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 811-21682
BB&T Variable Insurance Funds
(Exact name of registrant as specified in charter)
434 Fayetteville Street Mall, 5th Floor
Raleigh, NC 27601-0575
(Address of principal executive offices) (Zip code)
E.G. Purcell, III, President
BB&T Variable Insurance Funds
434 Fayetteville Street Mall, 5th Floor
Raleigh, NC 27601-0575
(Name and address of agent for service)
Registrant’s telephone number, including area code: (800) 228-1872
Date of fiscal year end: December 31
Date of reporting period: June 30, 2009
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. | Reports to Stockholders. |
The Report to Shareholders is attached herewith.
Table of Contents
2 | ||
3 | ||
4 | ||
5 | ||
6 | ||
7 | ||
8 | ||
Financial Statements | 12 | |
18 | ||
27 |
Summary of Portfolio Holdings (Unaudited)
June 30, 2009
The BB&TVariable Insurance Funds portfolio composition was as follows at June 30, 2009:
Percentage of net assets | |||
BB&T Large Cap VIF | |||
Consumer Discretionary | 9.0 | % | |
Consumer Staples | 4.0 | % | |
Energy | 16.7 | % | |
Exchange Traded Funds | 6.0 | % | |
Financials | 22.5 | % | |
Health Care | 9.9 | % | |
Industrials | 8.1 | % | |
Information Technology | 15.9 | % | |
Materials | 5.3 | % | |
Utilities | 2.4 | % | |
Cash Equivalents | 0.3 | % | |
100.1 | % | ||
BB&T Mid Cap Growth VIF | |||
Consumer Discretionary | 9.6 | % | |
Consumer Staples | 1.7 | % | |
Energy | 5.5 | % | |
Exchange Traded Funds | 19.8 | % | |
Financials | 1.2 | % | |
Health Care | 12.3 | % | |
Industrials | 9.9 | % | |
Information Technology | 28.3 | % | |
Materials | 6.7 | % | |
Telecommunication Services | 2.9 | % | |
Cash Equivalents | 5.0 | % | |
102.9 | % | ||
BB&T Capital Manager Equity VIF | |||
BB&T Equity Income Fund | 8.1 | % | |
BB&T Equity Index Fund | 1.5 | % | |
BB&T International Equity Fund | 27.2 | % | |
BB&T Large Cap Fund | 7.4 | % | |
BB&T Mid Cap Growth Fund | 7.8 | % | |
BB&T Mid Cap Value Fund | 11.7 | % | |
BB&T Special Opportunities Equity Fund | 4.6 | % | |
BB&T U.S. Treasury Money Market Fund | 1.5 | % | |
Exchange Traded Funds | 24.3 | % | |
Cash Equivalents | 4.8 | % | |
98.9 | % | ||
BB&T Special Opportunities Equity VIF | |||
Consumer Discretionary | 8.1 | % | |
Consumer Staples | 4.6 | % | |
Energy | 10.3 | % | |
Financials | 1.7 | % | |
Health Care | 26.3 | % | |
Industrials | 7.5 | % | |
Information Technology | 29.6 | % | |
Materials | 3.0 | % | |
Cash Equivalents | 14.1 | % | |
105.2 | % | ||
BB&T Total Return Bond VIF | |||
Asset Backed Securities | 8.8 | % | |
Collateralized Mortgage Obligations | 3.3 | % | |
Commercial Mortgage-Backed Securities | 6.5 | % | |
Corporate Bonds | 26.9 | % | |
Fannie Mae | 23.9 | % | |
Freddie Mac | 13.0 | % | |
Ginnie Mae | 1.2 | % | |
Foreign Government | 0.3 | % | |
Municipal Bonds | 3.3 | % | |
Supranational Bonds | 1.6 | % | |
U.S. Treasury Notes | 5.1 | % | |
Cash Equivalents | 7.1 | % | |
101.0 | % | ||
2
BB&T Variable Insurance Funds
June 30, 2009
As a shareholder of the BB&T Variable Insurance Funds, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses.
These examples are intended to help you understand your ongoing costs (in dollars) of investing in the BB&T Variable Insurance Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from January 1, 2009 through June 30, 2009.
Actual Example
The table below provides information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Beginning Account Value 1/1/09 | Ending Account Value 6/30/09 | Expenses Paid During Period 1/1/09 - 6/30/09* | Expense Ratio During Period 1/1/09 - 6/30/09 | |||||||||
BB&T Large Cap VIF | $ | 1,000.00 | $ | 959.30 | $ | 5.00 | 1.03 | % | ||||
BB&T Mid Cap Growth VIF | 1,000.00 | 1,037.70 | 5.36 | 1.06 | % | |||||||
BB&T Capital Manager Equity VIF | 1,000.00 | 1,027.40 | 2.21 | 0.44 | % | |||||||
BB&T Special Opportunities Equity VIF | 1,000.00 | 1,188.90 | 6.78 | 1.25 | % | |||||||
BB&T Total Return Bond VIF | 1,000.00 | 1,024.20 | 4.87 | 0.97 | % |
* | Expenses are equal to the average account value times the Fund’s annualized expense ratio multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year. Expenses shown do not include annuity contract fees. |
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and hypothetical expenses based on each BB&T Variable Insurance Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 1/1/09 | Ending Account Value 6/30/09 | Expenses Paid During Period 1/1/09 - 6/30/09* | Expense Ratio During Period 1/1/09 - 6/30/09 | |||||||||
BB&T Large Cap VIF | $ | 1,000.00 | $ | 1,019.69 | $ | 5.16 | 1.03 | % | ||||
BB&T Mid Cap Growth VIF | 1,000.00 | 1,019.54 | 5.31 | 1.06 | % | |||||||
BB&T Capital Manager Equity VIF | 1,000.00 | 1,022.61 | 2.21 | 0.44 | % | |||||||
BB&T Special Opportunities Equity VIF | 1,000.00 | 1,018.60 | 6.26 | 1.25 | % | |||||||
BB&T Total Return Bond VIF | 1,000.00 | 1,019.98 | 4.86 | 0.97 | % |
* | Expenses are equal to the average account value times the Fund’s annualized expense ratio multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year. Expenses shown do not include annuity contract fees. |
3
Schedule of Portfolio Investments
June 30, 2009 (Unaudited)
Shares | Fair Value | |||||
COMMON STOCKS (93.8%) |
| |||||
Consumer Discretionary (9.0%) | �� | |||||
73,669 | Comcast Corp., Class A | $ | 1,067,464 | |||
42,833 | KB Home | 585,955 | ||||
4,840 | McDonald’s Corp. | 278,252 | ||||
17,938 | Target Corp. | 708,013 | ||||
2,639,684 | ||||||
Consumer Staples (4.0%) | ||||||
6,498 | Costco Wholesale Corp. | 296,958 | ||||
12,122 | Kroger Co. (The) | 267,290 | ||||
12,272 | Wal-Mart Stores, Inc. | 594,456 | ||||
1,158,704 | ||||||
Energy (16.7%) | ||||||
18,530 | ConocoPhillips | 779,372 | ||||
8,560 | EOG Resources, Inc. | 581,395 | ||||
22,888 | Exxon Mobil Corp. | 1,600,101 | ||||
15,473 | Occidental Petroleum Corp. | 1,018,278 | ||||
16,766 | Schlumberger, Ltd. | 907,208 | ||||
4,886,354 | ||||||
Financials (22.5%) | ||||||
37,781 | Aflac, Inc | 1,174,611 | ||||
506 | Berkshire Hathaway, Inc. Class B(a) | 1,465,240 | ||||
22,230 | JPMorgan Chase & Co. | 758,265 | ||||
23,192 | Loews Corp. | 635,461 | ||||
9,134 | MetLife, Inc | 274,111 | ||||
39,900 | Progressive Corp. (The)(a) | 602,889 | ||||
11,433 | T. Rowe Price Group, Inc. | 476,413 | ||||
30,778 | U.S. Bancorp. | 551,542 | ||||
26,611 | Wells Fargo & Co. | 645,583 | ||||
6,584,115 | ||||||
Health Care (9.9%) | ||||||
11,379 | Johnson & Johnson | 646,327 | ||||
16,693 | Medco Health Solutions, Inc.(a) | 761,368 | ||||
13,725 | Medtronic, Inc. | 478,865 | ||||
24,265 | Merck & Co., Inc | 678,450 | ||||
21,831 | Pfizer, Inc. | 327,465 | ||||
2,892,475 | ||||||
Industrials (8.1%) | ||||||
36,474 | ABB, Ltd., ADR | 575,560 | ||||
54,604 | General Electric Co. | 639,959 | ||||
8,896 | Illinois Tool Works, Inc. | 332,176 | ||||
14,271 | Ingersoll-Rand PLC, Class A(a) | 298,264 | ||||
43,228 | Terex Corp.(a) | 521,762 | ||||
2,367,721 | ||||||
Information Technology (15.9%) | ||||||
42,064 | Cisco Systems, Inc.(a) | 784,073 | ||||
34,639 | eBay, Inc.(a) | 593,366 | ||||
1,939 | Google, Inc., Class A(a) | 817,463 | ||||
54,330 | Intel Corp | 899,161 | ||||
16,021 | Microsoft Corp. | 380,819 | ||||
18,842 | QUALCOMM, Inc. | 851,659 | ||||
15,530 | Texas Instruments, Inc. | 330,789 | ||||
4,657,330 | ||||||
Materials (5.3%) | ||||||
31,431 | Barrick Gold Corp. | 1,054,510 | ||||
10,244 | Freeport-McMoRan Copper & Gold, Inc. | 513,327 | ||||
1,567,837 | ||||||
Utilities (2.4%) | ||||||
61,053 | AES Corp. (The)(a) | 708,825 | ||||
Total Common Stocks | 27,463,045 | |||||
EXCHANGE TRADED FUNDS (6.0%) | ||||||
25,147 | Financial Select Sector SPDR Fund | 301,009 | ||||
54,197 | Industrial Select Sector SPDR Fund | 1,190,166 | ||||
2,809 | SPDR Gold Trust(a) | 256,125 | ||||
Total Exchange Traded Funds | 1,747,300 | |||||
INVESTMENT COMPANY (0.3%) | ||||||
94,605 | Federated Treasury Obligations Fund, Institutional Shares | 94,605 | ||||
Total Investment Company | 94,605 | |||||
Principal | ||||||
SECURITIES HELD AS COLLATERAL FOR SECURITIES ON LOAN (0.0%) | ||||||
$ 29,800 | Pool of Various Securities | 4,396 | ||||
Total Securities Held as Collateral for Securities on Loan | 4,396 | |||||
Total Investments — 100.1% | 29,309,346 | |||||
Net Other Assets (Liabilities) — (0.1)% | (32,094 | ) | ||||
NET ASSETS — 100.0% | $ | 29,277,252 | ||||
(a) | Represents non-income producing security. |
ADR — American Depository Receipt
See accompanying notes to the financial statements.
