

Ratings reflected in the wheel above are taken from the following sources in order of preference: Standard & Poor's, Moody's or management's internal ratings, where no other ratings are available.

Certain U.S. government securities in which the Portfolio may invest, such as Treasury securities and securities issued by the Government National Mortgage Association (Ginnie Mae), are backed by the full faith and credit of the U.S. government. However, other U.S. government securities in which the Portfolio may invest, such as securities issued by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Banks (FHLB), are not backed by the full faith and credit of the U.S. government, are not insured or guaranteed by the U.S. government and, instead, may be supported only by the right of the issuer to borrow from the U.S. Treasury or by the credit of the issuer.

The Investments of Mortgage Securities Portfolio
June 30, 2007			(Unaudited)
CORPORATE DEBT SECURITIES	Principal Amount in Thousands			Value
Finance Companies
ABFS Mortgage Loan Trust:
2001-2,
6.99%, 12-25-31 (A)	$	248	$	250,010
2002-4,
7.423%, 12-15-33 (A)		170		170,297
ABN AMRO Mortgage Corporation, Series 2003-2,
5.33023%, 3-25-18 (A)		99		93,418
Auburn Funding, LLC,
6.92%, 1-25-12 (A)(B)		165		160,798
Banc of America Alternative Loan Trust:
2004-11,
6.0%, 12-25-34		289		282,635
2005-6,
6.0%, 7-25-35		330		326,673
2005-8:
5.57487%, 9-25-35 (A)		212		202,002
5.57487%, 9-25-35 (A)		43		40,272
2005-10,
5.66855%, 11-25-35 (A)		121		104,993
2005-12,
5.80779%, 1-25-36 (A)		170		161,382
2006-4:
6.22513%, 5-25-36 (A)		64		62,111
6.22513%, 5-25-36 (A)		84		75,240
2006-6,
6.0%, 6-25-46		385		376,684
Banc of America Commercial Mortgage Inc.,       Commercial Mortgage Pass-Through Certificates:       Series 2002-2,
6.2%, 7-11-43 (C)		140		141,002
Series 2003-1,
4.9%, 9-11-36 (C)		450		424,596
Series 2004-6,
5.104%, 12-10-42 (A)(C)		100		94,679
Banc of America Commercial Mortgage Trust 2007-1,
5.451%, 1-15-49		250		241,824
Banc of America Funding 2004-2 Trust,
6.5%, 7-20-32		141		141,373
Banc of America Funding Corporation,
5.00784%, 9-20-34 (A)		99		96,899
Banc of America Mortgage:
2005-J Trust,
5.08865%, 11-25-35 (A)		255		252,944
2007-1 Trust,
6.0%, 3-25-37		219		212,904
Trust 2004-1,
5.5%, 2-25-34		170		155,341
Trust 2004-3,
4.875%, 4-25-19		84		79,869
Trust 2004-7,
5.75%, 8-25-34		107		105,421
Banc of America Structured Securities Trust 2002-X1 F,
6.274%, 10-11-33 (C)		250		252,888
BankAmerica Manufactured Housing Contract Trust,
7.015%, 1-10-28		104		105,333
Bear Stearns Commercial Mortgage Securities Inc.:       Series 2001-TOP2 Trust Fund:
7.49056%, 2-15-35 (A)(C)		500		521,883
7.83056%, 2-15-35 (A)(C)		75		79,011
Series 2000-WF1 Trust Fund,
6.5%, 2-15-32		150		152,331
C-Bass 2005-CB3 Trust,
5.109%, 12-25-34 (A)		200		185,650
C-Bass 2005-CB7 Trust,
5.147%, 11-25-35 (A)		150		148,889
C-Bass 2006-CB2 Trust,
5.86%, 12-25-36		285		282,397
C-Bass 2006-MH1 Trust,
5.97%, 9-25-36 (A)(C)		150		147,881
CHL Mortgage Pass-Through Trust:       2003-28,
4.15%, 8-25-33		150		142,151
2003-HYB2,
3.9709%, 7-19-33 (A)		259		247,463
CWHEQ Home Equity Loan Trust, Series 2006-S3,
6.518%, 1-25-29 (A)		215		215,594
Capital Auto Receivables Asset Trust 2006-1,
7.16%, 1-15-13 (C)		110		111,342
Centex Home Equity Loan Trust 2005-C,
5.048%, 6-25-35 (A)		210		208,026
Chase Mortgage Finance Trust, Series 2003-S11,
5.5%, 10-25-33		294		280,796
Citigroup Mortgage Loan Trust Inc., Mortgage       Pass-Through Certificates, Series 2004-2,
6.5%, 8-25-33 (C)		37		37,031
CitiMortgage Alternative Loan Trust, Series 2006-A7,
0.0%, 12-25-36 (D)		250		241,548
CountryPlace Manufactured Housing Contract       Trust 2005-1,
4.8%, 12-15-35 (A)(B)		145		140,615
Credit Suisse First Boston Mortgage Securities Corp.,
6.0%, 11-25-18		47		47,034
DLJ Commercial Mortgage Corp. 1998-CG1,
7.36358%, 6-10-31 (A)(C)		170		180,863
Flagstar Home Equity Loan Trust 2007-1,
5.997%, 1-25-35 (A)(B)		125		121,590
Ford Credit Auto Owner:       Trust 2006-B,
7.12%, 2-15-13 (C)		65		66,115
Trust 2007-A,
7.05%, 12-15-13 (C)		30		30,015
Global Mortgage Securitization 2005-A Ltd. and       Global Mortgage Securitization 2005-A LLC:
5.25%, 4-25-32		88		82,506
5.39543%, 4-25-32 (A)		128		115,006
Global Mortgage Securitization Ltd. and Global       Mortgage Securitization, LLC,
5.25%, 11-25-32 (B)		170		163,403
Green Tree Financial Corporation:
7.65%, 4-15-19		159		164,589
9.0%, 6-15-25		110		113,992
7.95%, 8-15-25		105		106,829
Hilton Hotel Pool Trust:
5.82%, 10-3-15 (A)(C)		100		100,906
7.653%, 10-3-15 (C)		220		228,470
Home Equity Loan Trust 2003-HS2,
5.09%, 7-25-33 (A)		43		41,716
Hometown Commercial Capital, LLC Hometown       Commercial Mortgage Pass-Through Notes 2006-1,
5.506%, 11-11-38 (B)		223		219,383
J.P. Morgan Alternative Loan Trust 2006-A6,
5.95%, 11-25-36 (A)		250		246,481
J.P. Morgan Chase Commercial Mortgage       Securities Corp.,
6.2207%, 10-12-37 (C)		200		202,456
J.P. Morgan Mortgage Acquisition:       Trust 2006-CW2,
6.337%, 8-25-36 (A)		270		268,520
Trust 2006-WF1,
6.41%, 7-25-36 (A)		250		248,249
J.P. Morgan Mortgage:       Trust 2005-S2,
5.66917%, 9-25-35 (A)		193		184,065
Trust 2006-A2,
3.75442%, 11-25-33 (A)		132		128,957
Trust 2006-A6,
6.05869%, 10-25-36 (A)		225		226,488
Trust 2006-S3:
6.187%, 8-25-36		393		384,656
6.5%, 8-25-36		160		158,145
Trust 2007-A1,
4.81722%, 7-25-35 (A)		299		287,947
LB-UBS Commercial Mortgage Trust 2003-C3,
4.846%, 2-15-37 (A)(C)		100		94,094
Lehman ABS Manufactured Housing Contract       Trust 2001-B,
3.01%, 3-15-10		127		123,458
Lehman XS Trust, Series 2005-8,
5.69%, 12-25-35		315		308,943
MASTR Asset Securitization Trust 2003-10,
5.5%, 11-25-33		72		68,662
Mid-State Capital Corporation 2004-1 Trust,
6.005%, 8-15-37		79		78,474
Morgan Stanley Dean Witter Capital I Trust 2002-IQ3,
6.6026%, 9-15-37 (A)(C)		100		98,105
NationsLink Funding Corporation, Commercial Mortgage       Pass-Through Certificates, Series 1998-2,
5.0%, 8-20-30 (C)		100		93,627
Nomura Asset Securities Corporation, Commercial Mortgage       Pass-Through Certificates, Series 1998-D6,
6.0%, 3-15-30 (C)		250		254,372
Origen Manufactured Housing Contract Trust:       2004-A:
5.7%, 1-15-35		100		97,031
5.91%, 1-15-35		200		195,703
2004-A, Class A-2,
3.38%, 8-15-17		496		492,427
2004-B,
4.75%, 8-15-21		100		95,297
2005-A,
4.97%, 10-15-21		105		101,303
2005-B,
5.605%, 5-15-22		35		33,912
PHH Alternative Mortgage Trust, Series 2007-1,       Class II-B-2,
6.0%, 2-25-37		100		94,283
RALI Series 2003-QS10 Trust,
5.5%, 5-25-33		230		220,777
RALI Series 2003-QS11 Trust,
5.75%, 6-25-33		213		207,184
RAMP Series 2005-RS1 Trust,
5.145%, 1-25-35 (A)		225		215,455
RASC Series 2003-KS10 Trust,
6.41%, 12-25-33		32		30,975
RESI Finance Limited Partnership 2003-C and       RESI Finance DE Corporation 2003-C,
6.72%, 9-10-35 (A)(B)		127		128,959
RFMSI Series 2004-S5 Trust,
4.5%, 5-25-19		84		79,384
Structured Adjustable Rate Mortgage Loan Trust,       Series 2005-21,
5.4%, 11-25-35 (A)		144		137,408
Structured Asset Securities Corporation:
5.54%, 11-25-32 (A)		25		24,427
5.25%, 8-25-33		139		130,084
5.63%, 5-25-34 (A)		83		81,973
6.0%, 6-25-34 (A)		250		246,673
Wachovia Bank Commercial Mortgage Trust (The),
4.942%, 11-15-34 (C)		105		99,622
Wells Fargo Alternative Loan 2007-PA3 Trust,
6.20103%, 6-1-27 (A)		120		113,887
Wells Fargo Mortgage Backed Securities 2004-1       Trust (The),
5.5%, 2-25-34		143		137,218
TOTAL CORPORATE DEBT SECURITIES - 56.50%			$	15,956,294
(Cost: $16,285,748)
UNITED STATES GOVERNMENT AND GOVERNMENT       AGENCY OBLIGATIONS
Agency Obligations - 0.51%
Federal National Mortgage Association,
2.5%, 6-15-08 (E)		150		146,147
Mortgage-Backed Obligations - 38.46%
Federal Home Loan Mortgage Corporation Agency       REMIC/CMO,
5.0%, 6-15-31		108		102,294

Federal Home Loan Mortgage Corporation Fixed       Rate Participation Certificates:
5.0%, 5-1-18		296		286,853
5.5%, 6-1-19		150		148,498
5.3%, 1-15-33		228		217,418
6.0%, 10-1-33		554		553,328
6.0%, 7-1-34		300		297,187
5.5%, 2-1-35		190		183,940
5.0%, 5-15-35		270		242,335
5.0%, 8-1-35		367		344,631
Federal National Mortgage Association Fixed Rate       Pass-Through Certificates:
5.5%, 3-1-18		173		171,352
5.0%, 10-1-18		162		156,819
5.5%, 9-1-19		107		105,517
7.0%, 11-1-32		153		160,243
5.5%, 5-1-33		600		578,625
6.0%, 6-1-33		363		360,956
6.0%, 12-1-33		257		255,728
5.5%, 1-1-34		153		148,528
5.5%, 1-1-34		146		141,122
5.0%, 2-1-34		343		322,315
5.5%, 2-1-34		348		337,643
6.0%, 4-1-34		177		175,479
5.0%, 7-1-34		260		243,587
5.5%, 7-1-34		333		323,288
5.5%, 9-1-34		103		100,100
6.5%, 9-1-34		73		73,676
5.5%, 11-1-34		266		257,177
6.0%, 11-1-34		100		98,956
6.5%, 11-1-34		335		340,077
6.0%, 12-1-34		452		448,586
5.5%, 2-1-35		532		515,376
6.5%, 3-1-35		125		127,720
6.0%, 4-1-35		176		173,975
5.0%, 7-1-35		82		76,705
5.5%, 7-1-35		206		199,157
5.5%, 10-1-35		550		532,201
5.5%, 10-1-35		170		164,498
6.5%, 2-1-36		90		90,880
6.5%, 6-1-36		165		166,754
6.0%, 8-1-36		371		366,750
Government National Mortgage Association       Agency REMIC/CMO (Interest Only),
0.94697%, 6-17-45 (A)	1,518			79,488
Government National Mortgage Association Fixed       Rate Pass-Through Certificates:
6.25%, 7-15-24		109		110,621
5.5%, 12-15-34		362		351,582
5.5%, 7-1-35		250		242,578
Government National Mortgage Association       Non-Agency REMIC/CMO,
5.008%, 12-16-25		500		487,341
				10,861,884
TOTAL UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS - 38.97%			$	11,008,031
(Cost: $11,245,948)
SHORT-TERM SECURITIES
Finance Companies - 4.96%
Ciesco, LLC,
5.37%, 7-2-07	1,400			1,399,791
Forest and Paper Products - 3.89%
Sonoco Products Co.,
5.52%, 7-2-07	1,100			1,099,832
TOTAL SHORT-TERM SECURITIES - 8.85%			$	2,499,623
(Cost: $2,499,623)
TOTAL INVESTMENT SECURITIES - 104.32%			$	29,463,948
(Cost: $30,031,319)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (4.32%)				(1,221,399	)
NET ASSETS - 100.00%			$	28,242,549

Notes to Schedule of Investments
Certain acronyms are used within the body of the Portfolio's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.
(A)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2007.
(B)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be illiquid under guidelines established by the Board of Directors. At June 30, 2007, the total value of these securities amounted to $934,748 or 3.31% of net assets.
(C)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be liquid under guidelines established by the Board of Directors. At June 30, 2007, the total value of these securities amounted to $3,258,958 or 11.54% of net assets.
(D)This security does not bear interest for an initial period of time and subsequently becomes interest bearing.
(E)Security serves as collateral for the following open futures contracts at June 30, 2007. (See Note 6 to financial statements):
	Description	Type	Number of Contracts	Expiration Date	Market Value			Unrealized Appreciation
	U.S. 5 Year Treasury Note	Short	7	9-28-07		$	728,547		$	5,434
	U.S. 10 Year Treasury Note	Short	4	9-19-07			422,813			3,105
						$	1,151,360		$	8,539
See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      MORTGAGE SECURITIES PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $30,031) (Notes 1 and 3)	$	29,464
Cash		1
Receivables:
Interest		123
Portfolio shares sold		58
Prepaid and other assets		1
Total assets		29,647
LIABILITIES
Payable for investment securities purchased		1,358
Payable to Portfolio shareholders		31
Payable for variation margin - futures (Note 6)		4
Accrued accounting services fee (Note 2)		2
Accrued management fee (Note 2)		1
Accrued shareholder servicing (Note 2)		1
Accrued service fee (Note 2)		–	*
Other		7
Total liabilities		1,404
Total net assets	$	28,243
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	6
Additional paid-in capital		28,368
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		665
Accumulated undistributed net realized loss on investment transactions		(237	)
Net unrealized depreciation in value of investments		(559	)
Net assets applicable to outstanding units of capital	$	28,243
Net asset value, redemption and offering price per share	$	5.0461
Capital shares outstanding		5,597
Capital shares authorized		50,000

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Operations
      MORTGAGE SECURITIES PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                             (Unaudited)

INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	804
Expenses (Note 2):
Investment management fee		69
Service fee		34
Audit fees		14
Accounting services fee		13
Custodian fees		5
Legal fees		1
Shareholder servicing		1
Other		6
Total expenses		143
Net investment income		661
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on securities		(10	)
Realized net gain on futures		44
Realized net gain on investments		34
Unrealized depreciation in value of securities during the period	(336		)
Unrealized depreciation in value of futures during the period		(3	)
Unrealized depreciation in value of investments during the period	(339		)
Net loss on investments	(305		)
Net increase in net assets resulting from operations	$	356

See Notes to Financial Statements.

