UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-23698
FORTUNE V SEPARATE ACCOUNT
(Exact name of registrant as specified in charter)
C/O Universal Life Insurance Company
Metro Office Park, Street 1, Lot 10
Guaynabo, PR 00968
(Address of principal executive offices) (Zip code)
Jose C. Benitez
C/O Universal Life Insurance Company
Metro Office Park, Street 1, Lot 10
Guaynabo, PR 00968
(Name and address of agent for service)
Registrant’s telephone number, including area code: (787) 706-7337
Date of fiscal year end: December 31
Date of reporting period: June 30, 2020
ITEM 1. REPORTS TO STOCKHOLDERS.
The following is a copy of the report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940, as amended (the “Act”) (17 CFR 270.30e-1).
FORTUNE V SEPARATE ACCOUNT
OF
UNIVERSAL LIFE INSURANCE COMPANY
Semi-Annual Report
June 30, 2021
Table of Contents
Proxy Voting Policies and Procedures
A description of the proxy voting policies and procedures of the Fortune V Separate Account is included in the Statement of Additional Information which is available without charge, upon request: (i) by calling 1-787-706-7337; or (ii) on the SEC’s website at www.sec.gov. In addition, the Fortune V Separate Account is required to file Form N-PX, with the complete proxy voting record for the most recent twelve months ended June 30, no later than August 31 of each year. Form N-PX for the twelve months ended June 30, 2021, is available without charge, upon request by calling 1-787-706-7337 and on the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Holdings
Each fiscal quarter, Fortune V Separate Account will file with the SEC a complete schedule of monthly portfolio holdings on Form N-PORT. The Subaccounts’ holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC’s website at http://www.sec.gov within 60 days of the end of the fiscal quarter.
1
UNIVERSAL LIFE INSURANCE COMPANY
Metro Office Park Street 1, Lot 10
Guaynabo, PR 00968
To Contract Holders with Interests in the
Fortune V Separate Account Funds:
We are pleased to present the most recent semi-annual report for the Fortune V Separate Account. As required under applicable law, we are sending this semi-annual report to contract holders of Universal VIA Annuity Contracts issued by Universal Life Insurance Company with unit interests in the Fortune V Separate Account, which invests its assets in the Universal VIA Asset Allocation Portfolios.
Please call Universal Life Insurance Company, at (787) 706-7095 if you have any questions regarding these reports.
2
(unaudited)
UNIT HOLDER EXPENSES
Universal VIA Asset Allocation Portfolios (each individually, a “Subaccount” and collectively, the “Subaccounts”) is a separate account established by Universal Life Insurance Company (“ULICO”), and is used as an investment vehicle under certain tax-deferred annuity contracts issued by ULICO. Each Subaccount invests in underlying investments in mutual funds based on specific asset allocation objectives. Subaccount contract holders bear the costs of operating the Subaccount (such as the advisory fee).
The following examples are intended to help you understand your ongoing costs (in dollars and cents) of investing in the Subaccounts and to compare these costs with the ongoing costs of investing in other funds.
The examples are based on an investment of $1,000 invested at January 1, 2021, and held for the entire six-month period until June 30, 2021.
ACTUAL EXPENSES
The information in the table below provides information about actual account values and actual expenses. You may use the information in these columns, 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 = $8.60), then multiply the result by the number in the appropriate column for your share class titled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The information in the table below provides information about hypothetical account values and hypothetical expenses based on the Subaccounts’ actual expense ratios and assumed rates of return of 5% per year before expenses, which are not the Subaccounts’ actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Subaccount versus other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
| Actual Expense | Hypothetical Expenses [A] | |||||||||||||||||||||||
| Beginning Account Value | Ending Account Value | Expenses Paid | Ending Account Value | Expenses Paid | Net Annualized | |||||||||||||||||||
| Subaccount | July 1, 2021 | December 31, 2021 | During Period [B] | December 31, 2021 | During Period [B] | Expense Ratio [C] [D] | ||||||||||||||||||
| ULICO VIA Conservative Allocation | $ | 1,000.00 | $ | 1,011.08 | $ | 10.26 | $ | 1,015.00 | $ | 10.28 | 2.02 | % | ||||||||||||
| ULICO VIA Moderate Allocation | 1,000.00 | 1,021.32 | 10.02 | 1,015.29 | 9.99 | 1.97 | ||||||||||||||||||
| ULICO VIA Moderate Growth Allocation | 1,000.00 | 1,045.48 | 10.76 | 1,014.68 | 10.60 | 2.09 | ||||||||||||||||||
| ULICO VIA Growth Allocation | 1,000.00 | 1,062.18 | 11.42 | 1,014.13 | 11.15 | 2.20 | ||||||||||||||||||
| ULICO VIA International Mod Growth Alloc | 1,000.00 | 1,044.35 | 12.49 | 1,012.98 | 12.30 | 2.42 | ||||||||||||||||||
| ULICO Money Market | 1,000.00 | 998.81 | 11.66 | 1,013.54 | 11.74 | 2.31 | ||||||||||||||||||
| [A] | 5% return per year before expenses. |
| [B] | Expenses are calculated using each Subaccount’ s net annualized expense ratios, as disclosed in the table, multiplied by the average account value for the period, multiplied by the number of days in the period (184 days), and divided by the number of days in the year (365 days). |
| [C] | Net annualized expense ratios, as disclosed in the table, do not include the expenses of the underlying investments in which the Subaccounts invest. The total annual expenses, as stated in the fee table of the Subaccounts’ Prospectus, may differ from the expense ratios disclosed in this report. |
| [D] | Net annualized expense ratios are reflective of applicable fee waivers and/or reimbursements and recapture, if any, and based on the most recent six-months which may differ from the net expense ratio displayed in the Financial Highlights that covers a twelve-month period |
3
| Schedules of Investment Composition | ||||
| At June 30, 2021 | ||||
| (unaudited) | ||||
| Fortune V Separate Account – ULICO VIA Conservative Allocation | ||||
| Asset Allocation | Percentage of Net Assets | |||
| Equity Funds | 27.96 | % | ||
| Fixed Income Funds | 72.11 | |||
| Alternative | - | |||
| Money Market Fund | - | |||
| Net Other Assets (Liabilities) | (0.07 | ) | ||
| Total | 100.00 | % | ||
Fortune V Separate Account – ULICO VIA Moderate Allocation
| Asset Allocation | Percentage of Net Assets | |||
| Equity Funds | 43.28 | % | ||
| Fixed Income Funds | 56.76 | |||
| Alternative | - | |||
| Money Market Fund | - | |||
| Net Other Assets (Liabilities) | (0.04 | ) | ||
| Total | 100.00 | % | ||
Fortune V Separate Account – ULICO VIA Moderate Growth Allocation
| Asset Allocation | Percentage of Net Assets | |||
| Equity Funds | 72.53 | % | ||
