-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K3VK7Eu0FpMHV/tGX7huVmGMdlE1tT94TF7UghPe1x7SUrfpqGJKHauLDuseSuEU AKXTUgK5J7jy6xVOv7AIzg== 0000950131-96-000725.txt : 19960229 0000950131-96-000725.hdr.sgml : 19960229 ACCESSION NUMBER: 0000950131-96-000725 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960228 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WANGER ADVISORS TRUST CENTRAL INDEX KEY: 0000929521 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: 1940 Act SEC FILE NUMBER: 811-08748 FILM NUMBER: 96526608 BUSINESS ADDRESS: STREET 1: 227 WEST MONROE STREET STE 3000 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3126349200 FORMER COMPANY: FORMER CONFORMED NAME: WANGER ADVISORS TRUT DATE OF NAME CHANGE: 19940902 N-30B-2 1 WANGER SMALL CAP AND WANGER INT'L SMALL CAP - -------------------------------------------------------------------------------- [LOGO] Wanger U.S. Small Cap Advisor Annual Report December 31, 1995 - ------------------------------------------------------------------------------- Wanger U.S. Small Cap Advisor Annual Report 1995 In a Nutshell - -------------------------------------------------------------------------------- Wanger U.S. Small Cap Advisor returned 16% to investors during the eight months the Fund was in operation during 1995. Through September, our performance was boosted by a number of winners in our information and finance groups. Our best stocks were Silver King (TV stations), Sierra On-line (computer games) and Aames (home equity lending). We more than doubled our money in each stock. The fourth quarter of 1995 was more of a struggle. Rising U.S. consumer debt delinquencies and bankruptcies spooked our credit card stocks (First USA, Peoples Bank). A few weak energy stocks also hurt performance. Our disappointing fourth quarter results pushed us slightly below the market averages shown in the table for the period from the commencement of the Fund's operations (May 3, 1995) through the end of the year. Our approach to investing is to buy the stocks of small- and medium-size companies that we believe will benefit from favorable long-term social, economic, or political trends. We have packed our portfolio with these companies and are ready for the new year. Bring on 1996! Results to December 31, 1995 - --------------------------------------------------------------------------------
Since 4th quarter May 3, 1995 ------------------------ Wanger U.S. Small Cap Advisor -- 3.8% 16.0% Dow-Jones 7.5% 20.4% Standard & Poor's 500 6.0% 21.8% Standard & Poor's MidCap 1.4% 18.7% Russell 2000 2.2% 20.1%
The Dow Jones Industrial Average includes 30 big companies. The S&P 500 is a broad market-weighted average, still blue chip dominated. The S&P MidCap 400 is a market value weighted index of 400 stocks that are in the next tier down from the S&P 500. The Russell 2000 is formed by taking 3,000 companies and then eliminating the largest 1,000 leaving a good small company index. All indices are unmanaged and returns include reinvested dividends. Net Asset Value Per Share as of 12/31/95: $11.60 - -------------------------------------------------------------------------------- The Value of a $10,000 Investment in Wanger U.S. Small Cap Advisor May 3, 1995 through December 31, 1995 [GRAPH APPEARS HERE] Wanger US Small Cap Russell 2000 ------------------- ------------ 5/3/95 $10,000 $10,000 5/31/95 $ 9,870 $10,172 6/30/95 $10,770 $10,700 7/31/95 $11,560 $11,316 8/31/95 $11,940 $11,550 9/30/95 $12,060 $11,757 10/31/95 $11,380 $11,231 11/30/95 $11,640 $11,703 12/31/95 $11,600 $12,012 This graph compares the results of $10,000 invested in Wanger U.S. Small Cap Advisor on May 3, 1995 (the date the Fund began operations) with the Russell 2000 with dividends reinvested. Past performance does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that Fund shares, when redeemed, may be worth more or less than their original cost. 2 - -------------------------------------------------------------------------------- Wanger U.S. Small Cap Advisor Statement of Investments December 31, 1995
Number of Shares Value - -------------------------------------------------------------------------------- Common Stocks and Other Equity-Like Securities--94.9% Information Group--24.5% - -------------------------------------------------------------------------------- Broadcasting and CATV--4.6% 20,000 Tele-Communications, Liberty $ 537,500 Media Group (b) 19,000 International Family Entertainment (b) 311,125 12,000 Jones Intercable, Cl. A (b) 148,500 - -------------------------------------------------------------------------------- 997,125 Mobile Communications--4.6% 15,000 Cellular Communications of 416,250 Puerto Rico (b) 18,000 Vanguard Cellular Systems (b) 364,500 10,600 Mobile Telecommunication 226,575 Technologies (b) - -------------------------------------------------------------------------------- 1,007,325 Software--2.2% 25,500 CACI International (b) 302,813 4,300 Business Records Corporation (b) 169,850 - -------------------------------------------------------------------------------- 472,663 Instrumentation--2.7% 30,000 COMARCO (b) 435,000 10,000 Thermo Spectra (b) 156,250 - -------------------------------------------------------------------------------- 591,250 Computer Systems--2.5% 12,500 Solectron (b) 551,563 Distribution--2.1% 22,200 Richey Electronics (b) 288,600 23,000 Bell Microproducts (b) 166,750 - -------------------------------------------------------------------------------- 455,350 Components and Peripherals--5.8% 15,000 In Focus Systems (b) 541,875 25,000 Oak Industries (b) 468,750 14,000 Planar Systems (b) 267,750 - -------------------------------------------------------------------------------- 1,278,375 - -------------------------------------------------------------------------------- Information Group--Total 5,353,651 Health Care Group--8.9% - -------------------------------------------------------------------------------- Medical Equipment--7.2% 42,000 Kinetic Concepts $ 504,000 30,000 AMSCO International (b) 446,250 14,000 Thermedics (b) 388,500 9,000 Invacare 227,250 - -------------------------------------------------------------------------------- 1,566,000 Services--1.7% 15,000 Lincare Holding (b) 375,000 - -------------------------------------------------------------------------------- Health Care Group--Total 1,941,000 Consumer Goods and Services Group--14.0% - -------------------------------------------------------------------------------- Retail--4.0% 30,000 Borders (b) 555,000 18,500 Dave & Buster's 224,312 10,000 Duckwall Alco Stores (b) 102,500 - -------------------------------------------------------------------------------- 881,812 Entertainment and Leisure--3.3% 20,000 Rio Hotel & Casino (b) 237,500 13,000 Station Casinos (b) 190,125 5,000 GC Companies (b) 167,500 35,000 Monarch Casino & Resort (b) 122,500 - -------------------------------------------------------------------------------- 717,625 Restaurants--1.8% 35,000 Quantum Restaurant Group (b) 393,750 Manufacturers--4.9% 21,000 Newell Companies 543,375 15,000 Liz Claiborne 416,250 10,000 Hampshire Group (b) 120,000 - -------------------------------------------------------------------------------- 1,079,625 - -------------------------------------------------------------------------------- Consumer Group--Total 3,072,812