Statement of Changes in Net Assets
      MORTGAGE SECURITIES PORTFOLIO
      (In Thousands)                                                                                                                (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income		$	661		$	1,344
Realized net gain (loss) on investments			34			(105	)
Unrealized appreciation (depreciation)			(339	)		97
Net increase in net assets resulting                      from operations			356			1,336
Distributions to shareholders from (Note 1E):(1)
Net investment income			(–	)		(1,340	)
Realized gains on investment transactions			(–	)		(–	)
			(–	)		(1,340	)
Capital share transactions(2)			(1,676	)		1,476
Total increase (decrease)			(1,320	)		1,472
NET ASSETS
Beginning of period			29,563			28,091
End of period		$	28,243		$	29,563
Undistributed net investment income		$	665		$	4
(1)See "Financial Highlights" on page 195.
(2)Shares issued from sale of shares			1,044			1,648
Shares issued from reinvestment of dividend       and/or capital gains distribution			–			269
Shares redeemed			(1,381	)		(1,624	)
Increase (decrease) in outstanding capital shares			(337	)		293
Value issued from sale of shares		$	5,261		$	8,355
Value issued from reinvestment of dividend       and/or capital gains distribution			–			1,340
Value redeemed			(6,937	)		(8,219	)
Increase (decrease) in outstanding capital		$	(1,676	)	$	1,476

See Notes to Financial Statements.

Financial Highlights
      MORTGAGE SECURITIES PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:                             (Unaudited)

	For the six months ended				For the fiscal year ended December 31,						For the period from 5-27-04(1) through
	6-30-07				2006			2005			12-31-04
Net asset value,       beginning of period		$	4.9818		$	4.9801		$	5.0791		$	5.0000
Income (loss) from       investment operations:
Net investment income			0.1181			0.2373			0.2010			0.1009
Net realized and unrealized             gain (loss) on             investments		(0.0538		)		0.0010		(0.0990		)		0.1476
Total from investment       operations			0.0643			0.2383			0.1020			0.2485
Less distributions from:
Net investment income		(0.0000		)	(0.2366		)	(0.2010		)	(0.1009		)
Capital gains		(0.0000		)	(0.0000		)	(0.0000		)	(0.0685		)
Total distributions		(0.0000		)	(0.2366		)	(0.2010		)	(0.1694		)
Net asset value, end of period		$	5.0461		$	4.9818		$	4.9801		$	5.0791
Total return			1.35	%		4.77	%		2.00	%		4.97	%
Net assets, end of period       (in millions)			$28			$30			$28			$21
Ratio of expenses       to average net assets       including expense waiver			1.03	%(2)		0.97	%		1.00	%		0.71	%(2)
Ratio of net investment       income to average net assets       including expense waiver			4.76	%(2)		4.76	%		4.21	%		4.02	%(2)
Ratio of expenses       to average net assets       excluding expense waiver			1.03	%(2)(3)		0.97	%(3)		1.00	%(3)		0.97	%(2)
Ratio of net investment       income to average net assets       excluding expense waiver			4.76	%(2)(3)		4.76	%(3)		4.21	%(3)		3.76	%(2)
Portfolio turnover rate			56	%		158	%		202	%		184	%

(1)Commencement of operations.

(2)Annualized.

(3)There was no waiver of expenses during the period.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF REAL ESTATE SECURITIES PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target Real Estate Securities Portfolio had net assets totaling $59,721,620 invested in a diversified portfolio of:

93.99%	Domestic Common Stocks
3.71%	Foreign Common Stocks
2.30%	Cash and Cash Equivalents

Sector Weightings

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007, your Portfolio owned:

Shelter Stocks	$	86.84
Business Equipment and Services Stocks	$	4.12
Miscellaneous Stocks	$	3.50
Consumer Services Stocks	$	3.24
Cash and Cash Equivalents	$	2.30

The Investments of Real Estate Securities Portfolio
June 30, 2007				(Unaudited)
COMMON STOCKS		Shares				Value
Business Equipment and Services - 4.12%
Brookfield Properties Corporation			91,125		$	2,215,249
CB Richard Ellis Group, Inc., Class A*			6,700			244,550
						2,459,799
Health Care - General - 0.31%
Brookdale Senior Living, Inc.			4,100			186,837
Hotels and Gaming - 3.24%
Hilton Hotels Corporation			24,100			806,627
Marriott International, Inc., Class A			5,500			237,820
Starwood Hotels & Resorts Worldwide, Inc.			13,300			892,031
						1,936,478
Multiple Industry - 2.84%
Digital Realty Trust, Inc.			16,100			606,648
Forest City Enterprises, Inc., Class A			13,726			843,873
Macquarie Infrastructure Company Trust			6,000			248,880
						1,699,401
Real Estate Investment Trust - 86.84%
AMB Property Corporation			19,900			1,059,078
Acadia Realty Trust			11,000			285,450
Alexandria Real Estate Equities, Inc.			7,500			726,150
American Campus Communities, Inc.			24,900			704,421
American Financial Realty Trust			13,200			136,224
Archstone-Smith Trust			41,200			2,435,332
Ashford Hospitality Trust, Inc.			18,000			211,680
Associated Estates Realty Corporation			13,200			205,788
AvalonBay Communities, Inc.			16,100			1,913,968
BioMed Realty Trust, Inc.			42,943			1,078,728
Boston Properties, Inc.			23,500			2,400,055
Brandywine Realty Trust			38,300			1,094,614
Camden Property Trust			19,800			1,326,006
Corporate Office Properties Trust			20,500			840,705
DCT Industrial Trust Inc.			51,300			551,988
Developers Diversified Realty Corporation			25,100			1,323,021
Douglas Emmett, Inc.			5,200			128,648
EastGroup Properties, Inc.			6,400			280,448
Equity Inns, Inc.			11,300			253,120
Equity Lifestyle Properties, Inc.			9,300			485,367
Equity Residential			50,700			2,313,441
Essex Property Trust, Inc.			7,700			895,510
Extra Space Storage Inc.			16,000			264,000
Federal Realty Investment Trust			11,500			888,490
First Potomac Realty Trust			7,000			163,030
General Growth Properties, Inc.			29,588			1,566,685
Hersha Hospitality Trust			17,300			204,486
Home Properties, Inc.			8,200			425,826
Hospitality Properties Trust			5,300			219,897
Host Hotels & Resorts, Inc.	108,968					2,519,340
Kilroy Realty Corporation			9,800			694,232
Kimco Realty Corporation			42,000			1,598,940
Kite Realty Group Trust			17,800			338,556
LaSalle Hotel Properties			6,800			295,256
Liberty Property Trust			17,600			773,168
Macerich Company (The)			14,700			1,211,574
Maguire Properties, Inc.			26,100			896,013
Mid-America Apartment Communities, Inc.			7,100			372,608
PS Business Parks, Inc.			6,600			418,242
ProLogis			61,802			3,516,534
Public Storage, Inc.			27,600			2,120,232
Regency Centers Corporation			13,100			923,550
SL Green Realty Corp.			14,200			1,759,238
Simon Property Group, Inc.			44,600			4,149,584
Sunstone Hotel Investors, Inc.			14,800			420,172
Tanger Factory Outlet Centers, Inc.			9,400			352,030
Taubman Centers, Inc.			15,900			788,799
UDR, Inc.			13,500			355,050
Ventas, Inc.			18,400			667,000
Vornado Realty Trust			26,000			2,855,840
Weingarten Realty Investors			11,000			452,100
						51,860,214
Utilities - Telephone - 0.35%
Crown Castle International Corp.*			5,700			206,739
TOTAL COMMON STOCKS - 97.70%					$	58,349,468
(Cost: $50,933,879)

SHORT-TERM SECURITIES - 1.93%	Principal Amount in Thousands
Forest and Paper Products
Sonoco Products Co.,
5.52%, 7-2-07	$	1,151	$	1,150,824
(Cost: $1,150,824)
TOTAL INVESTMENT SECURITIES - 99.63%			$	59,500,292
(Cost: $52,084,703)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.37%				221,328
NET ASSETS - 100.00%			$	59,721,620

Notes to Schedule of Investments

*No dividends were paid during the preceding 12 months.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      REAL ESTATE SECURITIES PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $52,085) (Notes 1 and 3)	$	59,500
Cash		12
Receivables:
Investment securities sold		393
Dividends and interest		217
Portfolio shares sold		60
Prepaid and other assets		1
Total assets		60,183
LIABILITIES
Payable for investment securities purchased		429
Payable to Portfolio shareholders		18
Accrued accounting services fee (Note 2)		3
Accrued management fee (Note 2)		3
Accrued shareholder servicing (Note 2)		2
Accrued service fee (Note 2)		1
Other		5
Total liabilities		461
Total net assets	$	59,722
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	7
Additional paid-in capital		49,919
Accumulated undistributed income:
Accumulated undistributed net investment income		636
Accumulated undistributed net realized gain on investment transactions		1,744
Net unrealized appreciation in value of investments		7,416
Net assets applicable to outstanding units of capital	$	59,722
Net asset value, redemption and offering price per share	$	8.1946
Capital shares outstanding		7,288
Capital shares authorized		50,000

See Notes to Financial Statements.

Statement of Operations
      REAL ESTATE SECURITIES PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                             (Unaudited)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $4)	$	985
Interest and amortization		28
Total income		1,013
Expenses (Note 2):
Investment management fee		290
Service fee		80
Accounting services fee		21
Audit fees		14
Custodian fees		8
Shareholder servicing		2
Legal fees		1
Other		8
Total expenses		424
Net investment income		589
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		1,194
Unrealized depreciation in value of investments during the period		(6,459	)
Net loss on investments		(5,265	)
Net decrease in net assets resulting from operations	$	(4,676	)

See Notes to Financial Statements.

Statement of Changes in Net Assets
      REAL ESTATE SECURITIES PORTFOLIO
      (In Thousands)                                                                                                                (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income		$	589		$	447
Realized net gain on investments			1,194			1,870
Unrealized appreciation (depreciation)			(6,459	)		9,143
Net increase (decrease) in net assets                      resulting from operations			(4,676	)		11,460
Distributions to shareholders from (Note 1E): (1)
Net investment income			(–	)		(400	)
Realized gains on investment transactions			(–	)		(1,431	)
			(–	)		(1,831	)
Capital share transactions (2)			4,626			17,625
Total increase (decrease)			(50	)		27,254
NET ASSETS
Beginning of period			59,772			32,518
End of period		$	59,722		$	59,772
Undistributed net investment income		$	636		$	47
(1)See "Financial Highlights" on page 203.
(2)Shares issued from sale of shares			1,240			2,295
Shares issued from reinvestment of dividend       and/or capital gains distribution			–			209
Shares redeemed			(762	)		(365	)
Increase in outstanding capital shares			478			2,139
Value issued from sale of shares		$	11,447		$	18,645
Value issued from reinvestment of dividend       and/or capital gains distribution			–			1,831
Value redeemed			(6,821	)		(2,851	)
Increase in outstanding capital		$	4,626		$	17,625

See Notes to Financial Statements.

Financial Highlights
      REAL ESTATE SECURITIES PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:                               (Unaudited)

	For the six months ended				For the fiscal year ended December 31,						For the period from 5-27-04(1) through
	6-30-07				2006			2005			12-31-04
Net asset value,       beginning of period		$	8.7770		$	6.9610		$	6.5176		$	5.0000
Income (loss) from investment       operations:
Net investment income			0.0732			0.0367			0.0779			0.0396
Net realized and unrealized             gain (loss) on investments		(0.6556		)		2.0572			0.6278			1.5935
Total from investment operations		(0.5824		)		2.0939			0.7057			1.6331
Less distributions from:
Net investment income		(0.0000		)	(0.0607		)	(0.0954		)	(0.0349		)
Capital gains		(0.0000		)	(0.2172		)	(0.1669		)	(0.0806		)
Total distributions		(0.0000		)	(0.2779		)	(0.2623		)	(0.1155		)
Net asset value, end of period		$	8.1946		$	8.7770		$	6.9610		$	6.5176
Total return			- -6.64	%		30.08	%		10.83	%		32.66	%
Net assets, end of period       (in millions)			$60			$60			$33			$19
Ratio of expenses to average       net assets including       expense waiver			1.32	%(2)		1.31	%		1.38	%		1.21	%(2)
Ratio of net investment income       to average net assets       including expense waiver			1.83	%(2)		1.03	%		1.26	%		2.14	%(2)
Ratio of expenses to average       net assets excluding       expense waiver			1.32	%(2)(3)		1.31	%(3)		1.38	%(3)		1.55	%(2)
Ratio of net investment income       to average net assets       excluding expense waiver			1.83	%(2)(3)		1.03	%(3)		1.26	%(3)		1.80	%(2)
Portfolio turnover rate			23	%		32	%		48	%		53	%

(1)Commencement of operations.

(2)Annualized.

(3)There was no waiver of expenses during the period.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF SCIENCE AND TECHNOLOGY PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target Science and Technology Portfolio had net assets totaling $378,713,219 invested in a diversified portfolio of:

89.28%	Domestic Common Stocks
7.49%	Foreign Common Stocks
3.23%	Cash and Cash Equivalents

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007, your Portfolio owned:

Sector Weightings

Technology Stocks	$	28.55
Business Equipment and Services Stocks	$	21.82
Health Care Stocks	$	20.71
Consumer Durables Stocks	$	11.80
Energy Stocks	$	5.98
Miscellaneous Stocks	$	5.22
Cash and Cash Equivalents	$	3.23
Consumer Nondurables Stocks	$	2.69

Country Weightings

United States	$	89.28
Pacific Basin (1)	$	4.90
Cash and Cash Equivalents	$	3.23
Other (2)	$	2.59

(1)Includes $2.54 South Korea and $2.36 Taiwan.

(2)Includes $1.49 Bermuda and $1.10 Spain.