4
Schedule of Portfolio Investments
June 30, 2009 (Unaudited)
Shares | Fair Value | |||||
COMMON STOCKS (78.1%) |
| |||||
Consumer Discretionary (9.6%) | ||||||
1,440 | Amazon.com, Inc.(a) | $ | 120,470 | |||
2,275 | Best Buy Co., Inc. | 76,190 | ||||
10,215 | Cheesecake Factory (The)(a) | 176,720 | ||||
4,950 | Darden Restaurants, Inc. | 163,251 | ||||
3,075 | JOS A Bank Clothiers, Inc.(a) | 105,964 | ||||
5,400 | P.F. Chang’s China Bistro, Inc.(a) | 173,124 | ||||
4,800 | Polo Ralph Lauren Corp. | 256,992 | ||||
1,072,711 | ||||||
Consumer Staples (1.7%) | ||||||
9,825 | Whole Foods Market, Inc.(b) | 186,478 | ||||
Energy (5.5%) | ||||||
6,175 | Alpha Natural Resources, Inc.(a) | 162,217 | ||||
2,255 | Anadarko Petroleum Corp | 102,355 | ||||
3,340 | National Oilwell Varco, Inc.(a) | 109,085 | ||||
2,900 | Petroleo Brasileiro SA, ADR | 118,842 | ||||
3,260 | Southwestern Energy Co.(a) | 126,651 | ||||
619,150 | ||||||
Financials (1.2%) | ||||||
445 | CME Group, Inc. | 138,444 | ||||
Health Care (12.3%) | ||||||
6,250 | Alexion Pharmaceuticals, Inc.(a) | 257,000 | ||||
3,481 | Amedisys, Inc.(a) | 114,943 | ||||
2,320 | Celgene Corp.(a) | 110,989 | ||||
15,150 | Mylan, Inc.(a)(b) | 197,707 | ||||
6,725 | Myriad Genetics, Inc.(a) | 239,746 | ||||
1,681 | Myriad Pharmaceuticals, Inc.(a) | 7,818 | ||||
4,500 | NuVasive, Inc.(a) | 200,700 | ||||
7,515 | Watson Pharmaceuticals, Inc.(a) | 252,955 | ||||
1,381,858 | ||||||
Industrials (9.9%) | ||||||
7,725 | Aecom Technology Corp.(a) | 247,200 | ||||
3,650 | Fluor Corp. | 187,209 | ||||
9,075 | McDermott International, Inc.(a) | 184,313 | ||||
11,550 | Orion Marine Group, Inc.(a) | 219,450 | ||||
12,000 | Quanta Services, Inc.(a) | 277,560 | ||||
1,115,732 | ||||||
Information Technology (28.3%) | ||||||
10,745 | Activision Blizzard, Inc.(a) | 135,709 | ||||
10,075 | Altera Corp. | 164,021 | ||||
1,135 | Baidu, Inc., ADR(a) | 341,737 | ||||
4,875 | Equinix, Inc.(a) | 354,607 | ||||
6,050 | InterDigital, Inc.(a) | 147,862 | ||||
15,350 | Macrovision Solutions Corp.(a) | 334,784 | ||||
18,300 | Nuance Communications, Inc.(a) | 221,247 | ||||
27,750 | PMC - Sierra, Inc.(a) | 220,890 | ||||
8,950 | Red Hat, Inc.(a) | 180,164 | ||||
11,165 | Sina China Corp.(a)(b) | 329,144 | ||||
8,800 | Synaptics, Inc.(a)(b) | 340,120 | ||||
9,725 | Varian Semiconductor Equipment Associates, Inc.(a) | 233,303 | ||||
8,410 | Xilinx, Inc. | 172,069 | ||||
3,175,657 | ||||||
Materials (6.7%) | ||||||
3,000 | Freeport-McMoRan Copper & Gold, Inc. | 150,330 | ||||
1,105 | Monsanto Co. | 82,146 | ||||
1,665 | Nucor Corp. | 73,976 | ||||
4,775 | Scotts Miracle-Gro Co. (The), Class A | 167,364 | ||||
17,425 | Teck Resources, Ltd., Class B(a) | 277,754 | ||||
751,570 | ||||||
Telecommunication Services (2.9%) | ||||||
4,625 | Leap Wireless International, Inc.(a) | 152,301 | ||||
13,000 | MetroPCS Communications, Inc.(a) | 173,030 | ||||
325,331 | ||||||
Total Common Stocks | 8,766,931 | |||||
EXCHANGE TRADED FUNDS (19.8%) |
| |||||
58,511 | iShares Russell MidCap Growth Index Fund | 2,132,726 | ||||
1,020 | SPDR Gold Trust(a) | 93,004 | ||||
Total Exchange Traded Funds | 2,225,730 | |||||
INVESTMENT COMPANY (1.2%) |
| |||||
130,915 | Federated Treasury Obligations Fund, Institutional Shares | 130,915 | ||||
Total Investment Company | 130,915 | |||||
Principal | ||||||
SECURITIES HELD AS COLLATERAL FOR SECURITIES ON LOAN (3.8%) | ||||||
$ 423,636 | Pool of Various Securities | 420,529 | ||||
Total Securities Held as Collateral for Securities on Loan | 420,529 | |||||
Total Investments — 102.9% | 11,544,105 | |||||
Net Other Assets (Liabilities) — (2.9)% | (323,537 | ) | ||||
NET ASSETS — 100.0% | $ | 11,220,568 | ||||
(a) | Represents non-income producing security. |
(b) | Represents that all or a portion of the security was on loan as of June 30, 2009. |
ADR — American Depository Receipt
See accompanying notes to the financial statements.
5
BB&T Capital Manager Equity VIF
Schedule of Portfolio Investments
June 30, 2009 (Unaudited)
Shares | Fair Value | ||||
AFFILIATED INVESTMENT COMPANIES (69.8%) | |||||
56,635 | BB&T Equity Income Fund, Institutional Class | $ | 588,433 | ||
17,864 | BB&T Equity Index Fund, Institutional Class | 110,039 | |||
457,598 | BB&T International Equity Fund, Institutional Class | 1,981,400 | |||
62,726 | BB&T Large Cap Fund, Institutional Class | 540,073 | |||
76,992 | BB&T Mid Cap Growth Fund, Institutional Class | 566,660 | |||
96,738 | BB&T Mid Cap Value Fund, Institutional Class | 849,363 | |||
25,435 | BB&T Special Opportunities Equity Fund, Institutional Class | 337,528 | |||
110,015 | BB&T U.S. Treasury Money Market Fund, Institutional Class | 110,015 | |||
Total Affiliated Investment Companies | 5,083,511 | ||||
EXCHANGE TRADED FUNDS (24.3%) | |||||
8,676 | iShares Russell 2000 Index Fund | 442,129 | |||
14,340 | iShares S&P 500 Index Fund | 1,323,008 | |||
Total Exchange Traded Funds | 1,765,137 | ||||
INVESTMENT COMPANY (4.8%) | |||||
43,683 | Credit Suisse Commodity Return Strategy Fund | 349,468 | |||
Total Investment Company | 349,468 | ||||
Total Investments — 98.9% | 7,198,116 | ||||
Net Other Assets (Liabilities) — 1.1% | 83,242 | ||||
NET ASSETS — 100.0% | $ | 7,281,358 | |||
See accompanying notes to the financial statements.
6
BB&T Special Opportunities Equity VIF
Schedule of Portfolio Investments
June 30, 2009 (Unaudited)
Shares | Fair Value | |||||
COMMON STOCKS (91.1%) |
| |||||
Consumer Discretionary (8.1%) | ||||||
82,000 | Comcast Corp., Class A | $ | 1,188,180 | |||
65,000 | News Corp., Class A | 592,150 | ||||
27,000 | Yum! Brands, Inc.(a) | 900,180 | ||||
2,680,510 | ||||||
Consumer Staples (4.6%) | ||||||
11,000 | Energizer Holdings, Inc.(b) | 574,640 | ||||
68,000 | Smithfield Foods, Inc.(a)(b)(c) | 949,960 | ||||
1,524,600 | ||||||
Energy (10.3%) | ||||||
11,400 | Apache Corp. | 822,510 | ||||
10,000 | Halliburton Co | 207,000 | ||||
35,000 | Petroleo Brasileiro SA, ADR(a) | 1,167,600 | ||||
62,100 | Weatherford International, Ltd.(a)(b) | 1,214,676 | ||||
3,411,786 | ||||||
Financials (1.7%) | ||||||
2,000 | Markel Corp.(b) | 563,400 | ||||
Health Care (26.3%) | ||||||
29,000 | Allscripts-Misys Healthcare Solutions, Inc.(a) | 459,940 | ||||
21,000 | Baxter International, Inc. | 1,112,160 | ||||
20,000 | Becton Dickinson & Co. | 1,426,200 | ||||
60,000 | Bristol-Myers Squibb Co | 1,218,600 | ||||
23,000 | McKesson Corp | 1,012,000 | ||||
30,329 | Medcath Corp.(b) | 356,669 | ||||
26,000 | Teva Pharmaceutical Industries, Ltd., ADR | 1,282,840 | ||||
55,000 | UnitedHealth Group, Inc. | 1,373,900 | ||||
13,000 | Varian Medical Systems, Inc.(b) | 456,820 | ||||
8,699,129 | ||||||
Industrials (7.5%) | ||||||
11,500 | L-3 Communications Holdings, Inc. | 797,870 | ||||
33,000 | Spirit Aerosystems Holdings, Inc., Class A(b) | 453,420 | ||||
25,000 | SPX Corp.(a) | 1,224,250 | ||||
2,475,540 | ||||||
Information Technology (29.6%) | ||||||
65,000 | Activision Blizzard, Inc.(b) | 820,950 | ||||
63,000 | Akamai Technologies, Inc.(b) | 1,208,340 | ||||
260,000 | ARM Holdings PLC, ADR(c) | 1,552,200 | ||||
60,000 | Cisco Systems, Inc.(b) | 1,118,400 | ||||
57,000 | Corning, Inc.(a) | 915,420 | ||||
98,000 | Dell, Inc.(b) | 1,345,540 | ||||
57,000 | eBay, Inc.(b) | 976,410 | ||||
33,000 | Harris Corp. | 935,880 | ||||
7,949 | Harris Stratex Networks, Inc., Class A(b) | 51,509 | ||||
57,000 | Symantec Corp.(a)(b) | 886,920 | ||||
9,811,569 | ||||||
Materials (3.0%) | ||||||
60,000 | Nalco Holding Co. | 1,010,400 | ||||
Total Common Stocks | 30,176,934 | |||||
INVESTMENT COMPANY (9.9%) | ||||||
3,284,452 | Federated Treasury Obligations Fund, Institutional Shares | 3,284,452 | ||||
Total Investment Company | 3,284,452 | |||||
Principal | ||||||
SECURITIES HELD AS COLLATERAL FOR SECURITIES ON LOAN (4.2%) |
| |||||
$ 1,405,760 | Pool of Various Securities | 1,373,925 | ||||
Total Securities Held as Collateral for Securities on Loan | 1,373,925 | |||||
Total Investments — 105.2% | 34,835,311 | |||||
Net Other Assets (Liabilities) — (5.2)% | (1,708,489 | ) | ||||
NET ASSETS — 100.0% | $ | 33,126,822 | ||||
(a) | Security held as collateral for written call option. |
(b) | Represents non-income producing security. |
(c) | Represents that all or a portion of the security was on loan as of June 30, 2009. |
ADR — American Depository Receipt
See accompanying notes to the financial statements.