3
================================================================================ Wanger U.S. Small Cap Advisor Statement of Investments December 31, 1995 Number of Shares Value - -------------------------------------------------------------------------------- Finance Group-22.7% - -------------------------------------------------------------------------------- Savings & Loans-5.7% 18,000 Washington Federal $ 461,250 22,000 Peoples Bank Bridgeport 418,000 10,000 Bell Bancorp 357,500 - -------------------------------------------------------------------------------- 1,236,750 Insurance-3.9% 18,000 Transnational Re 441,000 17,000 Leucadia National 425,000 - -------------------------------------------------------------------------------- 866,000 Money Management-1.7% 17,000 SEI Corporation 369,750 Credit Cards-4.3% 20,000 National Data 495,000 10,000 First USA 443,750 - -------------------------------------------------------------------------------- 938,750 Other-7.1% 35,000 Baker Fentress 586,250 30,000 DVI Health Services (b) 420,000 28,000 Americredit (b) 381,500 30,000 Cash America International 165,000 - -------------------------------------------------------------------------------- 1,552,750 - -------------------------------------------------------------------------------- Finance Group-Total 4,964,000 Industrial Goods and Services-14.1% - -------------------------------------------------------------------------------- Machinery-2.8% 25,000 Zoltek Companies (b) $ 418,750 10,600 Atchison Casting (b) 127,200 3,750 Baldor Electric 75,468 - -------------------------------------------------------------------------------- 621,418 Steel-1.2% 8,000 UCAR International (b) 270,000 Furniture and Textiles-3.9% 33,000 Lilly Industries, Cl. A 420,750 19,000 Unifi 420,375 - -------------------------------------------------------------------------------- 841,125 Services-6.2% 29,000 Wackenhut, Cl. B 449,500 35,000 AG Services of America (b) 332,500 25,000 NuCo2 (b) 325,000 19,000 Thomas Group (b) 256,500 - -------------------------------------------------------------------------------- 1,363,500 - -------------------------------------------------------------------------------- Industrial Group-Total 3,096,043
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================================================================================ Wanger U.S. Small Cap Advisor Statement of Investments December 31, 1995 Number of Shares Value - -------------------------------------------------------------------------------- Energy and Minerals Group--10.7% - -------------------------------------------------------------------------------- Cogeneration--4.8% 24,000 The AES Corporation (b) $ 573,000 29,000 Thermo Ecotek (b) 485,750 - -------------------------------------------------------------------------------- 1,058,750 Oil & Gas Producer--3.5% 36,000 Abraxas Petroleum (b) 225,000 25,000 Tesoro Petroleum (b) 215,625 10,000 United Meridian (b) 173,750 14,700 Global Natural Resources (b) 154,350 - -------------------------------------------------------------------------------- 768,725 Refining/Marketing--1.0% 24,000 NGC Corporation 213,000 Oil Services--1.4% 7,000 Atwood Oceanics (b) 176,750 5,000 Seacor Holdings (b) 135,000 - -------------------------------------------------------------------------------- 311,750 - -------------------------------------------------------------------------------- Energy Group--Total 2,352,225 - -------------------------------------------------------------------------------- Total Common Stocks and Other Equity-Like Securities--94.9% $20,779,731 - -------------------------------------------------------------------------------- (Cost: $20,340,288) Cash and Other Assets Less Liabilities--5.1% 1,123,805 - -------------------------------------------------------------------------------- Total Net Assets--100% $21,903,536 - --------------------------------------------------------------------------------
Notes To Statement of Investments: a) At December 31, 1995, for federal income tax purposes cost of investments was $20,340,288 and net unrealized appreciation was $439,443 consisting of gross unrealized appreciation of $1,596,638 and gross unrealized depreciation of $1,157,195. b) Non-income producing security. See accompanying notes to financial statements. 5 ================================================================================ Report of Independent Auditors To the Shareholders of Wanger U.S. Small Cap Advisor and the Trustees of Wanger Advisors Trust We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Wanger U.S. Small Cap Advisor as of December 31, 1995, the related statements of operations and changes in net assets and the financial highlights for the period from May 3, 1995 (commencement of operations) through December 31, 1995. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of investments owned as of December 31, 1995, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Wanger U.S. Small Cap Advisor at December 31, 1995, the results of its operations and changes in its net assets and the financial highlights for the period from May 3, 1995 through December 31, 1995 in conformity with generally accepted accounting principles. ERNST & YOUNG LLP Chicago, Illinois January 31, 1996 6
================================================================================ Wanger U.S. Small Cap Advisor Statement of Assets December 31, 1995 and Liabilities Assets Investments, at value (cost: $20,340,288) $20,779,731 Cash 1,045,491 Organization costs 86,672 Receivable for: Fund shares sold $305,337 Dividends 13,525 318,862 - ------------------------------------------------------------------------------- Total assets 22,230,756 Liabilities and Net Assets Payable for: Securities purchased 225,000 Amount owed to advisor 86,780 Other 15,440 - ------------------------------------------------------------------------------- Total liabilities 327,220 - ------------------------------------------------------------------------------- Net assets applicable to Fund shares outstanding $21,903,536 - ------------------------------------------------------------------------------- Fund shares outstanding 1,888,396 - ------------------------------------------------------------------------------- Pricing of Shares Net asset value, offering price and redemption price per share $ 11.60 - ------------------------------------------------------------------------------- Analysis of Net Assets Paid-in capital $21,506,936 Undistributed net realized gain on sales of investments 59,816 Unrealized appreciation of investments 439,443 Net investment loss (102,659) - ------------------------------------------------------------------------------- Net assets applicable to Fund shares outstanding $21,903,536 - -------------------------------------------------------------------------------