The Investments of Science and Technology Portfolio
June 30, 2007                                                                                                                  (Unaudited)
COMMON STOCKS	Shares			Value
Business Equipment and Services - 10.59%
CheckFree Corporation*		407,800	$	16,385,404
Euronet Worldwide, Inc.*		271,350		7,913,923
Global Cash Access, Inc.*		406,500		6,512,130
Telvent GIT, S.A.		158,000		4,163,300
VeriFone Holdings, Inc.*		145,200		5,118,300
				40,093,057
Chemicals - Petroleum and Inorganic - 2.25%
E.I. du Pont de Nemours and Company		167,400		8,510,616
Communications Equipment - 1.49%
Marvell Technology Group Ltd.*		310,100		5,650,022
Computers - Peripherals - 13.03%
Aspen Technology, Inc.*		806,800		11,299,234
Intuit Inc.*		176,900		5,319,383
Lawson Software, Inc.*		975,300		9,640,840
Red Hat, Inc.*		142,300		3,170,444
Symantec Corporation*		310,600		6,271,014
Synaptics Incorporated*		164,800		5,899,016
Transaction Systems Architects, Inc.*		229,700		7,736,296
				49,336,227
Consumer Electronics - 11.80%
Garmin Ltd.		101,300		7,489,616
NAVTEQ Corporation*		160,900		6,812,506
Research In Motion Limited*		151,900		30,391,393
				44,693,515
Defense - 2.38%
ESCO Technologies Inc.*		248,700		9,017,862
Electrical Equipment - 0.91%
Power-One, Inc.*		859,800		3,426,303
Electronic Components - 11.65%
Cree, Inc.*		314,700		8,133,421
Himax Technologies, Inc., ADR*		652,500		3,771,450
IPG Photonics Corporation*		84,500		1,685,352
MediaTek Incorporation (A)		332,500		5,179,821
Microchip Technology Incorporated		75,300		2,790,618
Motorola, Inc.		303,100		5,364,870
OmniVision Technologies, Inc.*		127,600		2,312,112
PMC-Sierra, Inc.*		683,600		5,277,392
Samsung Electronics Co., Ltd. (A)		15,700		9,618,661
				44,133,697
Food and Related - 2.69%
Archer Daniels Midland Company		308,100		10,195,029
Forest and Paper Products - 1.08%
Pentair, Inc.		106,200		4,096,134
Health Care - Drugs - 5.01%
Affymetrix, Inc.*		200,600		4,992,934
Animal Health International, Inc.*		294,800		4,279,022
Genzyme Corporation*		150,500		9,695,210
				18,967,166
Health Care - General - 5.02%
Advanced Medical Optics, Inc.*		203,900		7,112,032
Home Diagnostics, Inc.*		111,700		1,318,060
NightHawk Radiology Holdings, Inc.*		177,600		3,205,680
Radiation Therapy Services, Inc.*		125,200		3,295,890
Volcano Corporation*		201,800		4,078,378
				19,010,040
Hospital Supply and Management - 10.68%
Cerner Corporation*		448,700		24,884,902
HMS Holdings Corp.*		183,900		3,523,524
HealthSouth Corporation*		171,180		3,100,070
UnitedHealth Group Incorporated		69,000		3,528,660
WellPoint, Inc.*		67,900		5,420,457
				40,457,613
Multiple Industry - 0.98%
Syntax-Brillian Corporation*		471,100		2,313,101
Veraz Networks, Inc.*		216,000		1,408,320
				3,721,421
Petroleum - International - 4.81%
Noble Energy, Inc.		292,100		18,224,119
Petroleum - Services - 1.17%
Input/Output, Inc.*		284,900		4,447,289
Timesharing and Software - 11.23%
Alliance Data Systems Corporation*		421,000		32,534,880
Eclipsys Corporation*		264,600		5,240,403
Google Inc., Class A*		9,050		4,736,498
				42,511,781
TOTAL COMMON STOCKS - 96.77%			$	366,491,891
(Cost: $266,512,531)

SHORT-TERM SECURITIES	Principal Amount in Thousands
Health Care - Drugs - 0.58%
Abbott Laboratories,
5.26%, 7-12-07	$	2,200		2,196,464
Insurance - Life - 0.79%
American General Finance Corporation,
5.27%, 7-2-07		3,000		2,999,561
Publishing - 1.97%
E.W. Scripps Co.,
5.35%, 7-2-07		7,450		7,448,893
TOTAL SHORT-TERM SECURITIES - 3.34%			$	12,644,918
(Cost: $12,644,918)
TOTAL INVESTMENT SECURITIES - 100.11%			$	379,136,809
(Cost: $279,157,449)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.11%)				(423,590	)
NET ASSETS - 100.00%			$	378,713,219

Notes to Schedule of Investments

Certain acronyms may be used within the body of the Portfolio's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.

*No income dividends were paid during the preceding 12 months.

(A)Listed on an exchange outside the United States.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      SCIENCE AND TECHNOLOGY PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $279,157) (Notes 1 and 3)	$	379,137
Cash		1
Receivables:
Portfolio shares sold		37
Dividends and interest		17
Prepaid and other assets		5
Total assets		379,197
LIABILITIES
Payable for investment securities purchased		273
Payable to Portfolio shareholders		119
Accrued management fee (Note 2)		17
Accrued accounting services fee (Note 2)		10
Accrued shareholder servicing (Note 2)		10
Accrued service fee (Note 2)		5
Other		50
Total liabilities		484
Total net assets	$	378,713
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	19
Additional paid-in capital		248,950
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(1,094	)
Accumulated undistributed net realized gain on investment transactions		30,859
Net unrealized appreciation in value of investments		99,979
Net assets applicable to outstanding units of capital	$	378,713
Net asset value, redemption and offering price per share	$	20.0611
Capital shares outstanding		18,878
Capital shares authorized		60,000

See Notes to Financial Statements.

Statement of Operations
      SCIENCE AND TECHNOLOGY PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                            (Unaudited)

INVESTMENT LOSS
Income (Note 1B):
Interest and amortization	$	625
Dividends (net of foreign withholding taxes of $24)		398
Total income		1,023
Expenses (Note 2):
Investment management fee		1,539
Service fee		453
Accounting services fee		59
Audit fees		13
Custodian fees		10
Shareholder servicing		10
Legal fees		9
Other		42
Total		2,135
Less waiver of investment management fee (Notes 2 and 9)		(36	)
Total expenses		2,099
Net investment loss		(1,076	)
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		26,484
Realized net gain on written options		83
Realized net loss on foreign currency exchange transactions		(–	)*
Realized net gain on investments		26,567
Unrealized appreciation in value of investments during the period		19,862
Net gain on investments		46,429
Net increase in net assets resulting from operations	$	45,353

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Changes in Net Assets
      SCIENCE AND TECHNOLOGY PORTFOLIO
      (In Thousands)                                                                                                              (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss		$	(1,076	)	$	(2,341	)
Realized net gain on investments			26,567			23,557
Unrealized appreciation			19,862			5,250
Net increase in net assets                      resulting from operations			45,353			26,466
Dividends to shareholders from (Note 1E):(1)
Net investment income			(–	)		(–	)
Realized gains on investment transactions			(–	)		(9,599	)
			(–	)		(9,599	)
Capital share transactions (2)			(18,859	)		(25,627	)
Total increase (decrease)			26,494			(8,760	)
NET ASSETS
Beginning of period			352,219			360,979
End of period		$	378,713		$	352,219
Undistributed net investment loss		$	(1,094	)	$	(18	)
(1)See "Financial Highlights" on page 211.
(2)Shares issued from sale of shares			492			1,052
Shares issued from reinvestment of dividend       and/or capital gains distribution			–			542
Shares redeemed			(1,494	)		(3,093	)
Decrease in outstanding capital shares			(1,002	)		(1,499	)
Value issued from sale of shares		$	9,287		$	18,382
Value issued from reinvestment of dividend       and/or capital gains distribution			–			9,599
Value redeemed			(28,146	)		(53,608	)
Decrease in outstanding capital		$	(18,859	)	$	(25,627	)

See Notes to Financial Statements.

Financial Highlights
      SCIENCE AND TECHNOLOGY PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended December 31,
	6-30-07				2006			2005			2004			2003			2002
Net asset value,       beginning of period		$	17.7170		$	16.8844		$	14.4014		$	12.3883		$	9.4961		$	12.4927
Income (loss)       from investment       operations:
Net investment loss		(0.0571		)	(0.1178		)	(0.1145		)	(0.0751		)	(0.0521		)	(0.0245		)
Net realized and             unrealized gain             (loss) on             investments			2.4012			1.4468			2.5975			2.0882			2.9443		(2.9720		)
Total from investment       operations			2.3441			1.3290			2.4830			2.0131			2.8922		(2.9965		)
Less distributions from:
Net investment             income		(0.0000		)	(0.0000		)	(0.0000		)	(0.0000		)	(0.0000		)	(0.0001		)
Capital gains		(0.0000		)	(0.4964		)	(0.0000		)	(0.0000		)	(0.0000		)	(0.0000		)
Total distributions		(0.0000		)	(0.4964		)	(0.0000		)	(0.0000		)	(0.0000		)	(0.0001		)
Net asset value,       end of period		$	20.0611		$	17.7170		$	16.8844		$	14.4014		$	12.3883		$	9.4961
Total return			13.23	%		7.87	%		17.25	%		16.25	%		30.46	%		- -23.99	%
Net assets, end of period       (in millions)			$379			$352			$361			$322			$268			$195
Ratio of expenses to       average net assets       including expense       waiver			1.16	%(1)		1.17	%		1.17	%		1.17	%		1.16	%		1.17	%
Ratio of net investment       loss to average net       assets including       expense waiver			- -0.59	%(1)		- -0.65	%		- -0.74	%		- -0.59	%		- -0.52	%		- -0.23	%
Ratio of expenses to       average net assets       excluding expense       waiver			1.18	%(1)		1.18	%		1.17	%(2)		1.17	%(2)		1.16	%(2)		1.17	%(2)
Ratio of net investment       loss to average net       assets excluding       expense waiver			- -0.61	%(1)		- -0.66	%		- -0.74	%(2)		- -0.59	%(2)		- -0.52	%(2)		- -0.23	%(2)
Portfolio turnover rate			38	%		71	%		104	%		107	%		116	%		92	%

(1)Annualized.

(2)There was no waiver of expenses during the period.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF SMALL CAP GROWTH PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target Small Cap Growth Portfolio had net assets totaling $557,615,445 invested in a diversified portfolio of:

93.36%	Domestic Common Stocks
5.19%	Cash and Cash Equivalents
1.45%	Foreign Common Stocks

Sector Weightings

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007, your Portfolio owned:

Business Equipment and Services Stocks	$	23.92
Health Care Stocks	$	20.31
Technology Stocks	$	19.36
Consumer Services Stocks	$	7.03
Capital Goods Stocks	$	5.47
Cash and Cash Equivalents	$	5.19
Retail Stocks	$	5.13
Miscellaneous Stocks	$	4.53
Energy Stocks	$	3.12
Consumer Nondurables Stocks	$	3.11
Financial Services Stocks	$	2.83

The Investments of Small Cap Growth Portfolio
June 30, 2007			(Unaudited)
COMMON STOCKS	Shares			Value
Aircraft - 1.90%
AAR CORP.*		320,200	$	10,569,802
Apparel - 1.02%
Heelys, Inc.*		220,700		5,707,302
Business Equipment and Services - 12.70%
Argyle Security Acquisition Corporation*		300,000		2,343,000
Bucyrus International, Inc., Class A		220,400		15,591,096
Capella Education Company*		135,000		6,212,700
CheckFree Corporation*		329,855		13,253,574
DealerTrack Holdings, Inc.*		253,300		9,334,105
Mobile Mini, Inc.*		198,000		5,781,600
Riverbed Technology, Inc.*		188,100		8,234,077
TETRA Technologies, Inc.*		51,900		1,463,580
Tetra Tech, Inc.*		399,300		8,602,918
				70,816,650
Capital Equipment - 3.54%
Chicago Bridge & Iron Company N.V., NY Shares		523,100		19,741,794
Chemicals - Petroleum and Inorganic - 0.69%
UAP Holding Corp.		128,500		3,873,632
Communications Equipment - 2.61%
ARRIS Group, Inc.*		828,300		14,557,373
Computers - Micro - 1.01%
Sonic Solutions*		447,300		5,644,926
Computers - Peripherals - 8.82%
Allscripts Healthcare Solutions, Inc.*		658,500		16,781,873
MICROS Systems, Inc.*		304,800		16,582,644
Stratasys, Inc.*		179,600		8,438,506
Vital Images, Inc.*		272,100		7,388,875
				49,191,898
Construction Materials - 1.93%
Comtech Group, Inc.*		650,600		10,757,671
Defense - 1.78%
DRS Technologies, Inc.		173,000		9,907,710
Electronic Components - 1.09%
Silicon Laboratories Inc.*		175,300		6,065,380
Electronic Instruments - 2.15%
Trimble Navigation Limited*		373,400		12,016,012
Finance Companies - 1.84%
Financial Federal Corporation		343,575		10,245,407
Food and Related - 2.09%
United Natural Foods, Inc.*		438,300		11,652,205
Health Care - Drugs - 3.44%
Adams Respiratory Therapeutics, Inc.*		265,300		10,442,208
LifeCell Corporation*		285,700		8,728,135
				19,170,343
Health Care - General - 10.93%
American Medical Systems Holdings, Inc.*		389,000		7,015,615
Digene Corporation*		246,100		14,779,536
Emeritus Corporation*		127,000		3,934,460
Kyphon Inc.*		348,600		16,795,548
NuVasive, Inc.*		483,905		13,067,855
Omnicell, Inc.*		256,700		5,335,509
				60,928,523
Hospital Supply and Management - 5.94%
Cerner Corporation*		254,012		14,087,506
Healthways, Inc.*		242,200		11,474,225
PSS World Medical, Inc.*		413,400		7,536,282
				33,098,013
Hotels and Gaming - 6.06%
Gaylord Entertainment Company*		352,100		18,886,644
Scientific Games Corporation, Class A*		426,900		14,924,424
				33,811,068
Insurance - Property and Casualty - 0.99%
XL Capital Assurance Inc.		180,000		5,556,600
Leisure Time Industry - 0.97%
THQ Inc.*		177,400		5,416,022
Motor Vehicle Parts - 2.07%
LKQ Corporation*		468,000		11,547,900
Petroleum - Domestic - 1.36%
Delta Petroleum Corporation*		377,700		7,584,216
Petroleum - Services - 1.76%
Dril-Quip, Inc.*		218,300		9,812,585
Restaurants - 1.29%
Panera Bread Company, Class A*		156,800		7,216,720
Retail - Specialty Stores - 3.84%
O'Reilly Automotive, Inc.*		366,400		13,390,088
Tractor Supply Company*		105,000		5,461,050
Zumiez Inc.*		67,100		2,536,380
				21,387,518
Timesharing and Software - 11.22%
Blackbaud, Inc.		509,600		11,254,516
Blackboard Inc.*		275,200		11,594,176
Concur Technologies, Inc.*		142,700		3,259,982
CoStar Group, Inc.*		155,300		8,213,817
FactSet Research Systems, Inc.		107,325		7,335,664
Knot, Inc. (The)*		445,900		9,000,491
Ultimate Software Group, Inc. (The)*		203,000		5,872,790
Vocus, Inc.*		239,600		6,017,554
				62,548,990
Utilities - Telephone - 1.77%
NTELOS Holdings Corp.*		356,100		9,846,165
TOTAL COMMON STOCKS - 94.81%			$	528,672,425
(Cost: $442,524,482)

SHORT-TERM SECURITIES	Principal Amount in Thousands
Health Care - Drugs - 0.36%
Abbott Laboratories,
5.26%, 7-12-07	$	2,000	1,996,786
Household - General Products - 1.12%
Fortune Brands Inc.,
5.45%, 7-2-07		6,263	6,262,052

Insurance - Life - 0.90%
American General Finance Corporation,
5.27%, 7-2-07		5,000		4,999,268
Publishing - 1.01%
E.W. Scripps Co.,
5.35%, 7-2-07		5,622		5,621,164
Restaurants - 1.79%
Starbucks Corporation,
5.45%, 7-2-07	10,000			9,998,486
Retail - General Merchandise - 0.72%
Target Corporation,
5.27%, 7-2-07		4,000		3,999,414
Utilities - Telephone - 0.53%
AT&T Inc.,
5.28%, 7-25-07		3,000		2,989,440
TOTAL SHORT-TERM SECURITIES - 6.43%			$	35,866,610
(Cost: $35,866,610)
TOTAL INVESTMENT SECURITIES - 101.24%			$	564,539,035
(Cost: $478,391,092)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (1.24%)				(6,923,590	)
NET ASSETS - 100.00%			$	557,615,445

Notes to Schedule of Investments

*No dividends were paid during the preceding 12 months.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      SMALL CAP GROWTH PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $478,391) (Notes 1 and 3)	$	564,539
Cash		3
Receivables:
Investment securities sold		2,471
Dividends and interest		107
Portfolio shares sold		34
Prepaid and other assets		8
Total assets		567,162
LIABILITIES
Payable for investment securities purchased		9,110
Payable to Portfolio shareholders		301
Accrued management fee (Note 2)		25
Accrued shareholder servicing (Note 2)		15
Accrued accounting services fee (Note 2)		13
Accrued service fee (Note 2)		8
Other		75
Total liabilities		9,547
Total net assets	$	557,615
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	52
Additional paid-in capital		460,204
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(1,709	)
Accumulated undistributed net realized gain on investment transactions		12,920
Net unrealized appreciation in value of securities		86,148
Net assets applicable to outstanding units of capital	$	557,615
Net asset value, redemption and offering price per share	$	10.8110
Capital shares outstanding		51,579
Capital shares authorized		140,000

See Notes to Financial Statements.