| Fixed Income Funds | 26.74 | |||
| Alternative | 0.79 | |||
| Money Market Fund | - | |||
| Net Other Assets (Liabilities) | (0.06 | ) | ||
| Total | 100.00 | % | ||
Fortune V Separate Account – ULICO VIA Growth Allocation
| Asset Allocation | Percentage of Net Assets | |||
| Equity Funds | 98.95 | % | ||
| Fixed Income Funds | - | |||
| Alternative | 1.12 | |||
| Money Market Fund | - | |||
| Net Other Assets (Liabilities) | (0.07 | ) | ||
| Total | 100.00 | % | ||
4
| Schedules of Investment Composition (continued) | ||||
| At June 30, 2021 | ||||
| (unaudited) | ||||
Fortune V Separate Account – ULICO VIA International Mod Growth Alloc
| Asset Allocation | Percentage of Net Assets | |||
| Equity Funds | 99.75 | % | ||
| Fixed Income Funds | - | |||
| Alternative | - | |||
| Money Market Fund | 0.31 | |||
| Net Other Assets (Liabilities) | (0.06 | ) | ||
| Total | 100.00 | % | ||
Fortune V Separate Account – ULICO Money Market
| Asset Allocation | Percentage of Net Assets | |||
| Equity Funds | - | % | ||
| Fixed Income Funds | - | |||
| Alternative | - | |||
| Money Market Fund | 100.09 | |||
| Net Other Assets (Liabilities) | (0.09 | ) | ||
| Total | 100.00 | % | ||
5
| Fortune V Separate Account - ULICO VIA Conservative Allocation | ||||||||||||||||
| SCHEDULE OF INVESTMENTS | ||||||||||||||||
| At June 30, 2021 | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Shares | Value | |||||||
| INVESTMENT COMPANIES - 100.00% | ||||||||
| Equity Funds - 27.94% | ||||||||
| Transamerica Capital Growth I2 | 73,569 | $ | 1,822,296 | |||||
| Transamerica Emerging Markets Opps I2 | 192,057 | 2,437,206 | ||||||
| Transamerica Energy Infrastructure I2 | 286,830 | 1,875,869 | ||||||
| Transamerica Global Alloc Liquid Trust I2 | 50 | 114 | ||||||
| Transamerica International Equity I2 | 127,039 | 2,727,524 | ||||||
| Transamerica International Growth I2 | 186,682 | 1,866,825 | ||||||
| Transamerica International Sm Cp Val I2 | 36,142 | 574,658 | ||||||
| Transamerica International Stock I2 | 107,463 | 1,234,753 | ||||||
| Transamerica Large Cap Value I2 | 242,425 | 3,202,433 | ||||||
| Transamerica Mid Cap Growth I2 | 3,824 | 55,977 | ||||||
| Transamerica Mid Cap Value I2 | 59,300 | 745,402 | ||||||
| Transamerica Mid Cap Value Opps I2 | 34,881 | 502,979 | ||||||
| Transamerica Small Cap Growth I2 | 72,132 | 666,498 | ||||||
| Transamerica Small Cap Value I2 | 36,282 | 467,675 | ||||||
| Transamerica Sustainable Equity Inc I2 | 296,912 | 2,672,204 | ||||||
| Transamerica Us Growth I2 | 106,907 | 3,368,641 | ||||||
| 24,221,054 | ||||||||
| Fixed Income Funds - 72.06% | ||||||||
| Transamerica Bond I2 | 123,803 | 1,189,752 | ||||||
| Transamerica Core Bond I2 | 1,441,108 | 14,540,782 | ||||||
| Transamerica Emerging Markets Debt I2 | 96,875 | 1,054,972 | ||||||
| Transamerica Inflation Opps I2 | 445,520 | 4,998,740 | ||||||
| Transamerica Intermediate Bond I2 | 1,210,432 | 12,588,496 | ||||||
| Transamerica Short-Term Bond I2 | 822,834 | 8,401,132 | ||||||
| Transamerica Total Return I2 | 1,901,992 | 19,685,613 | ||||||
| 62,459,486 | ||||||||
| Total Investment Companies (Cost - $82,729,699) | $ | 86,680,540 | ||||||
| Total Investments (Cost - $82,729,699) | $ | 86,680,540 | ||||||
| Net Other Assets (Liabilities) -(0.07)% | (58,829 | ) | ||||||
| Net Assets - 100% | $ | 86,621,711 | ||||||
INVESTMENT VALUATION:
Valuation Inputs [A]
| Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 - Significant Unobservable Inputs | Value | |||||||||||||
| ASSETS | ||||||||||||||||
| Investments | ||||||||||||||||
| Investment Companies | $ | 86,680,540 | $ | - | $ | - | $ | 86,680,540 | ||||||||
| Total Investments | $ | 86,680,540 | $ | - | $ | - | $ | 86,680,540 | ||||||||
FOOTNOTES TO SCHEDULE OF INVESTMENTS:
| [A] | There were no transfers in or out of Level 3 during the period ended June 30, 2021. Please reference the Investment Valuation section of the Notes to Financial Statements for more information regarding investment valuation and pricing inputs. |
The Notes to Financial Statements are an integral part of this report.
6
| Fortune V Separate Account - ULICO VIA Moderate Allocation | ||||||||||||||||
| SCHEDULE OF INVESTMENTS | ||||||||||||||||
| At June 30, 2021 | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Shares | Value | |||||||
| INVESTMENT COMPANIES - 100.00% | ||||||||
| Equity Funds - 43.27% | ||||||||
| Transamerica Capital Growth I2 | 516,795 | $ | 12,801,006 | |||||
| Transamerica Emerging Markets Opps I2 | 1,112,825 | 14,121,753 | ||||||
| Transamerica Energy Infrastructure I2 | 1,313,814 | 8,592,346 | ||||||
| Transamerica Global Alloc Liquid Trust I2 | 148 | 338 | ||||||
| Transamerica International Equity I2 | 791,420 | 16,991,791 | ||||||
| Transamerica International Growth I2 | 1,526,463 | 15,264,626 | ||||||
| Transamerica International Sm Cp Val I2 | 259,316 | 4,123,122 | ||||||
| Transamerica International Stock I2 | 392,484 | 4,509,637 | ||||||
| Transamerica Large Cap Value I2 | 1,306,118 | 17,253,817 | ||||||
| Transamerica Mid Cap Growth I2 | 12,563 | 183,924 | ||||||
| Transamerica Mid Cap Value I2 | 260,360 | 3,272,725 | ||||||
| Transamerica Mid Cap Value Opps I2 | 140,000 | 2,018,800 | ||||||
| Transamerica Small Cap Growth I2 | 429,115 | 3,965,022 | ||||||
| Transamerica Small Cap Value I2 | 197,843 | 2,550,193 | ||||||
| Transamerica Sustainable Equity Inc I2 | 1,865,567 | 16,790,105 | ||||||
| Transamerica Us Growth I2 | 476,014 | 14,999,186 | ||||||
| 137,438,390 | ||||||||
| Fixed Income Funds - 56.73% | ||||||||
| Transamerica Bond I2 | 373,337 | 3,587,769 | ||||||
| Transamerica Core Bond I2 | 4,375,678 | 44,150,587 | ||||||
| Transamerica Emerging Markets Debt I2 | 411,793 | 4,484,425 | ||||||
| Transamerica Inflation Opps I2 | 1,285,461 | 14,422,868 | ||||||
| Transamerica Intermediate Bond I2 | 3,084,824 | 32,082,170 | ||||||
| Transamerica Short-Term Bond I2 | 1,755,655 | 17,925,240 | ||||||
| Transamerica Total Return I2 | 6,140,280 | 63,551,896 | ||||||
| 180,204,956 | ||||||||
| Total Investment Companies (Cost - $292,368,008) | $ | 317,643,346 | ||||||
| Total Investments (Cost - $292,368,008) | $ | 317,643,346 | ||||||
| Net Other Assets (Liabilities) -(0.04)% | (142,554 | ) | ||||||
| Net Assets - 100% | $ | 317,500,792 | ||||||
INVESTMENT VALUATION:
Valuation Inputs [A]
| Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 - Significant Unobservable Inputs | Value | |||||||||||||
| ASSETS | ||||||||||||||||
| Investments | ||||||||||||||||
| Investment Companies | $ | 317,643,346 | $ | - | $ | - | $ | 317,643,346 | ||||||||
| Total Investments | $ | 317,643,346 | $ | - | $ | - | $ | 317,643,346 | ||||||||
FOOTNOTES TO SCHEDULE OF INVESTMENTS:
| [A] | There were no transfers in or out of Level 3 during the period ended June 30, 2021. Please reference the Investment Valuation section of the Notes to Financial Statements for more information regarding investment valuation and pricing inputs. |
The Notes to Financial Statements are an integral part of this report.
