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
811-22865
Forethought Variable Insurance Trust
(Exact name of registrant as specified in charter)
17605 Wright Street, Omaha, Nebraska 68130
(Address of principal executive offices) (Zip code)
James Ash, Gemini Fund Services, LLC.
80 Arkay Drive Suite 110, Hauppauge, NY 11788
(Name and address of agent for service)
Registrant's telephone number, including area code:
631-470-2619
Date of fiscal year end:
12/31
Date of reporting period: 6/30/14
Item 1. Reports to Stockholders.
![[f1cover001.jpg]](https://capedge.com/proxy/N-CSRS/0000910472-14-004101/f1cover001.jpg)
Semi-Annual Report
June 30, 2014
FVIT Portfolios
FVIT American Funds® Managed Risk Portfolio
FVIT BlackRock Global Allocation Managed Risk Portfolio
FVIT WMC Research Managed Risk Portfolio
FVIT Balanced Managed Risk Portfolio
(formerly FVIT Index Managed Risk Portfolio)
FVIT Select Advisor Managed Risk Portfolio
FVIT Franklin Dividend and Income Managed Risk Portfolio
FVIT Growth Managed Risk Portfolio
FVIT Moderate Growth Managed Risk Portfolio
Class II shares
Each a series of the Forethought Variable Insurance Trust
Distributed by Northern Lights Distributors, LLC
Member FINRA
(Unaudited)
Dear Shareholders/Contract Owners,
Thank you for your continued interest in the FVIT Portfolios.
First Half of 2014
The second quarter of 2014 marked the eighth consecutive quarter in which domestic equities rallied, rebounding from pullbacks in January and April. This performance occurred despite the adverse weather conditions experienced in the first quarter, which pushed first quarter Gross Domestic Product (GDP) down 2.1%. The U.S. economy rebounded strongly in the second quarter due to pent up demand, with GDP up 4.0%. With domestic equities in their fifth year of a rising market, the market continues to receive support from strong merger and acquisition activity, stock buybacks, dividend increases, and globally accommodative monetary policies.
Globally, developed market equities (excluding Japan) were generally up in the first half of 2014, as markets saw improved Eurozone economic results and China showed better-than-expected trade data. While emerging markets were up during the period, results varied widely based upon country specific growth and geopolitical risk; Brazil up 3.2%, China up 3.4%, India up 21.8%, and Russia down 4.2%.
Fixed income markets rallied due to a combination of increased geopolitical risk and stronger conviction surrounding the continuation - albeit in varying degrees - of accommodative monetary policy from the Federal Reserve and other major central banks would continue. Below investment grade fixed income outperformed investment grade in response to improved equity markets and an on-going expectation of low default rates.
| | | |
Market Performance- 1st Half 2014 |
Domestic Equity Markets | Return |
S&P 500 Index | 7.9% |
S&P 400 Midcap Index | 6.8% |
S&P Small Cap 600 Index | 2.2% |
| |
International Equity Markets |
Euro Stoxx 50 | 4.9% |
MSCI EAFE | 3.7% |
Nikkei 225 Index | (5.2%) |
MSCI Emerging Market Index | 7.6% |
Fixed Income | |
Barclays U.S. Aggregate Total Return Index | 3.7% |
BofAML US High Yield Index | 6.3% |
The Fed continued to reduce its asset-purchase program by $10 billion per month, maintaining a schedule that will see QE3 end in October 2014. In June, the Fed announced that it was modestly increasing its projection for short-term interest rates in 2015 and 2016, but that it was simultaneously lowering its long-term outlook for rates due to a decline in longer term economic growth forecasts.
2014 Second Half Outlook
In the 2013 FVIT Portfolios’ Annual Report shareholder letter, we discussed our belief that the drivers of growth were in place for 2014. These key drivers included the improving domestic macro economy with declining unemployment and low inflation, the presence of a U.S. oil and natural gas renaissance, supportive monetary policy, and lower consumer and government debt. Furthermore, the improvement in corporate balance sheets combined with low borrowing costs has, and should continue to, lead to greater merger and acquisition activity, stock buybacks, and dividend payouts, all of which support stock market valuations. Finally, while U.S. fiscal policy was not helping the economy any, it now appears to be getting out of the way of economic progress.
U.S. GDP growth got off to a slow start in 2014 due to severe weather throughout much of the United States. While low relative to historic economic recoveries, domestic growth seems to have accelerated past the winter blues. Domestic unemployment and capacity utilization rates continued to improve. In short, while severe weather created a brief headwind, the economy is roughly where we expected it to be halfway through 2014.
Globally, there is growing deviation in central bank monetary policy. The Federal Reserve (Fed) is expected to stop buying securities in the fall of 2014, however, our expectation domestically is that interest rates will remain low until the middle of 2015. While the European Central Bank and the Bank of Japan maintain their accommodative monetary policies in order to fight disinflation and restore growth, the Bank of England has started to signal a possible rate hike before year-end.
In the 2013 Annual Report, we also outlined several of our key concerns, namely equity market valuations, the unprecedented nature of the Fed tapering, slowing growth in China, and capital outflows from emerging markets. Stock market valuations (i.e. price to earnings multiples) have continued to expand both domestically and internationally, while volatility globally is near historical lows. Low trading volumes and increased market concentration makes the market, in our view, susceptible to spikes in volatility. Although inflation expectations have risen modestly of late, they remain relatively low when put into a historical context.
Another area of risk we highlighted in our year end 2013 shareholder letter was geopolitics. During the first half of 2014, geopolitical risk has risen significantly, to the point where global growth, and in particular the already fragile European economic recovery, could be threatened. Events that have shaped this rise in risk include the Russian annexation of the Crimea from Ukraine and the continued fighting in the eastern part of that country, increased fighting in Gaza between Israel and Hamas, sectarian violence in Iraq, and the coup d’état in Thailand.
Portfolio Positioning
Equities1 - Based on our outlook and the continued rise in geopolitical risks, we currently favor U.S equities relative to each Portfolio's benchmark (S&P Target Risk Moderate Total Return Index or S&P Target Risk Growth Total Return Index), and remain underweight in Europe and Asia due to said rising geopolitical risk, but also due to more uncertain economic growth and the challenges related to needed structural reforms. That said, given the expectation that central banks in Europe and Asia may continue with accommodative monetary policies beyond those of the U.S., we are closely monitoring the valuations of European and Asian developed country equities relative to domestic stocks for potential opportunities.
From a market capitalization perspective, we remain underweight small cap stocks relative to each Portfolio's benchmark. Year-to-date, small cap equities have underperformed large cap and mid cap stocks, and we continue to closely monitor relative valuations for opportunities that may arise in this area.
Fixed Income2 - The Portfolios have some allocation to fixed income as a diversification benefit to prudent portfolio management. Year-to-date, below investment grade fixed income has outperformed investment grade. Depending upon the Portfolio, we are at or overweight the benchmark in high yield. From a broad perspective, we are modestly concerned about rising interest rates as we get closer to 2015 and the expectation that the Fed will begin to raise rates. Geographically, we continue to favor U.S. and developed market bonds, and are closely monitoring the Portfolios’ high yield exposure relative to opportunities in investment grade and other fixed income sectors.
Risk Management - We will continue to manage the Portfolios’ volatility, striving to help mitigate the impact of extreme risks. If the concerns outlined above, or other, perhaps unforeseen events unfold in the capital markets that cause volatility to increase, we would expect to increase risk management activity in each Portfolio. If volatility remains at its current low level, however, we would expect cash and related futures allocations to be at the lower end of the expected range of 0-20% for each Portfolio.
The following pages contain management’s discussion of recent Portfolio performance. Thank you again for your continued interest in the FVIT Portfolios.
Sincerely,
Eric Todd, CFA
Cameron Jeffreys, CFA
Co-Portfolio Manager
Co-Portfolio Manager
1 Excludes FVIT WMC Research Managed Risk Portfolio, the equity sleeve of the FVIT Franklin Managed Risk Portfolio, and FVIT BlackRock Global Allocation Managed Risk Portfolio, where portfolio positioning is determined by the sub-adviser or the underlying fund manager.
2Excludes FVIT WMC Research Managed Risk Portfolio and FVIT BlackRock Global Allocation Managed Risk Portfolio where portfolio positioning is determined by the sub-adviser or the underlying fund manager.
3 Excludes FVIT WMC Research Managed Risk Portfolio, the equity sleeve of the FVIT Franklin Managed Risk Portfolio, and FVIT BlackRock Global Allocation Managed Risk Portfolio, where portfolio positioning is determined by the sub-adviser or the underlying fund manager.
(Unaudited)
Management Discussion of Year-to-Date Portfolio Performance (Unaudited)
Benchmark and Blended Benchmark Background
See Exhibit A for definitions of the benchmark and blended benchmark (the “benchmarks”) for each Portfolio.
The benchmark (S&P Target Risk Moderate Total Return Index or S&P Target Risk Growth Total Return Index) represents an asset allocation portfolio where the equity exposure is diversified by geography (domestic, international, emerging market, etc.), style (growth, value, core), market capitalization (large cap, mid cap, small cap), and the fixed income exposure is varied by asset classes, including below investment grade credit. The index is rebalanced annually by S&P and does not include a hedge overlay.
In general, compared to the benchmark, the FVIT Portfolios3 were overweight to equities, U.S. equities, large cap equities and fixed income credit, while underweight to fixed income more broadly, U.S. government fixed income, European, Asian, and emerging market equities, and small cap equities. Furthermore, the FVIT Portfolios had, in general, a shorter duration than the benchmark as it relates to their fixed income exposure. With the exception of the FVIT American Funds® Managed Risk Portfolio which was overweight high yield fixed income securities, the FVIT Portfolios had a neutral weight to this asset class vis-à-vis their respective benchmarks. The overweight to U.S. equities, large cap stocks and credit generally contributed positively versus the benchmark.
The blended benchmark for each Portfolio is comprised of a S&P 500 Daily Risk Control Index and the Barclay’s Aggregate Bond Index. The S&P 500 Daily Risk Control Index is comprised of the S&P 500 and cash. This results in the blended benchmark having almost exclusively large cap and mid cap equity exposure to companies based in the United States, as well as investment grade fixed income. While the blended benchmark does not have a managed risk component that utilizes futures and other derivatives to manage risk, the S&P Daily Risk Control Indices (which are the majority of the blended benchmark) rebalance daily between cash and the S&P 500 to arrive at a target level of volatility.
In general, compared to the blended benchmark, the FVIT Portfolios were underweight in U.S. equities and overweight in below investment grade credit risk. The underweight in U.S. equities was a drag on performance, while the overweight to below investment grade credit risk was a benefit to performance relative to the Barclays Aggregate Bond Index.
Managed Risk Component
While volatility remained low for much of the first half of 2014, it did spike briefly in late January and early February and to a lesser degree in April. In each instance, volatility reversed to lower levels within a week or two. As a result, the managed risk component of the funds had a negative drag on performance during the period.
The following market conditions typically reveal the strengths of the managed risk component of the Portfolios:
•
Low volatility, upward trending markets (Similar to the 1990s, 2003-2007, and 2013)
•
High volatility, downward trending markets (Similar to 2008)
•
Low volatility, downward trending markets (Similar to 2000-2002)
The following market conditions typically reveal the costs of the managed risk component of the Portfolios:
•
High volatility, upward trending markets (Similar to 1998, 2009, October 2011)
•
“V” shaped markets, where the market trends down with low volatility, volatility increases, and then the market quickly returns to its previous level (Similar to Q1 2014)
Year-to-Date Net Returns
The following returns for each individual Portfolio, benchmark, and blended benchmark are all year-to-date net returns through June 30, 2014. Capture ratio is defined as net total return of the FVIT Portfolio divided by its benchmark return.
FVIT American Funds® Managed Risk Portfolio returned 4.28% which is below Portfolio’s benchmark and blended benchmark returns of 4.42% and 4.89% respectively. For the period, the capture ratios were 96.8% and 87.5%, respectively.
The following underlying funds contributed positively relative to the returns of the benchmark and blended benchmark (percentage of portfolio net assets as of June 30, 2014 stated in parentheses):
·
American Funds IS® Growth-Income Fund (23.1%)
·
American Funds IS® Growth Fund (14.8%)
·
American Funds IS® Blue Chip Income and Growth Fund (14.8%)
·
American Funds IS® Global Growth and Income (4.6%)
·
American Funds IS® New World Fund (2.8%)
The following underlying funds contributed negatively relative to the returns of the benchmark and blended benchmark:
·
American Funds IS® High-Income Bond Fund (13.8%)
·
American Funds IS® Bond Fund (18.5%)
During the first half of 2014, the American Funds IS® Blue Chip Income and Growth Fund allocation was increased by 4.1 percentage points, while the American Funds IS® Growth Fund allocation was reduced by 3.1 percentage points owing to the relative valuation between growth and value.
FVIT BlackRock Global Allocation Managed Risk Portfolio returned 2.84% which is below the Portfolio’s benchmark and blended benchmark returns of 4.42% and 4.90%, respectively. For the period, the capture ratios were 64.2% and 58.0%, respectively.
The underlying fund BlackRock Global Allocation V.I. Fund (93.0% of portfolio net assets) return was below the returns of the Portfolio’s benchmark and blended benchmark.
During the period, within equities, stock selection in energy and an overweight in health care contributed to performance. Within fixed income, an overweight in U.S. corporate bonds contributed to returns.
An overweight allocation to cash negatively impacted performance. Within equities, an overweight in Japan, stock selection in China, Europe and United States weighed on returns. Within fixed income, security selection in European sovereign debt hurt performance.
FVIT WMC Research Managed Risk Portfolio returned 4.95% which is above the Portfolio’s benchmark and blended benchmark returns of 4.42% and 4.89%, respectively. For the period the capture ratios were 112.0% and 101.21%, respectively.
Equity outperformance versus the benchmark was driven by security selection. Health care contributed to relative returns, driven by stock selection in pharmaceuticals and biotechnology companies. In consumer staples, holdings in tobacco and food and staples retailing added positively to relative results. Stock selection in materials, particularly chemicals, generated favorable performance as well. This was partially offset by weaker selection in consumer discretionary and information technology.
Top contributors to relative performance of the equity portion of the Fund during the period included Covidien (health care) and American Airlines (industrials). Shares of Covidien, a medical products, manufacturing, and distribution company, soared after medical device giant Medtronic entered into a definitive agreement to acquire the company for $42.9 billion. American Airlines merged with US Airways in December 2013 to create the new American Airlines Group. The stock rallied during the first quarter of 2014 as investors anticipated favorable prospects for significant cost and revenue synergies. In addition, American Airlines reported fourth quarter profits and earnings that beat consensus expectations and provided a strong outlook driven by improvements in passenger unit revenue.
Top detractors from relative performance of the equity portion of the Fund during the period included Citigroup (financials) and Lululemon Athletica (consumer discretionary). While Citigroup, a US-based financial services provider with global operations, passed the quantitative stress test in March, the Fed objected to its plan on a qualitative basis, sending the stock price lower. Shares of Lululemon Athletica, a North American-based manufacturer and retailer of athletic apparel, underperformed after reporting disappointing guidance for both the upcoming quarter as well as the fiscal year, the position was eliminated during the period.
The fixed income portion of the Fund underperformed the benchmark during the period. Short duration and yield curve positioning were the main drivers of underperformance as rates decreased during the period. The portfolio was underweight investment grade corporate bonds which also weighed on performance as corporate bonds outperformed over the period. Security selection within agency mortgage-backed securities (MBS) was a positive contributor to relative performance. Changes to and expectations for the Fed’s asset-purchase program continued to be the biggest driver of MBS performance.
FVIT Balanced Managed Risk Portfolio returned 4.32% which is below the Portfolio’s benchmark and blended benchmark returns of 4.42% and 4.66%, respectively. For the period, the capture ratios were 97.7% and 92.7%, respectively.
The following underlying funds contributed positively relative to the returns of the Portfolio’s benchmark and blended benchmark (percentage of portfolio net assets as of June 30, 2014 stated in parentheses):
·
iShares Core S&P 500 ETF (42.6%)
·
iShares Core S&P Mid-Cap ETF (3.6%)
·
iShares iBoxx $ High Yield Corporate Bond ETF (7.0%)
The following underlying funds contributed negatively relative to the returns of the fund’s benchmark and blended benchmark:
·
iShares Floating Rate Bond ETF (4.7%)
·
iShares Intermediate Credit Bond ETF (7.0%)
·
iShares Core Total Aggregate U.S. Bond Market ETF (23.3%)
·
iShares MSCI EAFE ETF (5.1%)
During the first half of 2014 the Portfolio's allocation to the iShares Core S&P 500 ETF and iShares Core Total U.S. Bond Market ETF were increased by 9.7% and 4.0% percentage points, respectively, primarily through the investment of cash.
FVIT Select Advisor Managed Risk Portfolio returned 4.69% which is below the Portfolio’s benchmark and blended benchmark returns of 5.42% and 5.10%, respectively. For the period, the capture ratios were 86.5% and 92.0%, respectively.
The following underlying funds contributed positively relative to the returns of the Portfolio’s benchmarks (percentage of portfolio net assets as of June 30, 2014 stated in parentheses):
·
iShares Core S&P 500 ETF (18.6%)
·
Putnam VT Equity Income Fund (16.3%)
·
American Century VP Value Fund (4.7%)
·
American Century VP Mid Cap Value Fund (4.8%)
·
Invesco V.I. International Growth Fund (2.3%)
·
Invesco V.I. Core Equity Fund (4.7%)
·
MFS®VIT II International Value (4.7%)
The following underlying funds contributed negatively relative to the returns of the Portfolio’s benchmark:
·
MFS® Growth Series (13.9%)
·
MFS® Research Bond Series (23.2%)
During the first half of 2014 the Portfolio's allocation to MFS VIT Growth, MFS VIT II International Value and Putnam VT Equity Income Fund increased by 9.6, 4.7 and 3.1 percentage points respectively. The fund reduced exposure to American Century VP Value Fund, Invesco V.I. International Growth Fund, and Invesco V.I. Core Equity Fund by 6.5, 6.6 and 2.0 percentage points, respectively. These changes were made due to relative valuations, to diversify international exposure and to shift geographic exposure toward the United States given increasing geopolitical risk and China’s slowing economy.
Management Discussion of Since Inception to Date Portfolio Performance
On April 30, 2014 the FVIT Franklin Dividend and Income Managed Risk Portfolio, the FVIT Growth Managed Risk Portfolio, and the FVIT Moderate Growth Managed Risk Portfolio were launched. The following returns for each individual Portfolio, benchmark, and blended benchmark are all since inception (of April 30, 2014) net returns through June 30, 2014 (unless otherwise stated).
FVIT Franklin Divided and Income Managed Risk Portfolio returned 2.60% which is below the Portfolio’s benchmark and blended benchmark returns of 3.15% and 4.25%, respectively. For the period the capture ratios were 82.5% and 61.2%, respectively.
The equity sleeve of the portfolio is managed pursuant to a rising dividends strategy. During the period the equity sleeve returned 3.45% (gross of fees) which is above the Portfolio's benchmark and below the Portfolio's blended benchmark. At period-end, the equity sleeve’s largest sector concentration was industrials, followed by consumer staples and health care. The equity sleeve’s five largest holdings were Johnson & Johnson (health care), Roper Industries Inc. (industrials), Chevron Corp. (energy), Pentair PLC (industrials) and Praxair Inc. (materials).
Since inception, Franklin Advisory Services, LLC has deployed assets into securities of companies they found attractively valued. The companies generally have a long history of increasing their dividends.
For the period since inception through June 30, 2014, the equity sleeve's relative performance benefited from stock selection in the health care sector. In contrast, its relative results were hindered by stock selection and an underweight in the IT sector.
The equity sleeve's best-performing stocks on a contribution-to-return basis were led by Johnson Controls Inc., a global manufacturer of batteries and interior systems for automobiles, as well as building efficiency controls; Air Products and Chemicals Inc., a specialty gases manufacturer; and Schlumberger Ltd., which provides project management and IT solutions to the oil and gas industry. During the period, shares of Johnson Controls Inc. rose sharply in response to the announced agreement to form a global automotive interiors joint venture with Yanfeng Automotive Trim Systems (not a portfolio holding). The new venture will be the largest automotive interiors company globally, with double the market share of its closest competitor. We believe Johnson Controls’ 30% stake in the new business should allow it to improve the market position of its automotive interiors business, while continuing to de-emphasize its overall automotive exposure as it transitions to a diversified industrial company. Shares of Air Products benefited from a solid earnings report and positive sentiment surrounding the ongoing involvement of an activist shareholder. The company’s fiscal second quarter saw a strong rebound in the economically sensitive electronics and performance materials segment. In mid-June, its shares rose sharply on the appointment of Seifi Ghasemi to replace the outgoing CEO John McGlade. Shares of Schlumberger saw strong performance over the period, driven in part by a rebound in global oil prices in response to concerns around international oil supply growth. Additionally, Schlumberger provided a positive sector outlook and attractive financial guidance at its investor conference, which was well received by investors and led to a sharp move up in the share price. These companies all have a history of strong and substantial dividend growth.
Detractors from absolute performance included International Business Machines Corp., a leading global provider of IT software, services and hardware; Pentair PLC, a manufacturer of water pumps and filtration products; and Target Corp., a mass-market discount retailer. Shares of International Business Machines have lagged recently as the company has been negatively impacted by weakness in emerging-market IT infrastructure spending. The company’s management is taking targeted actions to address the impact of this slowdown in investment, as well as shifting its focus to strategic growth areas, including mobility and cloud computing. The company has had 19 consecutive years of dividend increases. Shares of Pentair declined, largely driven by weaker-than-expected first-quarter results. Ongoing weakness in emerging-market infrastructure investment activity negatively impacted the company’s Australian pipes business. While these headwinds have been ongoing since the business was acquired as a non-core part of the merger with Tyco Flow, company management was surprised by the magnitude of the quarterly decline and has been focused on restructuring and right-sizing the business. The company also reported ongoing strength in its food and beverage and North American residential and commercial businesses. Over the past few months, Pentair has seen significant improvement in its operating margins as a result of cost control initiatives and ongoing synergy realization from the Tyco Flow merger. Pentair has had 38 years of dividend increases. Target’s stock has been pressured following the data breach that occurred in late 2013. Since then, the company has announced the departure and replacement of a number of its senior management members, as well as aggressive measures to drive a recovery in its flagging US and Canadian businesses. The company has raised its dividend for the past 43 years.
The fixed income sleeve was comprised of the Franklin Templeton Total Return fund (22.7% of portfolio net assets) which outperformed the Barclays Aggregate, but contributed negatively relative to the fund’s benchmarks as equities outperformed fixed income in the period.
FVIT Growth Managed Risk Portfolio returned 3.50% which is above the Portfolio’s benchmark of 3.15% and below its blended benchmark of 4.35%. For the period, the capture ratios were 111.1% and 80.5%, respectively.
The following underlying funds contributed positively relative to the returns of the Portfolio’s benchmarks (percentage of portfolio net assets as of June 30, 2014 stated in parentheses):
·
iShares Core S&P 500 ETF (45.6%)
·
iShares Russell 1000 ETF (13.2%)
·
iShares Core S&P Mid-Cap ETF (5.2%)
·
iShares Russell 2000 ETF (1.5%)
The following underlying funds contributed negatively relative to the returns of the fund’s benchmarks:
·
iShares MSCI EAFE ETF (7.8%)
·
iShares Floating Rate Bond ETF (1.3%)
·
iShares Intermediate Credit Bond ETF (2.6%)
·
iShares iBoxx $ High Yield Corporate Bond ETF (2.2%)
·
iShares Core U.S. Aggregate Bond ETF (6.9%)
Since inception, the Portfolio's allocations iShares Core S&P Mid-Cap ETF was reduced by 1.9 percentage points and reallocated to iShares Core S&P 500 ETF owing to relative valuation. An allocation of 14.6% was made to iShares Russell 1000 ETF with a corresponding reduction in iShares Core S&P 500 ETF to increase the number of large cap funds owned.
FVIT Moderate Growth Managed Risk Portfolio returned 2.70% which is above the Portfolio’s benchmark of 2.42% and below the blended benchmark of 3.75%. For the period, the capture ratios were 111.6% and 72.0%, respectively.
The following underlying funds contributed positively relative to the returns of the Portfolio’s benchmarks (percentage of portfolio net assets as of June 30, 2014 stated in parentheses):
·
iShares Core S&P 500 ETF (43.3%)
·
iShares Russell 1000 ETF (1.8%)
·
iShares Core S&P Mid-Cap ETF (3.9%)
·
iShares Russell 2000 ETF (1.1%)
The following underlying funds contributed negatively relative to the returns of the Portfolio’s benchmarks:
·
iShares Floating Rate Bond ETF (3.0%)
·
iShares Intermediate Credit Bond ETF (6.4%)
·
iShares iBoxx $ High Yield Corporate Bond ETF (4.3%)
·
iShares Core U.S. Aggregate Bond ETF (16.3%)
The following underlying fund’s return was between the returns of the Portfolio’s benchmarks.
·
iShares MSCI EAFE ETF (6.2%)
An allocation of 2.0% was made to iShares Russell 1000 ETF with a corresponding reduction in iShares Core S&P 500 ETF to increase the number of large cap funds owned.