See accompanying notes to financial statements. 7
================================================================================ U.S. Small Cap Advisor Statement of Operations December 31, 1995 May 3, 1995 through December 31, 1995 Investment Income: Dividends $ 40,287 Interest 46 - ------------------------------------------------------------------------------- Total investment income 40,333 Expenses: Investment advisory fee 71,496 Custodian fees and expenses 5,384 Legal and audit fees and expenses 52,389 Reports to shareholders 4,437 Transfer agent fees and expenses 2,172 Amortization of organization costs 13,328 Trustees' fees and other expenses 13,000 Insurance 4,941 Other expenses 1,025 - ------------------------------------------------------------------------------- Total Expenses 168,172 Less custodian fees paid indirectly (5,384) Less reimbursement of expenses by advisor (19,796) - ------------------------------------------------------------------------------- Net expenses 142,992 - ------------------------------------------------------------------------------- Net investment loss (102,659) Net realized and unrealized gain on investments: Net realized gain on sales of investments 59,816 Net change in unrealized appreciation 439,443 - ------------------------------------------------------------------------------- Net realized and unrealized gain on investments 499,259 - ------------------------------------------------------------------------------- Net increase in net assets resulting from operations $ 396,600 ================================================================================ Wanger U.S. Small Cap Advisor Statement May 3, 1995 through December 31, 1995 of Changes in Net Assets - ------------------------------------------------------------------------------- From operations: - ------------------------------------------------------------------------------- Net investment loss $ (102,659) Net realized gain on sales of investments 59,816 Net change in unrealized appreciation 439,443 - ------------------------------------------------------------------------------- Net increase in net assets resulting from operations 396,600 From Fund share transactions: Proceeds from shares sold 24,819,962 Payments for shares redeemed (3,438,708) - ------------------------------------------------------------------------------- Net increase in net assets from Fund share transactions 21,381,254 - ------------------------------------------------------------------------------- Total increase in net assets 21,777,854 Net assets: Beginning of period (May 3, 1995) 125,682 - ------------------------------------------------------------------------------- End of period (including net investment loss of $102,659) $21,903,536 - -------------------------------------------------------------------------------
See accompanying notes to financial statements. 8
================================================================================================ Wanger U.S. Small Cap Advisor Financial Highlights December 31, 1995 May 3, 1995 through December 31, 1995 - ------------------------------------------------------------------------------------------------ Net Asset Value, beginning of period $ 10.00 Income From Investment Operations Net investment loss (.05) Net realized and unrealized gain on investments 1.65 - ------------------------------------------------------------------------------------------------ Total from investment operations 1.60 Net Asset Value, end of period $ 11.60 ================================================================================================ Total Return 16.00% Ratios / Supplemental Data: Ratio of expenses to average net assets (a) (b) 2.08%* Ratio of net investment loss to average net assets (b) (1.44)%* Portfolio turnover rate 59%* Net assets at end of period $21,903,536 ================================================================================================
* Annualized a) In accordance with a requirement by the Securities and Exchange Commission, this ratio reflects gross custodian fees. This ratio net of custodian fees paid indirectly would have been 2.00%. b) The Fund was reimbursed by the Advisor for certain net expenses from May 3, 1995 through December 31, 1995. Without the reimbursement, the ratio of expenses to average net assets and the ratio of net investment loss to average net assets would have been 2.35% and (1.71%), respectively. See accompanying notes to financial statements. 9 =============================================================================== Wanger U.S. Small Cap Advisor Notes to Financial Statements December 31, 1995 1. Nature of operations Wanger U.S. Small Cap Advisor (the "Fund") is a series of Wanger Advisors Trust (the "Trust"), an open-end management investment company organized as a Massachusetts business trust. The investment objective of the Fund is to seek long-term growth of capital. The Fund is available only for allocation to certain life insurance company separate accounts established for the purpose of funding qualified and non-qualified variable annuity contracts, and may also be offered directly to certain types of pension plans and retirement arrangements. The Fund commenced operations on May 3, 1995. 2. Significant Accounting Policies Security valuation Investments are stated at current value. Securities traded on securities exchanges or in over-the-counter markets in which transaction prices are reported are valued at the last sales price at the time of valuation, or lacking any reported sales on that day, at the midpoint of the most recent bid and offer. Money market instruments having a maturity of 60 days or less from the valuation date are valued on an amortized cost basis. Securities for which quotations are not readily available and any other assets are valued at a fair value as determined in good faith by the Board of Trustees. Security transactions and investment income Security transactions are accounted for on the trade date (date the order to buy or sell is executed) and dividend income is recorded on the ex-dividend date. Interest income is recorded on the accrual basis and includes amortization of discounts on money market instruments and long-term debt instruments when required for federal income tax purposes. Realized gains and losses from security transactions are reported on an identified cost basis. Fund share valuation Fund shares are sold and redeemed on a continuing basis at net asset value. Net asset value per share is determined daily as of the close of trading on the New York Stock Exchange on each day the Exchange is open for trading by dividing the total value of the Fund's investments and other assets, less liabilities, by the number of Fund shares outstanding. Custodian fees Custodian fees are reduced based on the Fund's cash balances maintained with the custodian. This presentation does not affect the determination of net investment income. 