7
Schedule of Portfolio Investments
June 30, 2009 (Unaudited)
Principal | Fair Value | |||||
| ASSET BACKED SECURITIES (8.8%) | |||||
$ | 80,000 | American Express Credit Account Master Trust, Series 2004-5, Class A, 0.409%, 4/16/12*(a) | $ | 79,932 | ||
100,000 | American Express Credit Account Master Trust, Series 2007-8, Class B, 1.019%, 5/15/15* | 90,793 | ||||
210,000 | BMW Vehicle Lease Trust, Series 2009-1, Class A3, 2.910%, 3/15/12 | 211,201 | ||||
95,000 | Carmax Auto Owner Trust, Series 2009-1, Class A3, 4.120%, 3/15/13 | 97,746 | ||||
98,000 | Chase Funding Mortgage Loan Asset-Backed Certificates, Series 2003-4, Class 1A5, STEP, 5.416%, 5/25/33 | 52,262 | ||||
235,000 | Honda Auto Receivables Owner Trust, Series 2008-1, Class A4, 4.880%, 9/18/14 | 245,623 | ||||
79,000 | Honda Auto Receivables Owner Trust, Series 2009-2, Class A4, 4.430%, 7/15/15 | 80,391 | ||||
175,000 | Hyundai Auto Receivables Trust, Series 2008-A, Class A4, 5.480%, 11/17/14 | 182,589 | ||||
115,000 | MBNA Credit Card Master Note Trust, Series 2002-A8, Class A8, 1.281%, 12/15/11*(a) | 115,014 | ||||
125,000 | MBNA Credit Card Master Note Trust, Series 2004-B1, Class B1, 4.450%, 8/15/16 | 113,892 | ||||
120,000 | Nissan Auto Lease Trust, Series 2009-A, Class A3, 2.920%, 12/15/11 | 120,704 | ||||
75,000 | Nissan Auto Receivables Owner Trust, Series 2009-A, Class A4, 4.740%, 8/17/15 | 77,028 | ||||
127,000 | USAA Auto Owner Trust, Series 2008-1, Class A4, 4.500%, 10/15/13 | 131,628 | ||||
175,000 | USAA Auto Owner Trust, Series 2009-1, A4, 4.770%, 9/15/14 | 179,255 | ||||
82,000 | World Omni Auto Receivables Trust, Series 2009-A, Class A4, 5.120%, 5/15/14 | 84,823 | ||||
Total Asset Backed Securities | 1,862,881 | |||||
| COLLATERALIZED MORTGAGE OBLIGATIONS (3.3%) | |||||
195,207 | Chase Mortgage Finance Corp., Series 2003-S7, Class A1, 0.714%, 8/25/18* | 176,363 | ||||
95,516 | Countrywide Home Loan Mortgage Pass Through Trust, Series 2004-7, Class 3A1, 4.050%, 5/25/34* | 79,345 | ||||
102,706 | MASTR Asset Securitization Trust, Series 2004-1, Class 1A1, 5.000%, 2/25/34 | 101,966 | ||||
165,695 | RBSSP Resecuritization Trust, Series 2009-6, Class 2A1, 5.177%, 1/26/36*(b) | 154,097 | ||||
214,759 | Structured Adjustable Rate Mortgage Loan Trust, Series 2004-6, Class 4A1, 4.840%, 6/25/34* | 193,827 | ||||
Total Collateralized Mortgage Obligations | 705,598 | |||||
COMMERCIAL MORTGAGE-BACKED SECURITIES (6.5%) | ||||||
220,000 | CS First Boston Mortgage Securities Corp., Series 2005-C1, Class A3, 4.813%, 2/15/38 | 202,903 | ||||
199,621 | GE Capital Commercial Mortgage Corp., Series 2005-C1, Class A2, 4.353%, 6/10/48 | 194,597 | ||||
93,825 | Greenwich Capital Commercial Funding Corp., Series 2005-GG3, Class A2, 4.305%, 8/10/42 | 91,601 | ||||
165,000 | JP Morgan Chase Commercial Mortgage Securities Corp., Series 2003-CB7, Class A4, 4.879%, 1/12/38* | 146,206 | ||||
166,000 | JP Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP1, Class A3, 4.865%, 3/15/46 | 147,675 | ||||
320,000 | JP Morgan Chase Commercial Mortgage Securities Corp., Series 2007-CB18, Class A4, 5.440%, 6/12/47 | 240,962 | ||||
28,000 | Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2006-3, Class A3, 5.389%, 7/12/46* | 23,828 | ||||
220,000 | Morgan Stanley Capital I, Series 2005-HQ6, Class A4A, 4.989%, 8/13/42 | 187,953 | ||||
187,000 | Wachovia Bank Commercial Mortgage Trust, Series 2007-C33, Class A3, 6.100%, 2/15/51* | 141,535 | ||||
Total Commercial Mortgage-Backed Securities | 1,377,260 | |||||
CORPORATE BONDS (26.9%) | ||||||
Consumer Discretionary (2.3%) | ||||||
175,000 | Comcast Corp., 6.950%, 8/15/37(a) | 182,469 | ||||
48,000 | Historic TW, Inc., 9.125%, 1/15/13 | 52,848 | ||||
203,000 | Time Warner Cable, Inc., 6.750%, 6/15/39 | 197,578 | ||||
44,000 | Time Warner, Inc., 5.875%, 11/15/16 | 43,362 | ||||
476,257 | ||||||
Consumer Staples (1.8%) | ||||||
90,000 | Altria Group, Inc., 9.950%, 11/10/38 | 103,889 | ||||
127,000 | CVS Caremark Corp., 4.875%, 9/15/14(a) | 128,897 | ||||
65,000 | Kraft Foods, Inc., 6.125%, 2/1/18 | 67,205 | ||||
61,000 | PepsiCo, Inc., 7.900%, 11/1/18 | 74,213 | ||||
374,204 | ||||||
Energy (0.8%) | ||||||
105,000 | ConocoPhillips, 5.750%, 2/1/19 | 110,357 | ||||
68,000 | Peabody Energy Corp., Series B, 6.875%, 3/15/13 | 67,320 | ||||
177,677 | ||||||
Financials (11.6%) | ||||||
95,000 | Aflac, Inc., 8.500%, 5/15/19 | 101,511 | ||||
95,000 | American Express Co., 8.125%, 5/20/19 | 98,584 | ||||
250,000 | Bank of America Corp., 5.125%, 11/15/14(a) | 235,040 | ||||
81,000 | Bank of America Corp., 5.750%, 12/1/17 | 72,125 | ||||
60,000 | Bank of America Corp., 7.625%, 6/1/19 | 60,268 | ||||
200,000 | Bear Stearns Cos., Inc. (The), 7.250%, 2/1/18(a) | 210,798 | ||||
28,000 | ERP Operating LP, 5.125%, 3/15/16(c) | 25,679 | ||||
30,000 | GATX Financial Corp., 5.125%, 4/15/10 | 29,986 | ||||
365,000 | General Electric Capital Corp., Series MTN, 6.875%, 1/10/39 | 328,541 | ||||
67,000 | Goldman Sachs Group, Inc. (The), 7.500%, 2/15/19 | 71,742 | ||||
115,000 | Goldman Sachs Group, Inc. (The), 6.125%, 2/15/33(a) | 107,332 | ||||
90,000 | Goldman Sachs Group, Inc. (The), 6.750%, 10/1/37 | 80,010 | ||||
105,000 | Merrill Lynch & Co., Inc., 6.875%, 4/25/18 | 97,183 | ||||
90,000 | MetLife, Inc., 6.750%, 6/1/16 | 91,625 | ||||
137,000 | Morgan Stanley, 4.250%, 5/15/10 | 138,554 |
Continued
8
BB&T Total Return Bond VIF
Schedule of Portfolio Investments — (continued)
June 30, 2009 (Unaudited)
Principal | Fair Value | |||||
CORPORATE BONDS — (continued) | ||||||
Financials — (continued) | ||||||
$ | 253,000 | Morgan Stanley, MTN, Series F, 6.625%, 4/1/18(a) | $ | 252,217 | ||
148,000 | Prudential Financial, Inc., MTN, Series B, 5.100%, 9/20/14 | 139,834 | ||||
87,000 | Simon Property Group LP, 6.750%, 5/15/14(c) | 87,418 | ||||
70,000 | Wachovia Corp., 5.625%, 10/15/16 | 66,872 | ||||
178,000 | Wells Fargo & Co., 5.625%, 12/11/17(a) | 175,211 | ||||
2,470,530 | ||||||
Health Care (0.4%) | ||||||
90,000 | Laboratory Corp. of America Holdings, 5.625%, 12/15/15(a) | 83,898 | ||||
Industrials (2.4%) | ||||||
175,000 | Allied Waste North America, Inc., 6.875%, 6/1/17(a) | 173,250 | ||||
180,000 | Corrections Corp. of America, 6.250%, 3/15/13(a) | 170,550 | ||||
60,000 | Goodrich (BF) Corp., 6.290%, 7/1/16 | 61,320 | ||||
110,000 | L-3 Communications Corp., 5.875%, 1/15/15 | 97,625 | ||||
502,745 | ||||||
Information Technology (4.1%) | ||||||
100,000 | Fiserv, Inc., 6.125%, 11/20/12 | 103,800 | ||||
110,000 | Hewlett-Packard Co., 5.400%, 3/1/17(a) | 114,364 | ||||
215,000 | International Business Machines Corp., 5.700%, 9/14/17(a) | 228,258 | ||||
75,000 | International Business Machines Corp., 8.000%, 10/15/38 | 97,073 | ||||
125,000 | Oracle Corp., 6.125%, 7/8/39 | 124,167 | ||||
235,000 | Xerox Corp., 6.350%, 5/15/18 | 209,738 | ||||
877,400 | ||||||
Materials (0.7%) | ||||||
105,000 | ArcelorMittal, 9.850%, 6/1/19 | 113,317 | ||||
35,000 | Valspar Corp., 7.250%, 6/15/19 | 35,245 | ||||
148,562 | ||||||
Telecommunication Services (2.4%) | ||||||
25,000 | AT&T, Inc., 5.800%, 2/15/19 | 25,383 | ||||
190,000 | AT&T, Inc., 6.400%, 5/15/38(a) | 185,993 | ||||
75,000 | Deutsche Telekom International Finance BV, 6.000%, 7/8/19 | 75,668 | ||||
35,000 | Telecom Italia Capital SA, 7.175%, 6/18/19 | 35,479 | ||||
38,000 | Verizon Communications, Inc., 6.350%, 4/1/19 | . 39,531 | ||||
137,000 | Verizon Communications, Inc., 7.350%, 4/1/39 | . 149,282 | ||||
511,336 | ||||||
Utilities (0.4%) | ||||||
60,000 | Duke Energy Corp., 6.250%, 6/15/18 | 63,052 | ||||
24,000 | Ohio Power Co., Series K, 6.000%, 6/1/16 | 24,444 | ||||
87,496 | ||||||
Total Corporate Bonds | 5,710,105 | |||||
MORTGAGE-BACKED SECURITIES (38.1%) | ||||||
Fannie Mae(d) (23.9%) | ||||||
20,020 | 4.500%, 10/1/18, Pool #752030 | 20,770 | ||||
13,088 | 5.500%, 11/1/20, Pool #843972 | 13,762 | ||||
11,792 | 5.500%, 12/1/20, Pool #831138 | 12,399 | ||||
36,789 | 5.500%, 5/1/21, Pool #895628 | 38,684 | ||||
41,769 | 5.500%, 6/1/21, Pool #831526 | 43,802 | ||||
213,627 | 5.500%, 4/1/22, Pool #914937 | 223,861 | ||||
145,000 | 5.000%, 12/1/22, Pool #967350 | 150,338 | ||||
413,309 | 5.000%, 5/1/23, Pool #976197 | 428,307 | ||||
44,769 | 5.000%, 10/1/25, Pool #255894 | 45,879 | ||||
47,183 | 5.500%, 2/1/27, Pool #256600 | 49,004 | ||||
212,618 | 5.500%, 1/1/34, Pool #757571 | 220,622 | ||||
42,286 | 6.000%, 9/1/34, Pool #790912 | 44,467 | ||||
53,707 | 6.500%, 9/1/34, Pool #796569 | 57,517 | ||||
20,660 | 7.000%, 6/1/35, Pool #255820 | 22,507 | ||||
93,883 | 5.000%, 11/1/35, Pool #842402 | 95,918 | ||||
20,856 | 5.500%, 2/1/36, Pool #256101 | 21,608 | ||||
282,267 | 6.000%, 6/1/36, Pool #886959 | 295,680 | ||||
56,264 | 5.500%, 12/1/36, Pool #922224 | 58,197 | ||||
273,117 | 5.500%, 12/1/36, Pool #928043 | 282,503 | ||||
57,060 | 6.000%, 12/1/36, Pool #902054 | 59,772 | ||||
108,464 | 5.000%, 1/1/37, Pool #920727 | 110,663 | ||||
136,403 | 5.500%, 1/1/37, Pool #256552 | 141,091 | ||||
50,600 | 6.000%, 1/1/37, Pool #906095 | 53,005 | ||||
98,960 | 5.000%, 3/1/37, Pool #911395 | 100,919 | ||||
47,649 | 6.000%, 4/1/37, Pool #914725 | 49,869 | ||||
74,798 | 6.000%, 7/1/37, Pool #256800 | 78,282 | ||||
533,950 | 6.500%, 7/1/37, Pool #941315 | 569,419 | ||||
304,237 | 5.500%, 9/1/37, Pool #888638 | 314,502 | ||||
320,534 | 6.000%, 9/1/37, Pool #952420 | 335,465 | ||||
13,136 | 6.000%, 9/1/37, Pool #955005 | 13,748 | ||||
208,783 | 5.000%, 5/1/38, Pool #933811 | 212,906 | ||||
565,587 | 5.500%, 5/1/38, Pool #973968 | 584,638 | ||||
211,641 | 5.500%, 7/1/38, Pool #889685 | 218,770 | ||||
87,447 | 5.500%, 7/1/38, Pool #934323 | 90,392 | ||||
28,807 | 4.500%, 2/1/39, Pool #930492 | 28,788 | ||||
5,088,054 | ||||||
Freddie Mac(d) (13.0%) | ||||||
62,569 | 6.000%, 10/1/19, Pool #G11679 | 66,358 | ||||
31,223 | 5.500%, 10/1/21, Pool #G12425 | 32,704 | ||||
53,721 | 5.000%, 1/1/22, Pool #J04202 | 55,665 | ||||
91,915 | 5.000%, 5/1/22, Pool #J04788 | 95,241 | ||||
226,097 | 5.000%, 8/1/22, Pool #J05384 | 234,279 | ||||
280,000 | 5.500%, 1/1/23, Pool #G12966 | 293,064 | ||||
35,710 | 4.500%, 6/1/35, Pool #G01842 | 35,660 | ||||
30,543 | 5.500%, 7/1/35, Pool #A36540 | 31,636 | ||||
17,848 | 6.000%, 7/1/35, Pool #A36304 | 18,679 | ||||