(Unaudited)
| | |
Exhibit A |
Portfolio | Benchmark | Blended Benchmark |
FVIT American Funds® Managed Risk Portfolio | S&P Target Risk Moderate Total Return Index | 35% Barclays Aggregate Bond Index; 10% S&P 500 Daily Risk Controlled 10% Index; 55% S&P 500 Daily Risk Controlled 12% Index |
FVIT BlackRock Global Allocation Managed Risk Portfolio | S&P Target Risk Moderate Total Return Index | 40% Barclays Aggregate Bond Index; 60% S&P 500 Daily Risk Controlled 12% Index |
FVIT WMC Research Managed Risk Portfolio | S&P Target Risk Moderate Total Return Index | 35% Barclays Aggregate Bond Index; 10% S&P 500 Daily Risk Controlled 10% Index; 55% S&P 500 Daily Risk Controlled 12% Index |
FVIT Balanced Managed Risk Portfolio | S&P Target Risk Moderate Total Return Index | 45% Barclays Aggregate Bond Index; 20% S&P 500 Daily Risk Controlled 10% Index; 35% S&P 500 Daily Risk Controlled 12% Index |
FVIT Select Advisor Managed Risk Portfolio | S&P Target Risk Growth Total Return Index | 25% Barclays Aggregate Bond Index; 75% S&P 500 Daily Risk Controlled 12% Index |
FVIT Franklin Dividend and Income Managed Risk Portfolio | S&P Target Risk Growth Total Return Index | 25% Barclays Aggregate Bond Index; 75% S&P 500 Daily Risk Controlled 12% Index |
FVIT Growth Managed Risk Portfolio | S&P Target Risk Growth Total Return Index | 15% Barclays Aggregate Bond Index; 35% S&P 500 Daily Risk Controlled 10% Index; 50% S&P 500 Daily Risk Controlled 12% Index |
FVIT Moderate Growth Managed Risk Portfolio | S&P Target Risk Moderate Total Return Index | 35% Barclays Aggregate Bond Index; 10% S&P 500 Daily Risk Controlled 10% Index; 55% S&P 500 Daily Risk Controlled 12% Index |
The indices shown are for informational purposes only and are not reflective of any investment. As it is not possible to invest in the indices, the data shown does not reflect or compare features of an actual investment, such as its objectives, costs and expenses, liquidity, safety, guarantees or insurance, fluctuation of principal or return, or tax features. Past performance is no guarantee of future results.
This report contains the current opinions of Forethought Investment Advisors, LLC at the time of its publication and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Such opinions are subject to change without notice and securities described herein may no longer be included in, or may at any time be removed from, a Portfolio’s portfolio. This report is distributed for informational purposes only. Information contained herein has been obtained from sources believed reliable, but not guaranteed.
Index Definitions: Additional information and a detailed index methodology can be found on the web sites
https://ecommerce.barcap.com/indices/index.dxml and www.spindices.com.
Barclays Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM passthroughs), ABS, and CMBS.
S&P Target Risk Moderate Total Return Index provides significant exposure to fixed income, while also providing increased opportunity for capital growth through equities.
S&P Target Risk Growth Total Return Index which offers increased exposure to equities, while also using some fixed income exposure to diversify risk.
S&P 500 Daily Risk Controlled 10% Index represents a portfolio of the S&P 500 Low Volatility Index plus an interest accruing cash component. The index is dynamically rebalanced to target a 10% level of volatility. Volatility is calculated as a function of historical returns.
S&P 500 Daily Risk Controlled 12% Index represents a portfolio of the S&P 500 Low Volatility Index plus an interest accruing cash component. The index is dynamically rebalanced to target a 12% level of volatility. Volatility is calculated as a function of historical returns.
S&P 500 Low Volatility Index represents a portfolio of at the 100 least volatile stocks in the S&P 500. The index benchmarks low volatility or low variance strategies for the U.S. stock market.
3226-NLD-8/8/2014
| | | | | | | |
FVIT American Funds® Managed Risk Portfolio |
Portfolio Review |
June 30, 2014 (Unaudited) |
| | | | | | | |
| The Portfolio's performance figures* for the periods ended June 30, 2014, as compared to its benchmark and blended benchmark: |
| | | | | | | |
| | | | | Six | Performance | |
| | | | | Months | Since Inception** | |
| FVIT American Funds® Managed Risk Portfolio | | | | |
| Class II | | | | 4.28% | 7.20% | |
| S&P 500 Target Risk Moderate Total Return Index | | | 4.42% | 6.17% | |
| Blended Index - 35% - Barclays Aggregate Bond Index | | | | |
| 10% - S&P 500 Daily Risk Controlled 10% Index | | | | |
| 55% - S&P 500 Daily Risk Controlled 12% Index | | 4.89% | 8.70% | |
| | | | | | | |
| * The performance data quoted is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or on the redemption of Portfolio shares, as well as other charges and expenses of the insurance contract or separate account. The Portfolio's total annual operating expenses, after fee waiver and/or reimbursement, were 1.25% for Class II shares per the April 30, 2014 prospectus. | |
| ** Commencement of operations is October 31, 2013. | | | | |
| The S&P Target Risk® Moderate Total Return Index provides significant exposure to fixed income, while also providing increased opportunity for capital growth through equities. | |
| The Barclays Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM passthroughs), ABS, and CMBS. | |
| S&P 500 Daily Risk Controlled 10% Index represents a portfolio of the S&P 500 Low Volatility Index plus an interest accruing cash component. The index is dynamically rebalanced to target a 10% level of volatility. Volatility is calculated as a function of historical returns.
S&P 500 Daily Risk Controlled 12% Index represents a portfolio of the S&P 500 Low Volatility Index plus an interest accruing cash component. The index is dynamically rebalanced to target a 12% level of volatility. Volatility is calculated as a function of historical returns. | |
| | | | | | | |
| Holdings by Asset Class | | | | | % of Net Assets | |
| Equity Funds | | | | | 60.1% | |
| Debt Funds | | | | | 32.3% | |
| Money Market Fund | | | | | 2.6% | |
| Other Assets Less Liabilities | | | | | 5.0% | |
| | | | | | 100.0% | |
| | | | | | | |
| | | | | | | |
| Please refer to the Portfolio of Investments in this semi-annual report for more information regarding the Portfolio's holdings as June 30, 2014. | |
| | | | | | | |
FVIT BlackRock Global Allocation Managed Risk Portfolio |
Portfolio Review |
June 30, 2014 (Unaudited) |
| | | | | | | |
| The Portfolio's performance figures* for the periods ended June 30, 2014, as compared to its benchmark and blended benchmark: |
| | | | | | | |
| | | | | Six | Performance | |
| | | | | Months | Since Inception** | |
| FVIT BlackRock Global Allocation Managed Risk Portfolio | | | |
| Class II | | | | 2.84% | 5.10% | |
| S&P 500 Target Risk Moderate Total Return Index | | | 4.42% | 6.17% | |
| Blended Index - 40% - Barclays Aggregate Bond Index | | | | |
| 60% - S&P 500 Daily Risk Controlled 12% Index | | 4.90% | 8.45% | |
| | | | | | | |
| * The performance data quoted is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or on the redemption of Portfolio shares, as well as other charges and expenses of the insurance contract or separate account. The Portfolio's total annual operating expenses, after fee waiver and/or reimbursement, were 1.30% for Class II shares per the April 30, 2014 prospectus. | |
| ** Commencement of operations is October 31, 2013. | | | | |
| The S&P Target Risk® Moderate Total Return Index provides significant exposure to fixed income, while also providing increased opportunity for capital growth through equities. | |
| The Barclays Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM passthroughs), ABS, and CMBS. | |
| S&P 500 Daily Risk Controlled 12% Index represents a portfolio of the S&P 500 Low Volatility Index plus an interest accruing cash component. The index is dynamically rebalanced to target a 12% level of volatility. Volatility is calculated as a function of historical returns. | |
| | | | | | | |
| Holdings by Asset Class | | | | | % of Net Assets | |
| Equity Fund | | | | | 93.0% | |
| Money Market Fund | | | | | 1.1% | |
| Other Assets Less Liabilities | | | | | 5.9% | |
| | | | | | 100.0% | |
| | | | | | | |
| | | | | | | |
| Please refer to the Portfolio of Investments in this semi-annual report for more information regarding the Portfolio's holdings as June 30, 2014. | |
| | | | | | | |
| FVIT WMC Research Managed Risk Portfolio | |
| Portfolio Review | |
| June 30, 2014 (Unaudited) | |
| | | | | | | |
| The Portfolio's performance figures* for the periods ended June 30, 2014, as compared to its benchmark and blended benchmark: |
| | | | | | | |
| | | | | Six | Performance | |
| | | | | Months | Since Inception** | |
| FVIT WMC Research Managed Risk Portfolio | | | | | |
| Class II | | | | 4.95% | 8.20% | |
| S&P 500 Target Risk Moderate Total Return Index | | | 4.42% | 6.17% | |
| Blended Index - 35% - Barclays Aggregate Bond Index | | | | |
| 10% - S&P 500 Daily Risk Controlled 10% Index | | | | |
| 55% - S&P 500 Daily Risk Controlled 12% Index | | 4.89% | 8.70% | |
| | | | | | | |
| * The performance data quoted is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or on the redemption of Portfolio shares, as well as other charges and expenses of the insurance contract or separate account. The Portfolio's total annual operating expenses, after fee waiver and/or reimbursement, were 1.20% for Class II shares per the April 30, 2014 prospectus. | |
| ** Commencement of operations is October 31, 2013. | | | | |
| The S&P Target Risk® Moderate Total Return Index provides significant exposure to fixed income, while also providing increased opportunity for capital growth through equities. | |
| The Barclays Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM passthroughs), ABS, and CMBS. | |
| S&P 500 Daily Risk Controlled 10% Index represents a portfolio of the S&P 500 Low Volatility Index plus an interest accruing cash component. The index is dynamically rebalanced to target a 10% level of volatility. Volatility is calculated as a function of historical returns.
S&P 500 Daily Risk Controlled 12% Index represents a portfolio of the S&P 500 Low Volatility Index plus an interest accruing cash component. The index is dynamically rebalanced to target a 12% level of volatility. Volatility is calculated as a function of historical returns. | |
| | | | | | | |
| Holdings by Asset Class | | | | | % of Net Assets | |
| Common Stock | | | | | 59.7% | |
| U.S. Treasury Securities | | | | | 19.6% | |
| Mortgage Backed Securities | | | | | 9.5% | |
| Short-Term Investments | | | | | 8.1% | |
| Exchange Traded Funds | | | | | 2.1% | |
| Bonds & Notes | | | | | 0.9% | |
| Commercial Mortgage Backed Securities | | | | 0.6% | |
| Preferred Stock | | | | | 0.3% | |
| Other Assets Less Liabilities | | | | | (0.8)% | |
| | | | | | 100.0% | |
| | | | | | | |
| Please refer to the Portfolio of Investments in this semi-annual report for more information regarding the Portfolio's holdings as June 30, 2014. | |
| | | | | | | |
FVIT Balanced Managed Risk Portfolio |
Portfolio Review |
June 30, 2014 (Unaudited) |
| | | | | | | |
| The Portfolio's performance figures* for the periods ended June 30, 2014, as compared to its benchmark and blended benchmark: |
| | | | | | | |
| | | | | Six | Performance | |
| | | | | Months | Since Inception** | |
| FVIT Balanced Managed Risk Portfolio | | | | | |
| Class II | | | | 4.32% | 6.30% | |
| S&P 500 Target Risk Moderate Total Return Index | | | 4.42% | 6.17% | |
| Blended Index - 45% - Barclays Aggregate Bond Index | | | | |
| 20% - S&P 500 Daily Risk Controlled 10% Index | | | | |
| 35% - S&P 500 Daily Risk Controlled 12% Index | | 4.66% | 7.60% | |
| | | | | | | |
| * The performance data quoted is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or on the redemption of Portfolio shares, as well as other charges and expenses of the insurance contract or separate account. The Portfolio's total annual operating expenses, after fee waiver and/or reimbursement, were 1.05% for Class II shares per the April 30, 2014 prospectus. | |
| ** Commencement of operations is October 31, 2013. | | | | |
| The S&P Target Risk® Moderate Total Return Index provides significant exposure to fixed income, while also providing increased opportunity for capital growth through equities. | |
| The Barclays Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM passthroughs), ABS, and CMBS. | |
| S&P 500 Daily Risk Controlled 10% Index represents a portfolio of the S&P 500 Low Volatility Index plus an interest accruing cash component. The index is dynamically rebalanced to target a 10% level of volatility. Volatility is calculated as a function of historical returns.
S&P 500 Daily Risk Controlled 12% Index represents a portfolio of the S&P 500 Low Volatility Index plus an interest accruing cash component. The index is dynamically rebalanced to target a 12% level of volatility. Volatility is calculated as a function of historical returns. | |
| | | | | | | |
| Holdings by Asset Class | | | | | % of Net Assets | |
| Equity Funds | | | | | 51.3% | |
| Debt Funds | | | | | 42.0% | |
| Money Market Fund | | | | | 2.5% | |
| Other Assets Less Liabilities | | | | | 4.2% | |
| | | | | | 100.0% | |
| | | | | | | |
| | | | | | | |
| Please refer to the Portfolio of Investments in this semi-annual report for more information regarding the Portfolio's holdings as June 30, 2014. | |
| | | | | | | |
FVIT Select Advisor Managed Risk Portfolio |
Portfolio Review |
June 30, 2014 (Unaudited) |
| | | | | | | |
| The Portfolio's performance figures* for the periods ended June 30, 2014, as compared to its benchmark and blended benchmark: |
| | | | | | | |
| | | | | Six | Performance | |
| | | | | Months | Since Inception** | |
| FVIT Select Advisor Managed Risk Portfolio | | | | | |
| Class II | | | | 4.69% | 7.20% | |
| S&P 500 Target Risk Growth Total Return Index | | | 5.42% | 8.15% | |
| Blended Index - 25% - Barclays Aggregate Bond Index | | | | |
| 75% - S&P 500 Daily Risk Controlled 12% Index | | 5.10% | 9.81% | |
| | | | | | | |
| * The performance data quoted is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or on the redemption of Portfolio shares, as well as other charges and expenses of the insurance contract or separate account. The Portfolio's total annual operating expenses, after fee waiver and/or reimbursement, were 1.25% for Class II shares per the April 30, 2014 prospectus. | |
| ** Commencement of operations is October 31, 2013. | | | | |
| The S&P Target Risk® Growth Total Return Index which offers increased exposure to equities, while also using some fixed income exposure to diversify risk. | |
| The Barclays Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM passthroughs), ABS, and CMBS. | |
| S&P 500 Daily Risk Controlled 12% Index represents a portfolio of the S&P 500 Low Volatility Index plus an interest accruing cash component. The index is dynamically rebalanced to target a 12% level of volatility. Volatility is calculated as a function of historical returns. | |
| | | | | | | |
| Holdings by Asset Class | | | | | % of Net Assets | |
| Equity Funds | | | | | 69.9% | |
| Debt Funds | | | | | 23.3% | |
| Money Market Fund | | | | | 0.9% | |
| Other Assets Less Liabilities | | | | | 5.9% | |
| | | | | | 100.0% | |
| | | | | | | |
| | | | | | | |
| Please refer to the Portfolio of Investments in this semi-annual report for more information regarding the Portfolio's holdings as June 30, 2014. | |
| | | | | | | |
FVIT Franklin Dividend and Income Managed Risk Portfolio |
Portfolio Review |
June 30, 2014 (Unaudited) |
| | | | | | | |
| The Portfolio's performance figures* for the period ended June 30, 2014, as compared to its benchmark and blended benchmark: |
| | | | | | | |
| | | | | | Performance | |
| | | | | | Since Inception** | |
| FVIT Franklin Dividend and Income Managed Risk Portfolio | | | |
| Class II | | | | | 2.60% | |
| S&P 500 Target Risk Growth Total Return Index | | | | 3.15% | |
| Blended Index - 25% - Barclays Aggregate Bond Index | | | | |
| 75% - S&P 500 Daily Risk Controlled 12% Index | | | 4.25% | |
| | | | | | | |
| * The performance data quoted is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or on the redemption of Portfolio shares, as well as other charges and expenses of the insurance contract or separate account. The Portfolio's total annual operating expenses, after fee waiver and/or reimbursement, were 1.20% for Class II shares per the April 30, 2014 prospectus. | |
| ** Commencement of operations is April 30, 2014. | | | | | |
| The S&P Target Risk® Growth Total Return Index which offers increased exposure to equities, while also using some fixed income exposure to diversify risk. | |
| The Barclays Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM passthroughs), ABS, and CMBS. | |
| S&P 500 Daily Risk Controlled 12% Index represents a portfolio of the S&P 500 Low Volatility Index plus an interest accruing cash component. The index is dynamically rebalanced to target a 12% level of volatility. Volatility is calculated as a function of historical returns. | |
| | | | | | | |
| Holdings by Asset Class | | | | | % of Net Assets | |
| Common Stocks | | | | | 69.7% | |
| Debt Fund | | | | | 22.7% | |
| Money Market Fund | | | | | 0.3% | |
| Other Assets Less Liabilities | | | | | 7.3% | |
| | | | | | 100.0% | |
| | | | | | | |
| | | | | | | |
| Please refer to the Portfolio of Investments in this semi-annual report for more information regarding the Portfolio's holdings as June 30, 2014. |
| | | | | | | |
FVIT Growth Managed Risk Portfolio |
Portfolio Review |
June 30, 2014 (Unaudited) |
| | | | | | | |
| The Portfolio's performance figures* for the period ended June 30, 2014, as compared to its benchmark and blended benchmark: |
| | | | | | | |
| | | | | | Performance | |
| | | | | | Since Inception** | |
| FVIT Growth Managed Risk Portfolio | | | | | |
| Class II | | | | | 3.50% | |
| S&P 500 Target Risk Growth Total Return Index | | | | 3.15% | |
| Blended Index - 15% - Barclays Aggregate Bond Index | | | | |
| 35% - S&P 500 Daily Risk Controlled 10% Index | | | | |
| 50% - S&P 500 Daily Risk Controlled 12% Index | | | 4.35% | |
| | | | | | | |
| * The performance data quoted is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or on the redemption of Portfolio shares, as well as other charges and expenses of the insurance contract or separate account. The Portfolio's total annual operating expenses, after fee waiver and/or reimbursement, were 1.05% for Class II shares per the April 30, 2014 prospectus. | |
| ** Commencement of operations is April 30, 2014. | | | | | |
| The S&P Target Risk® Growth Total Return Index which offers increased exposure to equities, while also using some fixed income exposure to diversify risk. | |
| The Barclays Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM passthroughs), ABS, and CMBS. | |
| S&P 500 Daily Risk Controlled 10% Index represents a portfolio of the S&P 500 Low Volatility Index plus an interest accruing cash component. The index is dynamically rebalanced to target a 10% level of volatility. Volatility is calculated as a function of historical returns.
S&P 500 Daily Risk Controlled 12% Index represents a portfolio of the S&P 500 Low Volatility Index plus an interest accruing cash component. The index is dynamically rebalanced to target a 12% level of volatility. Volatility is calculated as a function of historical returns. | |
| | | | | | | |
| Holdings by Asset Class | | | | | % of Net Assets | |
| Equity Funds | | | | | 73.3% | |
| Debt Funds | | | | | 12.9% | |
| Money Market Fund | | | | | 12.4% | |
| Other Assets Less Liabilities | | | | | 1.4% | |
| | | | | | 100.0% | |
| | | | | | | |
| | | | | | | |
| Please refer to the Portfolio of Investments in this semi-annual report for more information regarding the Portfolio's holdings as June 30, 2014. |
| | | | | | |
FVIT Moderate Growth Managed Risk Portfolio |
Portfolio Review |
June 30, 2014 (Unaudited) |
| | | | | | |
| The Portfolio's performance figures* for the period ended June 30, 2014, as compared to its benchmark and blended benchmark: |
| | | | | | |
| | | | | | Performance |
| | | | | | Since Inception** |
| FVIT Moderate Growth Managed Risk Portfolio | | | |
| Class II | | | | | 2.70% |
| S&P 500 Target Risk Moderate Growth Total Return Index | | | 2.42% |
| Blended Index - 35% - Barclays Aggregate Bond Index | | | |
| 10% - S&P 500 Daily Risk Controlled 10% Index | | | |
| 55% - S&P 500 Daily Risk Controlled 12% Index | | | 3.75% |
| | | | | | |
| * The performance data quoted is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or on the redemption of Portfolio shares, as well as other charges and expenses of the insurance contract or separate account. The Portfolio's total annual operating expenses, after fee waiver and/or reimbursement, were 1.05% for Class II shares per the April 30, 2014 prospectus. |
| ** Commencement of operations is April 30, 2014. | | | | |
| The S&P Target Risk® Moderate Total Return Index provides significant exposure to fixed income, while also providing increased opportunity for capital growth through equities. |
| The Barclays Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM passthroughs), ABS, and CMBS. |
| S&P 500 Daily Risk Controlled 10% Index represents a portfolio of the S&P 500 Low Volatility Index plus an interest accruing cash component. The index is dynamically rebalanced to target a 10% level of volatility. Volatility is calculated as a function of historical returns.
S&P 500 Daily Risk Controlled 12% Index represents a portfolio of the S&P 500 Low Volatility Index plus an interest accruing cash component. The index is dynamically rebalanced to target a 12% level of volatility. Volatility is calculated as a function of historical returns. |
| | | | | | |
| Holdings by Asset Class | | | | | % of Net Assets |
| Equity Funds | | | | | 55.6% |
| Debt Funds | | | | | 29.9% |
| Money Market Fund | | | | | 6.5% |
| Other Assets Less Liabilities | | | | | 8.0% |
| | | | | | 100.0% |
| | | | | | |
| Please refer to the Portfolio of Investments in this semi-annual report for more information regarding the Portfolio's holdings as June 30, 2014. |
| | | | |
FVIT American Funds® Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS |
June 30, 2014 (Unaudited) |
| | | | |
Shares | | | | Value |
| | VARIABLE INSURANCE TRUSTS- 92.4% | | |
| | DEBT FUNDS - 32.3% | | |
684,163 | | American Funds Insurance Series - Bond Fund - Class 1 | | $ 7,614,731 |
496,601 | | American Funds Insurance Series - High-Income Bond Fund - Class 1 | | 5,705,946 |
| | | | 13,320,677 |
| | EQUITY FUNDS - 60.1% | | |
431,367 | | American Funds Insurance Series - Blue Chip Income and Growth Fund - Class 1 | 6,095,222 |
143,402 | | American Funds Insurance Series - Global Growth and Income Fund - Class 1 | | 1,905,818 |
77,547 | | American Funds Insurance Series - Growth Fund - Class 1 | | 6,095,999 |
184,564 | | American Funds Insurance Series - Growth-Income Fund - Class 1 | | 9,517,952 |
48,053 | | American Funds Insurance Series - New World Fund - Class 1 | | 1,145,594 |
| | | | 24,760,585 |
| | TOTAL VARIABLE INSURANCE TRUSTS (Cost - $37,527,487) | | 38,081,262 |
| | | | |
| | SHORT-TERM INVESTMENTS - 2.6% | | |
| | MONEY MARKET FUND - 2.6% | | |
1,064,467 | | Fidelity Institutional Money Market - Money Market Portfolio, Institutional Class | |
| | to yield 0.05% (a)(Cost - $1,064,467) | | 1,064,467 |
| | | | |
| | TOTAL INVESTMENTS - 95.0% (Cost - $38,591,954)(b) | | $ 39,145,729 |
| | OTHER ASSETS LESS LIABILITIES - NET - 5.0% | | 2,080,293 |
| | TOTAL NET ASSETS - 100.0% | | $ 41,226,022 |
| | | | |
(a) | Money market rate shown represents the rate at June 30, 2014. | | |
(b) | Represents cost for financial reporting purposes. Aggregate cost for federal tax purposes is $38,603,259 |
| and differs from market value by net unrealized appreciation (depreciation) of securities as follows: | |
| | | | |
| | | Unrealized Appreciation: | $ 591,250 |
| | | Unrealized Depreciation: | (37,475) |
| | Net Unrealized Appreciation: | $ 553,775 |
| | | | |
Contracts | | OPEN LONG FUTURES CONTRACTS | | Unrealized Appreciation |
1 | | MSCI EAFE Index Mini Future September 2014 | | |
| | (Underlying Face Amount at Value $98,445) | | $ 600 |
2 | | MSCI Emerging Market E-Mini Future September 2014 | | |
| | (Underlying Face Amount at Value $104,070) | | 360 |
6 | | S&P 500 E-Mini September 2014 | | |
| | (Underlying Face Amount at Value $585,750) | | 7,260 |
1 | | S&P Midcap 400 E-Mini Future September 2014 | | |
| | (Underlying Face Amount at Value $142,930) | | 3,085 |
| | | | |
| | NET UNREALIZED APPRECIATION OF OPEN LONG FURTURES CONTRACTS | $ 11,305 |
See accompanying notes to financial statements.
| | | | |
FVIT BlackRock Global Allocation Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS |
June 30, 2014 (Unaudited) |
| | | | |
Shares | | | | Value |
| | VARIABLE INSURANCE TRUSTS - 93.0% | | |
| | EQUITY FUND - 93.0% | | |
3,532,399 | | BlackRock Global Allocation V.I. Fund - Class 1 (Cost - $62,776,950) | | $ 64,430,949 |
| | | | |
| | SHORT-TERM INVESTMENTS - 1.1% | | |
| | MONEY MARKET FUND - 1.1% | | |
782,104 | | Fidelity Institutional Money Market - Money Market Portfolio, Institutional Class | |
| | to yield 0.05% (a)(Cost - $782,104) | | 782,104 |
| | | | |
| | TOTAL INVESTMENTS - 94.1% (Cost - $63,559,054)(b) | | $ 65,213,053 |
| | OTHER ASSETS LESS LIABILITIES -NET - 5.9% | | 4,093,667 |
| | TOTAL NET ASSETS - 100.0% | | $ 69,306,720 |
| | | | |
| | | | |
(a) | Money market rate shown represents the rate at June 30, 2014. | | |
(b) | Represents cost for financial reporting purposes. Aggregate cost for federal tax purposes is $63,574,822 |
| and differs from market value by net unrealized appreciation (depreciation) of securities as follows: | |
| | | | |
| | | Unrealized Appreciation: | $ 1,653,999 |
| | | Unrealized Depreciation: | - |
| | Net Unrealized Appreciation: | $ 1,653,999 |
| | | | |
| | | | |
Contracts | | OPEN LONG FUTURES CONTRACTS | | Unrealized Appreciation |
4 | | MSCI EAFE Index Mini Future September 2014 | | |
| | (Underlying Face Amount at Value $393,780) | | $ 2,500 |
8 | | MSCI Emerging Market E-Mini Future September 2014 | | |
| | (Underlying Face Amount at Value $416,280) | | 2,400 |
9 | | S&P 500 E-Mini September 2014 | | |
| | (Underlying Face Amount at Value $878,625) | | 10,868 |
| | | | |
| | NET UNREALIZED APPRECIATION OF OPEN LONG FUTURES CONTRACTS | $ 15,768 |
See accompanying notes to financial statements.