10 =============================================================================== Wanger U.S. Small Cap Advisor Notes to Financial Statements December 31, 1995 Federal income taxes, dividends and distributions to shareholders It is the Fund's policy to comply with the special provisions of the Internal Revenue Code available to regulated investment companies and, in the manner provided therein, to distribute all of its taxable income, as well as any net realized gain on sales of investments reportable for federal income tax purposes. Dividends and distributions payable to its shareholders are recorded by the Fund on the ex-dividend date. 3. Transactions with Affiliates The Fund's portfolio and business affairs are managed by its investment advisor, Wanger Asset Management, L.P. ("WAM"). The Fund pays WAM a monthly advisory fee based upon average daily net assets at the following annual rates: 1% up to $100 million, .95% in excess of $100 million and up to $250 million, and .90% in excess of $250 million. The investment advisory agreement also provides that WAM will reimburse the Fund to the extent that ordinary operating expenses (computed based on net custodian fees) exceed 2% of average net assets. For the period ended December 31, 1995, WAM reimbursed the Fund $19,796. Certain officers and trustees of the Trust are also principals of WAM. The Trust makes no direct payments to its officers and trustees who are affiliated with WAM. The Fund incurred trustees' fees and expenses of $13,000 in 1995 to trustees not affiliated with WAM. WAM advanced $100,000 in connection with the organization and initial registration of the Fund. These costs are being amortized and reimbursed to WAM over the period May, 1995 through April, 2000. 4. Fund Share Transactions Proceeds and payments on Fund shares as shown in the statement of changes in net assets are in respect of the following numbers of shares:
Period ended 12/31/95 - --------------------------------------------------------------- Shares sold 2,170,461 Less shares redeemed 294,633 - --------------------------------------------------------------- Net increase in shares outstanding 1,875,828 ===============================================================
5. Investment transactions
Period ended 12/31/95 - --------------------------------------------------------------- Investment securities (excluding money market instruments): Purchases $24,736,475 Proceeds from sales 4,456,003 ===============================================================
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======================================================================================================================== Wanger U.S. Small Cap Advisor - ------------------------------------------------------------------------------------------------------------------------ Trustees Fred D. Hasselbring James A. Star Terence M. Hogan Ralph Wanger Charles P. McQuaid Leah J. Zell P. Michael Phelps - ------------------------------------------------------------------------------------------------------------------------ Officers Ralph Wanger, President Merrillyn J. Kosier, Charles P. McQuaid, Senior Vice President Vice President and Secretary Terence M. Hogan, Vice President Bruce H. Lauer, Vice President and Treasurer Leah J. Zell, Vice President Kenneth A. Kalina, Assistant Treasurer - ------------------------------------------------------------------------------------------------------------------------ Transfer Agent, Dividend State Street Bank and Trust Company Disbursing Agent and Attention: Wanger Advisors Trust Custodian P.O. Box 8502 Boston, Massachusetts 02266-8502 1-800-4-WANGER (1-800-492-6437) - ------------------------------------------------------------------------------------------------------------------------ Investment Advisor Wanger Asset Management, L.P. 227 West Monroe Street, Suite 3000 Chicago, Illinois 60606 (312) 634-9200 - ------------------------------------------------------------------------------------------------------------------------ Legal Counsel Bell, Boyd & Lloyd Chicago, Illinois - ------------------------------------------------------------------------------------------------------------------------ Auditors Ernst & Young LLP Chicago, Illinois
This report, including the audited financial statements contained herein, is submitted for the general information of the shareholders of the Fund. This report is not authorized for distribution unless preceded or accompanied by a prospectus. ============================================================================= [LOGO] Wanger International Small Cap Advisor Annual Report December 31, 1995 ============================================================================= Wanger International Small Cap Advisor Annual Report 1995 In a Nutshell - ----------------------------------------------------------------------------- Wanger International Small Cap Advisor had an extraordinary 1995. We began operations on May 3, 1995. For the period from May 3 to the end of the year, the foreign markets were up about 2%. Your fund went up 34.5%. For the fourth quarter of 1995, your fund was up 4.2%, ahead of the two market averages shown in the table. Many of the best stocks of 1995 were in Europe. Our fund is a small cap fund, not an emerging markets fund, so we have the majority of our investments in the developed markets of Europe, Japan, Canada, and Australia. We participate in the high-risk, high-return emerging markets, but only with part of our money. Results to December 31, 1995 - -----------------------------------------------------------------------------
Since 4th quarter May 3, 1995 ------------------------- Wanger Int'l Small Cap 4.2% 34.5% EAFE 3.6% 4.1% Lipper Int'l Small Co. -0.3% 7.5% Funds Average
EAFE is Morgan Stanley's Europe, Australia and Far East Index. EAFE is an unmanaged index of companies throughout the world in proportion to world stock market capitalization, excluding the U.S. and Canada. The Lipper International Small Company Funds Average is a new group comprised of twelve small company international funds. Net Asset Value Per Share as of 12/31/95: $13.45 ============================================================================= The Value of a $10,000 Investment in Wanger International Small Cap Advisor May 3, 1995 through December 31, 1995 [GRAPH APPEARS HERE] Total Return Life of Fund 34.5%
Wanger International Measurement Period Small Cap Advisor EAFE - ------------------ -------------------- ---------- 5/3/95 $10,000 $10,000 5/31/95 $10,790 $ 9,867 6/30/95 $10,970 $ 9,681 7/31/95 $11,910 $10,270 8/31/95 $12,290 $ 9,864 9/30/95 $12,910 $10,044 10/31/95 $12,700 $ 9,760 11/30/95 $12,660 $10,019 12/31/95 $13,450 $10,409
This graph compares the results of $10,000 invested in Wanger International Small Cap Advisor on May 3, 1995 (the date the Fund began operations) with Morgan Stanley's Europe, Australia and Far East Index (EAFE). Past performance does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that Fund shares, when redeemed, may be worth more or less than their original cost. =================================================================== 5/95 6/95 9/95 12/31/95 +9.7% +17.7% +4.2% ------------------------------------------------------------------- Wanger International Small Cap Advisor Total Return for Each Period 2