7
| Fortune V Separate Account - ULICO VIA Moderate Growth Allocation | ||||||||||||||||
| SCHEDULE OF INVESTMENTS | ||||||||||||||||
| At June 30, 2021 | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Shares | Value | |||||||
| INVESTMENT COMPANIES - 100.00% | ||||||||
| Equity Funds - 72.48% | ||||||||
| Transamerica Capital Growth I2 | 267,385 | $ | 6,623,126 | |||||
| Transamerica Emerging Markets Opps I2 | 425,777 | 5,403,107 | ||||||
| Transamerica Energy Infrastructure I2 | 346,179 | 2,264,013 | ||||||
| Transamerica Global Alloc Liquid Trust I2 | 50 | 115 | ||||||
| Transamerica International Equity I2 | 268,800 | 5,771,143 | ||||||
| Transamerica International Growth I2 | 535,271 | 5,352,707 | ||||||
| Transamerica International Sm Cp Val I2 | 104,346 | 1,659,105 | ||||||
| Transamerica International Stock I2 | 80,546 | 925,474 | ||||||
| Transamerica Large Cap Value I2 | 475,464 | 6,280,874 | ||||||
| Transamerica Mid Cap Growth I2 | 46,871 | 686,186 | ||||||
| Transamerica Mid Cap Value I2 | 110,931 | 1,394,408 | ||||||
| Transamerica Mid Cap Value Opps I2 | 53,052 | 765,006 | ||||||
| Transamerica Small Cap Growth I2 | 121,980 | 1,127,096 | ||||||
| Transamerica Small Cap Value I2 | 69,427 | 894,920 | ||||||
| Transamerica Sustainable Equity Inc I2 | 747,982 | 6,731,837 | ||||||
| Transamerica Us Growth I2 | 202,306 | 6,374,649 | ||||||
| 52,253,767 | ||||||||
| Fixed Income Funds - 26.73% | ||||||||
| Transamerica Bond I2 | 85,603 | 822,640 | ||||||
| Transamerica Core Bond I2 | 484,201 | 4,885,589 | ||||||
| Transamerica Emerging Markets Debt I2 | 77,940 | 848,764 | ||||||
| Transamerica Inflation Opps I2 | 122,694 | 1,376,629 | ||||||
| Transamerica Intermediate Bond I2 | 325,085 | 3,380,881 | ||||||
| Transamerica Short-Term Bond I2 | 125,534 | 1,281,699 | ||||||
| Transamerica Total Return I2 | 644,603 | 6,671,640 | ||||||
| 19,267,843 | ||||||||
| Alternative Fund - 0.79% | ||||||||
| Transamerica Event Driven I2 | 50,775 | 572,746 | ||||||
| 572,746 | ||||||||
| Total Investment Companies (Cost - $61,871,668) | $ | 72,094,357 | ||||||
| Total Investments (Cost - $61,871,668) | $ | 72,094,357 | ||||||
| Net Other Assets (Liabilities) -(0.06)% | (43,726 | ) | ||||||
| Net Assets - 100% | $ | 72,050,631 | ||||||
INVESTMENT VALUATION:
Valuation Inputs [A]
| Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 - Significant Unobservable Inputs | Value | |||||||||||||
| ASSETS | ||||||||||||||||
| Investments | ||||||||||||||||
| Investment Companies | $ | 72,094,357 | $ | - | $ | - | $ | 72,094,357 | ||||||||
| Total Investments | $ | 72,094,357 | $ | - | $ | - | $ | 72,094,357 | ||||||||
FOOTNOTES TO SCHEDULE OF INVESTMENTS:
| [A] | There were no transfers in or out of Level 3 during the period ended June 30, 2021. Please reference the Investment Valuation section of the Notes to Financial Statements for more information regarding investment valuation and pricing inputs. |
The Notes to Financial Statements are an integral part of this report.
8
| Fortune V Separate Account - ULICO VIA Growth Allocation | ||||||||||||||||
| SCHEDULE OF INVESTMENTS | ||||||||||||||||
| At June 30, 2021 | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Shares | Value | |||||||
| INVESTMENT COMPANIES - 100.00% | ||||||||
| Equity Funds - 98.89% | ||||||||
| Transamerica Capital Growth I2 | 205,564 | $ | 5,091,817 | |||||
| Transamerica Emerging Markets Opps I2 | 329,844 | 4,185,718 | ||||||
| Transamerica Energy Infrastructure I2 | 278,116 | 1,818,878 | ||||||
| Transamerica Global Alloc Liquid Trust I2 | 25 | 57 | ||||||
| Transamerica International Equity I2 | 272,406 | 5,848,550 | ||||||
| Transamerica International Growth I2 | 412,721 | 4,127,208 | ||||||
| Transamerica International Sm Cp Val I2 | 86,130 | 1,369,474 | ||||||
| Transamerica International Stock I2 | 15,809 | 181,644 | ||||||
| Transamerica Large Cap Value I2 | 407,859 | 5,387,820 | ||||||
| Transamerica Mid Cap Growth I2 | 25,580 | 374,485 | ||||||
| Transamerica Mid Cap Value I2 | 119,410 | 1,500,979 | ||||||
| Transamerica Mid Cap Value Opps I2 | 60,259 | 868,942 | ||||||
| Transamerica Small Cap Growth I2 | 139,170 | 1,285,931 | ||||||
| Transamerica Small Cap Value I2 | 49,477 | 637,758 | ||||||
| Transamerica Sustainable Equity Inc I2 | 624,224 | 5,618,020 | ||||||
| Transamerica Us Growth I2 | 154,350 | 4,863,568 | ||||||
| 43,160,846 | ||||||||
| Alternative Fund - 1.11% | ||||||||
| Transamerica Event Driven I2 | 43,133 | 486,536 | ||||||
| 486,536 | ||||||||
| Total Investment Companies (Cost - $35,569,819) | 43,647,382 | |||||||
| Total Investments (Cost - $35,569,819) | $ | 43,647,382 | ||||||
| Net Other Assets (Liabilities) -(0.07)% | (29,655 | ) | ||||||
| Net Assets - 100% | $ | 43,617,727 | ||||||
INVESTMENT VALUATION:
Valuation Inputs [A]
| Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 - Significant Unobservable Inputs | Value | |||||||||||||
| ASSETS | ||||||||||||||||
| Investments | ||||||||||||||||
| Investment Companies | $ | 43,647,382 | $ | - | $ | - | $ | 43,647,382 | ||||||||
| Total Investments | $ | 43,647,382 | $ | - | $ | - | $ | 43,647,382 | ||||||||
FOOTNOTES TO SCHEDULE OF INVESTMENTS:
| [A] | There were no transfers in or out of Level 3 during the period ended June 30, 2021. Please reference the Investment Valuation section of the Notes to Financial Statements for more information regarding investment valuation and pricing inputs. |
The Notes to Financial Statements are an integral part of this report.
9
| Fortune V Separate Account - ULICO VIA International Mod Growth Alloc | ||||||||||||||||
| SCHEDULE OF INVESTMENTS | ||||||||||||||||
| At June 30, 2021 | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Shares | Value | |||||||
| INVESTMENT COMPANIES - 100.00% | ||||||||
| Equity Funds - 99.69% | ||||||||
| Transamerica Emerging Markets Opps I2 | 155,872 | $ | 1,978,014 | |||||
| Transamerica Global Alloc Liquid Trust I2 | 8 | 18 | ||||||
| Transamerica International Equity I2 | 93,361 | 2,004,454 | ||||||
| Transamerica International Growth I2 | 227,102 | 2,271,020 | ||||||
| Transamerica International Sm Cp Val I2 | 94,952 | 1,509,733 | ||||||
| Transamerica International Stock I2 | 4,748 | 54,555 | ||||||
| 7,817,794 | ||||||||
| Money Market Fund - 0.31% | ||||||||
| Transamerica Government Money Market I2 | 24,436 | 24,436 | ||||||
| 24,436 | ||||||||
| Total Investment Companies (Cost - $6,344,425) | $ | 7,842,231 | ||||||
| Total Investments (Cost - $6,344,425) | $ | 7,842,231 | ||||||
| Net Other Assets (Liabilities) -(0.06)% | (4,352 | ) | ||||||
| Net Assets - 100% | $ | 7,837,879 | ||||||
INVESTMENT VALUATION:
Valuation Inputs [A]
| Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 - Significant Unobservable Inputs | Value | |||||||||||||
| ASSETS | ||||||||||||||||
| Investments | ||||||||||||||||
| Investment Companies | $ | 7,842,231 | $ | - | $ | - | $ | 7,842,231 | ||||||||
| Total Investments | $ | 7,842,231 | $ | - | $ | - | $ | 7,842,231 | ||||||||
FOOTNOTES TO SCHEDULE OF INVESTMENTS:
| [A] | There were no transfers in or out of Level 3 during the period ended June 30, 2021. Please reference the Investment Valuation section of the Notes to Financial Statements for more information regarding investment valuation and pricing inputs. |
The Notes to Financial Statements are an integral part of this report.