| | | | | | |
FVIT WMC Research Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS |
June 30, 2014 (Unaudited) |
Shares | | | | | | Value |
| | COMMON STOCKS - 59.7% | | | | |
| | ADVERTISING - 0.1% | | | | |
1,676 | | The Interpublic Group of Cos., Inc. | | | | $ 32,699 |
| | | | | | |
| | AEROSPACE/DEFENSE - 1.7% | | | | |
619 | | The Boeing Co. | | | | 78,755 |
544 | | Lockheed Martin Corp. | | | | 87,437 |
490 | | Northrop Grumman Corp. | | | | 58,619 |
636 | | Raytheon Co. | | | | 58,671 |
1,360 | | United Technologies Corp. | | | | 157,012 |
| | | | | | 440,494 |
| | AGRICULTURE - 2.1% | | | | |
6,226 | | Altria Group, Inc. | | | | 261,119 |
2,146 | | Lorillard, Inc. | | | | 130,842 |
1,661 | | Philip Morris International, Inc. | | | | 140,039 |
| | | | | | 532,000 |
| | AIRLINES - 0.2% | | | | |
965 | | American Airlines Group, Inc. * | | | | 41,456 |
411 | | Delta Air Lines, Inc. | | | | 15,914 |
| | | | | | 57,370 |
| | APPAREL - 0.3% | | | | |
570 | | Ralph Lauren Corp. | | | | 91,593 |
| | | | | | |
| | BANKS - 4.1% | | | | |
7,733 | | Citigroup, Inc. | | | | 364,224 |
500 | | Northern Trust Corp. | | | | 32,105 |
2,519 | | The PNC Financial Services Group, Inc. | | | | 224,317 |
7,808 | | Wells Fargo & Co. | | | | 410,388 |
1,010 | | Zions Bancorporation | | | | 29,765 |
| | | | | | 1,060,799 |
| | BEVERAGES - 1.6% | | | | |
1,778 | | Anheuser-Busch InBev - ADR | | | | 204,363 |
1,042 | | Diageo PLC - ADR | | | | 132,615 |
1,049 | | Monster Beverage Corp. * | | | | 74,510 |
| | | | | | 411,488 |
| | BIOTECHNOLOGY - 0.9% | | | | |
128 | | Alnylam Pharmaceuticals, Inc. * | | | | 8,086 |
2,770 | | Arena Pharmaceuticals, Inc. * | | | | 16,232 |
972 | | BioCryst Pharmaceuticals, Inc. * | | | | 12,393 |
1,202 | | Exelixis, Inc. * | | | | 4,075 |
260 | | Genocea Biosciences, Inc. * | | | | 4,875 |
684 | | Gilead Sciences, Inc. * | | | | 56,710 |
1,650 | | GlycoMimetics, Inc. * | | | | 13,910 |
60 | | Incyte Corp Ltd. * | | | | 3,386 |
See accompanying notes to financial statements.
| | | | | | |
FVIT WMC Research Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS (Continued) |
June 30, 2014 (Unaudited) |
Shares | | | | | | Value |
| | BIOTECHNOLOGY - 0.9% (Continued) | | | | |
100 | | Karyopharm Therapeutics, Inc. * | | | | $ 4,655 |
1,101 | | Novavax, Inc. * | | | | 5,087 |
275 | | NPS Pharmaceuticals, Inc. * | | | | 9,089 |
187 | | PTC Therapeutics, Inc. * | | | | 4,888 |
63 | | Puma Biotechnology, Inc. * | | | | 4,158 |
279 | | Regeneron Pharmaceuticals, Inc. * | | | | 78,809 |
95 | | Seattle Genetics, Inc. * | | | | 3,634 |
60 | | Ultragenyx Pharmaceutical, Inc. * | | | | 2,693 |
100 | | Versartis, Inc. * | | | | 2,804 |
| | | | | | 235,484 |
| | BUILDING MATERIALS - 0.1% | | | | |
1,350 | | Boise Cascade Co. * | | | | 38,664 |
| | | | | | |
| | CHEMICALS - 1.0% | | | | |
685 | | Cabot Corp. | | | | 39,723 |
807 | | Celanese Corp. | | | | 51,874 |
406 | | LyondellBasell Industries | | | | 39,646 |
1,106 | | The Dow Chemical Co. | | | | 56,915 |
358 | | The Sherwin-Williams Co. | | | | 74,074 |
| | | | | | 262,232 |
| | COAL - 0.1% | | | | |
722 | | CONSOL Energy, Inc. | | | | 33,263 |
| | | | | | |
| | COMMERCIAL SERVICES - 1.4% | | | | |
1,196 | | Automatic Data Processing, Inc. | | | | 94,819 |
734 | | Equifax, Inc. | | | | 53,244 |
918 | | EVERTEC, Inc. | | | | 22,252 |
200 | | Robert Half International, Inc. | | | | 9,548 |
430 | | Global Payments, Inc. | | | | 31,325 |
851 | | Heartland Payment Systems, Inc. | | | | 35,070 |
441 | | Manpowergroup, Inc. | | | | 37,419 |
1,040 | | TriNet Group, Inc. * | | | | 25,033 |
608 | | WEX, Inc. * | | | | 63,822 |
| | | | | | 372,532 |
| | COMPUTERS - 3.5% | | | | |
1,192 | | Accenture PLC - Cl. A | | | | 96,361 |
7,090 | | Apple, Inc. | | | | 658,874 |
442 | | Cadence Design Systems, Inc. * | | | | 7,730 |
1,437 | | Cognizant Technology Solutions Corp. - Cl. A * | | | | 70,284 |
870 | | Western Digital Corp. | | | | 80,301 |
| | | | | | 913,550 |
See accompanying notes to financial statements.
| | | | | | |
FVIT WMC Research Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS (Continued) |
June 30, 2014 (Unaudited) |
Shares | | | | | | Value |
| | COSMETICS/PERSONAL CARE - 0.4% | | | | |
1,038 | | Colgate-Palmolive Co. | | | | $ 70,771 |
1,897 | | Coty, Inc. - Cl. A | | | | 32,495 |
| | | | | | 103,266 |
| | DIVERSIFIED FINANCIAL SERVICES - 2.0% | | | | |
830 | | Ameriprise Financial, Inc. | | | | 99,600 |
169 | | BlackRock, Inc. - Cl. A | | | | 54,012 |
69 | | IntercontinentalExchange, Inc. | | | | 13,034 |
393 | | LPL Financial Holdings, Inc. | | | | 19,548 |
415 | | Moelis & Co. - Cl. A * | | | | 13,948 |
5,090 | | Santander Consumer USA Holdings, Inc. | | | | 98,950 |
680 | | TD Ameritrade Holding Corp. | | | | 21,318 |
63 | | Virtus Investment Partners, Inc. * | | | | 13,340 |
672 | | Visa, Inc. - Cl. A | | | | 141,597 |
2,384 | | WisdomTree Investments, Inc. * | | | | 29,466 |
| | | | | | 504,813 |
| | ELECTRIC - 2.9% | | | | |
887 | | Ameren Corp. | | | | 36,261 |
1,919 | | Calpine Corp. * | | | | 45,691 |
1,770 | | Duke Energy Corp. | | | | 131,316 |
910 | | Edison International | | | | 52,880 |
480 | | Exelon Corp. | | | | 17,511 |
590 | | ITC Holdings Corp. | | | | 21,523 |
1,359 | | NextEra Energy, Inc. | | | | 139,270 |
682 | | Northeast Utilities | | | | 32,238 |
980 | | NRG Energy, Inc. | | | | 36,456 |
360 | | NRG Yield, Inc. - Cl. A | | | | 18,738 |
668 | | OGE Energy Corp. | | | | 26,105 |
934 | | PG&E Corp. | | | | 44,851 |
3,150 | | The Southern Co. | | | | 142,947 |
| | | | | | 745,787 |
| | ELECTRONICS - 0.8% | | | | |
677 | | Agilent Technologies, Inc. | | | | 38,887 |
1,794 | | Honeywell International, Inc. | | | | 166,752 |
| | | | | | 205,639 |
| | ENERGY-ALTERNATE SOURCES - 0.1% | | | | |
461 | | Pattern Energy Group, Inc. - Cl. A | | | | 15,264 |
| | | | | | |
| | ENGINEERING & CONSTRUCTION - 0.1% | | | | |
1,046 | | KBR, Inc. | | | | 24,947 |
| | | | | | |
| | ENTERTAINMENT - 0.1% | | | | |
863 | | DreamWorks Animation SKG, Inc. - Cl. A * | | | | 20,073 |
See accompanying notes to financial statements.
| | | | | | |
FVIT WMC Research Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS (Continued) |
June 30, 2014 (Unaudited) |
Shares | | | | | | Value |
| | FOOD - 1.7% | | | | |
445 | | Ingredion, Inc. | | | | $ 33,393 |
862 | | Kraft Foods Group, Inc. | | | | 51,677 |
6,786 | | Mondelez International, Inc. - Cl. A | | | | 255,221 |
400 | | Post Holdings, Inc. * | | | | 20,364 |
1,380 | | Sprouts Farmers Market, Inc. * | | | | 45,153 |
2,110 | | SunOpta, Inc. * | | | | 29,709 |
| | | | | | 435,517 |
| | FOREST PRODUCTS & PAPER - 0.3% | | | | |
1,548 | | International Paper Co. | | | | 78,128 |
| | | | | | |
| | HEALTHCARE-PRODUCTS - 2.2% | | | | |
2,389 | | Covidien PLC | | | | 215,440 |
2,719 | | Medtronic, Inc. | | | | 173,363 |
1,616 | | St. Jude Medical, Inc. | | | | 111,908 |
804 | | Stryker Corp. | | | | 67,793 |
| | | | | | 568,504 |
| | HEALTHCARE-SERVICES - 1.3% | | | | |
1,397 | | Aetna, Inc. | | | | 113,269 |
714 | | Cigna Corp. | | | | 65,666 |
1,717 | | HCA Holdings, Inc. * | | | | 96,804 |
554 | | UnitedHealth Group, Inc. | | | | 45,290 |
| | | | | | 321,029 |
| | INSURANCE - 3.3% | | | | |
1,032 | | Aflac, Inc. | | | | 64,242 |
3,299 | | American International Group, Inc. | | | | 180,059 |
576 | | Aon PLC | | | | 51,892 |
2,560 | | Hartford Financial Services Group, Inc. | | | | 91,674 |
2,048 | | Marsh & McLennan Cos., Inc. | | | | 106,127 |
1,650 | | Principal Financial Group, Inc. | | | | 83,292 |
1,008 | | Prudential Financial, Inc. | | | | 89,480 |
1,449 | | The Allstate Corp. | | | | 85,085 |
2,922 | | XL Group PLC | | | | 95,637 |
| | | | | | 847,488 |
| | INTERNET - 3.2% | | | | |
453 | | Amazon.com, Inc. * | | | | 147,125 |
1,076 | | Facebook, Inc. - Cl. A * | | | | 72,404 |
231 | | Google, Inc. - Cl. A * | | | | 135,059 |
411 | | Google, Inc. - Cl. C * | | | | 236,440 |
65 | | Netflix, Inc. * | | | | 28,639 |
301 | | Pandora Media, Inc. * | | | | 8,880 |
165 | | The Priceline Group, Inc. * | | | | 198,495 |
| | | | | | 827,042 |
See accompanying notes to financial statements.
| | | | | | |
FVIT WMC Research Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS (Continued) |
June 30, 2014 (Unaudited) |
Shares | | | | | | Value |
| | IRON/STEEL - 0.2% | | | | |
297 | | Allegheny Technologies, Inc. | | | | $ 13,395 |
441 | | Carpenter Technology Corp. | | | | 27,893 |
110 | | Nucor Corp. | | | | 5,417 |
72 | | Universal Stainless & Alloy Products, Inc. * | | | | 2,339 |
| | | | | | 49,044 |
| | LEISURE TIME - 0.5% | | | | |
395 | | Arctic Cat, Inc. | | | | 15,571 |
1,230 | | Harley-Davidson, Inc. | | | | 85,916 |
572 | | Norwegian Cruise Line Holdings, Ltd. * | | | | 18,132 |
| | | | | | 119,619 |
| | LODGING - 0.5% | | | | |
1,740 | | Hilton Worldwide Holdings, Inc. * | | | | 40,542 |
330 | | Las Vegas Sands Corp. | | | | 25,153 |
961 | | Wyndham Worldwide Corp. | | | | 72,767 |
| | | | | | 138,462 |
| | MEDIA - 2.3% | | | | |
386 | | Charter Communications, Inc. * | | | | 61,135 |
2,622 | | Comcast Corp. | | | | 140,749 |
2,176 | | DIRECTV * | | | | 184,982 |
600 | | Markit Ltd. * | | | | 16,188 |
994 | | Nielsen Holdings | | | | 48,119 |
238 | | Time Warner, Inc. | | | | 16,719 |
1,431 | | The Walt Disney Co. | | | | 122,694 |
| | | | | | 590,586 |
| | MINING - 0.1% | | | | |
1,381 | | Luxfer Holdings PLC - ADR | | | | 26,170 |
| | | | | | |
| | MISCELLANEOUS MANUFACTURING - 1.9% | | | | |
1,638 | | Danaher Corp. | | | | 128,960 |
765 | | Dover Corp. | | | | 69,577 |
1,164 | | Eaton Corp. PLC | | | | 89,837 |
1,338 | | Illinois Tool Works, Inc. | | | | 117,155 |
1,301 | | Pentair - PLC | | | | 93,828 |
| | | | | | 499,357 |
| | OIL & GAS - 4.2% | | | | |
5,319 | | Alon USA Energy, Inc. | | | | 66,168 |
1,174 | | Anadarko Petroleum Corp. | | | | 128,518 |
2,280 | | Cabot Oil & Gas Corp. | | | | 77,839 |
871 | | Chevron Corp. | | | | 113,709 |
10,969 | | Cobalt International Energy, Inc. * | | | | 201,281 |
130 | | Concho Resources, Inc. * | | | | 18,785 |
2,380 | | Exxon Mobil Corp. | | | | 239,618 |
See accompanying notes to financial statements.
| | | | | | |
FVIT WMC Research Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS (Continued) |
June 30, 2014 (Unaudited) |
Shares | | | | | | Value |
| | OIL & GAS - 4.2% (Continued) | | | | |
605 | | Gulfport Energy Corp. * | | | | $ 37,994 |
531 | | HollyFrontier Corp. | | | | 23,199 |
774 | | Laredo Petroleum, Inc. * | | | | 23,979 |
750 | | Nabors Industries Ltd. | | | | 22,028 |
747 | | Patterson-UTI Energy, Inc. | | | | 26,100 |
469 | | Pioneer Natural Resources Co. | | | | 107,781 |
| | | | | | 1,086,999 |
| | OIL & GAS SERVICES - 0.5% | | | | |
250 | | Baker Hughes, Inc. | | | | 18,613 |
444 | | Halliburton Co. | | | | 31,528 |
420 | | NOW, Inc. * | | | | 15,208 |
166 | | Oil States International, Inc. * | | | | 10,639 |
1,334 | | Superior Energy Services, Inc. | | | | 48,211 |
| | | | | | 124,199 |
| | PACKAGING & CONTAINERS - 0.6% | | | | |
1,785 | | Ball Corp. | | | | 111,884 |
961 | | Owens-Illinois, Inc. * | | | | 33,289 |
| | | | | | 145,173 |
| | PHARMACEUTICALS - 4.0% | | | | |
805 | | Abbott Laboratories | | | | 32,925 |
420 | | Achaogen, Inc. * | | | | 5,863 |
431 | | Actavis PLC * | | | | 96,135 |
263 | | Aerie Pharmaceuticals, Inc. * | | | | 6,515 |
1,418 | | Alkermes PLC * | | | | 71,368 |
100 | | Auspex Pharmaceuticals, Inc. * | | | | 2,227 |
3,412 | | Bristol-Myers Squibb Co. | | | | 165,516 |
682 | | Cardinal Health, Inc. | | | | 46,758 |
1,315 | | Eli Lilly & Co. | | | | 81,754 |
1,764 | | Ironwood Pharmaceuticals, Inc. - Cl. A * | | | | 27,042 |
1,472 | | Johnson & Johnson | | | | 154,001 |
200 | | Kite Pharma, Inc. * | | | | 5,784 |
564 | | McKesson Corp. | | | | �� 105,022 |
3,015 | | Merck & Co., Inc. | | | | 174,418 |
267 | | Relypsa, Inc. * | | | | 6,493 |
250 | | TESARO, Inc. * | | | | 7,778 |
220 | | Tetraphase Pharmaceuticals, Inc. * | | | | 2,968 |
510 | | Trevena, Inc. * | | | | 2,882 |
1,150 | | Zoetis, Inc. - Cl. A | | | | 37,111 |
| | | | | | 1,032,560 |
| | PIPELINES - 0.8% | | | | |
2,702 | | Enbridge, Inc. | | | | 128,264 |
512 | | Spectra Energy Corp. | | | | 21,750 |
See accompanying notes to financial statements.
| | | | | | |
FVIT WMC Research Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS (Continued) |
June 30, 2014 (Unaudited) |
Shares | | | | | | Value |
| | PIPELINES - 0.8% (Continued) | | | | |
765 | | The Williams Cos., Inc. | | | | $ 44,531 |
| | | | | | 194,545 |
| | REAL ESTATE INVESTMENT TRUSTS - 1.7% | | | | |
1,196 | | American Tower Corp. | | | | 107,616 |
599 | | AvalonBay Communities, Inc. | | | | 85,172 |
198 | | Public Storage | | | | 33,927 |
588 | | Simon Property Group, Inc. | | | | 97,773 |
370 | | SL Green Realty Corp. | | | | 40,482 |
2,324 | | Weyerhaeuser Co. | | | | 76,901 |
| | | | | | 441,871 |
| | RETAIL - 3.8% | | | | |
650 | | Advance Auto Parts, Inc. | | | | 87,698 |
250 | | AutoZone, Inc. * | | | | 134,060 |
1,613 | | CVS Caremark Corp. | | | | 121,572 |
1,896 | | Dollar Tree, Inc. * | | | | 103,256 |
4,219 | | Lowe's Cos., Inc. | | | | 202,470 |
350 | | Nu Skin Enterprises, Inc. | | | | 25,886 |
445 | | PVH Corp. | | | | 51,887 |
1,250 | | Ross Stores, Inc. | | | | 82,662 |
495 | | Signet Jewelers Ltd. | | | | 54,742 |
1,555 | | Walgreen Co. | | | | 115,272 |
| | | | | | 979,505 |
| | SEMICONDUCTORS - 1.4% | | | | |
1,530 | | Applied Materials, Inc. | | | | 34,501 |
80 | | First Solar, Inc. * | | | | 5,685 |
6,346 | | Freescale Semiconductor Ltd. * | | | | 149,131 |
1,310 | | Intel Corp. | | | | 40,479 |
290 | | Lam Research Corp. | | | | 19,598 |
331 | | Maxim Integrated Products, Inc. | | | | 11,191 |
1,389 | | QUALCOMM, Inc. | | | | 110,009 |
| | | | | | 370,594 |
| | SOFTWARE - 1.1% | | | | |
3,070 | | Activision Blizzard, Inc. | | | | 68,461 |
815 | | Akamai Technologies, Inc. * | | | | 49,764 |
407 | | Envestnet, Inc. * | | | | 19,910 |
2,970 | | Microsoft Corp. | | | | 123,849 |
410 | | MSCI, Inc. - Cl. A * | | | | 18,799 |
| | | | | | 280,783 |
| | TELECOMMUNICATIONS - 0.2% | | | | |
1,898 | | Juniper Networks, Inc. * | | | | 46,577 |
See accompanying notes to financial statements.
| | | | | | |
FVIT WMC Research Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS (Continued) |
June 30, 2014 (Unaudited) |
Shares | | | | | | Value |
| | TRANSPORTATION - 0.4% | | | | |
280 | | FedEx Corp. | | | | $ 42,386 |
93 | | Genesee & Wyoming, Inc. * | | | | 9,765 |
196 | | JB Hunt Transport Services, Inc. | | | | 14,461 |
218 | | Kansas City Southern | | | | 23,437 |
350 | | Swift Transportation Co. - Cl. A * | | | | 8,831 |
630 | | UTi Worldwide, Inc. | | | | 6,514 |
| | | | | | 105,394 |
| | | | | | |
| | TOTAL COMMON STOCKS (Cost - $13,992,955) | | | | 15,411,103 |
| | | | | | |
| | PERFERRED STOCK - 0.3% | | | | |
3,000 | | Verizon Communications, Inc. * (Cost $75,000) | | | | 77,280 |
| | | | | | |
| | EXCHANGE TRADED FUND - 2.1% | | | | |
| | EQUITY FUND - 2.1% | | | | |
2,741 | | SPDR S&P 500 ETF Trust (Cost - $501,016) | | | | 536,469 |
| | | | | | |
Principal Amount ($) | | | Coupon Rate (%) | | Maturity | |
| | BONDS & NOTES - 0.9% | | | | |
| | BANKS - 0.5% | | | | |
$ 45,000 | | Deutsche Bank AG/London | 3.7000 | | 5/30/2024 | 45,014 |
55,000 | | Goldman Sachs Group, Inc. | 4.8000 | | 7/8/2044 | 54,732 |
35,000 | | Wells Fargo & Co. | 4.1000 | | 6/3/2026 | 35,441 |
| | | | | | 135,187 |
| | INSURANCE - 0.1% | | | | |
25,000 | | ACE INA Holdings, Inc. | 3.3500 | | 5/15/2024 | 25,218 |
| | | | | | |
| | PHARMACEUTICALS - 0.3% | | | | |
60,000 | | Express Scripts Holding Co. | 3.5000 | | 6/15/2024 | 59,371 |
| | | | | | |
| | TOTAL BONDS & NOTES (Cost $219,054) | | | | 219,776 |
| | | | | | |
| | COMMERCIAL MORTGAGE BACKED SECURITIES - 0.6% | | | | |
34,486 | | JP Morgan Chase Commercial Mortgage Securities Trust 2006-LDP8 | 5.3990 | | 5/15/2045 | 37,142 |
100,000 | | LB-UBS Commercial Mortgage Trust 2006-C6 | 5.3720 | | 9/15/2039 | 108,231 |
| | TOTAL COMMERCIAL MORTGAGE BACKED SECURITIES (Cost - $146,958) | 145,373 |
| | | | | | |
| | MORTGAGE BACKED SECURITIES - 9.5% | | | | |
| | FEDERAL HOME LOAN MORTGAGE CORP. - 3.5% | | | | |
475,000 | | Freddie Mac + | 4.0000 | | 7/15/2044 | 502,754 |
50,000 | | Freddie Mac + | 4.5000 | | 7/1/2041 | 54,114 |
50,000 | | Freddie Mac + | 5.0000 | | 7/1/2044 | 55,344 |
See accompanying notes to financial statements.
| | | | | | |
FVIT WMC Research Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS (Continued) |
June 30, 2014 (Unaudited) |
Principal Amount ($) | | | Coupon Rate (%) | | Maturity | Value |
| | FEDERAL HOME LOAN MORTGAGE CORP. - 3.5% (Continued) | | | |
$ 50,000 | | Freddie Mac + | 5.5000 | | 7/1/2044 | $ 55,798 |
38,160 | | Freddie Mac Gold Pool | 2.5000 | | 10/1/2028 | 38,774 |
23,294 | | Freddie Mac Gold Pool | 3.0000 | | 9/1/2028 | 24,195 |
67,120 | | Freddie Mac Gold Pool | 3.0000 | | 2/1/2043 | 66,351 |
63,092 | | Freddie Mac Gold Pool | 3.5000 | | 10/1/2043 | 64,936 |
47,495 | | Freddie Mac Gold Pool | 4.0000 | | 10/1/2043 | 50,384 |
| | | | | | 912,650 |
| | FEDERAL NATIONAL MORTGAGE ASSOCIATION - 4.3% | | | | |
50,000 | | Fannie Mae + | 3.5000 | | 7/15/2029 | 52,991 |
250,000 | | Fannie Mae + | 4.5000 | | 7/1/2035 | 270,742 |
175,000 | | Fannie Mae + | 5.0000 | | 7/1/2035 | 194,332 |
50,000 | | Fannie Mae + | 5.5000 | | 7/1/2038 | 55,978 |
75,000 | | Fannie Mae + | 6.0000 | | 7/1/2044 | 84,480 |
51,849 | | Fannie Mae Pool | 2.5000 | | 4/1/2028 | 52,737 |
37,764 | | Fannie Mae Pool | 3.0000 | | 10/1/2028 | 39,276 |
126,717 | | Fannie Mae Pool | 3.0000 | | 7/1/2043 | 125,330 |
120,746 | | Fannie Mae Pool | 3.5000 | | 5/1/2043 | 124,487 |
99,742 | | Fannie Mae Pool | 4.0000 | | 11/1/2043 | 106,002 |
| | | | | | 1,106,355 |
| | GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 1.7% | | | |
100,000 | | Ginnie Mae + | 4.5000 | | 7/1/2044 | 109,147 |
50,000 | | Ginnie Mae + | 5.0000 | | 7/1/2044 | 54,939 |
85,719 | | Ginnie Mae II Pool | 3.0000 | | 12/20/2042 | 86,777 |
104,820 | | Ginnie Mae II Pool | 3.5000 | | 7/20/2043 | 109,359 |
65,697 | | Ginnie Mae II Pool | 4.0000 | | 9/20/2043 | 70,427 |
| | | | | | 430,649 |
| | TOTAL MORTGAGE BACKED SECURITIES (Cost - $2,417,716) | | | 2,449,654 |
| | | | | | |
| | U.S. TREASURY SECURITIES - 19.6% | | | | |
400,000 | | United States Treasury Floating Rate Note | 0.0850 | | 1/31/2016 | 399,994 |
95,000 | | United States Treasury Bond | 2.7500 | | 11/15/2023 | 97,368 |
450,000 | | United States Treasury Bond | 3.6250 | | 8/15/2043 | 475,313 |
65,000 | | United States Treasury Bond | 3.7500 | | 11/15/2043 | 70,200 |
3,010,000 | | United States Treasury Note | 0.7500 | | 10/31/2017 | 2,980,253 |
445,000 | | United States Treasury Note | 1.3750 | | 6/30/2018 | 446,008 |
510,000 | | United States Treasury Note | 2.5000 | | 8/15/2023 | 513,028 |
90,000 | | United States Treasury Note | 2.7500 | | 2/15/2024 | 92,046 |
| | TOTAL U.S. TREASURY SECURITIES (Cost - $5,022,685) | | | | 5,074,210 |
See accompanying notes to financial statements.