================================================================================================== Wanger International Small Cap Advisor Statement of Investments December 31, 1995 Number of Shares Value - -------------------------------------------------------------------------------- Common Stocks and Other Equity-Like Securities--95.3% Europe--45.8% - -------------------------------------------------------------------------------- Germany/Austria--4.6% - -------------------------------------------------------------------------------- 3,120 Rhoen Klinikum Ord. $ 309,537 Hospital Management 1,200 BWT 123,324 Water Filtration Systems (Austria) 1,000 Fresenius Pfd. 95,019 Dialysis Equipment and Solutions - -------------------------------------------------------------------------------- 527,880 Denmark--2.7% - -------------------------------------------------------------------------------- 6,000 Martin Group (b) 313,966 Computer Controlled Lights Netherlands--3.4% - -------------------------------------------------------------------------------- 20,000 Axxicon Group (b) 368,037 Plastic Injection Moulds for Compact Discs Finland--2.9% - -------------------------------------------------------------------------------- 10,000 Tietotehdas, Cl. B 324,720 Computer Services/Consulting Norway--1.7% - -------------------------------------------------------------------------------- 8,000 Elkjoeb Norge 198,797 Consumer Electronics Retailer Sweden--6.2% - -------------------------------------------------------------------------------- 12,000 Pricer, Cl. B (b) 202,807 Electronic Shelf Labels for Supermarkets 9,000 Althin Medical AB 183,341 Dialysis & Other Medical Equipment 15,000 HL Display 165,233 Retail Display Systems 5,250 Frontec, Series B (b) 151,313 Computer Consulting and Software - -------------------------------------------------------------------------------- 702,694 France--8.4% - -------------------------------------------------------------------------------- 6,000 Axime Ex Segin (b) 462,529 Computer Services/Consulting 10,000 Coflexip 188,750 Flexible Pipe for Subsea Oil Wells 1,500 Guilbert 176,362 Office Supplies Distributor 1,400 Spir Communication 128,535 Newspaper Publisher & Printer - -------------------------------------------------------------------------------- 956,176 United Kingdom/Ireland--10.5% - -------------------------------------------------------------------------------- 55,000 Oriflame International 345,842 Natural Cosmetics 44,500 Serco Group 253,563 Facilities Management 30,000 Capita Group 132,747 Outsourcing Government Services 5,000 International Cabletel (b) 122,500 Cable TV & Telephone System 20,000 N. Brown Group 83,219 Mail Order Women's Clothing 12,400 Seton Healthcare Group 76,046 Pharmaceuticals 10,000 Biocompatibles International (b) 73,749 Contact Lenses, Coronary Stents & Other Medical Devices 50,000 City Centre Restaurants 72,972 Fast Food Restaurants 15,000 Body Shop International 35,399 Natural Cosmetics and Toiletries - -------------------------------------------------------------------------------- 1,196,037 Switzerland--2.1% - -------------------------------------------------------------------------------- 300 Phoenix Mecano 150,691 Electrical Components Manufacturer 80 Suedelektra Holding (b) 86,208 Diversified Pool of Commodity-Related Projects - -------------------------------------------------------------------------------- 236,899 Italy--3.3% - -------------------------------------------------------------------------------- 16,000 Brembo (b) 185,334 Manufacturer of Disk Brake Systems 50,000 Costa Crociere Ord. 122,156 Cruise Ship Line 46,000 Tecnost 75,386 ATM, Lotto and Toll Collection Equipment Manufacturer - -------------------------------------------------------------------------------- 382,876 - -------------------------------------------------------------------------------- Europe--Total 5,208,082
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=========================================================================================== Wanger International Small Cap Advisor Statement of Investments December 31, 1995 Number of Shares Value - -------------------------------------------------------------------------------- Asia--31.9% - -------------------------------------------------------------------------------- Hong Kong/China--7.7% - -------------------------------------------------------------------------------- 1,000,000 Golden Harvest Entertainment $265,132 Movie Distribution & Exhibition 90,000 New World Infrastructure (b) 172,271 Infrastructure Investments (China) 150,000 Li and Fung 133,859 Sourcing of Consumer Goods 60,000 Varitronix International 111,355 LCD Manufacturer 200,000 Chen Hsong Holdings 104,759 Plastic Injection Machines 120,000 JCG Holdings 87,688 Consumer Finance - -------------------------------------------------------------------------------- 875,064 Japan--9.6% - -------------------------------------------------------------------------------- 7,000 Hokuto 254,459 Mushroom Grower 2,500 Autobacs Seven 207,929 Auto Parts Retailer 3,600 Sankyo Company 167,507 Pachinko Machine Manufacturer 3,300 Aucnet 159,946 Used Auto Auctions Via Satellite 6,000 Heiwa 156,456 Pachinko Machine Manufacturer 2,000 Paramount Bed 139,589 Hospital Bed Manufacturer - -------------------------------------------------------------------------------- 1,085,886 Malaysia--3.8% - -------------------------------------------------------------------------------- 50,000 Sistem Televisyen Malaysia 180,189 Television Franchise 33,750 Malaysian Assurance Alliance 152,865 Insurance 13,000 O.Y.L. Industries 100,866 Air Conditioners - -------------------------------------------------------------------------------- 433,920 Indonesia/Philippines--7.2% - -------------------------------------------------------------------------------- 280,000 Suba Indah 186,748 Beverage and Food Manufacturer 350,000 Int'l Container Terminal Services (b) 183,473 Container Handling Terminals & Port Management (Philippines) 350,000 Universal Robina 173,466 Snack Foods (Philippines) 150,000 PILTEL (b) 151,544 Mobile Communications (Philippines) 80,000 Mustika Ratu (b) 127,706 Traditional Cosmetics - -------------------------------------------------------------------------------- 822,937 Singapore--3.6% - -------------------------------------------------------------------------------- 70,000 Venture Manufacturing Warrants 111,347 7/26/99 (b) Contract Manufacturer of Electronic Goods 17,000 Clipsal Industries 38,420 Electrical Components 160,000 Genting International 260,800 Cruise Line - -------------------------------------------------------------------------------- 410,567 - -------------------------------------------------------------------------------- Asia--Total 3,628,374