10
| Fortune V Separate Account - ULICO Money Market | ||||||||||||||||
| SCHEDULE OF INVESTMENTS | ||||||||||||||||
| At June 30, 2021 | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Shares | Value | |||||||
| INVESTMENT COMPANIES - 100.00% | ||||||||
| Money Market Fund - 100.00% | ||||||||
| Transamerica Government Money Market I2 | 4,266,268 | 4,266,268 | ||||||
| 4,266,268 | ||||||||
| Total Investment Companies (Cost - $4,266,268) | $ | 4,266,268 | ||||||
| Total Investments (Cost - $4,266,268) | $ | 4,266,268 | ||||||
| Net Other Assets (Liabilities) -(0.09)% | (3,764 | ) | ||||||
| Net Assets - 100% | $ | 4,262,504 | ||||||
INVESTMENT VALUATION:
Valuation Inputs [A]
| Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 - Significant Unobservable Inputs | Value | |||||||||||||
| ASSETS | ||||||||||||||||
| Investments | ||||||||||||||||
| Investment Companies | $ | 4,266,268 | $ | - | $ | - | $ | 4,266,268 | ||||||||
| Total Investments | $ | 4,266,268 | $ | - | $ | - | $ | 4,266,268 | ||||||||
FOOTNOTES TO SCHEDULE OF INVESTMENTS:
| [A] | There were no transfers in or out of Level 3 during the period ended June 30, 2021. Please reference the Investment Valuation section of the Notes to Financial Statements for more information regarding investment valuation and pricing inputs. |
The Notes to Financial Statements are an integral part of this report.
11
| STATEMENTS OF ASSETS AND LIABILITIES | ||||||||||||||||||||||||||
| At June 30, 2021 | ||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||
| ULICO VIA Conservative Allocation | ULICO VIA Moderate Allocation | ULICO VIA Moderate Growth Allocation | ULICO VIA Growth Allocation | ULICO VIA International Mod Growth Alloc | ULICO Money Market | |||||||||||||||||||
| Assets: | ||||||||||||||||||||||||
| Investments, at value [A] | $ | 86,680,540 | $ | 317,643,346 | $ | 72,094,357 | $ | 43,647,382 | $ | 7,842,231 | $ | 4,266,268 | ||||||||||||
| Cash | - | - | 0 | - | - | - | ||||||||||||||||||
| Receivables and other assets: | ||||||||||||||||||||||||
| Dividend income | 17,133 | 40,558 | 3,810 | - | 4 | 817 | ||||||||||||||||||
| Receivable for investments sold | 11,105 | 32,107 | 3,092 | 1,970 | 348 | 187 | ||||||||||||||||||
| Units sold | 9 | 35 | 3 | - | - | - | ||||||||||||||||||
| Other receivables | 219 | 737 | 102 | - | 1,898 | - | ||||||||||||||||||
| Total assets | 86,709,006 | 317,716,783 | 72,101,364 | 43,649,352 | 7,844,481 | 4,267,271 | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||
| Payables and other liabilities: | ||||||||||||||||||||||||
| Payable for investments purchased | 17,462 | 41,260 | 3,860 | - | 5 | 840 | ||||||||||||||||||
| Units redeemed | 11,104 | 32,106 | 3,092 | 1,970 | 347 | 187 | ||||||||||||||||||
| Accrued expenses | 58,729 | 142,625 | 43,781 | 29,655 | 6,250 | 3,740 | ||||||||||||||||||
| Total liabilities | 87,295 | 215,991 | 50,733 | 31,625 | 6,602 | 4,767 | ||||||||||||||||||
| Net assets | $ | 86,621,711 | $ | 317,500,792 | $ | 72,050,631 | $ | 43,617,727 | $ | 7,837,879 | $ | 4,262,504 | ||||||||||||
| Net assets consist of: | - | |||||||||||||||||||||||
| Costs of accumulation units | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
| Total distributable earnings (accumulated losses) | 86,621,711 | 317,500,792 | 72,050,631 | 43,617,727 | 7,837,879 | 4,262,504 | ||||||||||||||||||
| Net assets | $ | 86,621,711 | $ | 317,500,792 | $ | 72,050,631 | $ | 43,617,727 | $ | 7,837,879 | $ | 4,262,504 | ||||||||||||
| Accumulation units | 4,676,351 | 15,407,373 | 3,006,598 | 1,712,951 | 443,592 | 459,425 | ||||||||||||||||||
| Unit value | $ | 18.52 | $ | 20.61 | $ | 23.96 | $ | 25.46 | $ | 17.67 | $ | 9.28 | ||||||||||||
| [A] Investments, at cost | $ | 82,729,699 | $ | 292,368,008 | $ | 61,871,668 | $ | 35,569,819 | $ | 6,344,425 | $ | 4,266,268 | ||||||||||||
The Notes to Financial Statements are an integral part of this report.
12
| STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||||
| For the six months ended June 30, 2021 | ||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||
| ULICO VIA Conservative Allocation | ULICO VIA Moderate Allocation | ULICO VIA Moderate Growth Allocation | ULICO VIA Growth Allocation | ULICO VIA International Mod Growth Alloc | ULICO Money Market | |||||||||||||||||||
| Investment income: | ||||||||||||||||||||||||
| Dividend income | $ | 681,617 | $ | 2,127,260 | $ | 292,112 | $ | 97,190 | $ | 36 | $ | 7,649 | ||||||||||||
| Expenses: | ||||||||||||||||||||||||
| Mortality Expense | 662,897 | 2,358,178 | 541,090 | 331,913 | 62,099 | 40,994 | ||||||||||||||||||
| Custodial, management and advisory fees | 221,640 | 729,876 | 184,782 | 114,603 | 31,368 | 19,830 | ||||||||||||||||||
| Net investment income (loss): | (202,920 | ) | (960,794 | ) | (433,760 | ) | (349,326 | ) | (93,431 | ) | (53,175 | ) | ||||||||||||
| Net realized gain (loss) on: | ||||||||||||||||||||||||
| Unaffiliated Investments | 1,303,802 | 4,362,854 | 713,250 | 329,274 | 124,282 | (0 | ) | |||||||||||||||||
| Net change in unrealized appreciation (depreciation) on: | ||||||||||||||||||||||||
| Unaffiliated Investments | 134,805 | 7,307,576 | 5,192,567 | 4,437,945 | 559,150 | 0 | ||||||||||||||||||
| Net realized and change in unrealized gain (loss) | 1,438,607 | 11,670,430 | 5,905,817 | 4,767,219 | 683,432 | 0 | ||||||||||||||||||
| Net increase (decrease) in net assets resulting from operations | $ | 1,235,687 | $ | 10,709,636 | $ | 5,472,057 | $ | 4,417,893 | $ | 590,001 | $ | (53,175 | ) | |||||||||||
The Notes to Financial Statements are an integral part of this report.
13
| STATEMENTS OF CHANGES IN NET ASSETS | ||||||||||||||||||||||||||
| For the six months ended June 30, 2021 | ||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||
| ULICO VIA Conservative Allocation | ULICO VIA Moderate Allocation | ULICO VIA Moderate Growth Allocation | ULICO VIA Growth Allocation | ULICO VIA International Mod Growth Alloc | ULICO Money Market | |||||||||||||||||||
| From operations: | ||||||||||||||||||||||||
| Net investment income (loss) | $ | (202,920 | ) | $ | (960,794 | ) | $ | (433,760 | ) | $ | (349,326 | ) | $ | (93,431 | ) | $ | (53,175 | ) | ||||||
| Net realized gain (loss) | 1,303,802 | 4,362,854 | 713,250 | 329,274 | 124,282 | (0 | ) | |||||||||||||||||
| Net change in unrealized appreciation (depreciation) | 134,805 | 7,307,576 | 5,192,567 | 4,437,945 | 559,150 | 0 | ||||||||||||||||||
| Net increase (decrease) in net assets resulting from operations | 1,235,687 | 10,709,636 | 5,472,057 | 4,417,893 | 590,001 | (53,175 | ) | |||||||||||||||||
| Unit transactions: | ||||||||||||||||||||||||
| Units sold | 1,457,696 | 5,305,593 | 2,525,585 | 3,018,714 | 424,699 | 1,350,753 | ||||||||||||||||||
| Units redeemed | (5,248,807 | ) | (13,005,335 | ) | (2,896,366 | ) | (2,292,534 | ) | (665,940 | ) | (2,626,015 | ) | ||||||||||||
| Net increase (decrease) in net assets resulting from unit transactions | (3,791,111 | ) | (7,699,742 | ) | (370,781 | ) | 726,180 | (241,241 | ) | (1,275,262 | ) | |||||||||||||
| Net increase (decrease) in net assets | (2,555,424 | ) | 3,009,894 | 5,101,276 | 5,144,073 | 348,760 | (1,328,437 | ) | ||||||||||||||||
| Net assets: | ||||||||||||||||||||||||
| Beginning of period | 89,177,134 | 314,490,898 | 66,949,355 | 38,473,655 | 7,489,119 | 5,590,941 | ||||||||||||||||||
| End of period | $ | 86,621,711 | $ | 317,500,792 | $ | 72,050,631 | $ | 43,617,727 | $ | 7,837,879 | $ | 4,262,504 | ||||||||||||
The Notes to Financial Statements are an integral part of this report.