| | | | | | |
FVIT WMC Research Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS (Continued) |
June 30, 2014 (Unaudited) |
Principal Amount ($) | | | Coupon Rate (%) | | Maturity | Value |
| | SHORT-TERM INVESTMENTS - 8.1% | | | | |
| | DISCOUNT NOTES - 1.5% | | | | |
$ 400,000 | | Federal Home Loan Bank Discount Notes (a) | 0.0800 | | 8/1/2014 | $ 399,973 |
| | | | | | |
Shares | | | | | | |
| | MONEY MARKET FUND - 6.6% | | | | |
1,716,924 | | Fidelity Institutional Money Market - Money Market Portfolio, Institutional Class | | | |
| | to yield 0.05% (b) | | | | 1,716,924 |
| | TOTAL SHORT-TERM INVESTMENTS (Cost - $2,116,897) | | | | 2,116,897 |
| | | | | | |
| | TOTAL INVESTMENTS - 100.8% (Cost - $24,492,281)(c) | | | | $ 26,030,762 |
| | OTHER ASSETS LESS LIABILITIES - NET - (0.8)% | | | | (202,464) |
| | TOTAL NET ASSETS - 100.0% | | | | $ 25,828,298 |
| | | | | | |
* Non-income producing security. | | | | |
+ All or a portion of these To Be Announced Securities (TBAs) are subject to dollar-roll transactions. | |
ADR - American Depositary Receipt | | | | |
(a) Represents discount rate at time of purchase. | | | | |
(b) Money market rate shown represents the rate at June 30, 2014. | | | | |
(c) Represents cost for financial reporting purposes. Aggregate cost for federal tax purposes is $24,509,836 | |
market value by net unrealized appreciation (depreciation) of securities as follows: | | | | |
| | | Unrealized Appreciation: | $ 1,685,420 |
| | | Unrealized Depreciation: | (155,409) |
| | Net Unrealized Appreciation: | $ 1,530,011 |
| | | | | | |
| | | | | | |
Contracts | | OPEN LONG FUTURES CONTRACTS | | | | Unrealized Appreciation |
1 | | MSCI EAFE Index Mini Future September 2014 | | | | |
| | (Underlying Face Amount at Value $98,445) | | | | $ 615 |
7 | | S&P 500 E-Mini September 2014 | | | | |
| | (Underlying Face Amount at Value $683,375) | | | | 8,470 |
| | | | | | |
| | TOTAL UNREALIZED APPRECIATION FOR OPEN LONG FUTURES CONTRACTS | $ 9,085 |
See accompanying notes to financial statements.
| | | | |
FVIT Balanced Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS |
June 30, 2014 (Unaudited) |
| | | | |
Shares | | | | Value |
| | EXCHANGE TRADED FUNDS - 93.3% | | |
| | DEBT FUNDS - 42.0% | | |
24,462 | | iShares Core U.S. Aggregate Bond ETF | | $ 2,676,143 |
10,537 | | iShares Floating Rate Bond ETF | | 535,279 |
8,425 | | iShares iBoxx $ High Yield Corporate Bond ETF | | 802,060 |
7,288 | | iShares Intermediate Credit Bond ETF | | 802,992 |
| | | | 4,816,474 |
| | EQUITY FUNDS - 51.3% | | |
24,798 | | iShares Core S&P 500 ETF | | 4,885,206 |
2,855 | | iShares Core S&P Mid-Cap ETF | | 408,493 |
8,618 | | iShares MSCI EAFE ETF | | 589,213 |
| | | | 5,882,912 |
| | TOTAL EXCHANGE TRADED FUNDS (Cost - $10,421,051) | | 10,699,386 |
| | | | |
| | SHORT-TERM INVESTMENTS - 2.5% | | |
| | MONEY MARKET FUND - 2.5% | | |
288,079 | | Fidelity Institutional Money Market - Money Market Portfolio, Institutional Class | | |
| | to yield 0.05% (a)(Cost - $288,079) | | 288,079 |
| | | | |
| | TOTAL INVESTMENTS - 95.8% (Cost - $10,709,130)(b) | | $ 10,987,465 |
| | OTHER ASSETS LESS LIABILITIES -NET - 4.2% | | 479,050 |
| | TOTAL NET ASSETS - 100.0% | | $ 11,466,515 |
| | | | |
(a) | Money market rate shown represents the rate at June 30, 2014. | | |
(b) | Represents cost for financial reporting purposes. Aggregate cost for federal tax purposes is $10,711,612 |
| and differs from market value by net unrealized appreciation (depreciation) of securities as follows: | |
| | | | |
| | | Unrealized Appreciation: | $ 278,335 |
| | | Unrealized Depreciation: | - |
| | Net Unrealized Appreciation: | $ 278,335 |
| | | | |
| |
Contracts | | OPEN LONG FUTURES CONTRACTS | | Unrealized Appreciation |
3 | | S&P 500 E-Mini September 2014 | | |
| | (Underlying Face Amount at Value $292,875) | | $ 2,482 |
See accompanying notes to financial statements.
| | | | |
FVIT Select Advisor Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS |
June 30, 2014 (Unaudited) |
| | | | |
Shares | | | | Value |
| | EXCHANGE TRADED FUND - 18.5% | | |
| | EQUITY FUND - 18.5% | | |
19,615 | | iShares Core S&P 500 ETF (Cost - $3,666,794) | | $ 3,864,155 |
| | | | |
| | VARIABLE INSURANCE TRUSTS - 74.7% | | |
| | DEBT FUND - 23.3% | | |
352,352 | | MFS Research Bond Series * | | 4,837,787 |
| | | | |
| | EQUITY FUNDS - 51.4% | | |
53,588 | | American Century VP Mid Cap Value - Class 1 | | 1,009,071 |
106,735 | | American Century VP Value Fund - Investor Class | | 970,223 |
23,221 | | Invesco VI Core Equity Fund - Class 1 | | 968,095 |
12,914 | | Invesco VI International Growth Fund - Class 1 | | 484,787 |
72,216 | | MFS Growth Series | | 2,900,931 |
42,056 | | MFS VIT II International Value Fund | | 971,915 |
154,989 | | Putnam VT Equity Income - Class 1A | | 3,388,054 |
| | | | 10,693,076 |
| | TOTAL VARIABLE INSURANCE TRUSTS (Cost - $14,931,530) | | 15,530,863 |
| | | | |
| | SHORT-TERM INVESTMENTS - 0.9% | | |
| | MONEY MARKET FUND - 0.9% | | |
184,318 | | Fidelity Institutional Money Market - Money Market Portfolio, Institutional Class | |
| | to yield 0.05% (a)(Cost - $184,318) | | 184,318 |
| | | | |
| | TOTAL INVESTMENTS - 94.1% (Cost - $18,782,642)(b) | | $ 19,579,336 |
| | OTHER ASSETS LESS LIABILITIES -NET - 5.9% | | 1,238,258 |
| | TOTAL NET ASSETS - 100.0% | | $ 20,817,594 |
| | | | |
(a) | Money market rate shown represents the rate at June 30, 2014. | | |
(b) | Represents cost for financial reporting purposes. Aggregate cost for federal tax purposes is $18,790,522 |
| and differs from market value by net unrealized appreciation (depreciation) of securities as follows: | |
| | | | |
| | | Unrealized Appreciation: | $ 796,694 |
| | | Unrealized Depreciation: | - |
| | Net Unrealized Appreciation: | $ 796,694 |
| | | | |
Contracts | | OPEN LONG FUTURES CONTRACTS | | Unrealized Appreciation |
1 | | MSCI EAFE Index Mini Future September 2014 | | |
| | (Underlying Face Amount at Value $98,445) | | $ 620 |
6 | | S&P 500 E-Mini September 2014 | | |
| | (Underlying Face Amount at Value $585,750) | | 7,260 |
| | | | |
| | NET UNREALIZED APPRECIATION OF OPEN LONG FURTURES CONTRACTS | $ 7,880 |
See accompanying notes to financial statements.
| | | | |
FVIT Franklin Dividend and Income Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS |
June 30, 2014 (Unaudited) |
Shares | | | | Value |
| | COMMON STOCKS- 69.7% | | |
| | AEROSPACE/DEFENSE - 3.4% | | |
2,500 | | General Dynamics Corp. | | $ 291,375 |
5,300 | | United Technologies Corp. | | 611,885 |
| | | | 903,260 |
| | AGRICULTURE - 3.4% | | |
10,300 | | Archer-Daniels-Midland Co. | | 454,333 |
5,900 | | Bunge, Ltd. | | 446,276 |
| | | | 900,609 |
| | APPAREL - 1.2% | | |
4,200 | | Nike, Inc. | | 325,710 |
| | | | |
| | AUTO PARTS & EQUIPMENT - 2.3% | | |
12,000 | | Johnson Controls, Inc. | | 599,160 |
| | | | |
| | BEVERAGES - 1.6% | | |
4,800 | | PepsiCo., Inc. | | 428,832 |
| | | | |
| | CHEMICALS - 7.2% | | |
4,400 | | Air Products & Chemicals, Inc. | | 565,928 |
6,700 | | Albemarle Corp. | | 479,050 |
2,200 | | Ecolab, Inc. | | 244,948 |
4,800 | | Praxair, Inc. | | 637,632 |
| | | | 1,927,558 |
| | COMMERCIAL SERVICES - 1.0% | | |
2,100 | | Cintas Corp. | | 133,434 |
3,100 | | Matthews International Corp. | | 128,867 |
| | | | 262,301 |
| | COMPUTERS - 2.1% | | |
1,400 | | Accenture PLC | | 113,176 |
2,500 | | International Business Machines Corp. | | 453,175 |
| | | | 566,351 |
| | COSMETICS/PERSONAL CARE - 3.0% | | |
5,900 | | Colgate-Palmolive Co. | | 402,262 |
5,200 | | The Procter & Gamble Co. | | 408,668 |
| | | | 810,930 |
| | DISTRIBUTION/WHOLESALE - 0.5% | | |
500 | | WW Grainger, Inc. | | 127,135 |
| | | | |
| | ELECTRONICS- 1.7% | | |
4,800 | | Honeywell International, Inc. | | 446,160 |
See accompanying notes to financial statements.
| | | | |
FVIT Franklin Dividend and Income Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS (Continued) |
June 30, 2014 (Unaudited) |
Shares | | | | Value |
| | FOOD- 0.7% | | |
2,500 | | McCormick & Co., Inc. | | $ 178,975 |
| | | | |
| | HEALTHCARE-PRODUCTS - 6.0% | | |
4,000 | | Becton Dickinson and Co. | | 473,200 |
2,000 | | DENTSPLY International, Inc. | | 94,700 |
8,600 | | Medtronic, Inc. | | 548,336 |
5,800 | | Stryker Corp. | | 489,056 |
| | | | 1,605,292 |
| | INSURANCE - 1.3% | | |
2,000 | | Aflac, Inc. | | 124,500 |
2,100 | | RLI, Corp. | | 96,138 |
1,400 | | The Chubb Corp. | | 129,038 |
| | | | 349,676 |
| | IRON/STEEL - 0.3% | | |
1,700 | | Nucor Corp. | | 83,725 |
| | | | |
| | MACHINERY-DIVERSIFIED - 2.5% | | |
4,500 | | Roper Industries, Inc. | | 657,045 |
| | | | |
| | MEDIA - 1.1% | | |
4,700 | | John Wiley & Sons, Inc. | | 284,773 |
| | | | |
| | MISCELLANEOUS MANUFACTURING - 5.6% | | |
1,500 | | Carlisle Cos., Inc. | | 129,930 |
3,000 | | Donaldson Co., Inc. | | 126,960 |
6,300 | | Dover Corp. | | 572,985 |
9,000 | | Pentair PLC | | 649,080 |
| | | | 1,478,955 |
| | OIL & GAS - 5.6% | | |
5,000 | | Chevron Corp. | | 652,750 |
4,000 | | ExxonMobil Corp. | | 402,720 |
4,300 | | Occidental Petroleum Corp. | | 441,309 |
| | | | 1,496,779 |
| | OIL & GAS SERVICES - 1.3% | | |
3,000 | | Schlumberger Ltd. | | 353,850 |
| | | | |
| | PHARMACEUTICALS - 4.5% | | |
6,000 | | Abbott Laboratories | | 245,400 |
3,500 | | AbbVie, Inc. | | 197,540 |
6,600 | | Johnson & Johnson | | 690,492 |
400 | | Perrigo Co. PLC | | 58,304 |
| | | | 1,191,736 |
See accompanying notes to financial statements.
| | | | |
FVIT Franklin Dividend and Income Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS (Continued) |
June 30, 2014 (Unaudited) |
Shares | | | | Value |
| | RETAIL - 9.2% | | |
2,000 | | CVS Caremark Corp. | | $ 150,740 |
6,400 | | Family Dollar Stores, Inc. | | 423,296 |
3,600 | | McDonald's Corp. | | 362,664 |
4,500 | | Ross Stores, Inc. | | 297,585 |
5,800 | | Target Corp. | | 336,110 |
6,600 | | Walgreen Co. | | 489,258 |
5,200 | | Wal-Mart Stores, Inc. | | 390,364 |
| | | | 2,450,017 |
| | SEMICONDUCTORS - 2.2% | | |
2,800 | | Texas Instruments, Inc. | | 133,812 |
5,900 | | QUALCOMM, Inc. | | 467,280 |
| | | | 601,092 |
| | SOFTWARE - 1.1% | | |
6,700 | | Microsoft Corp. | | 279,390 |
| | | | |
| | TRANSPORTAION - 0.9% | | |
2,400 | | United Parcel Service, Inc. | | 246,384 |
| | | | |
| | TOTAL COMMON STOCKS (Cost - $18,023,226) | | 18,555,695 |
| | | | |
| | MUTUAL FUND - 22.7% | | |
| | DEBT FUND - 22.7% | | |
594,648 | | Franklin Templeton Total Return Fund (Cost - $6,000,000) | | 6,041,625 |
| | | | |
| | SHORT-TERM INVESTMENT - 0.3% | | |
| | MONEY MARKET FUND - 0.3% | | |
74,456 | | Fidelity Institutional Money Market - Money Market Portfolio, Institutional Class | |
| | to yield 0.05% (a)(Cost - $74,456) | | 74,456 |
| | | | |
| | TOTAL INVESTMENTS - 92.7% (Cost - $24,097,682)(b) | | $ 24,671,776 |
| | OTHER ASSETS LESS LIABILITIES - NET - 7.3% | | 1,956,512 |
| | TOTAL NET ASSETS - 100.0% | | $ 26,628,288 |
| | | | |
(a) | Money market rate shown represents the rate at June 30, 2014. | | |
(b) | Represents cost for financial reporting purposes. Aggregate cost for federal tax purposes is $24,107,199 |
| and differs from market value by net unrealized appreciation (depreciation) of securities as follows: | |
| | | | |
| | | Unrealized Appreciation: | $ 745,307 |
| | | Unrealized Depreciation: | (171,213) |
| | Net Unrealized Appreciation: | $ 574,094 |
See accompanying notes to financial statements.
| | | | |
FVIT Franklin Dividend and Income Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS (Continued) |
June 30, 2014 (Unaudited) |
| | | | |
Contracts | | OPEN SHORT FUTURES CONTRACTS | | Unrealized Appreciation/ (Depreciation) |
(2) | | MSCI EAFE Index Mini Future September 2014 | | |
| | (Underlying Face Amount at Value $196,890) | | $ (1,350) |
| | | | |
| | OPEN LONG FUTURES CONTRACTS | | |
9 | | S&P 500 E-Mini September 2014 | | |
| | (Underlying Face Amount at Value $878,625) | | 10,867 |
| | | | |
| | NET UNREALIZED APPRECIATION OF OPEN FUTURES CONTRACTS | $ 9,517 |
See accompanying notes to financial statements.
| | | | |
FVIT Growth Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS |
June 30, 2014 (Unaudited) |
| | | | |
Shares | | | | Value |
| | EXCHANGE TRADE FUNDS - 86.2% | | |
| | DEBT FUNDS - 12.9% | | |
21,483 | | iShares Core U.S. Aggregate Bond ETF | | $ 2,350,240 |
8,676 | | iShares Floating Rate Bond ETF | | 440,741 |
7,708 | | iShares iBoxx $ High Yield Corporate Bond ETF | | 733,802 |
8,001 | | iShares Intermediate Credit Bond ETF | | 881,550 |
| | | | 4,406,333 |
| | EQUITY FUNDS - 73.3% | | |
78,852 | | iShares Core S&P 500 ETF | | 15,533,844 |
12,373 | | iShares Core S&P Mid-Cap ETF | | 1,770,329 |
38,703 | | iShares MSCI EAFE ETF | | 2,646,124 |
40,971 | | iShares Russell 1000 ETF | | 4,511,317 |
4,220 | | iShares Russell 2000 ETF | | 501,378 |
| | | | 24,962,992 |
| | TOTAL EXCHANGE TRADED FUNDS (Cost - $29,103,926) | | 29,369,325 |
| | | | |
| | SHORT-TERM INVESTMENT - 12.4% | | |
| | MONEY MARKET FUND - 12.4% | | |
4,211,321 | | Fidelity Institutional Money Market - Money Market Portfolio, Institutional Class | |
| | to yield 0.05% (a)(Cost - $4,211,321) | | 4,211,321 |
| | | | |
| | TOTAL INVESTMENTS - 98.6% (Cost - $33,315,247)(b) | | $ 33,580,646 |
| | OTHER ASSETS LESS LIABILITIES - NET - 1.4% | | 477,336 |
| | TOTAL NET ASSETS - 100.0% | | $ 34,057,982 |
| | | | |
(a) | Money market rate shown represents the rate at June 30, 2014. | | |
(b) | Represents cost for financial reporting purposes. Aggregate cost for federal tax purposes is $33,321,550 |
| and differs from market value by net unrealized appreciation (depreciation) of securities as follows: | |
| | | | |
| | | Unrealized Appreciation: | $ 291,441 |
| | | Unrealized Depreciation: | (26,042) |
| | Net Unrealized Appreciation: | $ 265,399 |
| | | | |
Contracts | | OPEN LONG FUTURES CONTRACTS | | Unrealized Appreciation/ (Depreciation) |
1 | | MSCI EAFE Index Mini Future September 2014 | | |
| | (Underlying Face Amount at Value $98,445) | | $ (85) |
8 | | S&P 500 E-Mini September 2014 | | |
| | (Underlying Face Amount at Value $781,000) | | 6,388 |
| | | | |
| | NET UNREALIZED APPRECIATION OF OPEN LONG FURTURES CONTRACTS | $ 6,303 |
See accompanying notes to financial statements.
| | | | |
FVIT Moderate Growth Managed Risk Portfolio |
PORTFOLIO OF INVESTMENTS |
June 30, 2014 (Unaudited) |
| | | | |
Shares | | | | Value |
| | EXCHANGE TRADED FUNDS - 85.5% | | |
| | DEBT FUNDS - 29.9% | | |
12,167 | | iShares Core U.S. Aggregate Bond ETF | | $ 1,331,070 |
4,827 | | iShares Floating Rate Bond ETF | | 245,212 |
3,675 | | iShares iBoxx $ High Yield Corporate Bond ETF | | 349,860 |
4,770 | | iShares Intermediate Credit Bond ETF | | 525,559 |
| | | | 2,451,701 |
| | EQUITY FUNDS - 55.6% | | |
17,976 | | iShares Core S&P 500 ETF | | 3,541,272 |
2,213 | | iShares Core S&P Mid-Cap ETF | | 316,636 |
6,666 | | iShares MSCI EAFE ETF | | 455,754 |
1,355 | | iShares Russell 1000 ETF | | 149,199 |
740 | | iShares Russell 2000 ETF | | 87,919 |
| | | | 4,550,780 |
| | TOTAL EXCHANGE TRADED FUNDS (Cost - $6,952,497) | | 7,002,481 |
| | | | |
| | SHORT-TERM INVESTMENT - 6.5% | | |
| | MONEY MARKET FUND - 6.5% | | |
532,976 | | Fidelity Institutional Money Market - Money Market Portfolio, Institutional Class | |
| | to yield 0.05% (a)(Cost - $532,976) | | 532,976 |
| | | | |
| | TOTAL INVESTMENTS - 92.0% (Cost - $7,485,473)(b) | | $ 7,535,457 |
| | OTHER ASSETS LESS LIABILITIES - NET - 8.0% | | 652,294 |
| | TOTAL NET ASSETS - 100.0% | | $ 8,187,751 |
| | | | |
(a) | Money market rate shown represents the rate at June 30, 2014. | | |
(b) | Represents cost for financial reporting purposes. Aggregate cost for federal tax purposes is $7,486,733 |
| and differs from market value by net unrealized appreciation (depreciation) of securities as follows: | |
| | | | |
| | | Unrealized Appreciation: | $ 57,008 |
| | | Unrealized Depreciation: | (7,024) |
| | Net Unrealized Appreciation: | $ 49,984 |
| | | | |
| | | | |
Contracts | | OPEN LONG FUTURES CONTRACTS | | Unrealized Appreciation |
2 | | S&P 500 E-Mini September 2014 | | |
| | (Underlying Face Amount at Value $195,250) | | $ 1,260 |
See accompanying notes to financial statements.
| | | | | |
FVIT Portfolios |
|
Statements of Assets and Liabilities |
June 30, 2014 (Unaudited) |
| | | | | |
| FVIT American | | FVIT BlackRock | | FVIT WMC Research |
| Funds® Managed Risk | | Global Allocation | | Managed Risk |
Assets: | Portfolio | | Managed Risk Portfolio | | Portfolio |
Investments in securities, at cost | $ 38,591,954 | | $ 63,559,054 | | $ 24,492,281 |
Investments in securities, at value | $ 39,145,729 | | $ 65,213,053 | | $ 26,030,762 |
Cash | - | | - | | 338,654 |
Deposits with broker + | 1,902,065 | | 3,379,423 | | 903,759 |
Unrealized appreciation on futures contracts | 11,305 | | 15,768 | | 9,085 |
Receivable for Portfolio shares sold | 1,248,166 | | 1,488,809 | | 507,029 |
Receivable for securities sold | - | | - | | 237,989 |
Interest and dividends receivable | 16 | | 17 | | 36,970 |
Receivable due from advisor | - | | 5,860 | | 12,129 |
Prepaid expenses and other assets | 1,270 | | 1,270 | | 1,270 |
Total Assets | 42,308,551 | | 70,104,200 | | 28,077,647 |
Liabilities: | | | | | |
Payable for securities purchased | 1,064,466 | | 782,104 | | 1,847,937 |
Payable for Portfolio shares redeemed | 32 | | 45 | | 365,043 |
Accrued investment advisory fees | 6,549 | | - | | - |
Administrative service fees payable | 3,895 | | 2,253 | | 30,987 |
Accrued distribution (12b-1) fees | 7,587 | | 13,078 | | 5,382 |
Total Liabilities | 1,082,529 | | 797,480 | | 2,249,349 |
Net Assets | $ 41,226,022 | | $ 69,306,720 | | $ 25,828,298 |
| | | | | |
Net Assets: | | | | | |
Paid in capital | $ 39,880,513 | | $ 67,506,021 | | $ 23,997,752 |
Undistributed net investment income | 888,918 | | 31,200 | | 55,325 |
Accumulated net realized gain/(loss) on | | | | | |
investments, futures contracts and swap contracts | (108,489) | | 99,732 | | 227,655 |
Net unrealized appreciation on investments, | | | | | |
futures contracts and swap contracts | 565,080 | | 1,669,767 | | 1,547,566 |
Net Assets | $ 41,226,022 | | $ 69,306,720 | | $ 25,828,298 |
| | | | | |
Class II Shares: | | | | | |
Net assets | $ 41,226,022 | | $ 69,306,720 | | $ 25,828,298 |
Total shares outstanding at end of year | | | | | |
($0 par value, unlimited shares authorized) | 3,844,483 | | 6,595,550 | | 2,387,660 |
| | | | | |
Net asset value, offering and redemption | | | | | |
price per share | | | | | |
(Net assets ÷ Total shares of beneficial | | | | | |
interest outstanding) | $ 10.72 | | $ 10.51 | | $ 10.82 |
| | | | | |
+ Collateral for futures contracts. | | | | | |
See accompanying notes to financial statements.
| | | | | |
FVIT Portfolios |
|
Statements of Assets and Liabilities (Continued) |
June 30, 2014 (Unaudited) |
| | | | | |
| FVIT Balanced | | FVIT Select Advisor | | FVIT Franklin |
| Managed Risk | | Managed Risk | | Dividend and Income |
Assets: | Portfolio | | Portfolio | | Managed Risk Portfolio |
Investments in securities, at cost | $ 10,709,130 | | $ 18,782,642 | | $ 24,097,682 |
Investments in securities, at value | $ 10,987,465 | | $ 19,579,336 | | $ 24,671,776 |
Cash | - | | 944,151 | | 725,028 |
Deposits with broker + | 570,556 | | - | | 1,324,204 |
Unrealized appreciation on futures contracts | 2,482 | | 7,880 | | 9,517 |
Receivable for Portfolio shares sold | 197,853 | | 472,987 | | 654,551 |
Interest and dividends receivable | 13,420 | | 5 | | 20,359 |
Receivable due from advisor | - | | 1,921 | | - |
Prepaid expenses and other assets | 1,270 | | 1,270 | | - |
Total Assets | 11,773,046 | | 21,007,550 | | 27,405,435 |
Liabilities: | | | | | |
Payable for securities purchased | 301,522 | | 184,272 | | 24,388 |
Payable for Portfolio shares redeemed | 9 | | 22 | | 725,063 |
Accrued investment advisory fees | 2,874 | | - | | 6,035 |
Administrative service fees payable | 31 | | 1,567 | | 16,096 |
Accrued distribution (12b-1) fees | 2,095 | | 4,095 | | 5,565 |
Total Liabilities | 306,531 | | 189,956 | | 777,147 |
Net Assets | $ 11,466,515 | | $ 20,817,594 | | $ 26,628,288 |
| | | | | |
Net Assets: | | | | | |
Paid in capital | $ 11,135,810 | | $ 20,002,437 | | $ 25,961,156 |
Undistributed net investment income | 49,304 | | 79,276 | | 46,000 |
Accumulated net realized gain/(loss) on | | | | | |
investments and futures contracts | 584 | | (68,693) | | 37,521 |
Net unrealized appreciation on | | | | | |
investments and futures contracts | 280,817 | | 804,574 | | 583,611 |
Net Assets | $ 11,466,515 | | $ 20,817,594 | | $ 26,628,288 |
| | | | | |
Class II Shares: | | | | | |
Net assets | $ 11,466,515 | | $ 20,817,594 | | $ 26,628,288 |
Total shares outstanding at end of year | | | | | |
($0 par value, unlimited shares authorized) | 1,078,299 | | 1,942,710 | | 2,595,514 |
| | | | | |
Net asset value, offering and redemption | | | | | |
price per share | | | | | |
(Net assets ÷ Total shares of beneficial | | | | | |
interest outstanding) | $ 10.63 | | $ 10.72 | | $ 10.26 |
| | | | | |
+ Collateral for futures contracts. | | | | | |
See accompanying notes to financial statements.