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==================================================================================================== Wanger International Small Cap Advisor Statement of Investments December 31, 1995 Number of Shares Value - -------------------------------------------------------------- Latin America--8.0% - -------------------------------------------------------------- Mexico--5.8% - -------------------------------------------------------------- 61,500 Nadro, Series L $207,528 Pharmaceutical Distributor 21,000 Grupo Radio Centro 154,875 Radio Stations and Networks 10,000 Kimberly Clark De Mexico 151,071 Paper Products 10,000 Bufete Industrial (b) 150,000 Engineering and Construction - -------------------------------------------------------------- 663,474 Brazil/Chile--2.2% - -------------------------------------------------------------- 5,000 Genesis Chile Fund 202,500 Closed-End Fund (Chile) 70,000 Brazilian Smaller Companies Warrants (b) 49,000 Closed-End Fund (Brazil) - -------------------------------------------------------------- 251,500 - -------------------------------------------------------------- Latin America--Total 914,974 Other Countries--9.6% - -------------------------------------------------------------- Australia/New Zealand--6.5% - -------------------------------------------------------------- 60,000 Publishing & Broadcasting 209,333 Media & TV Broadcasting 114,300 Austereo 161,553 Media - Radio 25,000 PDL Holdings 138,933 Electrical Equipment Manufacturer & Distributor (New Zealand) 80,000 Just Jeans Holdings 115,453 Jeans & Fashion Retail Stores 350,000 Command Petroleum Holdings (b) 106,750 Oil and Gas Exploration - -------------------------------------------------------------- 732,022 - -------------------------------------------------------------- Canada--3.1% - -------------------------------------------------------------- 50,000 Tesco (b) 242,870 Rental of Drilling Equipment 20,000 Veritas Energy Services (b) 109,979 Geophysical Contractor - -------------------------------------------------------------- 352,849 - -------------------------------------------------------------- Other--Total 1,084,871 Total Common Stocks and Other Equity-Like Securities--95.3% 10,836,301 - -------------------------------------------------------------- (Cost:$9,726,347) Cash and Other Assets Less Liabilities--4.7% 532,623 - -------------------------------------------------------------- Total Net Assets--100% $11,368,924 - --------------------------------------------------------------
Notes to Statement of Investments: a) At December 31, 1995, for federal income tax purposes cost of investments was $9,759,245 and net unrealized appreciation was $1,077,056 consisting of gross unrealized appreciation of $1,329,208 and gross unrealized depreciation of $252,152. b) Non-income producing security. See accompanying notes to financial statements. 5
========================================================================================================== Wanger International Small Cap Advisor Statement of Investments December 31, 1995 At December 31, 1995, the Fund's portfolio of investments as a percentage of net assets was diversified as follows: Value Percent - ---------------------------------------------------- Information Group - ---------------------------------------------------- Computer Systems $ 936,666 8.2% - ---------------------------------------------------- Broadcasting and CATV 828,450 7.3 - ---------------------------------------------------- Consumer Electronics 499,263 4.4 - ---------------------------------------------------- Mobile Communications 151,544 1.3 - ---------------------------------------------------- Software 151,313 1.3 - ---------------------------------------------------- Distribution 128,535 1.2 - ---------------------------------------------------- 2,695,771 23.7 Health Care - ---------------------------------------------------- Biotechnology/Drug Delivery 388,333 3.4 - ---------------------------------------------------- Services 383,286 3.4 - ---------------------------------------------------- Hospital/Laboratory Supplies 234,608 2.1 - ---------------------------------------------------- Equipment 183,341 1.6 - ---------------------------------------------------- 1,189,568 10.5 Consumer Goods and Services - ---------------------------------------------------- Retail 1,650,847 14.5 - ---------------------------------------------------- Entertainment and Leisure 706,919 6.2 - ---------------------------------------------------- Manufacturers 705,024 6.2 - ---------------------------------------------------- Food 687,645 6.1 - ---------------------------------------------------- 3,750,435 33.0 Finance Group - ---------------------------------------------------- Money Management 423,771 3.7 - ---------------------------------------------------- Other 1,042,853 9.2 - ---------------------------------------------------- 1,466,624 12.9 Industrial Goods and Services - ---------------------------------------------------- Machinery Processing 752,081 6.6 - ---------------------------------------------------- Services 183,473 1.6 - ---------------------------------------------------- Forest Products and Construction 150,000 1.3 - ---------------------------------------------------- 1,085,554 9.5 Energy and Minerals - ---------------------------------------------------- Oil Services 431,620 3.8 - ---------------------------------------------------- Oil and Gas Producers 216,729 1.9 - ---------------------------------------------------- 648,349 5.7 Total Common Stocks and Other Equity-Like Securities 10,836,301 95.3 - ---------------------------------------------------- Cash and Other Assets less Liabilities 532,623 4.7 - ---------------------------------------------------- Net Assets $11,368,924 100.0% - ----------------------------------------------------
=============================================================================== Report of Independent Auditors To the Shareholders of Wanger International Small Cap Advisor and the Trustees of Wanger Advisors Trust We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Wanger International Small Cap Advisor as of December 31, 1995, the related statements of operations and changes in net assets and the financial highlights for the period from May 3, 1995 (commencement of operations) through December 31, 1995. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of investments owned as of December 31, 1995, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Wanger International Small Cap Advisor at December 31, 1995, the results of its operations and changes in its net assets and the financial highlights for the period from May 3, 1995 through December 31, 1995 in conformity with generally accepted accounting principles. ERNST & YOUNG LLP Chicago, Illinois January 31, 1996 6