14
| For a unit outstanding during the period and years indicated | ULICO VIA Conservative Allocation | |||||||||||||||||||||||
| June 30, [A] | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
| 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||
| Unit value, beginning of period/year | $ | 18.13 | $ | 17.33 | $ | 15.43 | $ | 16.10 | $ | 14.69 | $ | 13.99 | ||||||||||||
| Investment operations: | ||||||||||||||||||||||||
| Net investment income (loss) [B] | 0.17 | 0.72 | 0.82 | 0.67 | 0.54 | 0.16 | ||||||||||||||||||
| Net realized and unrealized gain (loss) | 0.22 | 0.08 | 1.08 | (1.34 | ) | 0.87 | 0.54 | |||||||||||||||||
| Total investment operations | 0.39 | 0.80 | 1.90 | (0.67 | ) | 1.41 | 0.70 | |||||||||||||||||
| Unit value, end of period/year | $ | 18.52 | $ | 18.13 | $ | 17.33 | $ | 15.43 | $ | 16.10 | $ | 14.69 | ||||||||||||
| Total return | 2.20 | %[C] | 4.60 | % | 12.31 | % | (4.16 | )% | 9.59 | % | 5.00 | % | ||||||||||||
| Ratio and supplemental data: | ||||||||||||||||||||||||
| Net assets end of period/year (000's) | $ | 86,622 | $ | 89,177 | 98,314 | 103,821 | 129,456 | 143,985 | ||||||||||||||||
| Expenses to average net assets [D] | 2.02 | %[E] | 2.07 | % | 2.07 | % | 2.07 | % | 2.09 | % | 2.11 | % | ||||||||||||
| Net investment income (loss) to average net assets | (0.46 | )%[E] | 2.65 | % | 2.41 | % | 2.52 | % | 2.03 | % | 3.99 | % | ||||||||||||
| Portfolio turnover rate | 1.67 | %[C] | 6.51 | % | 3.68 | % | 3.80 | % | 4.66 | % | 16.04 | % | ||||||||||||
| [A] | For the six months ended June 30, 2021. |
| [B] | Calculated based on average number of units outstanding. |
| [C] | Not annualized. |
| [D] | Does not include expenses of the underlying investments in which the Subaccount invests. |
| [E] | Annualized. |
| For a unit outstanding during the period and years indicated | ULICO VIA Moderate Allocation | |||||||||||||||||||||||
| June 30,[A] | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
| 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||
| Unit value, beginning of period/year | $ | 19.77 | $ | 18.36 | $ | 15.98 | $ | 16.98 | $ | 15.06 | $ | 14.19 | ||||||||||||
| Investment operations: | ||||||||||||||||||||||||
| Net investment income (loss)[B] | 0.03 | 0.55 | 0.55 | 0.47 | 0.27 | 0.21 | ||||||||||||||||||
| Net realized and unrealized gain (loss) | 0.81 | 0.86 | 1.83 | (1.47 | ) | 1.65 | 0.66 | |||||||||||||||||
| Total investment operations | 0.84 | 1.41 | 2.38 | (1.00 | ) | 1.92 | 0.87 | |||||||||||||||||
| Unit value, end of period/year | $ | 20.61 | $ | 19.77 | $ | 18.36 | $ | 15.98 | $ | 16.98 | $ | 15.06 | ||||||||||||
| Total return | 4.23 | %[C] | 7.69 | % | 14.88 | % | (5.85 | )% | 12.69 | % | 6.15 | % | ||||||||||||
| Ratio and supplemental data: | ||||||||||||||||||||||||
| Net assets end of period/year (000's) | $ | 317,501 | $ | 314,491 | 336,518 | 324,580 | 388,652 | 348,689 | ||||||||||||||||
| Expenses to average net assets [D] | 1.97 | %[E] | 2.01 | % | 2.02 | % | 2.03 | % | 2.04 | % | 2.04 | % | ||||||||||||
| Net investment income (loss) to average net assets | (0.61 | )%[E] | 2.82 | % | 3.34 | % | 3.76 | % | 3.58 | % | 5.49 | % | ||||||||||||
| Portfolio turnover rate | 1.69 | %[C] | 2.68 | % | 4.32 | % | 4.77 | % | 6.68 | % | 9.93 | % | ||||||||||||
| [A] | For the six months ended June 30, 2021. |
| [B] | Calculated based on average number of units outstanding. |
| [C] | Not annualized. |
| [D] | Does not include expenses of the underlying investments in which the Subaccount invests. |
| [E] | Annualized. |
The Notes to Financial Statements are an integral part of this report.
15
FINANCIAL HIGHLIGHTS (Continued)
| For a unit outstanding during the period and years indicated | ULICO VIA Moderate Growth Allocation | |||||||||||||||||||||||
| June 30,[A] | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
| 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||
| Unit value, beginning of period/year | $ | 21.98 | $ | 18.73 | $ | 15.88 | $ | 17.33 | $ | 14.95 | $ | 13.95 | ||||||||||||
| Investment operations: | ||||||||||||||||||||||||
| Net investment income (loss)[B] | (0.11 | ) | 0.37 | 0.44 | 0.39 | 0.22 | 0.20 | |||||||||||||||||
| Net realized and unrealized gain (loss) | 2.10 | 2.88 | 2.41 | (1.84 | ) | 2.16 | 0.80 | |||||||||||||||||
| Total investment operations | 1.99 | 3.25 | 2.85 | (1.45 | ) | 2.38 | 1.00 | |||||||||||||||||
| Unit value, end of period/year | $ | 23.97 | $ | 21.98 | $ | 18.73 | $ | 15.88 | $ | 17.33 | $ | 14.95 | ||||||||||||
| Total return | 9.02 | %[C] | 17.34 | % | 18.00 | % | (8.42 | )% | 15.99 | % | 7.11 | % | ||||||||||||
| Ratio and supplemental data: | ||||||||||||||||||||||||
| Net assets end of period/year (000's) | $ | 72,051 | $ | 66,949 | 61,963 | 56,115 | 67,831 | 58,648 | ||||||||||||||||
| Expenses to average net assets[D] | 2.09 | %[E] | 2.13 | % | 2.11 | % | 2.12 | % | 2.16 | % | 2.10 | % | ||||||||||||
| Net investment income (loss) to average net assets | (1.25 | )%[E] | 3.02 | % | 4.46 | % | 5.08 | % | 4.88 | % | 7.14 | % | ||||||||||||
| Portfolio turnover rate | 3.63 | %[C] | 5.67 | % | 4.30 | % | 4.66 | % | 7.33 | % | 12.76 | % | ||||||||||||
| [A] | For the six months ended June 30, 2021. |
| [B] | Calculated based on average number of units outstanding. |
| [C] | Not annualized. |
| [D] | Does not include expenses of the underlying investments in which the Subaccount invests. |
| [E] | Annualized. |
| For a unit outstanding during the period and years indicated | ULICO VIA Growth Allocation | |||||||||||||||||||||||
| June 30,[A] | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
| 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||
| Unit value, beginning of period/year | $ | 22.67 | $ | 18.94 | $ | 15.49 | $ | 17.51 | $ | 14.49 | $ | 13.38 | ||||||||||||
| Investment operations: | ||||||||||||||||||||||||
| Net investment income (loss) [B] | (0.21 | ) | 0.01 | 0.30 | 0.19 | 0.12 | 0.17 | |||||||||||||||||
| Net realized and unrealized gain (loss) | 3.00 | 3.72 | 3.15 | (2.21 | ) | 2.90 | 0.94 | |||||||||||||||||
| Total investment operations | 2.79 | 3.73 | 3.45 | (2.02 | ) | 3.02 | 1.11 | |||||||||||||||||
| Unit value, end of period/year | $ | 25.46 | $ | 22.67 | $ | 18.94 | $ | 15.49 | $ | 17.51 | $ | 14.49 | ||||||||||||
| Total return | 12.34 | %[C] | 19.66 | % | 22.31 | % | (11.55 | )% | 20.84 | % | 8.27 | % | ||||||||||||
| Ratio and supplemental data: | ||||||||||||||||||||||||
| Net assets end of period/year (000's) | $ | 43,618 | $ | 38,474 | 29,117 | 25,406 | 30,511 | 24,097 | ||||||||||||||||
| Expenses to average net assets [D] | 2.20 | %[E] | 2.28 | % | 2.26 | % | 2.23 | % | 2.21 | % | 2.27 | % | ||||||||||||
| Net investment income (loss) to average net assets | (1.72 | )%[E] | 3.26 | % | 5.53 | % | 6.84 | % | 6.19 | % | 8.97 | % | ||||||||||||
| Portfolio turnover rate | 5.64 | %[C] | 7.66 | % | 6.23 | % | 9.19 | % | 5.65 | % | 11.92 | % | ||||||||||||
| [A] | For the six months ended June 30, 2021. |
| [B] | Calculated based on average number of units outstanding. |
| [C] | Not annualized. |
| [D] | Does not include expenses of the underlying investments in which the Subaccount invests. |
| [E] | Annualized. |
The Notes to Financial Statements are an integral part of this report.