Statement of Operations
      SMALL CAP GROWTH PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                            (Unaudited)

INVESTMENT LOSS
Income (Note 1B):
Interest and amortization	$	1,124
Dividends (net of foreign withholding taxes of $6)		338
Total income		1,462
Expenses (Note 2):
Investment management fee		2,331
Service fee		686
Accounting services fee		73
Audit fees		16
Legal fees		10
Custodian fees		9
Shareholder servicing		7
Other		66
Total		3,198
Less waiver of investment management fee (Notes 2 and 9)		(55	)
Total expenses		3,143
Net investment loss		(1,681	)
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		39,303
Unrealized appreciation in value of investments during the period		6,842
Net gain on investments		46,145
Net increase in net assets resulting from operations	$	44,464

See Notes to Financial Statements.

Statement of Changes in Net Assets
      SMALL CAP GROWTH PORTFOLIO
      (In Thousands)                                                                                                               (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss		$	(1,681	)	$	(3,247	)
Realized net gain on investments			39,303			65,388
Unrealized appreciation (depreciation)			6,842			(34,923	)
Net increase in net assets resulting                      from operations			44,464			27,218
Dividends to shareholders from (Note 1E):(1)
Net investment income			(–	)		(–	)
Realized gains on investment transactions			(–	)		(52,471	)
			(–	)		(52,471	)
Capital share transactions(2)			(41,409	)		(26,068	)
Total increase (decrease)			3,055			(51,321	)
NET ASSETS
Beginning of period			554,560			605,881
End of period		$	557,615		$	554,560
Undistributed net investment loss		$	(1,709	)	$	(28	)
(1)See "Financial Highlights" on page 220.
(2) Shares issued from sale of shares			694			1,960
Shares issued from reinvestment of dividend       and/or capital gains distribution			–			5,260
Shares redeemed			(4,711	)		(9,401	)
Decrease in outstanding capital shares			(4,017	)		(2,181	)
Value issued from sale of shares		$	7,153		$	21,281
Value issued from reinvestment of dividend       and/or capital gains distribution			–			52,471
Value redeemed			(48,562	)		(99,820	)
Decrease in outstanding capital		$	(41,409	)	$	(26,068	)

See Notes to Financial Statements.

Financial Highlights
      SMALL CAP GROWTH PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:                                (Unaudited)

	For the six months ended					For the fiscal year ended December 31,
	6-30-07					2006			2005			2004			2003			2002
Net asset value,       beginning of period		$	9.9749		$	10.4866		$	9.6810		$	8.4703		$	6.2388		$	7.9770
Income (loss) from       investment operations:
Net investment loss			(0.0326	)		(0.0584	)		(0.0647	)	(0.0741		)	(0.0485		)	(0.0458		)
Net realized and             unrealized gain             (loss) on             investments			0.8687			0.5883			1.3116			1.2848			2.2800		(1.6924		)
Total from investment       operations			0.8361			0.5299			1.2469			1.2107			2.2315		(1.7382		)
Less distributions from:
Net investment             income			(0.0000	)		(0.0000	)		(0.0000	)	(0.0000		)	(0.0000		)	(0.0000		)
Capital gains			(0.0000	)		(1.0416	)		(0.4413	)	(0.0000		)	(0.0000		)	(0.0000		)
Total distributions			(0.0000	)		(1.0416	)		(0.4413	)	(0.0000		)	(0.0000		)	(0.0000		)
Net asset value,       end of period		$	10.8110		$	9.9749		$	10.4866		$	9.6810		$	8.4703		$	6.2388
Total return			8.38	%		5.05	%		12.88	%		14.29	%		35.77	%		- -21.79	%
Net assets, end of period       (in millions)			$558			$555			$606			$589			$544			$279
Ratio of expenses       to average net       assets including       expense waiver			1.15	%(1)		1.15	%		1.16	%		1.17	%		1.15	%		1.15	%
Ratio of net investment       loss to average net       assets including       expense waiver			- -0.61	%(1)		- -0.55	%		- -0.63	%		- -0.82	%		- -0.88	%		- -0.66	%
Ratio of expenses       to average net       assets excluding       expense waiver			1.17	%(1)		1.16	%		1.16	%(2)		1.17	%(2)		1.15	%(2)		1.15	%(2)
Ratio of net investment       loss to average net       assets excluding       expense waiver			- -0.63	%(1)		- -0.56	%		- -0.63	%(2)		- -0.82	%(2)		- -0.88	%(2)		- -0.66	%(2)
Portfolio turnover rate			66	%		94	%		71	%		96	%		86	%		35	%

(1)Annualized.

(2)There was no waiver of expenses during the period.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF SMALL CAP VALUE PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target Small Cap Value Portfolio had net assets totaling $216,067,619 invested in a diversified portfolio of:

92.47%	Domestic Common Stocks
7.11%	Foreign Common Stocks
0.42%	Cash and Cash Equivalents

Sector Weightings

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007, your Portfolio owned:

Financial Services Stocks	$	17.76
Business Equipment and Services Stocks	$	10.37
Consumer Nondurables Stocks	$	10.05
Capital Goods Stocks	$	9.11
Consumer Services Stocks	$	8.72
Retail Stocks	$	8.55
Health Care Stocks	$	8.28
Technology Stocks	$	6.85
Energy Stocks	$	5.36
Utilities Stocks	$	4.94
Shelter Stocks	$	4.90
Raw Materials Stocks	$	2.65
Miscellaneous Stocks	$	2.04
Cash and Cash Equivalents	$	0.42

The Investments of Small Cap Value Portfolio
June 30, 2007			(Unaudited)
COMMON STOCKS	Shares			Value
Aircraft - 1.07%
Orbital Sciences Corporation*		110,400	$	2,319,504
Aluminum - 0.92%
Kaiser Aluminum Corporation*		27,300		1,989,897
Apparel - 0.69%
Albany International Corp., Class A		36,800		1,488,192
Banks - 10.05%
Boston Private Financial Holdings, Inc.		111,200		2,988,500
Cathay General Bancorp		74,300		2,492,765
Columbia Banking System, Inc.		35,800		1,047,508
First Midwest Bancorp, Inc.		75,800		2,691,279
First Niagara Financial Group, Inc.		201,400		2,639,347
First State Bancorporation		48,400		1,029,226
KBW, Inc.*		69,700		2,047,786
Sterling Bancshares, Inc.		137,500		1,555,812
Umpqua Holdings Corporation		81,201		1,908,630
United Bankshares, Inc.		52,600		1,672,417
Wintrust Financial Corporation		37,300		1,633,740
				21,707,010
Broadcasting - 1.52%
Belo Corp., Class A		121,700		2,505,803
Outdoor Channel Holdings, Inc.*		69,400		784,220
				3,290,023
Business Equipment and Services - 9.90%
Brink's Company (The)		73,900		4,573,671
Dollar Thrifty Automotive Group, Inc.*		43,400		1,772,456
Education Realty Trust, Inc.		70,500		989,115
H&E Equipment Services, Inc.*		85,400		2,368,996
PHH Corporation*		107,200		3,345,712
TriZetto Group, Inc. (The)*		92,000		1,780,660
Waste Connections, Inc.*		109,650		3,315,816
Watson Wyatt & Company Holdings, Inc., Class A		64,100		3,235,768
				21,382,194
Capital Equipment - 4.00%
Actuant Corporation, Class A		46,300		2,919,678
Astec Industries, Inc.*		48,400		2,044,658
Chart Industries, Inc.*		74,200		2,110,619
Goodman Global, Inc.*		71,091		1,579,642
				8,654,597
Chemicals - Specialty - 1.73%
H.B. Fuller Company		125,000		3,736,250
Communications Equipment - 1.04%
Dycom Industries, Inc.*		75,182		2,253,956
Computers - Peripherals - 2.99%
Electronics for Imaging, Inc.*		124,100		3,498,379
Lawson Software, Inc.*		298,700		2,952,649
				6,451,028
Construction Materials - 1.59%
Texas Industries, Inc.		43,700		3,426,517
Containers - 2.40%
Silgan Holdings Inc.		93,789		5,180,904
Cosmetics and Toiletries - 1.75%
Elizabeth Arden, Inc.*		72,865		1,767,341
Nu Skin Enterprises, Inc., Class A		122,361		2,018,956
				3,786,297
Electrical Equipment - 0.87%
Microsemi Corporation*		78,400		1,878,072
Electronic Components - 1.75%
Cirrus Logic, Inc.*		156,100		1,296,410
RF Micro Devices, Inc.*		196,300		1,225,893
Trident Microsystems, Inc.*		68,900		1,263,282
				3,785,585
Food and Related - 5.21%
Hain Celestial Group, Inc. (The)*		138,600		3,760,218
Pilgrim's Pride Corporation		130,100		4,965,917
Ralcorp Holdings, Inc.*		16,687		891,920
Sanderson Farms, Inc.		36,400		1,637,818
				11,255,873
Forest and Paper Products - 0.98%
Louisiana-Pacific Corporation		111,700		2,113,364
Health Care - Drugs - 2.10%
Axcan Pharma Inc.*		234,784		4,533,679
Health Care - General - 3.36%
Amedisys, Inc.*		32,100		1,166,193
DJO Incorporated*		147,615		6,092,071
				7,258,264
Hospital Supply and Management - 2.82%
Kindred Healthcare, Inc.*		87,500		2,688,000
Magellan Health Services, Inc.*		73,200		3,400,140
				6,088,140
Hotels and Gaming - 5.73%
Morgans Hotel Group Co.*		119,687		2,917,371
Orient-Express Hotels Ltd.		66,000		3,524,400
Pinnacle Entertainment, Inc.*		98,300		2,767,145
Vail Resorts, Inc.*		52,294		3,183,136
				12,392,052
Insurance - Property and Casualty - 4.29%
Aspen Insurance Holdings Limited		69,900		1,962,093
Endurance Specialty Holdings Ltd.		61,640		2,468,066
IPC Holdings, Ltd.		64,068		2,068,435
Platinum Underwriters Holdings, Ltd.		80,086		2,782,989
				9,281,583
Leisure Time Industry - 1.47%
LeapFrog Enterprises, Inc.*		110,152		1,129,058
RC2 Corporation*		51,000		2,038,725
				3,167,783
Metal Fabrication - 0.46%
A.M. Castle & Co.		27,800		998,298
Non-Residential Construction - 2.19%
Perini Corporation*		50,200		3,088,806
Washington Group International, Inc.*		20,501		1,640,285
				4,729,091
Petroleum - Domestic - 2.13%
Delta Petroleum Corporation*		81,200		1,630,496
Goodrich Petroleum Corporation*		47,866		1,657,600
Mariner Energy, Inc.*		54,500		1,321,625
				4,609,721
Petroleum - Services - 3.23%
Cal Dive International, Inc.*		103,400		1,719,542
Hercules Offshore, Inc.*		66,203		2,143,322
Oceaneering International, Inc.*		34,600		1,821,344
Universal Compression Holdings, Inc.*		17,900		1,297,213
				6,981,421
Real Estate Investment Trust - 3.92%
Arbor Realty Trust, Inc.		73,400		1,894,454
BioMed Realty Trust, Inc.		23,500		590,320
Corporate Office Properties Trust		28,100		1,152,381
DCT Industrial Trust Inc.		118,800		1,278,288
Gramercy Capital Corp.		51,105		1,407,432
LaSalle Hotel Properties		49,300		2,140,606
				8,463,481
Restaurants - 0.50%
Landry's Restaurants, Inc.		35,644		1,078,587
Retail - Food Stores - 1.23%
Ruddick Corporation		88,000		2,650,560
Retail - General Merchandise - 2.86%
BJ's Wholesale Club, Inc.*		171,500		6,179,145
Retail - Specialty Stores - 3.96%
Big 5 Sporting Goods Corporation		50,500		1,287,497
Borders Group, Inc.		41,600		792,896
Children's Place Retail Stores, Inc. (The)*		35,200		1,817,904
Hot Topic, Inc.*		115,053		1,249,476
Sally Holdings, Inc.*		87,284		785,556
Talbots, Inc. (The)		104,900		2,625,647
				8,558,976
Savings and Loans - 1.47%
Sterling Financial Corporation		81,021		2,344,343
WSFS Financial Corporation		12,689		830,051
				3,174,394
Security and Commodity Brokers - 1.95%
National Financial Partners Corp.		14,474		670,291
Piper Jaffray Companies*		63,560		3,542,199
				4,212,490
Timesharing and Software - 0.47%
TradeStation Group, Inc.*		88,000		1,023,880
Trucking and Shipping - 2.04%
Kirby Corporation*		69,782		2,678,931
Knight Transportation, Inc.		89,200		1,728,696
				4,407,627
Utilities - Electric - 3.68%
Black Hills Corporation		59,800		2,377,050
ITC Holdings Corp.		44,400		1,803,972
PNM Resources, Inc.		88,300		2,453,857
UIL Holdings Corporation		39,900		1,320,690
				7,955,569
Utilities - Gas and Pipeline - 1.26%
South Jersey Industries, Inc.		39,900		1,411,662
Southwest Gas Corporation		38,900		1,315,209
				2,726,871
TOTAL COMMON STOCKS - 99.58%			$	215,170,875
(Cost: $192,591,680)

SHORT-TERM SECURITIES	Principal Amount in Thousands
Finance Companies - 1.73%
Ciesco, LLC,
5.37%, 7-2-07	$	3,742		3,741,442
Insurance - Life - 0.70%
American General Finance Corporation,
5.27%, 7-2-07		1,500		1,499,780
TOTAL SHORT-TERM SECURITIES - 2.43%			$	5,241,222
(Cost: $5,241,222)
TOTAL INVESTMENT SECURITIES - 102.01%			$	220,412,097
(Cost: $197,832,902)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (2.01%)				(4,344,478	)
NET ASSETS - 100.00%			$	216,067,619

Notes to Schedule of Investments

*No income dividends were paid during the preceding 12 months.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      SMALL CAP VALUE PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $197,833) (Notes 1 and 3)	$	220,412
Cash		17
Receivables:
Investment securities sold		840
Portfolio shares sold		195
Dividends and interest		166
Prepaid and other assets		3
Total assets		221,633
LIABILITIES
Payable for investment securities purchased		5,473
Payable to Portfolio shareholders		49
Accrued management fee (Note 2)		10
Accrued accounting services fee (Note 2)		7
Accrued shareholder servicing (Note 2)		5
Accrued service fee (Note 2)		3
Other		18
Total liabilities		5,565
Total net assets	$	216,068
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	13
Additional paid-in capital		181,593
Accumulated undistributed income:
Accumulated undistributed net investment income		54
Accumulated undistributed net realized gain on investment transactions		11,829
Net unrealized appreciation in value of investments		22,579
Net assets applicable to outstanding units of capital	$	216,068
Net asset value, redemption and offering price per share	$	16.5258
Capital shares outstanding		13,075
Capital shares authorized		50,000

See Notes to Financial Statements.

Statement of Operations
      SMALL CAP VALUE PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                             (Unaudited)

INVESTMENT INCOME
Income (Note 1B):
Dividends	$	1,098
Interest and amortization		171
Total income		1,269
Expenses (Note 2):
Investment management fee		873
Service fee		257
Accounting services fee		41
Audit fees		11
Custodian fees		9
Shareholder servicing		6
Legal fees		3
Other		22
Total expenses		1,222
Net investment income		47
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		8,679
Unrealized appreciation in value of investments during the period		1,997
Net gain on investments		10,676
Net increase in net assets resulting from operations	$	10,723

See Notes to Financial Statements.

