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
Sterling Capital Variable Insurance Funds |
(Exact name of registrant as specified in charter)
434 Fayetteville Street, 5th Floor Raleigh, NC 27601-0575 |
(Address of principal executive offices) (Zip code)
E.G. Purcell III, President Sterling Capital Variable Insurance Funds 434 Fayetteville Street, 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, 2012
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.
Sterling Capital Variable Insurance Funds |
2 | ||
3 | ||
Schedules of Portfolio Investments | ||
4 | ||
5 | ||
6 | ||
7 | ||
12 | ||
18 | ||
24 |
Sterling Capital Variable Insurance Funds |
Summary of Portfolio Holdings (Unaudited)
June 30, 2012
Each Sterling Capital Variable Insurance Fund’s portfolio composition at June 30, 2012 was as follows:
Sterling Capital Select Equity VIF | Percentage of net assets | ||||
Consumer Discretionary | 10.8% | ||||
Consumer Staples | 8.1% | ||||
Energy | 13.1% | ||||
Financials | 13.3% | ||||
Health Care | 13.2% | ||||
Industrials | 11.5% | ||||
Information Technology | 25.2% | ||||
Materials | 2.3% | ||||
Telecommunication Services | 2.2% | ||||
Exchange Traded Funds | 0.2% | ||||
Cash Equivalents | 0.2% | ||||
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| ||||
100.1% | |||||
|
| ||||
Sterling Capital Strategic Allocation Equity VIF | |||||
Sterling Capital Equity Income Fund, Institutional Class | 5.6% | ||||
Sterling Capital Equity Index Fund, Institutional Class | 0.8% | ||||
Sterling Capital Mid Value Fund, Institutional Class | 7.6% | ||||
Sterling Capital Select Equity Fund, Institutional Class | 20.9% | ||||
Sterling Capital Small Value Fund, Institutional Class | 1.9% | ||||
Sterling Capital Special Opportunities Fund, Institutional Class | 11.6% | ||||
Sterling Capital U.S. Treasury Money Market Fund, Institutional Class | 2.2% | ||||
Non-Affiliated Investment Companies | 9.5% | ||||
Exchange Traded Funds | 39.8% | ||||
|
| ||||
99.9% | |||||
|
| ||||
Sterling Capital Special Opportunities VIF | |||||
Consumer Discretionary | 11.2% | ||||
Consumer Staples | 6.2% | ||||
Energy | 9.7% | ||||
Financials | 5.9% | ||||
Health Care | 20.4% | ||||
Industrials | 2.4% | ||||
Information Technology | 33.7% | ||||
Materials | 6.2% | ||||
Cash Equivalents | 3.6% | ||||
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| ||||
99.3% | |||||
|
| ||||
Sterling Capital Total Return Bond VIF | |||||
Asset Backed Securities | 2.1% | ||||
Collateralized Mortgage Obligations | 10.4% | ||||
Commercial Mortgage-Backed Securities | 12.2% | ||||
Corporate Bonds | 25.5% | ||||
Mortgage-Backed Securities | 37.4% | ||||
Municipal Bonds | 8.9% | ||||
Preferred Stocks | 1.7% | ||||
U.S. Treasury Bonds | 1.6% | ||||
U.S. Treasury Notes | 1.8% | ||||
Cash Equivalents | 0.0% | ||||
|
| ||||
101.6% | |||||
|
|
2
Sterling Capital Variable Insurance Funds |
June 30, 2012
As a shareholder of the Sterling Capital 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 Sterling Capital 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, 2012 through June 30, 2012.
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 1/1/12 | Ending Account Value 6/30/12 | Expenses Paid During Period 1/1/12 - 6/30/12* | Expense Ratio During Period 1/1/12 - 6/30/12 | |||||||||||||||||
Sterling Capital Select Equity VIF | $ | 1,000.00 | $ | 1,091.10 | $ | 5.41 | 1.04 | % | ||||||||||||
Sterling Capital Strategic Allocation Equity VIF | 1,000.00 | 1,052.20 | 3.62 | 0.71 | % | |||||||||||||||
Sterling Capital Special Opportunities VIF | 1,000.00 | 1,052.70 | 6.58 | 1.29 | % | |||||||||||||||
Sterling Capital Total Return Bond VIF | 1,000.00 | 1,032.20 | 5.66 | 1.12 | % |
* | Expenses are equal to the average account value times the Fund’s annualized expense ratio multiplied by 182 (the number of days in the most recent fiscal half-year) divided by 366 (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 Sterling Capital Variable Insurance Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds’ 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 1/1/12 | Ending Account Value 6/30/12 | Expenses Paid During Period 1/1/12 - 6/30/12* | Expense Ratio During Period 1/1/12 - 6/30/12 | |||||||||||||||||
Sterling Capital Select Equity VIF | $ | 1,000.00 | $ | 1,019.69 | $ | 5.22 | 1.04 | % | ||||||||||||
Sterling Capital Strategic Allocation Equity VIF | 1,000.00 | 1,021.33 | 3.57 | 0.71 | % | |||||||||||||||
Sterling Capital Special Opportunities VIF | 1,000.00 | 1,018.45 | 6.47 | 1.29 | % | |||||||||||||||
Sterling Capital Total Return Bond VIF | 1,000.00 | 1,019.29 | 5.62 | 1.12 | % |
* | Expenses are equal to the average account value times the Fund’s annualized expense ratio multiplied by 182 (the number of days in the most recent fiscal half-year) divided by 366 (the number of days in the fiscal year). Expenses shown do not include annuity contract fees. |
3
Sterling Capital Select Equity VIF |
Schedule of Portfolio Investments
June 30, 2012 (Unaudited)
Shares | Fair Value | |||||
COMMON STOCKS (99.7%) | ||||||
Consumer Discretionary (10.8%) | ||||||
13,650 | Comcast Corp., Class A | $ | 436,391 | |||
6,477 | DIRECTV, Class A(a) | 316,207 | ||||
6,630 | Lowe’s Cos., Inc. | 188,557 | ||||
4,940 | Target Corp. | 287,458 | ||||
2,805 | Time Warner Cable, Inc. | 230,291 | ||||
6,270 | Viacom, Inc., Class B | 294,815 | ||||
7,260 | Walt Disney Co. (The) | 352,110 | ||||
|
| |||||
2,105,829 | ||||||
|
| |||||
Consumer Staples (8.1%) | ||||||
3,660 | Coca-Cola Co. (The) | 286,175 | ||||
3,570 | CVS Caremark Corp. | 166,826 | ||||
2,225 | Kellogg Co. | 109,759 | ||||
3,000 | Kraft Foods, Inc., Class A | 115,860 | ||||
5,145 | PepsiCo, Inc. | 363,546 | ||||
1,680 | Philip Morris International, Inc. | 146,597 | ||||
4,515 | Procter & Gamble Co. (The) | 276,544 | ||||
1,500 | Wal-Mart Stores, Inc. | 104,580 | ||||
|
| |||||
1,569,887 | ||||||
|
| |||||
Energy (13.1%) | ||||||
5,460 | Anadarko Petroleum Corp. | 361,452 | ||||
9,800 | Cenovus Energy, Inc. | 311,640 | ||||
3,680 | Chevron Corp. | 388,240 | ||||
7,650 | Exxon Mobil Corp. | 654,611 | ||||
7,710 | Schlumberger, Ltd. | 500,456 | ||||
11,670 | Suncor Energy, Inc. | 337,847 | ||||
|
| |||||
2,554,246 | ||||||
|
| |||||
Financials (13.3%) | ||||||
1,590 | American Express Co. | 92,554 | ||||
5,100 | Berkshire Hathaway, Inc., Class B(a) | 424,983 | ||||
13,290 | JPMorgan Chase & Co. | 474,852 | ||||
11,445 | MetLife, Inc. | 353,078 | ||||
1,950 | T. Rowe Price Group, Inc. | 122,772 | ||||
4,320 | Travelers Cos., Inc. (The) | 275,789 | ||||
15,000 | Wells Fargo & Co. | 501,600 | ||||
15,450 | Weyerhaeuser Co., REIT | 345,462 | ||||
|
| |||||
2,591,090 | ||||||
|
| |||||
Health Care (13.2%) | ||||||
6,720 | Express Scripts Holding Co.(a) | 375,177 | ||||
4,920 | Johnson & Johnson | 332,395 | ||||
5,055 | Medtronic, Inc. | 195,780 | ||||
10,375 | Merck & Co., Inc. | 433,156 | ||||
14,145 | Pfizer, Inc. | 325,335 | ||||
7,800 | St. Jude Medical, Inc. | 311,298 | ||||
3,840 | Stryker Corp. | 211,584 | ||||
6,540 | UnitedHealth Group, Inc. | 382,590 | ||||
|
| |||||
2,567,315 | ||||||
|
| |||||
Industrials (11.5%) | ||||||
5,640 | Boeing Co. (The) | 419,052 | ||||
3,840 | FedEx Corp. | 351,782 | ||||
30,255 | General Electric Co. | 630,514 |
Shares | Fair Value | |||||
COMMON STOCKS — (continued) | ||||||
Industrials — (continued) | ||||||
6,620 | Honeywell International, Inc. | $ | 369,661 | |||
690 | Union Pacific Corp. | 82,324 | ||||
15,000 | Xylem, Inc. | 377,550 | ||||
|
| |||||
2,230,883 | ||||||
|
| |||||
Information Technology (25.2%) | ||||||
1,500 | Apple, Inc.(a) | 876,000 | ||||
25,710 | Cisco Systems, Inc. | 441,441 | ||||
18,109 | EMC Corp.(a) | 464,134 | ||||
762 | Google, Inc., Class A(a) | 442,013 | ||||
14,460 | Intel Corp. | 385,359 | ||||
1,680 | International Business Machines Corp. | 328,574 | ||||
21,750 | Microsoft Corp. | 665,333 | ||||
10,950 | Oracle Corp. | 325,215 | ||||
6,900 | QUALCOMM, Inc. | 384,192 | ||||
11,000 | TE Connectivity, Ltd. | 351,010 | ||||
8,160 | Texas Instruments, Inc. | 234,110 | ||||
|
| |||||
4,897,381 | ||||||
|
| |||||
Materials (2.3%) | ||||||
6,630 | Barrick Gold Corp. | 249,089 | ||||
3,705 | E.I. du Pont de Nemours & Co. | 187,362 | ||||
|
| |||||
436,451 | ||||||
|
| |||||
Telecommunication Services (2.2%) | ||||||
11,880 | AT&T, Inc. | 423,641 | ||||
|
| |||||
Total Common Stocks | 19,376,723 | |||||
|
| |||||
EXCHANGE TRADED FUNDS (0.2%) | ||||||
2,240 | Financial Select Sector SPDR Fund | 32,749 | ||||
195 | Utilities Select Sector SPDR Fund | 7,213 | ||||
|
| |||||
Total Exchange Traded Funds | 39,962 | |||||
|
| |||||
INVESTMENT COMPANY (0.2%) | ||||||
38,570 | Federated Treasury Obligations Fund, Institutional Shares | 38,570 | ||||
|
| |||||
Total Investment Company | 38,570 | |||||
|
| |||||
Total Investments — 100.1% | 19,455,255 | |||||
Net Other Assets (Liabilities) — (0.1)% | (19,014 | ) | ||||
|
| |||||
NET ASSETS — 100.0% | $ | 19,436,241 | ||||
|
|
(a) | Represents non-income producing security. |
REIT — Real Estate Investment Trust
SPDR — Standard and Poors Depositary Receipt
See accompanying notes to the financial statements.