16
FINANCIAL HIGHLIGHTS (Continued)
| For a unit outstanding during the period and years indicated | ULICO VIA International Mod Growth Alloc | |||||||||||||||||||||||
| June 30,[A] | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
| 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||
| Unit value, beginning of period/year | $ | 16.24 | $ | 14.35 | $ | 11.82 | $ | 14.30 | $ | 11.14 | $ | 11.06 | ||||||||||||
| Investment operations: | ||||||||||||||||||||||||
| Net investment income (loss) [B] | (0.08 | ) | 0.19 | 0.52 | 0.45 | 0.28 | 0.55 | |||||||||||||||||
| Net realized and unrealized gain (loss) | 1.51 | 1.70 | 2.01 | (2.93 | ) | 2.88 | (0.47 | ) | ||||||||||||||||
| Total investment operations | 1.43 | 1.89 | 2.53 | (2.48 | ) | 3.16 | 0.08 | |||||||||||||||||
| Unit value, end of period/year | $ | 17.67 | $ | 16.24 | $ | 14.35 | $ | 11.82 | $ | 14.30 | $ | 11.14 | ||||||||||||
| Total return | 8.80 | %[C] | 13.19 | % | 21.36 | % | (17.33 | )% | 28.43 | % | 0.66 | % | ||||||||||||
| Ratio and supplemental data: | ||||||||||||||||||||||||
| Net assets end of period/year (000's) | $ | 7,838 | $ | 7,489 | 6,964 | 6,408 | 8,996 | 7,582 | ||||||||||||||||
| Expenses to average net assets [D] | 2.42 | %[E] | 2.52 | % | 2.57 | % | 2.43 | % | 2.50 | % | 2.39 | % | ||||||||||||
| Net investment income (loss) to average net assets | (2.42 | )%[E] | (1.38 | )% | (0.03 | )% | 3.88 | % | 0.28 | % | 3.54 | % | ||||||||||||
| Portfolio turnover rate | 5.51 | %[C] | 5.16 | % | 7.68 | % | 10.01 | % | 8.69 | % | 14.32 | % | ||||||||||||
| [A] | For the six months ended June 30, 2021. |
| [B] | Calculated based on average number of units outstanding. |
| [C] | Not annualized. |
| [D] | Does not include expenses of the underlying investments in which the Subaccount invests. |
| [E] | Annualized. |
| For a unit outstanding during the period and years indicated | ULICO Money Market | |||||||||||||||||||||||
| June 30,[A] | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
| 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||
| Unit value, beginning of period/year | $ | 9.30 | $ | 9.33 | $ | 9.25 | $ | 9.32 | $ | 9.37 | $ | 9.42 | ||||||||||||
| Investment operations: | ||||||||||||||||||||||||
| Net investment income (loss) [B] | (0.31 | ) | 0.07 | 0.03 | (0.23 | ) | (0.24 | ) | (0.03 | ) | ||||||||||||||
| Net realized and unrealized gain (loss) | 0.29 | (0.10 | ) | 0.05 | 0.16 | 0.19 | (0.02 | ) | ||||||||||||||||
| Total investment operations | (0.02 | ) | (0.03 | ) | 0.08 | (0.07 | ) | (0.05 | ) | (0.05 | ) | |||||||||||||
| Unit value, end of period/year | $ | 9.28 | $ | 9.30 | $ | 9.33 | $ | 9.25 | $ | 9.32 | $ | 9.37 | ||||||||||||
| Total return | (0.24 | )%[C] | (0.28 | )% | 0.87 | % | (0.78 | )% | (0.61 | )% | (0.48 | )% | ||||||||||||
| Ratio and supplemental data: | ||||||||||||||||||||||||
| Net assets end of period/year (000's) | $ | 4,263 | $ | 5,591 | 4,830 | 5,206 | 7,026 | 12,017 | ||||||||||||||||
| Expenses to average net assets [D] | 2.31 | %[E] | 2.35 | % | 2.68 | % | 2.32 | % | 2.19 | % | 2.13 | % | ||||||||||||
| Net investment income (loss) to average net assets | (2.02 | )%[E] | (1.93 | )% | (0.99 | )% | (2.31 | )% | (2.19 | )% | (2.12 | )% | ||||||||||||
| Portfolio turnover rate | 25.69 | %[C] | 117.91 | % | 76.45 | % | 78.10 | % | 67.82 | % | 107.84 | % | ||||||||||||
| [A] | For the six months ended June 30, 2021. |
| [B] | Calculated based on average number of units outstanding. |
| [C] | Not annualized. |
| [D] | Does not include expenses of the underlying investments in which the Subaccount invests. |
| [E] | Annualized. |
The Notes to Financial Statements are an integral part of this report.
17
At June 30, 2021
1. ORGANIZATION
Fortune V Separate Account (the “Separate Account”), is a non-diversified separate account of Universal Life Insurance Company (“ULICO”), and is registered as a management investment company under the Investment Company Act of 1940, as amended. The Separate Account applies investment company accounting and reporting guidance. The Separate Account is composed of six different subaccounts (each, a “Subaccount” and collectively, the “Subaccounts”) that are separate investment funds and are as follows. Each Subaccount invests substantially all of its investable assets among mutual funds.
| Subaccount |
| Fortune V Separate Account - ULICO VIA Conservative Allocation (“VIA Conservative Alloc”) |
| Fortune V Separate Account - ULICO VIA Moderate Allocation (“VIA Moderate Alloc”) |
Fortune V Separate Account - ULICO VIA Moderate Growth Allocation (“VIA Mod Growth Alloc”) Fortune V Separate Account - ULICO VIA Growth Allocation (“VIA Growth Alloc”) Fortune V Separate Account - ULICO VIA International Moderate Growth Allocation (“VIA Int Mod Growth Alloc”) Fortune V Separate Account - ULICO VIA Money Market (“VIA Money Mrkt Alloc”) |
Each Subaccount invests substantially all of its investable assets among mutual funds. Assets within the Separate Account are legally insulated from ULICO assets. The only shareholders of the Separate Account are contract holders of the Universal VIA annuity product issued by ULICO.