16,961 | 5.500%, 12/1/35, Pool #A40359 | 17,568 | ||||
49,486 | 5.500%, 2/1/36, Pool #G08111 | 51,179 | ||||
32,646 | 5.500%, 4/1/36, Pool #A44445 | 33,763 | ||||
131,610 | 6.000%, 9/1/36, Pool #A52325 | 137,617 | ||||
22,235 | 5.500%, 12/1/36, Pool #A80368 | 22,996 | ||||
104,801 | 5.883%, 12/1/36, Pool #1J1390* | 110,488 | ||||
76,785 | 5.500%, 4/1/37, Pool #G08192 | 79,376 | ||||
50,198 | 6.000%, 4/1/37, Pool #A58853 | 52,450 | ||||
42,881 | 5.000%, 6/1/37, Pool #G03094 | 43,676 | ||||
143,145 | 6.000%, 8/1/37, Pool #A64067 | 149,567 | ||||
46,810 | 5.750%, 9/1/37, Pool #1Q0319* | 49,045 | ||||
156,124 | 6.500%, 12/1/37, Pool #A69955 | 166,096 | ||||
29,502 | 5.500%, 1/1/38, Pool #A71523 | 30,498 | ||||
117,650 | 5.500%, 1/1/38, Pool #G04507 | 121,620 | ||||
97,822 | 5.215%, 4/1/38, Pool #783255* | 102,047 | ||||
214,131 | 5.500%, 6/1/38, Pool #A77678 | 221,344 | ||||
153,495 | 5.500%, 7/1/38, Pool #A78982 | 158,665 | ||||
116,654 | 5.500%, 7/1/38, Pool #A79017 | 120,583 | ||||
67,182 | 5.500%, 7/1/38, Pool #G04388 | 69,444 |
Continued
9
BB&T Total Return Bond VIF
Schedule of Portfolio Investments — (continued)
June 30, 2009 (Unaudited)
Principal | Fair Value | |||||
MORTGAGE-BACKED SECURITIES — (continued) | ||||||
Freddie Mac(d) — (continued) | ||||||
$ 87,616 | 4.500%, 9/1/38, Pool #G04953 | $ | 87,336 | |||
60,561 | 6.000%, 9/1/38, Pool #A81453 | 63,275 | ||||
2,751,919 | ||||||
Ginnie Mae (1.2%) | ||||||
66,522 | 5.000%, 12/15/38, Pool #702756 | 67,966 | ||||
187,000 | 5.000%, 7/15/39(e) | 190,623 | ||||
258,589 | ||||||
Total Mortgage-Backed Securities | 8,098,562 | |||||
MUNICIPAL BONDS (3.3%) | ||||||
California (0.2%) | ||||||
30,000 | Los Angeles Harbor Department, Crossover Refunding Revenue, Series A, Callable 8/1/12 @ 100 (AMBAC), 5.500%, 8/1/14 | 31,375 | ||||
District of Columbia (0.3%) | ||||||
70,000 | Metropolitan Washington Airports Authority, Refunding Revenue Bonds, Series D (NATL-RE), 5.000%, 10/1/11 | 73,666 | ||||
Florida (0.6%) | ||||||
135,000 | Greater Orlando Aviation Authority, FL, Port, Airport & Marina Improvements Revenue, Series A, Callable 10/1/09 @ 101 (NATL-RE FGIC), 5.250%, 10/1/12 | 136,740 | ||||
Iowa (0.9%) | ||||||
250,000 | Iowa Student Loan Liquidity Corporation, Student Loan Revenue Bonds, Series E, Taxable, Callable 7/29/09 @ 100 (AMBAC, GTD STD LNS), 5.648%, 12/1/31*(f)(g) | 182,500 | ||||
New Jersey (1.0%) | ||||||
300,000 | Higher Education Student Assistance Authority, NJ, Student Loan Revenue, Series A, Callable 7/23/09 @ 100 (NATL-RE, GTD STD LNS), 0.840%, 6/1/36*(f)(g) | 210,000 | ||||
New York (0.3%) | ||||||
70,000 | New York & New Jersey Port Authority, Port, Airport & Marina Improvements Revenue, Series 122, Callable 8/10/09 @ 100.5 (General Obligation of Authority), 5.500%, 7/15/15 | 70,421 | ||||
Total Municipal Bonds | 704,702 | |||||
U.S. TREASURY NOTES (5.1%) | ||||||
291,000 | 3.750%, 11/15/18 | 296,025 | ||||
471,000 | 5.500%, 8/15/28(a) | 544,226 | ||||
200,000 | 4.375%, 2/15/38 | 201,969 | ||||
50,000 | 4.500%, 5/15/38(a) | 51,617 | ||||
Total U.S. Treasury Notes | 1,093,837 | |||||
FOREIGN GOVERNMENT BONDS (0.3%) | ||||||
Canada (0.2%) | ||||||
33,000 | Ontario (Province of), 4.100%, 6/16/14 | 33,654 | ||||
Germany (0.1%) | ||||||
26,000 | Kreditanstalt fuer Wiederaufbau, 4.875%, 6/17/19 | 26,941 | ||||
Total Foreign Government Bonds | 60,595 | |||||
SUPRANATIONAL BONDS (1.6%) | ||||||
40,000 | European Investment Bank, 2.375%, 3/14/14 | 38,900 | ||||
190,000 | European Investment Bank, 3.000%, 4/8/14 | 189,094 | ||||
115,000 | International Bank for Reconstruction & Development, 2.000%, 4/2/12 | 114,954 | ||||
Total Supranational Bonds | 342,948 | |||||
Shares | ||||||
INVESTMENT COMPANY (6.6%) | ||||||
1,405,236 | Federated Treasury Obligations Fund, Institutional Shares | 1,405,236 | ||||
Total Investment Company | 1,405,236 | |||||
Principal | ||||||
SECURITIES HELD AS COLLATERAL FOR SECURITIES ON LOAN (0.5%) | ||||||
$ 115,440 | Pool of Various Securities | 100,301 | ||||
Total Securities Held as Collateral for Securities on Loan | 100,301 | |||||
Total Investments — 101.0% | 21,462,025 | |||||
Net Other Assets (Liabilities) — (1.0)% | (208,094 | ) | ||||
NET ASSETS — 100.0% | $ | 21,253,931 | ||||
* | The interest rate for this variable rate note, which will change periodically, is based either on the prime rate or an index of market rates. The reflected rate is in effect as of June 30, 2009. The maturity date reflected is the final maturity date. |
(a) | Represents that all or a portion of the security was pledged as collateral for securities purchased on a when-issued basis or for futures contracts. |
(b) | Rule 144A, Section 4(2) or other security which is restricted as to resale to institutional investors. The Investment Advisor, using board approved procedures, has deemed these securities or a portion of these securities to be liquid. |
(c) | Represents that all or a portion of the security was on loan as of June 30, 2009. |
(d) | On September 7, 2008, the Federal Housing Finance Agency (FHFA) placed Fannie Mae and Freddie Mac into conservatorship with FHFA as the conservator. The conservatorship is a statutory process designed to stabilize a troubled institution with the objective of returning the entities to normal business operations. |
(e) | Represents a security purchased on a when-issued basis. At June 30, 2009, total cost of investments purchased on a when-issued basis for the Total Return Bond Fund was $8,688,465. |
(f) | Security was fair valued under methods approved by the Board of Trustees. |
(g) | Illiquid. |
Continued
10
BB&T Total Return Bond VIF
Schedule of Portfolio Investments — (continued)
June 30, 2009 (Unaudited)
AMBAC — Insured by AMBAC Indemnity Corp.
FGIC — Insured by the Financial Guaranty Insurance Corp.
GTD STD LNS — Guaranteed Student Loans
MTN — Medium Term Note
NATL — National
RE — Reinsurance
STEP — Step Coupon Bond
Futures | Contracts | Unrealized Appreciation (Depreciation) | ||||
Long | ||||||
U.S. Treasury Five Year Note, September 2009 | 8 | $ | (7,707 | ) | ||
U.S. Treasury Twenty Year Bond, September 2009 | 2 | 1,964 | ||||
Total Long Contracts | $ | (5,743 | ) | |||
See accompanying notes to the financial statements.
11
BB&T Variable Insurance Funds
Statements of Assets and Liabilities
June 30, 2009 (Unaudited)
BB&T Large Cap VIF | BB&T Mid Cap Growth VIF | BB&T Capital Manager Equity VIF | BB&T Special Opportunities Equity VIF | BB&T Total Return Bond VIF | ||||||||||||||||
Assets: | ||||||||||||||||||||
Investments: | ||||||||||||||||||||
Unaffiliated investments, at cost | $ | 29,767,321 | $ | 10,550,674 | $ | 2,886,413 | $ | 35,445,950 | $ | 21,230,910 | ||||||||||
Investments in affiliates, at cost | — | — | 7,362,660 | — | — | |||||||||||||||
Total investments, at cost* | 29,767,321 | 10,550,674 | 10,249,073 | 35,445,950 | 21,230,910 | |||||||||||||||
Unrealized appreciation (depreciation) | (457,975 | ) | 993,431 | (3,050,957 | ) | (610,639 | ) | 231,115 | ||||||||||||
Investments, at value | 29,309,346 | 11,544,105 | 7,198,116 | 34,835,311 | 21,462,025 | |||||||||||||||
Interest and dividends receivable | 37,230 | 5,655 | 5,040 | 48,962 | 156,515 | |||||||||||||||
Receivable for investments sold | — | 1,345,625 | 128,633 | 134,528 | 366,501 | |||||||||||||||
Receivable for capital shares issued | 35,476 | 39,123 | — | — | 213,894 | |||||||||||||||
Receivable from Advisor | — | — | 8 | — | — | |||||||||||||||
Prepaid and other assets | 13,368 | 8,916 | 3,051 | 23,992 | 17,396 | |||||||||||||||
Total Assets | 29,395,420 | 12,943,424 | 7,334,848 | 35,042,793 | 22,216,331 | |||||||||||||||
Liabilities: | ||||||||||||||||||||
Call options written (premiums received $ — , $ — , $ — , $339,949 and $ — , respectively) | — | — | — | 298,930 | — | |||||||||||||||
Cash overdraft | — | — | — | — | 17 | |||||||||||||||
Payable for investments purchased | — | 1,271,850 | 17,000 | — | 833,277 | |||||||||||||||
Payable for capital shares redeemed | 47,079 | 7,845 | 30,776 | 169,158 | 1,129 | |||||||||||||||
Payable for collateral received on loaned securities | — | 423,636 | — | 1,405,760 | 115,440 | |||||||||||||||
Payable to securities lending agent | 29,800 | — | — | — | — | |||||||||||||||
Payable for daily variation margin on futures contracts | — | — | — | — | 1,656 | |||||||||||||||
Accrued expenses: | ||||||||||||||||||||
Investment advisory fees | 12,413 | 4,756 | — | 20,987 | 5,468 | |||||||||||||||
Administration fees | 2,494 | 935 | — | 2,755 | 1,652 | |||||||||||||||
Audit fees | 21,868 | 9,141 | 5,087 | 13,772 | 3,761 | |||||||||||||||
Compliance service fees | 46 | 19 | 9 | 7 | — | |||||||||||||||
Other fees | 4,468 | 4,674 | 618 | 4,602 | — | |||||||||||||||
Total Liabilities | 118,168 | 1,722,856 | 53,490 | 1,915,971 | 962,400 | |||||||||||||||
Net Assets: | $ | 29,277,252 | $ | 11,220,568 | $ | 7,281,358 | $ | 33,126,822 | $ | 21,253,931 | ||||||||||
Net Assets Consist of: | ||||||||||||||||||||
Capital | $ | 57,604,626 | $ | 17,275,454 | $ | 14,960,618 | $ | 36,170,893 | $ | 21,133,754 | ||||||||||
Accumulated undistributed (distributions in excess of) net investment income (loss) | (553 | ) | (24,922 | ) | (1,388 | ) | (67,932 | ) | 221,055 | |||||||||||
Accumulated realized losses from investments, futures contracts and written options | (27,868,846 | ) | (7,023,395 | ) | (4,626,915 | ) | (2,406,519 | ) | (326,250 | ) | ||||||||||
Net unrealized appreciation/(depreciation) on investments, futures contracts and written options | (457,975 | ) | 993,431 | (3,050,957 | ) | (569,620 | ) | 225,372 | ||||||||||||
Net Assets | $ | 29,277,252 | $ | 11,220,568 | $ | 7,281,358 | $ | 33,126,822 | $ | 21,253,931 | ||||||||||
Shares of Beneficial Interest Outstanding (unlimited number of shares authorized, no par value) | 4,737,796 | 1,566,871 | 1,494,139 | 2,712,737 | 2,130,723 | |||||||||||||||
Net Asset Value — offering and redemption price per share | $ | 6.18 | $ | 7.16 | $ | 4.87 | $ | 12.21 | $ | 9.97 | ||||||||||
* | The BB&T Mid Cap Growth VIF, BB&T Special Opportunities Equity VIF, and BB&T Total Return Bond VIF include securities on loan of $415,729, $1,276,573, and $11,126,247 respectively. |
See accompanying notes to the financial statements.