4
Sterling Capital Strategic Allocation Equity VIF |
Schedule of Portfolio Investments
June 30, 2012 (Unaudited)
Shares | Fair Value | |||||
AFFILIATED INVESTMENT COMPANIES (50.6%) | ||||||
19,615 | Sterling Capital Equity Income Fund, | $ | 302,068 | |||
4,967 | Sterling Capital Equity Index Fund, | 45,303 | ||||
29,777 | Sterling Capital Mid Value Fund, | 410,024 | ||||
93,775 | Sterling Capital Select Equity Fund, | 1,131,860 | ||||
9,026 | Sterling Capital Small Value Fund, | 104,975 | ||||
35,586 | Sterling Capital Special Opportunities Fund, | 629,868 | ||||
117,078 | Sterling Capital U.S. Treasury Money Market Fund, Institutional Class | 117,078 | ||||
|
| |||||
Total Affiliated Investment Companies | 2,741,176 | |||||
|
| |||||
NON-AFFILIATED INVESTMENT COMPANIES (9.5%) | ||||||
29,635 | Credit Suisse Commodity Return Strategy Fund(a) | 231,452 | ||||
13,571 | Harding, Loevner International Equity Portfolio | 190,808 | ||||
2,425 | Lazard Emerging Markets Equity Portfolio | 44,118 | ||||
1,464 | Oppenheimer Developing Markets Fund | 45,882 | ||||
|
| |||||
Total Non-Affiliated Investment Companies | 512,260 | |||||
|
| |||||
EXCHANGE TRADED FUNDS (39.8%) | ||||||
3,879 | iShares Dow Jones US Real Estate Index Fund | 248,140 | ||||
10,906 | iShares MSCI EAFE Index Fund | 544,864 | ||||
4,333 | iShares MSCI EAFE Small Cap Index Fund | 156,595 | ||||
4,363 | iShares MSCI EAFE Value Index Fund | 185,253 | ||||
11,230 | iShares MSCI Emerging Markets Index Fund | 440,104 | ||||
2,036 | iShares Russell 2000 Index Fund | 162,167 | ||||
7,014 | iShares Russell Midcap Growth Index Fund | 415,159 | ||||
|
| |||||
Total Exchange Traded Funds | 2,152,282 | |||||
|
| |||||
Total Investments — 99.9% | 5,405,718 | |||||
Net Other Assets (Liabilities) — 0.1% | 5,542 | |||||
|
| |||||
NET ASSETS — 100.0% | $ | 5,411,260 | ||||
|
|
(a) | Represents non-income producing security. |
See accompanying notes to the financial statements.
5
Sterling Capital Special Opportunities VIF |
Schedule of Portfolio Investments
June 30, 2012 (Unaudited)
Shares | Fair Value | |||||
COMMON STOCKS (95.7%) | ||||||
Consumer Discretionary (11.2%) | ||||||
64,000 | Comcast Corp., Class A | $ | 2,046,080 | |||
50,000 | Ford Motor Co. | 479,500 | ||||
19,000 | Yum! Brands, Inc. | 1,223,980 | ||||
|
| |||||
3,749,560 | ||||||
|
| |||||
Consumer Staples (6.2%) | ||||||
90,000 | Dole Food Co., Inc.(a) | 790,200 | ||||
17,000 | Energizer Holdings, Inc.(a) | 1,279,250 | ||||
|
| |||||
2,069,450 | ||||||
|
| |||||
Energy (9.7%) | ||||||
15,000 | Apache Corp. | 1,318,350 | ||||
11,000 | Devon Energy Corp. | 637,890 | ||||
11,000 | EOG Resources, Inc. | 991,210 | ||||
10,000 | Halliburton Co. | 283,900 | ||||
|
| |||||
3,231,350 | ||||||
|
| |||||
Financials (5.9%) | ||||||
40,000 | Charles Schwab Corp. (The) | 517,200 | ||||
5,000 | CME Group, Inc. | 1,340,550 | ||||
15,500 | Och-Ziff Capital Management Group LLC, Class A | 117,490 | ||||
|
| |||||
1,975,240 | ||||||
|
| |||||
Health Care (20.4%) | ||||||
38,000 | Gilead Sciences, Inc.(a) | 1,948,640 | ||||
47,000 | Merck & Co., Inc. | 1,962,250 | ||||
34,000 | Teva Pharmaceutical Industries, Ltd., ADR | 1,340,960 | ||||
27,000 | UnitedHealth Group, Inc. | 1,579,500 | ||||
|
| |||||
6,831,350 | ||||||
|
| |||||
Industrials (2.4%) | ||||||
7,000 | FedEx Corp. | 641,270 | ||||
5,000 | Ryder System, Inc. | 180,050 | ||||
|
| |||||
821,320 | ||||||
|
| |||||
Information Technology (33.7%) | ||||||
150,000 | Activision Blizzard, Inc. | 1,798,500 |
Shares | Fair Value | |||||
COMMON STOCKS — (continued) | ||||||
Information Technology — (continued) | ||||||
50,000 | Adobe Systems, Inc.(a) | $ | 1,618,500 | |||
78,000 | Cisco Systems, Inc. | 1,339,260 | ||||
70,000 | Corning, Inc. | 905,100 | ||||
92,000 | Dell, Inc.(a) | 1,151,840 | ||||
46,000 | eBay, Inc.(a) | 1,932,460 | ||||
33,000 | Harris Corp. | 1,381,050 | ||||
19,000 | Intuit, Inc. | 1,127,650 | ||||
|
| |||||
11,254,360 | ||||||
|
| |||||
Materials (6.2%) | ||||||
26,000 | Newmont Mining Corp. | 1,261,260 | ||||
52,000 | Yamana Gold, Inc. | 800,800 | ||||
|
| |||||
2,062,060 | ||||||
|
| |||||
Total Common Stocks | 31,994,690 | |||||
|
| |||||
INVESTMENT COMPANY (3.6%) | ||||||
1,188,933 | Federated Treasury Obligations Fund, Institutional Shares | 1,188,933 | ||||
|
| |||||
Total Investment Company | 1,188,933 | |||||
|
| |||||
Total Investments — 99.3% | 33,183,623 | |||||
Net Other Assets (Liabilities) — 0.7% | 244,043 | |||||
|
| |||||
NET ASSETS — 100.0% | $ | 33,427,666 | ||||
|
|
(a) | Represents non-income producing security. |
ADR — American Depositary Receipt
See accompanying notes to the financial statements.
6
Sterling Capital Total Return Bond VIF |
Schedule of Portfolio Investments
June 30, 2012 (Unaudited)
Principal | Fair Value | |||||
ASSET BACKED SECURITIES (2.1%) | ||||||
$ 95,000 | American Express Credit Account Master Trust, | $ | 96,353 | |||
200,000 | Capital One Multi-Asset Execution Trust, | 199,897 | ||||
85,000 | MBNA Credit Card Master Note Trust, | 84,999 | ||||
|
| |||||
Total Asset Backed Securities | 381,249 | |||||
|
| |||||
COLLATERALIZED MORTGAGE | ||||||
98,842 | Adjustable Rate Mortgage Trust, | 95,857 | ||||
57,873 | Banc of America Alternative Loan Trust, | 56,728 | ||||
107,713 | Banc of America Funding Corp., | 100,536 | ||||
66,955 | Countrywide Alternative Loan Trust, | 66,424 | ||||
59,845 | Countrywide Home Loan Mortgage Pass Through Trust, | 61,702 | ||||
75,742 | Credit Suisse First Boston Mortgage Securities Corp., | 78,504 | ||||
158,490 | Fannie Mae, Series 2011-31, Class DA, 3.500%, 11/25/28(b) | 163,736 | ||||
59,443 | Fannie Mae, Series 2003-33, Class A, 4.000%, 5/25/33(b) | 64,682 | ||||
56,471 | Fannie Mae, Series 2003-33, Class AQ, 4.000%, 5/25/33(b) | 60,688 | ||||
158,663 | Fannie Mae, Series 2009-70, Class PA, 5.000%, 8/25/35(b) | 161,202 | ||||
79,464 | Fannie Mae, Series 2008-29, Class BG, 4.700%, 12/25/35(b) | 83,822 | ||||
39,041 | First Horizon Asset Securities, Inc., | 40,839 | ||||
52,928 | Freddie Mac, Series 2906, Class VC, 5.000%, 12/15/15(b) | 54,222 | ||||
40,170 | Freddie Mac, Series 3773, Class AL, 3.250%, 6/15/25(b) | 41,702 | ||||
63,163 | MASTR Alternative Loans Trust, Series 2004-13, Class 3A1, 6.500%, 1/25/35 | 64,153 | ||||
58,436 | RAAC, Series 2004-SP3, Class AI5, 4.890%, 12/25/32(a) | 59,040 | ||||
83,850 | Residential Accredit Loans, Inc., | 84,476 | ||||
53,069 | Residential Asset Securitization Trust, | 50,501 | ||||
138,356 | Structured Adjustable Rate Mortgage Loan Trust, | 128,754 | ||||
72,517 | Structured Asset Securities Corp., | 76,217 | ||||
40,716 | Structured Asset Securities Corp., | 41,309 | ||||
120,937 | Wells Fargo Mortgage Backed Securities Trust, | 107,053 | ||||
127,282 | Wells Fargo Mortgage Backed Securities Trust, | 119,454 |
Principal | Fair Value | |||||
COLLATERALIZED MORTGAGE OBLIGATIONS | ||||||
$ 44,777 | Wells Fargo Mortgage Backed Securities Trust, | $ | 46,052 | |||
|
| |||||
Total Collateralized Mortgage Obligations (Cost $1,886,548) | 1,907,653 | |||||
|
| |||||
COMMERCIAL MORTGAGE-BACKED | ||||||
14,000 | Banc of America Merrill Lynch Commercial Mortgage, Inc., | 15,304 | ||||
89,000 | Banc of America Merrill Lynch Commercial Mortgage, Inc., | 93,778 | ||||
100,000 | Banc of America Merrill Lynch Commercial Mortgage, Inc., | 112,901 | ||||
153,000 | Banc of America Merrill Lynch Commercial Mortgage, Inc., | 169,315 | ||||