| | | |
FVIT Portfolios |
|
Statements of Assets and Liabilities (Continued) |
June 30, 2014 (Unaudited) |
| | | |
| FVIT Growth | | FVIT Moderate Growth |
| Managed Risk | | Managed Risk |
Assets: | Portfolio | | Portfolio |
Investments in securities, at cost | $ 33,315,247 | | $ 7,485,473 |
Investments in securities, at value | $ 33,580,646 | | $ 7,535,457 |
Deposits with broker | 1,550,388 | | 368,085 |
Unrealized appreciation on futures contracts | 6,303 | | 1,260 |
Receivable for Portfolio shares sold | 3,148,150 | | 819,109 |
Interest and dividends receivable | 43,893 | | 9,724 |
Prepaid expenses and other assets | 669 | | 191 |
Total Assets | 38,330,049 | | 8,733,826 |
Liabilities: | | | |
Payable for securities purchased | 4,260,264 | | 543,109 |
Payable for Portfolio shares redeemed | 485 | | 58 |
Accrued investment advisory fees | 7,781 | | 1,999 |
Accrued distribution (12b-1) fees | 3,537 | | 909 |
Total Liabilities | 4,272,067 | | �� 546,075 |
Net Assets | $ 34,057,982 | | $ 8,187,751 |
| | | |
Net Assets: | | | |
Paid in capital | $ 33,696,246 | | $ 8,115,199 |
Undistributed net investment income | 102,408 | | 21,906 |
Accumulated net realized loss on | | | |
investments and futures contracts | (12,374) | | (598) |
Net unrealized appreciation on | | | |
investments and futures contracts | 271,702 | | 51,244 |
Net Assets | $ 34,057,982 | | $ 8,187,751 |
| | | |
Class II Shares: | | | |
Net assets | $ 34,057,982 | | $ 8,187,751 |
Total shares outstanding at end of year | | | |
($0 par value, unlimited shares authorized) | 3,292,067 | | 797,122 |
| | | |
Net asset value, offering and redemption | | | |
price per share | | | |
(Net assets ÷ Total shares of beneficial | | | |
interest outstanding) | $ 10.35 | | $ 10.27 |
| | | |
+ Collateral for futures contracts. | | | |
See accompanying notes to financial statements.
| | | | | |
FVIT Portfolios |
|
Statements of Operations |
For the Six Months Ended June 30, 2014 (Unaudited) |
| | | | | |
| FVIT American | | FVIT BlackRock | | FVIT WMC Research |
| Funds® Managed Risk | | Global Allocation | | Managed Risk |
| Porfolio | | Managed Risk Portfolio | | Portfolio |
Investment Income: | | | | | |
Dividend income (net of foreign taxes | | | | | |
withheld of $0, $0, and $52, respectively) | $ 921,609 | | $ - | | $ 115,244 |
Interest income | 61 | | 103 | | 52,628 |
Total Investment Income | 921,670 | | 103 | | 167,872 |
Expenses: | | | | | |
Investment advisory fees | 94,130 | | 160,437 | | 101,847 |
Administrative service fees | 43,168 | | 66,465 | | 94,790 |
Distribution fees (12b-1) - Class II Shares | 26,147 | | 44,566 | | 29,955 |
Organizational expenses | 1,852 | | 1,852 | | 1,852 |
Total Expenses | 165,297 | | 273,320 | | 228,444 |
Expenses waived/reimbursed | (74,618) | | (170,908) | | (84,480) |
Net Expenses | 90,679 | | 102,412 | | 143,964 |
Net Investment Income | 830,991 | | (102,309) | | 23,908 |
Net Realized and Unrealized Gain (Loss) on | | | | | |
Investments, Futures Contracts and Swap Contracts | | | | |
Net realized gain/(loss) on: | | | | | |
Investments | (6,605) | | - | | 304,808 |
Futures contracts | (101,884) | | (13,178) | | (108,054) |
Swap contracts | - | | �� - | | 14,586 |
Total net realized gain/(loss) | (108,489) | | (13,178) | | 211,340 |
Net change in unrealized appreciation/(depreciation) on: | | | | | |
Investments | 520,233 | | 1,803,505 | | 958,539 |
Futures contracts | 7,930 | | 11,878 | | (9,053) |
| 528,163 | | 1,815,383 | | 949,486 |
Net Realized and Unrealized Gain on Investments, | | | | | |
Futures Contracts and Swap Contracts | 419,674 | | 1,802,205 | | 1,160,826 |
Net Increase in Net Assets | | | | | |
Resulting from Operations | $ 1,250,665 | | $ 1,699,896 | | $ 1,184,734 |
See accompanying notes to financial statements.
| | | | | |
FVIT Portfolios |
|
Statements of Operations (Continued) |
For the Six Months Ended June 30, 2014 (Unaudited) |
| | | | | |
| FVIT Balanced | | FVIT Select Advisor | | FVIT Franklin |
| Managed Risk | | Managed Risk | | Dividend and Income |
| Portfolio | | Portfolio | | Managed Risk Portfolio* |
Investment Income: | | | | | |
Dividend income | $ 67,291 | | $ 112,036 | | $ 91,029 |
Interest income | 38 | | 34 | | 106 |
Total Investment Income | 67,329 | | 112,070 | | 91,135 |
Expenses: | | | | | |
Investment advisory fees | 13,955 | | 52,932 | | 36,115 |
Administrative service fees | 8,774 | | 23,777 | | 24,018 |
Distribution fees (12b-1) - Class II Shares | 6,343 | | 14,704 | | 10,622 |
Organizational expenses | 1,852 | | 1,852 | | - |
Total Expenses | 30,924 | | 93,265 | | 70,755 |
Expenses waived/reimbursed | (7,648) | | (55,872) | | (25,620) |
Net Expenses | 23,276 | | 37,393 | | 45,135 |
Net Investment Income | 44,053 | | 74,677 | | 46,000 |
Net Realized and Unrealized Gain/(Loss) on | | | | | |
Investments and Futures Contracts | | | | | |
Net Realized Gain/(Loss) on: | | | | | |
Investments | 5,006 | | 5,644 | | 13,318 |
Futures contracts | (4,473) | | (74,337) | | 24,203 |
Total net realized gain/(loss) | 533 | | (68,693) | | 37,521 |
Net change in unrealized appreciation/(depreciation) on: | | | | | |
Investments | 270,023 | | 766,256 | | 574,094 |
Futures contracts | 2,482 | | 7,880 | | 9,517 |
| 272,505 | | 774,136 | | 583,611 |
Net Realized and Unrealized Gain on | | | | | |
Investments and Futures Contracts | 273,038 | | 705,443 | | 621,132 |
Net Increase in Net Assets | | | | | |
Resulting from Operations | $ 317,091 | | $ 780,120 | | $ 667,132 |
| | | | | |
* The FVIT Franklin Dividend and Income Managed Risk Portfolio commenced operations on April 30, 2014. | | |
See accompanying notes to financial statements.
| | | |
FVIT Portfolios |
|
Statements of Operations (Continued) |
For the Six Months Ended June 30, 2014 (Unaudited) |
| | | |
| FVIT Growth | | FVIT Moderate Growth |
| Managed Risk | | Managed Risk |
| Portfolio* | | Portfolio* |
Investment Income: | | | |
Dividend income | $ 114,984 | | $ 25,199 |
Interest income | 138 | | 35 |
Total Investment Income | 115,122 | | 25,234 |
Expenses: | | | |
Investment advisory fees | 8,734 | | 2,281 |
Administrative service fees | 10 | | 10 |
Distribution fees (12b-1) - Class II Shares | 3,970 | | 1,037 |
Net Expenses | 12,714 | | 3,328 |
Net Investment Income | 102,408 | | 21,906 |
Net Realized and Unrealized Gain/(Loss) on | | | |
Investments and Futures Contracts | | | |
Net Realized Gain/(Loss) on: | | | |
Investments | (16,656) | | - |
Futures contracts | 4,282 | | (598) |
Total net realized loss | (12,374) | | (598) |
Net change in unrealized appreciation/(depreciation) on: | | | |
Investments | 265,399 | | 49,984 |
Futures contracts | 6,303 | | 1,260 |
| 271,702 | | 51,244 |
Net Realized and Unrealized Gain on | | | |
Investments and Futures Contracts | 259,328 | | 50,646 |
Net Increase in Net Assets | | | |
Resulting from Operations | $ 361,736 | | $ 72,552 |
| | | |
* The FVIT Growth Managed Risk Portfolio and FVIT Moderate Growth Managed Risk Portfolio commenced operations on April 30, 2014. |
See accompanying notes to financial statements.
| | | | | | | |
FVIT Portfolios |
|
Statements of Changes in Net Assets |
| | | | | | | |
| FVIT American Funds® Managed | | FVIT BlackRock Global Allocation |
| Risk Portfolio | | Managed Risk Portfolio |
| | | | | | | |
| Six Months Ended | | | | Six Months Ended | | |
| June 30, 2014 | | Period Ended | | June 30, 2014 | | Period Ended |
| (Unaudited) | | December 31, 2013* | | (Unaudited) | | December 31, 2013* |
| | | | | | | |
Increase (Decrease) in Net Assets: | | | | | | | |
From Operations: | | | | | | | |
Net investment income (loss) | $ 830,991 | | $ 55,358 | | $ (102,309) | | $ 132,097 |
Net realized loss on investments and futures contracts | (108,489) | | - | | (13,178) | | (761) |
Distributions of realized gains | | | | | | | |
by underlying investment companies | - | | - | | - | | 113,671 |
Net change in unrealized appreciation | | | | | | | |
(depreciation) on investments and futures contracts | 528,163 | | 36,917 | | 1,815,383 | | (145,616) |
Net increase in net assets | | | | | | | |
resulting from operations | 1,250,665 | | 92,275 | | 1,699,896 | | 99,391 |
From Shares of Beneficial Interest: | | | | | | | |
Proceeds from shares sold | 33,541,113 | | 6,382,456 | | 59,418,224 | | 8,330,465 |
Cost of shares redeemed | (40,222) | | (265) | | (239,385) | | (1,871) |
Net increase in net assets from share | | | | | | | |
transactions of beneficial interest | 33,500,891 | | 6,382,191 | | 59,178,839 | | 8,328,594 |
Total increase in net assets | 34,751,556 | | 6,474,466 | | 60,878,735 | | 8,427,985 |
| | | | | | | |
Net Assets: | | | | | | | |
Beginning of period | 6,474,466 | | - | | 8,427,985 | | - |
End of period | $ 41,226,022 | | $ 6,474,466 | | $ 69,306,720 | | $ 8,427,985 |
Undistributed net investment income | | | | | | | |
at end of period | $ 888,918 | | $ 57,927 | | $ 31,200 | | $ 133,509 |
| | | | | | | |
Share Activity: | | | | | | | |
Shares Sold | 3,218,671 | | 629,673 | | 5,794,127 | | 824,812 |
Shares Redeemed | (3,835) | | (26) | | (23,203) | | (186) |
Net increase in shares of beneficial | | | | | | | |
interest outstanding | 3,214,836 | | 629,647 | | 5,770,924 | | 824,626 |
| | | | | | | |
* The FVIT American® Funds Managed Risk Portfolio and FVIT BlackRock Global Allocation Managed Risk Portfolio commenced operations on October 31, 2013. |
See accompanying notes to financial statements.
| | | | | | | |
FVIT Portfolios |
|
Statements of Changes in Net Assets (Continued) |
| | | | | | | |
| FVIT WMC Research Managed | | FVIT Balanced Managed |
| Risk Portfolio | | Risk Portfolio |
| | | | | | | |
| Six Months Ended | | | | Six Months Ended | | |
| June 30, 2014 | | Period Ended | | June 30, 2014 | | Period Ended |
| (Unaudited) | | December 31, 2013* | | (Unaudited) | | December 31, 2013* |
| | | | | | | |
Increase (Decrease) in Net Assets: | | | | | | | |
From Operations: | | | | | | | |
Net investment income | $ 23,908 | | $ 22,237 | | $ 44,053 | | $ 2,039 |
Net realized gain on investments, futures contracts | | | | | | | |
and swap contracts | 211,340 | | 16,211 | | 533 | | 48 |
by underlying investment companies | - | | - | | - | | 3 |
Net change in unrealized appreciation (depreciation) | | | | | | | |
on investments and futures contracts | 949,486 | | 598,080 | | 272,505 | | 8,312 |
Net increase in net assets | | | | | | | |
resulting from operations | 1,184,734 | | 636,528 | | 317,091 | | 10,402 |
From Shares of Beneficial Interest: | | | | | | | |
Proceeds from shares sold | 18,823,787 | | 21,789,406 | | 10,129,372 | | 1,252,041 |
Cost of shares redeemed | (16,604,607) | | (1,550) | | (242,280) | | (111) |
Net increase in net assets from share | | | | | | | |
transactions of beneficial interest | 2,219,180 | | 21,787,856 | | 9,887,092 | | 1,251,930 |
Total increase in net assets | 3,403,914 | | 22,424,384 | | 10,204,183 | | 1,262,332 |
| | | | | | | |
Net Assets: | | | | | | | |
Beginning of period | 22,424,384 | | - | | 1,262,332 | | - |
End of period | $ 25,828,298 | | $ 22,424,384 | | $ 11,466,515 | | $ 1,262,332 |
Undistributed net investment income | | | | | | | |
at end of period | $ 55,325 | | $ 31,417 | | $ 49,304 | | $ 5,251 |
| | | | | | | |
Share Activity: | | | | | | | |
Shares Sold | 1,792,080 | | 2,176,027 | | 977,990 | | 123,852 |
Shares Redeemed | (1,580,295) | | (152) | | (23,532) | | (11) |
Net increase in shares of beneficial | | | | | | | |
interest outstanding | 211,785 | | 2,175,875 | | 954,458 | | 123,841 |
| | | | | | | |
* The FVIT WMC Research Managed Risk Portfolio and FVIT Balanced Managed Risk Portfolio commenced operations on October 31, 2013. | | |
See accompanying notes to financial statements.
| | | | | | |
FVIT Portfolios |
|
Statements of Changes in Net Assets (Continued) |
| | | | | | |
| | FVIT Select Advisor Managed | | FVIT Franklin Dividend and Income |
| | Risk Portfolio | | Managed Risk Portfolio |
| | | | | | |
| | Six Months Ended | | | | Period Ended |
| | June 30, 2014 | | Period Ended | | June 30, 2014 ** |
| | (Unaudited) | | December 31, 2013* | | (Unaudited) |
Increase (Decrease) in Net Assets: | | | | | | |
From Operations: | | | | | | |
Net investment income | | $ 74,677 | | $ 1,806 | | $ 46,000 |
Net realized gain (loss) on investments and futures contracts | (68,693) | | - | | 37,521 |
Net change in unrealized appreciation | | | | | | |
(depreciation) on investments and futures contracts | | 774,136 | | 30,438 | | 583,611 |
Net increase in net assets | | | | | | |
resulting from operations | | 780,120 | | 32,244 | | 667,132 |
From Shares of Beneficial Interest: | | | | | | |
Proceeds from shares sold | | 18,262,462 | | 2,383,382 | | 34,563,367 |
Cost of shares redeemed | | (640,403) | | (211) | | (8,602,211) |
Net increase in net assets from share | | | | | | |
transactions of beneficial interest | | 17,622,059 | | 2,383,171 | | 25,961,156 |
Total increase in net assets | | 18,402,179 | | 2,415,415 | | 26,628,288 |
| | | | | | |
Net Assets: | | | | | | |
Beginning of period | | 2,415,415 | | - | | - |
End of period | | $ 20,817,594 | | $ 2,415,415 | | $ 26,628,288 |
Undistributed net investment income | | | | | | |
at end of period | | $ 79,276 | | $ 4,599 | | $ 46,000 |
| | | | | | |
Share Activity: | | | | | | |
Shares Sold | | 1,768,404 | | 235,832 | | 3,438,480 |
Shares Redeemed | | (61,505) | | (21) | | (842,966) |
Net increase in shares of beneficial | | | | | | |
interest outstanding | | 1,706,899 | | 235,811 | | 2,595,514 |
| | | | | | |
* The FVIT Select Advisor Managed Risk Portfolio commenced operations on October 31, 2013. | | | | |
** The FVIT Franklin Dividend and Income Managed Risk Portfolio commenced operations on April 30, 2014. | | |
See accompanying notes to financial statements.
| | | | |
FVIT Portfolios |
|
Statements of Changes in Net Assets (Continued) |
| | | | |
| | FVIT Growth | | FVIT Moderate Growth |
| | Managed Risk Portfolio | | Managed Risk Portfolio |
| | | | |
| | Period Ended | | Period Ended |
| | June 30, 2014 ** | | June 30, 2014 ** |
| | (Unaudited) | | (Unaudited) |
Increase (Decrease) in Net Assets: | | | | |
From Operations: | | | | |
Net investment income | | $ 102,408 | | $ 21,906 |
Net realized loss on investments and futures contracts | | (12,374) | | (598) |
Net change in unrealized appreciation | | | | |
(depreciation) on investments and futures contracts | | 271,702 | | 51,244 |
Net increase in net assets | | | | |
resulting from operations | | 361,736 | | 72,552 |
From Shares of Beneficial Interest: | | | | |
Proceeds from shares sold | | 33,960,074 | | 8,125,764 |
Cost of shares redeemed | | (263,828) | | (10,565) |
Net increase in net assets from share | | | | |
transactions of beneficial interest | | 33,696,246 | | 8,115,199 |
Total increase in net assets | | 34,057,982 | | 8,187,751 |
| | | | |
Net Assets: | | | | |
Beginning of period | | - | | - |
End of period | | $ 34,057,982 | | $ 8,187,751 |
Undistributed net investment income | | | | |
at end of period | | $ 102,408 | | $ 21,906 |
| | | | |
Share Activity: | | | | |
Shares Sold | | 3,318,174 | | 798,173 |
Shares Redeemed | | (26,107) | | (1,051) |
Net increase in shares of beneficial | | | | |
interest outstanding | | 3,292,067 | | 797,122 |
| | | | |
** The FVIT Growth Managed Risk Portfolio and FVIT Moderate Growth Managed Risk Portfolio commenced operations on April 30, 2014. |
See accompanying notes to financial statements.
| | | | | | | | | | |
FVIT Portfolios |
|
Financial Highlights |
FVIT American Funds® Managed Risk Portfolio |
|
Selected data based on a share outstanding throughout each period indicated. | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | Class II Shares |
| | | | | | | Six Months Ended | | | |
| | | | | | | June 30, 2014 | | Period Ended | |
| | | | | | | (Unaudited) | | December 31, 2013(a) | |
| | | | | | | | | | |
Net asset value, beginning of period | | | | | $ 10.28 | | $ 10.00 | |
| | | | | | | | | | |
Income from investment operations: | | | | | | | | |
Net investment income (b) (c) | | | | | | 0.41 | | 0.29 | |
Net realized and unrealized gain/(loss) | | | | | | | |
on investments | | | | | | 0.03 | | (0.01) | (d) |
Total income from | | | | | | | | | |
investment operations | | | | | | 0.44 | | 0.28 | |
| | | | | | | | | | |
| | | | | | | | | | |
Net asset value, end of period | | | | | | $ 10.72 | | $ 10.28 | |
| | | | | | | | | | |
Total return (e) | | | | | | 4.28% | | 2.80% | |
| | | | | | | | | | |
Ratios and Supplemental Data: | | | | | | | | | |
Net assets, end of period (in 000's) | | | | | $ 41,226 | | $ 6,474 | |
Ratio of net expenses to | | | | | | | | | |
average net assets (f) | | | | | | 0.86% | (h) | 0.86% | (h) |
Ratio of gross expenses to | | | | | | | | | |
average net assets (f)(g) | | | | | | 1.57% | (h) | 5.00% | (h) |
Ratio of net investment income to | | | | | | | | |
average net assets (c) (f) | | | | | | 7.88% | (h) | 17.33% | (h) |
Portfolio turnover rate | | | | | | 5% | (i) | 0% | (i,j) |
| | | | | | | | | | |
| | | | | | | | | | |
(a) FVIT American Funds® Managed Risk Portfolio commenced operations on October 31, 2013. | | | |
(b) | Net investment income has been calculated using the average shares method, which more appropriately presents the per share data for the period. |
(c) | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the underlying investment companies in which the Portfolio invests. |
(d) | Realized and unrealized losses per share in this caption are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with aggregate gains and losses in the statement of operations due to the share transactions for the period. |
(e) | Total returns are historical and assume changes in share price and reinvestment of dividends and capital gains distributions. Total returns for periods of less than one year are not annualized. |
(f) Does not include the expenses of the investment companies in which the Portfolio invests. | | | |
(g) Represents the ratio of expenses to average net assets absent fee waivers and/or expense reimbursements by the Advisor. | |
(h) Annualized. | | | | | | | | | |
(i) Not annualized | | | | | | | | | |
(j) Amount represents less than 1%. | | | | | | | |
See accompanying notes to financial statements.
| | | | | | | | | | |
FVIT Portfolios |
|
Financial Highlights |
FVIT BlackRock Global Allocation Managed Risk Portfolio |
| | | | | | | | | | |
Selected data based on a share outstanding throughout each period indicated. |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | Class II Shares | |
| | | | | | | Six Months Ended | | | |
| | | | | | | June 30, 2014 | | Period Ended | |
| | | | | | | (Unaudited) | | December 31, 2013(a) | |
| | | | | | | | | | |
Net asset value, beginning of period | | | | | $ 10.22 | | $ 10.00 | |
| | | | | | | | | | |
Income from investment operations: | | | | | | | | |
Net investment income/(loss) (b) (c) | | | | (0.03) | | 0.60 | |
Net realized and unrealized gain/(loss) | | | | | | | |
on investments | | | | | | 0.32 | | (0.38) | |
Total income from | | | | | | | | | |
investment operations | | | | | | 0.29 | | 0.22 | |
| | | | | | | | | | |
| | | | | | | | | | |
Net asset value, end of period | | | | | | $ 10.51 | | $ 10.22 | |
| | | | | | | | | | |
Total return (d) | | | | | | 2.84% | | 2.20% | |
| | | | | | | | | | |
Ratios and Supplemental Data: | | | | | | | | | |
Net assets, end of period (in 000's) | | | | | $ 69,307 | | $ 8,428 | |
Ratio of net expenses to | | | | | | | | | |
average net assets (e) | | | | | | 0.57% | (g) | 0.57% | (g) |
Ratio of gross expenses to | | | | | | | | | |
average net assets (e)(f) | | | | | | 1.52% | (g) | 4.43% | (g) |
Ratio of net investment income to | | | | | | | | |
average net assets (c) (e) | | | | | | -0.57% | (g) | 35.20% | (g) |
Portfolio turnover rate | | | | | | 0% | (h) | 0% | (h,i) |
| | | | | | | | | | |
(a) FVIT BlackRock Global Allocation Managed Risk Portfolio commenced operations on October 31, 2013. |
(b) | Net investment income has been calculated using the average shares method, which more appropriately presents the per share data for the period. |
(c) | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the underlying investment companies in which the Portfolio invests. |
(d) | Total returns are historical and assume changes in share price and reinvestment of dividends and capital gains distributions. Total returns for periods of less than one year are not annualized. |
(e) Does not include the expenses of the investment companies in which the Portfolio invests. | | | |
(f) Represents the ratio of expenses to average net assets absent fee waivers and/or expense reimbursements by the Advisor. | |
(g) Annualized. | | | | | | | | | |
(h) Not annualized. | | | | | | | | | |
(i) Amount represents less than 1%. | | | | | | | | |
See accompanying notes to financial statements.