=============================================================================================================== Wanger International Small Cap Advisor Statement of Assets and Liabilities December 31, 1995 Assets Investments, at value (cost: $9,726,347) $10,836,301 Cash 883,814 Organization costs 86,672 Receivable for: Securities sold 79,781 Dividends 2,963 Fund shares sold 177,438 260,182 - --------------------------------------------------------------------------------------------------------------- Total assets 12,066,969 Liabilities and Net Assets Payable for: Securities purchased 594,769 Fund shares redeemed 81 Amount owed to advisor 86,740 Other 16,455 - --------------------------------------------------------------------------------------------------------------- Total liabilities 698,045 - --------------------------------------------------------------------------------------------------------------- Net assets applicable to Fund shares outstanding $11,368,924 - --------------------------------------------------------------------------------------------------------------- Fund shares outstanding 845,182 =============================================================================================================== Pricing of Shares Net asset value, offering price and redemption price per share $13.45 - --------------------------------------------------------------------------------------------------------------- Analysis of Net Assets Paid-in capital $10,233,014 Accumulated net realized gain on sales of investments and foreign currency transactions 53,357 Unrealized appreciation of investments and foreign currency transactions 1,109,954 Net investment loss (27,401) - --------------------------------------------------------------------------------------------------------------- Net assets applicable to Fund shares outstanding $11,368,924 ===============================================================================================================
See accompanying notes to financial statements. 7
============================================================================================== Wanger International Small Cap Advisor Statement of Operations December 31, 1995 May 3, 1995 through December 31, 1995 - ---------------------------------------------------------------------------------------------- Investment Income: Dividends (net of foreign taxes of $5,769) $ 39,708 Interest 161 - ---------------------------------------------------------------------------------------------- Total investment income 39,869 Expenses: Investment advisory fee 43,726 Custodian fees and expenses 19,208 Legal and audit fees and expenses 40,560 Reports to shareholders 3,199 Amortization of organization costs 13,328 Trustees' fees 13,000 Insurance 4,941 Other expenses 3,186 - ---------------------------------------------------------------------------------------------- Total expenses 141,148 Less custodian fees paid indirectly (10,886) Less reimbursement of expenses by advisor (62,992) - ---------------------------------------------------------------------------------------------- Net expenses 67,270 - ---------------------------------------------------------------------------------------------- Net investment loss (27,401) Net realized and unrealized gain on investments: Net realized gain on sales of investments 53,290 Net realized gain on foreign currency transactions 67 Net change in unrealized appreciation 1,109,954 - ---------------------------------------------------------------------------------------------- Net realized and unrealized gain on investments 1,163,311 - ---------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations $ 1,135,910 ============================================================================================== Wanger International Small Cap Advisor Statement of Changes in Net Assets ============================================================================================== From operations: Net investment loss $ (27,401) Net realized gain on sales of investments 53,290 Net realized gain on foreign currency transactions 67 Net change in unrealized appreciation 1,109,954 - ---------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 1,135,910 From Fund share transactions: Proceeds from shares sold 11,951,601 Payments for shares redeemed (1,844,269) - ---------------------------------------------------------------------------------------------- Net increase in net assets from Fund share transactions 10,107,332 - ---------------------------------------------------------------------------------------------- Total increase in net assets 11,243,242 Net Assets: - ---------------------------------------------------------------------------------------------- Beginning of period (May 3, 1995) 125,682 - ---------------------------------------------------------------------------------------------- End of period (including net investment loss of $27,401) $11,368,924 ==============================================================================================
See accompanying notes to financial statements. 8
================================================================================ Wanger International Small Cap Advisor Financial Highlights December 31, 1995 May 3, 1995 through December 31, 1995 - -------------------------------------------------------------------------------- Net Asset Value, beginning of period $ 10.00 Income From Investment Operations Net investment loss (.03) Net realized and unrealized gain on investments 3.48 - -------------------------------------------------------------------------------- Total from investment operations 3.45 Net Asset Value, end of period $ 13.45 ================================================================================ Total Return 34.50% Ratios/Supplemental Data Ratio of expenses to average net assets (a) (b) 2.32%* Ratio of net investment loss to average net assets (b) (0.81)%* Portfolio turnover rate 14%* Net assets at end of period $11,368,924 ================================================================================
* Annualized a) In accordance with a requirement by the Securities and Exchange Commission, this ratio reflects gross custodian fees. This ratio net of custodian fees paid indirectly would have been 2.00%. b) The Fund was reimbursed by the Advisor for certain net expenses from May 3, 1995 through December 31, 1995. Without the reimbursement, the ratio of expenses to average net assets and the ratio of net investment loss to average net assets would have been been 4.20% and (2.69)%, respectively. See accompanying notes to financial statements. 9 ============================================================================== Wanger International Small Cap Advisor Notes to Financial Statements December 31, 1995 1. Nature of operations Wanger International Small Cap Advisor (the "Fund") is a series of Wanger Advisors Trust (the "Trust"), an open-end management investment company organized as a Massachusetts business trust. The investment objective of the Fund is to seek long-term growth of capital. The Fund is available only for allocation to certain life insurance company separate accounts established for the purpose of funding qualified and non-qualified variable annuity contracts, and may also be offered directly to certain types of pension plans and retirement arrangements. The Fund commenced operations on May 3, 1995. 