29,348 | Banc of America Merrill Lynch Commercial Mortgage, Inc., | 30,395 | ||||
150,000 | Bear Stearns Commercial Mortgage Securities, | 162,694 | ||||
40,000 | Bear Stearns Commercial Mortgage Securities, | 42,699 | ||||
95,000 | Citigroup/Deutsche Bank Commercial Mortgage Trust, | 102,587 | ||||
95,000 | Citigroup/Deutsche Bank Commercial Mortgage Trust, | 107,543 | ||||
90,000 | Credit Suisse First Boston Mortgage Securities Corp., | 90,167 | ||||
139,000 | Credit Suisse First Boston Mortgage Securities Corp., | 142,554 | ||||
155,000 | Credit Suisse Mortgage Capital Certificates, | 171,609 | ||||
101,000 | DBUBS Mortgage Trust, Series 2011-LC2A, | 110,332 | ||||
100,000 | LB-UBS Commercial Mortgage Trust, | 107,015 | ||||
62,000 | LB-UBS Commercial Mortgage Trust, | 65,000 | ||||
150,000 | LB-UBS Commercial Mortgage Trust, | 169,231 | ||||
28,000 | Merrill Lynch/Countrywide Commercial Mortgage Trust, | 28,916 | ||||
80,000 | Morgan Stanley Capital I, | 85,810 | ||||
220,000 | Morgan Stanley Capital I, Inc., | 240,946 | ||||
119,000 | Wachovia Bank Commercial Mortgage Trust, | 129,020 |
Continued
7
Sterling Capital Total Return Bond VIF |
Schedule of Portfolio Investments — (continued)
June 30, 2012 (Unaudited)
Principal | Fair Value | |||||
COMMERCIAL MORTGAGE-BACKED | ||||||
$ 57,388 | Wachovia Bank Commercial Mortgage Trust, Series 2007-C30, Class A3, 5.246%, 12/15/43 | $ | 59,435 | |||
|
| |||||
Total Commercial Mortgage-Backed Securities | 2,237,251 | |||||
|
| |||||
CORPORATE BONDS (25.5%) | ||||||
Consumer Discretionary (2.5%) | ||||||
33,000 | CBS Corp., 8.875%, 5/15/19(d) | 43,639 | ||||
96,000 | Comcast Cable Communications Holdings, Inc., 9.455%, 11/15/22(d) | 139,749 | ||||
37,000 | Delphi Corp., 5.875%, 5/15/19 | 39,498 | ||||
38,000 | DIRECTV Holdings LLC, 6.000%, 8/15/40 | 41,409 | ||||
31,000 | Home Depot, Inc. (The), 5.875%, 12/16/36 | 39,687 | ||||
27,000 | NBCUniversal Media LLC, 5.950%, 4/1/41 | 31,873 | ||||
55,000 | Toyota Motor Credit Corp., MTN, 1.750%, 5/22/17 | 55,446 | ||||
33,000 | Wyndham Worldwide Corp., 5.625%, 3/1/21 | 35,931 | ||||
24,000 | Wyndham Worldwide Corp., 4.250%, 3/1/22 | 24,167 | ||||
|
| |||||
451,399 | ||||||
|
| |||||
Consumer Staples (1.5%) | ||||||
25,000 | Altria Group, Inc., 9.950%, 11/10/38 | 39,752 | ||||
19,000 | Anheuser-Busch InBev Worldwide, Inc., 6.375%, 1/15/40 | 25,987 | ||||
33,000 | Beam, Inc., 3.250%, 5/15/22 | 33,190 | ||||
26,000 | Coca-Cola Co. (The), 3.150%, 11/15/20 | 27,856 | ||||
38,000 | CVS Caremark Corp., 6.125%, 9/15/39 | 47,233 | ||||
27,000 | Flowers Foods, Inc., 4.375%, 4/1/22 | 27,287 | ||||
30,000 | Kraft Foods Group, Inc., 3.500%, 6/6/22(c) | 30,785 | ||||
37,000 | Wal-Mart Stores, Inc., 5.625%, 4/15/41(d) | 48,154 | ||||
|
| |||||
280,244 | ||||||
|
| |||||
Energy (3.8%) | ||||||
54,000 | BP Capital Markets PLC, 3.200%, 3/11/16(d) | 57,435 | ||||
25,000 | Canadian Oil Sands, Ltd., 4.500%, 4/1/22(c) | 25,917 | ||||
28,000 | Devon Energy Corp., 3.250%, 5/15/22(d) | 28,487 | ||||
51,000 | Energy Transfer Partners LP, 9.000%, 4/15/19(d) | 63,698 | ||||
40,000 | Enterprise Products Operating LLC, 5.950%, 2/1/41 | 45,234 | ||||
25,000 | Halliburton Co., 4.500%, 11/15/41 | 26,216 | ||||
43,000 | Kinder Morgan Energy Partners LP, 3.950%, 9/1/22 | 43,564 | ||||
32,000 | NuStar Logistics LP, 7.650%, 4/15/18(d) | 37,286 | ||||
36,000 | Occidental Petroleum Corp., 1.750%, 2/15/17 | 36,607 | ||||
51,000 | Petrobras International Finance Co., 3.500%, 2/6/17(d) | 52,351 | ||||
30,000 | Phillips 66, 4.300%, 4/1/22(c) | 31,559 | ||||
25,000 | Pioneer Natural Resources Co., 3.950%, 7/15/22 | 25,060 | ||||
41,000 | Schlumberger Investment SA, 3.300%, 9/14/21(c)(d) | 42,955 | ||||
42,000 | Statoil ASA, 3.150%, 1/23/22(d) | 43,833 | ||||
30,000 | Talisman Energy, Inc., 5.500%, 5/15/42 | 30,815 | ||||
30,000 | Western Gas Partners LP, 4.000%, 7/1/22 | 30,000 | ||||
54,000 | Williams Partners LP, 7.250%, 2/1/17 | 64,703 | ||||
|
| |||||
685,720 | ||||||
|
|
Principal | Fair Value | |||||
CORPORATE BONDS — (continued) | ||||||
Financials (10.1%) | ||||||
$ 31,000 | Aflac, Inc., 8.500%, 5/15/19 | $ | 40,468 | |||
33,000 | Alexandria Real Estate Equities, Inc., REIT, 4.600%, 4/1/22 | 33,789 | ||||
30,000 | Alleghany Corp., 4.950%, 6/27/22 | 30,568 | ||||
37,000 | American International Group, Inc., 3.800%, 3/22/17 | 37,717 | ||||
44,000 | Bank of America Corp., 5.700%, 1/24/22 | 48,457 | ||||
29,000 | Bank of New York Mellon Corp. (The), STEP, 1.969%, 6/20/17 | 29,340 | ||||
35,000 | Berkshire Hathaway, Inc., 2.200%, 8/15/16(d) | 36,413 | ||||
31,000 | BlackRock, Inc., 3.375%, 6/1/22 | 31,457 | ||||
19,000 | CIT Group, Inc., 4.750%, 2/15/15(c) | 19,451 | ||||
47,989 | CIT Group, Inc., 7.000%, 5/2/17(c) | 48,079 | ||||
40,000 | Citigroup, Inc., 5.875%, 1/30/42 | 43,687 | ||||
49,000 | Colonial Realty LP, 6.250%, 6/15/14(d) | 51,884 | ||||
23,000 | Cooperatieve Centrale Raiffeisen- Boerenleenbank BA, 3.875%, 2/8/22 | 23,396 | ||||
27,000 | Credit Suisse, 5.400%, 1/14/20 | 28,082 | ||||
31,000 | CubeSmart LP, REIT, 4.800%, 7/15/22 | 31,338 | ||||
38,000 | Eksportfinans ASA, GMTN, 1.875%, 4/2/13 | 37,242 | ||||
68,000 | Ford Motor Credit Co. LLC, 7.000%, 4/15/15(d) | 75,574 | ||||
89,000 | General Electric Capital Corp., 2.950%, 5/9/16(d) | 91,842 | ||||
52,000 | General Electric Capital Corp., GMTN, 6.875%, 1/10/39(d) | 67,087 | ||||
33,000 | Goldman Sachs Group, Inc. (The), 5.750%, 1/24/22 | 34,835 | ||||
45,000 | Health Care REIT, Inc., 4.125%, 4/1/19(d) | 45,709 | ||||
25,000 | ING Bank NV, 4.000%, 3/15/16(c) | 25,170 | ||||
35,000 | Jefferies Group, Inc., 8.500%, 7/15/19 | 37,975 | ||||
48,000 | John Deere Capital Corp., MTN, 1.850%, 9/15/16(d) | 49,131 | ||||
95,000 | JPMorgan Chase & Co., 4.350%, 8/15/21(d) | 100,263 | ||||
47,000 | KeyCorp, MTN, 5.100%, 3/24/21 | 52,420 | ||||
25,000 | Kimco Realty Corp., REIT, MTN, 5.783%, 3/15/16 | 27,478 | ||||
25,000 | Macquarie Bank, Ltd., 6.625%, 4/7/21(c) | 25,067 | ||||
66,000 | Merrill Lynch & Co., Inc., MTN, 6.875%, 4/25/18(d) | 73,850 | ||||
24,000 | MetLife, Inc., 6.750%, 6/1/16 | 28,142 | ||||
64,000 | Morgan Stanley, 5.375%, 10/15/15(e) | 65,422 | ||||
36,000 | Morgan Stanley, MTN, 6.625%, 4/1/18(d) | 37,640 | ||||
47,000 | Murray Street Investment Trust I, STEP, 4.647%, 3/9/17(d) | 47,091 | ||||
32,000 | National Rural Utilities Cooperative Finance Corp., 10.375%, 11/1/18 | 46,368 | ||||
31,000 | PNC Funding Corp., 2.700%, 9/19/16 | 32,127 | ||||
24,000 | Prudential Financial, Inc., 8.875%, 6/15/38(a) | 28,500 | ||||
96,000 | Scottrade Financial Services, Inc., 6.125%, 7/11/21(c)(d) | 97,492 | ||||
41,000 | Simon Property Group LP, REIT, 10.350%, 4/1/19(d) | 57,515 | ||||
30,000 | SL Green Realty Corp., REIT, 5.000%, 8/15/18(d) | 30,429 | ||||
28,000 | SunTrust Banks, Inc., 3.500%, 1/20/17 | 28,986 | ||||
70,000 | Wachovia Corp., 5.625%, 10/15/16 | 78,907 | ||||
|
| |||||
1,856,388 | ||||||
|
| |||||
Health Care (1.5%) | ||||||
26,000 | Cigna Corp., 5.375%, 2/15/42 | 27,664 |
Continued
8
Sterling Capital Total Return Bond VIF |
Schedule of Portfolio Investments — (continued)
June 30, 2012 (Unaudited)
Principal | Fair Value | |||||
CORPORATE BONDS — (continued) |
| |||||
Health Care — (continued) | ||||||
$ 42,000 | DENTSPLY International, Inc., 2.750%, 8/15/16(d) | $ | 42,702 | |||
28,000 | Fresenius US Finance II, Inc., 9.000%, 7/15/15(c) | 32,165 | ||||