12
BB&T Variable Insurance Funds
Statements of Operations
For the Six Months Ended June 30, 2009 (Unaudited)
BB&T Large Cap VIF | BB&T Mid Cap Growth VIF | BB&T Capital Manager Equity VIF | BB&T Special Opportunities Equity VIF | BB&T Total Return Bond VIF | ||||||||||||||||
Investment Income: | ||||||||||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | — | $ | 535,100 | ||||||||||
Dividend income from unaffiliates | 366,723 | 27,791 | 18,070 | 119,322 | 616 | |||||||||||||||
Dividend income from affiliates | — | — | 11,260 | — | — | |||||||||||||||
Foreign tax withholding | (943 | ) | (58 | ) | — | (9,998 | ) | — | ||||||||||||
Income from securities lending | 382 | 5,078 | — | 829 | — | |||||||||||||||
Total investment income | 366,162 | 32,811 | 29,330 | 110,153 | 535,716 | |||||||||||||||
Expenses: | ||||||||||||||||||||
Investment advisory fees (See Note 4) | 111,304 | 40,460 | 8,992 | 114,240 | 63,181 | |||||||||||||||
Administration fees (See Note 4) | 15,147 | 5,572 | — | 14,394 | 10,637 | |||||||||||||||
Audit fees | 14,977 | 4,762 | 3,572 | 14,042 | 12,749 | |||||||||||||||
Compliance service fees (See Note 4) | 194 | 72 | 45 | 145 | 105 | |||||||||||||||
Custodian fees | 1,008 | 1,101 | 153 | 1,245 | 706 | |||||||||||||||
Fund accounting fees (See Note 4) | 1,504 | 547 | 360 | 1,428 | 1,053 | |||||||||||||||
Insurance fees | 15,711 | 5,486 | 3,587 | 10,518 | 7,850 | |||||||||||||||
Legal fees | 13,992 | 4,939 | 2,896 | 10,216 | 7,013 | |||||||||||||||
Printing fees | 7,792 | 3,238 | 2,234 | 6,249 | 4,818 | |||||||||||||||
Transfer agent fees (See Note 4) | 5,596 | 2,007 | 1,301 | 4,251 | 3,262 | |||||||||||||||
Trustee fees | 1,262 | 432 | 286 | 820 | 636 | |||||||||||||||
Other fees | 2,399 | 2,239 | 1,357 | 2,420 | 8,929 | |||||||||||||||
Total expenses before waivers | 190,886 | 70,855 | 24,783 | 179,968 | 120,939 | |||||||||||||||
Less expenses waived or reimbursed by the Investment Advisor (See Note 4) | (36,098 | ) | (13,122 | ) | (8,992 | ) | (1,874 | ) | (18,790 | ) | ||||||||||
Net expenses | 154,788 | 57,733 | 15,791 | 178,094 | 102,149 | |||||||||||||||
Net investment income (loss) | 211,374 | (24,922 | ) | 13,539 | (67,941 | ) | 433,567 | |||||||||||||
Realized/Unrealized Gains (Losses) on Investments, Futures Contracts and Written Options: | ||||||||||||||||||||
Net realized gains (losses) from: | ||||||||||||||||||||
Unaffiliated investment transactions | (6,158,331 | ) | (3,856,454 | ) | (318,346 | ) | (1,024,119 | ) | 217,086 | |||||||||||
Affiliated investment transactions | — | — | (1,062,106 | ) | — | — | ||||||||||||||
Futures contracts | — | — | — | — | (81,384 | ) | ||||||||||||||
Written Options | — | — | — | 53,368 | — | |||||||||||||||
Change in unrealized appreciation/depreciation on: | ||||||||||||||||||||
Investments | 4,145,747 | 4,210,771 | 1,454,136 | 6,224,591 | (50,908 | ) | ||||||||||||||
Futures contracts | — | — | — | — | (13,393 | ) | ||||||||||||||
Written Options | — | — | — | 36,586 | — | |||||||||||||||
Net realized/unrealized gains (losses) on investments, futures contracts and written options | (2,012,584 | ) | 354,317 | 73,684 | 5,290,426 | 71,401 | ||||||||||||||
Change in net assets from operations | $ | (1,801,210 | ) | $ | 329,395 | $ | 87,223 | $ | 5,222,485 | $ | 504,968 | |||||||||
See accompanying notes to the financial statements.
13
BB&T Variable Insurance Funds
Statements of Changes in Net Assets
BB&T Large Cap VIF | BB&T Mid Cap Growth VIF | |||||||||||||||
For the Six Months Ended June 30, 2009 (Unaudited) | For the Year Ended December 31, 2008 | For the Six Months Ended June 30, 2009 (Unaudited) | For the Year Ended December 31, 2008 | |||||||||||||
From Investment Activities: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income (loss) | $ | 211,374 | $ | 921,379 | $ | (24,922 | ) | $ | (53,697 | ) | ||||||
Net realized gains (losses) on investments, futures contracts, written options and distributions from affiliated funds | (6,158,331 | ) | (21,659,986 | ) | (3,856,454 | ) | (3,193,231 | ) | ||||||||
Change in unrealized appreciation/depreciation of investments, futures contracts and written options | 4,145,747 | (6,116,076 | ) | 4,210,771 | (11,790,950 | ) | ||||||||||
Change in net assets from operations | (1,801,210 | ) | (26,854,683 | ) | 329,395 | (15,037,878 | ) | |||||||||
Distributions to Shareholders: | ||||||||||||||||
Net investment income | (211,950 | ) | (921,328 | ) | — | — | ||||||||||
Net realized gains from investment transactions | — | (12,646,677 | ) | — | (4,536,802 | ) | ||||||||||
Change in net assets from shareholders distributions | (211,950 | ) | (13,568,005 | ) | — | (4,536,802 | ) | |||||||||
Capital Transactions: | ||||||||||||||||
Proceeds from shares issued | 188,970 | 757,706 | 202,543 | 1,884,461 | ||||||||||||
Distributions reinvested | 211,950 | 13,568,005 | — | 4,536,802 | ||||||||||||
Value of shares redeemed | (5,088,807 | ) | (25,096,108 | ) | (1,481,115 | ) | (8,063,186 | ) | ||||||||
Change in net assets from capital transactions | (4,687,887 | ) | (10,770,397 | ) | (1,278,572 | ) | (1,641,923 | ) | ||||||||
Change in net assets | (6,701,047 | ) | (51,193,085 | ) | (949,177 | ) | (21,216,603 | ) | ||||||||
Net Assets: | ||||||||||||||||
Beginning of period | 35,978,299 | 87,171,384 | 12,169,745 | 33,386,348 | ||||||||||||
End of period | $ | 29,277,252 | $ | 35,978,299 | $ | 11,220,568 | $ | 12,169,745 | ||||||||
Accumulated undistributed (distributions in excess of) net investment income (loss) | $ | (553 | ) | $ | 23 | $ | (24,922 | ) | $ | — | ||||||
Share Transactions: | ||||||||||||||||
Issued | 31,645 | 74,734 | 29,244 | 158,834 | ||||||||||||
Reinvested | 36,524 | 1,571,115 | — | 425,991 | ||||||||||||
Redeemed | (873,343 | ) | (2,468,697 | ) | (225,377 | ) | (647,597 | ) | ||||||||
Change in Shares | (805,174 | ) | (822,848 | ) | (196,133 | ) | (62,772 | ) | ||||||||
See accompanying notes to the financial statements.
14
BB&T Capital Manager Equity VIF | BB&T Special Opportunities Equity VIF | BB&T Total Return Bond VIF | |||||||||||||||||||
For the Six Months Ended June 30, 2009 (Unaudited) | For the Year Ended December 31, 2008 | For the Six Months Ended June 30, 2009 (Unaudited) | For the Year Ended December 31, 2008 | For the Six Months Ended June 30, 2009 (Unaudited) | For the Year Ended December 31, 2008 | ||||||||||||||||
$ | 13,539 | $ | 158,507 | $ | (67,941 | ) | $ | 47,029 | $ | 433,567 | $ | 800,840 | |||||||||
(1,380,452) | (3,000,889 | ) | (970,751 | ) | (1,430,745 | ) | 135,702 | (282,156 | ) | ||||||||||||
1,454,136 | (3,419,265 | ) | 6,261,177 | (12,504,758 | ) | (64,301 | ) | 86,113 | |||||||||||||
87,223 | (6,261,647 | ) | 5,222,485 | (13,888,474 | ) | 504,968 | 604,797 | ||||||||||||||
(15,063) | (182,681 | ) | — | (47,020 | ) | (422,868 | ) | (803,726 | ) | ||||||||||||
— | (3,211,624 | ) | — | (1,229,604 | ) | — | — | ||||||||||||||
(15,063) | (3,394,305 | ) | — | (1,276,624 | ) | (422,868 | ) | (803,726 | ) | ||||||||||||
94,086 | 659,807 | 3,306,231 | 9,492,235 | 2,205,679 | 11,509,087 | ||||||||||||||||
15,063 | 3,394,305 | — | 1,276,625 | 422,868 | 803,726 | ||||||||||||||||
(1,428,151) | (4,364,667 | ) | (2,085,453 | ) | (4,539,850 | ) | (2,453,042 | ) | (5,181,198 | ) | |||||||||||
(1,319,002) | (310,555 | ) | 1,220,778 | 6,229,010 | 175,505 | 7,131,615 | |||||||||||||||
(1,246,842) | (9,966,507 | ) | 6,443,263 | (8,936,088 | ) | 257,605 | 6,932,686 | ||||||||||||||
8,528,200 | 18,494,707 | 26,683,559 | 35,619,647 | 20,996,326 | 14,063,640 | ||||||||||||||||
$ | 7,281,358 | $ | 8,528,200 | $ | 33,126,822 | $ | 26,683,559 | $ | 21,253,931 | $ | 20,996,326 | ||||||||||
$ | (1,388) | $ | 136 | $ | (67,932 | ) | $ | 9 | $ | 221,055 | $ | 210,356 | |||||||||
22,100 | 92,711 | 304,866 | 638,272 | 223,174 | 1,158,126 | ||||||||||||||||
3,093 | 526,651 | — | 88,168 | 42,835 | 81,352 | ||||||||||||||||
(326,587) | (613,433 | ) | (191,526 | ) | (348,611 | ) | (248,594 | ) | (529,896 | ) | |||||||||||
(301,394) | 5,929 | 113,340 | 377,829 | 17,415 | 709,582 | ||||||||||||||||
15
BB&T Variable Insurance Funds
Financial Highlights
Selected data for a share of beneficial interest outstanding throughout the periods indicated.
Investment Activities | Distributions | ||||||||||||||||||||
Net Asset Value, Beginning of Period | Net investment income (loss) | Net realized/ unrealized gains (losses) on investments | Total from Investment Activities | Net investment income | Net realized gains on investments | Total Distributions | |||||||||||||||
BB&T Large Cap VIF | |||||||||||||||||||||
Six Months Ended June 30, 2009 (Unaudited) | $ | 6.49 | 0.04 | (c) | (0.31 | ) | (0.27 | ) | (0.04 | ) | — | (0.04 | ) | ||||||||
Year Ended December 31, 2008 | $ | 13.69 | 0.16 | (c) | (4.63 | ) | (4.47 | ) | (0.16 | ) | (2.57 | ) | (2.73 | ) | |||||||
Year Ended December 31, 2007 | $ | 16.75 | 0.23 | (1.08 | ) | (0.85 | ) | (0.31 | ) | (1.90 | ) | (2.21 | ) | ||||||||
Year Ended December 31, 2006 | $ | 14.00 | 0.27 | 2.68 | 2.95 | (0.20 | ) | — | (0.20 | ) | |||||||||||
Year Ended December 31, 2005 | $ | 13.35 | 0.26 | 0.65 | 0.91 | (0.26 | ) | — | (0.26 | ) | |||||||||||
Year Ended December 31, 2004 | $ | 12.00 | 0.22 | 1.35 | 1.57 | (0.22 | ) | — | (0.22 | ) | |||||||||||
BB&T Mid Cap Growth VIF | |||||||||||||||||||||
Six Months Ended June 30, 2009 (Unaudited) | $ | 6.90 | (0.02 | )(c) | 0.28 | 0.26 | — | — | — | ||||||||||||
Year Ended December 31, 2008 | $ | 18.29 | (0.03 | )(c) | (8.40 | ) | (8.43 | ) | — | (2.96 | ) | (2.96 | ) | ||||||||
Year Ended December 31, 2007 | $ | 15.16 | (0.03 | ) | 5.09 | 5.06 | — | (d) | (1.93 | ) | (1.93 | ) | |||||||||
Year Ended December 31, 2006 | $ | 15.67 | 0.03 | 0.44 | 0.47 | (0.07 | ) | (0.91 | ) | (0.98 | ) | ||||||||||
Year Ended December 31, 2005 | $ | 13.70 | (0.04 | ) | 2.01 | 1.97 | — | — | — | ||||||||||||
Year Ended December 31, 2004 | $ | 11.69 | (0.05 | ) | 2.06 | 2.01 | — | — | — | ||||||||||||
BB&T Capital Manager Equity VIF*** | |||||||||||||||||||||
Six Months Ended June 30, 2009 (Unaudited) | $ | 4.75 | 0.01 | (c) | 0.12 | 0.13 | (0.01 | ) | — | (0.01 | ) | ||||||||||
Year Ended December 31, 2008 | $ | 10.33 | 0.09 | (c) | (3.50 | ) | (3.41 | ) | (0.10 | ) | (2.07 | ) | (2.17 | ) | |||||||
Year Ended December 31, 2007 | $ | 11.65 | 0.25 | — | (d) | 0.25 | (0.30 | ) | (1.27 | ) | (1.57 | ) | |||||||||
Year Ended December 31, 2006 | $ | 10.51 | 0.16 | 1.45 | 1.61 | (0.12 | ) | (0.35 | ) | (0.47 | ) | ||||||||||
Year Ended December 31, 2005 | $ | 9.99 | 0.17 | 0.50 | 0.67 | (0.15 | ) | — | (0.15 | ) | |||||||||||
Year Ended December 31, 2004 | $ | 8.99 | 0.07 | 1.00 | 1.07 | (0.07 | ) | — | (0.07 | ) | |||||||||||
BB&T Special Opportunities Equity VIF | |||||||||||||||||||||
Six Months Ended June 30, 2009 (Unaudited) | $ | 10.27 | (0.03 | )(c) | 1.97 | 1.94 | — | — | — | ||||||||||||
Year Ended December 31, 2008 | $ | 16.03 | 0.02 | (c) | (5.28 | ) | (5.26 | ) | (0.02 | ) | (0.48 | ) | (0.50 | ) | |||||||
Year Ended December 31, 2007 | $ | 15.07 | (0.02 | ) | 2.02 | 2.00 | — | (1.04 | ) | (1.04 | ) | ||||||||||
Year Ended December 31, 2006 | $ | 12.70 | (0.02 | ) | 3.07 | 3.05 | (0.01 | ) | (0.67 | ) | (0.68 | ) | |||||||||
Year Ended December 31, 2005 | $ | 12.12 | (0.03 | ) | 0.79 | 0.76 | — | (0.18 | ) | (0.18 | ) | ||||||||||
July 22, 2004 to December 31, 2004(e) | $ | 10.00 | (0.04 | ) | 2.16 | 2.12 | — | — | — | ||||||||||||
BB&T Total Return Bond VIF | |||||||||||||||||||||
Six Months Ended June 30, 2009 (Unaudited) | $ | 9.94 | 0.20 | (c) | 0.03 | 0.23 | (0.20 | ) | — | (0.20 | ) | ||||||||||
Year Ended December 31, 2008 | $ | 10.02 | 0.41 | (c) | (0.08 | ) | 0.33 | (0.41 | ) | — | (0.41 | ) | |||||||||
Year Ended December 31, 2007 | $ | 9.83 | 0.31 | 0.31 | 0.62 | (0.43 | ) | — | (0.43 | ) | |||||||||||
Year Ended December 31, 2006 | $ | 9.92 | 0.50 | (0.17 | ) | 0.33 | (0.42 | ) | — | (0.42 | ) | ||||||||||
Year Ended December 31, 2005 | $ | 10.08 | 0.33 | (0.10 | ) | 0.23 | (0.36 | ) | (0.03 | ) | (0.39 | ) | |||||||||
July 22, 2004 to December 31, 2004(e) | $ | 10.00 | 0.10 | 0.08 | 0.18 | (0.10 | ) | — | (0.10 | ) |
* | Total return ratios assume reinvestment of distributions at net asset value. |
Total return ratios do not reflect charges pursuant to the terms of the insurance contracts funded by separate accounts that invest in the Fund’s shares.