2. Significant Accounting Policies Security valuation Investments are stated at current value. Securities traded on securities exchanges or in over-the-counter markets in which transaction prices are reported are valued at the last sales price at the time of valuation, or lacking any reported sales on that day, at the midpoint of the most recent bid and offer. Money market instruments having a maturity of 60 days or less from the valuation date are valued on an amortized cost basis. Securities for which quotations are not readily available and any other assets are valued at a fair value as determined in good faith by the Board of Trustees. Foreign currency translations Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market rate of exchange at the time of valuation. Purchases and sales of investments and dividend and interest income are translated into U.S. dollars using the spot market rate of exchange prevailing on the respective dates of such transactions. The gain or loss on investments resulting from changes in foreign exchange rates is included with net realized and unrealized gain or loss as appropriate. Security transactions and investment income Security transactions are accounted for on the trade date (date the order to buy or sell is executed) and dividend income is recorded on the ex-dividend date, except that certain dividends from foreign securities are recorded as soon as the information is available to the Fund. Interest income is recorded on the accrual basis and includes amortization of discounts on money market instruments and on long-term debt instruments when required for federal income tax purposes. Realized gains and losses from security transactions are reported on an identified cost basis. Fund share valuation Fund shares are sold and redeemed on a continuing basis at net asset value. Net asset value per share is determined daily as of the close of trading on the New York Stock Exchange on each day the Exchange is open for trading by dividing the total value of the Fund's investments and other assets, less liabilities, by the number of Fund shares outstanding. Custodian fees Custodian fees are reduced based on the Fund's cash balances maintained with the custodian. This presentation does not affect the determination of net investment income. Federal income taxes, dividends and distributions to shareholders It is the Fund's policy to comply with the special provisions of the Internal Revenue Code available to regulated investment companies and, in the manner provided therein, to distribute all of its taxable income, as well as any net realized gain on sales of investments and foreign currency transactions reportable for federal income tax purposes. The Fund will elect to mark-to-market its investment in Passive Foreign Investment Companies ("PFICs") for income tax purposes. In accordance with this election, the Fund recognized unrealized appreciation on PFICs of $32,898 for the period ended December 31, 1995. Dividends and distributions payable to its shareholders are recorded by the Fund on the ex-dividend date. 10 ============================================================================== Wanger International Small Cap Advisor Notes to Financial Statements December 31, 1995 3. Transactions with Affiliates The Fund's investment advisor, Wanger Asset Management, L.P., ("WAM") furnishes continuing investment supervision to the Fund and is responsible for overall management of the Fund's business affairs. The Fund pays WAM a monthly advisory fee based upon average daily net assets at the following rates: 1.3% up to $100 million, 1.2% in excess of $100 million and up to $250 million and 1.1% in excess of $250 million. The investment advisory agreement also provides that WAM will reimburse the Fund to the extent that ordinary operating expenses (computed based on net custodian fees) exceed 2% of average net assets. For the year ended December 31, 1995, WAM reimbursed the Fund $62,992. Certain officers and trustees of the Trust are also principals of WAM. The Trust makes no direct payments to its officers and trustees who are affiliated with WAM. The Fund incurred trustees' fees and expenses of $13,000 in 1995 to trustees not affiliated with WAM. WAM advanced $100,000 in connection with the organization and initial registration of the Fund. These costs are being amortized and reimbursed to WAM over the period May, 1995 through April, 2000. 4. Fund Share Transactions Proceeds and payments on Fund shares as shown in the statement of changes in net assets are in respect of the following numbers of shares:
Period ended 12/31/95 - ------------------------------------------------------------------------------ Shares sold 986,106 Less shares redeemed 153,492 - ------------------------------------------------------------------------------ Net increase in shares outstanding 832,614 ==============================================================================
5. Investment transactions
Period ended 12/31/95 - ------------------------------------------------------------------------------ Investment securities (excluding money market instruments): Purchases $10,188,942 Proceeds from sales 516,063 ==============================================================================
11
======================================================================================================================== Wanger International Small Cap Advisor - ------------------------------------------------------------------------------------------------------------------------ Trustees Fred D. Hasselbring James A. Star Terence M. Hogan Ralph Wanger Charles P. McQuaid Leah J. Zell P. Michael Phelps - ------------------------------------------------------------------------------------------------------------------------ Officers Ralph Wanger, President Merrillyn J. Kosier, Charles P. McQuaid, Senior Vice President Vice President and Secretary Terence M. Hogan, Vice President Bruce H. Lauer, Vice President and Treasurer Leah J. Zell, Vice President Kenneth A. Kalina, Assistant Treasurer - ------------------------------------------------------------------------------------------------------------------------ Transfer Agent, Dividend State Street Bank and Trust Company Disbursing Agent and Attention: Wanger Advisors Trust Custodian P.O. Box 8502 Boston, Massachusetts 02266-8502 1-800-4-WANGER (1-800-492-6437) - ------------------------------------------------------------------------------------------------------------------------ Investment Advisor Wanger Asset Management, L.P. 227 West Monroe Street, Suite 3000 Chicago, Illinois 60606 (312) 634-9200 - ------------------------------------------------------------------------------------------------------------------------ Legal Counsel Bell, Boyd & Lloyd Chicago, Illinois - ------------------------------------------------------------------------------------------------------------------------ Auditors Ernst & Young LLP Chicago, Illinois
This report, including the audited financial statements contained herein, is submitted for the general information of the shareholders of the Fund. This report is not authorized for distribution unless preceded or accompanied by a prospectus. -----END PRIVACY-ENHANCED MESSAGE-----