17,000 | Gilead Sciences, Inc., 5.650%, 12/1/41 | 19,816 | ||||
28,000 | Mylan, Inc., 7.625%, 7/15/17(c) | 30,800 | ||||
47,000 | Teva Pharmaceutical Finance IV, BV, 3.650%, 11/10/21(d) | 49,434 | ||||
27,000 | Thermo Fisher Scientific, Inc., 2.250%, 8/15/16 | 27,923 | ||||
42,000 | UnitedHealth Group, Inc., 4.625%, 11/15/41(d) | 45,137 | ||||
|
| |||||
275,641 | ||||||
|
| |||||
Industrials (2.3%) | ||||||
32,000 | ADT Corp. (The), 4.875%, 7/15/42(c)(e) | 31,347 | ||||
52,000 | Burlington Northern Santa Fe LLC, 4.950%, 9/15/41 | 56,570 | ||||
47,000 | Corrections Corp. of America, 7.750%, 6/1/17(d) | 50,878 | ||||
65,000 | George Washington University (The), 3.485%, 9/15/22 | 68,452 | ||||
44,000 | Penske Truck Leasing Co. LP, 3.125%, 5/11/15(c) | 44,263 | ||||
30,000 | Republic Services, Inc., 3.550%, 6/1/22 | 30,324 | ||||
36,000 | Textron, Inc., 4.625%, 9/21/16 | 38,857 | ||||
30,000 | URS Corp., 5.000%, 4/1/22(c) | 29,633 | ||||
35,000 | Verisk Analytics, Inc., 5.800%, 5/1/21(d) | 39,063 | ||||
25,000 | Waste Management, Inc., 7.375%, 3/11/19 | 31,560 | ||||
|
| |||||
420,947 | ||||||
|
| |||||
Information Technology (0.3%) | ||||||
18,000 | Altera Corp., 1.750%, 5/15/17 | 18,133 | ||||
30,000 | Oracle Corp., 5.375%, 7/15/40 | 36,757 | ||||
|
| |||||
54,890 | ||||||
|
| |||||
Materials (1.1%) | ||||||
19,000 | Bemis Co., Inc., 4.500%, 10/15/21 | 20,505 | ||||
43,000 | Dow Chemical Co. (The), 4.250%, 11/15/20 | 46,649 | ||||
25,000 | Ecolab, Inc., 5.500%, 12/8/41 | 29,995 | ||||
31,000 | Freeport-McMoRan Copper & Gold, Inc., 3.550%, 3/1/22 | 30,500 | ||||
23,000 | Newmont Mining Corp., 4.875%, 3/15/42 | 22,427 | ||||
29,000 | Rock-Tenn Co., 4.900%, 3/1/22(c) | 29,876 | ||||
29,000 | Sealed Air Corp., 6.875%, 7/15/33(c)(d) | 27,840 | ||||
|
| |||||
207,792 | ||||||
|
| |||||
Telecommunication Services (1.0%) | ||||||
24,000 | AT&T, Inc., 5.550%, 8/15/41 | 28,607 | ||||
52,000 | Crown Castle International Corp., 9.000%, 1/15/15(d) | 56,745 | ||||
27,000 | Telefonica Emisiones SAU, 5.134%, 4/27/20(d) | 23,257 | ||||
57,000 | Verizon Communications, Inc., 6.350%, 4/1/19(d) | 71,050 | ||||
|
| |||||
179,659 | ||||||
|
| |||||
Utilities (1.4%) | ||||||
33,000 | Consumers Energy Co., 2.850%, 5/15/22 | 33,569 | ||||
55,000 | Duke Energy Carolinas LLC, 6.100%, 6/1/37 | 71,991 | ||||
15,000 | PSEG Power LLC, 5.500%, 12/1/15 | 16,802 | ||||
22,000 | PSEG Power LLC, 2.750%, 9/15/16 | 22,375 | ||||
30,000 | Puget Energy, Inc., 5.625%, 7/15/22(c) | 30,825 | ||||
56,000 | Southern Co. (The), 1.950%, 9/1/16(d) | 57,351 |
Principal | Fair Value | |||||
CORPORATE BONDS — (continued) |
| |||||
Utilities — (continued) | ||||||
$ 28,000 | Virginia Electric and Power Co., 2.950%, 1/15/22 | $ | 28,846 | |||
|
| |||||
261,759 | ||||||
|
| |||||
Total Corporate Bonds | 4,674,439 | |||||
|
| |||||
MORTGAGE-BACKED SECURITIES (37.4%) | ||||||
Fannie Mae(b) (16.3%) | ||||||
10,089 | 4.500%, 10/1/18, Pool #752030 | 10,864 | ||||
17,401 | 5.000%, 10/1/25, Pool #255894 | 19,034 | ||||
105,525 | 4.000%, 12/1/25, Pool #AH0973 | 112,292 | ||||
180,053 | 3.500%, 6/1/26, Pool #AB3171 | 190,449 | ||||
14,213 | 5.500%, 2/1/27, Pool #256600 | 15,546 | ||||
251,502 | 3.000%, 3/1/27, Pool #AK7410 | 263,944 | ||||
173,325 | 4.000%, 6/1/32, Pool #MA1089 | 186,658 | ||||
13,096 | 6.000%, 9/1/34, Pool #790912 | 14,616 | ||||
5,553 | 7.000%, 6/1/35, Pool #255820 | 6,465 | ||||
32,511 | 5.000%, 11/1/35, Pool #842402 | 35,276 | ||||
35,111 | 6.000%, 12/1/36, Pool #902054 | 38,693 | ||||
99,422 | 6.000%, 7/1/37, Pool #940807 | 109,563 | ||||
224,712 | 5.500%, 8/1/37, Pool #995082 | 246,904 | ||||
29,891 | 5.500%, 7/1/38, Pool #934323 | 32,619 | ||||
85,778 | 4.500%, 6/1/40, Pool #AD6432 | 92,319 | ||||
71,475 | 5.000%, 6/1/40, Pool #AD4927 | 77,732 | ||||
66,037 | 5.000%, 6/1/40, Pool #AD7860 | 71,818 | ||||
69,408 | 4.500%, 8/1/40, Pool #AE2305 | 74,701 | ||||
78,125 | 5.000%, 9/1/40, Pool #AE0530 | 84,574 | ||||
102,322 | 4.000%, 3/1/41, Pool #AH7283 | 109,106 | ||||
160,684 | 4.000%, 3/1/41, Pool #AH8824 | 171,337 | ||||
78,347 | 4.500%, 3/1/41, Pool #AH8825 | 84,468 | ||||
144,659 | 4.500%, 5/1/41, Pool #AI1023 | 155,961 | ||||
180,857 | 4.500%, 5/1/41, Pool #AI1859 | 194,987 | ||||
242,851 | 4.000%, 1/1/42, Pool #AK0685 | 260,468 | ||||
179,428 | 4.000%, 2/1/42, Pool #MA0971 | 192,443 | ||||
114,000 | 4.500%, 7/15/42(e) | 122,283 | ||||
|
| |||||
2,975,120 | ||||||
|
| |||||
Freddie Mac(b) (15.8%) | ||||||
17,305 | 6.000%, 10/1/19, Pool #G11679 | 18,337 | ||||
8,851 | 5.500%, 10/1/21, Pool #G12425 | 9,659 | ||||
248,914 | 4.000%, 9/1/25, Pool #J12911 | 263,203 | ||||
148,320 | 3.000%, 3/1/27, Pool #E03077 | 155,408 | ||||
354,119 | 3.000%, 4/1/27, Pool #E03091 | 372,036 | ||||
90,927 | 2.500%, 5/1/27, Pool #G14433 | 93,666 | ||||
181,789 | 3.500%, 4/1/32, Pool #C91437 | 192,344 | ||||
312,073 | 3.500%, 5/1/32, Pool #C91447 | 330,192 | ||||
13,652 | 5.500%, 7/1/35, Pool #A36540 | 14,928 | ||||
6,372 | 6.000%, 7/1/35, Pool #A36304 | 7,021 | ||||
18,694 | 5.500%, 2/1/36, Pool #G08111 | 20,377 | ||||
30,011 | 5.500%, 4/1/37, Pool #G08192 | 32,656 | ||||
126,236 | 5.500%, 5/1/37, Pool #G03240 | 137,598 | ||||
17,560 | 5.000%, 6/1/37, Pool #G03094 | 18,876 | ||||
83,763 | 6.000%, 8/1/37, Pool #A64401 | 92,267 | ||||
50,263 | 6.000%, 8/1/37, Pool #A64981 | 55,162 | ||||
57,836 | 6.500%, 12/1/37, Pool #A69955 | 64,941 | ||||
31,107 | 5.500%, 10/1/38, Pool #G04814 | 33,848 | ||||
130,975 | 4.500%, 1/1/40, Pool #A90764 | 139,939 | ||||
276,121 | 5.500%, 1/1/40, Pool #G06021 | 300,456 | ||||
127,792 | 3.793%, 7/1/40, Pool #1B4948(a) | 135,318 | ||||
206,761 | 5.000%, 7/1/40, Pool #A93070 | 224,070 |
Continued
9
Sterling Capital Total Return Bond VIF |
Schedule of Portfolio Investments — (continued)
June 30, 2012 (Unaudited)
Principal Amount | Fair Value | |||||
MORTGAGE-BACKED SECURITIES — (continued) | ||||||
Freddie Mac(b) — (continued) | ||||||
$ 60,405 | 5.000%, 7/1/40, Pool #C03487 | $ | 65,462 | |||
115,702 | 4.000%, 9/1/40, Pool #A93643 | 122,939 | ||||
|
| |||||
2,900,703 | ||||||
|
| |||||
Ginnie Mae (5.3%) | ||||||
199,949 | 5.500%, 1/15/39, Pool #646685 | 222,004 | ||||
34,125 | 4.500%, 3/15/39, Pool #697957 | 37,377 | ||||
110,238 | 4.500%, 2/15/40, Pool #737031 | 120,916 | ||||
66,691 | 5.000%, 2/15/40, Pool #737037 | 73,628 | ||||
235,842 | 4.500%, 9/20/40, Pool #4801 | 260,592 | ||||
234,000 | 5.000%, 7/15/41(e) | 257,473 | ||||
|
| |||||
971,990 | ||||||
|
| |||||
Total Mortgage-Backed Securities | 6,847,813 | |||||
|
| |||||
MUNICIPAL BONDS (8.9%) |
| |||||
California (2.0%) | ||||||
65,000 | California, Build America Bonds, School Improvements G.O., Taxable, 7.625%, 3/1/40 | 83,952 | ||||
30,000 | Los Angeles Harbor Department Refunding Revenue, Series A, Callable 8/1/12 @ 100 (AMBAC), 5.500%, 8/1/14 | 30,139 | ||||
220,000 | Metropolitan Water District of Southern California, Build America Bonds, Water Utility Improvements Revenue, Callable 7/1/19 @ 100, 6.538%, 7/1/39 | 255,424 | ||||
|
| |||||
369,515 | ||||||
|
| |||||
District of Columbia (0.4%) | ||||||
60,000 | District of Columbia, Income Tax Secured Revenue, Refunding, Series A, Callable 12/1/22 @ 100, 5.000%, 12/1/23 | 74,596 | ||||
|
| |||||
Illinois (0.7%) | ||||||
130,000 | Illinois State, Sales Tax Revenue, Taxable Building, 2.931%, 6/15/22 | 131,776 | �� | |||
|
| |||||
New Mexico (0.3%) | ||||||
50,000 | New Mexico, Public Improvements Revenue, Series A1, 5.000%, 7/1/15 | 56,559 | ||||