** | During the period certain fees were reduced. If such reductions had not occurred, the ratios would have been as indicated. |
*** | The expense ratios exclude the impact of fees/expenses paid by each underlying fund. |
(a) | Not annualized for periods less than one year. |
(b) | Annualized for periods less than one year. |
(c) | Per share net investment income (loss) has been calculated using the average daily shares method. |
(d) | Amount is less than $0.005. |
(e) | Period from commencement of operations. |
See accompanying notes to the financial statements.
16
Ratios/Supplemental Data | |||||||||||||||||||
Net Asset Value, End of Period | Total Return*(a) | Net Assets, End of Period (000) | Ratio of net expenses to average net assets(b) | Ratio of net investment income (loss) to average net assets(b) | Ratio of expenses to average net assets**(b) | Portfolio turnover rate(a) | |||||||||||||
$ | 6.18 | (4.07 | )% | $ | 29,277 | 1.03 | % | 1.41 | % | 1.27 | % | 55.73 | % | ||||||
$ | 6.49 | (37.43 | )% | $ | 35,978 | 0.81 | % | 1.52 | % | 1.16 | % | 49.73 | % | ||||||
$ | 13.69 | (5.87 | )% | $ | 87,171 | 0.77 | % | 1.50 | % | 1.08 | % | 52.81 | % | ||||||
$ | 16.75 | 21.28 | % | $ | 93,143 | 0.77 | % | 1.72 | % | 1.01 | % | 45.76 | % | ||||||
$ | 14.00 | 6.90 | % | $ | 113,648 | 0.79 | % | 1.95 | % | 1.05 | % | 21.76 | % | ||||||
$ | 13.35 | 13.18 | % | $ | 111,612 | 0.81 | % | 1.77 | % | 1.10 | % | 12.91 | % | ||||||
$ | 7.16 | 3.77 | % | $ | 11,221 | 1.06 | % | (0.46 | )% | 1.30 | % | 115.60 | % | ||||||
$ | 6.90 | (51.78 | )% | $ | 12,170 | 0.84 | % | (0.23 | )% | 1.17 | % | 205.82 | % | ||||||
$ | 18.29 | 35.02 | % | $ | 33,386 | 0.80 | % | (0.22 | )% | 1.05 | % | 127.76 | % | ||||||
$ | 15.16 | 3.26 | % | $ | 25,460 | 0.78 | % | 0.25 | % | 1.02 | % | 160.04 | % | ||||||
$ | 15.67 | 14.38 | % | $ | 39,090 | 0.78 | % | (0.28 | )% | 1.10 | % | 113.04 | % | ||||||
$ | 13.70 | 17.19 | % | $ | 32,407 | 0.83 | % | (0.44 | )% | 1.22 | % | 135.55 | % | ||||||
$ | 4.87 | 2.74 | % | $ | 7,281 | 0.44 | % | 0.38 | % | 0.69 | % | 10.31 | % | ||||||
$ | 4.75 | (38.22 | )% | $ | 8,528 | 0.31 | % | 1.15 | % | 0.59 | % | 61.04 | % | ||||||
$ | 10.33 | 1.98 | % | $ | 18,495 | 0.18 | % | 2.27 | % | 0.51 | % | 40.70 | % | ||||||
$ | 11.65 | 15.82 | % | $ | 18,222 | 0.17 | % | 1.15 | % | 0.54 | % | 20.55 | % | ||||||
$ | 10.51 | 6.77 | % | $ | 28,722 | 0.26 | % | 1.68 | % | 0.55 | % | 3.24 | % | ||||||
$ | 9.99 | 11.91 | % | $ | 25,611 | 0.34 | % | 0.75 | % | 0.54 | % | 1.09 | % | ||||||
$ | 12.21 | 18.89 | % | $ | 33,127 | 1.25 | % | (0.48 | )% | 1.26 | % | 18.50 | % | ||||||
$ | 10.27 | (33.71 | )% | $ | 26,684 | 1.10 | % | 0.14 | % | 1.18 | % | 35.80 | % | ||||||
$ | 16.03 | 13.41 | % | $ | 35,620 | 1.06 | % | (0.16 | )% | 1.11 | % | 23.86 | % | ||||||
$ | 15.07 | 24.71 | % | $ | 21,294 | 1.06 | % | (0.05 | )% | 1.06 | % | 59.93 | % | ||||||
$ | 12.70 | 6.29 | % | $ | 31,768 | 1.23 | % | (0.28 | )% | 1.23 | % | 42.15 | % | ||||||
$ | 12.12 | 21.20 | % | $ | 21,044 | 1.45 | % | (0.76 | )% | 1.45 | % | 13.81 | % | ||||||
$ | 9.97 | 2.42 | % | $ | 21,254 | 0.97 | % | 4.12 | % | 1.15 | % | 66.49 | % | ||||||
$ | 9.94 | 3.38 | % | $ | 20,996 | 0.81 | % | 4.11 | % | 1.03 | % | 152.74 | % | ||||||
$ | 10.02 | 6.47 | % | $ | 14,064 | 0.77 | % | 4.42 | % | 1.01 | % | 252.64 | % | ||||||
$ | 9.83 | 3.47 | % | $ | 6,767 | 0.77 | % | 4.34 | % | 0.88 | % | 188.24 | % | ||||||
$ | 9.92 | 2.29 | % | $ | 18,777 | 1.00 | % | 3.38 | % | 1.12 | % | 196.66 | % | ||||||
$ | 10.08 | 1.76 | % | $ | 15,653 | 1.29 | % | 2.34 | % | 1.29 | % | 36.74 | % |
17
Notes to Financial Statements
June 30, 2009 (Unaudited)
1. | Organization: |
The BB&T Variable Insurance Funds (the “Trust”) was organized on November 8, 2004, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end investment company established as a Massachusetts business trust. The Trust commenced operations on May 1, 2005 and presently offers shares of the BB&T Large Cap VIF, the BB&T Mid Cap Growth VIF, the BB&T Capital Manager Equity VIF, the BB&T Special Opportunities Equity VIF, and the BB&T Total Return Bond VIF (referred to individually as a “Fund” and collectively as the “Funds”). The Trust is authorized to issue an unlimited number of shares of beneficial interest. Shares of the Funds are offered through variable annuity contracts offered through the separate accounts of participating insurance companies. The BB&T Capital Manager Equity VIF invests primarily in underlying mutual funds as opposed to individual securities.
Under the Trust’s organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, in the normal course of business, the Funds may enter into contracts with their vendors and others that provide for general indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds. However, based on experience, the Funds expect that risk of loss to be remote.
2. | Significant Accounting Policies: |
The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. The policies are in conformity with United States generally accepted accounting principles (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the reporting period. Actual results could differ from those estimates.
Securities Valuation — Investments in common stocks, commercial paper, corporate bonds, municipal securities, U.S. Government securities, U.S. Government agency securities, futures and options, the principal market for which is a securities exchange or an over-the-counter market, are valued at their latest available sale price (except for those securities that are traded on NASDAQ, which will be valued at the NASDAQ official closing price) or in the absence of such a price, by reference to the latest available bid price in the principal market in which such securities are normally traded. The Funds may also use an independent pricing service approved by the Board of Trustees of the Trust (the “Board”) to value certain securities, including through the use of electronic and matrix techniques. Short-term obligations without significant credit risk that mature in 60 days or less are valued at either amortized cost or original cost plus interest, which approximates current fair value. Investments in open-end investment companies, including the affiliated funds invested in by the Capital Manager Equity VIF, are valued at their respective net asset values as reported by such companies. Investments in closed-end investment companies are valued at their market values based upon the latest available sale price or, absent such a price, by reference to the latest available bid prices in the principal market in which such securities are normally traded. The differences between cost and fair values of investments are reflected as either unrealized appreciation or depreciation. Securities for which market quotations are not readily available or deemed unreliable (e.g., an approved pricing service does not provide a price, a furnished price is in error, certain stale prices, or an event that materially effects the furnished price) will be valued at fair value determined in good faith by the Pricing Committee under the general supervision of the Board.
Financial Accounting Standard Board — SFAS No. 157 “Fair Value Measurements” (“SFAS No. 157”) clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements.
18
BB&T Variable Insurance Funds
Notes to Financial Statements — (continued)
June 30, 2009 (Unaudited)
The three levels of the fair value hierarchy under SFAS No. 157 are described below:
• | Level 1 – quoted prices in active markets for identical securities |
• | Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) |
• | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The summary of inputs used to value each Fund’s investments as of June 30, 2009 is as follows:
Assets: Investments in Securities | Level 1– Quoted Prices* | Level 2– Other Significant Observable Inputs | Level 3– Significant Unobservable Inputs | Total | |||||||||
BB&T Large Cap VIF | $ | 29,304,950 | $ | 4,396 | ** | $ | — | $ | 29,309,346 | ||||
BB&T Mid Cap Growth VIF | 11,123,576 | 420,529 | ** | — | 11,544,105 | ||||||||
BB&T Capital Manager Equity VIF | 7,198,116 | — | — | 7,198,116 | |||||||||
BB&T Special Opportunities Equity VIF | 33,461,386 | 1,373,925 | ** | — | 34,835,311 | ||||||||
Liabilities: Other Financial Instruments - Written Options | |||||||||||||
BB&T Special Opportunities Equity VIF | $ | 296,880 | $ | 2,050 | $ | — | $ | 298,930 |
* | Industries or security types as disclosed in the Schedules of Portfolio Investments. |
** | Level 2 investments are Securities Held As Collateral For Securities On Loan. |
Assets: Investments in Securities | Level 1– Quoted Prices | Level 2– Other Significant Observable Inputs | Level 3– Significant Unobservable Inputs | Total | ||||||||
BB&T Total Return Bond VIF | ||||||||||||
Asset Backed Securities | $ | — | $ | 1,862,881 | $ | — | $ | 1,862,881 | ||||
Collateralized Mortgages Obligations | — | 705,598 | — | 705,598 | ||||||||
Commercial Mortgage-Backed Securities | — | 1,377,260 | — | 1,377,260 | ||||||||
Corporate Bonds | — | 5,710,105 | — | 5,710,105 | ||||||||
Mortgage-Backed Securities | — | 8,098,562 | — | 8,098,562 | ||||||||
Municipal Bonds | — | 312,202 | 392,500 | 704,702 | ||||||||
U.S. Treasury Notes | — | 1,093,837 | — | 1,093,837 | ||||||||
Foreign Government Bonds | — | 60,595 | — | 60,595 | ||||||||
Supranational Bonds | — | 342,948 | — | 342,948 | ||||||||
Investment Company | 1,405,236 | — | — | 1,405,236 | ||||||||
Securities Held as Collateral for Securities on Loan | — | 100,301 | — | 100,301 | ||||||||
Total | $ | 1,405,236 | $ | 19,664,289 | $ | 392,500 | $ | 21,462,025 | ||||
Liabilities: Other Financial Instruments - Futures Contracts | ||||||||||||
BB&T Total Return Bond VIF | $ | 1,656 | $ | — | $ | — | $ | 1,656 |
19
BB&T Variable Insurance Funds
Notes to Financial Statements — (continued)
June 30, 2009 (Unaudited)
Following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:
BB&T Large Cap VIF | BB&T Mid Cap Growth VIF | BB&T Special Opportunities Equity VIF | BB&T Total Return Bond VIF | |||||||||||||
Securities Held As Collateral for Securities on Loan: | ||||||||||||||||
Balance as of 12/31/08 (market value) | $ | 2,682 | $ | 2,206 | $ | 6,566 | $ | 6,502 | ||||||||
Municipal Bonds: | ||||||||||||||||
Balance as of 12/31/08 (market value) | — | — | — | 368,500 | ||||||||||||
Change in unrealized appreciation/(depreciation)* | — | — | — | 24,000 | ||||||||||||
Net purchases/(sales) | — | — | — | — | ||||||||||||
Securities Held As Collateral for Securities on Loan: | ||||||||||||||||
Transfers in and/or out of Level 3 | (2,682 | ) | (2,206 | ) | (6,566 | ) | (6,502 | ) | ||||||||
Balance as of 06/30/09 (market value) | $ | — | $ | — | $ | — | $ | 392,500 | ||||||||
* | As reflected in the related net change in unrealized appreciation/depreciation on the Statements of Operations. |
Securities Transactions and Related Income — During the period, securities transactions are accounted for no later than one business day after trade date. For financial reporting purposes, however, security transactions are accounted for on trade date of the last business day of the reporting period. Interest income is recognized on the accrual basis and includes, where applicable, the amortization/accretion of premium or discount. Dividend income is recorded on the ex-dividend date. Gains or losses realized from sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.