| | | | | | | | | | |
FVIT Portfolios |
|
Financial Highlights |
FVIT WMC Research Managed Risk Portfolio |
| | | | | | | | | | |
Selected data based on a share outstanding throughout each period indicated. | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | Class II Shares | |
| | | | | | | Six Months Ended | | | |
| | | | | | | June 30, 2014 | | Period Ended | |
| | | | | | | (Unaudited) | | December 31, 2013(a) | |
| | | | | | | | | | |
Net asset value, beginning of period | | | | | $ 10.31 | | $ 10.00 | |
| | | | | | | | | | |
Income from investment operations: | | | | | | | | |
Net investment income (b) (c) | | | | | | 0.01 | | 0.01 | |
Net realized and unrealized gain | | | | | | | | | |
on investments | | | | | | 0.50 | | 0.30 | |
Total income from | | | | | | | | | |
investment operations | | | | | | 0.51 | | 0.31 | |
| | | | | | | | | | |
| | | | | | | | | | |
Net asset value, end of period | | | | | | $ 10.82 | | $ 10.31 | |
| | | | | | | | | | |
Total return (d) | | | | | | 4.95% | | 3.10% | |
| | | | | | | | | | |
Ratios and Supplemental Data: | | | | | | | | | |
Net assets, end of period (in 000's) | | | | | $ 25,828 | | $ 22,424 | |
Ratio of net expenses to | | | | | | | | | |
average net assets (e) | | | | | | 1.20% | (g) | 1.20% | (g) |
Ratio of gross expenses to | | | | | | | | | |
average net assets (e)(f) | | | | | | 1.90% | (g) | 1.62% | (g) |
Ratio of net investment income to | | | | | | | | |
average net assets (c) (e) | | | | | | 0.20% | (g) | 0.66% | (g) |
Portfolio turnover rate | | | | | | 39% | (h,i) | 14% | (h,i) |
| | | | | | | | | | |
(a) FVIT WMC Research Managed Risk Portfolio commenced operations on October 31, 2013. |
(b) Net investment income has been calculated using the average shares method, which more appropriately presents the per share data for the period. |
(c) Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the underlying investment companies in which the Portfolio invests. |
(d) Total returns are historical and assume changes in share price and reinvestment of dividends and capital gains distributions. Total returns for periods of less than one year are not annualized. |
(e) Does not include the expenses of the investment companies in which the Portfolio invests. |
(f) Represents the ratio of expenses to average net assets absent fee waivers and/or expense reimbursements by the Advisor. |
(g) Annualized. | | | | | | | | | |
(h) Not annualized. | | | | | | | | | |
(i) The portfolio turnover rates excludes dollar roll transactions for the periods ended June 30, 2014 and December 31, 2013. If these were included in the calculation the turnover percentage would be 73% and 19%, respectively. Refer to footnote 3. |
See accompanying notes to financial statements.
| | | | | | | | | | |
FVIT Portfolios |
|
Financial Highlights |
FVIT Balanced Managed Risk Portfolio |
| | | | | | | | | | |
Selected data based on a share outstanding throughout each period indicated. |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | Class II Shares | |
| | | | | | | Six Months Ended | | | |
| | | | | | | June 30, 2014 | | Period Ended | |
| | | | | | | (Unaudited) | | December 31, 2013(a) | |
| | | | | | | | | | |
Net asset value, beginning of period | | | | | $ 10.19 | | $ 10.00 | |
| | | | | | | | | | |
Income from investment operations: | | | | | | | | |
Net investment income (b) (c) | | | | | | 0.09 | | 0.09 | |
Net realized and unrealized gain | | | | | | |
on investments | | | | | | 0.35 | | 0.10 | |
Total income from | | | | | | | | | |
investment operations | | | | | | 0.44 | | 0.19 | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Net asset value, end of period | | | | | | $ 10.63 | | $ 10.19 | |
| | | | | | | | | | |
Total return (d) | | | | | | 4.32% | | 1.90% | |
| | | | | | | | | | |
Ratios and Supplemental Data: | | | | | | | | | |
Net assets, end of period (in 000's) | | | | | $ 11,467 | | $ 1,262 | |
Ratio of net expenses to | | | | | | | | | |
average net assets (e) | | | | | | 0.91% | (g) | 0.91% | (g) |
Ratio of gross expenses to | | | | | | | | | |
average net assets (e)(f) | | | | | | 1.21% | (g) | 30.74% | (g) |
Ratio of net investment income to | | | | | | | | |
average net assets (c) (e) | | | | | | 1.72% | (g) | 5.12% | (g) |
Portfolio turnover rate | | | | | | 5% | (h) | 1% | (h) |
| | | | | | | | | | |
(a) FVIT Balanced Managed Risk Portfolio commenced operations on October 31, 2013. |
(b) | Net investment income has been calculated using the average shares method, which more appropriately presents the per share data for the period. |
(c) | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the underlying investment companies in which the Portfolio invests. |
(d) | Total returns are historical and assume changes in share price and reinvestment of dividends and capital gains distributions. Total returns for periods of less than one year are not annualized. |
(e) Does not include the expenses of the investment companies in which the Portfolio invests. |
(f) Represents the ratio of expenses to average net assets absent fee waivers and/or expense reimbursements by the Advisor. | |
(g) Annualized. | | | | | | | | | |
(h) Not annualized. | | | | | | | | | |
See accompanying notes to financial statements.
| | | | | | | | | | |
FVIT Portfolios |
|
Financial Highlights |
FVIT Select Advisor Managed Risk Portfolio |
| | | | | | | | | | |
Selected data based on a share outstanding throughout each period indicated. |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | Class II Shares | |
| | | | | | | Six Months Ended | | | |
| | | | | | | June 30, 2014 | | Period Ended | |
| | | | | | | (Unaudited) | | December 31, 2013(a) | |
| | | | | | | | | | |
Net asset value, beginning of period | | | | | $ 10.24 | | $ 10.00 | |
| | | | | | | | | | |
Income from investment operations: | | | | | | | | |
Net investment income (b) (c) | | | | | | 0.07 | | 0.04 | |
Net realized and unrealized gain | | | | | | | |
on investments | | | | | | 0.41 | | 0.20 | |
Total income from | | | | | | | | | |
investment operations | | | | | | 0.48 | | 0.24 | |
| | | | | | | | | | |
| | | | | | | | | | |
Net asset value, end of period | | | | | | $ 10.72 | | $ 10.24 | |
| | | | | | | | | | |
Total return (d) | | | | | | 4.69% | | 2.40% | |
| | | | | | | | | | |
Ratios and Supplemental Data: | | | | | | | | | |
Net assets, end of period (in 000's) | | | | | $ 20,818 | | $ 2,415 | |
Ratio of net expenses to | | | | | | | | | |
average net assets (e) | | | | | | 0.63% | (g) | 0.63% | (g) |
Ratio of gross expenses to | | | | | | | | | |
average net assets (e)(f) | | | | | | 1.57% | (g) | 14.77% | (g) |
Ratio of net investment income to | | | | | | | | |
average net assets (c) (e) | | | | | | 1.26% | (g) | 2.06% | (g) |
Portfolio turnover rate | | | | | | 12% | (h) | 0% | (h,i) |
| | | | | | | | | | |
(a) FVIT Select Advisor Managed Risk Portfolio commenced operations on October 31, 2013. |
(b) | Net investment income has been calculated using the average shares method, which more appropriately presents the per share data for the period. |
(c) | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the underlying investment companies in which the Portfolio invests. |
(d) | Total returns are historical and assume changes in share price and reinvestment of dividends and capital gains distributions. Total returns for periods of less than one year are not annualized. |
(e) Does not include the expenses of the investment companies in which the Portfolio invests. |
(f) Represents the ratio of expenses to average net assets absent fee waivers and/or expense reimbursements by the Advisor. |
(g) Annualized. | | | | | | | | | |
(h) Not annualized. | | | | | | | | | |
(i) Amount represents less than 1%. | | | |
See accompanying notes to financial statements.
| | | | | | | | |
FVIT Portfolios |
|
Financial Highlights |
FVIT Franklin Dividend and Income Managed Risk Portfolio |
| | | | | | | | |
Selected data based on a share outstanding throughout the period indicated. |
| | | | | | | | |
| | | | | | | | |
| | | | | | | Class II Shares | |
| | | | | | | Period Ended | |
| | | | | | | June 30, 2014 (a) | |
| | | | | | | (Unaudited) | |
| | | | | | | | |
Net asset value, beginning of period | | | | | | $ 10.00 | |
| | | | | | | | |
Income from investment operations: | | | | | | | |
Net investment income (b) (c) | | | | | | 0.02 | |
Net realized and unrealized gain | | | | | | | |
on investments | | | | | | 0.24 | |
Total income from | | | | | | | |
investment operations | | | | | | 0.26 | |
| | | | | | | | |
Net asset value, end of period | | | | | | $ 10.26 | |
| | | | | | | | |
Total return (d) | | | | | | 2.80% | |
| | | | | | | | |
Ratios and Supplemental Data: | | | | | | | |
Net assets, end of period (in 000's) | | | | | | $ 26,628 | |
Ratio of net expenses to | | | | | | | |
average net assets (e) | | | | | | 1.08% | (g) |
Ratio of gross expenses to | | | | | | | |
average net assets (e)(f) | | | | | | 1.69% | (g) |
Ratio of net investment income to | | | | | | | |
average net assets (c) (e) | | | | | | 1.10% | (g) |
Portfolio turnover rate | | | | | | 1% | (h) |
| | | | | | | | |
(a) FVIT Franklin Dividend and Income Managed Risk Portfolio commenced operations on April 30, 2014. | |
(b) | Net investment income has been calculated using the average shares method, which more appropriately presents the per share data for the period. |
(c) | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the underlying investment companies in which the Portfolio invests. |
(d) | Total returns are historical and assume changes in share price and reinvestment of dividends and capital gains distributions. Total returns for periods of less than one year are not annualized. |
(e) Does not include the expenses of the investment companies in which the Portfolio invests. | |
(f) Represents the ratio of expenses to average net assets absent fee waivers and/or expense reimbursements by the Advisor. |
(g) Annualized. | | | | | | | |
(h) Not annualized. | | | | | | | |
See accompanying notes to financial statements.
| | | | | | | | |
FVIT Portfolios |
|
Financial Highlights |
FVIT Growth Managed Risk Portfolio |
| | | | | | | | |
Selected data based on a share outstanding throughout the period indicated. | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | Class II Shares | |
| | | | | | | Six Months Ended | |
| | | | | | | June 30, 2014 (a) | |
| | | | | | | (Unaudited) | |
| | | | | | | | |
Net asset value, beginning of period | | | | | | $ 10.00 | |
| | | | | | | | |
Income from investment operations: | | | | | | | |
Net investment income (b) (c) | | | | | | 0.11 | |
Net realized and unrealized gain | | | | | | | |
on investments | | | | | | 0.24 | |
Total income from | | | | | | | |
investment operations | | | | | | 0.35 | |
| | | | | | | | |
| | | | | | | | |
Net asset value, end of period | | | | | | $ 10.35 | |
| | | | | | | | |
Total return (d) | | | | | | 3.50% | |
| | | | | | | | |
Ratios and Supplemental Data: | | | | | | | |
Net assets, end of period (in 000's) | | | | | | $ 34,058 | |
Ratio of net expenses to | | | | | | | |
average net assets (e) | | | | | | 0.79% | (f) |
Ratio of net investment income to | | | | | | | |
average net assets (c) (e) | | | | | | 6.39% | (f) |
Portfolio turnover rate | | | | | | 14% | (g) |
| | | | | | | | |
(a) FVIT Growth Managed Risk Portfolio commenced operations on April 30, 2014. | |
(b) | Net investment income has been calculated using the average shares method, which more appropriately presents the per share data for the period. |
(c) | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the underlying investment companies in which the Portfolio invests. |
(d) | Total returns are historical and assume changes in share price and reinvestment of dividends and capital gains distributions. Total returns for periods of less than one year are not annualized. |
(e) Does not include the expenses of the investment companies in which the Portfolio invests. | |
(f) Annualized. | | | | | | | |
(g) Not annualized. | | | | | | | |
See accompanying notes to financial statements.
| | | | | | | | |
FVIT Portfolios |
|
Financial Highlights |
FVIT Moderate Growth Managed Risk Portfolio |
| | | | | | | | |
Selected data based on a share outstanding throughout the period indicated. | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | Class II Shares | |
| | | | | | | Six Months Ended | |
| | | | | | | June 30, 2014 (a) | |
| | | | | | | (Unaudited) | |
| | | | | | | | |
Net asset value, beginning of period | | | | | | $ 10.00 | |
| | | | | | | | |
Income from investment operations: | | | | | | | |
Net investment income (b) (c) | | | | | | 0.09 | |
Net realized and unrealized gain | | | | | | | |
on investments | | | | | | 0.18 | |
Total income from | | | | | | | |
investment operations | | | | | | 0.27 | |
| | | | | | | | |
| | | | | | | | |
Net asset value, end of period | | | | | | $ 10.27 | |
| | | | | | | | |
Total return (d) | | | | | | 2.70% | |
| | | | | | | | |
Ratios and Supplemental Data: | | | | | | | |
Net assets, end of period (in 000's) | | | | | | $ 8,188 | |
Ratio of net expenses to | | | | | | | |
average net assets (e) | | | | | | 0.81% | (f) |
Ratio of net investment income to | | | | | | | |
average net assets (c) (e) | | | | | | 5.31% | (f) |
Portfolio turnover rate | | | | | | 0% | (g) |
| | | | | | | | |
(a) FVIT Growth Managed Risk Portfolio commenced operations on April 30, 2014. | |
(b) | Net investment income has been calculated using the average shares method, which more appropriately presents the per share data for the period. |
(c) | Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the underlying investment companies in which the Portfolio invests. |
(d) | Total returns are historical and assume changes in share price and reinvestment of dividends and capital gains distributions. Total returns for periods of less than one year are not annualized. |
(e) Does not include the expenses of the investment companies in which the Portfolio invests. | |
(f) Annualized. | | | | | | | |
(g) Not annualized. | | | | | | | |
See accompanying notes to financial statements.
FVIT Portfolios
NOTES TO FINANCIAL STATEMENTS
June 30, 2014 (Unaudited)
1.
ORGANIZATION
The FVIT Portfolios (each a “Portfolio”, collectively the “Portfolios”) are comprised of eight different actively managed portfolios. Each Portfolio is a series of shares of beneficial interest of Forethought Variable Insurance Trust (the “Trust”), a statutory trust organized under the laws of the State of Delaware, and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. FVIT WMC Research Managed Risk Portfolio and FVIT Franklin Dividend and Income Managed Risk Portfolio are diversified series of the Trust; all other Portfolios are non-diversified. The Portfolios are intended to be funding vehicles for variable annuity contracts offered by the separate accounts of Forethought Life Insurance Company. The assets of each Portfolio are segregated and a shareholder's interest is limited to the Portfolio in which shares are held. Each Portfolio pays its own expenses. The investment objective of each Portfolio is as follows:
| |
| Portfolio | | Investment Objective |
FVIT American Funds® Managed Risk Portfolio * | | Income and capital appreciation while seeking to manage volatility. |
FVIT BlackRock Global Allocation Managed Risk Portfolio * | | Income and capital appreciation while seeking to manage volatility. |
FVIT WMC Research Managed Risk Portfolio * | | Income and capital appreciation while seeking to manage volatility. |
FVIT Balanced Managed Risk Portfolio (formerly FVIT Index Managed Risk Portfolio) * | | Income and capital appreciation while seeking to manage volatility. |
| | |
FVIT Select Advisor Managed Risk Portfolio * | | Income and capital appreciation while seeking to manage volatility. |
FVIT Franklin Dividend and Income Managed Risk Portfolio | | Capital appreciation and income while seeking to manage volatility. |
FVIT Growth Managed Risk Portfolio | | Capital appreciation and income while seeking to manage volatility. |
FVIT Moderate Growth Managed Risk Portfolio | | Capital appreciation and income while seeking to manage volatility. |
* Effective September 30, 2014, the Portfolio’s investment objective will be capital appreciation and income while seeking to manage volitity.
The Portfolios currently offer Class II shares at net asset value.
2.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the Portfolios in the preparation of their financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
Securities Valuation – Securities listed on an exchange are valued at the last reported sale price at the close of the regular trading session of the primary exchange on the business day the value is being determined, or in the case of securities listed on NASDAQ at the NASDAQ Official Closing Price (“NOCP”). In the absence of a sale such securities shall be valued at the mean between the current bids and ask prices on the day of valuation. Futures and future options are valued at the final settle price or, in the absence of a settle price, at the last sale price on the day of valuation. Short-term debt obligations having 60 days or less remaining until maturity, at time of purchase, are valued at amortized cost. Investments in open-end investment companies are valued at net asset value.
Valuation of Fund of Funds - The Portfolios may invest in portfolios of open-end investment companies (the “underlying funds”). Underlying funds are valued at their respective net asset values as reported by such investment companies. Underlying funds value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value based on the methods established by the board of directors of the underlying funds.
FVIT Portfolios
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2014 (Unaudited)
Illiquid Securities - A Portfolio may hold securities, such as private placements, interests in commodity pools, other non-traded securities or temporarily illiquid securities, for which market quotations are not readily available or are determined to be unreliable. These securities will be valued at their fair market value as determined using the “fair value” procedures approved by the Board. The Board has delegated execution of these procedures to a fair value team composed of one or more representatives from each of the (i) Trust, (ii) administrator, and (iii) advisor and/or sub-advisor. The team may also enlist third party consultants such as an audit firm or financial officer of a security issuer on an as-needed basis to assist in determining a security-specific fair value. The Board reviews and ratifies the execution of this process and the resultant fair value prices at least quarterly to assure the process produces reliable results.
Fair Value Team and Valuation Process - This team is composed of one or more officers from each of the (i) Trust, (ii) administrator, and (iii) advisor and/or sub-advisor. The applicable investments are valued collectively via inputs from each of these groups. For example, fair value determinations are required for the following securities: (i) securities for which market quotations are insufficient or not readily available on a particular business day (including without limitation securities for which there is a short and temporary lapse in the provision of a price by the regular pricing source), (ii) securities for which, in the opinion of the Advisor and/or Sub-Advisor, the prices or values available do not represent the fair value of the instrument. Factors which may cause the advisor or sub-advisor to make such a judgment include, but are not limited to, the following: the availability of only a bid price or an ask price; the spread between bid and ask prices; the frequency of sales; the thinness of the market; the size of reported trades; and actions of the securities markets or regulators, such as the suspension or limitation of trading; (iii) securities determined to be illiquid; (iv) securities with respect to which an event that will affect the value thereof has occurred (a “significant event”) subsequent to the determination of the closing price reported on the principal exchange on which the securities are traded, but prior to the relevant Portfolio’s calculation of its net asset value. Specifically, interests in commodity pools or managed futures pools are valued on a daily basis by reference to the closing market prices of each futures contract or other asset held by a pool, as adjusted for pool expenses. Restricted or illiquid securities, such as private placements or non-traded securities are valued via inputs from the Advisor or Sub-Advisor based upon the current bid for the security from two or more independent dealers or other parties reasonably familiar with the facts and circumstances of the security (who should take into consideration all relevant factors as may be appropriate under the circumstances). If the Advisor or Sub-Advisor is unable to obtain a current bid from such independent dealers or other independent parties, the fair value team shall determine the fair value of such security using the following factors: (i) the type of security; (ii) the cost at date of purchase; (iii) the size and nature of the Portfolio’s holdings; (iv) the discount from market value of unrestricted securities of the same class at the time of purchase and subsequent thereto; (v) information as to any transactions or offers with respect to the security; (vi) the nature and duration of restrictions on disposition of the security and the existence of any registration rights, as well as any estimation of the cost of registration or otherwise qualifying the security for public sale including commissions; (vii) how the yield of the security compares to similar securities of companies of similar or equal creditworthiness; (viii) the level of recent trades of similar or comparable securities; (ix) the liquidity characteristics of the security; (x) current market conditions; (xi) the market value of any securities into which the security is convertible or exchangeable; (xii) the security’s embedded option values; and (xiii) information about the financial condition of the issue and its prospectus.
Each Portfolio utilizes various methods to measure the fair value of all of its investments on a recurring basis. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of input are:
Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities that the Portfolio has the ability to access.
Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument in an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Portfolio’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
FVIT Portfolios
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2014 (Unaudited)
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following tables summarize the inputs used as of June 30, 2014 for each Portfolio’s investments measured at fair value:
| | | | |
FVIT American Funds® Managed Risk Portfolio | | | |
Assets | Level 1 | Level 2 | Level 3 | Total |
Variable Insurance Trusts | $ 38,081,262 | $ - | $ - | $ 38,081,262 |
Short-Term Investments | 1,064,467 | - | - | 1,064,467 |
Open Futures Contracts * | 11,305 | - | - | 11,305 |
Total | $ 39,157,034 | $ - | $ - | $ 39,157,034 |
| | | | |
FVIT BlackRock Global Allocation Managed Risk Portfolio | | |
Assets | Level 1 | Level 2 | Level 3 | Total |
Variable Insurance Trusts | $ - | $ 64,430,949 | $ - | $ 64,430,949 |
Short-Term Investment | 782,104 | - | - | 782,104 |
Open Futures Contracts * | 15,768 | - | - | 15,768 |
Total | $ 797,872 | $ 64,430,949 | $ - | $ 65,228,821 |
| | | | |
FVIT WMC Research Managed Risk Portfolio | | | |
Assets | Level 1 | Level 2 | Level 3 | Total |
Common Stocks | $ 15,411,103 | $ - | $ - | $ 15,411,103 |
Preferred Stock | 77,280 | - | - | 77,280 |
Exchange Traded Fund | 536,469 | - | - | 536,469 |
Bonds & Notes | - | 219,776 | - | 219,776 |
Commercial Mortgage Backed Securities | - | 145,373 | - | 145,373 |
Mortgage Backed Securities | - | 2,449,654 | - | 2,449,654 |
U.S. Treasury Securities | - | 5,074,210 | - | 5,074,210 |
Short-Term Investments | 2,116,897 | - | - | 2,116,897 |
Open Futures Contracts * | 9,085 | - | - | 9,085 |
Total | $ 18,150,834 | $ 7,889,013 | $ - | $ 26,039,847 |
| | | | |
FVIT Balanced Managed Risk Portfolio | | | | |
Assets | Level 1 | Level 2 | Level 3 | Total |
Exchange Traded Funds | $ 10,699,386 | $ - | $ - | $ 10,699,386 |
Short-Term Investment | 288,079 | - | - | 288,079 |
Open Futures Contracts * | 2,482 | - | - | 2,482 |
Total | $ 10,989,947 | $ - | $ - | $ 10,989,947 |
FVIT Portfolios
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2014 (Unaudited)
| | | | |
FVIT Select Advisor Managed Risk Portfolio | | | |
Assets | Level 1 | Level 2 | Level 3 | Total |
Exchange Traded Fund | $ 3,864,155 | $ - | $ - | $ 3,864,155 |
Variable Insurance Trusts | 15,530,863 | - | - | 15,530,863 |
Short-Term Investment | 184,318 | - | - | 184,318 |
Open Futures Contracts* | 7,880 | - | - | 7,880 |
Total | $ 19,587,216 | $ - | $ - | $ 19,587,216 |
| | | | |
FVIT Franklin Dividend and Income Managed Risk Portfolio | | |
Assets | Level 1 | Level 2 | Level 3 | Total |
Common Stocks | $ 18,555,695 | $ - | $ - | $ 18,555,695 |
Mutual Fund | 6,041,625 | - | - | 6,041,625 |
Short-Term Investment | 74,456 | - | - | 74,456 |
Open Futures Contracts* | 9,517 | - | - | 9,517 |
Total | $ 24,681,293 | $ - | $ - | $ 24,681,293 |
| | | | |
FVIT Growth Managed Risk Portfolio | | | |
Assets | Level 1 | Level 2 | Level 3 | Total |
Exchange Traded Funds | $ 29,369,325 | $ - | $ - | $ 29,369,325 |
Short-Term Investment | 4,211,321 | - | - | 4,211,321 |
Open Futures Contracts* | 6,303 | - | - | 6,303 |
Total | $ 33,586,949 | $ - | $ - | $ 33,586,949 |
| | | | |
FVIT Moderate Growth Managed Risk Portfolio | | | |
Assets | Level 1 | Level 2 | Level 3 | Total |
Exchange Traded Funds | $ 7,002,481 | $ - | $ - | $ 7,002,481 |
Short-Term Investment | 532,976 | - | - | 532,976 |
Open Futures Contracts* | 1,260 | - | - | 1,260 |
Total | $ 7,536,717 | $ - | $ - | $ 7,536,717 |
The Portfolios did not hold any Level 3 securities during the period.
There were no transfers into or out of Level 1 or Level 2 during the current period presented. It is the Portfolios’ policy to record transfers into or out of Level 1 or Level 2 at the end of the reporting period.
*Cumulative appreciation (depreciation) of futures contracts is reported in the above table.
Security Transactions and Related Income – Security transactions are accounted for on a trade date basis. Interest income is recognized on an accrual basis. Discounts are accreted and premiums are amortized on securities purchased over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Realized gains or losses from sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.
FVIT Portfolios
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2014 (Unaudited)
Dividends and Distributions to Shareholders – Dividends from net investment income and distributions from net realized capital gains if any, are declared and paid annually. Dividends and distributions to shareholders are recorded on ex-date and are determined in accordance with Federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either temporary (e.g., deferred losses, capital loss carryforwards) or permanent in nature. To the extent these differences are permanent in nature, 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 effect on net assets, results from operations or net asset values per share of the Portfolios.
Cash and Cash Equivalents – Cash and cash equivalents include cash and overnight investments in interest-bearing demand deposits with a financial institution with original maturities of three months or less. The Portfolios maintain deposits with a financial institution in an amount that is in excess of federally insured limits.
Federal Income Tax – It is each Portfolio’s policy to qualify as a regulated investment company by complying with the provisions of the Internal Revenue Code that are applicable to regulated investment companies and to distribute substantially all of their taxable income and net realized gains to shareholders. Therefore, no Federal income tax provision is required.
Each Portfolio will recognize the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. Management has analyzed each Portfolio’s tax positions, and has concluded that no liability for unrecognized tax benefits is expected to be taken in each Portfolio’s 2013 tax returns. Each Portfolio identified its major tax jurisdictions as U.S. Federal, Nebraska and foreign jurisdictions where the Portfolios make significant investments; however, the Portfolios are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
Futures Contracts – The Portfolios are subject to equity price risk in the normal course of pursuing their investment objectives. The Portfolios may sell futures contracts to hedge against market risk and to reduce return volatility. The Portfolios may also buy or sell hedge instruments based on one or more market indices in an attempt to maintain the Portfolios’ volatility at a targeted level. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral for the account of the broker (the Portfolio’s agent in acquiring the futures position). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by “marking to market” on a daily basis to reflect the market value of the contracts at the end of each day’s trading. Variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. When the contracts are closed, a Portfolio recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Portfolio’s basis in the contract. If a Portfolio were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Portfolio would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Each Portfolio segregates liquid securities having a value at least equal to the amount of the current obligation under any open futures contract. These amounts are disclosed on the Statements of Assets and Liabilities as Deposits with Brokers. Risks may exceed amounts recognized in the Statements of Assets and Liabilities. With futures, there is minimal counterparty credit risk to a Portfolio since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default.