|
| |||||
New York (2.4%) | ||||||
95,000 | New York City Municipal Water Finance Authority Revenue, Build America Bonds Taxable, Series EE, Refunding Notes, Callable 6/15/20 @ 100, 6.491%, 6/15/42 | 109,319 | ||||
100,000 | New York State Environmental Facilities Corp., Revenue Bonds, Taxable, State Revolving Funds, Series C, 2.745%, 6/15/22 | 99,869 | ||||
155,000 | New York, Build America Bonds, Public Improvements G.O., 4.774%, 3/1/20 | 179,464 | ||||
39,000 | New York, Refunding G.O., Series E, Callable 2/1/22 @ 100, 5.000%, 8/1/23 | 46,945 | ||||
|
| |||||
435,597 | ||||||
|
| |||||
North Carolina (0.2%) | ||||||
25,000 | Raleigh, Public Improvements G.O., Series B, 5.000%, 4/1/22 | 31,968 | ||||
|
| |||||
Texas (1.8%) | ||||||
50,000 | Garland, Refunding G.O., Independent School District (Permanent School Fund Guaranteed), 5.000%, 2/15/21 | 62,366 |
Principal Amount | Fair Value | |||||
MUNICIPAL BONDS — (continued) | ||||||
Texas — (continued) | ||||||
$ 119,000 | Houston, Refunding, Public Improvements G.O., Series A, 5.000%, 3/1/21 | $ | 146,704 | |||
95,000 | San Antonio, Electric & Gas Revenue, Refunding Bonds, 5.000%, 2/1/23 | 119,023 | ||||
|
| |||||
328,093 | ||||||
|
| |||||
Virginia (0.6%) | ||||||
80,000 | Virginia, Commonwealth Transportation Board, Transportation Revenue, Capital Projects, 5.000%, 5/15/22 | 100,491 | ||||
|
| |||||
Washington (0.5%) | ||||||
80,000 | Washington State, Refunding G.O., Motor Vehicle, Series R-2012D, 5.000%, 7/1/22 | 100,305 | ||||
|
| |||||
Total Municipal Bonds | 1,628,900 | |||||
|
| |||||
U.S. TREASURY BONDS (1.6%) | ||||||
282,000 | 3.125%, 2/15/42 | 302,885 | ||||
|
| |||||
Total U.S. Treasury Bonds | 302,885 | |||||
|
| |||||
U.S. TREASURY NOTES (1.8%) | ||||||
277,583 | 0.625%, 4/15/13(f) | 278,038 | ||||
46,000 | 1.750%, 5/15/22 | 46,374 | ||||
|
| |||||
Total U.S. Treasury Notes | 324,412 | |||||
|
| |||||
Shares | ||||||
PREFERRED STOCKS (1.7%) | ||||||
Consumer Staples (0.6%) | ||||||
1 | HJ Heinz Finance Co., Series B, 8.000%(c) | 107,313 | ||||
|
| |||||
Financials (1.0%) | ||||||
2,059 | Citigroup Capital XIII, 7.875% | 56,190 | ||||
1,249 | Fifth Third Capital Trust VI, 7.250% | 31,887 | ||||
1,505 | Kimco Realty Corp., REIT, Series G, 7.750% | 38,603 | ||||
1,850 | US Bancorp, Series F, 6.500% | 52,873 | ||||
|
| |||||
179,553 | ||||||
|
| |||||
Telecommunication Services (0.1%) | ||||||
960 | Qwest Corp., 7.000% | 24,576 | ||||
|
| |||||
Total Preferred Stocks | 311,442 | |||||
|
| |||||
INVESTMENT COMPANY (0.0%) | ||||||
5,316 | Federated Treasury Obligations Fund, Institutional Shares | 5,316 | ||||
|
| |||||
Total Investment Company | 5,316 | |||||
|
|
Total Investments — 101.6% | 18,621,360 | |||||||
Net Other Assets (Liabilities) — (1.6)% | (288,478 | ) | ||||||
|
| |||||||
NET ASSETS — 100.0% | $ | 18,332,882 | ||||||
|
|
Continued
10
Sterling Capital Total Return Bond VIF |
Schedule of Portfolio Investments — (continued)
June 30, 2012 (Unaudited)
(a) | 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, 2012. The maturity date reflected is the final maturity date. |
(b) | 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. |
(c) | Rule 144A, Section 4(2) or other security which is restricted as to resale to qualified institutional investors. The Investment Advisor, using Board approved procedures, has deemed these securities or a portion of these securities to be liquid. |
(d) | Represents that all or a portion of the security was pledged as collateral for |
securities purchased on a when-issued basis. |
(e) | Represents securities purchased on a when-issued basis. At June 30, 2012, total cost of investments purchased on a when-issued basis was $439,928. |
(f) | Inflation protection security. Principal amount periodically adjusted for inflation. |
AMBAC — American Municipal Bond Insurance Corp.
G.O. — General Obligation
GMTN — Global Medium Term Note
MTN — Medium Term Note
REIT — Real Estate Investment Trust
STEP — Step Coupon Bond
See accompanying notes to the financial statements.
11
Sterling Capital Variable Insurance Funds |
Statements of Assets and Liabilities
June 30, 2012 (Unaudited)
Sterling Capital Select Equity VIF | Sterling Capital Strategic Allocation Equity VIF | Sterling Capital Special Opportunities VIF | Sterling Capital Total Return Bond VIF | |||||||||||||
Assets: | ||||||||||||||||
Investments: | ||||||||||||||||
Investments - unaffiliated, at cost | $ | 15,960,666 | $ | 2,503,811 | $ | 27,996,654 | $ | 17,994,737 | ||||||||
Investments - affiliated, at cost | — | 2,362,263 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investments, at cost | 15,960,666 | 4,866,074 | 27,996,654 | 17,994,737 | ||||||||||||
Unrealized appreciation (depreciation) | 3,494,589 | 539,644 | 5,186,969 | 626,623 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Investments, at value | 19,455,255 | 5,405,718 | 33,183,623 | 18,621,360 | ||||||||||||
Interest and dividends receivable | 23,672 | 1,689 | 34,402 | 118,412 | ||||||||||||
Receivable for investments sold | 258,405 | — | 174,298 | 266,926 | ||||||||||||
Receivable for capital shares issued | — | 8,878 | 78,318 | — | ||||||||||||
Prepaid expenses | 8,535 | 2,295 | 14,742 | 7,893 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Assets | 19,745,867 | 5,418,580 | 33,485,383 | 19,014,591 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Liabilities: | ||||||||||||||||
Payable for investments purchased | 200,657 | — | — | 514,950 | ||||||||||||
Payable for capital shares redeemed | 79,898 | 381 | 2,441 | 142,453 | ||||||||||||
Accrued expenses and other payables: | ||||||||||||||||
Investment advisory fees | 9,351 | 1,079 | 21,674 | 7,619 | ||||||||||||
Administration fees | 1,605 | — | 2,755 | 1,533 | ||||||||||||
Audit fees | 9,450 | 2,528 | 15,953 | 8,053 | ||||||||||||
Compliance service fees | 26 | 7 | 47 | 24 | ||||||||||||
Trustee fees | 34 | 11 | 68 | 42 | ||||||||||||
Legal fees | 2,405 | 657 | 4,035 | 2,141 | ||||||||||||
Printing fees | 4,252 | 1,839 | 6,918 | 3,713 | ||||||||||||
Transfer agent fees | 1,472 | 405 | 2,524 | 1,125 | ||||||||||||
Other fees | 476 | 413 | 1,302 | 56 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Liabilities | 309,626 | 7,320 | 57,717 | 681,709 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net Assets: | $ | 19,436,241 | $ | 5,411,260 | $ | 33,427,666 | $ | 18,332,882 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net Assets Consist of: | ||||||||||||||||
Capital | $ | 37,773,355 | $ | 10,907,266 | $ | 26,081,148 | $ | 16,575,666 | ||||||||
Accumulated undistributed net investment income | 10,821 | 9,398 | 42,275 | 375,659 | ||||||||||||
Accumulated realized gain (loss) | (21,842,524 | ) | (6,045,048 | ) | 2,117,274 | 754,934 | ||||||||||
Net unrealized appreciation (depreciation) | 3,494,589 | 539,644 | 5,186,969 | 626,623 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net Assets | $ | 19,436,241 | $ | 5,411,260 | $ | 33,427,666 | $ | 18,332,882 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Shares of Beneficial Interest Outstanding | ||||||||||||||||
(Unlimited number of shares authorized, no par value) | 2,241,028 | 840,693 | 2,066,994 | 1,698,500 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net Asset Value - offering and redemption price per share | $ | 8.67 | $ | 6.44 | $ | 16.17 | $ | 10.79 | ||||||||
|
|
|
|
|
|
|
|
See accompanying notes to the financial statements.