Statement of Changes in Net Assets
      SMALL CAP VALUE PORTFOLIO
      (In Thousands)                                                                                                               (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
INCREASE IN NET ASSETS
Operations:
Net investment income		$	47		$	265
Realized net gain on investments			8,679			18,711
Unrealized appreciation			1,997			8,971
Net increase in net assets resulting                      from operations			10,723			27,947
Dividends to shareholders from (Note 1E):(1)
Net investment income			(–	)		(270	)
Realized gains on investment transactions			(–	)		(15,464	)
			(–	)		(15,734	)
Capital share transactions(2)			6,673			26,475
Total increase			17,396			38,688
NET ASSETS
Beginning of period			198,672			159,984
End of period		$	216,068		$	198,672
Undistributed net investment income		$	54		$	7
(1)See "Financial Highlights" on page 230.
(2) Shares issued from sale of shares			907			2,152
Shares issued from reinvestment of dividend       and/or capital gains distribution			–			1,003
Shares redeemed			(496	)		(1,462	)
Increase in outstanding capital shares			411			1,693
Value issued from sale of shares		$	14,680		$	33,671
Value issued from reinvestment of dividend       and/or capital gains distribution			–			15,734
Value redeemed			(8,007	)		(22,930	)
Increase in outstanding capital		$	6,673		$	26,475

See Notes to Financial Statements.

Financial Highlights
      SMALL CAP VALUE PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended December 31,
	6-30-07				2006			2005			2004			2003			2002
Net asset value,       beginning of period		$	15.6884		$	14.5826		$	16.6329		$	15.2013		$	10.2000		$	12.7000
Income (loss) from       investment operations:
Net investment             income (loss)			0.0036			0.0226			0.0012			(0.0569	)		(0.0364	)		0.0000
Net realized and             unrealized gain             (loss) on             investments			0.8338			2.4333			0.6886			2.3402			5.0377			(2.5000	)
Total from investment       operations			0.8374			2.4559			0.6898			2.2833			5.0013			(2.5000	)
Less distributions from:
Net investment             income			(0.0000	)		(0.0232	)		(0.0000	)		(0.0000	)		(0.0000	)		(0.0000	)
Capital gains			(0.0000	)		(1.3269	)		(2.7401	)		(0.8517	)		(0.0000	)		(0.0000	)
Total distributions			(0.0000	)		(1.3501	)		(2.7401	)		(0.8517	)		(0.0000	)		(0.0000	)
Net asset value,       end of period		$	16.5258		$	15.6884		$	14.5826		$	16.6329		$	15.2013		$	10.2000
Total return			5.34	%		16.84	%		4.15	%		15.02	%		49.48	%		- -19.98	%
Net assets, end of       period (in millions)			$216			$199			$160			$132			$96			$55
Ratio of expenses to       average net assets       including expense       waiver			1.19	%(1)		1.18	%		1.20	%		1.23	%		1.15	%		1.10	%
Ratio of net investment       income (loss) to       average net assets       including expense       waiver			0.05	%(1)		0.15	%		0.01	%		- -0.43	%		- -0.34	%		- -0.43	%
Ratio of expenses to       average net assets       excluding expense       waiver			1.19	%(1)(2)		1.18	%(2)		1.20	%(2)		1.23	%(2)		1.19	%		1.17	%
Ratio of net investment       income (loss) to       average net assets       excluding expense       waiver			0.05	%(1)(2)		0.15	%(2)		0.01	%(2)		- -0.43	%(2)		- -0.38	%		- -0.50	%
Portfolio turnover rate			52	%		131	%		166	%		32	%		51	%		39	%

(1)Annualized.

(2)There was no waiver of expenses during the period.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF VALUE PORTFOLIO

Portfolio Highlights

On June 30, 2007, W&R Target Value Portfolio had net assets totaling $396,189,189 invested in a diversified portfolio of:

92.92%	Domestic Common Stocks
4.00%	Foreign Common Stocks
3.08%	Cash and Cash Equivalents

Sector Weightings

As a shareholder of the Portfolio, for every $100 you had invested on June 30, 2007, your Portfolio owned:

Financial Services Stocks	$	33.82
Energy Stocks	$	13.27
Technology Stocks	$	11.50
Health Care Stocks	$	10.45
Utilities Stocks	$	9.15
Miscellaneous Stocks	$	8.25
Multi-Industry Stocks	$	3.85
Consumer Nondurables Stocks	$	3.62
Cash and Cash Equivalents	$	3.08
Capital Goods Stocks	$	3.01

The Investments of Value Portfolio
June 30, 2007                                                                                                                  (Unaudited)
COMMON STOCKS	Shares			Value
Aircraft - 3.23%
Lockheed Martin Corporation		40,400	$	3,802,852
Raytheon Company		166,900		8,994,241
				12,797,093
Banks - 8.52%
Bank of America Corporation		322,800		15,781,692
Citigroup Inc.		191,106		9,801,827
Wachovia Corporation		86,200		4,417,750
Wells Fargo & Company		106,400		3,742,088
				33,743,357
Beverages - 1.46%
Diageo plc, ADR		69,300		5,773,383
Business Equipment and Services - 0.98%
Waste Management, Inc.		99,400		3,881,570
Capital Equipment - 1.19%
Illinois Tool Works Inc.		87,300		4,730,787
Chemicals - Petroleum and Inorganic - 0.95%
E.I. du Pont de Nemours and Company		74,300		3,777,412
Chemicals - Specialty - 0.66%
Air Products and Chemicals, Inc. (A)		32,700		2,628,099
Communications Equipment - 0.96%
Cisco Systems, Inc. (A)*		64,100		1,783,582
Nokia Corporation, Series A, ADR		71,300		2,004,243
				3,787,825
Computers - Main and Mini - 5.61%
Hewlett-Packard Company		386,400		17,241,168
Xerox Corporation*		269,300		4,976,664
				22,217,832
Computers - Peripherals - 0.51%
Adobe Systems Incorporated*		50,400		2,022,552
Defense - 0.82%
General Dynamics Corporation (A)		41,700		3,261,774
Electronic Components - 0.37%
Motorola, Inc.		82,900		1,467,330
Finance Companies - 6.28%
Capital One Financial Corporation (A)		115,800		9,083,352
Countrywide Financial Corporation (A)		46,000		1,672,100
Fannie Mae		119,400		7,800,402
Freddie Mac		104,100		6,318,870
				24,874,724
Food and Related - 2.16%
General Mills, Inc.		85,200		4,977,384
Kraft Foods Inc.		102,211		3,602,938
				8,580,322
Furniture and Furnishings - 0.67%
Masco Corporation		93,900		2,673,333
Health Care - Drugs - 4.20%
Endo Pharmaceuticals Holdings Inc. (A)*		73,700		2,523,488
McKesson Corporation		133,000		7,932,120
Pfizer Inc.		242,100		6,190,497
				16,646,105
Health Care - General - 1.40%
Boston Scientific Corporation (A)*		134,400		2,061,696
Da Vita Inc. (A)*		64,400		3,469,872
				5,531,568
Hospital Supply and Management - 4.85%
Aetna Inc.		116,400		5,750,160
Coventry Health Care, Inc.*		136,300		7,857,695
Humana Inc. (A)*		92,100		5,609,811
				19,217,666
Insurance - Life - 2.96%
Unum Group		448,600		11,712,946
Insurance - Property and Casualty - 7.53%
Assurant, Inc.		63,800		3,759,096
Everest Re Group, Ltd.		74,400		8,082,816
MBIA Inc.		87,800		5,462,916
Travelers Companies, Inc. (The)		234,401		12,540,453
				29,845,281
Metal Fabrication - 1.82%
Loews Corporation, Carolina Group		93,200		7,201,564
Multiple Industry - 3.85%
Altria Group, Inc.		217,500		15,255,450
Petroleum - International - 13.27%
Chevron Corporation		169,100		14,244,984
ConocoPhillips		68,700		5,392,950
Devon Energy Corporation		75,000		5,871,750
Exxon Mobil Corporation		265,104		22,236,924
Marathon Oil Corporation		80,300		4,814,788
				52,561,396
Railroad - 1.95%
Union Pacific Corporation		67,000		7,715,050
Real Estate Investment Trust - 1.05%
Vornado Realty Trust		37,800		4,151,952
Retail - General Merchandise - 1.84%
Family Dollar Stores, Inc.		117,700		4,039,464
Macy's Inc. (A)		81,900		3,257,982
				7,297,446
Retail - Specialty Stores - 0.15%
Home Depot, Inc. (The)		15,000		590,250
Security and Commodity Brokers - 8.53%
Bear Stearns Companies Inc. (The)		33,500		4,690,000
CIT Group Inc.		81,800		4,485,094
J.P. Morgan Chase & Co.		337,788		16,365,829
Morgan Stanley		98,400		8,253,792
				33,794,715
Utilities - Electric - 3.00%
Mirant Corporation*		133,000		5,672,450
NRG Energy, Inc.*		149,600		6,218,872
				11,891,322
Utilities - Gas and Pipeline - 2.07%
FirstEnergy Corp.		126,700		8,201,291
Utilities - Telephone - 4.08%
AT&T Inc.		214,700		8,910,050
Sprint Nextel Corporation		104,300		2,160,053
Verizon Communications Inc.		124,000		5,105,080
				16,175,183
TOTAL COMMON STOCKS - 96.92%			$	384,006,578
(Cost: $289,825,035)

SHORT-TERM SECURITIES	Principal Amount in Thousands
Beverages - 0.84%
PepsiCo, Inc.,
5.33%, 7-2-07	$	3,320		3,319,508
Finance Companies - 1.01%
Ciesco, LLC,
5.37%, 7-2-07		2,009		2,008,700
PACCAR Financial Corp.,
5.24%, 7-31-07		2,000		1,991,267
				3,999,967
Insurance - Life - 0.50%
American General Finance Corporation,
5.27%, 7-2-07		2,000		1,999,707
Retail - General Merchandise - 0.76%
Target Corporation,
5.27%, 7-2-07		3,000		2,999,561
TOTAL SHORT-TERM SECURITIES - 3.11%			$	12,318,743
(Cost: $12,318,743)
TOTAL INVESTMENT SECURITIES - 100.03%			$	396,325,321
(Cost: $302,143,778)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.03%)				(136,132	)
NET ASSETS - 100.00%			$	396,189,189

Notes to Schedule of Investments
Certain acronyms may be used within the body of the Portfolio's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.
*No income dividends were paid during the preceding 12 months.
(A)Securities serve as cover for the following written options outstanding at June 30, 2007. (See Note 5 to financial statements):
	Underlying Security	Contracts Subject to Call	Expiration Month/ Exercise Price	Premium Received			Market Value
	Air Products and Chemicals, Inc.	327	July/80		$	44,798	$	65,400
	Boston Scientific Corporation:	672	July/19			10,416		604
		672	August/17.5			24,561		13,440
	Cisco Systems, Inc.	641	July/30			19,871		6,410
	Da Vita Inc.	644	July/60			43,791		1,610
	General Dynamics Corporation	177	August/85			20,709		6,195
	Humana Inc.	921	August/70			126,175		23,025
					$	290,321	$	116,684
	Underlying Security	Contracts Subject to Put	Expiration Month/ Exercise Price	Premium Received				Market Value
	Capital One Financial Corporation:	356	August/75		$	31,328	$	55,180
		356	September/75			48,771		65,860
	Countrywide Financial Corporation:	512	July/30			45,055		7,680
		460	July/35			29,236		46,000
	Endo Pharmaceuticals Holdings Inc.	658	July/25			19,082		3,290
	Macy's Inc.	18	August/37.5			1,926		1,530
					$	175,398	$	179,540
See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      VALUE PORTFOLIO
      June 30, 2007
      (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $302,144) (Notes 1 and 3)	$	396,325
Cash		1
Receivables:
Dividends and interest		368
Portfolio shares sold		96
Prepaid and other assets		6
Total assets		396,796
LIABILITIES
Outstanding written options - at value (premium received - $466) (Note 5)		296
Payable to Portfolio shareholders		232
Accrued management fee (Note 2)		15
Accrued accounting services fee (Note 2)		10
Accrued shareholder servicing (Note 2)		10
Accrued service fee (Note 2)		5
Other		39
Total liabilities		607
Total net assets	$	396,189
NET ASSETS
$0.001 par value capital stock:
Capital stock	$	54
Additional paid-in capital		287,697
Accumulated undistributed income:
Accumulated undistributed net investment income		2,217
Accumulated undistributed net realized gain on investment transactions		11,870
Net unrealized appreciation in value of investments		94,351
Net assets applicable to outstanding units of capital	$	396,189
Net asset value, redemption and offering price per share	$	7.3029
Capital shares outstanding		54,251
Capital shares authorized		120,000

See Notes to Financial Statements.

Statement of Operations
      VALUE PORTFOLIO
      For the Six Months Ended June 30, 2007
      (In Thousands)                                                                                                             (Unaudited)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $6)	$	3,882
Interest and amortization		250
Total income		4,132
Expenses (Note 2):
Investment management fee		1,342
Service fee		479
Accounting services fee		60
Audit fees		16
Shareholder servicing		11
Custodian fees		10
Legal fees		7
Other		42
Total		1,967
Less waiver of investment management fee (Notes 2 and 9)		(19	)
Total expenses		1,948
Net investment income		2,184
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		10,067
Realized net gain on written options		605
Realized net gain on investments		10,672
Unrealized appreciation in value of securities during the period		17,818
Unrealized appreciation in value of written options during the period		53
Unrealized appreciation in value of investments during the period		17,871
Net gain on investments		28,543
Net increase in net assets resulting from operations	$	30,727

See Notes to Financial Statements.

Statement of Changes in Net Assets
      VALUE PORTFOLIO
      (In Thousands)                                                                                                                (Unaudited)

	For the six months ended June 30,				For the fiscal year ended December 31,
	2007				2006
INCREASE IN NET ASSETS
Operations:
Net investment income		$	2,184		$	3,940
Realized net gain on investments			10,672			16,251
Unrealized appreciation			17,871			35,211
Net increase in net assets resulting                      from operations			30,727			55,402
Dividends to shareholders from (Note 1E):(1)
Net investment income			(–	)		(3,900	)
Realized gains on investment transactions			(–	)		(14,654	)
			(–	)		(18,554	)
Capital share transactions(2)			(8,269	)		(16,172	)
Total increase			22,458			20,676
NET ASSETS
Beginning of period			373,731			353,055
End of period		$	396,189		$	373,731
Undistributed net investment income		$	2,217		$	33
(1)See "Financial Highlights" on page 240.
(2)Shares issued from sale of shares			1,992			3,808
Shares issued from reinvestment of dividend       and/or capital gains distribution			–			2,751
Shares redeemed			(3,169	)		(9,294	)
Decrease in outstanding capital shares			(1,177	)		(2,735	)
Value issued from sale of shares		$	14,085		$	24,609
Value issued from reinvestment of dividend       and/or capital gains distribution			–			18,554
Value redeemed			(22,354	)		(59,335	)
Decrease in outstanding capital		$	(8,269	)	$	(16,172	)

See Notes to Financial Statements.