The Fortune V Separate Account has selected Morningstar Investment Management LLC as the Portfolio Construction Manager to serve as asset allocation consultant in connection with the management of the Sub-Accounts with the exception of the Money Market Portfolio.
Morningstar Investment Management LLC is a registered investment adviser and wholly owned subsidiary of Morningstar, Inc. Morningstar Investment Management LLC has approximately $36.5 Billion in assets under management as of March 31, 2021.
The portfolio construction managers for the Fortune V Separate Account are:
| ● | Dan McNeela, CFA, joined Morningstar, Inc. in 2000 as a manager research analyst, and served as associate director of fund analysis and editor of Morningstar Mutual Funds before joining Morningstar Investment Management LLC in 2006. |
| ● | Michael Stout is a portfolio manager within Morningstar’s Investment Management Group and a member of the Asset Allocation Committee. He focuses on asset-allocation strategies employing mutual funds and ETFs, and co-manages two mutual funds at the firm. Mike was an original member of the Morningstar Investment Management Group’s predecessor organization in 1998. |
| ● | Dominic Pappalardo is a Senior Client Portfolio Manager within Morningstar’s Investment Management Group. Mr. Pappalardo has oversight responsibilities for managing the Client Portfolio Management team which delivers customized solutions for institutional and third-party platform clients. Prior to joining Morningstar in 2020, he spent 19 years working in all aspects of fixed income portfolio management at McDonnell Investment Management, an affiliate of Natixis Investment Managers. |
The Statement of Additional Information (“SAI”) provides additional information about the portfolio managers’ compensation, other accounts managed by the portfolio managers, and the portfolio managers’ ownership of securities in the Variable Account.
2. SIGNIFICANT ACCOUNTING POLICIES
In preparing the Subaccounts’ financial statements in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”), estimates or assumptions (which could differ from actual results) may be used that affect reported amounts and disclosures. The following is a summary of significant accounting policies followed by the Subaccounts.
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2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Security transactions: Security transactions are accounted for on the trade date. Security gains and losses are calculated on the specific identification basis. Net realized gain (loss) is from investments in units of investment companies.
Operating expenses: The Separate Account, accounts separately for the assets, liabilities, and operations of each Subaccount. Each Subaccount will indirectly bear the fees and expenses reflected in the underlying mutual funds unit value. These expenses are not reflected in the expenses within the Statements of Operations of the Subaccount and are not included in the Expenses to average net assets, and Net investment income (loss) to average net assets within the Financial Highlights.
Indemnification: In the normal course of business, the Subaccounts enter into contracts that contain a variety of representations that provide general indemnifications. The Subaccounts’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Subaccounts and/or their affiliates that have not yet occurred. However, based on experience, the Subaccounts expect the risk of loss to be remote.
3. INVESTMENT VALUATION
All investments in securities are recorded at their estimated fair value. The value of each Subaccount’s investment in a corresponding underlying mutual funds is valued at the mutual fund unit value per share at the official close of the New York Stock Exchange (“NYSE”) each day the NYSE is open for business.
The Subaccounts utilize various methods to measure the fair value of their investments on a recurring basis. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The three levels (“Levels”) of inputs of the fair value hierarchy are defined as follows:
Level 1—Unadjusted quoted prices in active markets for identical securities.
Level 2—Inputs, other than quoted prices included in Level 1, which are observable, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates, and similar data.
Level 3—Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available, which may include the Subaccounts’ own assumptions used in determining the fair value of investments.
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 that is assigned to the fair value measurement of a security is determined based on the lowest Level input that is significant to the fair value measurement in its entirety. Certain investments that are measured at fair value using NAV per share, or its equivalent, using the “practical expedient” have not been classified in the fair value Levels. The hierarchy classification of inputs used to value the Subaccounts’ investments at June 30, 2021, is disclosed within the Investment Valuation section of each Subaccount’s Schedule of Investments.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, but not limited to, 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 generally greatest for instruments categorized in Level 3. Due to the inherent uncertainty of valuation, the determination of values may differ significantly from values that would have been realized had a ready market for investments existed, and the differences could be material.
Fair value measurements: Each Subaccount invests substantially all of its investable assets among mutual funds. The summary of the inputs used for valuing each Fund’s assets carried at fair value is discussed in the Investment Valuation section of the Funds’ Notes to Financial Statements. Descriptions of the valuation techniques applied to the Subaccounts’ significant categories of assets and liabilities measured at fair value on a recurring basis are as follows:
Investment companies: Certain investment companies are valued at the NAV as the practical expedient. These investment companies are not included within the fair value hierarchy. Certain other investment companies are valued at the actively traded NAV and no valuation adjustments are applied. These investment companies are categorized in Level 1 of the fair value hierarchy.
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4. RISK FACTORS
Investing in the Subaccounts involves certain key risks related to the Subaccounts’ trading activity. Please reference the Subaccounts’ prospectus for a more complete discussion of the following risk(s), as well as other risks of investing in the Subaccounts.
Market risk and Coronavirus: The market values of a Subaccount’s securities and other assets will fluctuate, sometimes sharply and unpredictably, due to changes in general market conditions, overall economic trends or events, governmental actions or interventions, actions taken by the U.S. Federal Reserve or foreign central banks, political developments, investor sentiment, public health emergencies such as a pandemic, and other factors that may or may not be related to the issuer of the security or other asset. The market prices of securities and other assets also may go down due to events or conditions that affect particular sectors, industries or issuers. Adverse market conditions may be prolonged and may not have the same impact on all types of securities or other assets.
Economies and financial markets throughout the world are increasingly interconnected. Economic, financial or political events, trading and tariff arrangements, public health events, terrorism, technology and data interruptions, natural disasters, and other circumstances in one or more countries or regions could be highly disruptive to, and have profound impacts on, global economies or markets. As a result, whether or not a Subaccount invests in securities of issuers located in or with significant exposure to the countries directly affected, the value and liquidity of a Subaccount’s investments may go down.
The COVID-19 pandemic has caused substantial market disruption around the world, including the U.S. There have been periods of extreme volatility, and periods where there have been no buyers for certain securities, including U.S. Treasury securities. Some sectors of the economy and individual issuers have experienced particularly large losses. The pandemic has reduced liquidity of particular investments and asset classes; resulted in significant disruptions to business operations, including business closures; strained healthcare systems; disrupted supply chains, consumer demand and employee availability; and restricted travel. These conditions may continue for an extended period of time, or worsen. The pandemic may result in a sustained domestic or global economic downturn or recession. Developing or emerging market countries may be more adversely impacted. The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers, are not known.
The U.S. government and the Federal Reserve, as well as certain foreign governments and central banks, have taken extraordinary actions to support local and global economies and the financial markets in response to the COVID-19 pandemic. These actions have resulted in significant expansion of public debt, including in the U.S. The long-term consequences of this level of public debt are not known. In addition, certain interest rates have been reduced to very low levels. This and other government intervention into the economy and financial markets to address the pandemic may not work as intended, particularly if the efforts are perceived by investors as being unlikely to achieve the desired results.
The COVID-19 pandemic could continue to adversely affect the value and liquidity of a Subaccount’s investments, impair a Subaccount’s ability to satisfy redemption requests, and negatively impact a Subaccount’s performance.
5. FEES AND OTHER AFFILIATED TRANSACTIONS
Universal Financial Services, Inc., (“UFS”), is the investment adviser of the Separate Account. UFS, a Puerto Rico corporation, is a wholly-owned subsidiary of Universal Group, Inc. (“UNIGR”) and an affiliate of ULICO. UFS currently serves as investment adviser to the Separate Account pursuant to an investment advisory agreement (“Investment Advisory Agreement”) with the Company. Pursuant to such investment advisory agreement, UFS charges a fee to the Sub-Accounts of 0.35% of the value of the assets of the Sub-Accounts.
Certain managing board members and officers of the Separate Account are also trustees, officers, or employees of UNIGR or its affiliates. No interested managing board member, who is deemed an interested person due to current or former service with UNIGR or an affiliate of UNIGR receives compensation from the Separate Account. Similarly, none of the Separate Account’s officers or interested trustees receive compensation from the Subaccounts. The independent board members of the Separate Account are also trustees of the Funds, for which they receive fees.