FVIT Portfolios
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2014 (Unaudited)
For the six months ended June 30, 2014, realized gains (losses) and the change in unrealized appreciation (depreciation) on futures contracts, as disclosed in the Statements of Operations, is as follows:
| | | | |
| | Realized Gain (Loss) | | Change in Unrealized Appreciation (Depreciation) |
FVIT American Funds® Managed Risk Portfolio | | $ (101,884) | | $ 7,930 |
FVIT BlackRock Global Allocation Managed Risk Portfolio | | $ (13,178) | | $ 11,878 |
FVIT WMC Research Managed Risk Portfolio | | $ (108,054) | | $ (9,053) |
FVIT Balanced Managed Risk Portfolio | | $ (4,473) | | $ 2,482 |
FVIT Select Advisor Managed Risk Portfolio | | $ (74,337) | | $ 7,880 |
FVIT Franklin Dividend and Income Managed Risk Portfolio | | $ 24,203 | | $ 9,517 |
FVIT Growth Managed Risk Portfolio | | $ 4,282 | | $ 6,303 |
FVIT Moderate Growth Managed Risk Portfolio | | $ (598) | | $ 1,260 |
Swap Agreements – The FVIT WMC Research Managed Risk Portfolio is subject to equity price risk and/or interest rate risk in the normal course of pursuing its investment objective. The Portfolio may enter into various swap transactions for investment purposes or to manage interest rate, equity, foreign exchange (currency), or credit risk. These would be two-party contracts entered into primarily to exchange the returns (or differentials in rates of returns) earned or realized on particular pre-determined investments or instruments.
The gross returns to be exchanged or “swapped” between parties are calculated with respect to a notional amount, i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate, in a particular foreign currency, or in a “basket” of securities representing a particular index or market segment. Changes in the value of swap agreements are recognized as unrealized gains or losses in the Statement of Operations by “marking to market” on a daily basis to reflect the value of the swap agreement at the end of each day. Payments received or paid at the beginning of the agreement are reflected as such on the Statement of Assets and Liabilities and may be referred to as upfront payments. The Portfolio amortizes upfront payments and/or accrues for the fixed payment stream on swap agreements on a daily basis with the net amount recorded as a component of unrealized gain or loss on the Statement of Operations. Realized gains and losses from the decrease in notional value of the swap are recognized on trade date. A liquidation payment received or made at the termination of the swap agreement is recorded as a realized gain or loss on the Statement of Operations. The Portfolio segregates cash or liquid securities having a value at least equal to the amount of its current obligation under any swap transaction. Entering into these agreements involves, to varying degrees, lack of liquidity and elements of credit, market and counterparty risk in excess of amounts recognized on the Statement of Assets and Liabilities. The Portfolio’s maximum risk of loss from the counterparty credit risk is the discounted net value of the cash flow to be received from the counterparty over the contract’s remaining life, to be the extent that amount is positive. For the six months ended June 30, 2014, the FVIT WMC Research Managed Risk Portfolio had realized gains of $14,586 from swap contracts.
The derivative instruments outstanding as of June 30, 2014 as disclosed in the Portfolios of Investments and the amounts of realized and changes in unrealized gains and losses on derivative instruments during the period as disclosed in the Statements of Operations serve as indicators of the volume of derivative activity for the Portfolios.
FVIT Portfolios
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2014 (Unaudited)
Offsetting of Financial Assets and Derivative Assets
The following table presents the each Portfolio’s asset derivatives available for offset under a master netting arrangement net of collateral pledged as of June 30, 2014.
| | | | | | | | | | | | |
FVIT Franklin Dividend and Income Managed Risk Portfolio | | | | | | | | |
Assets: | | | | | | | | Gross Amounts Not Offset in the Statement of Assets & Liabilities | | |
Description | | Gross Amounts of Recognized Assets | | Gross Amounts Offset on the Statement of Assets & Liabilities | | Net Amounts of Assets Presented in the Statement of Assets & Liabilities | | Financial Instruments | | Cash Collateral Received | | Net Amount of Assets |
Futures Contracts | | $ 10,867 | (1) | $ (1,350) | | $ 9,517 | (2) | | | $ 9,517 | | $ - |
Total | | $ 10,867 | | $ (1,350) | | $ 9,517 | | $ - | | $ 9,517 | | $ - |
| | | | | | | | | | | | |
Liabilities: | | | | | | | | Gross Amounts Not Offset in the Statement of Assets & Liabilities | | |
Description | | Gross Amounts of Recognized Liabilities | | Gross Amounts Offset on the Statement of Assets & Liabilities | | Net Amounts of Assets Presented in the Statement of Assets & Liabilities | | Financial Instruments | | Cash Collateral Received | | Net Amount of Assets |
Futures Contracts | | $ 1,350 | (1) | $ (1,350) | | $ - | | $ - | | $ - | | $ - |
Total | | $ 1,350 | | $ (1,350) | | $ - | | $ - | | $ - | | $ - |
| | | | | | | | | | | | |
FVIT Growth Managed Risk Portfolio | | | | | | | | | | |
Assets: | | | | | | | | Gross Amounts Not Offset in the Statement of Assets & Liabilities | | |
Description | | Gross Amounts of Recognized Assets | | Gross Amounts Offset on the Statement of Assets & Liabilities | | Net Amounts of Assets Presented in the Statement of Assets & Liabilities | | Financial Instruments | | Cash Collateral Received | | Net Amount of Assets |
Futures Contracts | | $ 6,388 | (1) | $ (85) | | $ 6,303 | | $ - | | $ 6,303 | (2) | $ - |
Total | | $ 6,388 | | $ (85) | | $ 6,303 | | $ - | | $ 6,303 | | $ - |
| | | | | | | | | | | | |
Liabilities: | | | | | | | | Gross Amounts Not Offset in the Statement of Assets & Liabilities | | |
Description | | Gross Amounts of Recognized Liabilities | | Gross Amounts Offset on the Statement of Assets & Liabilities | | Net Amounts of Assets Presented in the Statement of Assets & Liabilities | | Financial Instruments | | Cash Collateral Received | | Net Amount of Assets |
Futures Contracts | | $ 85 | (1) | $ (85) | | $ - | | $ - | | $ - | | $ - |
Total | | $ 85 | | $ (85) | | $ - | | $ - | | $ - | | $ - |
(1)
Gross realized appreciation and depreciation as presented in the Portfolio of Investments.
(2)
The amount is limited to the net derivative balance and, accordingly, does not include excess collateral pledged.
Exchange Traded Funds – The Portfolios may invest in exchange traded funds (“ETFs”). ETFs are a type of index fund bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. A Portfolio may purchase an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity on an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
FVIT Portfolios
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2014 (Unaudited)
When-Issued and Delayed-Delivery Transactions - The Portfolios may engage in when-issued or delayed-delivery transactions. The Portfolios record when-issued securities on the trade date and maintain security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed-delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Dollar Roll Transactions – A mortgage dollar roll transaction involves a sale by the portfolio of mortgage related securities that it holds with an agreement by the Portfolios to repurchase similar securities at an agreed upon price and date. The securities purchased will bear the same interest rate as those sold, but generally will be collateralized by pools of mortgages with different prepayment histories than those securities sold. The Portfolios account for mortgage dollar rolls as purchases and sales transactions.
Use of Estimates – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
Expenses – Expenses of the Trust that are directly identifiable to a specific Portfolio are charged to that Portfolio. Expenses, which are not readily identifiable to a specific Portfolio, are allocated in such a manner as deemed equitable, taking into consideration the nature and type of expense and the relative sizes of the Portfolios in the Trust.
Indemnification – The Trust indemnifies its officers and Trustees for certain liabilities that may arise from the performance of their duties to the Trust. Additionally, in the normal course of business, the Portfolios enter into contracts that contain a variety of representations and warranties and which provide general indemnities. Each Portfolio’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Portfolios that have not yet occurred. However, the Portfolios expect the risk of loss due to these warranties and indemnities to be remote.
3.
INVESTMENT TRANSACTIONS
For the six months ended June 30, 2014, cost of purchases and proceeds from sales of portfolio securities, other than short-term investments, were as follows:
| | |
Portfolio | Purchases | Sales |
FVIT American Funds® Managed Risk Portfolio | $ 32,758,493 | $ 978,826 |
FVIT BlackRock Global Allocation Managed Risk Portfolio | 55,264,367 | - |
FVIT WMC Research Managed Risk Portfolio | 11,151,755 | 8,051,285 |
FVIT Balanced Managed Risk Portfolio | 9,683,286 | 256,687 |
FVIT Select Advisor Managed Risk Portfolio | 17,819,815 | 1,355,553 |
FVIT Franklin Dividend and Income Managed Risk Portfolio | 24,147,517 | 137,609 |
FVIT Growth Managed Risk Portfolio | 31,763,264 | 2,642,682 |
FVIT Moderate Growth Managed Risk Portfolio | 6,952,497 | - |
The aggregate amount of purchases and sales for FVIT WMC Research Managed Risk Portfolio (including paydowns) of investment securities, excluding short-term securities and financial futures during the six months ended June 30, 2014, amounted to $19,883,071 and $16,011,040 respectively of which $8,731,316 in purchases and $7,959,755 in sales were from mortgage dollar roll transactions.
FVIT Portfolios
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2014 (Unaudited)
4.
INVESTMENT ADVISORY AGREEMENT / TRANSACTIONS WITH AFFILIATES
Forethought Investment Advisors, LLC serves as the Portfolios’ Investment Advisor (the “Advisor”). The Advisor has engaged Milliman Financial Risk Management, LLC (“Milliman”) as a sub-advisor for each Portfolio. The Advisor has also engaged Wellington Management Company, LLP (“Wellington”) as the sub-advisor for FVIT WMC Research Managed Risk Portfolio and Franklin Advisory Services, LLC (“Franklin”) as the sub-advisor for FVIT Franklin Dividend and Income Managed Risk Portfolio. The Portfolios have employed Gemini Fund Services, LLC (“GFS”) to provide administration, fund accounting and transfer agent services. Certain officers of the Trust are also officers of GFS.
Pursuant to an Advisory Agreement with the Trust, on behalf of the Portfolios, the Advisor, under the oversight of the Board, directs the daily investment operations of the Portfolios and supervises the performance of administrative and professional services provided by others. As compensation for its services and the related expenses borne by the Advisor, the Portfolios pay the Advisor a management fee, computed on average daily net assets and accrued daily and paid monthly. The following chart details the annual fee for each Portfolio. Pursuant to a sub-advisory agreement, the Advisor pays Milliman, Wellington (with respect to the FVIT WMC Research Managed Risk Portfolio) and Franklin (with respect to the FVIT Franklin Dividend and Income Managed Risk Portfolio) a fee, which is computed and paid monthly.
| |
Portfolio | Advisory Fee |
FVIT American Funds® Managed Risk Portfolio | 0.900% of the first $500 million, 0.875% of the next $500 million and 0.850% over $1 billion |
FVIT BlackRock Global Allocation Managed Risk Portfolio | 0.90% |
FVIT WMC Research Managed Risk Portfolio | 0.850% of the first $500 million, 0.825% of the next $500 million and 0.800% over $1 billion |
FVIT Balanced Managed Risk Portfolio | 0.550% of the first $500 million, 0.525% of the next $500 million and 0.500% over $1 billion |
FVIT Select Advisor Managed Risk Portfolio | 0.900% of the first $500 million, 0.875% of the next $500 million and 0.850% over $1 billion |
FVIT Franklin Dividend and Income Managed Risk Portfolio | 0.850% of the first $500 million, 0.825% of the next $500 million and 0.800% over $1 billion |
FVIT Growth Managed Risk Portfolio | 0.550% of the first $500 million, 0.525% of the next $500 million and 0.500% over $1 billion |
FVIT Moderate Growth Managed Risk Portfolio | 0.550% of the first $500 million, 0.525% of the next $500 million and 0.500% over $1 billion |
FVIT Portfolios
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2014 (Unaudited)
With respect to each Portfolio, the Advisor has contractually agreed to waive its fees and to reimburse expenses, at least until April 30, 2015, to ensure that total annual portfolio operating expenses after fee waiver and/or reimbursement (exclusive of any front-end or contingent deferred loads, brokerage fees and commissions, acquired fund fees and expenses, borrowing costs (such as interest and dividend expense on securities sold short), taxes and extraordinary expenses, such as litigation) will not exceed the average daily net asset percentages attributable to the Portfolio’s shares listed below (“Waiver Agreement”). The expense reimbursement is subject to possible recoupment from the Portfolio in future years on a rolling three year basis (within the three years after the fees have been waived or reimbursed) if such recoupment can be achieved within the foregoing expense limit. The agreements may be terminated only by the Portfolio's Board of Trustees, on 60 days’ written notice to the Advisor.
| |
Portfolio | Expense Limitation |
FVIT American Funds® Managed Risk Portfolio | 0.86% |
FVIT BlackRock Global Allocation Managed Risk Portfolio | 0.57% |
FVIT WMC Research Managed Risk Portfolio | 1.20% |
FVIT Balanced Managed Risk Portfolio | 0.91% |
FVIT Select Advisor Managed Risk Portfolio | 0.63% |
FVIT Franklin Dividend and Income Managed Risk Portfolio | 1.08% |
FVIT Growth Managed Risk Portfolio | 0.91% |
FVIT Moderate Growth Managed Risk Portfolio | 0.91% |
For the six months ended June 30, 2014, the advisor waived fees and reimbursed expenses as follows:
| |
Portfolio | Waiver/Reimbursement |
FVIT American Funds® Managed Risk Portfolio | $ 74,618 |
FVIT BlackRock Global Allocation Managed Risk Portfolio | $ 170,908 |
FVIT WMC Research Managed Risk Portfolio | $ 84,480 |
FVIT Balanced Managed Risk Portfolio | $ 7,648 |
FVIT Select Advisor Managed Risk Portfolio | $ 55,872 |
FVIT Franklin Dividend and Income Managed Risk Portfolio | $ 25,620 |
If the Advisor waives any fee or reimburses any expense pursuant to the Waiver Agreement, and the Portfolio’s operating expenses are subsequently less than the expense limitation, the Advisor shall be entitled to reimbursement by the Portfolio for such waived fees or reimbursed expenses provided that such reimbursement does not cause the Portfolio's expenses to exceed the amount of the expense limitation. If Portfolio operating expenses subsequently exceed the expense limitation, the reimbursements shall be suspended.
The Advisor may recapture the following amounts by the following dates:
| |
Portfolio | December 31, 2016 |
FVIT American Funds® Managed Risk Portfolio | $ 13,217 |
FVIT BlackRock Global Allocation Managed Risk Portfolio | $ 14,505 |
FVIT WMC Research Managed Risk Portfolio | $ 14,217 |
FVIT Balanced Managed Risk Portfolio | $ 11,885 |
FVIT Select Advisor Managed Risk Portfolio | $ 12,417 |
The Trust, on behalf of the Portfolios, has adopted the Trust’s Distribution and Shareholder Servicing Plan (“12b-1 Plan” or “Plan”) for Class II shares. The fee is calculated at an annual rate of 0.25% of the average daily net assets attributable to each Portfolio’s Class II shares and is paid to Northern Lights Distributors, LLC (the “Distributor”) to provide compensation for ongoing shareholder servicing and distribution related activities and/or maintenance of each Portfolio’s shareholder accounts, not otherwise required to be provided by the Advisor. The Distributor is an affiliate of GFS.
FVIT Portfolios
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2014 (Unaudited)
Pursuant to the terms of an administrative servicing agreement with GFS, each Portfolio pays to GFS a monthly fee for all operating expenses of the Portfolio, which is calculated by each Portfolio on its average daily net assets. Operating expenses include but are not limited to fund accounting, fund administration, transfer agency, legal fees, audit fees, compliance services, shareholder reporting expenses, trustee’s fees and custody fees. The approved entities may be affiliates of GFS. GFS provides a Principal Financial Officer to the Portfolios.
For the six months ended June 30, 2014, the Trustees received fees as follows:
| |
Portfolio | Fees Received |
FVIT American Funds® Managed Risk Portfolio | $8,531 |
FVIT BlackRock Global Allocation Managed Risk Portfolio | 8,531 |
FVIT WMC Research Managed Risk Portfolio | 8,531 |
FVIT Balanced Managed Risk Portfolio | 8,531 |
FVIT Select Advisor Managed Risk Portfolio | 8,531 |
FVIT Franklin Dividend and Income Managed Risk Portfolio | 3,281 |
FVIT Growth Managed Risk Portfolio | 3,281 |
FVIT Moderate Growth Managed Risk Portfolio | 3,281 |
Certain affiliates of GFS provide ancillary services to the Portfolios as follows:
Gemcom, LLC (“Gemcom”), an affiliate of GFS, provides EDGAR conversion and filing services as well as print management services for the Portfolios on an ad-hoc basis. For the provision of these services, Gemcom receives customary fees from GFS under the administrative servicing agreement.
5. CONTROL OWNERSHIP
The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a Portfolio creates presumption of the control of the Portfolio, under section 2(a)(9) of the 1940 Act. As of June 30, 2014 Forethought Life Insurance Company held 100% of the voting securities of each Portfolio for the benefit of others. The Trust has no knowledge as to whether all or any portion of the shares owned of record are also owned beneficially.
Shareholder Concentration Risk — Forethought Life Insurance Company, certain accounts, or the Advisor’s affiliates may from time to time own (beneficially or of record) or control a significant percentage of a Portfolio’s shares. Redemptions by these entities of their holdings in the Portfolio may impact the Portfolio’s liquidity and NAV. These redemptions may also force the Portfolio to sell securities.
6. TAX COMPONENTS OF CAPITAL
As of December 31, 2013, the components of accumulated earnings/(deficit) on a tax basis were as follows:
| | | | | | | | | | | | | | |
| | Undistributed | | Undistributed | | Capital Loss | | Other | | Post October | | Unrealized | | Total |
| | Ordinary | | Long-Term | | Carry | | Book/Tax | | Loss and Late | | Appreciation/ | | Accumulated |
| | Income | | Capital Gains | | Forwards | | Differences | | Year Loss | | (Depreciation) | | Earnings/(Deficits) |
American Funds Managed Risk Portfolio | | $ 59,277 | | $ 2,025 | | $ - | | $ - | | $ - | | $ 33,542 | | $ 94,844 |
BlackRock Global Allocation Managed Risk Portfolio | | 134,761 | | 115,548 | | - | | - | | - | | (149,506) | | 100,803 |
WMC Research Managed Risk Portfolio | | 61,336 | | 13,004 | | - | | - | | - | | 571,472 | | 645,812 |
Balanced Managed Risk Portfolio | | 5,299 | | 3 | | - | | - | | - | | 8,312 | | 13,614 |
Select Advisor Managed Risk Portfolio | | 4,599 | | - | | - | | - | | - | | 30,438 | | 35,037 |
FVIT Portfolios
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2014 (Unaudited)
The difference between book basis and tax basis unrealized appreciation (depreciation), undistributed ordinary income (loss) and accumulated net realized gain (loss) from investments is primarily attributable to the tax deferral of losses on wash sales, return of capital distributions from C-Corporations, and mark-to-market on open futures contracts and passive foreign investment companies.
Permanent book and tax differences, primarily attributable to the book/ tax basis treatment of non-deductible expenses and paydowns, and adjustments related to real estate investment trusts resulted in reclassification for the following Portfolios for the period ended December 31, 2013 as follows:
| | | | | | |
| | Paid | | Undistributed | | Undistributed |
| | In | | Ordinary | | Long-Term |
| | Capital | | Income (Loss) | | Gains (Loss) |
American Funds Managed Risk Portfolio | | $ (2,569) | | $ 2,569 | | $ - |
BlackRock Global Allocation Managed Risk Portfolio | | (1,412) | | 1,412 | | - |
WMC Research Managed Risk Portfolio | | (9,284) | | 9,180 | | 104 |
Balanced Managed Risk Portfolio | | (3,212) | | 3,212 | | - |
Select Advisor Managed Risk Portfolio | | (2,793) | | 2,793 | | - |
7. UNDERLYING INVESTMENTS IN OTHER INVESTMENT COMPANIES
The FVIT BlackRock Global Allocation Managed Risk Portfolio currently invests a portion of its assets in BlackRock Global Allocation V.I. Fund. The BlackRock Global Allocation V.I. Fund is registered under the 1940 Act as an open-end management investment company. The Portfolio may redeem its investment from the BlackRock Global Allocation V.I. Fund at any time if the Advisor determines that it is in the best interest of the Portfolio and its shareholders to do so.
The performance of the Portfolio may be directly affected by the performance of the BlackRock Global Allocation V.I. Fund. The financial statements of the BlackRock Global Allocation V.I. Fund, including the portfolio of investments, can be found at the BlackRock website, http://www2.blackrock.com or the Securities and Exchange Commission’s website www.sec.gov and should be read in conjunction with the Portfolio’s financial statements. As of June 30, 2014, the Portfolio invested 93.0% of its net assets in the BlackRock Global Allocation V.I. Fund.
The FVIT Balanced Managed Risk Portfolio, FVIT Growth Managed Risk Portfolio, and FVIT Moderate Growth Managed Risk Portfolio currently invest a portion of their assets in iShares Core S&P 500 ETF. The iShares Core S&P 500 ETF is registered under the 1940 Act as an open-end management investment company. The Portfolio may redeem its investment from the iShares Core S&P 500 ETF at any time if the Advisor determines that it is in the best interest of the Portfolio and its shareholders to do so.
The performance of the Portfolios may be directly affected by the performance of the iShares Core S&P 500 ETF. The financial statements of the iShares Core S&P 500 ETF, including the portfolio of investments, can be found at the iShares website, http://us.ishares.com or the Securities and Exchange Commission’s website www.sec.gov and should be read in conjunction with the Portfolio’s financial statements. As of June 30, 2014, the Portfolios invested the following of percentages of their respective net assets in the iShares Core S&P 500 ETF:
FVIT Balanced Managed Risk Portfolio
42.6%
FVIT Growth Managed Risk Portfolio
45.6%
FVIT Moderate Growth Managed Risk Portfolio
43.3%
8. SUBSEQUENT EVENTS
Subsequent events after the balance sheet date have been evaluated through the date the financial statements were issued. Management has concluded that no events or transactions occurred requiring adjustment or disclosure in the financial statements.
FVIT Portfolios
EXPENSE EXAMPLES
June 30, 2014 (Unaudited)
As a shareholder of the Portfolios, you incur ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in each Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from January 1, 2014* through June 30, 2014.
Actual Expenses
The “Actual” expenses set of columns in 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.
Hypothetical Example for Comparison Purposes
The “Hypothetical” expenses set of columns in the table below provides information about hypothetical account values and hypothetical expenses based on each Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the period. You may use this information to compare this 5% hypothetical example for a specific Portfolio 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, such as sales charges (loads), or redemption fees or other expenses charged by your insurance contract or separate account. Therefore, the Hypothetical columns of the table are 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.
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Actual | Hypothetical (5% return before expenses) |
Class II Shares | Portfolio’s Annualized Net Expense Ratio |
Beginning Account Value 1-1-14 | Ending Account Value 6-30-14 |
Expenses Paid During Period* |
Ending Account Value 6-30-14 | Expenses Paid During Period* |
FVIT American Funds® Managed Risk Portfolio* | 0.86% | $1,000.00 | $1,042.80 | $4.36 | $1,020.53 | $4.31 |
FVIT BlackRock Global Allocation Managed Risk Portfolio* | 0.57% | $1,000.00 | $1,028.40 | $2.87 | $1,021.97 | $2.86 |
FVIT WMC Research Managed Risk Portfolio* | 1.20% | $1,000.00 | $1,049.50 | $6.10 | $1,018.84 | $6.01 |
FVIT Balanced Managed Risk Portfolio* | 0.91% | $1,000.00 | $1,043.20 | $4.61 | $1,020.28 | $4.56 |
FVIT Select Advisor Managed Risk Portfolio* | 0.63% | $1,000.00 | $1,046.90 | $3.20 | $1,021.67 | $3.16 |
FVIT Portfolios
EXPENSE EXAMPLES (Continued)
June 30, 2014 (Unaudited)
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| | |
Actual | Hypothetical (5% return before expenses) |
Class II Shares | Portfolio’s Annualized Net Expense Ratio |
Beginning Account Value 1-1-14 | Ending Account Value 6-30-14 |
Expenses Paid During Period* |
Ending Account Value 6-30-14 | Expenses Paid During Period* |
FVIT Franklin Dividend and Income Managed Risk Portfolio** | 1.08% | $1,000.00 | $1,026.00 | $1.80 | $1,019.44 | $5.41 |
FVIT Growth Managed Risk Portfolio** | 0.79% | $1,000.00 | $1,035.00 | $1.32 | $1,020.88 | $3.96 |
FVIT Moderate Growth Managed Risk Portfolio** | 0.81% | $1,000.00 | $1,027.00 | $1.35 | $1,020.78 | $4.06 |
* Expenses are equal to the Fund’s annualized expense ratio, multiplied by the number of days in the period (181) divided by the number of days in the fiscal year (365).
**”Actual” expense information for the Portfolios are for the period from 04/30/14 (date of initial investment) to 06/30/14. Actual expenses are equal to the Portfolio's annualized net expense ratio multiplied by 60/181 (to reflect the period from initial investment to June 30 2014). "Hypothetical" expense information for the Portfolio is presented on the basis of the full one-half year period to enable comparison to other funds. It is based on assuming the same net expense ratio and average account value over the period, but it is multiplied by 181/365 (to reflect the full half-year period).
FVIT Portfolios
SUPPLEMENTAL INFORMATION
June 30, 2014 (Unaudited)
FVIT Franklin Dividend and Income Managed Risk Portfolio (Adviser – Forethought Investment Advisors, LLC)
At an in-person meeting held on February 11, 2014, the Board of Trustees (the “Trustees” or the “Board”) of Forethought Variable Insurance Trust (the “Trust”), including a majority of the Trustees who are not “interested persons,” as that term is defined in the Investment Company Act of 1940, as amended (the “Independent Trustees”), considered the approval of an investment advisory agreement (the “Advisory Agreement”) between Forethought Investment Advisors, LLC (the “Adviser”) and the Trust, on behalf of FVIT Franklin Dividend and Income Managed Risk Portfolio (“the “New Fund”). The Trustees requested, received and reviewed written responses from the Adviser to questions posed to the Adviser on behalf of the Trustees. The Trustees also received in-person presentations concerning the Advisory Agreement from personnel of the Adviser at the February 11, 2014 meeting.