Financial Highlights
      VALUE PORTFOLIO
      For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended December 31,
	6-30-07				2006			2005			2004			2003			2002
Net asset value,       beginning of period		$	6.7426		$	6.0701		$	6.2226		$	5.4790		$	4.4016		$	5.0815
Income (loss) from       investment operations:
Net investment income			0.0403			0.0747			0.0918			0.0619			0.0279			0.0348
Net realized and             unrealized gain             (loss) on             investments			0.5200			0.9499			0.1831			0.7437			1.0774		(0.6799		)
Total from investment       operations			0.5603			1.0246			0.2749			0.8056			1.1053		(0.6451		)
Less distributions from:
Net investment income		(0.0000		)	(0.0740		)	(0.0916		)	(0.0620		)	(0.0279		)	(0.0348		)
Capital gains		(0.0000		)	(0.2781		)	(0.3358		)	(0.0000		)	(0.0000		)	(0.0000		)
Total distributions		(0.0000		)	(0.3521		)	(0.4274		)	(0.0620		)	(0.0279		)	(0.0348		)
Net asset value,       end of period		$	7.3029		$	6.7426		$	6.0701		$	6.2226		$	5.4790		$	4.4016
Total return			8.31	%		16.88	%		4.42	%		14.70	%		25.11	%		- -12.70	%
Net assets, end of period       (in millions)			$396			$374			$353			$340			$269			$75
Ratio of expenses to       average net assets       including expense       waiver			1.02	%(1)		1.01	%		1.02	%		1.03	%		1.02	%		1.04	%
Ratio of net investment       income to average net       assets including       expense waiver			1.14	%(1)		1.12	%		1.42	%		1.13	%		1.06	%		0.92	%
Ratio of expenses to       average net assets       excluding expense       waiver			1.03	%(1)		1.02	%		1.02	%(2)		1.03	%(2)		1.02	%(2)		1.04	%(2)
Ratio of net investment       income to average net       assets excluding       expense waiver			1.13	%(1)		1.11	%		1.42	%(2)		1.13	%(2)		1.06	%(2)		0.92	%(2)
Portfolio turnover rate			14	%		73	%		40	%		78	%		97	%		96	%

(1)Annualized.

(2)There was no waiver of expenses during the period.

See Notes to Financial Statements.

Notes to Financial Statements
  

      June 30, 2007 (Unaudited)

    NOTE 1 - Significant Accounting Policies

W&R Target Funds, Inc. (the Fund) is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. Capital stock is divided into the twenty-one classes (each a Portfolio). The assets belonging to each Portfolio are held separately by the custodian. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America.

      A. Security valuation - Each stock and convertible bond is valued at the latest sale price thereof on each business day of the fiscal period as reported by the principal securities exchange on which the issue is traded or, if no sale is reported for a stock, the average of the latest bid and asked prices. Bonds, other than convertible bonds, are valued using a pricing system provided by a pricing service or dealer in bonds. Convertible bonds are valued using this pricing system only on days when there is no sale reported. Stocks which are traded over-the-counter are priced using the Nasdaq Stock Market, which provides information on bid and asked prices quoted by major dealers in such stocks. Gold bullion is valued at the last settlement price for current delivery as calculated by the Commodity Exchange, Inc. as of the close of that exchange. Securities for which quotations are not readily available or are deemed not to be reliable because of significant events or ci rcumstances identified between the closing of their principal markets and the closing of the New York Stock Exchange are valued at fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors. Management's valuation committee makes fair value determinations for the Fund subject to the supervision of the Board of Directors. Short-term debt securities, purchased with less than 60 days to maturity, are valued at amortized cost, which approximates market value. Short-term debt securities denominated in foreign currencies are valued at amortized cost in that currency.

      B. Security transactions and related investment income - Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Securities gains and losses are calculated on the identified cost basis. Premium and discount on the purchase of bonds are amortized for both financial and tax reporting purposes over the remaining lives of the bonds. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Interest income is recorded on the accrual basis. See Note 3 - Investment Securities Transactions.

      C. Foreign currency translations - All assets and liabilities denominated in foreign currencies are translated into U.S. dollars daily. Purchases and sales of investment securities and accruals of income and expenses are translated at the rate of exchange prevailing on the date of the transaction. For assets and liabilities other than investments in securities, net realized and unrealized gains and losses from foreign currency translations arise from changes in currency exchange rates. The Fund combines fluctuations from currency exchange rates and fluctuations in market value when computing net realized and unrealized gain or loss from investments.

      D. Federal income taxes - It is the Fund's policy to distribute all of its taxable income and capital gains to its shareholders and otherwise qualify as a regulated investment company under the Internal Revenue Code. Accordingly, provision has not been made for Federal income taxes. See Note 4 - Federal Income Tax Matters.

      E. Dividends and distributions - Dividends and distributions to shareholders are recorded by each Portfolio on the business day following the record date. Net investment income distributions and capital gains distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as deferral of wash sales and post-October losses, foreign currency transactions, net operating losses and expiring capital loss carryovers.

      F. Repurchase agreements - Repurchase agreements are collateralized by the value of the resold securities which, during the entire period of the agreement, remains at least equal to the value of the loan, including accrued interest thereon. The collateral for the repurchase agreement is held by the Fund's custodian bank.

      G. Forward foreign currency exchange contracts - A forward foreign currency exchange contract (Forward Contract) is an obligation to purchase or sell a specific currency at a future date at a fixed price. Forward Contracts are marked-to-market daily at the applicable translation rates and the resulting unrealized gains or losses are reflected in the Fund's financial statements. Gains or losses are realized by the Fund at the time the forward contract is extinguished. Contracts may be extinguished either by entry into a closing transaction or by delivery of the currency. Risks may arise from the possibility that the other party will not complete the obligations of the Contract and from unanticipated movements in the value of the foreign currency relative to the United States dollar. A Portfolio uses Forward Contracts to attempt to reduce the overall risk of its investments or to enhance returns.

      H. New Accounting Pronouncements - In June 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management has concluded that the adoption of FIN 48 will not result in a material impact on the Fund's net assets, results of operations and financial statement disclosures. In September 2006, FASB issued Statement on Financial Accounting Standards (SFAS) No. 157, "Fair Value Measurements." SFAS No. 157 defines fair value for purposes of financial statement presentation, establishes a hierarchy for measuring fair value in generally accepted accounting princi ples and expands financial statement disclosures about fair value measurements that are relevant to mutual funds. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Fund will adopt SFAS No. 157 during 2008 and its potential impact, if any, on each Portfolio's financial statements is currently being assessed by management.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

NOTE 2 - Investment Management and Payments to Affiliated Persons

Waddell & Reed Investment Management Company (WRIMCO), a wholly owned subsidiary of Waddell & Reed, Inc. (W&R), serves as the Fund's investment manager. The Fund pays a fee for investment management services. The fee is computed and paid daily based on the net asset value at the close of business. Until September 30, 2006, the fee was payable by each Portfolio at the following annual rates:

Portfolio	Net Asset Breakpoints	Annual Rate
Asset Strategy Portfolio	Up to $1 Billion	0.700%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
Balanced Portfolio	Up to $1 Billion	0.700%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
Bond Portfolio	Up to $500 Million	0.525%
	Over $500 Million up to $1 Billion	0.500%
	Over $1 Billion up to $1.5 Billion	0.450%
	Over $1.5 Billion	0.400%
Core Equity Portfolio	Up to $1 Billion	0.700%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
Dividend Income Portfolio	Up to $1 Billion	0.700%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
Energy Portfolio	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Global Natural Resources Portfolio	Up to $500 Million	1.000%
	Over $500 Million up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Growth Portfolio	Up to $1 Billion	0.700%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
High Income Portfolio	Up to $500 Million	0.625%
	Over $500 Million up to $1 Billion	0.600%
	Over $1 Billion up to $1.5 Billion	0.550%
	Over $1.5 Billion	0.500%
International Growth Portfolio	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
International Value Portfolio	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Limited-Term Bond Portfolio	Up to $500 Million	0.500%
	Over $500 Million up to $1 Billion	0.450%
	Over $1 Billion up to $1.5 Billion	0.400%
	Over $1.5 Billion	0.350%
Micro Cap Growth Portfolio	Up to $1 Billion	0.950%
	Over $1 Billion up to $2 Billion	0.930%
	Over $2 Billion up to $3 Billion	0.900%
	Over $3 Billion	0.860%
Mid Cap Growth Portfolio	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Money Market Portfolio	All Net Assets	0.400%
Mortgage Securities Portfolio	Up to $500 Million	0.500%
	Over $500 Million up to $1 Billion	0.450%
	Over $1 Billion up to $1.5 Billion	0.400%
	Over $1.5 Billion	0.350%
Real Estate Securities Portfolio	Up to $1 Billion	0.900%
	Over $1 Billion up to $2 Billion	0.870%
	Over $2 Billion up to $3 Billion	0.840%
	Over $3 Billion	0.800%
Science and Technology Portfolio	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Small Cap Growth Portfolio	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Small Cap Value Portfolio	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Value Portfolio	Up to $1 Billion	0.700%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%

Effective October 1, 2006, under terms of a settlement agreement reached in July 2006 (see Note 9), the fee is payable by each Portfolio at the following annual rates:

Portfolio	Net Asset Breakpoints	Annual Rate
Asset Strategy Portfolio	Up to $1 Billion	0.690%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
Balanced Portfolio	Up to $1 Billion	0.700%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
Bond Portfolio	Up to $500 Million	0.485%
	Over $500 Million up to $1 Billion	0.500%
	Over $1 Billion up to $1.5 Billion	0.450%
	Over $1.5 Billion	0.400%
Core Equity Portfolio	Up to $1 Billion	0.650%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
Dividend Income Portfolio	Up to $1 Billion	0.700%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
Energy Portfolio	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Global Natural Resources Portfolio	Up to $500 Million	1.000%
	Over $500 Million up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Growth Portfolio	Up to $1 Billion	0.670%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
High Income Portfolio	Up to $500 Million	0.575%
	Over $500 Million up to $1 Billion	0.600%
	Over $1 Billion up to $1.5 Billion	0.550%
	Over $1.5 Billion	0.500%
International Growth Portfolio	Up to $1 Billion	0.820%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
International Value Portfolio	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Limited-Term Bond Portfolio	Up to $500 Million	0.455%
	Over $500 Million up to $1 Billion	0.450%
	Over $1 Billion up to $1.5 Billion	0.400%
	Over $1.5 Billion	0.350%
Micro Cap Growth Portfolio	Up to $1 Billion	0.950%
	Over $1 Billion up to $2 Billion	0.930%
	Over $2 Billion up to $3 Billion	0.900%
	Over $3 Billion	0.860%
Mid Cap Growth Portfolio	Up to $1 Billion	0.830%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Money Market Portfolio	All Net Assets	0.400%
Mortgage Securities Portfolio	Up to $500 Million	0.500%
	Over $500 Million up to $1 Billion	0.450%
	Over $1 Billion up to $1.5 Billion	0.400%
	Over $1.5 Billion	0.350%
Real Estate Securities Portfolio	Up to $1 Billion	0.900%
	Over $1 Billion up to $2 Billion	0.870%
	Over $2 Billion up to $3 Billion	0.840%
	Over $3 Billion	0.800%
Science and Technology Portfolio	Up to $1 Billion	0.830%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Small Cap Growth Portfolio	Up to $1 Billion	0.830%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Small Cap Value Portfolio	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Value Portfolio	Up to $1 Billion	0.690%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%

During the six-month period ended June 30, 2007, the following amounts were waived as a result of the reduced rates:

Asset Strategy Portfolio	$	31,873
Bond Portfolio		42,462
Core Equity Portfolio		188,966
Growth Portfolio		148,754
High Income Portfolio		52,488
International Growth Portfolio		37,594
Limited-Term Bond Portfolio		15,095
Mid Cap Growth Portfolio		6,569
Science and Technology Portfolio		36,222
Small Cap Growth Portfolio		54,836
Value Portfolio		19,154

WRIMCO has agreed to waive a Portfolio's investment management fee on any Portfolio that is not sub-advised on any day that the Portfolio's net assets are less than $25 million, subject to its right to change or modify this waiver. During the six-month period ended June 30, 2007, WRIMCO voluntarily waived investment management fees as shown in the following table:

Energy Portfolio $ 35,559

Advantus Capital Management, Inc. serves as subadvisor to Mortgage Securities Portfolio and Real Estate Securities Portfolio pursuant to an agreement with WRIMCO and receives a fee that is equal to, on an annual basis, 0.30% and 0.55% of the respective Portfolio's average net assets.

Mackenzie Financial Corporation (MFC) serves as subadvisor to Global Natural Resources Portfolio pursuant to an agreement with WRIMCO and receives a fee that is shown in the following table:

Net Asset Breakpoints	Annual Rate
Up to $500 Million	0.500%
Over $500 Million and up to $1 Billion	0.425%
Over $1 Billion and up to $2 Billion	0.415%
Over $2 Billion and up to $3 Billion	0.400%
Over $3 Billion	0.380%

State Street Research & Management Company (SSRM) served as subadvisor to Small Cap Value Portfolio pursuant to an agreement with WRIMCO and received a fee that was equal to, on an annual basis, 0.50% of the Portfolio's average net assets. Effective January 31, 2005, the Portfolio's subadvisor changed from SSRM to BlackRock Financial Management, Inc. (BlackRock) as a result of BlackRock's acquisition of SSRM from MetLife, Inc. The shareholders approved BlackRock as the Portfolio's subadvisor at a shareholder meeting held on January 20, 2005. BlackRock receives a fee that is equal to, on an annual basis, 0.50% of the Portfolio's average net assets.

On September 29, 2006, Merrill Lynch & Co., Inc. (Merrill Lynch) contributed its investment management business, Merrill Lynch Investment Managers, to BlackRock, Inc. (BlackRock) to form a new asset management company (the Transaction). Prior to the Transaction, BlackRock Financial Management, Inc. (BFM), served as the subadviser for W&R Target Funds, Inc. Small Cap Value Portfolio (the Fund) pursuant to a subadvisory agreement with WRIMCO (Prior Agreement). As a result of the Transaction, BlackRock Capital Management, Inc. (BCM), an affiliate of BFM now provides equity portfolio management services to BFM's former clients, including the Fund. At a meeting of the Board of Directors held on August 29, 2006, the Directors, anticipating the Transaction, approved an Interim Subadvisory Agreement with BCM, and also approved, and recommended that shareholders of the Fund approve, a subadvisory agreement with BCM. Both the Interim Subadvisory Agreement and the proposed subadvisory agreement are on the same terms as the Prior Agreement with BFM.

At a Meeting held on February 2, 2007, Shareholders of the Fund approved the proposed new sub-advisory agreement for the Fund with BCM. There has been no change in the Fund's investment goal and strategies under the new subadvisory agreement with BCM. The subadvisory fee rate payable by WRIMCO to BCM under the new agreement remains the same as under the Prior Agreement with BFM.

Templeton Investment Counsel, LLC serves as subadvisor to International Value Portfolio pursuant to an agreement with WRIMCO and receives a fee that is shown in the following table:

Net Asset Breakpoints	Annual Rate
On the first $100 Million	0.50%
On the next $100 Million	0.35%
On the next $250 Million	0.30%
On all assets exceeding $450 Million	0.25%

Wall Street Associates serves as subadvisor to Micro Cap Growth Portfolio pursuant to an agreement with WRIMCO and receives a fee that is equal to, on an annual basis, 0.50% of the Portfolio's average net assets.

The Fund has an Accounting Services Agreement with Waddell & Reed Services Company (WRSCO), a wholly owned subsidiary of W&R. Under the agreement, WRSCO acts as the agent in providing accounting services and assistance to the Fund and pricing daily the value of shares of each Portfolio. For these services, each Portfolio pays WRSCO a monthly fee of one-twelfth of the annual fee shown in the following table:

Accounting Services Fee
	Average Net Asset Level (in millions)						Annual Fee Rate for Each Level
	From	$	0	to	$	10	$	0
	From	$	10	to	$	25	$	11,500
	From	$	25	to	$	50	$	23,100
	From	$	50	to	$	100	$	35,500
	From	$	100	to	$	200	$	48,400
	From	$	200	to	$	350	$	63,200
	From	$	350	to	$	550	$	82,500
	From	$	550	to	$	750	$	96,300
	From	$	750	to	$	1,000	$	121,600
		$	1,000 and Over				$	148,500

Each Portfolio also pays monthly a fee at the annual rate of 0.01% or one basis point for the first $1 billion of net assets with no fee charged for net assets in excess of $1 billion.

The Fund has adopted a Service Plan pursuant to Rule 12b-1 of the 1940 Act. Under the Plan, each Portfolio may pay a fee to W&R in an amount not to exceed 0.25% of the Portfolio's average annual net assets. The fee is to be paid to compensate W&R for amounts it expends in connection with the provision of personal services to Policyowners and/or maintenance of Policyowner accounts.