12
Sterling Capital Variable Insurance Funds |
Statements of Operations
For the Six Months Ended June 30, 2012 (Unaudited)
Sterling Capital Select Equity VIF | Sterling Capital Strategic Allocation Equity VIF | Sterling Capital Special Opportunities VIF | Sterling Capital Total Return Bond VIF | |||||||||||||
Investment Income: | ||||||||||||||||
Interest income | $ | — | $ | — | $ | — | $ | 332,367 | ||||||||
Dividend income - unaffiliated | 208,347 | 33,299 | 273,205 | 12,132 | ||||||||||||
Dividend income - affiliated | — | 10,452 | — | — | ||||||||||||
Foreign taxes withheld | (1,561 | ) | — | (5,289 | ) | — | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investment income | 206,786 | 43,751 | 267,916 | 344,499 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Expenses: | ||||||||||||||||
Investment advisory fees (See Note 5) | 76,327 | 7,093 | 142,936 | 53,058 | ||||||||||||
Administration fees (See Note 5) | 10,590 | — | 18,073 | 9,461 | ||||||||||||
Audit fees | 9,449 | 2,525 | 15,946 | 8,160 | ||||||||||||
Compliance service fees (See Note 5) | 121 | 33 | 206 | 107 | ||||||||||||
Custodian fees | 901 | 222 | 1,273 | 836 | ||||||||||||
Fund accounting fees (See Note 5) | 1,049 | 284 | 1,787 | 936 | ||||||||||||
Insurance fees | 10,090 | 2,708 | 17,427 | 9,331 | ||||||||||||
Legal fees | 5,833 | 1,535 | 9,833 | 5,107 | ||||||||||||
Printing fees | 5,622 | 2,260 | 9,239 | 5,218 | ||||||||||||
Transfer agent fees (See Note 5) | 4,005 | 1,081 | 6,780 | 3,383 | ||||||||||||
Trustee fees | 926 | 249 | 1,574 | 823 | ||||||||||||
Other fees | 4,497 | 2,243 | 5,317 | 15,119 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total expenses before waivers | 129,410 | 20,233 | 230,391 | 111,539 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Less expenses waived by the Investment Advisor (See Note 5) | (20,629 | ) | — | — | (6,260 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net expenses | 108,781 | 20,233 | 230,391 | 105,279 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net investment income | 98,005 | 23,518 | 37,525 | 239,220 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Realized and Unrealized Gain: | ||||||||||||||||
Net realized gain from: | ||||||||||||||||
Investment transactions - unaffiliated | 672,111 | 106,981 | 752,445 | 279,076 | ||||||||||||
Investment transactions - affiliated | — | 51,364 | — | — | ||||||||||||
Change in unrealized appreciation/depreciation on: | ||||||||||||||||
Investments | 1,140,911 | 108,522 | 1,137,967 | 94,759 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net realized and unrealized gain | 1,813,022 | 266,867 | 1,890,412 | 373,835 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Change in net assets from operations | $ | 1,911,027 | $ | 290,385 | $ | 1,927,937 | $ | 613,055 | ||||||||
|
|
|
|
|
|
|
|
See accompanying notes to the financial statements.
13
Sterling Capital Variable Insurance Funds |
Statements of Changes in Net Assets
Sterling Capital Select Equity VIF | Sterling Capital Strategic Allocation Equity VIF | |||||||||||||||
For the Six Months Ended June 30, 2012 (Unaudited) | For the Year Ended December 31, 2011 | For the Six Months Ended June 30, 2012 (Unaudited) | For the Year Ended December 31, 2011 | |||||||||||||
From Investment Activities: | ||||||||||||||||
Operations: | ||||||||||||||||
Net investment income (loss) | $ | 98,005 | $ | 272,072 | $ | 23,518 | $ | 52,995 | ||||||||
Net realized gain | 672,111 | 594,772 | 158,345 | 81,981 | ||||||||||||
Change in unrealized appreciation/depreciation | 1,140,911 | (1,778,016 | ) | 108,522 | (569,273 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Change in net assets from operations | 1,911,027 | (911,172 | ) | 290,385 | (434,297 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Distributions to Shareholders: | ||||||||||||||||
Net investment income | (87,184 | ) | (264,006 | ) | (17,044 | ) | (50,968 | ) | ||||||||
Net realized gains from investment transactions | — | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Change in net assets from shareholders distributions | (87,184 | ) | (264,006 | ) | (17,044 | ) | (50,968 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Capital Transactions: | ||||||||||||||||
Proceeds from shares issued | 24,228 | 473,691 | 19,274 | 230,099 | ||||||||||||
Distributions reinvested | 87,184 | 264,006 | 17,044 | 50,968 | ||||||||||||
Value of shares redeemed | (3,782,849 | ) | (6,596,389 | ) | (441,976 | ) | (1,922,281 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Change in net assets from capital transactions | (3,671,437 | ) | (5,858,692 | ) | (405,658 | ) | (1,641,214 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Change in net assets | (1,847,594 | ) | (7,033,870 | ) | (132,317 | ) | (2,126,479 | ) | ||||||||
Net Assets: | ||||||||||||||||
Beginning of period | 21,283,835 | 28,317,705 | 5,543,577 | 7,670,056 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 19,436,241 | $ | 21,283,835 | $ | 5,411,260 | $ | 5,543,577 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Accumulated undistributed net investment income | $ | 10,821 | $ | — | $ | 9,398 | $ | 2,924 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Share Transactions: | ||||||||||||||||
Issued | 2,906 | 60,431 | 2,940 | 34,273 | ||||||||||||
Reinvested | 10,002 | 32,304 | 2,646 | 7,852 | ||||||||||||
Redeemed | (439,938 | ) | (790,647 | ) | (67,504 | ) | (287,640 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Change in Shares | (427,030 | ) | (697,912 | ) | (61,918 | ) | (245,515 | ) | ||||||||
|
|
|
|
|
|
|
|
See accompanying notes to the financial statements.
14
Sterling Capital Special Opportunities VIF | Sterling Capital Total Return Bond VIF | |||||||||||||
For the Six Months Ended June 30, 2012 (Unaudited) | For the Year Ended December 31, 2011 | For the Six Months Ended June 30, 2012 (Unaudited) | For the Year Ended December 31, 2011 | |||||||||||
$ | 37,525 | $ | (21,746 | ) | $ | 239,220 | $ | 657,479 | ||||||
752,445 | 1,460,907 | 279,076 | 645,611 | |||||||||||
1,137,967 | (2,880,794 | ) | 94,759 | (148,416 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||
1,927,937 | (1,441,633 | ) | 613,055 | 1,154,674 | ||||||||||
|
|
|
|
|
|
|
| |||||||
— | — | (280,782 | ) | (714,012 | ) | |||||||||
— | (1,463,601 | ) | — | (678,181 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||
— | (1,463,601 | ) | (280,782 | ) | (1,392,193 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||
524,134 | 2,957,322 | 637,518 | 4,818,430 | |||||||||||
— | 1,463,601 | 280,782 | 1,392,193 | |||||||||||
(4,591,049 | ) | (9,293,407 | ) | (2,396,106 | ) | (7,891,763 | ) | |||||||
|
|
|
|
|
|
|
| |||||||
(4,066,915 | ) | (4,872,484 | ) | (1,477,806 | ) | (1,681,140 | ) | |||||||
|
|
|
|
|
|
|
| |||||||
(2,138,978 | ) | (7,777,718 | ) | (1,145,533 | ) | (1,918,659 | ) | |||||||
35,566,644 | 43,344,362 | 19,478,415 | 21,397,074 | |||||||||||
|
|
|
|
|
|
|
| |||||||
$ | 33,427,666 | $ | 35,566,644 | $ | 18,332,882 | $ | 19,478,415 | |||||||
|
|
|
|
|
|
|
| |||||||
$ | 42,275 | $ | 4,750 | $ | 375,659 | $ | 417,221 | |||||||
|
|
|
|
|
|
|
| |||||||
31,387 | 177,554 | 59,405 | 445,293 | |||||||||||
— | 100,384 | 26,105 | 130,342 | |||||||||||
(280,168 | ) | (573,708 | ) | (223,457 | ) | (734,049 | ) | |||||||
|
|
|
|
|
|
|
| |||||||
(248,781 | ) | (295,770 | ) | (137,947 | ) | (158,414 | ) | |||||||
|
|
|
|
|
|
|
|
15
Sterling Capital Variable Insurance Funds |
Financial Highlights
The financial highlights table is intended to help you understand the Funds’ financial performance for the past 5 years. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and distributions).
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 | |||||||||||||||||||||||||||||
Sterling Capital Select Equity VIF |
| ||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2012 (Unaudited) | $ | 7.98 | 0.04 | (d) | 0.69 | 0.73 | (0.04 | ) | — | (0.04 | ) | ||||||||||||||||||||||||
Year Ended December 31, 2011 | $ | 8.41 | 0.09 | (d) | (0.43 | ) | (0.34 | ) | (0.09 | ) | — | (0.09 | ) | ||||||||||||||||||||||
Year Ended December 31, 2010 | $ | 7.61 | 0.09 | (d) | 0.81 | 0.90 | (0.10 | ) | — | (0.10 | ) | ||||||||||||||||||||||||
Year Ended December 31, 2009 | $ | 6.49 | 0.07 | (d) | 1.12 | 1.19 | (0.07 | ) | — | (0.07 | ) | ||||||||||||||||||||||||
Year Ended December 31, 2008 | $ | 13.69 | 0.16 | (d) | (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 | ) | ||||||||||||||||||||||
Sterling Capital Strategic Allocation Equity VIF(e) |
| ||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2012 (Unaudited) | $ | 6.14 | 0.03 | (d) | 0.29 | 0.32 | (0.02 | ) | — | (0.02 | ) | ||||||||||||||||||||||||
Year Ended December 31, 2011 | $ | 6.68 | 0.05 | (d) | (0.54 | ) | (0.49 | ) | (0.05 | ) | — | (0.05 | ) | ||||||||||||||||||||||
Year Ended December 31, 2010 | $ | 5.90 | 0.07 | (d) | 0.81 | 0.88 | (0.10 | ) | — | (0.10 | ) | ||||||||||||||||||||||||
Year Ended December 31, 2009 | $ | 4.75 | 0.06 | (d) | 1.14 | 1.20 | (0.05 | ) | — | (0.05 | ) | ||||||||||||||||||||||||
Year Ended December 31, 2008 | $ | 10.33 | 0.09 | (d) | (3.50 | ) | (3.41 | ) | (0.10 | ) | (2.07 | ) | (2.17 | ) | |||||||||||||||||||||
Year Ended December 31, 2007 | $ | 11.65 | 0.25 | — | (f) | 0.25 | (0.30 | ) | (1.27 | ) | (1.57 | ) | |||||||||||||||||||||||
Sterling Capital Special Opportunities VIF |
| ||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2012 (Unaudited) | $ | 15.36 | 0.02 | (d) | 0.79 | 0.81 | — | — | — | ||||||||||||||||||||||||||
Year Ended December 31, 2011 | $ | 16.60 | (0.01 | )(d) | (0.61 | ) | (0.62 | ) | — | (0.62 | ) | (0.62 | ) | ||||||||||||||||||||||
Year Ended December 31, 2010 | $ | 14.29 | (0.04 | )(d) | 2.36 | 2.32 | (0.01 | ) | — | (0.01 | ) | ||||||||||||||||||||||||
Year Ended December 31, 2009 | $ | 10.27 | (0.03 | )(d) | 4.47 | 4.44 | — | (0.42 | ) | (0.42 | ) | ||||||||||||||||||||||||
Year Ended December 31, 2008 | $ | 16.03 | 0.02 | (d) | (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 | ) | ||||||||||||||||||||||||
Sterling Capital Total Return Bond VIF |
| ||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2012 (Unaudited) | $ | 10.61 | 0.14 | (d) | 0.20 | 0.34 | (0.16 | ) | — | (0.16 | ) | ||||||||||||||||||||||||
Year Ended December 31, 2011 | $ | 10.73 | 0.36 | (d) | 0.28 | 0.64 | (0.39 | ) | (0.37 | ) | (0.76 | ) | |||||||||||||||||||||||
Year Ended December 31, 2010 | $ | 10.37 | 0.40 | (d) | 0.39 | 0.79 | (0.41 | ) | (0.02 | ) | (0.43 | ) | |||||||||||||||||||||||
Year Ended December 31, 2009 | $ | 9.94 | 0.41 | (d) | 0.42 | 0.83 | (0.40 | ) | — | (0.40 | ) | ||||||||||||||||||||||||
Year Ended December 31, 2008 | $ | 10.02 | 0.41 | (d) | (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 | ) |
* | During the periods certain fees were reduced. If such reductions had not occurred, the ratios would have been as indicated. |
(a) | Not annualized for periods less than one year. |
(b) | 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. |
(c) | Annualized for periods less than one year. |
(d) | Per share net investment income (loss) has been calculated using the average daily shares method. |
(e) | The expense ratios exclude the impact of fees/expenses paid by each underlying fund. |
(f) | Amount is less than $0.005. |
See accompanying notes to the financial statements.