Prior to the meeting, the Trustees received a memorandum from counsel to the Trust describing the legal standards for their consideration of the approval of the Advisory Agreement. Prior to voting on the approval of the Advisory Agreement, the Independent Trustees met in executive session with counsel to the Trust. The Trustees relied upon the advice of counsel and their own business judgment in determining the material factors to be considered in evaluating the Advisory Agreement and the weight to be given to each such factor. The conclusions reached by the Trustees were based on a comprehensive evaluation of all of the information provided and were not the result of any one factor. Moreover, each Trustee may have afforded different weight to the various factors in reaching his conclusions with respect to the Advisory Agreement.
Nature, Extent and Quality of Services. The Trustees reviewed the experience of the Adviser and of the personnel who will be responsible for servicing the New Fund, and noted the many years of financial industry experience as well as portfolio management, compliance, and operations experience of the Adviser’s personnel. The Trustees reviewed the description provided by the Adviser of its proposed practices for monitoring compliance with the New Fund’s investment limitations and concluded that such practices were adequate. The Trustees reviewed the Adviser’s philosophy and process for managing the Fund. The Trustees concluded that the Adviser had sufficient quality and depth of personnel, resources, investment methods and compliance policies and procedures to perform its duties under the proposed Investment Advisory Agreement and that the nature, overall quality and extent of the management services to be provided by the Adviser to the Fund were satisfactory.
Performance. The Trustees considered the Adviser’s limited prior performance in managing the existing Funds of the Trust. The Trustees also considered that the Adviser would allocate a portion of the New Fund’s assets among underlying funds, and retain Franklin Advisory Services, LLC (“Franklin”) and Milliman Financial Risk Management LLC (“Milliman”) as sub-advisers to manage respective portions of the New Fund’s assets on a day-to-day basis, subject to the Adviser’s oversight. The Trustees reviewed the performance of the initial underlying funds, and of Franklin and Milliman with respect to similar strategies. The Trustees concluded that the Adviser is capable of managing the New Fund in a manner that seeks to achieve the New Fund’s investment objectives.
Fees and Expenses. The Trustees discussed the advisory fees and total operating expense data provided to them and reviewed the New Fund’s proposed advisory fees and overall expenses compared to a peer group comprised of funds selected by the Adviser with similar investment objectives and strategies and of similar size. The Trustees also considered the “spread” between the proposed advisory and sub-advisory fees at various asset levels for the New Fund.
The Trustees noted that they had requested, and been provided, additional information that compared the New Fund’s proposed fees and expenses to a broader group of funds than had initially been provided by the Adviser. Based on their review, the Trustees concluded that the fees and expenses proposed to be charged to the New Fund are fair and reasonable in light of the services to be provided by the Adviser to the New Fund.
Economies of Scale. The Trustees discussed the Adviser’s expectations for growth of the New Fund. The Trustees considered that although the New Fund had not yet commenced operations and material economies of scale may not be achieved in the near term, the New Fund’s advisory fee schedule contains breakpoints to share economies of scale with shareholders as assets increase.
Profitability. The Trustees considered the level of profits that could be expected to accrue to the Adviser with respect to the New Fund. The Trustees reviewed and considered an estimated profitability report and analysis and selected financial information of the Adviser provided by the Adviser. The Trustees concluded that based on the services to be provided and the projected growth of the New Fund, the advisory fees were reasonable and that anticipated profits from the Adviser’s relationship with the New Fund were not excessive.
Other Benefits. The Trustees considered other benefits to the Adviser and its affiliates from their proposed relationships with the New Fund, including the role of the New Fund in supporting the variable annuity products offered by Forethought Life Insurance Company. The Trustees noted that Forethought Life Insurance Company would receive 12b-1 fees from the New Fund.
Conclusion. Having requested and received such information from the Adviser as the Trustees believed to be reasonably necessary to evaluate the terms of the Investment Advisory Agreement, and as assisted by the advice of counsel, the Trustees, including the Independent Trustees voting separately, unanimously concluded that approving the Investment Advisory Agreement for an initial two-year term is in the best interests of the New Fund and its future shareholders.
FVIT Portfolios
SUPPLEMENTAL INFORMATION (Continued)
June 30, 2014 (Unaudited)
FVIT Franklin Dividend and Income Managed Risk Portfolio (Sub-Adviser – Milliman Financial Risk Management LLC)
At an in-person meeting held on February 11, 2014, the Board of Trustees (the “Trustees” or the “Board”) of Forethought Variable Insurance Trust (the “Trust”), including a majority of the Trustees who are not “interested persons,” as that term is defined in the Investment Company Act of 1940, as amended (the “Independent Trustees”), considered the approval of a sub-advisory agreement (the “Sub-Advisory Agreement”) between Forethought Investment Advisors, LLC (the “Adviser”) and Milliman Financial Risk Management LLC (“Milliman”), on behalf of FVIT Franklin Dividend and Income Managed Risk Portfolio (the “New Fund”). The Trustees requested, received and reviewed written responses from the Adviser and from Milliman to questions posed to the Adviser on behalf of the Trustees. The Trustees also received a presentation concerning the Sub-Advisory Agreement from personnel of Milliman at the February 11, 2014 meeting.
Prior to the meeting, the Trustees received a memorandum from counsel to the Trust describing the legal standards for their consideration of the approval of the Sub-Advisory Agreement. Prior to voting on the approval of the Sub-Advisory Agreement, the Independent Trustees met in executive session with counsel to the Trust. The Trustees relied upon the advice of counsel and their own business judgment in determining the material factors to be considered in evaluating the Sub-Advisory Agreement and the weight to be given to each such factor. The conclusions reached by the Trustees were based on a comprehensive evaluation of all of the information provided and were not the result of any one factor. Moreover, each Trustee may have afforded different weight to the various factors in reaching his conclusions with respect to the Sub-Advisory Agreement.
Nature, Extent and Quality of Services. The Trustees reviewed the nature of the services to be provided by Milliman. The Trustees reviewed Milliman’s investment philosophy and process. The Trustees reviewed the resources, experience and capabilities of Milliman and the personnel who will provide services to the New Fund. The Trustees also noted the Adviser’s recommendation that Milliman should be retained. The Trustees ’concluded that Milliman’s experience and reputation demonstrate that Milliman is capable of providing high quality services to the New Fund.
Performance. The Trustees reviewed the performance information provided with respect to other funds that utilize Milliman’s strategy. The Trustees discussed the fact that the information was of limited utility given that the Milliman strategy accounted for only a portion of each fund’s performance history. The Trustees concluded that Milliman is capable of managing the New Fund in a manner that contributes to achieving the New Fund’s investment objectives.
Fees and Expenses. The Trustees reviewed the proposed sub-advisory fee arrangement for New Fund and noted the representations of the Adviser that the fee arrangement was negotiated by the Adviser on an arm’s length basis. The Trustees reviewed the information provided by Milliman with respect to fees charged to other funds using the strategy proposed for the New Fund and Milliman’s standard sub-advisory fee schedules. The Trustees concluded that Milliman’s proposed sub-advisory fees for the New Fund are fair and reasonable in light of the services to be provided by Milliman.
Economies of Scale. The Trustees considered whether there will be economies of scale with respect to the management of the New Fund. ’The Trustees concluded that the sub-advisory fees to be paid by the Adviser to Milliman will reflect the benefits of economies of scale resulting from the growth of assets.
Profitability. The Trustees were not provided with information on Milliman’s anticipated profitability with respect to managing the New Fund. However, based on the information provided by Milliman regarding fees charged to other funds that utilize the proposed Milliman strategy and the factors considered in setting the New Fund’s proposed sub-advisory fee, the Trustees concluded that Milliman’s profits with respect to the New Fund would not be unreasonable.
Other Benefits. The Trustees considered other benefits to Milliman and its affiliates from its proposed relationship with the New Fund. The Trustees noted that Milliman would not receive soft dollar benefits in connection with its sub-advisory relationship with the New Fund.
Conclusion. Having requested and received such information from the Adviser and Milliman as the Trustees believed to be reasonably necessary to evaluate the terms of the Sub-Advisory Agreement, and as assisted by the advice of counsel, the Trustees, including the Independent Trustees voting separately, unanimously concluded that approving the Sub-Advisory Agreement for an initial two-year term is in the best interests of the New Fund and its future shareholders.
FVIT Portfolios
SUPPLEMENTAL INFORMATION (Continued)
June 30, 2014 (Unaudited)
FVIT Franklin Dividend and Income Managed Risk Portfolio (Sub-Adviser – Franklin Advisory Services, LLC)
At an in-person meeting held on February 11, 2014, the Board of Trustees (the “Trustees” or the “Board”) of Forethought Variable Insurance Trust (the “Trust”), including a majority of the Trustees who are not “interested persons,” as that term is defined in the Investment Company Act of 1940, as amended (the “Independent Trustees”), considered the approval of a sub-advisory agreement (the “Sub-Advisory Agreement”) between Forethought Investment Advisors, LLC (the “Adviser”) and Franklin Advisory Services, LLC (“Franklin”), on behalf of FVIT Franklin Dividend and Income Managed Risk Portfolio (the “New Fund”). The Trustees requested, received and reviewed written responses from the Adviser and from Franklin to questions posed to the Adviser on behalf of the Trustees. The Trustees also received an in-person presentation concerning the Sub-Advisory Agreement from personnel of Franklin at the February 11, 2014 meeting.
Prior to the meeting, the Trustees received a memorandum from counsel to the Trust describing the legal standards for their consideration of the approval of the Sub-Advisory Agreement. Prior to voting on the approval of the Sub-Advisory Agreement, the Independent Trustees met in executive session with counsel to the Trust. The Trustees relied upon the advice of counsel and their own business judgment in determining the material factors to be considered in evaluating the Sub-Advisory Agreement and the weight to be given to each such factor. The conclusions reached by the Trustees were based on a comprehensive evaluation of all of the information provided and were not the result of any one factor. Moreover, each Trustee may have afforded different weight to the various factors in reaching his conclusions with respect to the Sub-Advisory Agreement.
Nature, Extent and Quality of Services. The Trustees noted that Franklin will provide certain research, security selection, trade execution, and compliance services for the New Fund. The Trustees reviewed Franklin’s investment philosophy and process. The Trustees reviewed the resources, experience and capabilities of Franklin and the personnel who will provide services to the New Fund. The Trustees also noted the Adviser’s recommendation that Franklin should be retained. The Trustees concluded that Franklin’s experience and reputation demonstrate that Franklin is capable of providing high quality services to the New Fund.
Performance. The Trustees reviewed performance information provided with respect to other funds that utilize Franklin’s strategy. The Trustees concluded that Franklin is capable of managing the Fund in a manner that contributes to achieving the New Fund’s investment objectives.
Fees and Expenses. The Trustees reviewed the proposed sub-advisory fee arrangement for the Fund and noted the representations of the Adviser that the fee arrangement was negotiated by the Adviser on an arm’s length basis. The Trustees reviewed the information provided by Franklin with respect to Franklin’s standard sub-advisory fee schedules and fees charged to funds with substantially similar strategies. The Trustees concluded that Franklin’s proposed sub-advisory fees for the New Fund are fair and reasonable in light of the services to be provided by Franklin to the New Fund.
Economies of Scale. The Trustees considered whether there will be economies of scale with respect to Franklin’s management of the New Fund. The Trustees concluded that the sub-advisory fees to be paid by the Adviser to Franklin will reflect the benefits of economies of scale resulting from the growth of assets.
Profitability. The Trustees were not provided with information on Franklin’s anticipated profitability with respect to managing the New Fund. However, based on the information provided by Franklin regarding its standard sub-advisory fee schedules, fees charged to funds with substantially similar strategies and the factors considered in setting the New Fund’s proposed sub-advisory fee, the Trustees concluded that Franklin’s profits with respect to the New Fund would not be unreasonable.
Other Benefits. The Trustees considered other benefits to Franklin and its affiliates from its proposed relationship with the New Fund. The Trustees noted that Franklin may receive soft dollar benefits in connection with its sub-advisory relationship with the New Fund.
Conclusion. Having requested and received such information from the Adviser and Franklin as the Trustees believed to be reasonably necessary to evaluate the terms of the Sub-Advisory Agreement, and as assisted by the advice of counsel, the Trustees, including the Independent Trustees voting separately, unanimously concluded that approving the Sub-Advisory Agreement for an initial two-year term is in the best interests of the New Fund and its future shareholders.
FVIT Portfolios
SUPPLEMENTAL INFORMATION (Continued)
June 30, 2014 (Unaudited)
FVIT Moderate Growth Managed Risk Portfolio, FVIT Growth Managed Risk Portfolio (Adviser – Forethought Investment Advisors, LLC)
At an in-person special meeting held on March 12, 2014, the Board of Trustees (the “Trustees” or the “Board”) of Forethought Variable Insurance Trust (the “Trust”), including a majority of the Trustees who are not “interested persons,” as that term is defined in the Investment Company Act of 1940, as amended (the “Independent Trustees”), considered the approval of an investment advisory agreement (the “Advisory Agreement”) between Forethought Investment Advisors, LLC (the “Adviser”) and the Trust, on behalf of FVIT Moderate Growth Managed Risk Portfolio and FVIT Growth Managed Risk Portfolio (each a “New Fund” and collectively the “New Funds). The Trustees requested, received and reviewed written responses from the Adviser to questions posed to the Adviser on behalf of the Trustees. The Trustees also received in-person presentations concerning the Advisory Agreement from personnel of the Adviser at the March 12, 2014 special meeting.
Prior to the meeting, the Trustees received a memorandum from counsel to the Trust describing the legal standards for their consideration of the approval of the Advisory Agreement. Prior to voting on the approval of the Advisory Agreement, the Independent Trustees met in executive session with counsel to the Trust. The Trustees relied upon the advice of counsel and their own business judgment in determining the material factors to be considered in evaluating the Advisory Agreement and the weight to be given to each such factor. The conclusions reached by the Trustees were based on a comprehensive evaluation of all of the information provided and were not the result of any one factor. Moreover, each Trustee may have afforded different weight to the various factors in reaching his conclusions with respect to the Advisory Agreement.
Nature, Extent and Quality of Services. The Trustees reviewed the experience of the Adviser and of the personnel who will be responsible for servicing the New Funds, and noted the many years of financial industry experience as well as portfolio management, compliance, and operations experience of the Adviser’s personnel. The Trustees reviewed the description provided by the Adviser of its proposed practices for monitoring compliance with the New Funds’ investment limitations and concluded that such practices were adequate. The Trustees reviewed the Adviser’s philosophy and process for managing the New Funds. The Trustees concluded that the Adviser had sufficient quality and depth of personnel, resources, investment methods and compliance policies and procedures to perform its duties under the proposed Investment Advisory Agreement and that the nature, overall quality and extent of the management services to be provided by the Adviser to each New Fund were satisfactory.
Performance. The Trustees considered the Adviser’s limited prior performance in managing the existing Funds of the Trust. The Trustees also considered that the Adviser would allocate a portion of the New Funds’ assets among underlying funds, and retain Milliman Financial Risk Management LLC (“Milliman”) as sub-adviser to manage a portion of the New Funds’ assets on a day-to-day basis, subject to the Adviser’s oversight. The Trustees reviewed the performance of the initial underlying funds and Milliman with respect to similar strategies. The Trustees concluded that the Adviser is capable of managing the New Funds in a manner that seeks to achieve the New Funds investment objectives.
Fees and Expenses. The Trustees discussed the advisory fees and total operating expense data provided to them and reviewed the New Funds’ proposed advisory fees and overall expenses compared to a peer group comprised of funds selected by the Adviser with similar investment objectives and strategies and of similar size. The Trustees also considered the “spread” between the proposed advisory and sub-advisory fees at various asset levels for the New Funds.
Economies of Scale. The Trustees discussed the Adviser’s expectations for growth of the New Funds. The Trustees considered that although the New Funds had not yet commenced operations and material economies of scale may not be achieved in the near term, the New Fund’s advisory fee schedule contains breakpoints to share economies of scale with shareholders as assets increase.
Profitability. The Trustees considered the level of profits that could be expected to accrue to the Adviser with respect to the New Funds. The Trustees reviewed and considered an estimated profitability report and analysis and selected financial information of the Adviser provided by the Adviser. The Trustees concluded that based on the services to be provided and the projected growth of the New Funds, the advisory fees were reasonable and that profits anticipated from the Adviser’s relationship with the New Funds were not excessive.
Other Benefits. The Trustees considered other benefits to the Adviser and its affiliates from their proposed relationships with the New Funds, including the role of the New Funds in supporting the variable annuity products offered by Forethought Life Insurance Company. The Trustees noted that Forethought Life Insurance Company would receive 12b-1 fees from the New Funds.
Conclusion. Having requested and received such information from the Adviser as the Trustees believed to be reasonably necessary to evaluate the terms of the Investment Advisory Agreement, and as assisted by the advice of counsel, the Trustees, including the Independent Trustees voting separately, unanimously concluded that approving the Investment Advisory Agreement for an initial two-year term is in the best interests of the New Funds and its future shareholders.
FVIT Portfolios
SUPPLEMENTAL INFORMATION (Continued)
June 30, 2014 (Unaudited)
FVIT Moderate Growth Managed Risk Portfolio, FVIT Growth Managed Risk Portfolio (Sub-Adviser – Milliman Financial Risk Management LLC)
At an in-person special meeting held on March 12, 2014, the Board of Trustees (the “Trustees” or the “Board”) of Forethought Variable Insurance Trust (the “Trust”), including a majority of the Trustees who are not “interested persons,” as that term is defined in the Investment Company Act of 1940, as amended (the “Independent Trustees”), considered the approval of a sub-advisory agreement (the “Sub-Advisory Agreement”) between Forethought Investment Advisors, LLC (the “Adviser”) and Milliman Financial Risk Management LLC (“Milliman”), on behalf of FVIT Moderate Growth Managed Risk Portfolio and FVIT Growth Managed Risk Portfolio (each a “New Fund” and collectively the “New Funds). The Trustees requested, received and reviewed written responses from the Adviser and from Milliman to questions posed to the Adviser on behalf of the Trustees. The Trustees also received a presentation concerning the Sub-Advisory Agreement from personnel of Milliman at the March 12, 2014 meeting.
Prior to the meeting, the Trustees received a memorandum from counsel to the Trust describing the legal standards for their consideration of the approval of the Sub-Advisory Agreement. Prior to voting on the approval of the Sub-Advisory Agreement, the Independent Trustees met in executive session with counsel to the Trust. The Trustees relied upon the advice of counsel and their own business judgment in determining the material factors to be considered in evaluating the Sub-Advisory Agreement and the weight to be given to each such factor. The conclusions reached by the Trustees were based on a comprehensive evaluation of all of the information provided and were not the result of any one factor. Moreover, each Trustee may have afforded different weight to the various factors in reaching his conclusions with respect to the Sub-Advisory Agreement.
Nature, Extent and Quality of Services. The Trustees reviewed the nature of the services to be provided by Milliman. The Trustees reviewed Milliman’s investment philosophy and process. The Trustees reviewed the resources, experience and capabilities of Milliman and the personnel who will provide services to the New Funds. The Trustees also noted the Adviser’s recommendation that Milliman should be retained. The Trustees concluded that Milliman’s experience and reputation demonstrate that Milliman is capable of providing high quality services to the New Funds.
Performance. The Trustees reviewed the performance information provided with respect to other funds that utilize Milliman’s strategy. The Trustees discussed the fact that the information was of limited utility given that the Milliman strategy accounted for only a portion of each fund’s performance history. The Trustees concluded that Milliman is capable of managing the New Funds in a manner that contributes to achieving the New Funds investment objectives.
Fees and Expenses. The Trustees reviewed the proposed sub-advisory fee arrangement for the New Funds and noted the representations of the Adviser that the fee arrangements were negotiated by the Adviser on an arm’s length basis. The Trustees reviewed the information provided by Milliman with respect to fees charged to other funds using the strategy proposed for the New Funds and Milliman’s standard sub-advisory fee schedules. The Trustees concluded that Milliman’s proposed sub-advisory fees for each New Fund are fair and reasonable in light of the services to be provided by Milliman.
Economies of Scale. The Trustees considered whether there will be economies of scale with respect to the management of the New Funds. The Trustees concluded that the sub-advisory fees to be paid by the Adviser to Milliman will reflect the benefits of economies of scale resulting from the growth of assets.
Profitability. The Trustees were not provided with information on Milliman’s anticipated profitability with respect to managing the New Funds. However, based on the information provided by Milliman regarding fees charged to other funds that utilize the proposed Milliman strategy and the factors considered in setting the New Funds’ proposed sub-advisory fees, the Trustees concluded that Milliman’s profits with respect to the New Funds would not be unreasonable.
Other Benefits. The Trustees considered other benefits to Milliman and its affiliates from its proposed relationship with the New Funds. The Trustees noted that Milliman would not receive soft dollar benefits in connection with its sub-advisory relationship with the New Funds.
Conclusion. Having requested and received such information from the Adviser and Milliman as the Trustees believed to be reasonably necessary to evaluate the terms of the Sub-Advisory Agreement, and as assisted by the advice of counsel, the Trustees, including the Independent Trustees voting separately, unanimously concluded that approving the Sub-Advisory Agreement for an initial two-year term is in the best interests of the New Funds and their future shareholders.
PRIVACY NOTICE
FVIT
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FACTS | WHAT DOES FVIT DO WITH YOUR PERSONAL INFORMATION? |
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Why? | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some, but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
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What? | The types of personal information we collect and share depends on the product or service that you have with us. This information can include: · Social Security number and wire transfer instructions · account transactions and transaction history · investment experience and purchase history
When you are no longer our customer, we continue to share your information as described in this notice. |
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How? | All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons FVIT chooses to share; and whether you can limit this sharing. |
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Reasons we can share your personal information: | Does FVIT share information? | Can you limit this sharing? |
For our everyday business purposes - such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus. | YES | NO |
For our marketing purposes - to offer our products and services to you. | NO | We don’t share |
For joint marketing with other financial companies. | NO | We don’t share |
For our affiliates’ everyday business purposes - information about your transactions and records. | NO | We don’t share |
For our affiliates’ everyday business purposes - information about your credit worthiness. | NO | We don’t share |
For nonaffiliates to market to you | NO | We don’t share |
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QUESTIONS? | Call 1-877-881-7735 |
PRIVACY NOTICE
FVIT
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What we do: |
How does FVIT protect my personal information? | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.
Our service providers are held accountable for adhering to strict policies and procedures to prevent any misuse of your nonpublic personal information. |
How does FVIT collect my personal information? | We collect your personal information, for example, when you · open an account or deposit money · direct us to buy securities or direct us to sell your securities · seek advice about your investments We also collect your personal information from others, such as credit bureaus, affiliates, or other companies. |
Why can’t I limit all sharing? | Federal law gives you the right to limit only: · sharing for affiliates’ everyday business purposes – information about your creditworthiness. · affiliates from using your information to market to you. · sharing for nonaffiliates to market to you. State laws and individual companies may give you additional rights to limit sharing. |
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Definitions |
Affiliates | Companies related by common ownership or control. They can be financial and nonfinancial companies. · FVIT has no affiliates. |
Nonaffiliates | Companies not related by common ownership or control. They can be financial and nonfinancial companies. · FVIT does not share with nonaffiliates so they can market to you. |
Joint marketing | A formal agreement between nonaffiliated financial companies that together market financial products or services to you. · FVIT doesn’t jointly market. |
PROXY VOTING POLICY
Information regarding how the Portfolios voted proxies relating to portfolio securities for the most recent twelve month period ended June 30 as well as a description of the policies and procedures that the Portfolios use to determine how to vote proxies is available without charge, upon request, by calling 1-877-881-7735 or by referring to the Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov.
PORTFOLIO HOLDINGS
Each Portfolio files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Portfolios’ Form N-Qs are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of The Public Reference Room may be obtained by calling 1-800-SEC-0330.
INVESTMENT ADVISOR
Forethought Investment Advisors, LLC
300 North Meridian Street, Suite 1800
Indianapolis, IN 46204
INVESTMENT SUB-ADVISOR
Milliman Financial Risk Management, LLC
71 S. Wacker Drive, 31st Floor
Chicago, IL 60606
Wellington Management Company, LLP
280 Congress Street
Boston, MA 02210
Franklin Advisory Services, LLC
One Park Plaza, 9th Floor
Fort Lee, NJ 07024
ADMINISTRATOR
Gemini Fund Services, LLC
80 Arkay Drive Suite 110
Hauppauge, NY 11788
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 Companies. Not applicable to open-end investment companies.
Item 6. Schedule of Investments. Schedule of investments in securities of unaffiliated issuers is included under Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds. Not applicable to open-end investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not applicable to open-end investment companies.
Item 9. Purchases of Equity Securities by Closed-End Funds. Not applicable to open-end investment companies.
Item 10. Submission of Matters to a Vote of Security Holders. Vote of security holders is included under item 1.
Item 11. Controls and Procedures.
(a)
Based on an evaluation of the Registrant’s disclosure controls and procedures as of a date within 90 days of filing date of this Form N-CSR, the principal executive officer and principal financial officer of the Registrant have concluded that the disclosure controls and procedures of the Registrant are reasonably designed to ensure that the information required in filings on Form N-CSR is recorded, processed, summarized, and reported by the filing date, including that information required to be disclosed is accumulated and communicated to the Registrant’s management, including the Registrant’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
(b)
There were no significant changes in the Registrant’s internal control over financial reporting that occurred during the Registrant’s last fiscal half-year 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 required by Section 302 of the Sarbanes-Oxley Act of 2002 (and Item 11(a)(2) of Form N-CSR) are filed herewith.
(a)(3)
Not applicable for open-end investment companies.
(b)
Certifications required by Section 906 of the Sarbanes-Oxley Act of 2002 (and Item 11(b) of Form N-CSR) are filed herewith.
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) Forethought Variable Insurance Trust
By (Signature and Title)
/s/ Robert Arena
Robert Arena, President
Date
8/25/14
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/ Robert Arena
Robert Arena, President
Date
8/25/14
By (Signature and Title)
/s/ Laura Szalyga
Laura Szalyga, Treasurer
Date
8/25/14