When-Issued and Forward Commitments — The Funds may purchase securities on a “when-issued” basis. The Funds record when-issued securities on the trade date and pledge assets with a value at least equal to the purchase commitment for payment of the securities purchased. The value of the securities underlying when-issued or forward commitments to purchase securities and any subsequent fluctuation in their value is taken into account when determining the net asset value of the Funds commencing with the date the Funds agree to purchase the securities. The Funds do not accrue interest or dividends on “when-issued” securities until the underlying securities are received.
Repurchase Agreements and Collateralized Loan Agreements — The Funds may enter into agreements with member banks of the Federal Deposit Insurance Corporation and with registered broker/dealers that BB&T Asset Management, Inc. (“BB&T AM”) or a sub-advisor deemed creditworthy under guidelines approved by the Board, subject to the seller’s agreement to repurchase such securities at a mutually agreed-upon date and price. The repurchase price generally equals the price paid by the Funds plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying Fund securities. The seller under these types of agreements is required to maintain the value of collateral held pursuant to the agreement at not less than the repurchase price (including accrued interest). Securities subject to repurchase are held by the Funds’ custodian, or another qualified custodian, or in the Federal Reserve/Treasury book-entry system. In the event of counterparty default, the Fund has the right to use the collateral to offset losses incurred. There is a potential for loss to the Fund in the event the Fund is delayed or prevented from exercising its rights to dispose of the collateral securities, including the risk of possible decline in value of the underlying securities during the period while the Fund seeks to assert its rights.
Mortgage Dollar Rolls — The Total Return Bond VIF may sell mortgage-backed securities for delivery in the current month and simultaneously contract to repurchase substantially similar (same type, coupon and maturity) securities on a specific future date at an agreed-upon price. The market value of the securities that the Fund is required to purchase may decline below the agreed upon repurchase price of those securities. Pools of mortgages collateralizing those securities may have different prepayment histories than those sold. During the period between the sale and repurchase, the Fund will not be entitled to receive interest and principal payments on the securities sold. Proceeds of the sale will be invested in additional instruments for the Fund, and the income from these investments will generate income for the Fund. If such income does not exceed the income, capital appreciation and gain or loss that would have been realized on the securities sold as part of the dollar roll, the use of this technique will diminish the investment performance of the Fund compared with what the performance would have been without the use of dollar rolls.
20
BB&T Variable Insurance Funds
Notes to Financial Statements — (continued)
June 30, 2009 (Unaudited)
Financial Futures Contracts — The Funds (excluding the Capital Manager Equity VIF) may invest in financial futures contracts and options on financial futures contracts to gain exposure to, or economically hedge against, changes in the value of equity securities (equity risk), interest rates (interest rate risk), or foreign currencies (foreign currency exchange rate risk). Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made or received by the Fund each day, depending on the daily fluctuations in the fair value of the underlying security. The Fund recognizes a gain or loss equal to the daily variation margin. Should market conditions move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts and the underlying hedged assets. Financial futures contracts involve minimal counterparty risk since financial futures contracts are guaranteed against default by the exchange on which they trade. For open financial futures contracts as of June 30, 2009, see the Schedules of Portfolio Investments, which is also indicative of activity for the year ended December 31, 2008.
Option Contracts — The Funds (excluding the Total Return Bond VIF) may purchase or write option contracts. These transactions may be entered into to hedge against changes in interest rates (interest rate risk), security prices (equity risk), currency fluctuations (foreign currency exchange rate risk), and other market developments, or for the purposes of earning additional income (i.e., speculation).
The risk associated with purchasing an option is that the Fund pays a premium whether or not the option is exercised. Additionally, the Funds bear the risk of loss of the premium and change in value should the counterparty not perform under the contract. Put and call options purchased are accounted for in the same manner as other securities owned. The cost of securities acquired through the exercise of call options is increased by the premiums paid. The proceeds from securities sold through the exercise of put options are decreased by the premiums paid.
In writing an option, the Funds contract with a specified counterparty to purchase (put option written) or sell (call option written) a specified quantity (notional amount) of an underlying asset at a specified price during a specified period upon demand of the counterparty. The risk associated with writing an option is that the Funds bear the market risk of an unfavorable change in the price of an underlying asset and may be required to buy or sell an underlying asset under the contractual terms of the option at a price different from the current value. The Funds may execute transactions in both listed and over-the-counter options. Listed options involve minimal counterparty risk since the listed options are guaranteed against default by the exchange on which they trade. Transactions in over-the-counter options may expose the Funds to the risk of default by the counterparty to the transaction. In the event of default by the counterparty to the over-the-counter transaction, the Funds maximum amount of loss is the premium paid (as the purchaser) or the unrealized loss of the contract (as the writer). The options contracts listed below are also indicative of activity for the year ended December 31, 2008.
The BB&T Special Opportunities Equity VIF had the following transactions in written covered call options during the six months ended June 30, 2009:
BB&T Special Opportunities Equity VIF | |||||||
Covered Call Options | Number of Contracts | Premiums Received | |||||
Balance at beginning of period | 260 | $ | 14,833 | ||||
Options written | 8,088 | 750,629 | |||||
Options closed | (3,056 | ) | (223,305 | ) | |||
Options expired | (2,266 | ) | (133,994 | ) | |||
Options exercised | (500 | ) | (68,214 | ) | |||
Balance at end of period | 2,526 | $ | 339,949 | ||||
21
BB&T Variable Insurance Funds
Notes to Financial Statements — (continued)
June 30, 2009 (Unaudited)
The following is a summary of written options outstanding as of June 30, 2009:
BB&T Special Opportunities Equity VIF | ||||||
Security | Number of Contracts | Value | ||||
Allscripts-Misys Healthcare Solutions Inc., $17.50, 9/19/09 | 200 | $ | (18,000 | ) | ||
Corning, Inc., $17.50, 8/22/09 | 570 | (25,650 | ) | |||
Petroleo Brasileiro SA, ADR, $35.00, 12/19/09 | 350 | (99,750 | ) | |||
Smithfield Foods, Inc., $15.00, 8/22/09 | 300 | (22,500 | ) | |||
SPX Corp., $65.00, 9/19/09 | 75 | (750 | ) | |||
Symantec Corp., $20.00, 3/21/09* | 200 | (1,000 | ) | |||
Weatherford International, Ltd., $17.50, 8/22/09 | 300 | (88,500 | ) | |||
Weatherford International, Ltd., $21.00, 8/22/09 | 321 | (41,730 | ) | |||
Yum! Brands, Inc., $40.00, 7/18/09* | 210 | (1,050 | ) | |||
2,526 | $ | (298,930 | ) | |||
* | Security was valued under methods approved by the Board of Trustees. |
Security Loans — The Funds may loan securities secured by collateral in the form of securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities, irrevocable letters of credit, U.S. dollars, cash or other forms of collateral as may be agreed between the Trust and Mellon Bank, N.A., the lending agent (“Mellon”). A Fund may receive compensation for lending securities in the form of fees payable by the borrower or by retaining a portion of income and earnings from the investment and reinvestment of cash collateral received and held on behalf of the Fund (after payment of a “broker rebate fee” to the borrower). In extremely low interest rate environments, the broker rebate fee may exceed the interest earned on the cash collateral which would result in a loss to the Fund. A Fund also continues to receive interest or dividends on the securities loaned. Although security loans are secured at all times by collateral, the loans may not be fully supported if, for example, the instruments in which cash collateral is invested decline in value or the borrower fails to provide additional collateral when required in a timely manner or at all. Concurrently with the delivery of a Fund’s securities to a borrower, Mellon is required to obtain from the borrower collateral equal to at least 102% of the market value of the securities loaned plus accrued interest in the case of U.S. securities, and at least 105% of the market value of the securities loaned plus accrued interest in the case of foreign securities. If at the close of trading on any business day the cost of the collateral is less than 100% of the market value of such loaned securities as of such business day, the borrower is required to deliver additional collateral equal to not less than 102% of the market value of the securities loaned plus accrued interest in the case of U.S. securities and 105% of the market value of the securities loaned plus accrued interest in the case of foreign securities. The Funds bear all of the gains and losses on such investments. Cash collateral received by several Funds at June 30, 2009, was invested in the BNY Institutional Cash Reserve Fund (“ICRF”) Series A and B, an unregistered investment pool managed by Mellon, which was invested in repurchase agreements and Lehman Brothers.
The net asset value of a Fund may be affected by an increase or decrease in the value of the securities loaned or by an increase or decrease in the value of the ICRF or any other investment vehicle in which cash collateral may be invested. At June 30, 2009, the ICRF held investments in Lehman Brothers (Series B) which were in default. These defaults resulted in the value of the ICRF being less than the amount of collateral owed back to the borrowing brokers. The difference between the value of the collateral investments in the ICRF and what is owed to the borrowing brokers negatively affects net asset value of these Funds. The difference between the value of the collateral investments in the ICRF and what is owed to borrowing brokers negatively impacted the NAV’s of certain Funds at June 30, 2009 by the following amounts per share.
NAV Impact | |||
BB&T Large Cap VIF | $ | 0.01 | |
BB&T Special Opportunities Equity VIF | 0.01 | ||
BB&T Total Return VIF | 0.01 |
There may be risks of delay in recovery of the securities or even loss of rights in the collateral should the borrower of the securities fail financially. Another risk from securities lending is that the borrower may not provide additional collateral when
22
BB&T Variable Insurance Funds
Notes to Financial Statements — (continued)
June 30, 2009 (Unaudited)
required or return the securities when due or when called for by the Fund. The Funds are indemnified from losses resulting from brokers failing to return securities. As the securities lending agent for the Funds, Mellon receives for its services 20% of the revenues earned on the securities lending activities and incurs all expenses. The securities lending agent may make payments to borrowers and placing brokers, who may not be affiliated, directly or indirectly, with the Trust, the adviser or the distributor. In connection with lending securities, a Fund may pay reasonable administrative and custodial fees. The value of the securities on loan, the related collateral and the liability to return the collateral at June 30, 2009, are shown on the Statements of Assets and Liabilities. At June 30, 2009, the following Funds had loans outstanding:
Value of Loaned Securities | Cost of Collateral | Value of Collateral | Average Value on Loan for the period ended June 30, 2009 | |||||||||
BB&T Mid Cap Growth VIF | $ | 415,729 | $ | 423,636 | $ | 420,529 | $ | 350,628 | ||||
BB&T Special Opportunities Equity VIF | 1,276,573 | 1,405,760 | 1,373,925 | 699,038 | ||||||||
BB&T Total Return Bond VIF | 11,126,247 | 115,440 | 100,301 | 111,025 |
Credit Enhancements — Certain obligations held in the Funds have credit enhancement or liquidity features that may, under certain circumstances, provide for repayment of principal and interest on the obligation upon demand date, interest rate reset date or final maturity. These enhancements may include: letters of credit; liquidity guarantees; security purchase agreements; tender option purchase agreements; and third-party insurance (i.e., AMBAC).