Brokerage commissions: The Subaccounts incurred no brokerage commissions on security transactions placed with affiliates of the investment manager or sub-adviser(s) for the period ended June 30, 2021.
6. PURCHASES AND SALES OF SECURITIES
For the period ended June 30, 2021, the cost of securities purchased and proceeds from securities sold (excluding short-term securities) are as follows:
| Subaccount | Purchases of Securities | Sales of Securities | ||||||
| ULICO VIA Conservative Allocation | $ | 10,689,685 | $ | 14,748,662 | ||||
| ULICO VIA Moderate Allocation | 37,708,618 | 46,597,495 | ||||||
| ULICO VIA Moderate Growth Allocation | 5,727,971 | 6,582,550 | ||||||
| ULICO VIA Growth Allocation | 3,353,201 | 3,004,494 | ||||||
| ULICO VIA International Moderate Growth Allocation | 322,347 | 666,340 | ||||||
| ULICO VIA Money Market | 1,290,921 | 2,626,169 | ||||||
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7. INCOME TAXES
The operations of the Separate Account form a part of, and are taxed with, the operations of ULICO, a wholly-owned subsidiary of Universal Insurance Company (“UNICO”), which is a wholly-owned subsidiary of UNIGR. ULICO does not expect, based upon current tax law, to incur any income tax upon the earnings or realized capital gains attributable to the Separate Account. Based upon this expectation, no charges are currently being deducted from the Separate Account for federal income tax purposes. The Subaccounts 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. The Subaccounts identify their major tax jurisdictions as Puerto Rico.
Pursuant to Section 1018A of the Puerto Rico Internal Revenue Code, the Company annually withhold, on behalf of the contract holders of the separate accounts, a special tax of 0.10% of their corresponding net asset value and remits them to the Puerto Rico Treasury Department.
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Considerations in Approving Investment Advisory Agreement
As required under the Investment Company Act of 1940 (the “1940 Act”), the Board of Directors (the “Board”) of Fortune V Separate Account (the “Fund”), determines whether to approve the Fund’s investment advisory agreement with Universal Financial Services, the investment adviser to the Fund. In considering the approval of the agreement, the Board, including a majority of those Directors who are not “interested persons” of the Fund (the “Independent Directors”), as defined in the 1940 Act, met with representatives of Universal Financial Services on May 19, 2021 (the “Meeting”) and in separate executive sessions at the May 19, 2021 meeting and approved the investment advisory agreement after concluding that the approval of the investment advisory agreement was in the best interests of the Fund and its shareholders.
The Board requested and received materials relating to the investment advisory agreement in advance of the Meeting. Among other things, the Board considered expense and performance comparisons to those of other funds of similar size and with similar investment objectives and strategies as the respective Sub-Account (the “Peer Group”). The additional material prepared by management generally included Fund information including the Fund’s average net assets; management fees; expense limitation arrangements; investment performance and risk metrics; fee comparisons; services provided by the Adviser and profitability information.
In approving the agreement, the Board, including the Independent Directors, considered the factors it deemed relevant, including the nature, quality and extent of services provided, the performance of the Fund, the profitability of the Adviser, expenses and fees, and the potential for economies of scale that may be shared with the Fund and its shareholders as the Fund’s assets grow. In their deliberations, the Board did not identify any single factor which alone was responsible for the Board’s decision to approve the agreement with respect to the Fund, and each Director may have given different weights to different factors and, thus, each Director may have had a different basis for his decision. In connection with its deliberations, the Board considered information furnished at or in advance of the meeting held on May 19, 2021.
Nature, Extent and Quality of the Services under the Advisory Agreement. The Board received and considered information regarding the nature, extent and quality of services provided to the Fund by the Adviser under the advisory agreement for the Fund. The Board reviewed background information about the Adviser, and considered the background and experience of the Adviser’s senior management and the qualifications, backgrounds and responsibilities of the individuals responsible for overseeing the portfolio construction managers and validating compliance with the investment objectives within each Sub-Account. The Board also considered that the Adviser assumes significant entrepreneurial risk in sponsoring the Fund and that the Adviser also bears and assumes significant ongoing risks, including investment, operational, enterprise, litigation, regulatory and compliance risks, with respect to the Fund.
Adviser Profitability. The Board was provided with information on the Adviser’s profitability in serving as the investment adviser to the Fund. The Board recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations of expenses and the adviser’s capital structure and cost of capital. Taking these factors into account, the Board concluded that the Adviser’s profitability in relation to the services rendered was reasonable and that it was believed to be sufficient to continue to support increased investments to enhance services to the Fund and its shareholders.
Economies of Scale. The Board considered information regarding potential economies of scale with respect to the management of the Fund, whether the Fund has appropriately benefited from any economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered whether or not the advisory fee reflected economies of scale and noted that the advisory fee retained by the Adviser does not decrease at breakpoints, but instead remains fixed at 0.35% of the average net daily assets of the Fund. The Board further noted that other expenses of the Fund are expected to increase in the near term as a result of additional requirements related to registration under the 1940 Act. The Board noted that this increase would be offset if assets in the Fund grow as operating costs are spread over a larger asset base resulting in a lower per unit allocation of such costs which the Board believes will benefit shareholders. The Board was also aware that is it extremely difficult to determine whether potential economies of scale in fact exist for any fund, or for a fund complex, and, or, at what point any potential economies of scale may begin to be reduced at some asset level, or possibly reverse and become diseconomies of scale. Thus, the Board was aware that they needed to use their business judgment and experience in evaluating whether any potential economies of scale might be equitably shared with the Fund.
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Other Benefits to the Adviser. The Board considered other benefits received by the Adviser as a result of its relationship with the Fund. The Board concluded that the potential benefits to be derived by the Adviser included the potential benefits consistent with those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to its reputation. The Board concluded that the benefits derived by the Adviser were consistent with the types of benefits generally derived by investment advisers to mutual funds. The Independent Directors considered these and any other potential fall-out benefits and generally determined these to be not material to the consideration of the management and other fees and to the Adviser’s profitability generally.
Investment Advisory Fee Rates and Expenses and Performance. The Board reviewed and considered the contractual advisory fee rates for the Fund in light of the nature, extent and quality of the advisory services provided by the Adviser.
The Board received and considered information on the contractual advisory fee and gross and net total operating expense ratios for the Fund in comparison to the Peer Group. The Board noted that for each Sub-Account the advisory fee was at the average or below the average for the Peer Group. The Board further noted that the fee paid to Morningstar is 0.10%, which is included under Other Fees when comparing the Sub-Accounts to the Peer Group.
The Board reviewed the market indexes used as the benchmarks for the Sub-Accounts. It was noted that the objective factors considered when selecting the market indexes are the current asset allocation weightings of the Sub-Accounts.
Following its review, the Board determined that the Fund’s fee structure was reasonable.
The Board determined that, given all of the factors provided, it would be in the best interests of the Fund and its shareholders to approve the advisory agreement.
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ITEM 2. CODE OF ETHICS.
Not applicable to semi-annual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to semi-annual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to semi-annual reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
Included as part of the report to shareholders filed under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to semi-annual reports.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to semi-annual reports.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 11. CONTROLS AND PROCEDURES.
| (a) | The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the registrant’s disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by the registrant on Form N-CSR is (i) accumulated and communicated to the investment company’s management, including its certifying officers, to allow timely decisions regarding required disclosure; and (ii) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. |
| (b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that have materially affected or are reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 13. EXHIBITS.
(a)(1) Not applicable to semi-annual reports.
(a)(2) Certifications pursuant to Rule 30a-2(a), Section 302 are attached hereto.
(a)(3) Not applicable.
(a)(4) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b), Section 906 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Fortune V Separate Account
| By (Signature and Title) | /s/ Jose C. Benitez | |
| Jose C. Benitez | ||
| (Principal Executive Officer) |
Date 8/4/21
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/ Jose C. Benitez | |
| Jose C. Benitez | ||
| (Principal Executive Officer) |
Date 8/4/21
| By (Signature and Title) | /s/ Roberto J. Martinez | |
| Roberto J. Martinez | ||
| (Principal Financial Officer & Secretary) |
Date 8/4/21