During the six-month period ended June 30, 2007, the Fund paid Directors' regular compensation of $191,048, which is included in other expenses.

W&R is a subsidiary of Waddell & Reed Financial, Inc., a public holding company, and a direct subsidiary of Waddell & Reed Financial Services, Inc., a holding company.

The Fund has a Transfer Agency Agreement with WRSCO. For shareholder servicing provided under the agreement, the Fund reimburses WRSCO for certain out-of-pocket costs.

NOTE 3 - Investment Securities Transactions

Investment securities transactions for the six-month period ended June 30, 2007 are summarized as follows:

		Asset Strategy Portfolio		Balanced Portfolio		Bond Portfolio
Purchases of investment securities,       excluding short-term and U.S.       government obligations		$	360,075,670	$	24,047,884	$	1,000,515
Purchases of U.S. government       obligations			956,854		–		39,345,286
Purchases of short-term securities		2,129,495,088		1,072,791,842		281,974,111
Purchases of bullion			4,181,695		–		–
Purchases of options			213,606		–		–
Purchases of affiliates			360,000		–		–
Proceeds from maturities and sales of       investment securities, excluding       short-term and U.S. government       obligations			220,343,382		58,951,584		5,671,270
Proceeds from maturities and sales       of U.S. government obligations			1,471,300		1,168,594		31,371,602
Proceeds from maturities and sales of       short-term securities	2,235,457,720			1,074,941,961		280,167,856
Proceeds from bullion			32,061,542		–		–
Proceeds from options			26,045		–		–
Proceeds from sales of affiliates			–		–		–
Distributions from affiliates			–		–		–

	Core Equity Portfolio		Dividend Income Portfolio		Energy Portfolio
Purchases of investment securities,       excluding short-term and       U.S. government obligations	$	370,247,746	$	23,299,688	$	3,899,216
Purchases of U.S. government       obligations		–		–		–
Purchases of short-term securities		521,049,162		423,008,435		86,035,422
Purchases of options		–		–		–
Proceeds from maturities and sales of       investment securities, excluding       short-term and U.S. government       obligations		405,684,254		14,461,363		910,983
Proceeds from maturities and sales of       U.S. government obligations		–		–		–
Proceeds from maturities and sales of       short-term securities		516,500,154		418,822,000		84,871,644
Proceeds from options		–		–		–

	Global Natural Resources Portfolio			Growth Portfolio		High Income Portfolio
Purchases of investment securities,       excluding short-term and       U.S. government obligations		$	59,126,740	$	296,017,117	$	97,634,554
Purchases of U.S.       government obligations			–		–		–
Purchases of short-term securities			239,392,800		799,015,119	473,844,679
Proceeds from maturities and sales of       investment securities, excluding       short-term and U.S. government       obligations			60,913,316		367,179,308		87,011,635
Proceeds from maturities and sales of       U.S. government obligations			–		–		–
Proceeds from maturities and       sales of short-term securities			224,654,674		807,257,456	471,758,000

	International Growth Portfolio		International Value Portfolio		Limited-Term Bond Portfolio
Purchases of investment securities,       excluding short-term and       U.S. government obligations	$	129,364,865	$	73,970,845	$	–
Purchases of U.S. government       obligations		–		–		26,572,962
Purchases of short-term securities		626,410,106		972,105,993		200,849,578
Proceeds from maturities and sales of       investment securities, excluding       short-term and U.S. government       obligations		136,924,871		69,109,496		12,009,125
Proceeds from maturities and sales of       U.S. government obligations		–		–		18,624,598
Proceeds from maturities and       sales of short-term securities		619,136,891		972,033,675		201,011,709

	Micro Cap Growth Portfolio		Mid Cap Growth Portfolio		Mortgage Securities Portfolio
Purchases of investment securities,       excluding short-term and       U.S. government obligations	$	19,113,636	$	13,221,903	$	4,181,772
Purchases of U.S. government       obligations		–		–		10,891,467
Purchases of short-term securities		141,846,567		662,750,239		188,219,207
Purchases of options		–		47,666		–
Proceeds from maturities and sales of       investment securities, excluding       short-term and U.S. government       obligations		21,623,984		4,984,455		2,102,340
Proceeds from maturities and sales of       U.S. government obligations		–		–		13,582,569
Proceeds from maturities and sales of       short-term securities		142,148,000		662,665,000		189,716,961
Proceeds from options		–		40,876		–

	Real Estate Securities Portfolio		Science and Technology Portfolio		Small Cap Growth Portfolio
Purchases of investment securities,       excluding short-term and       U.S. government obligations	$	19,659,177	$	129,302,723	$	339,441,600
Purchases of U.S. government       obligations		–		–		–
Purchases of short-term securities	123,732,144		1,114,728,840		1,431,522,724
Proceeds from maturities and sales of       investment securities, excluding       short-term and U.S. government       obligations		14,465,732		133,031,554		346,761,376
Proceeds from maturities and sales of       U.S. government obligations		–		–		–
Proceeds from maturities and sales of       short-term securities	123,711,115		1,129,057,655		1,462,595,074

	Small Cap Value Portfolio		Value Portfolio
Purchases of investment securities,       excluding short-term and       U.S. government obligations	$	115,884,568	$	53,067,115
Purchases of U.S. government       obligations		–		–
Purchases of short-term securities		462,937,798		599,433,700
Purchases of options		–		–
Proceeds from maturities and sales of       investment securities, excluding       short-term and U.S. government       obligations		105,399,540		56,249,776
Proceeds from maturities and sales of       U.S. government obligations		–		–
Proceeds from maturities and sales of       short-term securities		461,009,201		605,005,351
Proceeds from options		–		–

For Federal income tax purposes, cost of investments owned at June 30, 2007 and the related unrealized appreciation (depreciation) were as follows:

	Cost		Appreciation		Depreciation		Aggregate Appreciation (Depreciation)
Asset Strategy Portfolio	$	575,270,978	$	128,788,431	$	7,640,256	$	121,148,175
Balanced Portfolio		432,548,062		124,175,627		3,299,745		120,875,882
Bond Portfolio		215,438,038		1,852,704		4,287,726		(2,435,022	)
Core Equity Portfolio		610,014,597		162,559,648		5,817,228		156,742,420
Dividend Income Portfolio		83,837,084		19,472,339		417,362		19,054,977
Energy Portfolio		11,384,957		1,644,520		89,254		1,555,266
Global Natural Resources Portfolio		100,862,681		24,694,947		794,784		23,900,163
Growth Portfolio		899,633,659		286,039,737		6,235,068		279,804,669
High Income Portfolio		212,218,262		4,581,037		2,123,968		2,457,069
International Growth Portfolio		207,426,317		63,212,414		2,300,643		60,911,771
International Value Portfolio		452,828,493		180,938,068		2,442,137		178,495,931
Limited-Term Bond Portfolio		65,292,337		38,942		973,750		(934,808	)
Micro Cap Growth Portfolio		50,049,296		16,875,138		3,405,989		13,469,149
Mid Cap Growth Portfolio		43,103,167		7,241,938		698,422		6,543,516
Money Market Portfolio		76,807,774		–		–		–
Mortgage Securities Portfolio		30,032,043		47,845		615,940		(568,095	)
Real Estate Securities Portfolio		52,095,157		8,010,086		604,951		7,405,135
Science and Technology Portfolio		279,283,196		112,850,040		12,996,427		99,853,613
Small Cap Growth Portfolio		478,621,820		99,227,568		13,310,353		85,917,215
Small Cap Value Portfolio		197,941,354		26,774,532		4,303,789		22,470,743
Value Portfolio		303,655,512		95,373,399		2,703,590		92,669,809

NOTE 4 - Federal Income Tax Matters

For Federal income tax purposes, the Portfolios' distributed and undistributed earnings and profit for the fiscal period ended December 31, 2006 and the related Capital Loss Carryover and Post-October activity were as follows:

	Asset Strategy Portfolio			Balanced Portfolio		Bond Portfolio
Net ordinary income		$	19,772,789	$	7,820,983	$	9,416,547
Distributed ordinary income			13,120,091		7,700,092		9,299,916
Undistributed ordinary income			6,751,716		120,891		116,818
Realized long-term capital gains			91,620,112		1,094,023		–
Distributed long-term capital gains			80,681,979		1,888,341		63,796
Undistributed long-term capital gains			10,938,133		103		–
Capital loss carryover			–		–		1,975,245
Post-October losses deferred			–		–		65,163

	Core Equity Portfolio			Dividend Income Portfolio		Energy Portfolio
Net ordinary income		$	6,697,266	$	987,157	$	43,995
Distributed ordinary income			6,399,761		969,965		35,006
Undistributed ordinary income			297,771		17,192		8,989
Realized long-term capital gains			53,037,843		724,885		–
Distributed long-term capital gains			20,679,620		394,291		–
Undistributed long-term capital gains			32,358,224		330,594		–
Capital loss carryover			–		–		–
Post-October losses deferred			–		–		–

	Global Natural Resources Portfolio			Growth Portfolio		High Income Portfolio
Net ordinary income		$	3,298,042	$	13,100	$	14,307,329
Distributed ordinary income			2,983,566		–		13,999,842
Undistributed ordinary income			400,775		13,100		307,545
Realized long-term capital gains			607,935		–		–
Distributed long-term capital gains			452,115		–		–
Undistributed long-term capital gains			155,821		–		–
Capital loss carryover			–		–		1,101,945
Post-October losses deferred			–		–		–

	International Growth Portfolio			International Value Portfolio		Limited- Term Bond Portfolio
Net ordinary income		$	1,846,689	$	15,262,485	$	2,591,207
Distributed ordinary income			1,400,018		12,663,235		2,500,000
Undistributed ordinary income			446,704		2,599,249		91,269
Realized long-term capital gains			–		46,358,687		–
Distributed long-term capital gains			–		36,310,443		–
Undistributed long-term capital gains			–		10,048,244		–
Capital loss carryover			–		–		–
Post-October losses deferred			–		–		–

	Micro Cap Growth Portfolio			Mid Cap Growth Portfolio		Money Market Portfolio
Net ordinary income		$	–	$	115,089	$	2,583,112
Distributed ordinary income			–		136,264		2,582,409
Undistributed ordinary income			–		2,928		4,752
Realized long-term capital gains			–		–		–
Distributed long-term capital gains			–		–		–
Undistributed long-term capital gains			–		–		–
Capital loss carryover			–		51,981		–
Post-October losses deferred			–		–		–

	Mortgage Securities Portfolio			Real Estate Securities Portfolio		Science and Technology Portfolio
Net ordinary income		$	1,344,349	$	929,652	$	–
Distributed ordinary income			1,339,988		697,127		–
Undistributed ordinary income			4,361		232,525		–
Realized long-term capital gains			–		1,350,828		14,188,312
Distributed long-term capital gains			–		1,133,548		9,599,309
Undistributed long-term capital gains			–		386,578		4,589,004
Capital loss carryover			167,905		–		–
Post-October losses deferred			2,319		–		–

	Small Cap Growth Portfolio			Small Cap Value Portfolio		Value Portfolio
Net ordinary income		$	–	$	12,927,576	$	7,406,860
Distributed ordinary income			–		10,112,871		6,114,849
Undistributed ordinary income			–		3,005,620		1,292,012
Realized long-term capital gains			56,300,561		6,415,848		13,999,200
Distributed long-term capital gains			52,470,598		5,620,644		12,439,246
Undistributed long-term capital gains			4,439,219		795,204		1,559,954
Capital loss carryover			–		–		–
Post-October losses deferred			–		–		–

Internal Revenue Code regulations permit each Portfolio to defer into its next fiscal year net capital losses or net long-term capital losses incurred between each November 1 and the end of its fiscal year (post-October losses).

Capital Loss Carryovers are available to offset future realized capital gain net income for Federal income tax purposes. The following shows the totals by year in which the capital loss carryovers will expire if not utilized.

	Asset Strategy Portfolio			Balanced Portfolio		Bond Portfolio		Core Equity Portfolio
December 31, 2008		$	–	$	1,674,016	$	–	$	–
December 31, 2009			–		20,192,432		–		630,890
December 31, 2010			–		–		–		3,320,170
December 31, 2014			–		–		1,975,245		–
Total carryover		$	–	$	21,866,448	$	1,975,245	$	3,951,060

	Dividend Income Portfolio			Energy Portfolio		Global Natural Resources Portfolio		Growth Portfolio
December 31, 2008		$	–	$	–	$	–	$	43,092,890
December 31, 2009			–		–		–		29,515,634
December 31, 2010			–		–		–		27,508,573
December 31, 2011			–		–		–		5,393,125
Total carryover		$	–	$	–	$	–	$	105,510,222

	High Income Portfolio			International Growth Portfolio		International Value Portfolio		Limited- Term Bond Portfolio
December 31, 2008		$	9,209,777	$	–	$	–	$	–
December 31, 2009			9,637,801		–		–		–
December 31, 2010			13,911,720		10,819,964		–		181,704
December 31, 2011			–		10,822,425		–		–
December 31, 2012			–		–		–		73,128
December 31, 2013			–		–		–		118,406
December 31, 2014			1,101,945		–		–		–
Total carryover		$	33,861,243	$	21,642,389	$	–	$	373,238

	Micro Cap Growth Portfolio			Mid Cap Growth Portfolio		Mortgage Securities Portfolio		Real Estate Securities Portfolio
December 31, 2010		$	4,723,037	$	–	$	–	$	–
December 31, 2013			–		–		95,073		–
December 31, 2014			–		51,981		167,905		–
Total carryover		$	4,723,037	$	51,981	$	262,978	$	–

	Science and Technology Portfolio			Small Cap Growth Portfolio		Small Cap Value Portfolio		Value Portfolio
December 31, 2009	$		–	$	20,376,371	$	–	$	–
December 31, 2010			–		10,215,239		–		–
Total carryover		$	–	$	30,591,610	$	–	$	–

Advantus Core Equity Portfolio was merged into Target Core Equity Portfolio as of September 22, 2003. At the time of the merger, Advantus Core Equity Portfolio had capital loss carryovers available to offset future gains of the Target Core Equity Portfolio. These carryovers are limited to $987,765 for each period ending from December 31, 2007 through 2010 plus any unused limitations from prior years.

Advantus Growth Portfolio and Advantus Capital Appreciation Portfolio were merged into Target Growth Portfolio as of September 22, 2003. At the time of the merger, Advantus Growth Portfolio and Advantus Capital Appreciation Portfolio had capital loss carryovers available to offset future gains of the Target Growth Portfolio. These carryovers are limited to $10,461,247 and $7,747,159, respectively, for each period ending from December 31, 2007 through 2009 and $2,114,422 and $7,747,159, respectively, for the period ending December 31, 2010 plus any unused limitations from prior years and the amount of certain built-in gains realized, if any.

Advantus Small Company Growth Portfolio was merged into Target Small Cap Growth Portfolio as of September 22, 2003. At the time of the merger, Advantus Small Company Growth Portfolio had capital loss carryovers available to offset future gains of the Target Small Cap Growth Portfolio. These carryovers are limited to $7,647,902 for each period ending from December 31, 2007 through 2010 plus any unused limitations from prior years.

NOTE 5 - Options

Options purchased by a Portfolio are accounted for in the same manner as marketable portfolio securities. The cost of portfolio securities acquired through the exercise of call options is increased by the premium paid to purchase the call. The proceeds from securities sold through the exercise of put options are decreased by the premium paid to purchase the put. A Portfolio may also enter into a collar situation in which elements of buying a cap and selling a floor or vice versa are combined in an attempt to reduce risk.