16
Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||
Net Asset Value, End of Period | Total Return(a)(b) | Net Assets, End of Period (000) | Ratio of net expenses to average net assets(c) | Ratio of net investment income (loss) to average net assets(c) | Ratio of expenses to average net assets*(c) | Portfolio turnover rate(a) | |||||||||||||||||||||||||||
$ | 8.67 | 9.11 | % | $ | 19,436 | 1.04 | % | 0.93 | % | 1.23 | % | 28.15 | % | ||||||||||||||||||||
$ | 7.98 | (4.04 | )% | $ | 21,284 | 0.97 | % | 1.11 | % | 1.21 | % | 69.66 | % | ||||||||||||||||||||
$ | 8.41 | 11.93 | % | $ | 28,318 | 0.94 | % | 1.22 | % | 1.21 | % | 63.34 | % | ||||||||||||||||||||
$ | 7.61 | 18.50 | % | $ | 32,124 | 1.00 | % | 1.01 | % | 1.24 | % | 137.52 | % | ||||||||||||||||||||
$ | 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 | % | ||||||||||||||||||||
$ | 6.44 | 5.22 | % | $ | 5,411 | 0.71 | % | 0.83 | % | 0.71 | % | 24.31 | % | ||||||||||||||||||||
$ | 6.14 | (7.32 | )% | $ | 5,544 | 0.58 | % | 0.80 | % | 0.67 | % | 6.80 | % | ||||||||||||||||||||
$ | 6.68 | 14.98 | % | $ | 7,670 | 0.40 | % | 1.21 | % | 0.68 | % | 64.81 | % | ||||||||||||||||||||
$ | 5.90 | 25.24 | % | $ | 7,947 | 0.41 | % | 1.21 | % | 0.66 | % | 18.04 | % | ||||||||||||||||||||
$ | 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 | % | ||||||||||||||||||||
$ | 16.17 | 5.27 | % | $ | 33,428 | 1.29 | % | 0.21 | % | 1.29 | % | 6.13 | % | ||||||||||||||||||||
$ | 15.36 | (3.53 | )% | $ | 35,567 | 1.25 | % | (0.05 | )% | 1.25 | % | 26.68 | % | ||||||||||||||||||||
$ | 16.60 | 16.24 | % | $ | 43,344 | 1.24 | % | (0.28 | )% | 1.27 | % | 39.24 | % | ||||||||||||||||||||
$ | 14.29 | 43.53 | % | $ | 40,162 | 1.26 | % | (0.28 | )% | 1.29 | % | 32.57 | % | ||||||||||||||||||||
$ | 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 | % | ||||||||||||||||||||
$ | 10.79 | 3.22 | % | $ | 18,333 | 1.12 | % | 2.56 | % | 1.19 | % | 78.23 | % | ||||||||||||||||||||
$ | 10.61 | 6.10 | % | $ | 19,478 | 1.07 | % | 3.32 | % | 1.17 | % | 131.16 | % | ||||||||||||||||||||
$ | 10.73 | 7.73 | % | $ | 21,397 | 1.07 | % | 3.70 | % | 1.20 | % | 140.32 | % | ||||||||||||||||||||
$ | 10.37 | 8.57 | % | $ | 22,062 | 0.94 | % | 4.09 | % | 1.24 | % | 109.12 | % | ||||||||||||||||||||
$ | 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 | % |
17
Sterling Capital Variable Insurance Funds |
June 30, 2012 (Unaudited)
1. | Organization: |
Sterling Capital 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 Sterling Capital Select Equity VIF, Sterling Capital Strategic Allocation Equity VIF, Sterling Capital Special Opportunities VIF, and Sterling Capital 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 without par value. Shares of the Funds are offered through variable annuity contracts offered through the separate accounts of participating insurance companies. All Funds are “diversified” funds.
Sterling Capital Strategic Allocation Equity VIF invests primarily in underlying mutual funds and exchange traded funds as opposed to individual securities. By owning shares of underlying investment companies (including exchange traded funds), Sterling Capital Strategic Allocation Equity VIF invests, to varying degrees, in securities of U.S. and non-U.S. companies, including small and medium sized companies, and in fixed-income securities. In addition, Sterling Capital Strategic Allocation Equity VIF’s exposure to underlying equity funds may include funds that invest in real estate or other similar securities and invest in derivatives.
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 preparation of their financial statements. The policies are in conformity with United States generally accepted accounting principles (“U.S. GAAP”). The preparation of the 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 securities, 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 (the “Board”) to value certain securities, including 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 fair value. Investments in open-end investment companies, including the underlying funds in which Sterling Capital Strategic Allocation Equity VIF invests, are valued at their respective net asset values as reported by such companies. Investments in closed-end investment companies and exchange traded funds 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 value 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 occurs that materially affects the furnished price) will be fair valued in accordance with procedures established in good faith under the general supervision of the Board. No securities were valued in accordance with these procedures as of June 30, 2012.
Fair Value Measurements — The objective of a fair value measurement is to determine the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
• Level 1 – quoted prices in active markets for identical securities
• Level 2 – based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
• Level 3 – based on significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
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Sterling Capital Variable Insurance Funds |
Notes to Financial Statements — (continued)
June 30, 2012 (Unaudited)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. During the period ended June 30, 2012 there were no significant changes to the valuation policies and procedures.
The summary of inputs used to determine the fair value of each Fund’s investments as of June 30, 2012 is as follows:
Investments in Securities | Level 1– Quoted Prices | Level 2– Other Significant Observable Inputs | Level 3– Significant Unobservable Inputs | Total | ||||||||||
Sterling Capital Select Equity VIF | $ | 19,455,255(a) | $ | — | $— | $ | 19,455,255 | |||||||
Sterling Capital Strategic Allocation Equity VIF | 5,405,718(a) | — | — | 5,405,718 | ||||||||||
Sterling Capital Special Opportunities VIF | 33,183,623(a) | — | — | 33,183,623 | ||||||||||
Sterling Capital Total Return Bond VIF | 5,316(b) | 18,616,044(a) | — | 18,621,360 |
(a) | Industries or security types are disclosed in the Schedules of Portfolio Investments. |
(b) | Represents investment companies. |
There were no transfers between Level 1 and Level 2 during the period ended June 30, 2012. The Fund’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period.
Securities Transactions and Related Income — During the period, security transactions are accounted for no later than one business day following the trade date. For financial reporting purposes, however, security transactions as of the last business day of the reporting period are accounted for on the trade date. 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.
Mortgage Dollar Rolls — Sterling Capital 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. The Funds account for mortgage dollar roll transactions as purchases and sales.
Expenses and Allocation Methodology — 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 Sterling Capital Funds are allocated across the Funds and Sterling Capital Funds, based upon relative net assets or on another reasonable basis.
Distributions to Shareholders — Dividends from net investment income are declared and paid quarterly for the Funds, with the exception of Sterling Capital Total Return Bond VIF, in which case dividends from net investment income are
19
Sterling Capital Variable Insurance Funds |
Notes to Financial Statements — (continued)
June 30, 2012 (Unaudited)
declared daily and paid monthly. 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.
The character of income and gains distributed are determined in accordance with federal income tax regulations, which may differ from U.S. 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, disposition of market discount and market premium bonds, paydown gains and losses, mortgage dollar roll gains and losses, investments in real estate investment trusts (REITs), regulated investment companies (RICs) and the character of 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.
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).
Federal Income Taxes — It is the policy of each Fund to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code of 1986, as amended, 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 in the Funds’ financial statements.
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 period ended June 30, 2012 were as follows:
Purchases | Sales | |||||||
Sterling Capital Select Equity VIF | $ | 5,780,236 | $ | 8,997,909 | ||||
Sterling Capital Strategic Allocation Equity VIF | 1,356,518 | 1,809,853 | ||||||
Sterling Capital Special Opportunities VIF | 2,071,101 | 5,030,354 | ||||||
Sterling Capital Total Return Bond VIF | 4,437,125 | 5,778,504 |
Purchases and sales of U.S. Government Securities (excluding securities maturing less than one year from acquisition) for the period ended June 30, 2012 for the Sterling Capital Total Return Bond VIF were $10,664,560 and $8,925,198, respectively.