Distributions to Shareholders — Dividends from net investment income are declared and paid quarterly for the Funds, (except the BB&T Total Return Bond VIF) to the extent they exceed a de minimis amount set by the Board. Dividends from net investment income are declared daily and paid monthly for the BB&T Total Return Bond VIF. Distributable net realized gains, if any, are declared and distributed at least annually. Distributions to shareholders which exceed net investment income and net realized gains for tax purposes are reported as distributions of capital or return of capital.
The character of income and gains distributed are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature (e.g., reclass of net operating losses, market discounts, gain/loss, paydowns and distributions), such amounts are reclassified within the composition of net assets based on their federal tax-basis treatment; temporary differences do not require reclassification. These reclassifications have no impact on net assets or net asset values per share.
Federal Income Taxes — It is the policy of the Funds to continue to qualify as regulated investment companies by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income tax is required.
Other — Expenses directly attributable to a Fund are charged to that Fund. Expenses not directly attributable to a Fund are allocated proportionately among all Funds daily in relation to the net assets of each Fund or on another reasonable basis. Expenses which are attributable to both the Funds and the BB&T Funds are allocated across Funds and BB&T Funds, based upon relative net assets or on another reasonable basis.
3. | Purchases and Sales of Securities: |
Purchases and sales of securities (excluding U.S. Government Securities and securities maturing less than one year from acquisition) for the six months ended June 30, 2009 are as follows:
Purchases | Sales | |||||
BB&T Large Cap VIF | $ | 16,182,096 | $ | 19,049,140 | ||
BB&T Mid Cap Growth VIF | 12,245,018 | 12,934,346 | ||||
BB&T Capital Manager Equity VIF | 732,015 | 1,895,820 | ||||
BB&T Special Opportunities Equity VIF | 5,942,334 | 4,766,349 | ||||
BB&T Total Return Bond VIF | 8,403,599 | 5,438,485 |
Purchases and sales of U.S. Government Securities (excluding securities maturing less than one year from acquisition) for the six months ended June 30, 2009 for the BB&T Total Return Bond VIF were $6,117,783 and $8,111,630, respectively.
23
BB&T Variable Insurance Funds
Notes to Financial Statements — (continued)
June 30, 2009 (Unaudited)
4. | Related Party Transactions: |
Investment advisory services are provided to the Funds by BB&TAM. Under the terms of the investment advisory agreement, BB&T AM is entitled to receive fees based on a percentage of the average daily net assets of the Funds. These fees are accrued daily and payable on a monthly basis and are reflected on the Statements of Operations as “Investment advisory fees”. BB&T AM waived investment advisory fees and certain expenses of the Funds referenced below which are not subject to recoupment and are included on the Statements of Operations as “Less expenses waived or reimbursed by the Investment Advisor”.
Information regarding these transactions is as follows for the six months ended June 30, 2009:
Contractual Fee Rate | Fee Rate after Voluntary Waivers1 | |||||
BB&T Large Cap VIF | 0.74 | % | 0.50 | % | ||
BB&T Mid Cap Growth VIF | 0.74 | % | 0.50 | % | ||
BB&T Capital Manager Equity VIF | 0.25 | % | 0.00 | % | ||
BB&T Special Opportunities Equity VIF | 0.80 | % | 0.80 | %2 | ||
BB&T Total Return Bond VIF | 0.60 | % | 0.50 | %2 |
1 | For all or a portion of the six months ended June 30, 2009, BB&T AM voluntarily waived investment advisory fees and reimbursed other expenses. All voluntary waivers and reimbursements are not subject to recoupment in subsequent fiscal periods and may be discontinued at any time. |
2 | BB&T voluntarily waived additional advisory fees for the six months ended June 30, 2009. |
Pursuant to a sub-advisory agreement with BB&T AM, Scott & Stringfellow, LLC, a wholly-owned subsidiary of BB&T Corporation, serves as the sub-advisor to the BB&T Special Opportunities Equity VIF, subject to the general supervision of the Board and BB&T AM. Pursuant to a sub-advisory agreement with BB&T AM, Sterling Capital Management LLC, a wholly-owned subsidiary of BB&T Corporation, serves as the sub-advisor to the BB&T Total Return Bond VIF, subject to the general supervision of the Board and BB&TAM. For their services, the sub-advisors are entitled to a fee payable by BB&T AM.
BB&T AM serves as the administrator to the Funds pursuant to the administration agreement effective as of April 23, 2007. The Funds pay their portion of a fee to BB&T AM for providing administration services based on the aggregate assets of the Funds and the BB&T Funds at a rate of 0.11% on the first $3.5 billion of average net assets; 0.075% on the next $1 billion of average net assets; 0.06% on the next $1.5 billion of average net assets; and 0.04% of average net assets over $6 billion. This fee is accrued daily and payable on a monthly basis. Expenses incurred are reflected on the Statements of Operations as “Administration fees”. Pursuant to a sub-administration agreement with BB&TAM, PNC Global Investment Servicing (U.S.) Inc. (“PNC”) serves as the sub-administrator to the Funds subject to the general supervision of the Board and BB&T AM. For these services, PNC is entitled to a fee payable by BB&T AM.
PNC serves as the Funds’ fund accountant and transfer agent and receives compensation by the Funds for these services. Expenses incurred are reflected on the Statement of Operations as “Fund accounting fees” and “Transfer agent fees”.
BB&TAM’s Chief Compliance Officer (“CCO”) serves as the Funds’ CCO. The CCO’s compensation is reviewed and approved by the Funds’ Board and paid by BB&T AM. However, the Funds reimburse BB&T AM for their allocable portion of the CCO’s salary. Expenses incurred for the Funds are reflected on the Statements of Operations as “Compliance service fees“.
For the six months ended June 30, 2009, the Funds paid $26,011 in brokerage fees to Scott & Stringfellow LLC, a wholly owned subsidiary of BB&T Corporation, on the execution of purchases and sales of the Funds’ portfolio investments.
The Trust has adopted a Variable Contract Owner Servicing Plan (the “Service Plan”) under which the Funds may pay a fee computed daily and paid monthly, at an annual rate of up to 0.25% of the average daily net assets of the Fund. A servicing agent may periodically waive all or a portion of its servicing fees. For the six months ended June 30, 2009 the Funds did not participate in any service plans.
Certain Officers and Trustees of the Funds are affiliated with the adviser, the administrator, or the sub-administrator. Such Officers and Trustees receive no compensation from the Funds for serving in their respective roles. Each of the Trustees who is not an interested person (as defined in the 1940 Act) of the Trust is compensated at the annual rate of $30,000 plus $5,000 for each regularly scheduled quarterly meeting attended, $4,000 for each special meeting attended in person and $3,000 for
24
BB&T Variable Insurance Funds
Notes to Financial Statements — (continued)
June 30, 2009 (Unaudited)
each special meeting attended by telephone. Each Trustee serving on a Committee of the Board of Trustees receives a fee of $4,000 for each Committee meeting attended in person and $3,000 for each Committee meeting attended by telephone, plus reimbursement for certain out of pocket expenses. Additionally, the Chairman of the Board and Audit Committee Chairman each receive an annual retainer of $10,000, and the Chairman of the Nominations Committee receives $1,000 for each meeting over which he or she presides as Chairman. The fees are allocated across the Funds and the BB&T Funds based upon relative net assets.
5. | Line of Credit: |
U.S. Bank, N.A. has made available a credit facility to the Funds, pursuant to a Credit Agreement (the “Agreement”). The primary purpose of the Agreement is to allow the Funds to avoid security liquidations that BB&T AM believes are unfavorable to shareholders. Outstanding principal amounts under the Agreement bear interest at a rate per annum equal to the Prime Rate minus two percent (2%), but never a net rate of less than two percent (2%) per annum. The line of credit was not used during the six months ended June 30, 2009.
6. | Federal Tax Information: |
Management has analyzed the Funds’ tax positions taken on federal income tax returns for all open tax years (current and prior three tax years), and has concluded that no provision for federal income tax is required in the Funds’ financial statements. The Funds’ federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.
At December 31, 2008 the following Funds had net capital loss carryforwards available to offset future net capital gains, if any, to the extent provided by the Treasury regulations. To the extent that these carryforwards are used to offset future capital gains, it is possible that the gains that are offset will not be distributed to shareholders.
Amount | Expires | ||||
BB&T Large Cap VIF | $ | 21,055,133 | 2016 | ||
BB&T Mid Cap Growth VIF | 609,632 | 2016 | |||
BB&T Capital Manager Equity VIF | 2,272,242 | 2016 | |||
BB&T Total Return Bond VIF | 73,894 | 2013 | |||
BB&T Total Return Bond VIF | 62,902 | 2014 | |||
BB&T Total Return Bond VIF | 78,797 | 2016 |
The tax character of distributions paid to shareholders during the fiscal year ended December 31, 2008, were as follows:
Distributions paid from | |||||||||
Ordinary Income | Net Long-Term Gains | Total Taxable Distributions* | |||||||
BB&T Large Cap VIF | $ | 1,160,944 | $ | 12,407,061 | $ | 13,568,005 | |||
BB&T Mid Cap Growth VIF | 1,251,675 | 3,285,127 | 4,536,802 | ||||||
BB&T Capital Manager Equity VIF | 296,392 | 3,097,913 | 3,394,305 | ||||||
BB&T Special Opportunities Equity VIF | 605,227 | 671,397 | 1,276,624 | ||||||
BB&T Total Return Bond VIF | 803,726 | — | 803,726 |
* | Total distributions paid may differ from the Statements of Changes in Net Assets because distributions are recognized when actually paid for tax purposes. |
Under current tax law, capital losses realized after October 31 of a Fund’s fiscal year may be deferred and treated as occurring on the first business day of the following fiscal year for tax purposes. The following Funds had deferred post October capital losses, which will be treated as occurring on the first business day of the fiscal year ending December 31, 2009:
Post- October Losses | |||
BB&T Large Cap VIF | $ | 594,486 | |
BB&T Mid Cap Growth VIF | 1,849,892 | ||
BB&T Capital Manager Equity VIF | 334,236 |
25
BB&T Variable Insurance Funds
Notes to Financial Statements — (continued)
June 30, 2009 (Unaudited)
Post- October Losses | |||
BB&T Special Opportunities VIF | $ | 2,521,166 | |
BB&T Total Return Bond VIF | 234,451 |
At June 30, 2009, the book cost, which approximates federal income tax cost, gross unrealized appreciation and gross unrealized depreciation on securities were as follows:
Book Cost | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | |||||||||||
BB&T Large Cap VIF | $ | 29,737,521 | $ | 2,952,859 | $ | (3,385,429 | ) | $ | (432,570 | ) | ||||
BB&T Mid Cap Growth VIF | 10,127,038 | 1,422,549 | (426,012 | ) | 996,537 | |||||||||
BB&T Capital Manager Equity VIF | 10,249,072 | — | (3,050,957 | ) | (3,050,957 | ) | ||||||||
BB&T Special Opportunities Equity VIF | 34,040,190 | 3,645,965 | (4,224,769 | ) | (578,804 | ) | ||||||||
BB&T Total Return Bond VIF | 21,115,471 | 565,720 | (319,467 | ) | 246,253 |
7. | Subsequent Events: |
Management has evaluated the impact of all subsequent events on the Funds through August 19, 2009, the date the financial statements were issued, and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.
26
BB&T Variable Insurance Funds
June 30, 2009
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling 1-800-228-1872; and (ii) on the Securities and Exchange Commission’s (the “Commission”) website at http://www.sec.gov.
Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30th is available (i) without charge, upon request, by calling 1-800-228-1872 and (ii) on the Commission’s website at http://www.sec.gov.
The Funds file complete Schedules of Portfolio Holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available without charge on the Commission’s website at http://www.sec.gov, or may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
27
Item 2. | Code of Ethics. |
Not applicable.
Item 3. | Audit Committee Financial Expert. |
Not applicable.
Item 4. | Principal Accountant Fees and Services. |
Not applicable.
Item 5. | Audit Committee of Listed Registrants. |
Not applicable.
Item 6. | Investments. |
(a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. |
(b) | Not applicable. |
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable.
Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable.
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable.
Item 10. | Submission of Matters to a Vote of Security Holders. |
There have been no material changes to the procedures by which the shareholders may recommend nominees to the Registrant’s Board of Trustees to report.
Item 11. | Controls and Procedures. |
(a) | The Registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 Act (17 CFR 270.30a-3(c))) are effective to provide reasonable assurance that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. |
(b) | There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
Item 12. | Exhibits. |
(a)(1) | Not applicable. | |
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. | |
(a)(3) | Not applicable. | |
(b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) BB&T Variable Insurance Funds
By (Signature and Title)* | /s/ E.G. Purcell, III | |||
E.G. Purcell, III, President | ||||
(principal executive officer) |
Date 8/24/09
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 (Signature and Title)* | /s/ E.G. Purcell, III | |||
E.G. Purcell, III, President | ||||
(principal executive officer) |
Date 8/24/09
By (Signature and Title)* | /s/ Andrew J. McNally | |||
Andrew J. McNally, Treasurer | ||||
(principal financial officer) |
Date 8/24/09
* | Print the name and title of each signing officer under his or her signature. |