When a Portfolio writes (sells) an option, an amount equal to the premium received by the Portfolio is recorded as a liability. The amount of the liability is subsequently adjusted to reflect the current market value of the option written. The current market value of an option is the last sales price on the principal exchange on which the option is traded or, in the absence of transactions, the mean between the bid and asked prices or a value supplied by a broker-dealer. When an option expires on its stipulated expiration date or the Portfolio enters into a closing purchase transaction, the Portfolio realizes a gain (or loss if the cost of a closing purchase transaction exceeds the premium received when the call option was sold) and the liability related to such option is extinguished. When a written call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether the Portfolio has realized a gain or loss. For the Portfolio, when a written put opt ion is exercised, the cost basis of the securities purchased by the Portfolio is reduced by the amount of the premium received.

For Asset Strategy Portfolio, transactions in written put options were as follows:

	Number of Contracts			Premium Received
Outstanding at December 31, 2006		–			$	–
Options written		335				96,627
Options terminated in closing purchase transactions		(29	)			(7,743	)
Options exercised		(–	)			(–	)
Options expired		(60	)		(44,850		)
Outstanding at June 30, 2007		246			$	44,034

For Mid Cap Growth Portfolio, transactions in written call options were as follows:

	Number of Contracts			Premium Received
Outstanding at December 31, 2006		2			$	334
Options written		10,125				76,359
Options terminated in closing purchase transactions		(74	)		(21,616		)
Options exercised		(–	)		(–		)
Options expired		(113	)		(16,166		)
Outstanding at June 30, 2007	9,940				$	38,911

For Science and Technology Portfolio, transactions in written call options were as follows:

	Number of Contracts			Premium Received
Outstanding at December 31, 2006		484			$	82,930
Options written		–				–
Options terminated in closing purchase transactions		(–	)			(–	)
Options exercised		(–	)		(–		)
Options expired		(484	)		(82,930		)
Outstanding at June 30, 2007		–			$	–

For Value Portfolio, transactions in written call options were as follows:

	Number of Contracts			Premium Received
Outstanding at December 31, 2006		3,288			$	105,532
Options written		11,849				813,489
Options terminated in closing purchase transactions		(316	)			(50,715	)
Options exercised		(2,881	)		(201,395		)
Options expired		(7,886	)		(376,590		)
Outstanding at June 30, 2007		4,054			$	290,321

For Value Portfolio, transactions in written put options were as follows:

	Number of Contracts			Premiums Received
Outstanding at December 31, 2006		1,170			$	80,090
Options written		4,097				399,739
Options terminated in closing purchase transactions		(–	)			(–	)
Options exercised		(632	)			(91,154	)
Options expired		(2,275	)		(213,277		)
Outstanding at June 30, 2007		2,360			$	175,398

NOTE 6 - Futures

No price is paid upon entering into a futures contract. Instead, upon entering into a futures contract, a Portfolio is required to deposit, in a segregated account, an amount of cash or liquid securities equal to a varying specified percentage of the contract amount. This amount is known as the initial margin. Subsequent payments (variation margins) are made or received by the Portfolio each day, dependent on the daily fluctuations in the value of the underlying debt security or index. These changes in the variation margins are recorded by the Portfolio as unrealized gains or losses. Upon the closing of the contracts, the cumulative net change in the variation margin is recorded as realized gain or loss. A Portfolio uses futures to attempt to reduce the overall risk of its investments or to enhance returns.

NOTE 7 - Swaps

Each Portfolio may invest in swap agreements, which are agreements to exchange the return generated by one instrument for the return generated by another instrument. Each Portfolio may enter into credit default, total return, variance and other swap agreements to: 1) preserve a return or a spread on a particular investment or portion of its portfolio; 2) to protect against any increase in the price of securities the Portfolio anticipates purchasing at a later date; or 3) to attempt to enhance yield.

Credit default swaps involve the exchange of a fixed rate premium for protection against the loss in value of an underlying security in the event of a defined credit event, such as payment default or bankruptcy. Under a credit default swap one party acts as a guarantor by receiving the fixed periodic payment in exchange for the commitment to purchase the underlying security at par if the defined credit event occurs. Each Portfolio may enter into credit default swaps in which either it or its counterparty act as the guarantor.

Total return swaps involve a commitment to pay periodic interest payments in exchange for a market-linked return based on a security or a basket of securities representing a variety of securities or a particular index. To the extent the total return of the security, index or other financial measure underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the Portfolio will receive a payment from or make a payment to the counterparty.

Variance swaps involve a contract in which two parties agree to exchange cash flows based on the measured variance of a specified underlying security or index during a certain time period. On the trade date, the two parties agree on the strike price of the contract (the reference level against which cash flows are exchanged), as well as the number of units in the transaction and the length of the contract. Like an option contract, the value of a variance swap is influenced by both realized and implied volatility, as well as the passage of time. Each Portfolio may enter into variance swaps to manage volatility risk.

The creditworthiness of firms with which a Portfolio enters into a swap agreement is monitored by WRIMCO. If a firm's creditworthiness declines, the value of the agreement would likely decline, potentially resulting in losses. If a default occurs by the counterparty to such a transaction, the Portfolio will have contractual remedies pursuant to the agreement related to the transaction.

Swaps are marked-to-market daily based on valuations provided by a pricing vendor or a broker dealer. Changes in value are recorded as unrealized appreciation (depreciation) in the Statement of Operations. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with the custodian or counterparty. Payments received or made at the beginning of the measurement period are reflected as such on the Statement of Assets and Liabilities. These upfront payments, as well as any periodic payments, are recorded as realized gain or loss in the Statement of Operations. Gains or losses may be realized upon termination of the swap agreement.

Entering into swap agreements involves certain risks. Among these are possible failure of the counterparty to fulfill its obligations, possible lack of liquidity, and unfavorable changes in interest rates or underlying investments.

NOTE 8 - Commitment

In connection with Asset Strategy Portfolio's investment in Vietnam Azalea Fund Limited (VAF), the Portfolio is contractually committed to provide additional capital of up to $2,700,000 if and when VAF requests such contributions or draw downs. The total commitment is limited to $3,000,000. At June 30, 2007, Asset Strategy Portfolio had made its first contribution of $300,000.

NOTE 9 - Regulatory and Litigation Matters

On July 24, 2006, WRIMCO, W&R and WRSCO (collectively, Waddell & Reed) reached a settlement with each of the SEC, the New York Attorney General (NYAG) and the Securities Commissioner of the State of Kansas to resolve proceedings brought by each regulator in connection with its investigation of frequent trading and market timing in certain Waddell & Reed Advisors Funds.

Under the terms of the SEC's cease-and desist order (SEC Order), pursuant to which Waddell & Reed neither admitted nor denied any of the findings contained therein, among other provisions Waddell & Reed has agreed to: pay $40 million in disgorgement and $10 million in civil money penalties; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; maintain certain compliance and ethics oversight structures; retain an independent consultant to periodically review Waddell & Reed's supervisory, compliance, control and other policies and procedures; and retain an independent distribution consultant (described below). According to the SEC Order, the SEC found that some market timers made profits in some of the Waddell & Reed Advisors Funds, and that this may have caused some dilution in those Funds. Also, the SEC found that Waddell & Reed failed to make certain disclosures to the Waddell & Reed Advisors Funds' Boards of Direct ors and shareholders regarding the market timing activity and Waddell & Reed's acceptance of service fees from some market timers.

The Assurance of Discontinuance with the NYAG (NYAG Settlement), pursuant to which Waddell & Reed neither admitted nor denied any of the findings contained therein, among its conditions requires that Waddell & Reed: reduce the aggregate investment management fees paid by certain of the Waddell & Reed Advisors Funds and certain of the W&R Target Funds, Inc. (the Funds) by $5 million per year for five years, for a projected total of $25 million in investment management fee reductions; bear the costs of an independent fee consultant to be retained by the Funds to review and consult regarding the Funds' investment management fee arrangements; and make additional investment management fee-related disclosures to Fund shareholders. The NYAG Settlement also effectively requires that the Funds implement certain governance measures designed to maintain the independence of the Funds' Boards of Directors and appoint an independent compliance consultant responsible for monitoring the Funds' and WRIMCO's c ompliance with applicable laws.

The consent order issued by the Securities Commissioner of the State of Kansas (Kansas Order), pursuant to which Waddell & Reed neither admitted nor denied any of the findings contained therein, requires Waddell & Reed to pay a fine of $2 million to the Office of the Commissioner.

The SEC Order further requires that the $50 million in settlement amounts described above will be distributed in accordance with a distribution plan developed by an independent distribution consultant, in consultation with Waddell & Reed, and that is agreed to by the SEC staff and the Funds' Disinterested Directors. The SEC Order requires that the independent distribution consultant develop a methodology and distribution plan pursuant to which Fund shareholders shall receive their proportionate share of losses, if any, suffered by the Funds due to market timing. Therefore, it is not currently possible to specify which particular Fund shareholders or groups of Fund shareholders will receive distributions of those settlement monies or in what proportion and amounts. However, as noted above, the SEC Order makes certain findings with respect to market timing activities in some of the Waddell & Reed Advisors Funds only. Accordingly, it is not expected that shareholders of W&R Target Funds, Inc. will r eceive distributions of settlement monies.

The foregoing is only a summary of the SEC Order, NYAG Settlement and Kansas Order. A copy of the SEC Order is available on the SEC's website at www.sec.gov. A copy of the SEC Order, NYAG Settlement and Kansas Order is available as part of the Waddell & Reed Financial, Inc. Form 8-K as filed on July 24, 2006.

In addition, pursuant to the terms of agreement in the dismissal of separate litigation, Waddell & Reed has also agreed to extend the reduction in the aggregate investment management fees paid by the Fund, as described above, for an additional five years.

Shareholder Meeting Results

On February 2, 2007, a special shareholder meeting (Meeting) for W&R Target Small Cap Value Portfolio (Portfolio), a series of W&R Target Funds, Inc., was held at the offices of Waddell & Reed Financial, Inc., 6300 Lamar Avenue, Overland Park, Kansas, 66202. The Meeting was held for the following purpose (and with the following results):

Proposal 1: To approve a sub-advisory agreement between Waddell & Reed Investment Management Company and BlackRock Capital Management, Inc. with respect to the Portfolio.

For	Against	Abstain
10,760,526	377,969	512,884

Proposal 2: To authorize a "manager of managers" structure for the Portfolio whereby Waddell & Reed Investment Management Company will be able to make changes to the Portfolio's sub-advisors and materially amend investment sub-advisory agreements related to the Portfolio without obtaining shareholder approval.

For	Against	Abstain
10,383,481	749,182	518,716

Proxy Voting Information

Proxy Voting Guidelines

A description of the policies and procedures W&R Target Funds, Inc. uses to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling 1.888.WADDELL and (ii) on the Securities and Exchange Commission's (SEC) website at www.sec.gov.

Proxy Voting Records

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on Form N-PX through Waddell & Reed's website at www.waddell.com and on the SEC's website at www.sec.gov.

Quarterly Portfolio Schedule Information

A complete schedule of portfolio holdings for the first and third quarters of each fiscal year will be filed with the Securities and Exchange Commission (SEC) on the Fund's Form N-Q. This form may be obtained in the following ways:

• On the SEC's website at www.sec.gov.
• For review and copy at the SEC's Public Reference Room in Washington, DC. Information on the operations of the Public Reference Room may be obtained by calling 1.800.SEC.0330.
• On Waddell & Reed's website at www.waddell.com.

THE W&R TARGET FUNDS FAMILY

Global/International Funds      

International Growth Portfolio
International Value Portfolio

Domestic Equity Funds      

Core Equity Portfolio
Dividend Income Portfolio
Growth Portfolio
Micro Cap Growth Portfolio
Mid Cap Growth Portfolio
Small Cap Growth Portfolio
Small Cap Value Portfolio
Value Portfolio

Fixed Income Funds      

Bond Portfolio
High Income Portfolio
Limited-Term Bond Portfolio
Mortgage Securities Portfolio

Money Market Funds      

Money Market Portfolio

Specialty Funds      

Asset Strategy Portfolio
Balanced Portfolio
Energy Portfolio
Global Natural Resources Portfolio
Real Estate Securities Portfolio
Science and Technology Portfolio

FOR MORE INFORMATION:

Contact your financial advisor, or your local office as listed on your Account Statement, or contact:
United Investors Life		Securian Financial Services, Inc.
Variable Products Division	or	400 Robert Street North
P.O. Box 156		St. Paul, MN 55101-2098
Birmingham, AL 35201-0156		1.888.237.1838
205.325.4300		or
or		Call 1.888.WADDELL
Nationwide Financial, Inc.
P.O. Box 182449
One Nationwide Plaza
Columbus, OH 43218-2449
1.888.867.5175

The underlying portfolios discussed in this report are only available as investment options in variable annuity and variable life insurance contracts issued by life insurance companies. They are not offered or made available directly to the general public.

This report is submitted for the general information of the shareholders of W&R Target Funds, Inc. It is not authorized for distribution to prospective investors in a Portfolio unless accompanied with or preceded by the W&R Target Funds, Inc. current prospectus as well as the variable product prospectus.

NUR1016SA (6-07)

ITEM 2. CODE OF ETHICS.

Required in annual report only.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Required in annual report only.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Required in annual report only.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS.

See Item 1 Shareholder Report.

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.

There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant's board of directors.

ITEM 11. CONTROLS AND PROCEDURES.

(a)

The Registrant's Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, have concluded that such controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective and adequately designed to ensure that information required to be disclosed by the Registrant in its reports that it files or submits is accumulated and communicated to the Registrant's management, including the Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

(b)

There were no significant changes in the registrant's internal controls over financial reporting that occurred over the Registrant's second fiscal quarter of the period covered by this report that has affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.

ITEM 12. EXHIBITS.

(a) (2) A separate certification 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)).

Attached hereto as Exhibit 99.CERT.

(b) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)).

Attached hereto as Exhibit 99.906CERT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

W&R Target Funds, Inc.

(Registrant)

By     /s/Kristen A. Richards

         Kristen A. Richards, Vice President and Assistant Secretary

Date: September 7, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By     /s/Henry J. Herrmann

         Henry J. Herrmann, Principal Executive Officer

Date: September 7, 2007

By     /s/Joseph W. Kauten

         Joseph W. Kauten, Principal Financial Officer

Date: September 7, 2007

EX-99.CERT

EXHIBIT 99.CERT

CERTIFICATION

I, Henry J. Herrmann, certify that:

1.         I have reviewed this report on Form N-CSR of W&R Target Funds, Inc.;

2.         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4.         The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

         a)         Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that the material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

         b)         Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

         c)         Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

         d)         Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.         The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions):

         a)         All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

         b)         Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: September 7, 2007	/s/Henry J. Herrmann
	Henry J. Herrmann, Principal Executive Officer

CERTIFICATION

I, Joseph W. Kauten, certify that:

1.         I have reviewed this report on Form N-CSR of W&R Target Funds, Inc.;

2.         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4.         The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

         a)         Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that the material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

         b)         Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

         c)         Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

         d)         Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.         The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions):

         a)         All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

         b)         Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: September 7, 2007	/s/Joseph W. Kauten
	Joseph W. Kauten, Principal Financial Officer

EX-99.906.CERT

EXHIBIT 99.906 CERT

CERTIFICATION UNDER SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

Henry J. Herrmann, Principal Executive Officer, and Joseph W. Kauten, Principal Financial Officer of W&R Target Funds, Inc. (the "Registrant"), each certify to the best of his knowledge that:

         1.         The Registrant's periodic report on Form N-CSR for the period covered by the report (the "Form N-CSR") fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended; and

         2.         The information contained in the Form N-CSR fairly represents, in all material respects, the financial condition and results of operation of the Registrant.

This certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document. A signed original of this written statement required by 18 U.S.C. Section 1350 has been provided to the Registrant and will be retained and furnished to the U.S. Securities and Exchange Commission or its staff upon request.

By     /s/Henry J. Herrmann

         Henry J. Herrmann, Principal Executive Officer

Date: September 7, 2007

By     /s/Joseph W. Kauten

         Joseph W. Kauten, Principal Financial Officer

Date: September 7, 2007