4. | Investments in Affiliated Issuers: |
A summary of Sterling Capital Strategic Allocation Equity VIF’s transactions in the shares of affiliated issuers during the period ended June 30, 2012 is set forth below:
Shares Held at December 31, 2011 | Shares Purchased | Shares Sold | Shares Held at June 30, 2012 | Value at June 30, 2012 | Dividend Income January 1, 2012 - June 30, 2012 | Net Realized Gain (Loss) January 1, 2012 - June 30, 2012 | |||||||||||||||||||||||||||||
Sterling Capital Equity Income Fund, Institutional Class | 24,835 | — | 5,220 | 19,615 | $ | 302,068 | $ | 2,344 | $ | 11,040 | |||||||||||||||||||||||||
Sterling Capital Equity Index Fund, Institutional Class | 6,607 | 30 | 1,670 | 4,967 | 45,303 | 272 | (1,627 | ) | |||||||||||||||||||||||||||
Sterling Capital International Fund, Institutional Class | 125,310 | — | 125,310 | — | — | — | 27,454 | ||||||||||||||||||||||||||||
Sterling Capital Mid Value Fund, Institutional Class | 38,986 | — | 9,209 | 29,777 | 410,024 | 1,823 | 27,551 | ||||||||||||||||||||||||||||
Sterling Capital Select Equity Fund, Institutional Class | 90,720 | 27,449 | 24,394 | 93,775 | 1,131,860 | 6,007 | (14,788 | ) | |||||||||||||||||||||||||||
Sterling Capital Small Value Fund, Institutional Class | 11,128 | — | 2,102 | 9,026 | 104,975 | — | 3,064 |
20
Sterling Capital Variable Insurance Funds |
Notes to Financial Statements — (continued)
June 30, 2012 (Unaudited)
Shares Held at December 31, 2011 | Shares Purchased | Shares Sold | Shares Held at June 30, 2012 | Value at June 30, 2012 | Dividend Income January 1, 2012 - June 30, 2012 | Net Realized Gain (Loss) January 1, 2012 - June 30, 2012 | |||||||||||||||||||||||||||||
Sterling Capital Special Opportunities Fund, Institutional Class | 13,912 | 23,497 | 1,823 | 35,586 | $ | 629,868 | $ | — | $ | (1,330 | ) | ||||||||||||||||||||||||
Sterling Capital U.S. Treasury Money Market Fund, Institutional Class | 76,801 | 13,901,161 | 13,860,884 | 117,078 | 117,078 | 6 | — | ||||||||||||||||||||||||||||
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Total Affiliates | 388,299 | 13,952,137 | 14,030,612 | 309,824 | $ | 2,741,176 | $ | 10,452 | $ | 51,364 | |||||||||||||||||||||||||
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5. | Related Party Transactions: |
Under the terms of the investment advisory agreement Sterling Capital Management LLC (“Sterling Capital”) 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.” Sterling Capital waived investment advisory fees and reimbursed certain expenses for the Funds referenced below which are not subject to recoupment and are included on the Statements of Operations as “Less expenses waived by the Investment Advisor.” Information regarding these transactions for the period ended June 30, 2012 is as follows:
Contractual Fee Rate | Fee Rate after Voluntary Waivers | |||||||||
Sterling Capital Select Equity VIF | 0.70 | %1,2 | 0.60 | %1,2 | ||||||
Sterling Capital Strategic Allocation Equity VIF | 0.25 | % | 0.25 | % | ||||||
Sterling Capital Special Opportunities VIF | 0.80 | % | 0.80 | % | ||||||
Sterling Capital Total Return Bond VIF | 0.50 | %2,3 | 0.50 | %2,3 |
1 | The contractual fee rate was 0.74% and the fee rate after voluntary waivers was 0.50% prior to May 1, 2012. Beginning May 1, 2012, the contractual fee rate was 0.70% and the fee rate after voluntary waivers was 0.60%. |
2 | For a portion of the period ended June 30, 2012 Sterling Capital voluntarily reimbursed certain expenses of the Funds. Voluntary reimbursements of expenses are not subject to recoupment in subsequent fiscal periods, and may be discontinued at any time. |
3 | The contractual fee rate was 0.60% and the fee rate after voluntary waivers was 0.50% prior to May 1, 2012. |
Pursuant to a sub-advisory agreement with Sterling Capital, Scott & Stringfellow LLC (Scott & Stringfellow), a wholly owned subsidiary of BB&T Corporation, serves as the sub-advisor to Sterling Capital Special Opportunities VIF, subject to the general supervision of the Board and Sterling Capital. For its services, Scott & Stringfellow is entitled to a fee, payable by Sterling Capital.
Sterling Capital serves as the administrator to the Funds pursuant to an administration agreement. The Funds except Sterling Capital Strategic Allocation Equity VIF pay their portion of a fee to Sterling Capital for providing administration services based on the aggregate assets of the Funds except Sterling Capital Strategic Allocation Equity VIF and the Sterling Capital Funds, excluding the assets of Sterling Capital Strategic Allocation Conservative Fund, Sterling Capital Strategic Allocation Balanced Fund, Sterling Capital Strategic Allocation Growth Fund, Sterling Capital Strategic Allocation Equity Fund, Sterling Capital Corporate Fund and Sterling Capital Securitized Opportunities Fund, 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 Sterling Capital, BNY Mellon Investment Servicing (US) Inc. (“BNY Mellon” or the “Sub-Administrator”), serves as the sub-administrator to the Funds subject to the general supervision of the Board and Sterling Capital. For these services, BNY Mellon is entitled to a fee payable by Sterling Capital.
BNY Mellon serves as the Funds’ fund accountant and transfer agent and receives compensation by the Funds for these services. Expenses incurred are reflected on the Statements of Operations as “Fund accounting fees” and “Transfer agent fees.”
Sterling Capital’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 Sterling Capital. However, the Funds reimburse Sterling Capital 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.”
21
Sterling Capital Variable Insurance Funds |
Notes to Financial Statements — (continued)
June 30, 2012 (Unaudited)
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 Funds. A servicing agent may periodically waive all or a portion of its servicing fees. For the period ended June 30, 2012 the Funds did not participate in any service plans.
Certain Officers and a Trustee of the Funds are affiliated with Sterling Capital or the Sub-Administrator. Such Officers and Trustee receive no compensation from the Funds for serving in their respective roles. Each of the Trustees who are not interested persons (as defined in the 1940 Act) of the Trust who serve on the Board are compensated at the annual rate of $40,000 plus $5,000 for each regularly scheduled quarterly meeting attended, $4,000 for each special meeting attended in person and $3,000 for each special meeting attended by telephone, plus reimbursement for certain out of pocket expenses. Each Trustee serving on a Committee of the Board 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 the Audit Committee Chairman each receive an annual retainer of $15,000, and the Chairman of the Nominations Committee receives additional compensation at the rate of $1,000 for each meeting over which he or she presides as Chairman. The fees are allocated across the Funds and the Sterling Capital Funds based upon relative net assets.
6. | 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 Sterling Capital 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 one percent (1%) per annum. During the period ended June 30, 2012 the Funds did not utilize the line of credit.
7. | Federal Tax Information: |
Management evaluates its tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as “Income tax expense” in the Statements of Operations. During the period, the Funds did not incur any interest or penalties.
Management has analyzed the Funds’ tax positions taken on federal income tax returns for all open tax years (current year 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, 2011, 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 probable that the gains that are offset will not be distributed to shareholders.
Amount | Expires | |||||||||
Sterling Capital Select Equity VIF | $ | 18,975,564 | 2016 | |||||||
Sterling Capital Select Equity VIF | 3,263,903 | 2017 | ||||||||
Sterling Capital Strategic Allocation Equity VIF | 2,264,206 | 2016 | ||||||||
Sterling Capital Strategic Allocation Equity VIF | 1,989,928 | 2017 | ||||||||
Sterling Capital Strategic Allocation Equity VIF | 1,467,590 | 2018 |
Under the Regulated Investment Company Modernization Act of 2010, capital losses originating in taxable years beginning after December 22, 2010 (“post-enactment capital losses”) are carried forward indefinitely. Furthermore, post-enactment capital losses will retain their character as either short-term or long-term capital losses rather than being considered all short-term capital losses as under previous law.
22
Sterling Capital Variable Insurance Funds |
Notes to Financial Statements — (continued)
June 30, 2012 (Unaudited)
The tax character of distributions paid to shareholders during the fiscal year ended December 31, 2011, were as follows:
Distributions paid from | |||||||||||||||
Ordinary Income | Net Long-Term Gains | Total Distributions Paid* | |||||||||||||
Sterling Capital Select Equity VIF | $ | 264,006 | $ | — | $ | 264,006 | |||||||||
Sterling Capital Strategic Allocation Equity VIF | 50,968 | — | 50,968 | ||||||||||||
Sterling Capital Special Opportunities VIF | 44,822 | 1,418,779 | 1,463,601 | ||||||||||||
Sterling Capital Total Return Bond VIF | 1,031,540 | 360,653 | 1,392,193 |
* | Total Distributions Paid may differ from the Statements of Changes in Net Assets because distributions are recognized when actually paid for tax purposes. |
At June 30, 2012, federal income tax cost, gross unrealized appreciation and gross unrealized depreciation on securities were as follows:
Tax Cost | Gross Tax Unrealized Appreciation | Gross Tax Unrealized Depreciation | Net Tax Unrealized Appreciation | |||||||||||||||||
Sterling Capital Select Equity VIF | $ | 16,208,212 | $ | 3,688,698 | $ | (441,655 | ) | $ | 3,247,043 | |||||||||||
Sterling Capital Strategic Allocation Equity VIF | 5,059,236 | 629,872 | (283,390 | ) | 346,482 | |||||||||||||||
Sterling Capital Special Opportunities VIF | 28,052,509 | 6,749,817 | (1,618,703 | ) | 5,131,114 | |||||||||||||||
Sterling Capital Total Return Bond VIF | 17,994,985 | 678,149 | (51,774 | ) | 626,375 |
8. | Subsequent Events: |
Management has evaluated the need for disclosure and/or adjustments resulting from subsequent events through the date the financial statements were issued, and has noted the following:
Beginning July 1, 2012, the fee to be paid to Sterling Capital as the administrator to the Funds will be at a rate of 0.1075% 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 and will be based on the aggregate assets of the Funds except Sterling Capital Strategic Allocation Equity VIF and the Sterling Capital Funds, excluding the assets of Sterling Capital Strategic Allocation Conservative Fund, Sterling Capital Strategic Allocation Balanced Fund, Sterling Capital Strategic Allocation Growth Fund, Sterling Capital Strategic Allocation Equity Fund, Sterling Capital Corporate Fund and Sterling Capital Securitized Opportunities Fund.
23
Sterling Capital Variable Insurance Funds |
June 30, 2012 (Unaudited)
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’ Form N-Q is filed with the Commission within 60 days of the end of the quarter to which it relates, and is 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.
24
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 shareholders may recommend nominees to the registrant’s board of trustees, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
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 defined in Rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))) as of a date within 90 days of the filing date of this report, that the design and operation of such procedures 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, and that information required to be disclosed by the registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the registrant’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. |
(b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 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) | Sterling Capital Variable Insurance Funds |
By (Signature and Title) | /s/ E.G. Purcell III | |||
E.G. Purcell III, President | ||||
(principal executive officer) |
Date | 8/22/12 |
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 | 8/22/12 |
By (Signature and Title) | /s/ James T. Gillespie | |||
James T. Gillespie, Treasurer | ||||
(principal financial officer) |
Date | 8/22/12 |